Shell Ferris v. Progressive Casualty Insurance. Company ( 2021 )

December 8, 2021
Supreme Court
No. 2019-483-M.P.
(PC 17-5302)
Shell Ferris :
v. :
Progressive Casualty Insurance :
Company et al.
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested
to notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at
Telephone 222-3258 or Email opinionanalyst@courts.ri.gov of
any typographical or other formal errors in order that corrections
may be made before the opinion is published.
Supreme Court
No. 2019-483-M.P.
(PC 17-5302)
Shell Ferris :
v. :
Progressive Casualty Insurance :
Company et al.
Present: Suttell, C.J., Goldberg, Robinson, and Lynch Prata, JJ.
OPINION
Justice Lynch Prata, for the Court. This case came before the Supreme
Court on November 2, 2021, pursuant to a writ of certiorari seeking review of a
Superior Court order denying the motion to vacate entry of default by the defendant,
Progressive Casualty Insurance Company (defendant or PCIC). After considering
the parties’ written and oral submissions and reviewing the record, we conclude that
cause has not been shown and that this case may be decided without further briefing
or argument. For the reasons set forth in this opinion, we affirm the order of the
Superior Court.
Facts and Travel
The plaintiff, Shell Ferris, was involved in a motorcycle accident in
Smithfield, Rhode Island in October 2016. The plaintiff alleges that an unidentified
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motor vehicle pulled out in front of him, causing him to lose control of his
motorcycle. As a result of the accident, plaintiff’s motorcycle was extensively
damaged and plaintiff suffered lacerations and a shattered knee. At the time of the
accident, plaintiff held a Rhode Island motorcycle insurance policy underwritten by
another defendant in this case, Progressive Northern Insurance Company
(Progressive Northern).
In January 2018 a representative from “Progressive Claims” informed
plaintiff in writing that his claim under the policy was denied because, based on their
investigation, it had been found that plaintiff was responsible for the accident. On
October 12, 2018, plaintiff filed an amended Superior Court complaint 1 against
PCIC and Progressive Northern, alleging that he “was an insured by virtue of his
contracts with” PCIC and Progressive Northern and that their denial of his uninsured
motorist claims was unreasonable and made in bad faith.
On October 17, 2018, a licensed constable served a copy of the summons and
amended complaint upon Tiffany Welch, an employee of PCIC, at PCIC’s office
located at One Coastway Boulevard in Warwick, Rhode Island. The defendant failed
to timely answer the complaint, and plaintiff filed an affidavit and request for entry
1
The plaintiff had instituted the Superior Court action on November 3, 2017, by
filing a complaint against various “John Doe” defendants.
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of default. Default entered against both PCIC and Progressive Northern on
November 8, 2018.
Forty-two days later, on December 20, 2018, PCIC and Progressive Northern
moved to vacate default. In support of the motion as it related to PCIC, defendant
argued that it “has nothing to do with this matter and is not and has never been the
plaintiff’s insurer.” PCIC maintained that plaintiff’s motorcycle insurance policy
was issued by Progressive Northern, a “completely distinct and separate corporate
entit[y].” The defendant contended that the default that had entered against PCIC
could not “be sustained given its utter lack of connection to this matter and the
plaintiff’s resultant lack of standing to maintain a claim against PCIC.”
The hearing justice denied the motion without prejudice, finding that
defendant had not met the applicable standards to vacate default under Rule 55(c) of
the Superior Court Rules of Civil Procedure. 2 She found that plaintiff had properly
served defendant and that defendant had failed to show “any indication of the
circumstances excusing the failure to plead or otherwise defend.” The hearing
justice suggested that defendant should find out “what it is that they did once Tiffany
2
The hearing justice determined that service was not properly carried out upon
Progressive Northern in accordance with Rule 4(e)(3) of the Superior Court Rules
of Civil Procedure, and she granted Progressive Northern’s motion to vacate default.
The record reflects that discovery is proceeding in the Superior Court on plaintiff’s
claim against Progressive Northern.
