439 Mass. 652 | Mass. | 2003
We granted the application of United States Fidelity and Guaranty Company (USF&G) for further appellate review in this case. The Appeals Court reversed an order granting summary judgment entered in the Superior Court that had dismissed claims that USF&G and another insurer
The factual background of this case may be summarized as follows. The plaintiff, a mildly retarded individual, was about sixty years old at the time of the accident that gave rise to this litigation. For approximately three weeks a month, the plaintiff resided with his sister, Pauline Graustein. One week per month, the plaintiff stayed at the Walnut Street Center (Walnut), a facil
It was the responsibility of the operator of Park’s van to ensure that passengers in the van, all developmentally disabled individuals, were met by someone at their destination. On January 15, 1993, the plaintiff apparently was left unattended after Park had transported him to Walnut. He crossed Highland Avenue, a busy main street in Somerville, to go to a convenience store and, as he approached the store, he slipped and fell on an icy embankment. This fall resulted in a displaced fracture at the head of the plaintiff’s right femur. The plaintiff did not completely recover from his injuries, and, at the time of the judge’s memorandum and order granting summary judgment and dismissing the plaintiff’s G. L. c. 93A claim against USF&G, he walked with the aid of a walker. Medical bills for the plaintiff’s care totaled in excess of $80,000.
The procedural history of this case is complicated. We relate only those prior proceedings relevant to our decision. On October 25, 1994, the plaintiff filed a complaint in the Superior Court, asserting claims of negligence against Park and Walnut, and G. L. c. 93A violations against USF&G (Park’s insurer) and Continental
The plaintiff subsequently filed a motion to amend his complaint to add, among other matters, a loss of consortium claim on behalf of his sister. A judge in the Superior Court denied the motion “insofar as it seeks to add Pauline Graustein
Following a trial on the plaintiff’s tort claims, a jury found for the plaintiff and apportioned liability in the following manner: Park, forty per cent; Walnut, twenty per cent; Rebecca Pontius,
The underlying tort claims having been resolved, the remaining parties in the case, the plaintiff, USF&G, and Continental, filed motions for summary judgment on the G. L. c. 93A claims. In her written memorandum of decision, the judge concluded, essentially, that the summary judgment record (to be summarized later in this opinion) was devoid of evidence that either USF&G or Continental had engaged in unfair claim settlement practices. Accordingly, the judge allowed both insurers’ motions for summary judgment, and judgment subsequently entered on the G. L. c. 93A claims in favor of USF&G and Continental. The plaintiff appealed, challenging the resolution of the summary judgment motions as well as the denial of his earlier motion to amend his complaint in order to pursue a loss of consortium claim on behalf of Graustein.
The Appeals Court affirmed the denial of the motion to amend, reversed the entry of summary judgment in favor of USF&G and Continental, and remanded the case to the Superior Court for further proceedings. See Bobick v. United States Fid.
1. No disputes of material fact appear in the summary judgment record, which we now summarize. USF&G received its first notice of the plaintiff’s claim in a letter from the plaintiff’s counsel dated May 16, 1994. The letter alleged that Park was at fault in connection with the injuries incurred by the plaintiff on January 15, 1993,
USF&G made no offer in response to this letter. According to an affidavit of Deborah A. Duncan, the USF&G senior claims representative assigned to the case, Park’s insurance policy with USF&G was for automobile coverage, and USF&G initially took the position that the claim was not an “auto” risk.
USF&G received a letter, dated August 23, 1994, from the plaintiff’s counsel, sent pursuant to G. L. c. 93A, demanding payment of its full policy amount, $250,000. USF&G initiated
In its original response to the G. L. c. 93A demand letter, on September 16, 1994, USF&G declined to offer a settlement because, in its opinion, liability was not “reasonably certain” at that time. USF&G further informed the plaintiff that “[o]ur investigation to date, which continues, of the circumstances surrounding this loss has revealed that the control of [the plaintiff] had been passed on to the personnel of [Walnut] by [Park] prior to his injury .... Upon the delivery and discharge of [the plaintiff] he then became the responsibility of [Walnut].” USF&G also repeated its position that the plaintiff had not received his injury “while in transport, delivery or disembarking [its] insured’s vehicle” and stated that “we continue to investigate this case. When and if additional facts should be discovered linking our insured more closely to the cause of the [plaintiff’s] injury our position regarding settlement will be reevaluated.”
On October 17, 1994, the plaintiff extended to October 21 the thirty-day response period allowed by G. L. c. 93A, § 9 (3), and, the next day, USF&G extended to the plaintiff a settlement offer of $50,000. Duncan’s deposition testimony indicates that this offer reflected USF&G’s assessment of its share of the settlement offer, which USF&G had valued at $170,000 or $180,000. The plaintiff rejected this offer and immediately initiated litigation.
