Hawley v. Preferred Mutual Insurance Co., 36 N.E.3d 1284

Linda and Robert Hawley owned a three-family rental property insured by Preferred Mutual for policy period Nov 14, 2003–Nov 14, 2004; water damage occurred June 11, 2004.
Preferred investigated, made a $5,000 advance, but on Nov 8, 2004 denied the claim (citing failure to repair and policy exclusions); Hawleys did not cash the advance or begin repairs.
Hawleys sent a c. 93A demand in May 2006 and a written request for reference (arbitration of loss amount) on June 5, 2006—five days before the two-year limitations period under G. L. c. 175, § 99 would expire.
Preferred declined the reference on July 10, 2006 and again later; Hawleys filed suit on June 2, 2008—nearly four years after the loss.
The Superior Court found the breach of contract claim time-barred and that the loss was excluded by the policy as resulting from repeated seepage/leakage from plumbing; therefore c. 93A and c. 176D claims failed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a mere timely request for reference tolled the two-year limitations in G. L. c. 175, § 99	Hawleys: their June 5, 2006 request for reference tolled the limitations	Preferred: reference was not commenced; mere request does not toll § 99	Request alone does not toll the § 99 limitations period
If tolling applied, whether Hawleys filed suit within a reasonable time after reference was denied	Hawleys: insurer’s conduct lulled them into delay; additional communications justified later filing	Preferred: it repeatedly denied liability; plaintiffs waited nearly two years after denial	Even if tolled, filing nearly two years after denial was not reasonably prompt
Whether the loss was covered or excluded by the policy	Hawleys: loss resulted from a sudden event (shower door break) and thus covered	Preferred: loss resulted from ongoing leakage/seepage from plumbing and is excluded	Loss was caused by ongoing leak from plumbing and is excluded under policy
Whether c. 93A / c. 176D claims survive	Hawleys: insurer’s refusal and handling violated c. 176D and c. 93A	Preferred: liability was not reasonably clear; dispute was in good faith	Because loss not covered and liability not reasonably clear, c. 93A and c. 176D claims fail

J. & T. Enters., Inc. v. Liberty Mut. Ins. Co., 384 Mass. 586 (statute begins to run at time of loss)
Gallant v. Federal Mut. Ins. Co., 354 Mass. 146 (loss date controls limitations; estoppel only in limited circumstances)
Trust Ins. Co. v. Comm’r of Ins., 48 Mass. App. Ct. 617 (reasonableness of delay depends on case facts)
Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556 (c. 176D/c. 93A principles on insurer practices)
Bobick v. U.S. Fid. & Guar. Co., 439 Mass. 652 (interaction of c. 176D and c. 93A)
Duclersaint v. Fed. Nat’l Mort. Ass’n, 427 Mass. 809 (good-faith dispute is not a c. 93A violation)
Clegg v. Butler, 424 Mass. 413 (insurers may delay in good faith pending investigation)
Pacific Indem. Co. v. Lampro, 86 Mass. App. Ct. 60 (no penalty for insurer delay when liability unclear)