Opinion ID: 2327093
Heading Depth: 1
Heading Rank: 6

Heading: Applicability of Asermely in the Multiple Claimant Context

Text: We shall first address Travelers' contention on appeal that the hearing justice erred in granting summary judgment for plaintiff on count one of his complaint, which count alleged that Travelers was liable under Asermely for the judgment against its insureds in excess of the policy limits. Travelers argues that summary judgment should not have been granted with respect to this count for several reasons. Travelers asserts that the rule established by this Court in Asermely applies only where there is a single claimant for the policy proceeds and where that claimant offers to settle within the policy limits; Travelers contends that the Asermely principle does not apply in a situation (such as the case at bar presents) where there are multiple claimants whose combined claims exceed the policy limits. Travelers further contends that, with respect to the instant case, it acted reasonably and in its insureds' best interests in refusing to settle with Mr. DeMarco for the policy limits. Travelers also argues (1) that there was evidence that Mr. Doire opposed payment of the policy limits to Mr. DeMarco and (2) that such opposition by the insured would relieve it of liability under Asermely. Travelers characterizes the issue before us with respect to count one as constituting a matter of first impression for this Court; it describes the issue as being the existence vel non of an insurer's liability for a tort judgment in excess of the liability insurance policy limit when there are multiple claimants and an insufficient limit to pay all claims. Since promulgating what the Asermely opinion characterized as a new rule, 728 A.2d at 464, this Court has not delved further into the ramifications of the holding in that case in the context of an insurer's decision not to settle third-party claims. Accordingly, it is now incumbent upon us to determine whether the principles set forth in Asermely should apply to the factual context of the case before us, in which there were multiple claimants for insurance policy proceeds and the total amount of those claims exceeded the policy limitsand, if those principles do apply at least in a general sense, whether it is necessary to modify the reach of the Asermely rule in any respect. For the reasons set forth below, it is our opinion that the principles underlying this Court's opinion in Asermely apply to cases involving multiple claims that exceed the policy limits; but it is further our opinion that it is incumbent upon us to explicate the applicability of the Asermely principles in the multiple claimant context. Moreover, since certain facts in dispute need to be resolved by a fact-finder, it will be necessary for us to vacate the grant of summary judgment for plaintiff with respect to count one of his complaint and remand for further findings of fact to determine whether or not defendant met its obligations under the explicated Asermely standard.
We begin our analysis by reviewing this Court's opinion in Asermely v. Allstate Insurance Co., 728 A.2d 461 (R.I.1999). That case involved a plaintiff who brought a negligence action against certain defendants with a limited amount of insurance coverage; after a jury trial, the plaintiff was awarded damages that amounted to approximately $36,000 in excess of the limits of the insureds' liability policy. Asermely, 728 A.2d at 462. Prior to trial, the case had been the subject of a court-annexed arbitration proceeding, at the conclusion of which the arbitrator issued an award in plaintiff's favor within the policy limits. Although the plaintiff was willing to accept that award, the insurance company rejected it and opted to proceed to trial. Id. After the plaintiff prevailed at trial on the negligence claim, the insureds assigned their rights to the plaintiff, who proceeded to sue the insurance company for damages. The plaintiff's complaint in the Asermely case contained five counts: (1) a claim that the plaintiff was entitled to interest in excess of the policy limits pursuant to § 27-7-2.2 (the rejected settlement offer statute); (2) an allegation that the defendant insurance company had breached its duty to exercise good faith in the handling of the plaintiffs claim; (3) a claim that the plaintiff was entitled to damages as a result of the defendant's alleged fraudulent misrepresentation and refusal to pay the policy limits to the plaintiff for more than one and one-half years after the final judgment; (4) an allegation that the defendant breached its duty under the statutorily created tort of bad faith refusal to settle; [36] and (5) an allegation that the defendant had breached its contractual obligations. Asermely, 728 A.2d at 463-64. In