New England Property Services Group, LLC v. NGM Insurance Company

Supreme Court

No. 2023-238-Appeal.
(PC 22-4911)

New England Property Services :
Group, LLC

v. :

NGM Insurance Company. :

NOTICE: This opinion is subject to formal revision
before publication in the Rhode Island Reporter. Readers
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Supreme Court

No. 2023-238-Appeal.
(PC 22-4911)

New England Property Services :
Group, LLC

v. :

NGM Insurance Company. :

Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.

OPINION

Justice Lynch Prata, for the Court. The plaintiff, New England Property

Services Group, LLC (NEPSG), appeals from the entry of summary judgment in

favor of the defendant, NGM Insurance Company (NGM). NEPSG asserts that the

Superior Court erred in determining (1) that it was not entitled to either a

modification of the Appraisal Agreement Award or a second appraisal; and (2) that

NEPSG failed to establish its claims for breach of contract, bad faith, unjust

enrichment, and tortious interference with contractual relations. For the reasons set

forth herein, we affirm the judgment of the Superior Court.

Facts and Travel

The defendant, NGM, issued a homeowner’s insurance policy to Stephen and

Betty Callahan (policyholders) for the residence located at 142 Cooper Road,

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Chepachet, Rhode Island. In December of 2020, the policyholders filed a claim

under the policy for storm-related direct physical loss to the subject premises

(claim).

Thereafter, the policyholders executed a written irrevocable assignment of

insurance claim benefits and rights contract with NEPSG, whereby the policyholders

assigned all their rights and benefits regarding the claim to NEPSG. NGM retained

Keystone Experts + Engineers to inspect the subject premises. Based on Keystone’s

inspection, NGM sent NEPSG a letter confirming coverage for the wind damage to

the front porch door and light and the water damage to the interior. The letter

indicated that NGM was unable to cover the roof and siding damages because the

policy did not cover loss caused by improper work and/or maintenance activities.

Subsequently, NGM hired The Hamel Company to inspect the physical

damage to the subject premises and prepare an estimate of loss. According to

NEPSG, on February 10, 2021, NGM issued a check to the policyholders and

NEPSG representing the valuation for the amount of loss, but which purportedly

included only payment for the wind and water damage to the front porch. After

NEPSG disagreed with that estimate, NGM hired Envista Forensics to conduct a full

reinspection of the subject premises and generate an updated estimate. On October

8, 2021, NGM issued a check for the updated estimated amount of loss based on the

second inspection. NEPSG again disagreed with the estimated amount of loss. The

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disagreement persisted until NEPSG eventually demanded an appraisal of the loss

pursuant to the policy’s “Appraisal” clause. The “Appraisal” clause reads as

follows:

“If you and we fail to agree on the amount of loss, either
may demand an appraisal of the loss. In this event, each
party will choose a competent appraiser within 20 days
after receiving a written request from the other. The two
appraisers will choose an umpire. * * * The appraisers will
separately set the amount of loss. If the appraisers submit
a written report of an agreement to us, the amount agreed
upon will be the amount of loss. If they fail to agree, they
will submit their differences to the umpire. A decision
agreed to by any two will set the amount of loss.”

NEPSG emailed its written demand for appraisal to NGM on February 25,

2022, and named its appraiser. On March 7, 2022, NGM accepted the demand for

appraisal and selected its appraiser. Thereafter, the appraisers agreed to appoint

William Poore, Esquire, as the umpire. On March 31, 2022, the appraisers signed

an Appraisal Agreement Award (award) that set the replacement cost value of the

loss at $88,355.97. In reaching such agreement, the appraisers used Xactimate

software to determine the cost of the repairs involved in restoring the subject

premises.1 On April 6, 2022, NGM rendered full payment of the amount due under

the award to NEPSG.

