389 F. Supp. 3d 94
D. Mass.2019Background
- Jane Doe alleges repeated sexual abuse by defendant Pike (oral sex, forced oral contact, "penny game," other sexualized conduct) occurring at multiple residences where Barbara Pike sometimes supervised or was present. Jane Doe reports severe, long‑term emotional and physical harm.
- Barbara Pike is accused of leaving Jane Doe alone with Pike, sometimes observing conduct (e.g., making eye contact while abuse occurred); Barbara denies knowing of the abuse and claims she first learned in 2014.
- State Farm issued three relevant policies effective fall 2009 (condominium, homeowners, umbrella). Jane Doe, as a third‑party beneficiary, sent a demand under Mass. Gen. Laws ch. 93A and ch. 176D in January 2017; State Farm denied relief in February 2017, stating Barbara’s liability was not "reasonably clear."
- State Farm moved for summary judgment seeking declaratory relief (no coverage for pre‑policy events; that the multiple acts constitute a single "occurrence"), and sought judgment on Jane Doe's bad‑faith settlement/refusal-to-settle counterclaim under c. 93A/176D.
- The court applied summary judgment standards, choice‑of‑law principles (parties agreed New Hampshire or Arizona law would govern; no conflict required), and established that duties to indemnify are premature before liability is adjudicated.
- The court denied State Farm’s motion: (1) indemnity/declaratory rulings on coverage and occurrence are premature pending trial; and (2) triable issues exist on whether liability was "reasonably clear" such that State Farm breached duties under ch. 93A/ch. 176D by not making a reasonable settlement offer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness of declaratory judgment on duty to indemnify / occurrence determination | State Farm should not get a pre‑trial declaration; indemnity and occurrence are fact‑dependent and premature until liability is established | State Farm seeks declaration that events before policy dates are not covered and that all acts constitute one occurrence, eliminating coverage | Denied as premature: indemnity and occurrence questions are fact‑intensive and await trial/adjudication |
| Whether State Farm violated Mass. Gen. Laws ch. 93A / ch. 176D by refusing to make a reasonable settlement offer | Jane Doe: facts (Barbara's prior knowledge of allegations, observed conduct, leaving child alone) could make Barbara’s liability reasonably clear; State Farm’s refusal may be unfair/deceptive | State Farm: liability of Barbara Pike was not reasonably clear after its investigation; insurer may delay in good faith while investigating | Denied summary judgment to State Farm on counterclaim: factual disputes and insufficient detail on State Farm’s investigation create triable issues whether liability was "reasonably clear" |
| Choice of law | Jane Doe: (implicit) apply governing state law (parties agreed) | State Farm: (implicit) New Hampshire or Arizona law applies | Court accepted parties' agreement that New Hampshire/Arizona law govern and did not resolve further choice‑of‑law conflicts |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard for genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (party moving for summary judgment must show absence of genuine issue or lack of evidence for nonmoving party)
- Klaxon Co. v. Stentor Elec. Mfg., 313 U.S. 487 (federal diversity court applies forum state choice‑of‑law rules)
- Wilton v. Seven Falls Co., 515 U.S. 277 (Declaratory Judgment Act confers discretion; not an absolute right)
- Travelers Ins. Co. v. Waltham Indus. Labs. Corp., 883 F.2d 1092 (duty to indemnify ordinarily determined after underlying liability adjudicated)
- Abbott Laboratories v. Gardner, 387 U.S. 136 (ripeness requirements for declaratory relief in federal courts)
- R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. 66 (insurer's duty to make reasonable settlement offer can continue as facts develop; post‑verdict liability may support c. 176D claim)