57 F.4th 1
1st Cir.2022Background
- Plaintiff Peter Gottlieb bought a homeowners policy from Amica for 3/10/2015–3/10/2016 with Coverage A (dwelling) limit $311,000 and $730 premium; policy included an endorsement allowing Amica to adjust limits and premium based on property evaluations and “any increases in inflation.”
- Amica sent a proposed renewal for 2016–2017 with a new Coverage A of $321,000 and a $795 premium (a $65 increase, $16 attributable to the higher Coverage A). Amica used a vendor (E2Value) multiplier to calculate the new limit.
- Gottlieb accepted the renewal, then sued, alleging (1) breach of the original contract because Amica allegedly violated the endorsement’s limits when setting the renewal limit, (2) breach of the implied covenant of good faith and fair dealing, (3) unjust enrichment/money had and received, and (4) deceptive practices under Mass. Gen. Laws ch. 93A.
- The district court dismissed the breach and implied-covenant claims and granted summary judgment for Amica on the equitable and Chapter 93A claims; the court concluded the original policy did not restrict how Amica could set the coverage limit in a new renewal contract and Gottlieb showed no cognizable injury from any alleged deception.
- On appeal, the First Circuit affirmed: renewal policies are separate contracts; no contractual or implied-covenant right required Amica to use only a new inspection or only historical inflation when setting the renewal limit; equitable claims barred by an express contract; Gottlieb failed to prove injury for Chapter 93A.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract: whether the 2015–16 policy limited how Amica could set the 2016–17 renewal Coverage A | The 2015–16 endorsement limited increases to a new inspection or inflation so Amica breached by using projected/repriced reconstruction costs to set renewal limit | Renewal is a new contract; nothing in the original policy restricted how Amica could propose a limit for a subsequent policy | Held for Amica: renewal is a separate contract and the original policy did not constrain setting the renewal limit |
| Breach of implied covenant of good faith and fair dealing | Amica acted in bad faith by using impermissible factors, rewriting the contract, and deceiving Gottlieb about cost trends | The covenant cannot create rights beyond the written contract; Gottlieb had no reasonable expectation that the original-year limitations would govern a new renewal | Held for Amica: covenant cannot be used to create contractual terms that do not exist; no deprivation of expected contractual benefits |
| Equitable claims (unjust enrichment, money had and received) | Amica received extra premium for illusory coverage it would never pay | A valid, controlling written contract governs the parties’ relationship; equitable remedies are unavailable where contract provides the remedy | Held for Amica: equitable claims barred because a valid contract governs the dispute |
| Chapter 93A deceptive practices | Amica’s cover letter statement that reconstruction costs "have risen steadily" was misleading and caused Gottlieb to pay an inflated premium | Even if the statement might be deceptive, Gottlieb failed to show cognizable injury causally linked to deception (no evidence coverage was illusory) | Held for Amica: no actionable 93A claim because plaintiff failed to prove injury and causation |
Key Cases Cited
- Legal Sea Foods, LLC v. Strathmore Ins. Co., 36 F.4th 29 (1st Cir. 2022) (standard of review for motion to dismiss)
- Cardigan Mountain School v. N.H. Ins. Co., 787 F.3d 82 (1st Cir. 2015) (plausibility standard on Rule 12(b)(6))
- Noonan v. Staples, Inc., 556 F.3d 20 (1st Cir. 2009) (summary judgment review and inferences for nonmovant)
- Epstein v. Nw. Nat'l Ins. Co., 166 N.E. 749 (Mass. 1929) (renewal policies are new contracts)
- Guldseth v. Fam. Med. Assocs. LLC, 45 F.4th 526 (1st Cir. 2022) (scope of implied covenant tied to contract terms)
- Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 805 N.E.2d 957 (Mass. 2004) (covenant cannot create rights not in contract)
- Latson v. Plaza Home Mortgage, Inc., 708 F.3d 324 (1st Cir. 2013) (definition of implied covenant: preserve fruits of contract)
- Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215 (1st Cir. 2005) (three-part test for unfairness under Chapter 93A)
- Tomasella v. Nestlé USA, Inc., 962 F.3d 60 (1st Cir. 2020) (deception standard under Chapter 93A)
- Jelmoli Holding, Inc. v. Raymond James Fin. Servs., Inc., 470 F.3d 14 (1st Cir. 2006) (money had and received parallels unjust enrichment)