due course, the defendant insurance company moved for summary judgment. After a hearing on that motion, a justice of the Superior Court granted the motion for summary judgment with respect to the rejected settlement offer statutory claim, the fraudulent misrepresentation claim, and the bad faith refusal to settle claim. On the plaintiffs appeal to this Court, we affirmed the grant of summary judgment with respect to the fraudulent misrepresentation and bad faith claims (although we sustained the plaintiff's appeal as to the rejected settlement offer statutory claim). Asermely, 728 A.2d at 463-64. Applying the bad faith tort standard with respect to an insurer's extra-contractual liability, the Court held that the insurer had not acted in bad faith in refusing to settle because the claim against its insureds was fairly debatable. Id. at 464 (internal quotation marks omitted). At the same time, however, the Court took the opportunity to promulgate a new rule to serve as guidance to the trial courts in deciding future cases where an insurance company's opting not to settle claims prior to trial eventuates in a judgment against its insured in excess of policy limits. Id. We observed that [t]his Court has held that an insurance company has a fiduciary obligation to act in the `best interests of its insured in order to protect the insured from excess liability    [and to] refrain from acts that demonstrate greater concern for the insurer's monetary interest than the financial risk attendant to the insured's situation.' Id. (quoting Medical Malpractice Joint Underwriting Association of Rhode Island v. Rhode Island Insurers' Insolvency Fund, 703 A.2d 1097, 1102 (R.I.1997)). The Court in Asermely further noted that this obligation extends not only to the insurance company's insureds, but also to parties to whom the insureds have assigned their rights. Id. The Court then described an insurer's obligation as follows: It is not sufficient that the insurance company act in good faith. An insurance company's fiduciary obligations include a duty to consider seriously a plaintiff's reasonable offer to settle within the policy limits. Accordingly, if it has been afforded reasonable notice and if a plaintiff has made a reasonable written offer to a defendant's insurer to settle within the policy limits, the insurer is obligated to seriously consider such an offer. If the insurer declines to settle the case within the policy limits, it does so at its peril in the event that a trial results in a judgment that exceeds the policy limits, including interest. Id. Under Asermely, even if bad faith cannot be shown, an insurer will still be exposed to potential liability for the amount of a judgment that exceeds policy limits, unless the insurer can show that the insured was unwilling to accept the plaintiff's settlement offer. Id. The Court in Asermely concluded its discussion with the following unambiguous statement: Even if the insurer believes in good faith that it has a legitimate defense against the third party, it must assume the risk of miscalculation if the ultimate judgment should exceed the policy limits. Id. In several subsequent decisions involving contexts other than the failure to settle third-party claims, this Court has explicated further the principle that was first set forth in Asermely. In our opinion in Travelers Insurance Co. v. Hindle, 748 A.2d 256 (R.I.2000), we addressed an insurer's obligations in the context of an injured plaintiff who had filed a claim for uninsured/underinsured motorist benefits from his insurer and then requested permission from that insurer to settle his personal injury suit with the defendant-tortfeasor. In that case, the insurer had argued that court-ordered discovery of the defendant's assets was necessary so that the insurer could meet its fiduciary obligations to consider seriously a plaintiffs reasonable offer to settle within the policy limits, as required by Asermely and our subsequent decision in Bolton v. Quincy Mutual Fire Insurance Co., 730 A.2d 1079 (R.I. 1999). [37] Hindle, 748 A.2d at 259. We held in Hindle that, for an insurer to meet its obligations under Asermely and Bolton, it was not required that the insurer avail itself of court-ordered discovery concerning the defendant's assets. Hindle, 748 A.2d at 260. Rather, we construed our precedent as meaning that an insurer's duty to seriously consider a defendant's offer to settle would be satisfied by conducting a reasonable inquiry into a defendant's assets by means of private asset discovery (as contrasted with court-ordered discovery). We further observed that, although [t]he reasonableness standard articulated in Asermely and its progeny, Bolton, is necessarily flexible, and we are reluctant to give it rigid judicial shape, an insurer that