Supreme Court

No. 2012-309-Appeal. 

(PB 06-6103)

Wayne DeMarco et al. :

v. :

Travelers 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 of any typographical or other formal errors in order that 

corrections may be made before the opinion is published.
- 1 -

Supreme Court

No. 2012-309-Appeal. 

(PB 06-6103)

(Dissent begins on Page 15)

Wayne DeMarco et al. :

v. :

Travelers Insurance Company et al. :

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

O P I N I O N

Justice Goldberg, for the Court. The plaintiff, Wayne DeMarco (DeMarco or 

plaintiff),1was severely injured in a collision while a passenger in a motor vehicle owned by 

insureds of the defendant, Travelers Insurance Company (defendant or Travelers). After 

obtaining a judgment for money damages in the prior underlying tort action, the plaintiff settled 

with the insureds in exchange for an assignment of any claims that the insureds had against

Travelers and filed this action. A justice of the Superior Court granted partial summary 

judgment, which this Court affirmed.2 Thereafter, an order entered requiring the defendant to 

pay all interest accrued on the underlying judgment pursuant to G.L. 1956 § 27-7-2.2.

3

The 

 

1

The actual named plaintiffs in this action are Wayne DeMarco and Leesa DeMarco, 

individually, as parents and legal guardians of Chayce DeMarco, a minor, and Brayden 

DeMarco, a minor, and as assignees of Leo H. Doire, and Virginia Transportation Corporation.

2 DeMarco v. Travelers Insurance Co., 26 A.3d 585 (R.I. 2011) (DeMarco I).

3 General Laws 1956 § 27-7-2.2 provides: 

“In any civil action in which the defendant is covered by liability insurance and in 

which the plaintiff makes a written offer to the defendant’s insurer to settle the 

action in an amount equal to or less than the coverage limits on the liability policy 
- 2 -

defendant alleges that this order was entered in the absence of subject-matter jurisdiction. 

Specifically, the defendant contends that the issue of prejudgment interest was rendered moot by

an order entered in the underlying tort action which characterized the judgment as “satisfied in 

full”—thus depriving the Superior Court of subject-matter jurisdiction. For the reasons set forth 

below, we affirm the Superior Court order directing payment of prejudgment and postjudgment 

interest in accordance with § 27-7-2.2.4

Facts and Travel

This Court extensively addressed the facts and travel of this case in DeMarco v. Travelers 

Insurance Co., 26 A.3d 585 (R.I. 2011) (DeMarco I). Therefore, we will discuss only recent 

events and any relevant facts necessary for context.

On September 10, 2003, DeMarco, while traveling as a passenger in a motor vehicle 

owned by Virginia Transportation Corporation (Virginia Transportation) and operated by 

Virginia Transportation’s owner, Leo H. Doire (Doire), seriously was injured when the vehicle 

struck two utility poles. Another passenger, Paul Woscyna (Woscyna), also sustained serious 

injuries. Travelers insured the vehicle for a policy limit of $1 million.

 

in force at the time the action accrues, and the offer is rejected by the defendant’s 

insurer, then the defendant’s insurer shall be liable for all interest due on the 

judgment entered by the court even if the payment of the judgment and interest 

totals a sum in excess of the policy coverage limitation. This written offer shall be 

presumed to have been rejected if the insurer does not respond in writing within a 

period of thirty (30) days.”

4

The motion was captioned as “Motion * * * Calculating All Interest Due Pursuant to R.I.G.L. 

§ 27-7-2.2 and to Determine the Operative Effect of the Judgment Satisfied Order in These 

Proceeding [sic] After Remand.”
- 3 -

On March 4, 2004, DeMarco instituted a personal injury action in the Superior Court 

against Virginia Transportation and Doire (underlying tort action).5 Prior to and during the 

course of the underlying tort action, DeMarco made several written settlement demands upon 

Travelers to settle for the policy limits of $1 million. On February 2, 2004, DeMarco’s attorney 

wrote Travelers, before filing suit, seeking payment of the policy limits to DeMarco. Later, on 

February 25, 2004, DeMarco’s attorney again wrote Travelers asking to settle for the policy 

limits and also informed Travelers of potential Asermely6liability if it did not settle the claim. 

By letter dated February 27, 2004, Travelers responded and informed DeMarco that other claims 

existed as a result of the accident and that, therefore, Travelers could not exhaust its entire policy 

limits on DeMarco. Additionally, Travelers’ counsel informed the claim services director for 

Travelers (1) that Asermely liability would not apply in the circumstances of this case because 

there were multiple claimants and (2) that exhausting the policy limits on one claimant might 

violate Travelers’ fiduciary obligations to its insureds. Over the course of the next year, on April 

19, June 7, and June 29, 2005, DeMarco’s attorney wrote to Travelers’ counsel seeking to 

engage in settlement negotiations. Further, on July 22, 2005, DeMarco’s attorney wrote to 

Travelers’ counsel yet again, offering to settle for the policy limits. There was no response from 

Travelers or its counsel to any of these communications, and Travelers’ efforts, if any, to resolve 

this case, with or without the participation of its insureds, remains an open question. 

