Court Opinion

ID: 1039104
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:27:47.202871+00
Date Added: 2024-06-11T09:20:15.408379
License: Public Domain

Supreme Court

                                                                No. 2011-130-Appeal.
                                                                (PC 06-6322)

  Tracie Peloquin, as Administratrix of the   :
       Estate of Pearl E. Archambault

                     v.                       :

Haven Health Center of Greenville, LLC 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.
                                                                      Supreme Court

                                                                      No. 2011-130-Appeal.
                                                                      (PC 06-6322)

      Tracie Peloquin, as Administratrix of the    :
           Estate of Pearl E. Archambault

                         v.                        :

    Haven Health Center of Greenville, LLC et al. :

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

                                           OPINION

          Chief Justice Suttell, for the Court. In June 2006, Pearl E. Archambault tragically died

while in the care of Haven Health Center of Greenville, LLC (Haven Health) after a nurse

mistakenly administered a lethal overdose of morphine. The administratrix of her estate, Tracie

Peloquin (plaintiff), filed a medical malpractice action and now appeals from the Superior

Court’s denial of her partial summary-judgment motion and grant of summary judgment in favor

of the defendant Columbia Casualty Company (Columbia), 1 the professional liability insurer of

the now-defunct nursing facility. 2       The plaintiff avers that the Superior Court erred in

interpreting Rhode Island law, argues that this Court should construe the insurance contract

between Columbia and its insured in her favor, and urges this Court to reverse the Superior

1
  Typically, the denial of a plaintiff’s summary-judgment motion is reviewable only through a
petition for certiorari, and is not appealable as a matter of right. “However, this Court ‘regularly
consider[s] appeals from the denial of a motion for summary judgment when coupled with an
appeal or cross-appeal of the granting of a motion for summary judgment.’” Avilla v. Newport
Grand Jai Alai LLC, 935 A.2d 91, 94 n.4 (R.I. 2007) (quoting O’Gara v. Ferrante, 690 A.2d
1354, 1356 (R.I. 1997)). “In those situations, ‘the appeal is no longer interlocutory because the
grant of summary judgment constituted a final and appealable judgment.’” Id. (quoting O’Gara,
690 A.2d at 1356). Thus, we will consider both plaintiff’s appeal of the grant of summary
judgment for Columbia as well as the denial of plaintiff’s motion.
2
  Because there have been multiple defendants involved in this case, we will refer to Columbia
by name in this opinion to maintain clarity. Of the various defendants, only Columbia is party to
this appeal.
                                                  -1-
Court’s decision and order that summary judgment be entered in her favor. For the reasons set

forth in this opinion, we vacate the judgment of the Superior Court and remand with instructions

that the Superior Court enter judgment in favor of the plaintiff for $100,000, plus prejudgment

and postjudgment interest that has accrued on that amount.

                                                 I

                                 Facts and Procedural History 3

         In June 2006, Archambault was a resident at Haven Health. On June 24 of that year,

Denise Hardesty, 4 a registered nurse employed by Haven Health, misinterpreted a physician’s

order prescribing five milligrams of a morphine solution, and instead administered five milliliters

of that substance to Archambault. As a result of this drug overdose, Archambault died on June

25.

         In December 2006, plaintiff filed the present action against Haven Health and Hardesty

on behalf of Archambault’s estate.      During discovery, Hardesty gave deposition testimony

acknowledging that she was negligent when she mistakenly administered the incorrect dosage of

morphine solution to Archambault. She also testified at her deposition that she was a registered

nurse in Rhode Island and a full-time employee of Haven Health at the time of Archambault’s

death.

3
  It is well established that when evaluating a motion for summary judgment, a court must
“view[] the facts and all reasonable inferences therefrom in the light most favorable to the
nonmoving party * * *.” See Derderian v. Essex Insurance Co., 44 A.3d 122, 126-27 (R.I. 2012)
(quoting Travelers Property and Casualty Corp v. Old Republic Insurance Co., 847 A.2d 303,
307 (R.I. 2004)). Columbia notes in its filings with this Court that it “generally does not disagree
with [plaintiff’s] statement of the factual and procedural posture of this action,” although it
would characterize the insurance contract’s language differently. Therefore, the opinion’s
summary of the underlying facts is drawn largely from plaintiff’s filings.
4
  We note that plaintiff refers to “Deborah Hardesty” throughout her filings, but that other
documents indicate that Hardesty’s correct first name is Denise.
                                               -2-
       When plaintiff filed her complaint, the Greenville Haven Health facility was insured

under a claims-made professional liability insurance policy issued by Columbia (Columbia

policy). The Columbia policy insured both Haven Health as an entity, as well as “any individual

who is or becomes [a Haven Health] ‘employee’ * * * during the ‘policy period’ but only for

