943 F.3d 27
1st Cir.2019Background
- River Farm Realty Trust (owners Paul and Linda DeRensis) suffered interior water damage from ice dams in Feb–Mar 2015 and submitted a claim under a Farm Family Casualty Insurance Co. (FFI) homeowner policy covering actual cash value and providing a Massachusetts "Reference" appraisal procedure.
- FFI's initial adjuster inspected in May 2015 and issued an estimate (after deductible/depreciation) of $17,825.95 in June 2015; River Farm did not object until a November 13, 2015 letter attaching contractor estimates totaling $154,769.93 (which included non-recoverable hotel/furniture costs).
- After attorney involvement and a larger contractor estimate in Feb 2016, FFI re-inspected in March 2016 and paid $28,005.21 (excluding roof damage, which was reserved). River Farm demanded Reference under Mass. Gen. Laws ch. 175 § 99.
- The Reference panel (June–July 2016) fixed building replacement cost at $153,208 and actual cash value at $137,888 (including roof); FFI paid the panel-determined actual cash value less prior payment.
- River Farm sued FFI for breach of contract and violations of Mass. Gen. Laws chs. 93A and 176D; district court granted summary judgment for FFI, and the First Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FFI violated Mass. Gen. Laws ch. 176D by unreasonably delaying/handling the claim | Delay from initial notice to Reference (Mar 2015–Jul 2016) and disparities in estimates show unfair claim settlement practices/bad faith | FFI responded when notified, investigated, corresponded with counsel, complied with Reference; differences reflect evolving information and legitimate disagreements | No 176D violation; summary judgment for insurer — delays/disparities insufficient without evidence of bad faith or unreasonable investigation |
| Whether disparity between insurer estimates and final award shows violation of 176D §3(9) (failure to reasonably investigate/pay) | Large gaps between FFI estimates and River Farm demands/award prove unreasonable, "lowballing" | Disparities due to changed/different scopes, reserved roof damage, evolving information; plaintiffs failed to point to specific unreasonable line-items or industry-standard breaches | Held for insurer — disparate figures alone (without evidence insurer acted unreasonably) do not create triable 176D claim |
| Breach of contract: did FFI fail to pay policy amount or follow appraisal/Reference procedure | FFI underpaid; failed to pay replacement costs and living expenses; refusal to extend time waived policy rights | Policy required payment of least of listed values (including actual cash value) and provided Reference for disputes; FFI complied with Reference and paid panel award | No breach — FFI followed policy terms and Reference procedure; summary judgment for insurer |
| Whether factual disputes required a jury or precluded summary judgment | Plaintiffs asserted factual disputes about adjuster conduct and bad faith that should go to a jury | Plaintiffs produced no admissible evidence (depositions, affidavits, industry standards) creating a genuine factual dispute; many contentions were conclusory | No genuine dispute of material fact; summary judgment appropriate; jury trial right not implicated absent triable issues |
Key Cases Cited
- Bobick v. U.S. Fid. & Guar. Co., 790 N.E.2d 653 (Mass. 2003) (insurer response standard under c.176D; disparity alone not dispositive)
- Clegg v. Butler, 676 N.E.2d 1134 (Mass. 1997) (duty to settle arises when liability and damages become reasonably clear)
- Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912 (Mass. 1993) (use of c.176D violations as evidence under c.93A)
- Boyle v. Zurich Am. Ins. Co., 36 N.E.3d 1229 (Mass. 2015) (mere negligence does not establish a c.176D unfair practice)
- Forcucci v. U.S. Fid. & Guar. Co., 11 F.3d 1 (1st Cir. 1993) (negotiation dynamics; final offers need not match initial positions)
- Full Spectrum Software, Inc. v. Forte Automation Sys., Inc., 858 F.3d 666 (1st Cir. 2017) (addresses jury-trial questions for c.93A claims in federal court)
- Bulwer v. Mount Auburn Hosp., 46 N.E.3d 24 (Mass. 2016) (elements required to prove breach of contract)
- Doe v. Liberty Mut. Ins. Co., 667 N.E.2d 1149 (Mass. 1996) (delay insufficient for c.176D liability absent bad faith)