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Lombardi v. Rhode Island Insurers' Insolvency Fund5/25/2000
PER CURIAM.
The defendant, Rhode Island Insurers' Insolvency Fund (hereinafter defendant or the Fund), appeals from a Superior Court judgment in favor of the plaintiff, Arlene D. Lombardi (plaintiff or Lombardi), declaring the Fund liable for the applicable limits of coverage under an insurance policy in the amount of $79,500, and denying a motion to dismiss filed by defendant alleging that plaintiff was not the real party in interest. This case came before the Court for oral argument pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After hearing the arguments of counsel and reviewing the memoranda submitted by the parties, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time without further briefing or argument.
Lombardi was the owner of a two-family dwelling located on Gendron Street in West Warwick (hereinafter the premises) when, in November of 1990, the building was significantly damaged by fire. Lombardi insured the premises the previous January through a policy issued by American Universal Insurance Group (hereinafter American). The limits of insurance coverage under the policy were $75,000 for property loss, plus $5,000 for debris removal, minus a $500 deductible. The effective dates of the policy were January 26, 1990, through January 25, 1991. At the time of the fire, Colonial Bank (Colonial) held a mortgage on the premises in accordance with a promissory note and mortgage given by Lombardi in the amount of $75,000, for which approximately $68,540 remained outstanding. In turn, Colonial was the scheduled loss payee under the terms of the policy.
As a result of the fire, the premises incurred property damage in excess of the policy limits. On January 8, 1991, the insurance carrier, American, was declared insolvent by a justice of the Superior Court. On October 24, 1991, Lombardi filed this action against American, alleging breach of contract. Thereafter, Colonial was placed into receivership and its assets came under the control of the Resolution Trust Company (hereinafter Resolution). Included in Colonial's assets was an insurance policy in the amount of $1,000,000 issued by Lloyd's of London (Lloyd's) that purportedly covered this loss. Because of American's insolvency, the parties stipulated that in accordance with G.L. 1956 chapter 34 of title 27, the Fund be substituted as a party defendant for both American and Guaranteed Fund Management.
On May 14, 1998, this matter went on for trial before a justice of the Superior Court sitting without a jury. After making numerous findings of fact, the trial justice, in reliance upon Greater Providence Trust Co. v. Nationwide Mutual Fire Insurance Co., 116 R.I. 268, 355 A.2d 718 (1976), held that the mortgagee's clause under the standard Rhode Island fire insurance contract creates two separate and independent contracts, one between the mortgagor and the insurer, and the other between the mortgagee and the insurer, and therefore Lombardi had a separate and independent cause of action against her insolvent insurer for breach of contract. The trial justice ordered the Fund to pay Lombardi the sum of $79,500, and subsequently denied a motion to dismiss by defendant on the ground that Lombardi was not the real party in interest. The defendant has appealed.
Before this Court, defendant argued, in reliance on a clause in the insurance contract that lists Colonial as the loss payee, that Lombardi was not the real party in interest and that her claim should be dismissed pursuant to Rule 17 of the Superior Court Rules of Civil Procedure, which requires that " very a
Page 1 2 3 Rhode Island Personal Injury Attorneys
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