1
Xactimate is a computer program that estimates the cost of property damage repairs
and replacements. Verisk, Xactimate: Property Claims Estimating Software,
https://www.verisk.com/products/xactimate/ (last visited Dec. 4, 2024).
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On April 14, 2022, NEPSG sent NGM a letter indicating the increased price

of vinyl siding labor for March 2022 and requesting a supplemental payment in the

amount of $9,713.64 to reflect the intent of the parties to use the actual March 2022

labor market projections in the award. In the letter, NEPSG alleged that, on April 1,

2022, Xactimate had published an increase in its valuation of the labor costs

associated with the installation of vinyl siding based on data from March 2022.

NGM declined to supplement the award. On April 17, 2022, NEPSG emailed NGM

a written demand for a second appraisal of the claim. According to NEPSG, NGM

refused to engage in a second appraisal.

On August 15, 2022, plaintiff filed the instant action in Superior Court seeking

a declaratory judgment that the award is subject to G.L. 1956 § 10-3-14 and should

be modified to account for the miscalculated vinyl siding labor cost or, alternatively,

that NEPSG was entitled to a second appraisal of the claim. The complaint also

alleged that NGM had engaged in a breach of contract, bad faith, unjust enrichment,

and tortious interference with a contractual relationship.

NGM moved for summary judgment on December 16, 2022, arguing (1) that

NEPSG’s claims were barred by the doctrine of accord and satisfaction because it

had negotiated a settlement and accepted payment in full, and (2) that NGM had

discharged any duty it owed to NEPSG by engaging in the appraisal process.

NEPSG objected to summary judgment, asserting that the award at issue was an

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arbitration award rather than an accord and satisfaction and that an insurer does not

discharge all legal and equitable duties to a claimant merely by engaging in the

appraisal process.

In a bench decision on April 4, 2023, the hearing justice granted NGM’s

motion for summary judgment, finding that although the award was an arbitration

award rather than an accord and satisfaction resolving the entire dispute, NEPSG

had not set forth sufficient evidence in the record to support its claims. An order

reflecting this decision entered on May 5, 2023, and final judgment in defendant’s

favor entered thereafter. NEPSG filed a timely notice of appeal.

Standard of Review

“A decision granting summary judgment is reviewed de novo by this Court.”

Saint Elizabeth Home v. Gorham, 266 A.3d 112, 113 (R.I. 2022). “We, like the trial

justice, ‘view the evidence in the light most favorable to the nonmoving party, and

if we conclude that there are no genuine issues of material fact and that the moving

party is entitled to judgment as a matter of law, we will affirm the judgment.’” Id. at

113-14 (quoting Middle Creek Farm, LLC v. Portsmouth Water & Fire District, 252

A.3d 745, 751 (R.I. 2021)). “Although summary judgment is recognized as an

extreme remedy, to avoid summary judgment the burden is on the nonmoving party

to produce competent evidence that proves the existence of a disputed issue of

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material fact.” Id. at 114 (quoting Citizens Bank, N.A. v. Palermo, 247 A.3d 131,

133 (R.I. 2021)).

Analysis

Declaratory Judgment

NEPSG asserts that the hearing justice erred in granting summary judgment

with respect to its declaratory-judgment claim, which seeks a declaration pursuant

to G.L. 1956 § 9-30-1 that the award is subject to § 10-3-14 and should be modified

or, alternatively, that NEPSG was entitled to a second appraisal of the claim.

Initially, we note that this Court has, on multiple occasions, looked at insurance

policy appraisal clauses with nearly identical language to the clause at issue here and

determined that the appraisal process is generally considered to be a form of

arbitration. See Grady v. Home Fire & Marine Insurance Company, 27 R.I. 435,

436-37, 441, 63 A. 173, 173, 175 (1906); Waradzin v. Aetna Casualty & Surety

Company, 570 A.2d 649, 649-50 (R.I. 1990). As such, we will treat the award as an

arbitration award and thus it is subject to the rules that govern arbitration

proceedings.

Generally, an arbitration award may be disturbed only in very narrow

circumstances. Lemerise v. Commerce Insurance Company, 137 A.3d 696, 700 (R.I.

