Bingham v. Supervalu, Inc., 2015 U.S. App. LEXIS 19794

In Jan 2006 Marion Bingham was injured at a Shaw's supermarket; she later died and her estate (through executor Warren Bingham) pursued a negligence suit against Shaw's.
Albertson's owned Shaw's at the time of the injury; Supervalu acquired Albertson's in June 2006 and thereafter controlled settlement authority for Shaw's claims.
Supervalu ran a centralized risk-management system handling and paying certain claims for its ~228 subsidiaries; it did not issue insurance policies and retained the first $2,000,000 of loss (self-insured retention).
A Massachusetts state court entered judgment for the Estate; after appeals and threats of further appeal by Supervalu, the Estate accepted a $475,000 settlement in 2010.
In 2013 the Estate alleged Supervalu had acted as an insurer and violated Mass. Gen. Laws ch. 176D (and ch. 93A) by willfully delaying settlement; Supervalu moved for summary judgment arguing it was not "in the business of insurance."
The district court granted summary judgment for Supervalu relying on Massachusetts precedent (Morrison). The First Circuit affirmed, holding Supervalu was a self-insurer and not subject to ch. 176D.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Supervalu was "in the business of insurance" under Mass. Gen. Laws ch. 176D	Supervalu effectively acted as an insurer: centralized claims handling, paid claims from a central account, owned an insurance agency (Risk Planners), and functioned like a captive insurer/TPA	Supervalu was a self-insurer that did not sell insurance, did not assume risk for unaffiliated third parties, had no contractual duty to settle, and thus falls outside ch. 176D (Morrison control)	Affirmed: Supervalu is a self-insurer not covered by ch. 176D; summary judgment for Supervalu affirmed

Morrison v. Toys "R" Us, Inc., 806 N.E.2d 388 (Mass. 2004) (self-insurer not "in the business of insurance" where it handled claims for itself/subsidiaries and had no contractual obligation to settle)
Poznik v. Mass. Med. Prof'l Ins. Ass'n, 628 N.E.2d 1 (Mass. 1994) (characteristics of entities engaged in the business of insurance)
Miller v. Risk Mgmt. Found. of Harvard Med. Insts., Inc., 632 N.E.2d 841 (Mass. App. Ct. 1994) (risk-management provider interposed between insurer and claimant can be subject to fair-dealing duties)
Lemos v. Electrolux N. Am., Inc., 937 N.E.2d 984 (Mass. App. Ct. 2010) (definition and regulation of captive insurers)
Hopkins v. Liberty Mut. Ins. Co., 750 N.E.2d 943 (Mass. 2001) (legislative purpose of ch. 176D to encourage prompt settlement of insurance claims)