‘professional services’ performed on [Haven Health’s] behalf.” 5 This policy limited coverage

for professional liability to $1 million per claim and $3 million in the aggregate. However, the

policy also contained a self-insured retention endorsement (SIR Endorsement) requiring Haven

Health to pay the first $2 million of “all ‘damages’ and all ‘claim expenses’ resulting from * * *

each ‘claim’ under the Professional Liability Coverage Form.” The policy described the parties’

obligations under the SIR Endorsement as follows:

               “[Columbia’s] obligation to pay ‘damages’ and ‘claim expenses’ as
               a result of a ‘claim’ is in excess of the Self-Insured Retention.
               [Haven Health] [is] required to pay all ‘damages’ and ‘claim
               expenses’ up to the amount of the Self-Insured Retention listed
               herein. The Limits of Liability set forth on the Declarations Page
               are in excess of the Self-Insured Retention regardless of [Haven
               Health’s] financial ability or inability to pay the Self-Insured
               Retention and in no event are we required to make any payments
               within [Haven Health’s] Self-Insured Retention.”

Thus, under the terms of the policy, Columbia’s obligation to pay on a professional liability

claim would arise only to the extent that the damages and expenses exceeded $2 million, and

Haven Health would be directly responsible for paying any amounts less than that.

5
  The policy defined “employee” as “a person, whose work is engaged and directed by [Haven
Health],” but excluding independent contractors. The term “professional services” was defined
to include “healthcare services,” which, in turn, meant “services performed by an Insured to care
for or assist [Haven Health] patients provided such Insured is licensed; trained or qualified to
perform such services in the jurisdiction in which such services are rendered.”
                                              -3-
       In late 2007 or early 2008, Haven Health and two related entities—Haven Eldercare of

New England, LLC (HENE) and Haven Eldercare, LLC (HE) 6—filed for Chapter 11

bankruptcy. 7 The next summer, the bankruptcy court approved the sale of substantially all of the

assets of Haven Health, HENE, and HE, and dismissed their cases (without a discharge). In

2008, Hardesty filed for Chapter 7 bankruptcy, and she obtained a discharge later that year.

       In 2009, plaintiff amended her complaint to add Columbia as a defendant and to assert

two counts against Columbia directly, based on G.L. 1956 § 27-7-2.4, which permits an injured

party to proceed against an insurer when the insured has filed for bankruptcy. The plaintiff also

added HENE and HE as defendants. 8 Haven Health, HENE, and HE failed to respond to

plaintiff’s amended complaint, and the Superior Court entered default judgment against each of

those defendants on November 20, 2009. The plaintiff was awarded a total of $364,421.63, 9

against Haven Health, HENE, and HE. Columbia answered plaintiff’s complaint and was not

defaulted.

       The plaintiff moved for partial summary judgment against Columbia on May 10, 2010, 10

urging the Superior Court to declare the SIR Endorsement “void and unenforceable as against

6
   According to plaintiff’s complaint, Haven Health is wholly owned by HENE, and HE holds
HENE stock.
7
   A large number of Haven Health entities filed for bankruptcy protection between November
2007 and January 2008. However, it is unclear from the documents provided by the parties
exactly when during that period the entities involved in the present action filed their bankruptcy
petitions.
8
   At times, plaintiff’s complaint also has named as individual defendants HENE and HE
shareholders, as well as the company that brokered the Columbia policy, but the status of these
parties is not relevant to this appeal.
9
  This sum includes $256,881 in damages (the statutory minimum amount under Rhode Island’s
wrongful death statute, G.L. 1956 § 10-7-2, medical expenses, and funeral expenses), costs, and
12 percent per annum interest accruing from June 24, 2006, to the date of default judgment.
10
    The plaintiff amended her motion on July 22, 2010. We will deal exclusively with this
amended motion because it is plaintiff’s operative pleading in this case.
                                               -4-
public policy” and to enter judgment against Columbia for $238,007.96. 11 Columbia objected to

plaintiff’s motion for summary judgment, and it filed its own cross-motion for summary

judgment.    The Superior Court granted summary judgment in favor of Columbia, denied

plaintiff’s summary judgment motion, and entered final judgment against plaintiff. The plaintiff

filed a timely notice of appeal.