 

5 Wayne DeMarco et al. v. Leo H. Doire and Virginia Transportation Corp., C.A. No. PC 04-

1171.

6 Asermely v. Allstate Insurance Co., 728 A.2d 461 (R.I. 1999).
- 4 -

On July 11, 2006, approximately three months before trial was set to begin, Travelers 

sought a global settlement—for the policy limits7—with DeMarco, Woscyna,8and National Grid 

USA Service Company, Inc. (National Grid).

9

 Travelers’ offer to have the three parties divide 

the policy limits amongst themselves was not accepted; and, on August 15, 2006, Travelers 

commenced an interpleader action in the Superior Court where it sought—unsuccessfully—to 

deposit the policy limits into the registry of the court.10 On August 23, 2006, DeMarco’s 

attorney—for the final time—offered to settle for the policy limits. Travelers responded to 

DeMarco’s final demand and rejected the offer to settle. On September 14, 2006, after the 

parties engaged in unsuccessful mediation, Travelers offered to pay DeMarco $550,000 and 

Woscyna $450,000, “in exchange for a complete release from both claimants” in favor of 

Virginia Transportation and Doire. The offer was contingent on acceptance by both DeMarco 

and Woscyna. Although Woscyna was prepared to accept the offer, DeMarco rejected the offer 

by letter dated September 15, 2006.

The underlying tort action proceeded to trial on September 18, 2006. On September 22, 

2006, a jury returned a verdict in favor of DeMarco in the amount of $2,053,795. With statutory 

interest, the total amount of the judgment was $2,801,939.07. On the same day, an attorney 

independently retained by Doire wrote to Travelers informing Travelers that it was Doire’s 

 

7

The settlement offer was for the policy limits minus a prior $5,000 payment to DeMarco for 

medical coverage.

8 Woscyna subsequently filed suit against Travelers in August 2006.

9 National Grid’s claim for damage to their utility poles later was settled personally with Virginia 

Transportation and Doire. The utility poles belonged to The Narragansett Electric Company, 

which now does business as National Grid. 

10 Travelers pressed its interpleader action, which was denied after Travelers failed to satisfy the 

justice of the Superior Court that it lacked a substantial interest in the outcome of the underlying 

tort action.
- 5 -

position that Travelers was responsible for the entire judgment entered against Doire in light of 

Travelers’ failure to settle with DeMarco. Apparently, Virginia Transportation and Doire were 

now facing bankruptcy. Travelers again sought mediation, by letter dated October 30, 2006.11 

On November 17, 2006, mediation commenced among DeMarco, Virginia 

Transportation, Doire, Woscyna, and Travelers. As a result of this mediation, Travelers paid the 

sum of $450,000 to Woscyna in exchange for a release of Virginia Transportation, Doire, and 

Travelers from all liability. Furthermore, Travelers agreed to pay $550,000 to DeMarco. 

DeMarco agreed to release both Virginia Transportation and Doire but conditioned that release 

upon an assignment of any claims Virginia Transportation and Doire might have against 

Travelers. The release specifically excepted Travelers “from any and all claims that Releasors

may have against Travelers in any way arising from the Litigation or any aspect thereof.” 

Virginia Transportation and Doire assigned “any and all claims and causes of action that 

[Virginia Transportation and Doire] may have” against Travelers to DeMarco. This assignment 

was made “in consideration of the General Release executed contemporaneously herewith[.]” 

Later, on January 3, 2007, the trial justice who presided over the underlying tort action entered 

an order that provided: “After hearing thereon and in consideration thereof judgment entered in 

favor of the plaintiffs on September 22, 2006, plus taxed costs in the amount of $5,879.32. Said 

judgment is satisfied in full.” 

On November 22, 2006, DeMarco commenced this action in Superior Court against 

Travelers, its counsel, and counsel’s law firm. The first two counts of the six-count complaint 

sought: (1) a declaratory judgment in accordance with Asermely v. Allstate Insurance Co., 728 

 

11 In this letter, Travelers’ independently retained counsel acknowledged that the insureds’

ability to contribute “to a settlement * * * will likely be extinguished if * * * DeMarco’s 

judgment forces them into bankruptcy.”
- 6 -

A.2d 461 (R.I. 1999), requiring Travelers to pay the entire judgment from the underlying tort 

action; (2) a declaratory judgment pursuant to § 27-7-2.2 declaring Travelers liable for 

prejudgment interest on the judgment in the underlying tort action. On September 23, 2008, a

justice of the Superior Court granted summary judgment for plaintiff on counts one and two and 

denied defendant’s cross-motion for summary judgment on counts one, two, three, and four.