Three months after suit was filed, USF&G prepared a case assessment report estimating the total damages of the plaintiff’s case, including incremental cost of future custodial care, to be $190,000. In addition, the report estimated chances of a verdict in USF&G’s favor to be zero to twenty per cent. The report
Subsequent mediation efforts between the plaintiff, USF&G, and Continental, however, were unsuccessful. An offer of $200,000 extended to the plaintiff during mediation was rejected.
We set forth the applicable law. General Laws c. 93A, § 2 (a), states that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” General Laws c. 176D, § 3, in turn, prohibits “unfair or deceptive acts or practices in the business of insurance,” including, in subsection (9) (/), the failure “to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” We have stated that “the former statute incorporates the latter, and [accordingly] an insurer that has violated G. L. c. 176D, § 3 (9) (/), by failing to ‘effectu
The plaintiff’s claim against USF&G rests on the two-fold premise that (1) Park’s liability was reasonably clear on August 23, 1994, when the plaintiff’s demand pursuant to G. L. c. 93A was sent to USF&G, and (2) the $50,000 offer of settlement USF&G extended in response to that demand was neither fair nor equitable. Although these matters ordinarily are appropriately determined by a fact finder, there is no reason why the question whether an insurer has fulfilled its duties under G. L. c. 176D may not be settled in favor of an insurer on a motion pursuant to rule 56, in circumstances when undisputed material facts in the record demonstrate that the plaintiff has “no reasonable expectation of proving an essential element” of his case. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). See Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 678 (1983). Such circumstances are present here.
USF&G was not required to put a fair and reasonable offer on the table until liability and damages were apparent. See Hopkins v. Liberty Mut. Ins. Co., supra at 566; Clegg v. Butler, supra at 418. The record leaves no doubt that, from the time the initial claim was presented to USF&G on May 16, 1994, until
Regardless whether liability was clear, on October 18, 1994, an offer of $50,000 was extended by USF&G and rejected by the plaintiff. Had this matter proceeded to trial, the burden would have been on USF&G to prove that $50,000 was a
We emphasize two factors. First, USF&G’s own evaluation of the plaintiff’s claim as of the fall of 1994, taking into consideration the plaintiff’s documented medical expenses of approximately $83,000, was $170,000 to $180,000. This amount is higher than the total damage award accorded the plaintiff by the jury, and even the plaintiff does not now contend that USF&G’s estimation was low. USF&G was allowed to discount this amount to reflect the potential liability of Walnut employees, who were insured by Continental and fully solvent. We reject the plaintiff’s argument that the doctrine of joint liability, which allows an injured plaintiff to proceed against, and recover damages from, any or all joint tortfeasors, operates in these circumstances. The statutes at issue were enacted to encourage the settlement of insurance claims and to discourage insurers from forcing claimants into unnecessary litigation to obtain relief, see Clegg v. Butler, supra at 419, but do not require an insurer to settle not only its own, but another solvent tortfeasor’s liability.
Second, the reasonableness of an insurer’s response is to be
We make final observations to clarify a subject of apparent confusion. Neither G. L. c. 176D nor G. L. c. 93A, of course, required USF&G to accede to the plaintiff’s demand of $250,000, made in his G. L. c. 93A letter. Even excessive demands on the part of a claimant, however, do not relieve an insurer of its statutory duty to extend a prompt and equitable offer of settlement once liability and damages are reasonably clear. They may be considered as part of the over-all circumstances affecting the amount that would qualify as a reasonable offer in response, but the underlying duty to effectuate a prompt, fair, and equitable settlement remains unaltered.
The judge’s written memorandum and order on the motions for summary judgment indicates that her decision was based, in part, on the plaintiff’s failure to demonstrate that he would have been willing to accept a reasonable settlement offer at any time
2. The relevant portion of the plaintiff’s motion to amend the complaint to add a loss of consortium claim had been denied well before judgment entered on the plaintiff’s tort claims against Walnut, Pontius, and Park. A joint motion for entry of separate and final judgment was allowed on August 1, 1996. The waiver filed at that time by the parties with respect to “their rights of appeal of the within case” allowed for immediate execution on the judgment. Thus, the plaintiff’s right to appeal from the denial of his motion to amend may have been waived.
Putting aside the waiver issue, the judge properly denied the
3. We affirm that part of the judgment dismissing the plaintiff’s claim against USF&G. The judgment against Continental will be the judgment directed by the Appeals Court. See note 3, supra.
So ordered.
ContinentaI Insurance Company and Continental Loss Adjusting Services (together, Continental). Continental Insurance Company is an insurance company under the service mark of CNA, but it is not a party to the case.