                                                 II

                                       Standard of Review

       “In reviewing the parties’ cross-motions for summary judgment, we examine the matter

de novo.” Derderian v. Essex Insurance Co., 44 A.3d 122, 126 (R.I. 2012) (quoting Travelers

Property and Casualty Corp. v. Old Republic Insurance Co., 847 A.2d 303, 307 (R.I. 2004)). “In

reviewing the Superior Court’s judgment on the parties’ motions for summary judgment, we

* * * apply the same standards as those used by the trial court.” Delta Airlines, Inc. v. Neary, 785

A.2d 1123, 1126 (R.I. 2001). Thus, “[s]ummary judgment is appropriate when, viewing the facts

and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the

[C]ourt determines that there are no issues of material fact in dispute, and the moving party is

entitled to judgment as a matter of law.” Derderian, 44 A.3d at 126-27 (quoting Travelers

Property and Casualty Corp., 847 A.2d at 307).

       “[Q]uestions of statutory construction are reviewed de novo by this Court.” Mendes v.

Factor, 41 A.3d 994, 1002 (R.I. 2012) (quoting Generation Realty, LLC v. Catanzaro, 21 A.3d

253, 258 (R.I. 2011)). “When the language of the statute is clear and unambiguous, it is our

responsibility to give the words of the enactment their plain and ordinary meaning.” Id. (quoting

11
  This figure included $100,000 in damages (the amount of coverage that plaintiff argued
Columbia was statutorily obligated to provide), prejudgment interest amounting to $105,060.21,
and postjudgment interest amounting to $32,947.75.
                                               -5-
Generation Realty, LLC, 21 A.3d at 258). “Moreover, when we examine an unambiguous

statute, there is no room for statutory construction and we must apply the statute as written.”

Tanner v. Town Council of East Greenwich, 880 A.2d 784, 796 (R.I. 2005) (quoting State v.

DiCicco, 707 A.2d 251, 253 (R.I. 1998)).

       “The plain meaning approach, however, is not the equivalent of myopic literalism, and it

is entirely proper for us to look to the sense and meaning fairly deducible from the context.”

Mendes, 41 A.3d at 1002 (quoting Generation Realty, LLC, 21 A.3d at 259). “Therefore we

must consider the entire statute as a whole; individual sections must be considered in the context

of the entire statutory scheme, not as if each section were independent of all other sections.” Id.

(quoting Generation Realty, LLC, 21 A.3d at 259). “It is generally presumed that the General

Assembly ‘intended every word of a statute to have a useful purpose and to have some force and

effect,’” Curtis v. State, 996 A.2d 601, 604 (R.I. 2010) (quoting LaPlante v. Honda North

America, Inc., 697 A.2d 625, 629 (R.I. 1997)), and this Court’s “ultimate goal is to give effect to

the purpose of the act as intended by the Legislature.” Hanley v. State, 837 A.2d 707, 711 (R.I.

2003) (quoting Oliveira v. Lombardi, 794 A.2d 453, 457 (R.I. 2002)). “Finally, under no

circumstances will this Court construe a statute to reach an absurd result.” Mendes, 41 A.3d at

1002 (quoting Generation Realty, LLC, 21 A.3d at 259).

                                                 III

                                             Discussion

       The plaintiff raises numerous issues on appeal. She maintains that the SIR Endorsement

in Columbia’s policy is invalid under Rhode Island law, and she further urges that it is void as

against public policy. Additionally, plaintiff asserts that the trial justice erred in concluding that

G.L. 1956 § 42-14.1-2(a) and regulations promulgated based on it do not require nursing

                                                -6-
facilities to maintain professional liability insurance at a minimum level of $100,000 per claim,

$300,000 in the aggregate. Next, plaintiff argues that this Court should conclude as a matter of

law that, based on the policy’s language, Haven Health and Hardesty should be treated as

separate insureds and that statutory minimum coverage requirements should be applied to each,

separately. Finally, plaintiff urges that we read the Columbia policy’s language to require

Columbia to pay prejudgment and postjudgment interest on the full amount of the judgment

entered against the insureds, rather than on only that portion of the judgment that is within the

per-claim limit. The plaintiff asserts that it would best serve the interests of judicial economy for

this Court to enter summary judgment in her favor, rather than remanding the case to Superior

Court for further proceedings. 12

                                                  A

                                Validity of the SIR Endorsement

       The parties disagree about whether the SIR Endorsement in the Columbia Policy, which

required Haven Health to cover the first $2 million of any damages awarded and expenses

incurred in connection with a claim, is valid under Rhode Island law. Under § 42-14.1-2(a),

“[t]he director of the department of business regulation is * * * authorized to establish rules and

regulations allowing persons or entities with sufficient financial resources to be self-insurers.”