12

 

Although the issues concerning the release were argued on summary judgment—and rejected by 

this Court on appeal—the effect (if any) of the judgment satisfied order had not been raised 

before the Superior Court. Final judgment on counts one and two, pursuant to Rule 54(b) of the

Superior Court Rules of Civil Procedure, subsequently was entered.

13

 The defendant timely 

appealed; and, on July 12, 2011, this Court issued its opinion in DeMarco I, in which we vacated 

the judgment in count one and remanded that count for trial, and affirmed the judgment in count 

two.

14

With respect to count one, this Court held that, because the circumstances of this case 

involved multiple claimants, it was a question of fact as to the reasonableness of Travelers’

conduct with respect to the duty it owed its insureds under Asermely. See DeMarco I, 26 A.3d at 

614. We remanded count one to the Superior Court for a trial. Id. at 615. We affirmed count 

two. Id. at 629. We concluded that the language of § 27-7-2.2 (the rejected settlement offer 

statute) was clear and unambiguous and required the insurer to pay both prejudgment and 

 

12 Count three alleges a breach-of-contract claim and count four is a claim for insurer bad faith.

13 The judgment provided “Separate and Final Judgment pursuant to [Super. R. Civ. P] 54(b) is 

hereby entered for [p]laintiff on [c]ounts I and II.”

14 This Court “vacate[d] the grant of partial summary judgment as to Travelers’ liability pursuant 

to the principles set forth in Asermely, but we affirm[ed] the ruling with respect to the 

applicability of the rejected settlement offer statute.” DeMarco I, 26 A.3d at 629.
- 7 -

postjudgment interest. DeMarco I, 26 A.3d at 617. Moreover, we determined that the general 

release granted to Virginia Transportation and Doire did not foreclose DeMarco’s ability to 

maintain the assigned claims against Travelers. Id. at 625-26. As we stated: 

“[I]t is our view that Travelers should not now be able to avoid 

having to deal with Mr. DeMarco’s suit for excess damages by 

claiming that it obtained a release for its insureds—and that 

therefore the insureds had no claims to assign to Mr. DeMarco—

when the only reason the insureds were released from liability was 

that they assigned to Mr. DeMarco the very rights that he is now 

seeking to assert against Travelers.” Id. at 626.

Finally, we concluded that the Judgment Satisfied Order was not properly before the Court 

because Travelers had not raised the issue in Superior Court and that the raise-or-waive rule 

controlled. Id. at 629.

On remand, plaintiff sought a calculation of prejudgment interest. The Superior Court 

justice granted plaintiff’s motion and determined that DeMarco I vacated final judgment on 

count one, but that the final judgment entered on count two remained undisturbed. Moreover, 

with respect to the judgment satisfied order, the Superior Court justice determined that Travelers 

had waived this argument with respect to count two and stated “to the extent it remains alive and 

impacts claims and counts other than [c]ount 2, [it] has not been properly presented in the 

context of today’s motion.” After analyzing three different approaches to assessing interest, the 

Superior Court justice ordered that interest be paid in the amount of $1,595,850.03. That 

calculation has not been challenged on appeal. 

By order dated June 11, 2012, Travelers was to make payment to DeMarco by June 22, 

2012. Travelers timely appealed from that order.15 Despite the fact that additional claims 

remain pending before the Superior Court, final judgment had entered previously on count two

 

15 Travelers also petitioned the Court for a writ of certiorari. The Court denied that petition on 

March 21, 2013.
- 8 -

pursuant to Rule 54(b) and was affirmed in DeMarco I. Additionally, we are of the opinion that 

the payment order contains sufficient elements of finality so as to invoke the jurisdiction of this 

Court. See McAuslan v. McAuslan, 34 R.I. 462, 472, 83 A. 837, 841 (1912).

Standard of Review

“As we consistently have articulated, ‘a claim of lack of subject[-]matter jurisdiction may 

be raised at any time.’” Long v. Dell, Inc., 984 A.2d 1074, 1078 (R.I. 2009) (quoting Pollard v. 

Acer Group, 870 A.2d 429, 433 (R.I. 2005)). The issue of subject-matter jurisdiction may be 

raised at any time, cannot be waived or conferred by either party, and can be raised sua sponte by 

the court. Rogers v. Rogers, 18 A.3d 491, 493 (R.I. 2011). Additionally, “[w]hether a court has 

subject[-]matter jurisdiction over a controversy is reviewed de novo by the Supreme Court.” Ims 

v. Audette, 40 A.3d 236, 237 (R.I. 2012) (citing Sidell v. Sidell, 18 A.3d 499, 504 (R.I. 2011)).

