Massachusetts Insurers Insolvency Fund v. Smith
458 Mass. 561
Mass.2010Background
- Fund is a Massachusetts insolvency fund that covers claims against insolvent insurers up to $299,999 per covered claim.
- Underlying action: Smith family members sue Dr. Mason for medical malpractice; Mason’s insurer later insolvent, triggering Fund liability.
- Policy provides $1 million per medical incident cap, defined to cover all related acts for a single incident.
- Fund seeks declaratory judgment that its liability is capped at $299,999 for each covered claim, not aggregated across all claims from one incident.
- Massachusetts Superior Court rejected Fund’s view; held the cap applies to each covered claim but total does not exceed policy’s $1 million aggregate.
- Court granted Fund's direct appellate review to resolve statutory interpretation and policy-coverage issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §5(1)(a) caps liability per claim or aggregates per incident. | Fund argues cap applies to each covered claim. | Smiths argue aggregation via policy for all claims from one incident. | Cap applies per covered claim; aggregation not implied. |
| Whether loss of consortium is a separate covered claim under §5. | Fund considers all family claims as separate claims. | Policy covers loss of consortium as a claim. | Loss of consortium is a separate covered claim. |
| Whether the policy’s $1 million per incident cap limits Fund’s liability for all claims from a medical incident. | Policy aggregation translates to single coverage for all related claims. | Statute caps each covered claim, not aggregate within incident. | Statute requires per-claim cap; policy cap is not the aggregate across claims. |
| What is the proper interpretive approach given the remedial purpose of the Fund statute? | A broad reading to maximize claimant protection. | Interpret statute by its plain language. | Apply plain language; remedial purpose supports per-claim cap. |
Key Cases Cited
- Clark Equip. Co. v. Massachusetts Insurers Insolvency Fund, 423 Mass. 165 (1996) (establishes Fund's role and general framework for covered claims)
- A. W. Chesterton Co. v. Massachusetts Insurers Insolvency Fund, 445 Mass. 502 (2005) (remedial purpose and policy considerations)
- Oglesby v. Liberty Mut. Ins. Co., 832 P.2d 834 (Okla. 1992) (statutory cap applies per claim, not per occurrence)
- Commissioner of Correction v. Superior Court Dep't of the Trial Court for the County of Worcester, 446 Mass. 123 (2006) (statutory interpretation aids; avoid reading in words not present)
- General Elec. Co. v. Department of Envtl. Protection, 429 Mass. 798 (1999) (statutory construction principles; plain language controls)
- Massachusetts Motor Vehicle Reinsurance Facility v. Commissioner of Ins., 379 Mass. 527 (1980) (insurer cost and remedial scheme basics)