Thomas Shannahan v. Rhode Interlocal Risk Management Trust

Syllabus

The plaintiffs appealed from a Superior Court judgment in favor of the defendant, following the grant of the defendant's motion for summary judgment pursuant to Rule 56 of the Superior Court Rules of Civil Procedure. After this Court had affirmed summary judgment relative to the plaintiffs' underlying claims against the City of Central Falls in a prior case, the defendant filed a motion for summary judgment to dismiss plaintiffs' bad-faith insurance claim against the defendant. The trial justice granted its motion, and the plaintiffs appealed. The Supreme Court concluded that the plaintiffs were not the insureds under defendant's insurance policy, nor assignees for purposes of a bad-faith claim. As third-party claimants, the plaintiffs did not obtain any judgment in their favor under the insurance policy—let alone a judgment in excess of the insurance policy limits—both of which are required to properly assign a bad-faith claim to a third party. Lastly, the Court held that, even if the plaintiffs were assignees to the City of Central Falls under the defendant's insurance policy, they did not meet their burden for a bad-faith action by showing an absence of a reasonable basis for denial of their claims, or by establishing that the defendant intentionally or recklessly failed to properly investigate their claims. The Supreme Court therefore affirmed the judgment of the Superior Court.