Analysis

On appeal, Travelers argues that the Superior Court was divested of subject-matter 

jurisdiction over count two because of the prior judgment satisfied order in the underlying tort 

action, despite the fact that this Court affirmed the judgment as to count two. Before this Court, 

Travelers seeks to amalgamate subject-matter jurisdiction with mootness. Travelers contends 

that DeMarco’s § 27-7-2.2 claim for interest was rendered moot because, after the judgment 

satisfied order entered, there was no longer a justiciable controversy and, based on mootness, the 

Superior Court was divested of subject-matter jurisdiction. Because issues regarding subjectmatter jurisdiction can never be waived and can be raised at any time, Travelers argues to this 

Court that the Superior Court justice erred in deciding that Travelers had waived its mootness 

argument. We reject this contention.
- 9 -

The judgment satisfied order was entered before our opinion in DeMarco I. In that case,

we concluded that issues with respect to that order were not properly before the Court because 

they were not raised in Superior Court and therefore were deemed waived. DeMarco I, 26 A.3d 

at 629. Travelers now seeks to engage in a collateral attack on the judgment in count two—

which this Court affirmed—by raising the judgment satisfied order. To the extent that Travelers 

invites us to revisit our holding in DeMarco I and entertain issues that previously were waived,

we decline to do so. 

We note that if, as Travelers argues, the judgment satisfied order rendered the 

controversy moot and stripped the Superior Court or this Court of subject-matter jurisdiction, 

then the same would have been true at the time of DeMarco I. These issues, however, were 

never raised in DeMarco I. Despite this unique posture, we briefly address Travelers’ assertions 

of subject-matter jurisdiction and mootness.

“A challenge to subject-matter jurisdiction ‘may not be waived by any party and may be 

raised at any time in the proceedings.’” Boyer v. Bedrosian, 57 A.3d 259, 270 (R.I. 2012) 

(quoting Pine v. Clark, 636 A.2d 1319, 1321 (R.I. 1994)). When considering claims for lack of 

subject-matter jurisdiction, we are “refer[ring] only to the court’s power to hear and decide a 

case and not to whether a court having the power to adjudicate should exercise that power.” 

Narragansett Electric Co. v. Saccoccio, 43 A.3d 40, 44 (R.I. 2012) (quoting Mesolella v. City of 

Providence, 508 A.2d 661, 666 (R.I. 1986)). Pursuant to G.L. 1956 § 8-2-14(a), the Superior 

Court “shall have exclusive original jurisdiction of all other actions at law in which the amount 

in controversy shall exceed the sum of ten thousand dollars ($10,000) * * *.” (Emphasis added.) 

It cannot be disputed that DeMarco’s § 27-7-2.2 claim met the threshold requirement of § 8-2-

14(a). Furthermore, G.L. 1956 § 9-30-1 provides that the Superior Court has the power to 
- 10 -

entertain declaratory-judgment actions. Thus, the Superior Court was vested with jurisdiction 

over DeMarco’s § 27-7-2.2 claim for interest. 

Mootness is a distinct concept, separate and apart from subject-matter jurisdiction. See

Boyer, 57 A.3d at 271 (stating that a case may become moot “despite the court’s retention of 

subject-matter jurisdiction” (citing Matos v. Clinton School District, 367 F.3d 68, 71 (1st Cir. 

2004))). Concededly, some courts have treated mootness claims as implicating issues of subjectmatter jurisdiction. See, e.g., In re Jorden R., 979 A.2d 469, 479 (Conn. 2009) (“Mootness is a 

question of justiciability that must be determined as a threshold matter because it implicates [a] 

court’s subject[-]matter jurisdiction[.]” (quoting In re Melody L., 962 A.2d 81, 106 (Conn. 

2009))). In our view, however, while mootness ranks high on the justiciability spectrum, and 

may not be lightly overlooked, mootness does not equate with subject-matter jurisdiction. See

Town Houses at Bonnet Shores Condominium Association v. Langlois, 45 A.3d 577, 582 (R.I. 

2012) (deciding appeal of a moot case that fell within mootness exception); see also Honig v. 

Doe, 484 U.S. 305, 330 (1988) (Rehnquist, J., concurring) (“If our mootness doctrine were 

forced upon us by the case or controversy requirement of [U.S. Const.] Art. III itself, we would 

have no more power to decide lawsuits which are ‘moot’ but which also raise questions which 

are capable of repetition but evading review than we would to decide cases which are ‘moot’ but 

raise no such questions.”). 