performs private asset discovery as routinely conducted by other similarly situated insurers in the industry would presumably    be deemed to have acted reasonably as to that aspect of its duty. Hindle, 748 A.2d at 260. In Skaling v. Aetna Insurance Co., 799 A.2d 997 (R.I.2002) ( Skaling II ), we were called upon to review the trial court's grant of summary judgment in favor of a defendant insurance company in the face of its insured's allegation of bad faith in connection with the insurer's investigation and handling of the insured's claim for underinsured motorist benefits. Citing our opinion of three years earlier in Asermely, we stated in Skaling II: We have made it abundantly clear that the duty of good faith and fair dealing includes an affirmative duty to engage in timely and meaningful settlement negotiations and to make and consider offers of settlement consistent with an insurer's fiduciary duty to protect its insured from excess liability. Skaling II, 799 A.2d at 1005 (emphasis added). We further stated in Skaling II that, under Asermely, the risk of miscalculating the merits of a claim and proceeding to trial falls upon the insurer, the entity that controls the litigation and with whom the insured has contracted. Id. at 1006. Although Skaling II involved the first-party claim of an insured against an insurer rather than a third-party claim as was at issue in Asermely, we indicated that both cases implicated similar policy concerns; we emphasized that, even if a claim against an insured is fairly debatable, an insurer is nonetheless obliged to engage in settlement discussions in an effort to relieve the insured from the burden and expense of litigation. Id. at 1011. And we very clearly stated that [i]t is the policy of this state to encourage the settlement of controversies in lieu of litigation. Id. at 1012. We must now determine whether, as Travelers contends, the Asermely rule should not apply in this case where, in contrast to the single claimant at issue in Asermely, there was more than one claimant for the policy proceeds and the combined claims exceeded the policy limits. Travelers has argued to this Court that the rationale behind the rule in Asermely applies only to cases involving a single injured claimant who makes a settlement demand within the policy limitin view of the fact that, under such circumstances, it is wholly within the insurer's power to prevent exposure [of] its insured's personal assets. [38] (Emphasis in original.) Travelers contends that, in contrast to the single claimant situation, the Asermely rule should not apply where there are multiple claimants for the policy proceeds with claims that in the aggregate exceed the policy limitsbecause in such a situation the insurer does not have the ability to prevent exposure of the insured's personal assetssince paying the entire policy limits to one claimant would leave the insured without protection against the other claim(s). Travelers contends that, under such circumstances, imposing Asermely liability on an insurer for rejecting one claimant's demand for the policy limits would effectively place the interests of that claimant above that of the insured defendant. Accordingly, Travelers asserts that an insurer's rejection of one claimant's demand is insufficient in and of itself to prove a breach of its fiduciary duty; rather, it argues that a more searching inquiry is required   . Travelers contends that the appropriate standard should be a reasonableness standard such as that endorsed by the First Circuit in Peckham v. Continental Casualty Insurance Co., 895 F.2d 830, 835 (1st Cir.1990)rather than what Travelers describes as the assumption of risk standard imposed by the rule in Asermely. [39] Travelers submits that the hearing justice correctly called for [the] application of a `reasonableness' standard in her decision (which, the reader will recall, explicitly cited Peckham ), but it argues that the factual determination as to whether it should have settled with Mr. DeMarco for the policy limits and the assessment of the reasonableness of its conduct should be made by a jury; accordingly, Travelers contends that the hearing justice erred in granting summary judgment. [40] Travelers further contends that, from a public policy perspective, affirming the hearing justice's decision could have severe consequences for policyholders, claimants, and insurers. Travelers argues that an inflexible rule compelling an insurer to pay its policy limit to one of multiple claimants [in order] to avoid liability for a judgment in excess of the policy limit would harm policyholders (1) by leaving them without insurance coverage for the remaining claims and (2) by requiring them to cover the cost of defending against the other claimsbecause, in Travelers' words, an