Supreme Court

No. 2021-30-Appeal.

 (PC 16-4707) 

Daniel Houle et al. :

v. :

Liberty Insurance Corporation,

Alias, A/K/A Liberty Mutual Group, 

A/K/A Liberty Mutual, A/K/A 

Liberty Mutual Insurance.

:

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.

March 30, 2022
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Supreme Court

No. 2021-30-Appeal.

(PC 16-4707)

Daniel Houle et al. :

v. :

Liberty Insurance Corporation, :

Alias, A/K/A Liberty Mutual Group, 

A/K/A Liberty Mutual, A/K/A 

Liberty Mutual Insurance.

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

O P I N I O N

Justice Lynch Prata, for the Court. This case came before the Supreme 

Court on March 1, 2022, pursuant to an order directing the parties to appear and 

show cause why the issues raised in this appeal should not be summarily decided. 

The plaintiffs, Daniel Houle and Karen Houle (plaintiffs or the Houles), appeal from 

a decision and order of the Superior Court granting the motion for judgment on the 

pleadings by the defendant, Liberty Mutual Insurance Corporation, alias, a/k/a 

Liberty Mutual Group, a/k/a Liberty Mutual, a/k/a Liberty Mutual Insurance 

(defendant or Liberty Mutual).

1

 After considering the parties’ written and oral 

1 It appears from the record of the case that the name of the defendant entity is 

“Liberty Mutual Insurance Company.”
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submissions and reviewing the record, we are satisfied that cause has not been shown 

and that this appeal may be decided at this time. For the reasons set forth herein, we 

vacate the order of the Superior Court. 

Facts and Travel

On February 21, 2015, the roof at plaintiffs’ home located at 520 Snake Hill 

Road in North Scituate, Rhode Island (the property), collapsed due to accumulating 

ice and snow. The property was insured through a “Libertyguard Deluxe 

Homeowners Policy” issued by Liberty Mutual (the policy or the Libertyguard 

Deluxe policy). The plaintiffs timely notified Liberty Mutual about the loss, and an 

adjuster from Liberty Mutual was assigned to investigate. The adjuster submitted a 

repair estimate of $18,349.66. Thereafter, the Houles submitted proof-of-loss 

documents estimating that the cost of repair would amount to $193,280.40. The 

defendant then enlisted the services of an engineering firm and a construction 

company to draw plans and estimate the cost of repairs. The estimate was 

$53,615.26. 

On June 20, 2016, the Houles informed Liberty Mutual that they were electing 

to invoke the appraisal provision of the Libertyguard Deluxe policy, which provides, 

in pertinent part, that:

“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 
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appraisers will choose an umpire. If they cannot agree 

upon an umpire within 15 days, you or we may request 

that the choice be made by a judge of a court of record in 

the state where the ‘residence premises’ is located. 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.”

Both parties selected their appraiser, but the appraisers could not agree on an umpire. 

The Houles filed the instant action in Superior Court on October 7, 2016, 

seeking “relief in the form of a judgment naming an independent and qualified 

umpire to set the amount of loss for insurance coverage[.]” Liberty Mutual filed an 

answer and counterclaim, as well as an objection to plaintiffs’ request for declaratory 

relief and cross-motion for declaratory judgment. On December 6, 2016, the various 

matters were heard before a Superior Court justice. On December 30, 2016, an order 

entered by agreement, stating that the parties had agreed upon the selection of an 

umpire. The appraisal hearing went forward on March 9, 2018, and plaintiffs were 

awarded $81,641 by the appraisal panel.

On August 7, 2019, plaintiffs filed a second amended complaint, alleging that 

Liberty Mutual had breached the terms of the Libertyguard Deluxe policy “by not 

performing a full and complete investigation.” The plaintiffs also alleged that 

defendant “acted in bad faith in the handling of” their claim. On November 25, 

2019, defendant filed a motion for judgment on the pleadings, arguing that plaintiffs’
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claims failed as a matter of law because plaintiffs had failed to allege facts that could

prove that Liberty Mutual breached the policy and/or acted in bad faith. The Houles 

objected to the motion, maintaining that, as pled in the second amended complaint,

defendant’s alleged failure to “provide a full and complete investigation of the 

Houles’ loss” constituted a prima facie case for breach of contract and bad faith.

