Date: 01-17-2007

Case Style: Robert D. McAdam, et al. v. Walter C. Grzelczyk et al.

Case Number: 2005-301

Judge: Williams

Court: Rhode Island Supreme Court, Providence County

Plaintiff's Attorney:

Ronald J. Resmini

Defendant's Attorney:

Gary T. Mena

Description:

On February 9, 2000, plaintiff was involved in an automobile accident in Warwick with a vehicle owned by and registered to Travelers and operated by Grzelczyk. After the accident, the lawyer representing plaintiff in connection with the accident engaged in discussions with Wausau Insurance Companies (Wausau),2 Travelers's insurer, regarding personal injuries plaintiff allegedly suffered as a result of the collision. During these discussions, plaintiff's then counsel informed Wausau's adjustor, Keith Allen, by letter dated February 11, 2002, as follows:

"We are now [ten] months since I sent you a demand to settle this case. As of yet, I have not had a counter-offer to my demand. Please provide same within [thirty] days. If I do not hear from you regarding a counter-offer, I will assume that you are not willing to make one and I will proceed forward with filing suit in this matter.

"It is this office[']s policy to initial [sic] a civil complaint at least [six] months prior to the running of the statute of limitations period. In that we are now within months of the statute, I must proceed forward. Hopefully we will be able to resolve this within the next month. Please contact me to discuss this."

In the months following this conversation, Allen never submitted a counteroffer.

In September 2002, plaintiff's claim file was transferred from Allen to Richard DiNicola, a technical claims specialist at Wausau. DiNicola's internal file notes, dated October 31, 2002, indicated that DiNicola reviewed the matter and believed Grzelczyk was clearly liable. After this assessment, DiNicola requested from plaintiff's counsel Magnetic Resonance Imaging (MRI) films relative to both plaintiff's preexisting back condition and his accident-related injury. Although films concerning plaintiff's preexisting condition could not be located, DiNicola's notes reflected that plaintiff's counsel agreed to forward the films regarding plaintiff's injury from the accident as soon as possible. DiNicola's notes also reflected that both parties were open-minded about alternative dispute resolution if they could not agree on damages.

An affidavit filed by the secretary to plaintiff's counsel explained that on December 9, 2002, DiNicola informed her that he had received the MRI films and would contact plaintiff's counsel in three to four weeks with a settlement offer. She also said that she called DiNicola several weeks later to follow up on his evaluation, but only reached his voice mail where she left messages.

The statute of limitations on plaintiff's claim expired on February 9, 2003, without plaintiff having filed a complaint. Upon realizing that the statute of limitations had expired more than a month before, plaintiff's counsel phoned DiNicola on March 19, 2003. DiNicola's notes from that conversation reflected plaintiff's counsel's concern that his claim was time-barred. While speaking with DiNicola, plaintiff's counsel substantially lowered his settlement proposal from $450,000 to $175,000.

Finally, on April 7, 2003, plaintiff commenced this negligence action, seeking compensation for his personal injury, including damages for pain and suffering, medical expenses, and lost wages. The plaintiff's wife and two minor children also were parties to the suit to recover for their loss of consortium. The defendants immediately moved under Rule 12(b)(6) of the Superior Court Rules of Civil Procedure to dismiss the adult plaintiffs' claims on the ground that their actions were barred by the statute of limitations. Before a hearing was held on defendants' motion, defendants also moved to dismiss the minor children's claims on the same grounds. After a hearing on both motions, the Superior Court denied defendants' motion to dismiss, ruling that it would be improper to dismiss a claim when a claimant had reason to believe a settlement was forthcoming and relied on that belief when opting against litigation.3

Unsatisfied with this ruling, defendants moved for summary judgment on similar grounds. The plaintiff's counsel again argued that defendants had led him to believe that the matter would be settled without his needing to file a lawsuit. After a hearing on defendants' motion, the Superior Court granted summary judgment, noting that ceasing negotiations is not equivalent to lulling the party into believing a case will be settled. On July 18, 2005, plaintiff filed a premature notice of appeal.4 An order granting summary judgment was entered on July 20, 2005, and final judgment was entered on August 1, 2005.

* * *

Pursuant to G.L. 1956 § 9-1-14, personal-injury claims, as well as claims for loss of consortium arising therefrom, are subject to a three-year statute of limitations. Thus, February 9, 2003, marked the expiration of the statute of limitations for personal injury claims arising from the instant February 9, 2000 automobile collision. We adhere to statutes of limitations based on our recognition that "[s]tatutes of limitation[s] promote certainty and finality and avoid stale claims * * *." Roe v. Gelineau, 794 A.2d 476, 485 (R.I. 2002). However, we also have recognized that in exceptional circumstances, settlement negotiations can estop a party from invoking the statute of limitations if accompanied "by certain statements or conduct calculated to lull the claimant into a reasonable belief that his claim will be settled without a suit." Gagner v. Strekouras, 423 A.2d 1168, 1169 (R.I. 1980) (citing Greater Providence Trust Co. v. Nationwide Mutual Fire Insurance Co., 116 R.I. 268, 272, 355 A.2d 718, 720 (1976)). Nevertheless, we have explained that "[m]ere negotiations between [an] insurer and a claimant cannot alone justify the application of estoppel. If so, settlement negotiations would be frustrated and impeded." Greater Providence Trust Co., 116 R.I. at 272, 355 A.2d at 720. Rather, this Court has said that there are two scenarios in which estoppel can arise: "(1) the insurer, by his actions or communications, has assured the claimant that a settlement would be reached, thereby inducing a late filing, or (2) the insurer has intentionally continued and prolonged the negotiations in order to cause the claimant to let the limitation pass without commencing suit." Gagner, 423 A.2d at 1170 (citing Greater Providence Trust Co., 116 R.I. at 273, 355 A.2d at 720).

* * *

Outcome: For the reasons set forth herein, the judgment of the Superior Court is affirmed. The record shall be remanded to the Superior Court.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None