insurer's duty to defend ends when the policy limit has been paid. Such a rule, Travelers urges, would encourage insurance companies to place their own interests and the interests of one or more third parties above the interests of the insureds. In addition, Travelers argues that injured claimants would be harmed because such an inflexible rule would create an unprincipled race to be the first to present the insurer with a policy limit demand, leaving some claimants with no recovery and undermining efforts by insurers to apportion policy proceeds based on the relative severity of the claimants' injuries. Mr. DeMarco, for his part, argues that the primary issue to be resolved by this Court in passing upon Travelers' appeal  is not necessarily the extent to which [ Asermely ] applies generally in cases where more than one injured party is making a claim against the policy limit, but rather it is the extent to which Travelers is responsible for a significant excess judgment against its insured in the narrow context of the egregious undisputed facts of this case. (Emphasis in original.) Mr. DeMarco asserts that, contrary to Travelers' contention, the hearing justice did consider the reasonableness of Travelers' conduct, and he contends that the undisputed facts established that Travelers acted unreasonably as a matter of law under Asermely. Mr. DeMarco argues that Travelers' failing to engage in any settlement negotiations and forcing the DeMarco claim to trial did not satisfy the insurer's duty of eliminating as much exposure of its insureds to personal liability as possible. Mr. DeMarco asserts that, if Travelers had settled with him for the policy limits prior to the personal injury trial, it would have protected its insureds by minimizing their maximum potential exposure on the unresolved claim to $450,000 (the amount for which the other injured party, Mr. Woscyna, was willing to settle prior to the DeMarco trial). Instead, Mr. DeMarco contends, because Travelers failed to settle with him and opted to proceed to trial, the exposure of Travelers' insureds ballooned from $450,000 to approximately $3,250,000 following the verdictthe latter amount representing the sum of the approximately $2,800,000 verdict (with interest) added to the $450,000 for which Mr. Woscyna settled after trial. Accordingly, Mr. DeMarco argues, Travelers' failure to settle with him for the policy limits prior to trial placed its insureds in a much worse position than if the insureds had faced direct liability only with respect to the Woscyna claim. Mr. DeMarco further contends that Travelers made a conscious decision not to engage in any settlement negotiations because it took the position that Asermely would not apply in a multiple claimant case. He then proceeds to argue that the hearing justice appropriately granted summary judgment on count one of his complaint because, [a]s a matter of law, conduct of this nature by an insurance company cannot be deemed reasonable. Although Mr. DeMarco argues that, due to what he characterizes as the egregious facts of this case, this Court is not required to decide whether Asermely applies in multiple claimant cases, he also contends that there is nothing contained in the specific language of the Asermely decision which would suggest that its broad, policy-based principles should not be applicable in the multiple claimant context. Mr. DeMarco acknowledges that multiple claimant cases are clearly more complicated than single claimant cases, but he asserts that an insurer facing multiple claimants should be required to proceed even more cautiously than in the single claimant contextkeeping in mind its duty under Asermely and Skaling II to (1) engage in timely and meaningful settlement negotiations [41] and (2) to eliminate (in plaintiff's words) as much risk and excess exposure to its insured as may be possible under the circumstances. Agreeing with the reasoning and language contained in the rescript decision of the hearing justice in the instant case, Mr. DeMarco suggests that an appropriate standard in multiple claimant cases would be the standard set forth by the First Circuit in Peckham [42]  i.e., that an insurer's liability for failure to settle should, in the words of the hearing justice, turn on its exercise of professional skill and good faith in making that judgment call   . In response to Travelers' contention that applying the Asermely rule to multiple claimant cases would have negative public policy consequences, plaintiff asserts (1) that this state has an overriding concern in favor of promoting the settlement of controversies in lieu of litigation and (2) that this overriding concern is advanced by requiring insurers to engage affirmatively in settlement negotiations. In approaching the question of the applicability