A hearing was held on defendant’s motion on February 26, 2020, at the 

conclusion of which the motion justice issued a decision dismissing plaintiffs’ 

complaint. The motion justice found that plaintiffs failed to “set forth sufficient facts 

relating to the allegedly deficient investigation and how [it] was a breach of contract 

and led to damages” and did not identify “any part of the policy that’s been breached

by * * * Liberty Mutual.” She noted that plaintiffs’ amount-of-loss “claim went 

through the full appraisal process[,]” and was “fully and finally adjudicated by” that 

process. Because the motion justice found that plaintiffs could not maintain an 

action for breach of contract against defendant, she also dismissed their bad-faith 

claim because she found “that bad faith claims cannot be sustained without a breach 

of contract claim[.]”2

2 In her bench decision, the motion justice also addressed Liberty Mutual’s 

counterclaim against plaintiffs, which sought a declaratory judgment that “Liberty 

Mutual has fully complied with all obligations under the [p]olicy and has not 

committed a breach of the [p]olicy.” The motion justice declined to render a 

declaratory judgment on the counterclaim; on March 13, 2020, the parties stipulated

in the Superior Court that all claims against plaintiffs were dismissed, thereby 

resolving defendant’s counterclaim.
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An order consistent with the motion justice’s bench decision entered, granting 

defendant’s motion for judgment on the pleadings. The Superior Court granted 

defendant’s motion for entry of judgment, and plaintiffs filed a timely notice of 

appeal.

Standard of Review 

Pursuant to Rule 12(c) of the Superior Court Rules of Civil Procedure, a 

hearing justice may “dispos[e] of a case early in the litigation process when the 

material facts are not in dispute after the pleadings have been closed and only 

questions of law remain to be decided.” Premier Home Restoration, LLC v. Federal 

National Mortgage Association, 245 A.3d 745, 748 (R.I. 2021) (quoting Nugent v. 

State Public Defender’s Office, 184 A.3d 703, 706 (R.I. 2018)). “When reviewing 

the decision of a hearing justice on a motion for judgment on the pleadings pursuant 

to [R]ule 12(c), we utilize the Rule 12(b)(6) motion-to-dismiss test.” Nugent, 184 

A.3d at 706. As such, “a judgment on the pleadings ‘may be granted only when it 

is established beyond a reasonable doubt that a party would not be entitled to relief 

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

of its claim.’” Premier Home Restoration, LLC, 245 A.3d at 748 (quoting Nugent, 

184 A.3d at 706-07). 
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Discussion

On appeal, plaintiffs argue that the motion justice erred in granting judgment 

on the pleadings in favor of Liberty Mutual because, they contend, the pleadings 

established the facts necessary to support claims for breach of contract and bad faith. 

Specifically, plaintiffs maintain that, pursuant to the Libertyguard Deluxe policy,

“Liberty Mutual had an inherent contractual obligation to perform a full and 

complete investigation of the loss[,]” which it failed to do.

It is well established that the terms of an insurance policy are interpreted “in 

accordance [with] the rules of construction that govern contracts.” Derderian v. 

Essex Insurance Co., 44 A.3d 122, 127 (R.I. 2012). “[W]hether a party has 

substantially performed or materially breached its contractual obligations is usually 

a question of fact to be decided by the jury.” Women’s Development Corporation v. 

City of Central Falls, 764 A.2d 151, 158 (R.I. 2001). Moreover, as this Court has 

explained many times, “virtually every contract contains an implied covenant of 

good faith and fair dealing between the parties[,]” McNulty v. Chip, 116 A.3d 173, 

185 (R.I. 2015) (brackets omitted) (quoting Dovenmuehle Mortgage, Inc. v. 

