Jeff Liptrot Wins R.I. Supreme Court Insurance Victory

Providence Partner Jeffrey Liptrot recently won the complete reversal of a lower court’s decision before the Rhode Island Supreme Court in a coverage dispute between competing insurers. The case of first impression is the first reported decision in Rhode Island for Lewis Brisbois.

The issue before the court involved the contractual interpretation of two workers’ compensation policies issued to a Rhode Island employer following an injury to its employee while he was working in Massachusetts.

The trial court found our client, Beacon Mutual Insurance Company, primarily liable since the employee’s claim was brought in Rhode Island and Beacon issued a policy to the employer pursuant to the Rhode Island Workers’ Compensation Act. However, the court ruled that the Massachusetts insurer must reimburse Beacon for 50 percent of the benefits paid to the employee given the overlapping coverage.

The Appellate Division overturned the order, assigning complete liability to Beacon based on the employee’s decision to file for Rhode Island benefits and a statutory requirement that Beacon cover the “entire liability” of the insured. The court rejected our equity arguments regarding the amount of premium collected, which we based on the fact that the Massachusetts insurer collected most of the premium for the employee’s risk since the employee worked extensively out of state. The Appellate Division also narrowly interpreted the term “Massachusetts employee” even though it was not a specifically defined term in the carrier’s policy.

The Rhode Island Supreme Court reversed this decision on both grounds, finding in our client’s favor. The Supreme Court rejected the lower court’s narrow definition of “Massachusetts employee,” finding the undefined term must be strictly construed against the drafter and in favor of the insured. Citing extensively from our brief, the court found that the injured worker’s choice of forum is “mere happenstance,” which has no bearing on the contractual rights and obligations of the parties.

The court went on to reject the statutory interpretation of “entire liability,” reasoning that an employer was free to have more than one insurer to cover its workers’ compensation liability. Furthermore, the court rebuked the Massachusetts carrier for accepting considerable premium and denying the claim in Massachusetts in hopes that the injured worker would file his claim in Rhode Island, where coverage existed with Beacon.

The decision will impact other pending matters currently before the Rhode Island Workers’ Compensation Court.

Read the full opinion here.