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Welch accepted service on behalf of PCIC, and * * * find out why it is that they
failed to plead or otherwise defend.”
Eight months later, the hearing justice entertained a motion by PCIC to
reconsider and to vacate entry of default. The defendant did not provide the hearing
justice with any additional affidavits. The hearing justice denied the motion to
reconsider and to vacate entry of default, finding again that PCIC failed to show
cause to excuse its failure to plead or defend. Thereafter, defendant filed a petition
for writ of certiorari with this Court, which we granted on June 12, 2020.
Standard of Review
A motion to vacate default “is addressed to the [sound] discretion of the [trial
justice] and * * * will not be disturbed on appeal absent a showing of an abuse of
discretion or an error of law.” Clark v. Dubuc, 486 A.2d 603, 604 (R.I. 1985)
(quoting Prudential Investment Corporation v. Porcaro, 115 R.I. 117, 120, 341 A.2d
720, 722 (1975)); see Reyes v. Providence Place Group, L.L.C., 853 A.2d 1242,
1246 (R.I. 2004) (“We review a Superior Court entry of default for abuse of
discretion or error of law.”). This Court has recognized that “the appropriate
standard for the Superior Court to apply on a motion to vacate default before
judgment on the default has been entered is the ‘good cause’ standard under Rule
55(c).” Reyes, 853 A.2d at 1247.
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Discussion
Before this Court, PCIC asserts that the hearing justice erred in denying its
motion to vacate entry of default because, it contends, there was good cause to set
aside the entry of default. Specifically, defendant maintains that its lack of
connection to the underlying insurance policy is a sufficient indicator of good cause
and that the hearing justice erred when she searched the record “for a comprehensive
explanation of what caused the delay[.]”
Rule 55(c) provides that “[f]or good cause shown the court may set aside an
entry of default * * *.” This Court has recognized “additional grounds upon which
a motion to vacate default may be granted[.]” Reyes, 853 A.2d at 1247. Specifically,
the Court has developed a three-prong test, whereby the defaulting party must show
“that the default was not the result of gross neglect, that the nondefaulting party will
not be substantially prejudiced by the reopening, and the party in default has a
meritorious defense.” Id. (quoting Security Pacific Credit (Hong Kong) Ltd. v. Lau
King Jan, 517 A.2d 1035, 1036 (R.I. 1986)). However, in any case, “the defaulting
party must show * * * circumstances excusing the failure to plead or otherwise
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defend[.]” 1 Robert B. Kent et al., Rhode Island Civil and Appellate Procedure §
55:5, VII-510 (West 2020). 3
Here, we discern no error with the hearing justice’s finding that PCIC utterly
failed to present evidence “of the circumstances excusing the failure to plead or
otherwise defend.” The only relevant evidence as to what happened after PCIC was
served with the summons and complaint is Welch’s affidavit. Welch admitted that
the signature on the summons and complaint was hers, and she stated in her affidavit
that her usual practice when she accepts a delivery is to “leave it on the receptionist’s
desk.” She stated, “I do not know what happens to it after that.” Counsel for
defendant admitted to the hearing justice that he could not “say that there is” any
indication of the circumstances excusing the failure to plead or defend in the
affidavits submitted to the court on the motion to vacate entry of default. Even after
3
The defendant, before both the Superior Court and this Court, relies heavily on its
alleged lack of connection to the underlying cause of action to excuse its failure to
plead or defend. However, regardless of whether that constitutes a meritorious
defense against plaintiff’s claims, Rule 55(c) of the Superior Court Rules of Civil
Procedure requires a defendant to show, from the outset, circumstances excusing its
failure to plead or defend. See 1 Robert B. Kent et al., Rhode Island Civil and
Appellate Procedure § 55:5, VII-510 (West 2020). After such a showing, the trial
court may consider whether those circumstances are not the result of gross neglect,
whether the nondefaulting party will be substantially prejudiced, and whether the
defaulting party has a meritorious defense. See Security Pacific Credit (Hong Kong)
Ltd. v. Lau King Jan, 517 A.2d 1035, 1036 (R.I. 1986). Thus, PCIC cannot simply
rely on its allegedly meritorious defense to excuse its failure to plead or defend. The
defendant was obligated to offer the hearing justice an explanation as to why it failed
to plead or otherwise defend against plaintiff’s complaint.