2016). “Public policy favors the finality of arbitration awards, and such awards

enjoy a presumption of validity.” Id. at 699 (quoting State Department of

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Corrections v. Rhode Island Brotherhood of Correctional Officers, 64 A.3d 734, 739

(R.I. 2013)). “To preserve the integrity and efficacy of arbitration proceedings,

judicial review of arbitration awards is extremely limited.” Id. (quoting Berkshire

Wilton Partners, LLC v. Bilray Demolition Co., 91 A.3d 830, 834-35 (R.I. 2014)).

The limited grounds for modifying an arbitration award are set forth in § 10-3-14,

which provides in pertinent part:

“(a) In any of the following cases, the court must make an
order modifying or correcting the award, upon the
application of any party to the arbitration:

“(1) Where there was an evident material
miscalculation of figures, or an evident material
mistake in the description of any person, thing, or
property referred to in the award.

“* * *

“(b) The order must modify and correct the award, so as to
effect the intent thereof and promote justice between the
parties.”

Here, NEPSG argues that the failure to use the updated March 2022 Xactimate

vinyl siding labor cost projections in calculating the value of the award constitutes a

material miscalculation of figures and thus warrants a modification. However, the

alleged updated Xactimate cost projections were not published until the day after the

parties signed the award. Accordingly, NEPSG’s argument in support of

modification is based entirely on facts that were not in existence at the time the

parties agreed to the award; this is not a case where the math was wrong. We have
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held that “a trial justice reviewing an arbitration award is constrained to the four

corners of the award itself and the record of the arbitration proceeding.” Lemerise,

137 A.3d at 703. Consequently, there is no admissible evidence upon which a finder

of fact could conclude that there was a miscalculation and that NEPSG is entitled to

a modification pursuant to § 10-3-14.

Additionally, NEPSG’s assertion that it is entitled to a second appraisal of the

claim must also fail. NEPSG has alleged no basis for vacating the award outside of

the fact that it submitted a second demand for appraisal to NGM after it was

dissatisfied with the outcome of the first appraisal. There exists no mechanism by

which a dissatisfied party can freely set aside a binding arbitration award in the

absence of cause shown pursuant to § 10-3-12.2 Further, there is no language in the

2
General Laws 1956 § 10-3-12 provides that an arbitration award must be vacated:

“(1) Where the award was procured by corruption, fraud
or undue means.

“(2) Where there was evident partiality or corruption on
the part of the arbitrators, or either of them.

“(3) Where the arbitrators were guilty of misconduct in
refusing to postpone the hearing, upon sufficient cause
shown, or in hearing legally immaterial evidence, or
refusing to hear evidence pertinent and material to the
controversy, or of any other misbehavior by which the
rights of any party have been substantially prejudiced.

“(4) Where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and
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subject insurance policy to suggest that an insured is entitled to a second appraisal

of a claim. Rather, the “Appraisal” clause clearly and unambiguously states that

once the appraisers submit a written report of an agreement to the insurer, the amount

agreed upon will be the amount of loss. Accordingly, we affirm the hearing justice’s

grant of summary judgment with respect to NEPSG’s declaratory-judgment claim.

Breach of Contract and Bad Faith

Next, NEPSG contends that the hearing justice erroneously granted summary

judgment on its claims of breach of contract and bad faith. NEPSG maintains that,

because the appraisal was limited to determining the amount of loss and did not

resolve the entire dispute, its claims of breach of contract and bad faith must survive

given the disputed issues of fact regarding NGM’s investigation and handling of the

claim.

We first address NEPSG’s assertion that NGM’s decision not to either

supplement the award or engage in a second appraisal constitutes both a breach of

contract and an act of bad faith. As discussed supra, NGM had no duty to

supplement the award or to acquiesce to a second appraisal under the language of

the insurance contract or laws of this state. See Providence Teachers Union, Local

958, American Federation of Teachers, AFL-CIO v. McGovern, 113 R.I. 169, 177,

definite award upon the subject matter submitted was not
made.”
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319 A.2d 358, 363 (1974) (“[An arbitration] award, if rendered in compliance with

all legal requirements, is a complete, final, and binding determination of a

controversy which was properly before the arbitrator.”). Thus, NGM’s refusal to

take such actions cannot amount to either bad faith or a breach of contract.

