Allstate Insurance Company v. Jessica Ahlquist , 2013 R.I. LEXIS 21 ( 2013 )

Supreme Court
No. 2012-16-Appeal.
(PC 09-3843)
Allstate Insurance Company :
v. :
Jessica Ahlquist. :
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
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corrections may be made before the opinion is published.
Supreme Court
No. 2012-16-Appeal.
(PC 09-3843)
Allstate Insurance Company :
v. :
Jessica Ahlquist. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Justice Goldberg, for the Court. This case came before the Supreme Court on
November 29, 2012, pursuant to an order directing the parties to appear and show cause why the
issues raised in this appeal should not summarily be decided. The defendant, Jessica Ahlquist
(Ahlquist or defendant), appeals from a Superior Court grant of summary judgment in favor of
the plaintiff, Allstate Insurance Company (Allstate or plaintiff). The defendant argues that the
trial justice erred in ruling that an insurance policy issued to Cheryl Crook (Cheryl)—the mother
of the underinsured tortfeasor—did not cover the injuries she sustained when she was struck
from behind by a vehicle operated by Cheryl‟s son, Jared Crook (Jared). The defendant further
contends that the trial justice erred in holding that an exclusion contained in the Allstate policy
applied to this case.
The trial justice, having determined that defendant failed to produce evidence
demonstrating a material question of fact on either issue, granted summary judgment in favor of
Allstate. After hearing the arguments of counsel and examining the memoranda filed by the
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parties, we are of the opinion that cause has not been shown; we proceed to decide the appeal at
this time. For the reasons set forth below, we affirm the judgment of the Superior Court.
Facts and Travel
On June 1, 2008, Jared was driving a 2006 Cadillac CST—which was leased for him by
his father, Calvin Crook (Calvin)—when he collided with Ahlquist‟s vehicle at the intersection
of Harris Avenue and Atwells Avenue in Providence, Rhode Island. As a result of that accident,
Ahlquist‟s car was seriously damaged and she sustained severe personal injuries.
The Cadillac was insured by Calvin through a policy issued by Allstate. That policy had
a $100,000 per person and $300,000 per occurrence liability limit. After Allstate paid the policy
limits, Ahlquist sought to recover additional compensation through another Allstate insurance
policy issued to Cheryl, Calvin‟s former wife. It is this policy that is in dispute in this case. The
policy was issued for Cheryl‟s vehicle, a Ford Escape; Cheryl was the named insured, and she
and Calvin were covered drivers. Under the policy‟s “Driver(s) Excluded” category, “[n]one”
was listed. However, the policy also provided that a non-owned automobile would be insured if
it was used by the policyholder or a resident relative with the owner‟s permission, but it further
provided that the automobile “must not be available or furnished for the regular use of an insured
person.”
On July 7, 2009, Allstate filed an action seeking a declaratory judgment that Cheryl‟s
insurance policy did not apply to the accident. Allstate moved for summary judgment, arguing
that, under the unambiguous terms of the policy, Jared‟s operation of the Cadillac was not
covered by the policy because the Cadillac was furnished for his regular use. The defendant
filed a cross-motion for summary judgment, countering that Cheryl‟s policy covered the accident
because Jared, who resided with his mother, was not excluded as a driver under the policy and
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that, therefore, the policy provisions were ambiguous and the ambiguity should be resolved in
her favor. The defendant further argued that Calvin was negligent in leasing the vehicle for
Jared‟s use and that because Calvin was a named driver under the policy, there should be
coverage. Finally, defendant asserted that the exclusion was contrary to public policy and that
Allstate should not benefit because, according to defendant, Allstate‟s agent improperly wrote
the insurance policies for Calvin and Cheryl.
The trial justice entertained argument on both motions on May 24, 2011, and issued a
bench decision in which she determined that the non-owned auto exclusion under Cheryl‟s
policy was clear and unambiguous. The trial justice stated that the following facts were
undisputed: Cheryl did not own the Cadillac driven by Jared; Jared was a resident relative of
Cheryl‟s; Jared was insured to drive the Cadillac; and the Cadillac was available to Jared and
furnished for his regular use. In light of these undisputed facts, the trial justice was satisfied that
the exclusion applied and that the accident in which Ahlquist was injured and the claims arising
from it were not covered by Cheryl‟s insurance policy. The trial justice also found that the non-
owned vehicle exclusion did not conflict with the declaration that there were no excluded drivers
under Cheryl‟s policy. Finally, the trial justice held that the exclusion did not violate public
policy. Accordingly, the trial justice granted summary judgment in Allstate‟s favor and denied
defendant‟s motion for summary judgment. An order was entered on June 1, 2011, and final
judgment was entered on August 30, 2011.
Before this Court, defendant contends that the trial justice erred in granting summary
judgment because Calvin, who was a named driver under Cheryl‟s insurance policy, provided the
Cadillac to Jared. The defendant also argues that there is ambiguity as to whether the policy
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covers the accident. According to defendant, Jared was not an excluded driver because the
declarations page listed “[n]one” in the section for excluded drivers.
Standard of Review
“[T]his Court reviews a grant of summary judgment de novo.” Moore v. Rhode Island
Board of Governors for Higher Education, 18 A.3d 541, 544 (R.I. 2011) (citing Waterman v.
Caprio, 983 A.2d 841, 844 (R.I. 2009)). We 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.
