922 F. Supp. 2d 138
D. Mass.2013Background
- Plaintiff Donald Bohn alleges Vermont Mutual violated M.G.L. c. 176D and c. 93A in handling his claim stemming from a January 11, 2006 injury.
- Vermont Mutual, insured Giardinas, and their property were involved in liability coverage of $500,000 and medical payments of $5,000.
- Gillespie (claims specialist) and Kelly (casualty program manager) supervised the investigation; the Giardinas’ parking lot adjacent to the insured property was central to liability questions.
- Rench conducted the initial investigation; statements were taken from Ragauskaite (the other party) and Bohn later provided a recorded statement.
- Vermont Mutual offered $25,000 plus $5,000 medical payments in October 2006, while reserving liability questions; the claim later matured in the tort case with a September 2008 offer of judgment of $61,000.
- Plaintiff filed a tort action in January 2007; mediation occurred in 2008, resulting in settlement with Ragauskaite but not with the Giardinas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether liability was reasonably clear to trigger settlement duties | Bohn argues liability was reasonably clear by Oct. 2006, supporting settlement demand. | Vermont Mutual contends liability was not reasonably clear due to natural vs. unnatural ice, trespass questions, and contributory negligence. | Not reasonably clear prior to Sept. 2008 offer; liability became reasonably clear only after acceptance of the offer. |
| Whether conditioning a settlement on a release of 176D claims violated the statute | Bohn contends release condition unlawfully coerced 176D claims. | Vermont Mutual argues release conditioning was permissible since liability was not reasonably clear earlier. | Permissible; conditioning on release did not violate 176D where liability was not yet reasonably clear. |
| Whether insurer’s initial settlement offer constituted unlawful low-balling | Bohn argues early offer was an improper low-ball tactic. | Defendant asserts initial offers are within latitude and not compelled to final terms immediately. | Not a violation; early offers may be at the low end of the range when liability is not clear or highly likely. |
| Whether the insurer conducted a reasonable investigation before denial | Bohn claims the investigation was strategically limited to avoid unfavorable evidence. | Rench conducted investigations, obtained photos, weather data, and witness statements; reliance on counsel. | Investigation was reasonable; no denial without a reasonable investigation. |
| Whether the insurer’s offer and timing violated 176D or 93A in relation to prejudgment interest | Bohn seeks damages tied to interest on settlements. | Interest issues were unsettled and subject to later judgment. | Liability for prejudgment interest related to the offer was not established as clear before acceptance. |
Key Cases Cited
- Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556 (Mass. 2001) (incorporates 176D into 93A violation analysis)
- Clegg v. Butler, 424 Mass. 413 (Mass. 1997) (duty to settle after liability is reasonably clear; good faith investigations)
- Bobick v. U.S. Fid. & Guar. Co., 439 Mass. 652 (Mass. 2003) (liability not reasonably clear when substantial questions persist; 50% damages rule nuances)
- Guity v. Commerce Ins. Co., 36 Mass.App. Ct. 339 (Mass. App. Ct. 1994) (plaintiff’s plausible legal position not automatically liability; not liable for 93A/176D)