SCNA filed no application for further appellate review. We thus leave undisturbed that part of the rescript of the Appeals Court reversing the summary judgment that had dismissed the case against Continental and remanding the case to the Superior Court for further proceedings. See Bobick v. United States Fid. & Guar. Co., 57 Mass. App. Ct. 1,9 (2003).
The original complaint named only Continental Loss Adjusting Services, Inc., but later was amended to add CNA as a codefendant. Inexplicably, the plaintiff’s original complaint and amended complaints are included in neither the record appendix nor the supplemental record appendix. Because there appears to be no dispute as to their contents, we merely note their absence.
Rebecca Pontius, a Walnut employee, was impleaded by Park as a third-party defendant.
The record does not indicate, however, that a separate and final judgment ever entered.
In the letter, the plaintiff’s counsel alleged: “When dropping clients off, the transportation company [Park] is required to wait until a staff member of [Walnut] comes to the van to escort the client into [Walnut]. If a staff member does not appear, the driver is required to call to let [Walnut] know of the client’s arrival and wait until a staff member appears.
“These rules were not followed on January 15, 1993. [The plaintiff] was dropped off unattended and the driver of the van simply lef[t].”
This document properly was excluded from the evidence at trial as inadmissible hearsay. We refer to it, nonetheless, because the prohibition against hearsay would not render the document inadmissible if offered by the plaintiff in the G. L. c. 93A claim, not for its truth, but to demonstrate the extent of USF&G’s awareness of its potential liability in connection with the plaintiff’s injuries.
The plaintiff has introduced no evidence that USF&G’s investigation was inadequate in any respect.
It appears that Walnut may be protected by the charitable cap of $20,000 imposed by G. L. c. 231, § 85K, on damages recoverable from a charitable corporation for a tort committed in the course of the performance of its charitable purpose.
The plaintiff’s attempt to characterize this offer as a privileged communication under G. L. c. 233, § 23C, is unavailing. That the offer of $200,000 was extended (presumably, jointly by USF&G and Continental) and rejected is undisputed and is relevant to demonstrate USF&G’s continuing attempt to settle the plaintiff’s claim and thus relieve the plaintiff of his burden to litigate. In our view, by accusing USF&G of failing to make a reasonable settlement offer, the plaintiff implicitly has waived the privilege, at least with respect to the issue whether such an offer indeed was made. See Darius v. Boston, 433 Mass. 274, 277-278 (2001), and cases cited (accepting principle that litigant may implicitly waive attorney-client privilege by injecting certain claims or defenses into case). Moreover, as noted by the judge who allowed summary judgment in favor of USF&G, if the plaintiff’s position were deemed correct, there could be no evidence in cases involving alleged misfeasance by a mediator or breach of settlement agreements achieved during the mediation process.
We note that, although this date was beyond the thirty-day period allowed by G. L. c. 93A, § 9 (3), the time period had been extended by the plaintiff, and, thus, the offer was timely.
At the time, USF&G also questioned whether any liability would be covered under the automobile policy, but, in its summary judgment motion, USF&G did not rely on coverage issues as a basis for finding that its settlement offers were reasonable. We therefore do not address issues of coverage.
The plaintiff’s counsel testified that, although he was aware at the time that the DPPC report would be inadmissible at trial, he conducted no independent investigation into the matter on behalf of the plaintiff at that time.
The situation would be different in circumstances where a plaintiff’s potential recovery against other tortfeasors was barred by reason of insolvency, limited by a statutory cap on damages, or remote, due to a weak theory of liability, or a paucity of facts pertaining to liability. Although USF&G may have suspected, at the time the offer was made, that the plaintiff’s potential recovery against Walnut could be limited by the charitable cap of $20,000 set forth in G. L. c. 231, § 85K, USF&G would have been aware that Walnut’s employees, also insured by Continental, were not protected by the cap. See Mullins v. Pine Manor College, 389 Mass. 47, 63-64 (1983).
USF&G ultimately paid approximately $75,000 (including interest and costs) as its share of the plaintiff’s damages. At the time of USF&G’s offer, neither interest nor costs had begun to accrue.
We use the words “may have been waived” because the loss of consortium claim belonged to the plaintiff’s sister, not to the plaintiff, and, thus, his waiver may not have been operative as to her claim. No one argues this precise point, so we merely note it and dispose of the asserted claim on its merits.
The decision of Morgan v. Lalumiere, 22 Mass. App. Ct. 262, 270 (1986), in which the Appeals Court allowed a loss of consortium claim brought by a handicapped adult who was “physically, emotionally and financially” dependent on an injured parent, is inapposite.