It is well established that “a case is moot if the original complaint raised a justiciable 

controversy, but events occurring after the filing have deprived the litigant[s] of a continuing 

stake in the controversy.” Bucci v. Lehman Brothers Bank, FSB, 68 A.3d 1069, 1079 (R.I. 2013) 

(quoting Boyer, 57 A.3d at 272). Additionally, “[i]f this Court’s judgment would fail to have a 

practical effect on the existing controversy, the question is moot, and [the Court] will not render 
- 11 -

an opinion on the matter.” Id. (quoting City of Cranston v. Rhode Island Laborers’ District 

Council, Local 1033, 960 A.2d 529, 533 (R.I. 2008)). A narrow exception to the mootness 

doctrine exists whereby a case that is moot may still be decided if it involves issues “of extreme 

public importance, which are capable of repetition but which evade review.” Boyer, 57 A.3d at 

281 (quoting Campbell v. Tiverton Zoning Board, 15 A.3d 1015, 1022 (R.I. 2011)). This could 

not occur, of course, if mootness divested the Court of subject-matter jurisdiction.

Having previously determined in DeMarco I that the release executed in favor of Virginia 

Transportation and Doire did not affect the claims assigned to DeMarco, DeMarco I, 26 A.3d at 

626, Travelers now recycles the same arguments in the context of the judgment satisfied order,

fashioned as mootness.16 Specifically, Travelers attempts to evade liability based on the fact that 

their insureds, to whom they owed a fiduciary duty to protect from excess liability, see

Asermely, 728 A.2d at 464; Medical Malpractice Joint Underwriting Association of Rhode 

Island v. Rhode Island Insurers’ Insolvency Fund, 703 A.2d 1097, 1102 (R.I. 1997), secured the 

protection of the judgment satisfied order in the face of an otherwise imminent bankruptcy by 

 

16 The justice succinctly summarized the argument when she stated:

“As I understand Travelers’ argument * * * an insurer would not be required to 

pay if its insured for some reason is excused or absolved from payment. That 

would be the case regardless of whether the payment sought from the insurer is 

based upon a direct claim or upon an assigned claim and regardless of whether it 

is for an excess judgment, a breach of contract claim, a bad faith claim, or for 

statutory interest under the Rejected Settlement Offer statute. This also would be 

the case regardless of whether the insured’s escape from payment is the result of 

an assignment and release, a ‘judgment satisfied’ order, an agreement to 

permanently forbear from enforcing an execution, a discharge in bankruptcy, or 

some other means. The insurer would be entitled to the benefit of the insured’s 

escape from liability or payment. * * * Thus, as I understand the argument, 

distilled, the ‘Judgment Satisfied’ order must be viewed in isolation, has 

independent legal significance, and trumps all.”

The trial justice appropriately rejected this argument.
- 12 -

assigning to DeMarco their claims against Travelers. We declared in DeMarco I, “an assignment 

of rights in a case such as this is ‘a valuable means by which the insured may obtain protection 

from his insurance and by which the third party may obtain compensation * * *.’” DeMarco I, 26 

A.3d at 626 (quoting Stephen S. Ashley, Bad Faith Actions, Liability and Damages, § 7:18 at 7-

68 (1997)). Additionally, we previously have upheld an insured’s assignment of claims against 

its insurer and refused to:

“obstruct an appropriate device for the payment of a claim by an 

insurance carrier that has an obligation to its insured to absolve 

him of liability without depriving itself of the right to pursue action 

against another insurance carrier that it considers to be wholly or 

partly liable for the loss.” Etheridge v. Atlantic Mutual Insurance 

Co., 480 A.2d 1341, 1345 (R.I. 1984) (emphasis added). 

The judgment satisfied order that was entered in accordance with the assignment of rights does 

not alter the above quoted analysis.

The argument propounded by Travelers, that the judgment satisfied order rendered 

DeMarco’s § 27-7-2.2 claim moot, amounts to the same form-over-substance analysis that we 

rejected unequivocally in DeMarco I, 26 A.3d at 624 (citing Etheridge, 480 A.2d at 1345). The 

settlement between DeMarco, Virginia Transportation, and Doire provided that only after “the 

exchange of the [a]ssignment and the release” would the judgment be deemed satisfied, not that 

the claims would be extinguished. Thus, the judgment satisfied order merely memorialized the 

parties’ intentions as set forth in the settlement agreement.

17

 This is confirmed by a review of 

the hearing transcript, where the original trial justice who directed the entry of the order stated: 

 

17 In fact, at the hearing preceding the entry of the judgment satisfied order, counsel for DeMarco 

explicitly stated that “we’ve continuously taken the position that our settlement agreement was 

with Virginia and Leo Doire and had nothing to do with Traveler’s [sic]. * * * So I don’t want 

the record to reflect that we consent to any explanation down the road that we consented or 

agreed to any settlement with Traveler’s [sic].” In the face of this clear statement, in open court,
- 13 -

“clearly my concern * * * was that I wasn’t looking immediately to 

inflict any undue harm on the defendant’s business to see if there 

was some way to find a resolution through that which has been 

found. What happened is the settlement occurred and an 

assignment of rights was given, which I’m going to assume would 

shield the defendants from any further personal liability in this 

matter.” (Emphasis added.)

