Atmed Treatment Center, Inc. v. The Travelers Indemnity Company

Summary

The Rhode Island Supreme Court reviewed an insurance coverage dispute involving Atmed Treatment Center's claim that Travelers had a duty to defend discrimination-related proceedings and litigation. The court held that the trial justice properly reconsidered and vacated an interlocutory decision and concluded that the policy's discrimination exclusion applied to the allegations before the Rhode Island Commission for Human Rights. The court affirmed the Superior Court in part and vacated it in part, including with respect to summary judgment on a severed and stayed bad-faith claim.

Holdings

1. Rule 60(b) did not govern Travelers' motion because the Superior Court's original decision was interlocutory rather than a final judgment or order.
2. A trial justice has plenary and inherent authority to modify or vacate an interlocutory judgment or order before final judgment.
3. The policy's discrimination exclusion applied to Olofinlade's charge, placing the alleged injuries outside the policy's coverage; therefore, Travelers had no duty to defend Atmed against the charge before the Rhode Island Commission for Human Rights.
4. The Superior Court erred by granting summary judgment on count three because that count had been severed and stayed, the parties had not fully litigated it, and Travelers had not requested summary judgment on it.

Questions Presented

1. Whether Travelers' motion for reconsideration was governed by Rule 60(b) when the Superior Court's original bench decision had not become final.
2. Whether the Superior Court justice had authority to vacate and modify the prior interlocutory decision.
3. Whether the policy's discrimination exclusion precluded coverage and eliminated Travelers' duty to defend Atmed against Olofinlade's discrimination charge.
4. Whether the Superior Court improperly granted summary judgment on the severed and stayed bad-faith and implied-covenant claim when Travelers had not moved for summary judgment on that count.

Disposition

other