Antonelli, 790 A.2d 1113, 1115 (R.I. 2002)), which “ensures that ‘contractual 

objectives may be achieved[.]’” Id. (quoting Ide Farm & Stable, Inc. v. Cardi, 110 

R.I. 735, 739, 297 A.2d 643, 645 (1972)). 
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In the case at bar, the motion justice granted defendant’s motion for judgment 

on the pleadings because she found that “[p]laintiff[s have] not identified any part 

of the policy that[ has] been breached by * * * Liberty Mutual.” She acknowledged 

the contention “that there is an implicit requirement [in the contract] that the 

insurance company * * * do things correctly and * * * not do a shoddy or an 

insufficient job at the investigation[,]” but still found that plaintiffs’ breach-ofcontract claim failed because the complaint did not plead that defendant’s conduct 

caused damages to plaintiffs and “plaintiffs’ claim * * * was fully and finally 

adjudicated by the appraisal process.”

After reviewing the record before us, we are of the opinion that the motion

justice erred in granting judgment on the pleadings in favor of defendant. The factual 

allegations contained in the pleadings, when viewed in the light most favorable to 

the nonmoving plaintiffs, do not allow for the Superior Court to conclude beyond a 

reasonable doubt that plaintiffs would be unable to prove facts at trial that constitute 

a claim for breach of contract. Cf. Chase v. Nationwide Mutual Fire Insurance 

Company, 160 A.3d 970, 974-75 (R.I. 2017) (holding that a plaintiff’s allegation that 

its insurer “engaged in a pattern of dilatory conduct thereby refusing to fulfill its 

obligations under the [p]olicy” was too “broad and undetailed” to withstand 

judgment on the pleadings and allow plaintiff’s breach-of-contract and estoppel 

arguments to proceed). The Houles alleged, in their second amended complaint, that 
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Liberty Mutual breached the contract by not performing a full and complete 

investigation of the loss. The allegation was supported by additional averments in 

the complaint, including that defendant “prepar[ed] an estimate in March of 2015 

without performing a full and complete investigation, hir[ed] an unlicensed engineer 

to prepare a remediation plan and to draw engineering documents, and enlist[ed] the 

services of an unlicensed contractor to prepare an estimate.”

The linchpin of the motion justice’s decision was plaintiffs’ purported failure 

to point out specific language in the policy that detailed defendant’s contractual 

duties related to investigating a loss. However, this conclusion plainly overlooks the 

implied covenant of good faith and fair dealing that is inherent in every insurance 

contract. See Skaling v. Aetna Insurance Company, 799 A.2d 997, 1010, 1011 (R.I. 

2002) (recognizing that insurers are obligated to deal with their insureds “consistent 

with [the] implied in law obligations of good faith and fair dealing” and that 

“[i]nsurers doing business in Rhode Island have an implied obligation to promptly 

and fully respond to their insured, to investigate a claim and to subject that claim to 

appropriate review”). It cannot be said that the allegations as pled, and under any 

set of facts that may be proven at trial, would not support a claim for breach of 

contract or breach of the implied covenant of good faith and fair dealing. See 

McNulty, 116 A.3d at 185 (making clear that a claim for breach of the implied 
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covenant of good faith and fair dealing is not an independent cause of action that 

must be pled separate and apart from a claim for breach of contract).

Conclusion

For the foregoing reasons, we conclude that the grant of judgment on the 

pleadings for the defendant was erroneous. The order of the Superior Court granting 

defendant’s motion is vacated, and the papers in this case may be remanded to the 

Superior Court for further proceedings. 
SU-CMS-02A (revised June 2020)

STATE OF RHODE ISLAND 

SUPREME COURT – CLERK’S OFFICE

Licht Judicial Complex

250 Benefit Street

Providence, RI 02903

OPINION COVER SHEET

Title of Case

Daniel Houle et al. v. Liberty Insurance Corporation, 

Alias, A/K/A Liberty Mutual Group, A/K/A Liberty 

Mutual, A/K/A Liberty Mutual Insurance.

Case Number

No. 2021-30-Appeal.

(PC 16-4707)

Date Opinion Filed March 30, 2022

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

Long, JJ.

Written By Associate Justice Erin Lynch Prata

Source of Appeal Providence County Superior Court

Judicial Officer from Lower Court Associate Justice Melissa E. Darigan

Attorney(s) on Appeal

For Plaintiffs:

Tanis G. Caine, Esq.

Kevin M. Daley, Esq.

For Defendant:

Christopher M. Reilly, Esq.