In DeMarco I, 26 A.3d at 626, we declared, 

“it is our view that Travelers should not now be able to avoid 

having to deal with Mr. DeMarco’s suit for excess damages by 

claiming that it obtained a release for its insureds—and that 

therefore the insureds had no claims to assign to Mr. DeMarco—

when the only reason the insureds were released from liability was 

that they assigned to Mr. DeMarco the very rights that he is now 

seeking to assert against Travelers.”

See Pinto v. Allstate Insurance Co., 221 F.3d 394, 404 (2nd Cir. 2000) (“It defies common sense 

to believe that [the injured plaintiff] contemplated receiving as consideration for her release of 

[the insured] a right of [the insured’s] that no longer existed.”). 

Rather, it is precisely because DeMarco received an assignment of rights from Travelers’ 

insureds that there exists a justiciable controversy. See Etheridge, 480 A.2d at 1346 (concluding 

that a justiciable controversy existed following an assignment of rights). DeMarco was assigned 

all claims that Travelers’ insureds had against Travelers. We held that DeMarco’s § 27-7-2.2 

claim “encompass[ed] the case at bar and [is] to be applied on remand[.]” DeMarco I, 26 A.3d at 

617. DeMarco’s § 27-7-2.2 claim was not extinguished merely because the judgment satisfied 

order also entered. See Black v. Goodwin, Loomis & Britton, Inc., 681 A.2d 293, 300 (Conn. 

1996) (“An insurer may not hide behind the language of the policy after the insurer abandons its 

insured and the insured settles the claim by agreement.” (quoting Red Giant Oil Co. v. Lawlor, 

528 N.W.2d 524, 532 (Iowa 1995))). Moreover, judgment was affirmed by this Court on

 

Travelers’ counsel remained silent; yet he raises the argument in this Court. Our decision in 

DeMarco I speaks loudly.
- 14 -

DeMarco’s § 27-7-2.2 claim. DeMarco I, 26 A.3d at 629. Yet, the prejudgment interest award

remains unpaid, demonstrating DeMarco’s continuing stake in the controversy. See Bucci, 68 

A.3d at 1079 (requiring that litigants maintain a continuing stake in the controversy). 

In this case, it was in the insureds’ pecuniary interests to assign their claims in exchange 

for a release, in order to escape financial ruin, thus allowing those claims to be litigated later

between the assignee and the insurance company. The fact that the judgment satisfied order

memorialized the clear intent of the parties does not render the claims moot.

Finally, the justice of the Superior Court was correct in her conclusion that this Court

affirmed the entry of summary judgment on count two in DeMarco I.

18

 In DeMarco I, after 

explicating the reasonableness test that needed to be applied to the Asermely claim which we 

vacated and remanded, we declared that § 27-7-2.2 was “neither complex nor ambiguous” and 

required that both prejudgment and postjudgment interest be assessed.19 DeMarco I, 26 A.3d at 

617. The Court concluded, “we vacate the grant of partial summary judgment as to Travelers’ 

liability pursuant to the principles set forth in Asermely, but we affirm the ruling with respect to 

 

18 Indeed, as this seasoned trial justice noted on remand: “[t]he Supreme Court didn’t, as 

Travelers says in its papers, reverse me on [c]ount 2. If it did, this is the first time in twenty-two 

years that I’ve not been able to recognize that I’ve been reversed.”

19 We note that the dissent seeks to condition any recovery on count two upon a determination on

count one. Amalgamating the claims, the dissent is implicitly creating a reasonableness standard 

for § 27-7-2.2 claims, which standard is not found in the statute. This reasoning ignores our 

venerable rules of statutory construction. “When interpreting a statute, our ultimate goal is to 

give effect to the General Assembly’s intent. * * * The best evidence of such intent can be found 

in the plain language used in the statute. Thus, a clear and unambigious statute will be literally 

construed.” Martone v. Johnston School Committee, 824 A.2d 426, 431 (R.I. 2003) (citing 

Stebbins v. Wells, 818 A.2d 711, 715 (R.I. 2003)). In DeMarco I, we recognized our previous 

holdings that § 27-7-2.2 was “neither complex nor ambiguous.” DeMarco I, 26 A.3d at 617 