To date, the Department of Business Regulation (DBR) has not promulgated any such

12
   The plaintiff also argues on appeal that the hearing justice erred in concluding that she lacked
standing to proceed directly against Columbia under G.L. 1956 § 27-7-2 (permitting direct action
against an insurer by an injured party who has obtained a judgment against the insured).
However, it is undisputed that plaintiff has standing under § 27-7-2.4 (permitting an injured party
to proceed directly against an insurer when the insured has filed for bankruptcy protection).
Because our holding does not depend on which of these statutes confers standing, and the parties
agree that plaintiff has standing under the latter, it is unnecessary for us to address this argument.
                                                -7-
regulations, and the parties disagree on whether healthcare providers may lawfully self-insure in

the absence of DBR action.

       The plaintiff contends that self-insurance does not constitute insurance coverage and, thus

the SIR Endorsement in Haven Health’s policy did not satisfy the minimum coverage levels

purportedly required by § 42-14.1-2(a). In particular, plaintiff notes that, under the Columbia

policy’s SIR Endorsement, Haven Health was required to make all payments up to $2 million,

rendering Columbia’s coverage meaningless for any claims below that amount. The plaintiff

argues that unlike policies with deductibles, in which the insurer (rather than the claimant) must

seek to recover the deductible amount from the insured, SIR endorsements frustrate the public-

protection purpose of the statute. In short, plaintiff argues that “self-insurance is no insurance at

all,” Guerico v. Hertz Corp., 358 N.E.2d 261, 264 (N.Y. 1976), and cannot possibly satisfy the

minimum coverage thresholds that she argues are required under Rhode Island law. Thus,

plaintiff urges that this Court should declare the SIR Endorsement “void as against public policy

to the extent of the statutorily mandated minimum insurance limits.” The plaintiff acknowledges

that not all self-insured retentions violate public policy and recognizes that Rhode Island law

permits self-insurance in several other contexts. See, e.g., G.L. 1956 § 28-36-1 (requiring

employers to maintain workers’ compensation insurance but permitting self-insurance); G.L.

1956 § 31-33-9 (permitting self-insurance for certain motor vehicles provided that the State

Division of Motor Vehicles “is satisfied that the person is possessed and will continue to be

possessed of the ability to pay judgment obtained against the person”). The plaintiff argues,

however, that self-insurance is not permitted in the medical-liability-coverage context because

neither the General Assembly nor the DBR have expressly permitted it, and she emphasizes that

§ 42-14.1-2(a) merely “authorizes the DBR ‘to establish rules and regulations allowing persons

                                                -8-
or entities with sufficient financial resources to be self-insurers.’” (Quoting § 42-14.1-2(a)

(emphasis added by the party)).      The plaintiff suggests that since both Haven Health and

Hardesty filed for bankruptcy shortly after plaintiff filed her action, neither would have been

deemed by the DBR to be sufficiently financially stable to qualify for self-insurance.

       To support her argument, plaintiff cites Ryan v. Knoller, 695 A.2d 990, 992 (R.I. 1997),

in which this Court held that an intoxication exclusion in an automobile rental and insurance

agreement was void because it limited statutorily required liability coverage. The plaintiff also

asserts that cases from other jurisdictions have declared self-insurance void as against public

policy. See Commercial Union Insurance Co. v. Insurance Co. of North America, 273 S.E.2d

24, 27, 28 (Ga. Ct. App. 1980); Thomas v. Petrolane Gas Service Limited Partnership, 588 So.

2d 711, 720 (La. Ct. App. 1991).

       Columbia responds that § 42-14.1-2(a) does not prohibit healthcare providers from self-

insuring and, in fact, “expressly provides that a health care provider may be self insured.” Thus,

Columbia argues, “that § 42-14.1-2 specifically authorizes the self-insurance of health care

facilities conclusively establishes that the SIR [Endorsement] of the Columbia Policy does not

violate public policy.” Columbia notes that the DBR has not promulgated any regulations setting

forth the financial prerequisites for self-insurance; and it argues that “if the General Assembly

had wanted to proscribe the use of self-insurance by health care providers until the DBR

promulgated appropriate regulations it could easily have stated as such, which would have placed

insurers on notice.” Finally, Columbia asserts that the case law cited by plaintiff is either

distinguishable or inapplicable.     In particular, Columbia contends that self-insurance is

fundamentally different from the intoxication exclusion that this Court held violated public

policy in Ryan, 695 A.2d at 992, because an exclusion “operates to bring a covered loss outside

                                               -9-
of coverage,” whereas a “satisfaction of an SIR is a condition precedent of coverage.” Finally,

Columbia argues that the two cases cited by plaintiff from outside this jurisdiction are

inapplicable because in both of those cases the parties failed to demonstrate that the insureds had

satisfied the relevant requirements for self-insurance under those states’ laws. See Commercial

Union Insurance Co., 273 S.E.2d at 27; Thomas, 588 So. 2d at 721.