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the hearing justice gave defendant the opportunity to further investigate what
transpired and reargue its motion, PCIC failed to present additional affidavits, and
PCIC’s counsel told the hearing justice, “[W]e don’t know * * * what specifically
happened, and we couldn’t commit somebody to an affidavit * * *.”
The only explanation offered by defendant for its failure to timely plead or
defend was offered by counsel during the hearing on the motion to reconsider.
Counsel surmised that an “administrative error” occurred and that the complaint
“was essentially put into the system and eventually routed to [the attorney’s] office.”
However, “statements of counsel made in the course of argument, whether written
or oral, do not constitute evidence[.]” Wood v. Ford, 525 A.2d 901, 903 (R.I. 1987).
We also conclude that the hearing justice did not “disregard[] * * * other
indicia of good cause to include anomalies in service of process,” as argued by
defendant before this Court. The defendant argued to the hearing justice that
plaintiff failed to properly serve PCIC in accordance with Rule 4(e)(3), and the
hearing justice flatly rejected that argument. She found that the office located at One
Coastway Boulevard was an office of defendant and that Welch was an employee
authorized to accept service. The defendant has not sought review of that
determination, and thus we will not consider it. Cf. Retirement Board of Employees’
Retirement System v. Randall, 249 A.3d 629, 635 (R.I. 2021) (declining to review a
factual determination of the Superior Court when no appeal was taken). A defendant
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should not, at least in the context of a motion to vacate default, attempt to hide the
ball. If defendant believed that it had reason to appeal or otherwise seek review of
the hearing justice’s ruling of proper service, it should have done so. 4 We will not
permit that issue to obscure our good-cause analysis.
Ultimately, the hearing justice appropriately concluded that the only
competent evidence she had before her was that Welch, upon receiving a delivery,
normally leaves the delivery on the receptionist’s desk. This fails to manifest
sufficient circumstances that would show good cause to excuse the defendant’s
failure to plead or defend. See R.C. Associates v. Centex General Contractors, Inc.,
810 A.2d 242, 245 (R.I. 2002) (affirming the denial of a motion to vacate default
judgment where the affidavit presented to the court was vague, misleading, and
failed to explain a five-month delay in moving to vacate default). The hearing justice
provided the defendant with every opportunity to show good cause to justify
vacating the entry of default, and she certainly did not abuse her discretion in
denying the defendant’s motion.
4
We pause to note that the record reflects that two licensed Rhode Island constables,
including the president of the Rhode Island Independent Constables Association,
submitted affidavits relevant to their experiences serving defendant. Both attested
that, in their combined thirty-two years of experience, PCIC “has [n]ever raised the
issue of failure to have the authority to accept service” at the PCIC office located at
One Coastway Boulevard in Warwick, Rhode Island.
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Conclusion
For the foregoing reasons, we affirm the order of the Superior Court. The
record shall be returned to the Superior Court with our decision endorsed thereon.
Justice Long did not participate.
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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
Shell Ferris v. Progressive Casualty Insurance
Title of Case
Company et al.
No. 2019-483-M.P.
Case Number
(PC 17-5302)
Date Opinion Filed December 8, 2021
Justices Suttell, C.J., Goldberg, Robinson, and Lynch Prata, JJ.
Written By Associate Justice Erin Lynch Prata
Source of Appeal Providence County Superior Court
Judicial Officer from Lower Court Associate Justice Melissa A. Long
For Plaintiff:
George P. Microulis, Esq.
Merrill J. Friedemann, Esq.
Attorney(s) on Appeal
For Defendant:
Todd J. Romano, Esq.
Patricia A. Buckley, Esq.
SU-CMS-02A (revised June 2020)