of the Asermely rule to this case, we first have carefully scrutinized the analyses contained in the opinions of certain other appellate courts that have considered an insurer's duty to its insured where there are multiple claimants whose claims in the aggregate exceed the policy limits. In Peckham v. Continental Casualty Insurance Co., 895 F.2d 830 (1st Cir.1990), the United States Court of Appeals for the First Circuit discussed an insurer's duty when faced with what the court described as the thorny problem of an excess-limits case. Peckham, 895 F.2d at 835. The court noted that such cases are complicated logarithmically when multiple claims exist, each likely to outstrip the coverage. Id. When policy limits are much lower than the insured's potential exposure, the court observed, the insurer cannot put its own interests first, but must negotiate as it would if its liability limits were unbounded. Id. at 834 (citing Murach v. Massachusetts Bonding and Insurance Co., 339 Mass. 184, 158 N.E.2d 338, 341 (1959)). [43] The First Circuit in Peckham explained that the duty to negotiate in good faith would require the carrier    to treat the claim as if [the carrier] were alone liable for the entire amount, and it further noted that, in such straitened circumstances, the insurer must inform the insured of its conflicting interests, advise him of his rights, and keep him abreast of settlement offers and meaningful developments. Id. (internal quotation marks omitted). In language of helpful clarity, the First Circuit in Peckham went on to state: The insurer has both the right and the duty to exercise its professional judgment in settling, or refusing to settle, such claimsbut it must do so mindful of the insured's best interests and in good faith. The insurer's goal should be to try to effect settlement of all or some of the multiple claims so as to relieve its insured of so much of his potential liability as is reasonably possible, considering the paucity of the policy limits. So long as it acts in good faith, the insurer is not held to standards of omniscience or perfection; it has leeway to use, and should consistently employ, its honest business judgment. The carrier, in fine, will not be held to prophesy. Id. at 835 (internal citation and quotation marks omitted). In support of the just-quoted statement concerning the insurer's right and duty in the multiple claimant context, the First Circuit cited to Judge John Minor Wisdom's opinion for the United States Court of Appeals for the Fifth Circuit in Liberty Mutual Insurance Co. v. Davis, 412 F.2d 475 (5th Cir.1969). In Davis, the Fifth Circuit upheld the trial court's determination that an insurer had acted in bad faith where it failed to settle with one claimant for the insured's policy limits due to the fact that it was faced with multiple claimants whose claims were expected to exceed the policy limits. The Fifth Circuit observed: When several claimants are involved, and liability is evident, rejection of a single offer to compromise within policy limits does not necessarily conflict with the interest of the insured. He hopes to see the insurance fund used to compromise as much of his potential liability as possible. Of course, if the fund is needlessly exhausted on one claim, when it might cancel out others as well, the insured suffers from the company's readiness to settle. To put the point another way, even if liability be conceded, plaintiffs will usually settle for less than they would ultimately recover after trial, if only to save time and attorney's fees.    But where the insurance proceeds are so slight compared with the totality of claims as to preclude any chance of comprehensive settlement, the insurer's insistence upon such a settlement profits the insured nothing. He would do better to have the leverage of his insurance money applied to at least some of the claims, to the end of reducing his ultimate judgment debt. Davis, 412 F.2d at 480-81. The Fifth Circuit in Davis went on to conclude that efforts to achieve a prorated, comprehensive settlement may excuse an insurer's reluctance to settle with less than all of the claimants, but need not do so. Id. at 481. Stating that this question is for the jury to decide, the court in Davis then set out the factors which the jury should be instructed to consider in a multiple claimant case: Here, bearing in mind the existence of multiple claims and the insured's exposure to heavy damages, did the insurer act in good faith in managing the proceeds in a manner reasonably calculated to protect the insured by minimizing his total liability? In many cases, efforts to achieve an overall agreement, even though entailing a refusal to settle immediately with one or more parties, will accord with the insurer's duty. In other cases, use