       Although plaintiff emphasizes public policy in urging that this Court declare the present

SIR Endorsement void, we need not undertake a public policy analysis here because we read

§ 42-14.1-2(a) to preclude Rhode Island healthcare providers from self-insuring unless and until

the DBR promulgates regulations setting forth parameters for self-insurance. As we have noted

on various occasions, “[w]hen the language of the statute is clear and unambiguous, it is our

responsibility to give the words of the enactment their plain and ordinary meaning.” Mendes, 41

A.3d at 1002 (quoting Generation Realty, LLC, 21 A.3d at 259). Here, the statutory language at

issue provides that the DBR director is “authorized to establish rules and regulations allowing

persons or entities with sufficient financial resources to be self-insurers.” Section 42-14.1-2(a)

(emphasis added). Having carefully read that provision, we conclude that before any self-

insurance may be incorporated into an insurance policy governed by § 42-14.1-2(a), the DBR

first must promulgate a regulatory framework expressly “allowing” for self-insurance.           In

particular, we note that the General Assembly employed the term “allow,” which the American

Heritage Dictionary defines as “[t]o let do or happen; permit” or, alternatively, “[t]o make

provision for; assign.” American Heritage Dictionary of the English Language 48 (4th ed. 2000).

Under these definitions of the term “allow,” before a Rhode Island healthcare provider lawfully

may self-insure, the DBR is required to take the affirmative step of “allowing” self-insurance and

defining the conditions under which “persons or entities” possess “sufficient financial resources

                                              - 10 -
to be self-insurers.” See § 42-14.1-2(a). Thus, unless and until the DBR promulgates regulations

that expressly make provision for self-insurance by healthcare providers, by its plain language,

the final sentence of § 42-14.1-2(a) does not permit the SIR Endorsement that appears in the

Columbia policy.

       This reading of the statute also comports with the treatment of Rhode Island self-insurers

in other contexts. For example, § 31-33-9 allows for any person with a fleet of more than

twenty-five vehicles to self-insure, but only upon “obtaining a certificate of self-insurance issued

by the division of motor vehicles,” which may be obtained only if the Division of Motor

Vehicles is “satisfied that the person is possessed and will continue to be possessed of the ability

to pay judgment obtained against the person.” Thus, in the automobile insurance context, § 31-

33-9 requires that, as a condition precedent to self-insurance, the Division of Motor Vehicles

take the affirmative steps of reviewing an applicant’s financial stability and issuing a certificate

of self-insurance. Similarly, in the workers’ compensation context, Rhode Island law, § 28-36-

1(b)(1), permits covered employers to “apply for approval to self insure,” but it requires, among

other things, that the employer “furnish[] to the director of labor and training satisfactory proof

of his or her financial ability to pay directly to injured employees or their dependents the

compensation, and by furnishing security, indemnity, or a bond in kind and in amount

satisfactory to the director.”   Section 28-36-1(a)(2)(i).   Therefore, as with automobile self-

insurance, before an employer may self-insure, it must demonstrate financial responsibility, and

the relevant state agency must act upon that employer’s application. Although the General

Assembly’s directive to the DBR about the circumstances under which it may permit self-

insurance by healthcare providers was far less detailed and specific than its directives to the

Division of Motor Vehicles and the Department of Labor and Training, we nonetheless conclude,

                                               - 11 -
based on the plain language of § 42-14.1-2(a), that, before Rhode Island healthcare providers

may self-insure, the DBR is required to first take the affirmative step of “establish[ing] rules and

regulations allowing persons or entities with sufficient financial resources to be self-insurers.”

       We also note that some authorities have characterized self-insurance as “the antithesis of

insurance” because it fails to shift the risk of loss away from the insured, and we agree with the

general proposition that “[t]o meet the conceptual definition of self-insurance, an entity would

have to engage in the same sorts of underwriting procedures that insurance companies employ.”