Berman v. Sitrin, 991 A.2d 1038, 1043 (R.I. 2010) (quoting Ouch v. Khea, 963 A.2d 630, 632
(R.I. 2009)). Here, however, the material facts of this case are undisputed, and the issue before
us is one of contract interpretation. This Court employs a de novo review of such questions of
law. See Irene Realty Corp. v. Travelers Property Casualty Co. of America, 973 A.2d 1118,
1122 (R.I. 2009) (“[A] trial court‟s ruling as to [the alleged existence of ambiguity in a contract]
is reviewed by this Court on a de novo basis.”).
Discussion
It is well settled that, when examining an insurance policy, this Court applies the rules for
construction of contracts. New London County Mutual Insurance Co. v. Fontaine, 45 A.3d 551,
557 (R.I. 2012). “[W]e shall not depart from the literal language of the policy absent a finding
that the policy is ambiguous.” Beacon Mutual Insurance Co. v. Spino Brothers, Inc., 11 A.3d
645, 649 (R.I. 2011) (quoting Lynch v. Spirit Rent-A-Car, Inc., 965 A.2d 417, 425 (R.I. 2009)).
Indeed, “[t]his Court interprets the terms of an insurance policy according to the same rules of
construction governing contracts.” Town of Cumberland v. Rhode Island Interlocal Risk
Management Trust, Inc., 860 A.2d 1210, 1215 (R.I. 2004) (citing Pawtucket Mutual Insurance
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Co. v. Gay, 786 A.2d 383, 386 (R.I. 2001)); see also Textron, Inc. v. Aetna Casualty & Surety
Co., 638 A.2d 537, 539 (R.I. 1994). We confine our analysis to the four corners of the policy,
viewing it “in its entirety, affording its terms their „plain, ordinary and usual meaning.‟” Casco
Indemnity Co. v. Gonsalves, 839 A.2d 546, 548 (R.I. 2004) (quoting American Commerce
Insurance Co. v. Porto, 811 A.2d 1185, 1192 (R.I. 2002)).
Furthermore, “[w]e refrain from engaging in mental gymnastics or from stretching the
imagination to read ambiguity into a policy where none is present.” Beacon Mutual Insurance
Co., 11 A.3d at 649 (quoting Lynch, 965 A.2d at 425). “The test to be applied is not what the
insurer intended * * *, but what the ordinary reader and purchaser would have understood [the
language] to mean.” Pressman v. Aetna Casualty and Surety Co., 574 A.2d 757, 760 (R.I. 1990)
(quoting Elliott Leases Cars, Inc. v. Quigley, 118 R.I. 321, 326, 373 A.2d 810, 812 (1977)).
The defendant argues that Jared was not an excluded driver under Cheryl‟s policy and
that that circumstance, combined with the policy‟s provision extending coverage to members of
Cheryl‟s household, gives rise to an ambiguity in the policy provisions. Therefore, according to
defendant, the exclusionary language cannot apply to relieve plaintiff of its obligations under
Cheryl‟s policy.
The undisputed operative facts are these: Jared lived with his mother at the time of the
accident; he was operating a vehicle that was not owned by Jared but had been furnished to him
for his regular use; and the Cadillac was not a covered vehicle under Cheryl‟s policy. Thus, the
only question before us is one of contract interpretation—a question of law. Our de novo review
of that issue confirms that the clear and unambiguous vehicle-exclusion provision under the
policy clearly applies to these facts. The exclusion in the policy relates to the vehicle and not the
driver.
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The terms of Cheryl‟s policy provide that a non-owned automobile will be covered if it
was used by the policyholder or a resident relative with the owner‟s permission, but it also
provides that the automobile “must not be available or furnished for the regular use of an insured
person.” Jared‟s use of the Cadillac clearly falls within this exclusion: as a “resident-relative,”
Jared is considered an insured person per the definition under the policy; however, he used the
vehicle on a regular basis. Thus, the policy language excluding vehicles furnished for the regular
use of an insured person applies in this case. This exclusion does not, as defendant contends,
conflict with the declarations page of the policy, which declares that there are no specific drivers
excluded under the policy. In this case, it is the vehicle that is excluded, not the driver. Because
we discern no ambiguity in these provisions, “we shall not depart from the literal language of the
policy” and decline to “engag[e] in mental gymnastics * * * to read ambiguity into [this] policy
where none is present.” Beacon Mutual Insurance Co., 11 A.3d at 649 (quoting Lynch, 965
A.2d at 425).
Having examined the policy in its entirety, and applying the plain and ordinary meaning
of the policy language, it is our conclusion that the exclusion provision is not ambiguous. We
are satisfied that defendant‟s construction of the policy perceives an ambiguity in the provision
where none exists.
Finally, the defendant argues that, because both policies were issued by Allstate, Allstate
had actual knowledge of “all issues” pertaining to coverage. In effect, comparing the two
policies, the defendant asks this Court to impute an improper intention by Allstate to exploit the
facts and create a gap in coverage. Having examined the record before us, we reject this
contention.
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Conclusion
For the foregoing reasons, the judgment of the Superior Court is affirmed. The record
shall be remanded to the Superior Court.
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RHODE ISLAND SUPREME COURT CLERK’S OFFICE
Clerk’s Office Order/Opinion Cover Sheet
TITLE OF CASE: Allstate Insurance Company v. Jessica Ahlquist.
CASE NO: No. 2012-16-Appeal.
(PC 09-3843)
COURT: Supreme Court
DATE OPINION FILED: January 25, 2013
JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia JJ.
WRITTEN BY: Associate Justice Maureen McKenna Goldberg
SOURCE OF APPEAL: Providence County Superior Court
JUDGE FROM LOWER COURT:
Associate Justice Sarah Taft-Carter
ATTORNEYS ON APPEAL:
For Plaintiff: Carol A. Zangari, Esq.
For Defendant: Michael T. Brady, Esq.