360 F. Supp. 3d 31
D.D.C.2019Background
- River Farm Realty Trust owned the insured building; Paul and Linda DeRensis lived there. Farm Family Casualty Ins. Co. issued a policy (Nov 15, 2014–Nov 15, 2015) that covered building loss on an actual cash value (ACV) basis but did not cover household contents.
- Ice dams formed in Feb–Mar 2015 causing water intrusion; plaintiffs initially used personal remedies and later reported the loss to Farm Insurance in March 2015.
- Farm Insurance's handling involved record-keeping confusion, multiple adjusters (Dineley Claims Service), two on-site inspections, divergent repair estimates, and plaintiffs’ counsel ultimately demanded a Reference under M.G.L. c.175 §99.
- A three-referee Reference panel (June–July 2016) issued a unanimous award valuing building ACV at $137,888 and total potential recovery (including replacement cost, contents, and living expenses) at $183,848; Farm Insurance paid $137,887.99 (the ACV) and later tendered $7,766.58 in interest.
- Plaintiffs sued for breach of contract and violations of M.G.L. c.93A (invoking c.176D §3(9) subsections) seeking additional award, fees, costs of the Reference, and punitive damages; Farm Insurance moved for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Farm Insurance breach the policy by failing to pay owed sums? | DeRensis: insurer underpaid; Reference and estimates show larger loss than ACV paid. | Farm: policy limits recovery to ACV for building; it paid ACV and interest per the Reference. | Court: No breach — insurer paid ACV per policy and satisfied contractual obligations. |
| Do insurer's actions constitute unfair/deceptive practices under c.93A / c.176D? | DeRensis: delays, record-keeping errors, low estimates, and forcing Reference show unfair/ deceptive claim handling. | Farm: errors were clerical, insurer investigated, conducted second inspection, submitted to Reference, and paid timely once award issued. | Court: No c.93A liability — conduct not extreme/egregious; no bad faith or coercion. |
| Did Farm violate specific c.176D §3(9) duties (prompt response, reasonable investigation, timely coverage decision, prompt settlement)? | DeRensis: insurer failed to acknowledge/act promptly, investigated unreasonably, did not timely affirm/deny, and failed to promptly settle. | Farm: acknowledged delays with explanation, conducted investigations (two inspections), plaintiffs never provided signed proof of loss, submitted to and complied with Reference. | Court: No violation — record shows reasonable responses and investigations; absence of proof of loss precluded some claims; Reference was available and used. |
| Are plaintiffs entitled to damages, fees, or punitive relief under c.93A? | DeRensis: seek Reference costs, difference between estimates and award, attorney's fees, and punitive damages. | Farm: payments made offset claims; Reference was mandated; no willful or knowing deception to justify punitive damages. | Court: Even if liability existed, requested damages largely unavailable: Reference costs not recoverable, double recovery barred, punitive damages unwarranted; at best nominal fees. |
Key Cases Cited
- Allmerica Fin. Corp. v. Certain Underwriters at Lloyd's, London, 449 Mass. 621, 871 N.E.2d 418 (2007) (insurance contracts are interpreted by fair and reasonable meaning; ambiguities construed against insurer)
- Mass. Employers Ins. Exch. v. Propac-Mass, Inc., 420 Mass. 39, 648 N.E.2d 435 (1995) (focus on nature, purpose, and effect of challenged conduct in c.93A analysis)
- Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747, 610 N.E.2d 912 (1993) (violations of c.176D may predicate a c.93A §9 claim but not §11)
- Auto Flat Car Crushers, Inc. v. Hanover Ins. Co., 469 Mass. 813, 17 N.E.3d 1066 (2014) (acceptance of payment does not automatically bar a c.93A claim; payments may offset damages)
- Peabody Essex Museum, Inc. v. U.S. Fire Ins. Co., 802 F.3d 39 (1st Cir. 2015) (c.93A requires extreme or egregious business wrong; simple breach insufficient)