1A Steven Plitt et al., Couch on Insurance 3d § 10:1 & n.1 (rev. ed. 2010). Here, the record is

devoid of any indication that any effort was undertaken to ascertain Haven Health’s risk of loss

and financial ability to meet that potential loss. Moreover, we believe that the fact that Haven

Health filed for bankruptcy protection less than a year and a half after the Columbia policy was

issued would bring into question whether at the time the Columbia policy became effective,

Haven Health was in a financial position to adequately self-insure against the first $2 million of

loss pursuant to the SIR Endorsement.

       Because the DBR has not yet promulgated “rules and regulations allowing persons or

entities with sufficient financial resources to be self-insurers,” we hold that the Columbia

policy’s SIR Endorsement is invalid under § 42-14.1-2(a). Therefore, plaintiff may recover from

Columbia, even though her judgment against Haven Health does not exceed the $2 million SIR

Endorsement amount.

                                               - 12 -
                                                 B

     Mandatory Minimum Policy Limits Under § 42-14.1-2 and Insurance Regulation 21

       The plaintiff argues that § 42-14.1-2(a) 13 or Insurance Regulation 21, 14 or both, mandate

minimum coverage requirements of $100,000 per claim, $300,000 in the aggregate, for all

professional liability policies issued to Rhode Island healthcare providers. Columbia responds

that there is no such statutory mandate because the statute authorizes, but does not require, the

DBR to act, and the minimum coverage requirements set forth in the statute will become

effective if, and only if, the DBR exercises its discretion by promulgating rules and regulations

setting minimum coverage levels. Additionally, Columbia asserts that Insurance Regulation 21’s

general reference back to the statute does not constitute an exercise of that agency’s discretion

and thus does not convert the statute’s permissive minimum coverage requirements into

mandatory ones.

       We note that at no point during this proceeding has plaintiff asserted that she is entitled to

recover any damages in excess of the per-claim minimum coverage limit of $100,000 that she

13
   General Laws 1956 § 42-14.1-2(a) provides, in pertinent part, as follows:
               “The director of business regulation shall promulgate rules and
               regulations requiring all licensed medical and dental
               professional[s] and all licensed health care providers to be covered
               by professional liability insurance insuring the practitioner for
               claims of bodily injury or death arising out of malpractice,
               professional error, or mistake. The director of the department of
               business regulation is hereby authorized to promulgate regulations
               establishing the minimum insurance coverage limits which shall be
               required; provided, however, that such limits shall not be less than
               one hundred thousand dollars ($100,000) for claims arising out of
               the same professional service and three hundred thousand dollars
               ($300,000) in the aggregate.”
14
   The portion of Insurance Regulation 21 highlighted by plaintiff provides that “[a]ny insurer
authorized to write medical malpractice insurance in this State shall be allowed to do so subject
to the provisions of * * * [G.L. 1956 chapter 14.1 of title 42].” 11-5 R.I. Admin. Code R. §
21:4(D).
                                               - 13 -
contends § 42-14.1-2(a) requires. 15 The plaintiff also represented to this Court during oral

arguments that she was seeking only the purported per-claim minimum coverage amount because

it was her position that § 42-14.1-2(a) would not require Columbia to pay any amounts above

and beyond that statutory minimum. Because plaintiff consistently has taken the position that

she is entitled only to $100,000 of her damages award (plus interest), we need not determine

whether that statute actually limits her recovery in this way. We already have determined the

SIR Endorsement in the Columbia policy to be invalid, and we hold that plaintiff should receive

the $100,000 in damages to which she consistently has argued she is entitled. Thus, we need not

determine whether the $100,000 per-claim minimum specified in § 42-14.1-2(a) currently is

mandatory (and therefore applicable to all policies insuring Rhode Island healthcare providers),

or whether it becomes effective only if and when the DBR exercises its discretion by

promulgating regulations setting forth minimum professional liability insurance coverage

requirements for healthcare providers.

                                                C

                      Separate Treatment of Insureds Under the Policy

       On appeal, plaintiff argues that because § 42-14.1-2(a) requires “all licensed medical and

dental professional[s] and all licensed health care providers” to maintain at least $100,000

liability coverage per claim, Columbia is obligated to cover $200,000 of plaintiff’s total damages

award—$100,000 for the claim against Haven Health, a licensed healthcare provider, and

$100,000 for the claim against Hardesty, a licensed medical professional. (Emphasis added.)