With that, the only remaining breach-of-contract allegation is that NGM

breached the terms of the policy by denying coverage for part of the claim where the

physical damage to the subject premises was caused by a peril insured against.

While NGM initially refused coverage for the roof and vinyl siding damage, the

company promptly conducted a full reinspection of the premises and determined that

the entirety of the claim was covered. The parties then reached an agreement as to

the amount of loss for the entire claim pursuant to the policy’s “Appraisal” clause.

This is the exact process anticipated by the policy for any such disagreement. As

such, NEPSG’s breach-of-contract claim must fail.

With respect to the bad-faith claim, it is alleged that NGM acted in bad faith

by hiring appraisers to inspect the claim who were purportedly not licensed as

contractors, insurance adjusters, home inspectors, or engineers in the State of Rhode

Island, thereby unduly delaying the settlement of the claim. NEPSG contends that

this claim should survive summary judgment because the allegations are factually

similar to the bad-faith allegations that were deemed sufficient to withstand a motion

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for judgment on the pleadings in Houle v. Liberty Insurance Corporation, 271 A.3d

591 (R.I. 2022).

However, NEPSG’s reliance on Houle is misplaced. First and foremost,

Houle was an appeal from a judgment on the pleadings wherein our review was

confined to the pleadings; and the judgment could only be affirmed if it was

“established beyond a reasonable doubt that [the plaintiff] would not be entitled to

relief from the defendant under any set of conceivable facts that could be proven in

support of its claim.” Houle, 271 A.3d at 594 (quoting Premier Home Restoration,

LLC v. Federal National Mortgage Association, 245 A.3d 745, 748 (R.I. 2021)). In

contrast, this is an appeal from summary judgment; thus our review extends beyond

the pleadings and the judgment will be affirmed “if we conclude that there are no

genuine issues of material fact and that the moving party is entitled to judgment as

a matter of law * * *.” Saint Elizabeth Home, 266 A.3d at 113 (quoting Middle Creek

Farm, LLC, 252 A.3d at 751).

Additionally, in Houle the plaintiffs alleged that the defendant insurance

company had acted in bad faith not only by enlisting the services of an unlicensed

contractor to prepare an estimate, but also by preparing an estimate without

performing a full and complete investigation and by hiring an unlicensed engineer

to prepare a remediation plan and draw engineering documents. Houle, 271 A.3d at

594-95. In the instant case, NEPSG merely alleges that NGM used unlicensed

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contractors to investigate the claim which resulted in an unduly delayed settlement

of the claim. The use of unlicensed investigators, standing alone, is not a sufficient

basis for a bad-faith claim against an insurance company. NGM investigated the

claim and paid out the initial estimate within sixty days of the loss being reported

despite the fact that the policy does not require payment until after there is a final

settlement. Thereafter, NGM continued to negotiate the claim with NEPSG and

conducted a full reinspection of the loss at NEPSG’s request. After the reinspection,

NGM paid NEPSG the amount in excess of the initial estimate despite the fact that

there was still no final settlement. Finally, when NEPSG demanded appraisal nearly

five months later, NGM promptly complied with the “Appraisal” clause of the policy

and paid the amount due pursuant to the award within a week of the agreement being

signed. Consequently, we deem no error in the hearing justice’s grant of summary

judgment as to NEPSG’s claims of breach of contract and bad faith.

Unjust Enrichment

NEPSG next alleges that the hearing justice erred in finding that it failed to

establish a claim for unjust enrichment. NEPSG’s claim for unjust enrichment is

based on NGM’s refusal to subsequently modify the award based on the updated

Xactimate labor-cost projections. NEPSG contends that the failure to use the

updated projections created a “clerical windfall” for NGM and that it would be

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inequitable and unjust for NGM to retain the benefit of such windfall without

compensating NEPSG.