of the whole fund to cancel out a single claim will best serve to minimize the defendant's liability. Id. We are persuaded that the principles that undergird our decisions in Asermely and Skaling II also apply in cases involving multiple claims for insurance policy proceeds, which claims in the aggregate exceed the policy limits. We are further persuaded that the flexible standards set forth by the First Circuit in Peckham and the Fifth Circuit in Davis constitute the most sensible and jurisprudentially sound way to approach the complex issues involved in multiple claimant cases where the available insurance proceeds are decidedly finite. Today we further explicate an insurer's obligations under the rule announced in Asermely so as to address the complicated set of considerations with which an insurer must grapple in deciding whether and how to settle particular claims in a multiple claimant case. At the same time, we would emphasize that today's holding in no way lessens an insurer's fiduciary obligation to act in the best interests of its insured by refraining from taking steps that demonstrate greater concern for the insurer's monetary interest than the financial risk attendant to the insured's situation, Asermely, 728 A.2d at 464 (internal quotation marks omitted); nor does this holding lessen in any way an insurer's  affirmative duty to engage in timely and meaningful settlement negotiations and to make and consider offers of settlement consistent with an insurer's fiduciary duty to protect its insured from excess liability. Skaling II, 799 A.2d at 1005 (emphasis added). Because insurers have such a weighty fiduciary duty with respect to settlement negotiations and the litigation of cases involving their insureds, it is helpful to focus on an insurer's obligations in the multiple claimant context to ensure that insurers will act in the best interests of their insureds; the need for a recognition of such obligations is as acute in the multiple claimant situation as it is in the single claimant situation. However, we recognize that, unlike what was possible in the single claimant situation at issue in Asermely, in a multiple claimant case it will not always be possible for an insurer, by exhausting the policy limits, to guarantee that its insured will not face direct liabilitydue to the fact that other claims may still be outstanding. It is clear that an insurer may have to engage in a much more complex assessment of whether and how to settle claims in order to meet its duty to protect its insured's best interests in the face of multiple claims, the aggregate of which exceeds the policy limits. However, it is also clear that such complexities do not relieve an insurer of its affirmative duty to engage in timely and meaningful settlement negotiations [44] in spite of the sometimes Sisyphean challenge that reaching a global settlement within the policy limits represents. There undoubtedly will be some instances where an insured will still face direct liability even in the face of the fact that the insurer acted in the insured's best interests; even in such a situation, however, the critical issue to be determined is whether or not the insurer did everything it reasonably could to minimize the amount of that direct liability. We hold that, when an insurer is faced with multiple claimants with claims that in the aggregate exceed the policy limits, the insurer has a fiduciary duty to engage in timely and meaningful settlement negotiations in a purposeful attempt to bring about settlement of as many claims as is possible, such that the insurer will thereby relieve its insured of as much of the insured's potential liability as is reasonably possible given the policy limits and the surrounding circumstances. See Peckham, 895 F.2d at 835; Davis, 412 F.2d at 480-81; Skaling II, 799 A.2d at 1005. In meeting this duty, the insurer must negotiate as if there were no policy limits applicable to the claims and as if the insurer alone would be liable for the entire amount of any excess judgment. See Peckham, 895 F.2d at 834; Murach, 158 N.E.2d at 341. The insurer must exercise its best professional judgment throughout this process, always keeping in mind the best interests of its insured and the necessity of minimizing its insured's possible eventual direct liability. As with the Asermely rule when it is applied in the single claimant situation, in order to show that an insurer has violated its fiduciary duty in a multiple claimant case, the insured (or a party to whom the rights of the insured have been assigned) need not demonstrate that the insurer acted in bad faith but only that the insurer did not act reasonably and in its insured's best interests in light of the surrounding circumstances. See Asermely, 728 A.2d at 464; see also Skaling