Rhode Island's top court affirmed an insurer's denial of a vandalism claim - even after the insurer's own brief cited cases that do not exist.
In a July 30, 2026 opinion, the Rhode Island Supreme Court gave insurers a useful marker on two questions: when an insurer can raise fraud, and when a dispute has to go to appraisal.
The case started with a rental property. In February 2014, an insured bought a house in North Kingstown for $21,000 at a foreclosure sale, then took out a dwelling and personal liability policy from the Rhode Island Joint Reinsurance Association (RIJRA). A tenant already living there stopped paying rent and was evicted. When the owners returned that June, they found the house damaged and filed a vandalism claim.
RIJRA's adjuster disagreed. Flanagan Claims Service inspected the property and reported that "the damage to the dwelling was the result of unfinished remodeling and we found no evidence of vandalism." The insurer's letter said RIJRA "fully reserves unto itself all defenses."
Instead of paying, RIJRA filed a declaratory judgment action to define the parties' rights under the policy, later amending it to add counts alleging the owners "had made material misrepresentations and engaged in fraud." A jury found the owners had not proven the damage occurred within the policy period. That finding ended the case, so the jury never reached the fraud question.
The appraisal ruling is the one for claims teams to note. The policy let "either [party] may demand an appraisal of the loss" if the sides "fail to agree on the amount of loss." The owners pushed for appraisal; the court said appraisal decides how much a loss is worth, not whether a loss is covered. Because the fight was about coverage, appraisal never applied.
The court also rejected the argument that RIJRA raised fraud too late. Fraud was a count in the insurer's own declaratory action, not a new denial reason raised at trial, so the rule limiting late-added defenses did not apply.
In an unusual aside, the court flagged that RIJRA's brief quoted cases that could not be located, cited "a case that does not exist," and attributed a quote to the trial justice that was not in the record. The justices warned that "advancements in technology do not absolve attorneys from their obligations to ensure the accuracy and veracity of their filings."
The court affirmed the judgment for RIJRA.