15
   The plaintiff does, however, argue that Columbia is obligated to provide this minimum
coverage for Haven Health and Hardesty separately, thus requiring Columbia to pay $200,000 of
plaintiff’s total damages award. Still, she does not assert that she is entitled to any amount
greater than the ostensible statutory minimum for her claims against each insured. We consider
this to be a separate and distinct argument, which we address infra.
                                              - 14 -
The plaintiff points to case law from other jurisdictions to support her reading of the word “and”

in § 42-14.1-2(a). See Lewinski v. Commonwealth, 852 A.2d 1270, 1277 (Pa. Commw. Ct.

2004) (deferring to the Pennsylvania Insurance Department’s determination that “‘shared limits’

policy language violated the [statutory] requirement that the professional corporation maintain

separate basic liability coverage”); Haislip v. Southern Heritage Insurance Co., 492 S.E.2d 135,

137 (Va. 1997) (holding that a Virginia statute mandating that motor vehicle insurance policies

“contain ‘a provision insuring the named insured, and any other person using * * * the motor

vehicle * * *’” required the insurer to provide separate coverage for the vehicle’s owner and

permissive user).

       Columbia responds that plaintiff waived her right to make this argument to this Court

when she failed to raise it in the first instance in the summary-judgment proceedings before the

Superior Court. We agree. “It is axiomatic that this [C]ourt will not consider an issue raised for

the first time on appeal that was not properly presented before the trial court.” State v. Breen,

767 A.2d 50, 57 (R.I. 2001) (quoting State v. Saluter, 715 A.2d 1250, 1258 (R.I. 1998)). The

plaintiff acknowledges that she did not make this argument below, but urges that we apply an

exception to the raise-or-waive rule apparently recognized by some federal courts under which

an appellate court will consider questions of law not posed to the trial court. See, e.g., United

States v. Kin-Hong, 110 F.3d 103, 116 (1st Cir. 1997) (“While it is true that, as a general matter,

federal courts of appeals do not rule on issues not decided in the district court, * * * we do have

discretion to address issues not reached by the district court when the question is essentially legal

and the record is complete.”). However, although “[s]ome courts seem to be slightly less exigent

about the raise or waive rule * * *, this Court has remained quite exigent with respect to the raise

or waive rule * * * and we continue to believe that the rule is jurisprudentially sound.” Pollard v.

                                               - 15 -
Acer Group, 870 A.2d 429, 433 n.11 (R.I. 2005). Here, plaintiff had the opportunity to make

this argument when she moved for summary judgment against defendant, but she failed to do

so. 16 Thus, because plaintiff did not present this argument to the hearing justice below, we hold

that plaintiff waived her right to assert this argument here, and her recovery for damages is

limited to the $100,000 claim amount that she asserted below.

                                                D

                           Prejudgment and Postjudgment Interest

       Finally, the parties disagree as to the amount of prejudgment and postjudgment interest

that Columbia is required to pay pursuant to the policy language. The “Supplemental Payments”

section of the Columbia policy provides that “[Columbia] will pay with respect to any ‘claim’

* * * prejudgment interest and postjudgment interest that is awarded in connection with a

judgment made against the Insured, or that portion of the judgment that is within the applicable

limits of insurance.” The parties disagree on the meaning of this provision. The plaintiff argues

that because a comma and the disjunctive term “or” separate the initial clause establishing

16
   The plaintiff attempts to draw a distinction between her case and the well-established case law
from this Court, arguing that in other cases the raise-or-waive rule applied because the issues
should have been raised at trial, whereas here, the case was disposed of through summary
judgment and thus issues “remain open to the Superior Court for decision upon remand * * *.”
However, it is clear that when plaintiff moved for summary judgment below, she sought
complete resolution of all her claims against Columbia, and thus intended her motion to be a
complete statement of her legal arguments. For example, although plaintiff titled her motion a
“partial” motion for summary judgment, she also sought Rule 54(b) certification of final
judgment on all claims against Columbia. See Rule 54(b) of the Superior Court Rules of Civil
Procedure (permitting an entry of final judgment as to some but not all parties or claims).
Additionally, plaintiff argued to the lower court that her “motion for partial summary judgment
[against Columbia] [was] distinct and separate from the remaining claims brought against the
owners of the nursing facility in attempting to pierce the corporate veil,” further indicating that
she was seeking complete resolution of any and all claims she may have had against Columbia.
Thus, because we conclude that plaintiff intended to adjudicate all of her claims against
Columbia through this motion, rather than preserving some for trial, our established case law
applying the raise-or-waive rule to issues that could have been raised at trial applies with equal
force here.
                                              - 16 -
Columbia’s obligation to pay prejudgment and postjudgment interest from the final clause