II, 799 A.2d at 1005-06. In determining whether an insurer has met its duty in a multiple claimant case, it will be necessary to engage in a comprehensive factual analysis, taking into account all of the surrounding circumstances in the particular case. Such circumstances would include, inter alia: the number of claimants; the relative extent of the damages suffered by each claimant; the time at which the extent of those damages was made known to the insurer; the amounts of the claimants' settlement demands; the wishes of the insured; the timing and nature of the insurer's attempts at negotiating a settlement; the perceived likelihood of litigation being commenced by a particular claimant; and the relative willingness of the various claimants to settle. In the instant case, it must be determined by a fact-finder whether Travelers met its duty to engage in timely and meaningful settlement negotiations with the goal being to relieve its insureds of as much of their potential liability as was reasonably possible. The determination of the reasonableness of an insurer's action in multiple claimant cases will normally be a question for a fact-finder to decide. See Davis, 412 F.2d at 480 (stating that it was for the jury to decide whether the refusal to settle was primarily in [the insurer's] own interests and with too little regard for the insured's interests); Southern General Insurance Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274, 276 (1992) (noting that, in determining an insurer's liability for failure to settle a claim, [t]he jury generally must decide whether the insurer, in view of the existing circumstances, has accorded the insured the same faithful consideration it gives its own interest) (internal quotation marks omitted); see also R.E. King v. Avtech Aviation, Inc., 655 F.2d 77, 78 (5th Cir.1981) (stating that, although material facts are undisputed, a case requiring the determination of the reasonableness of the acts and conduct of the parties under all the facts and circumstances of the case    cannot ordinarily be disposed of by summary judgment) (internal quotation marks omitted); Shaffer v. Regions Financial Corp., 29 So.3d 872, 882 (Ala.2009) (Ordinarily, [t]he question of reasonableness is one of fact to be resolved by the trier of fact.) (internal quotation marks omitted); cf. Botelho v. Caster's Inc., 970 A.2d 541, 546-47 (R.I.2009) (agreeing with the trial justice's assessment that there were significant factual issues still to be determined by the jury, concerning which issues reasonable persons might reach differing conclusions); Gliottone, 870 A.2d at 1028 (noting that it has been widely recognized that issues of negligence are ordinarily not susceptible of summary adjudication, but should be resolved by trial in the ordinary manner) (internal quotation marks omitted); DeNardo v. Fairmount Foundries Cranston, Inc., 121 R.I. 440, 448, 399 A.2d 1229, 1234 (R.I.1979) (In Rhode Island the general rule is that negligence is a question for the jury unless the facts warrant only one conclusion.). For the reasons set forth below, it is our opinion that the issue of whether Travelers met its duty under Asermely in the case at bar was not one that could properly have been resolved on summary judgment.
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 one 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. We also note that the record reveals that genuine issues of material fact exist regarding the actions of the parties with respect to efforts to settle the claims of Mr. DeMarco and Mr. Woscyna in the years leading up to the entry of judgment against Travelers' insureds in the personal injury case. It is clear to us that the existing record contains facts on which a fact-finder could conclude that Travelers acted reasonably and in its insureds' best interests under the explicated Asermely standardand it is likewise clear that there are facts on the basis of which a fact-finder could reach the opposite conclusion. [45] With respect to the instant case, it is for a fact-finder to determine the reasonableness of Travelers' actions in light of the surrounding circumstancesincluding the important factor of the presence of multiple claimants. We therefore hold that summary judgment should not have been granted with respect to count one, and we remand this case to the trial court for further proceedings consistent with the explications set forth in this opinion. We also take this opportunity to observe that it seems most appropriate for the issue of Travelers' liability for the excess judgment under the modified Asermely standard to be tried along with the bad faith claim, which is set forth in count four of plaintiffs original complaint and which plaintiff did not address in his motion for partial summary judgment.