Opinion ID: 615028
Heading Depth: 2
Heading Rank: 1

Heading: Ambiguity in the Excess Policies

Text: Ordinarily, when interpreting an insurance policy, a court look[s] at the four corners of [the] policy, viewing it in its entirety, affording its terms their plain, ordinary and usual meaning. Town of Cumberland v. R.I. Interlocal Risk Mgmt. Trust, Inc., 860 A.2d 1210, 1215 (R.I.2004) (internal quotation marks omitted). However, [i]n situations in which ambiguity does exist in an insurance policy or the terms are subject to more than one reasonable interpretation, the contract will be strictly construed against the insurer. Amica Mut. Ins. Co., 583 A.2d at 552. The Roscitis argue that there is a clash between the Retained Limit Provision and the Bankruptcy Provision. The Bankruptcy Provision says that Monaco's bankruptcy, insolvency or inability to pay . . . shall not relieve [ICSOP] from the payment of any claim covered by the Excess Policies. However, the Roscitis argue, if the Retained Limit Provision remains in force, then its net effect in this case is to relieve [ICSOP] from the payment of [a] claim covered by the Excess Policies. Since this reading would nullify the Bankruptcy Provision, the Roscitis urge us to read an exception to the Retained Limit Provision for situations where, as here, it cannot be satisfied due to insolvency. ICSOP, in contrast, argues that the Roscitis are asking us to impermissibly read ambiguity into the contract where none exists. See Town of Cumberland, 860 A.2d at 1215 (court should not indulge in mental gymnastics to read ambiguity where none is present) (internal omission and quotation marks omitted). ICSOP notes that the Bankruptcy Provision applies only to claims covered by the Excess Policies. This, ICSOP argues, is a clear reference to limitation provisions elsewhere in the Excess Policies, including the Retained Limit Provision. Thus, according to ICSOP, the meaning of the Excess Policies is clear: ICSOP is liable if Monaco is bankrupt, but only if the Retained Limit Provision is somehow satisfied. We agree with ICSOP that the policy is not ambiguous. We see no inherent conflict between the Retained Limit Provision and the Bankruptcy Provision; rather, we agree with ICSOP that the latter is plainly subject to the limitations in the former. We disagree with the Roscitis that the reverse reading of the Excess Policiesunder which the Bankruptcy Provision is a limit on the Retained Limit Provisionis also plausible. The Bankruptcy Provision, by referring to claims covered by this Policy, clearly alerts the reader to examine the rest of the contract for possible limits on ICSOP's liability. The Retained Limit Provision, in contrast, contains no such cautionary language; ICSOP is liable  only after there has been a complete expenditure of [Monaco's] retained limit (emphasis added). Since we will not read ambiguity into the contract, see Town of Cumberland, 860 A.2d at 1215, we will not automatically construe the Excess Policies against ICSOP. Contra Amica Mut. Ins. Co., 583 A.2d at 552. Rather, we will give the Excess Policies their plain meaning: ICSOP is still liable above the retained limit if Monaco is bankrupt, but only after Monaco exhausts the retained limit. However, this does not end our inquiry, for we must still consider whether this result is compatible with public policy.