(quoting Skaling v. Aetna Insurance Co., 742 A.2d 282, 291 (R.I. 1999)). Thus, the Court must 

give the words of the statute their plain and ordinary meaning. It is clear from a review of the 

statute that there is no language which would suggest that § 27-7-2.2 liability is subject to a 

reasonableness standard, akin to an analysis under Asermely. Accordingly, such an analysis has 

no place in analyzing DeMarco’s § 27-7-2.2 claim. 
- 15 -

the applicability of the rejected settlement offer statute.” Id. at 629 (emphasis added). Thus, the 

Superior Court justice did not err in concluding that count two had been affirmed or in ruling that

the payment order was consistent with our holding in DeMarco I. A determination that the 

§ 27 7-2.2 claim for interest was extinguished because the summary judgment decision provided 

that “Travelers * * * is liable for the judgment entered in [the underlying tort action], interest 

included, to the extent that judgment remains unsatisfied” would be favoring the form-oversubstance argument that we repudiated in DeMarco I and reject herein. 

Conclusion

For the reasons stated in this opinion, the order of the Superior Court is affirmed. The 

papers may be returned to the Superior Court.

Justice Flaherty, with whom Justice Indeglia joins, dissenting in part and 

concurring in part. I agree, in part, with the holdings of the majority, that Travelers waived its 

arguments with respect to the judgment satisfied order and that the Superior Court had subjectmatter jurisdiction over the dispute throughout the litigation. I concur with the majority that 

Travelers failed to raise the judgment satisfied order as a possible defense and that the trial 

justice rightly concluded that the argument had been waived. I also accept the reasoning of the 

majority that the Superior Court never was deprived of jurisdiction to resolve this case. 

However, because it is my opinion that the imposition of excess interest under the provisions of 

G.L. 1956 § 27-7-2.2 is at best premature, I must respectfully dissent from the majority’s holding 

in this case.

In Asermely v. Allstate Insurance Co., 728 A.2d 461, 464 (R.I. 1999), this Court plowed 

new ground when it seized the opportunity to promulgate a rule that addressed the vexing issues 
- 16 -

that arise when a plaintiff’s claim has the potential to exceed the available liability insurance 

coverage protecting a defendant. In essence, the Court held in Asermely that when a plaintiff 

offers to settle a claim for an amount that is within the policy limits, and the carrier declines to 

settle, the insurer is at risk if a later judgment exceeds the policy limit, including applicable 

interest. Id. The Court went on to say that an insurer’s good-faith calculation about the value of 

a particular claim provides no safe harbor, and that the insurer, because of its fiduciary duty to its 

insured, must assume the risk of a judgment that exceeds the limits of the contract of insurance. 

Id. It is clear, however, that when it issued Asermely, this Court considered only claims that 

involved one plaintiff and one defendant.

In DeMarco v. Travelers Insurance Co., 26 A.3d 585, 609 (R.I. 2011) (DeMarco I), the 

Court was faced with a different and vastly more complicated situation that involved more than 

one serious claim against an insured who clearly lacked sufficient coverage to satisfy both, or 

perhaps either, claim without leaving the insured exposed, or even uninsured, against the other 

serious claim. Altering the contours of its Asermely holding to address this issue, the Court, 

with respect to count 1, vacated summary judgment in favor of plaintiff and remanded the matter 

for a factual determination on whether the insurer had acted reasonably and in its insured’s best 

interest in handling the multiple claims. Id. at 615 (“In view of the fact that we have today 

explicated the parameters of the Asermely rule as it is to be applied in multiple claimant cases 

where the combined claims exceed the policy limits, it is necessary for us to vacate the grant of 

summary judgment for plaintiff with respect to count [1] of his complaint and remand for further 

findings of fact so that it can be determined whether or not Travelers met its duty to its 

insureds.”) However, the Court affirmed summary judgment in plaintiff’s favor with respect to 
- 17 -

count 2, involving § 27-7-2.2, the so called “rejected-settlement offer” statute.1 DeMarco I, 26 

A.3d at 617.

An essential element of the Court’s decision in DeMarco I was that, irrespective of 

whether Travelers might be found liable on the merits of the Asermely claim, count 1, after 

remand, the summary judgment on the rejected-settlement offer statute, count 2, was affirmed. 

DeMarco I, 26 A.3d at 616-17. On remand from this Court, and following this Court’s mandate 

in DeMarco I, the trial justice granted a motion to calculate interest on count 2 and ascertained 

the excess interest due to DeMarco from Travelers, a determination from which Travelers timely 

appealed. 

In its affirming of that judgment, there can be no doubt that this Court has literally 

applied a statute which it concluded was clear and unambiguous in its language. DeMarco I, 26 

A.3d at 617. The language of that statute is indeed unequivocal and unmistakable. Further, there 

is no debate that there was a demand to settle on behalf of DeMarco at the policy limit, a refusal 

to extend an offer to meet that demand, and an eventual judgment that surpassed the available 

policy limits. Id. at 587-95.