limiting interest to the amount of the judgment that falls within the policy limits, the policy

provision actually sets out two alternative methods for determining interest (one that permits

interest based on the full amount of the judgment, and a second that limits the interest calculation

to only that portion of the award that is within the policy limits). The plaintiff asserts that she

should be able to benefit from the method for interest calculation that is most advantageous to

her. Alternatively, plaintiff argues that the two clauses, taken together, create an ambiguity that

should be construed in her favor. Thus, plaintiff asserts, Columbia is obligated to pay $100,000

toward plaintiff’s damages award as well as prejudgment and postjudgment interest calculated on

the basis of the total damages award, i.e., $256, 881.

       Columbia, on the other hand, maintains that the final clause of this policy provision

modifies the preceding clause, thereby limiting prejudgment and postjudgment interest to only

that portion of the judgment actually covered by the policy.         Thus, Columbia argues, any

prejudgment and postjudgment interest that it is obligated to pay must be determined with

reference only to $100,000 of plaintiff’s damages, not the entire judgment amount.

       “It is well established that this [C]ourt applies the rules for construction of contracts when

interpreting an insurance policy * * * .” Lynch v. Spirit Rent-A-Car, Inc., 965 A.2d 417, 425

(R.I. 2009) (quoting Mallane v. Holyoke Mutual Insurance Co. in Salem, 658 A.2d 18, 20 (R.I.

1995)). “The necessary prerequisite to this Court’s departure from the literal language of a

policy is a finding that the policy is ambiguous. In order to make such a determination of

ambiguity, we read a policy in its entirety, giving words their plain, ordinary, and usual

meaning.” Sjogren v. Metropolitan Property and Casualty Insurance Co., 703 A.2d 608, 610 (R.I.

1997). “We do not engage in ‘mental gymnastics * * * to read ambiguity into a policy where

                                               - 17 -
none is present.’” Id. (quoting Mallane, 658 A.2d at 20). “If, however, a policy’s terms are

ambiguous or capable of more than one reasonable meaning, the policy will be strictly construed

in favor of the insured and against the insurer.” Id.

       To support her argument, the plaintiff cites to Fratus v. Republic Western Insurance Co.,

147 F.3d 25, 27 (1st Cir. 1998). There, the First Circuit held that policy language requiring the

insurer to pay “[a]ll interest accruing after the entry of judgment” unambiguously obligated the

insurer to pay interest on the full amount of the judgment (over $3 million), rather than on only

that portion of the judgment that was within the policy’s coverage limit ($25,000). Id. at 27, 28-

29. By contrast, here, the Columbia policy language is not as sweeping or general, and we

disagree with the plaintiff’s argument that the policy provides for two alternate methods for

determining how much interest is owed. Instead, we are of the opinion that a fair reading of the

policy provision limits Columbia’s obligation to pay interest only on that portion of the award

that falls within the policy limits. Thus, because we hold that the plaintiff is entitled to receive

$100,000 under the policy, see Section III, B, supra, prejudgment and postjudgment interest in

this case must be calculated on the basis of that limited amount rather than on the full amount of

the plaintiff’s judgment against Haven Health and its affiliated entities.

                                                 IV

                                            Conclusion

       For the reasons set forth in this opinion, we vacate the judgment of the Superior Court,

and we remand the record to the Superior Court with instructions to enter judgment in favor of

the plaintiff for $100,000, plus prejudgment and postjudgment interest calculated on the basis of

that amount.

                                                - 18 -
                            RHODE ISLAND SUPREME COURT CLERK’S OFFICE

                                 Clerk’s Office Order/Opinion Cover Sheet

TITLE OF CASE:        Tracie Peloquin, as Administratrix of the Estate of Pearl E.
                      Archambault v. Haven Health Center of Greenville, LLC et al.

CASE NO:              No. 2011-130-Appeal.
                      (PC 06-6322)

COURT:                Supreme Court

DATE OPINION FILED: January 14, 2013

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

WRITTEN BY:           Associate Justice Paul A. Suttell

SOURCE OF APPEAL:     Providence County Superior Court

JUDGE FROM LOWER COURT:

                      Associate Justice Brian P. Stern

ATTORNEYS ON APPEAL:

                      For Plaintiff: Stephen P. Sheehan, Esq.

                      For Defendant: Douglas K. Eisenstien, Esq.
                                     Pro Hac Vice