35 N.E.3d 401
Mass. App. Ct.2015Background
- Silva operated an auto-repair business damaged when a neighboring building was negligently demolished; Associated Building Wreckers was insured by Steadfast.
- Trial judge entered judgment for Silva on June 21, 2010; Associated did not appeal but Silva appealed parts of the judgment (liability and damages issues) and sought postjudgment modifications.
- Steadfast paid $186,464 pretrial; after appeals and postjudgment proceedings reduced and amended the original award, an amended judgment of $342,201.53 entered March 5, 2013, and Steadfast paid that full amount on March 28, 2013.
- Silva sued Steadfast under G. L. c. 176D § 3(9)(f) and G. L. c. 93A §§ 2 and 11, alleging failure to effectuate a prompt, fair, and equitable settlement in the period after the June 2010 judgment and before March 2013 payment.
- The Superior Court granted summary judgment for Steadfast, concluding liability/damages were not reasonably clear while Silva pursued appeals and postjudgment motions; the Appeals Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Silva may bring a c.93A §11 business claim against insurer as a third-party claimant | Silva: §11 applies because parties were engaged in commerce and he acted in a business context | Steadfast: Silva’s mixed personal/business damages and lack of privity mean §9 (consumer) applies, not §11 | Held: Silva could proceed under §11 as a third-party/business claimant; no bright-line bar to §11 claims by third parties |
| Whether Steadfast violated G. L. c.176D §3(9)(f) by failing to settle after the June 2010 judgment | Silva: postverdict liability and damages were sufficiently clear to require a prompt, fair offer | Steadfast: liability/damages were not reasonably clear because Silva appealed and postjudgment motions affected amount; thus no duty to make offer earlier | Held: No violation as matter of law—damages (and scope) were not reasonably clear during appeals and postjudgment proceedings, so insurer’s delay was not unfair |
| Whether a c.176D violation automatically establishes a c.93A §11 violation | Silva: a c.176D breach supports §11 liability in business context | Steadfast: c.176D does not automatically convert into §11 liability | Held: c.176D evidence can support a §11 claim in appropriate business-context cases, but not every c.176D breach equates to a §11 violation; court assesses whether conduct is within §93A boundaries |
| Whether summary judgment was appropriate | Silva: factual dispute over when liability/damages were ‘‘reasonably clear’’ precludes summary judgment | Steadfast: undisputed record shows appeals/postjudgment motions made damages uncertain | Held: Summary judgment for Steadfast affirmed—no reasonable expectation Silva could prove a §93A violation given the uncertainty of damages through the appeals process |
Key Cases Cited
- Clegg v. Butler, 424 Mass. 413 (affirming third-party claimant rights under statute and discussing insurer settlement duties)
- R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. 66 (postverdict insurer conduct found to violate c.176D and support c.93A §§2,11 claim)
- Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486 (postjudgment offer was unreasonable where liability and damages were certain)
- Bobick v. United States Fid. & Guar. Co., 439 Mass. 652 (insurer’s duty to make prompt equitable offer when liability and damages are clear)
- Jet Line Servs., Inc. v. American Employers Ins. Co., 404 Mass. 706 (insurer not unfair for legally correct disclaimer of coverage)