However, it is perfectly clear to me that, similar to this Court’s holding in Asermely, the 

statute anticipates a situation in which there is but one plaintiff and not, as here, multiple serious 

claims, any one of which might well exhaust the available coverage under the relevant policy of 

 

1

I dissented from the holding in DeMarco v. Travelers Insurance Co., 26 A.3d 585 (R.I. 2011)

because it was my opinion that a general release that had been executed by the plaintiff in the 

named insureds’ favor extinguished all rights of the parties in the case, and that, after defendants 

were absolved of all liability, with Traveler’s money, there was nothing left to assign. Id. at 629-

34. Because it was based on the release, the rationale for the dissent was overarching, and I 

therefore saw no reason for further discussion with respect to count 2.
- 18 -

insurance.2 Under the facts presented here, somewhat complicated by the Court’s holding in 

DeMarco I, it is entirely possible that, after trial on remand of count 1, Travelers may be found to 

have acted reasonably in protecting the interests of its insured in the face of multiple serious 

claims yet nevertheless be responsible for enormous sums of interest on judgments involving 

those very claims.

For that reason, it is my opinion that the literal application of the rejected-settlement offer 

statute at this time, before it is determined whether Travelers has any liability whatsoever under 

count 1, could very well lead to an absurd result. It is axiomatic that this Court will not construe 

a statute, even if it is clear and unambiguous, in a way that may lead to absurdity. See Swain v. 

Estate of Tyre ex rel. Reilly, 57 A.3d 283, 289 (R.I. 2012); DaPonte v. Ocean State Job Lot, Inc., 

21 A.3d 248, 251 (R.I. 2011); Skaling v. Aetna Insurance Co., 742 A.2d 282, 290 (R.I. 1999) 

(Skaling I); Commercial Union Insurance Company v. Pelchat, 727 A.2d 676, 681 (R.I. 1999).

Indeed, it seems to me that the only way that Travelers could have avoided the rather 

draconian impact of the majority’s holding in this case would have been for it to pay out the 

entire policy limit to DeMarco and thus avoid the imposition of an enormous interest burden. Of 

course, following that path would have left the insureds entirely unprotected against the also very 

substantial Woscyna claim. Further, it would have resulted in, if not necessitated, Travelers 

placing its own financial interests over the fiduciary duty that it owes to its insureds, something 

that this Court has said in the strongest terms an insurance carrier may not do. See DeMarco I, 

26 A.3d at 613; Skaling v. Aetna Insurance Co., 799 A.2d 997, 1012 (R.I. 2002) (Skaling II); 

Bolten v. Quincy Mutual Fire Insurance Co., 730 A.2d 1079, 1080-81 (R.I. 1999); Asermely, 

 

2

It is noteworthy that G.L. 1956 § 27-7-2.2 employs only singular words throughout, suggesting 

that the General Assembly only intended the excess interest statute to apply in single plaintiff 

cases.
- 19 -

728 A.2d at 464; Medical Malpractice Joint Underwriting Association of Rhode Island v. Rhode 

Island Insurers’ Insolvency Fund, 703 A.2d 1097, 1102 (R.I. 1997).

Given these applications, it is my opinion that the only reasonable interpretation of § 27-

7-2.2 would be to wait until Travelers’ liability, or lack thereof, has been determined after trial 

on count 1.3If found not to be liable, then, in my opinion, Travelers should bear no burden for 

excess interest with respect to count 2. If, on the other hand, a factfinder concludes that 

Travelers, in keeping with this Court’s holding in DeMarco I, did not act reasonably in light of 

its fiduciary duties to its insureds, it would be liable for the entire judgment under the principles 

set forth in Asermely and for all the interest on that judgment pursuant to § 27-7-2.2.

For these reasons, I respectfully dissent from the majority’s opinion in this case.

 

3

 I do not agree with the majority’s characterization of the dissent as creating a reasonableness 

standard for § 27-7-2.2. Certainly it is true that we employ a time-honored rule of construction 

literally applying the plain language of an unambiguous statute. However, the rule that a clear 

and unambiguous statute will not be literally applied if to do so would lead, as I believe it does 

here, to an absurd result, is equally venerated. Please see citations above, supra.
RHODE ISLAND SUPREME COURT CLERK’S OFFICE

Clerk’s Office Order/Opinion Cover Sheet

TITLE OF CASE: Wayne DeMarco et al. v. Travelers Insurance Company et al. 

 

CASE NO: No. 2012-309-Appeal.

(PB 06-6103)

COURT: Supreme Court

DATE OPINION FILED: November 18, 2014

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 Patricia A. Hurst

ATTORNEYS ON APPEAL:

 For Plaintiff: Robert A. D’Amico II, Esq.

 

For Defendant: Anthony R. Zelle, Pro Hac Vice