“To recover for unjust enrichment, a claimant must prove: (1) that he or she

conferred a benefit upon the party from whom relief is sought; (2) that the recipient

appreciated the benefit; and (3) that the recipient accepted the benefit under such

circumstances ‘that it would be inequitable for the recipient to retain the benefit

without paying the value thereof.’” Dellagrotta v. Dellagrotta, 873 A.2d 101, 113

(R.I. 2005) (brackets omitted) (quoting Bouchard v. Price, 694 A.2d 670, 673 (R.I.

1997)).

Here, there is no basis to suggest that NGM accepted a benefit under

circumstances that would make it inequitable to retain in the absence of payment.

The parties mutually agreed to a binding award using the most up-to-date figures

available at the time of agreement to determine the amount of loss. Thereafter, NGM

promptly fulfilled its contractual obligations by paying NEPSG the amount due

under the award. Subsequent market fluctuations cannot serve as a basis to support

a claim for unjust enrichment. Thus, the hearing justice appropriately granted

summary judgment as to NEPSG’s unjust-enrichment claim.

Tortious Interference

Finally, NEPSG argues that the hearing justice erred in granting summary

judgment with respect to its claim of tortious interference with contractual relations.

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NEPSG maintains that NGM intentionally interfered with the assignment contract

between itself and the policyholders by directly contacting the policyholders

regarding the settlement of the claim.

“To prevail on a claim of tortious interference with contractual relations, a

plaintiff must show (1) the existence of a contract; (2) the alleged wrongdoer’s

knowledge of the contract; (3) his or her intentional interference; and (4) damages

resulting therefrom.” Nissensohn v. CharterCARE Home Health Services, 306 A.3d

1026, 1038 (R.I. 2024) (brackets omitted) (quoting Tidewater Realty, LLC v. State,

942 A.2d 986, 993 (R.I. 2008)). Further, “[t]he element of intentional interference

requires a showing of legal malice—meaning ‘an intent to do harm without

justification’—or that he acted ‘for an improper purpose.’” Greensleeves, Inc. v.

Smiley, 68 A.3d 425, 434 (R.I. 2013) (quoting Belliveau Building Corp. v. O’Coin,

763 A.2d 622, 627, 628 (R.I. 2000)).

Here, NEPSG failed to provide any evidence that NGM interfered with the

assignment contract with an intent to do harm or for an improper purpose. See

Nissensohn, 306 A.3d at 1038-39 (affirming the grant of summary judgment on the

plaintiff’s claim of tortious interference because there was no evidence that the

defendant intended to do harm to the plaintiff’s contract). NEPSG has made a bald

assertion with no attempt to explain how NGM’s communications with the

policyholders regarding the settlement of the claim were intended to harm the

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assignment contract. See Estate of Cassiere v. Cassiere, 246 A.3d 391, 397 (R.I.

2021) (“This Court has consistently declared that ‘a party opposing summary

judgment bears the burden of proving the existence of a disputed material issue of

fact and, in so doing, has an affirmative duty to produce specific evidence

demonstrating that summary judgment should be denied.’”) (quoting Brochu v.

Santis, 939 A.2d 449, 452 (R.I. 2008)). Accordingly, we shall not disturb the hearing

justice’s grant of summary judgment with respect to NEPSG’s claim of tortious

interference.

Conclusion

For the reasons stated herein, we affirm the judgment of the Superior Court.

The papers may be returned to the Superior Court.

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STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903

OPINION COVER SHEET

New England Property Services Group, LLC v. NGM
Title of Case
Insurance Company.
No. 2023-238-Appeal.
Case Number
(PC 22-4911)

Date Opinion Filed February 11, 2025

Suttell, C.J., Goldberg, Robinson, Lynch Prata, and
Justices
Long, JJ.

Written By Associate Justice Erin Lynch Prata

Source of Appeal Providence County Superior Court

Judicial Officer from Lower Court Associate Justice Kevin F. McHugh

For Plaintiff:

Thomas J. Alves, Esq.
Attorney(s) on Appeal
For Defendant:

Donna M. Lamontagne, Esq.