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Rhode Island Supreme Court Upholds Enforceability of Release

Blogs, Insurance Coverage

The Supreme Court of Rhode Island recently ruled that a general release executed by an insured in exchange for dropping criminal charges was enforceable. Miller v. Metro. Prop. & Cas. Ins. Co., 111 A.3d 332 (R.I. 2015).

David Miller, owner, and operator of Miller’s Auto Body (‘MAB”), was suspected of insurance fraud. The State Police received complaints from insurance companies that Miller and MAB were billing for inflated or fictitious damage to cars. The State Police planned an undercover operation with help from Amica Mutual Insurance Company (“Amica”) and Metropolitan Property Casualty Insurance Company (“Metropolitan”). The State Police later arrested Miller, but the charges were dropped if he agreed to repay the insurance companies, relinquish his Department of Business Regulation auto-body license, and execute a general release on behalf of the State Police, Attorney General, Amica, Metropolitan, and Allstate Insurance Company (“Allstate”). Shortly after signing the waiver, Miller filed suit against Amica, Metropolitan, and Allstate asserting claims of tortious interference with contractual relations and abuse of process.

All three defendants raised the release as an affirmative defense. After multiple motions for summary judgment, Allstate’s motion was granted in full, but Miller’s abuse of process claim remained against Amica and Metropolitan. At trial, the jury found for Miller and awarded him over 3 million dollars. Amica and Metropolitan both filed a motion for judgment as a matter of law and moved for a new trial. The trial judge granted Amica’s motion but denied Metropolitans. Miller and Metropolitan both appealed.

On appeal, the Supreme Court ruled that the general liability release was sufficient to grant judgment for all three defendants. The Court reasoned that Miller was not under duress nor forced to sign the agreement. The Court noted that he received valid consideration for the release, in that he would no longer face criminal prosecution. Further, the Court found that Miller’s own defense counsel drafted the release, gave him legal counsel, and did not advise him to sign it.

As the Court found the release enforceable, the judgments in favor of Allstate and Amica were affirmed. The Court reversed the trial court and granted judgment as a matter of law for Metropolitan.