51 Mass. App. Ct. 465 | Mass. App. Ct. | 2001
On this appeal we apply the rule established in the Gamache and Rubinstein cases. Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93 (1997). Rubinstein v. Royal Ins. Co. of America, 429 Mass. 355 (1999). Those cases considered the question of responsibility for attorney’s fees incurred by an insured in defending against his insurance company’s action for a declaration about the scope of the company’s duties under the policy.
By October, 1988, there had been discovery and other preparation for possible trial. Hanover, however, on October 11, 1988, brought the instant action in Superior Court against the Goldens, seeking “a declaratory judgment that it may pay to [the Brisettes] the full amount of the available liability coverage ($100,000.00) and by so doing fully discharge its obligation to defend and indemnify [the Goldens] for the accident at issue . . . .” The Goldens’ motion to dismiss the action failed. They filed an answer with counterclaim. Cross motions for summary judgment followed on the case apart from the counterclaim. A judge of the Superior Court held, with memorandum, against Hanover, and on May 12, 1989, entered judgment declaring that Hanover “has an obligation to defend [the Goldens] in the litigation brought against them by [the Brisettes].”
Hanover noticed an appeal from the judgment — entered as a final judgment under Mass.KCiv.P. 54(b), 365 Mass. 821 (1974) — on June 5, 1989. It withdrew the appeal in July, 1989.
Counsel for the Goldens in September, 1989, requested payment by Hanover of attorney’s fees and expenses in the claimed
Instructed by the declaratory judgment, Hanover continued its representation of the Goldens in the Brisette action.
The counterclaim remained, and after a long lapse, it reached trial in February, 1997. The counterclaim set out alleged unfair or deceptive practices on the part of Hanover entitling the Gold-ens to relief under the consumer protection statutes, G. L. c. 93A and c. 176D. It alleged also (although rather inartfully) that by bringing the declaratory suit Hanover created a conflict of interest with the Goldens, its insureds, and was therefore bound to provide the Goldens with independent counsel (see counterclaim, count III) or, alternatively, to cover the Goldens’ damages, notably attorney’s fees and expenses, in resisting the action to a successful conclusion (count V).
The trial (nonjury) of the counterclaim centered upon , the c. 93A and c. 176D claims of unfair or deceptive practices. These claims turned out to be weak. Thus there was not much substance in a claim that Hanover misrepresented its June 5, 1986, letters to the Goldens as amounting to a “reservation of rights” and by so doing engaged in an unfair or deceptive act. Also weak was a claim that the bringing of the action for a declaration was itself an unfair or deceptive practice under the cited statutes. The trial judge, on findings of fact and rulings of law, held correctly for Hanover on the counterclaim, dismissing the statutory claims.
The statutes to one side, however, the Goldens on the basic facts, as recounted above and rehearsed in the trial judge’s findings, had a clear right to be reimbursed the attorney’s fees and expenses incurred by them in their successful defense of the declaratory action: these corresponded to the unit or base damages which in certain circumstances might have been trebled if the statutory requisites for such recovery had been satisfied. The right to the unit reimbursement is clear when the rule of the
The court speaks in broadly inclusive terms: “[A]n insured ‘is entitled to the reasonable attorney’s fees and expenses incurred in successfully establishing the insurer’s duty to defend under the policy.’ ” Rubinstein, 429 Mass. at 359, quoting from Gamache, 426 Mass. at 98. While the proposition was established by Gamache in respect to a homeowner’s policy, it extends to other liability insurance — a comprehensive liability policy in Rubinstein, 429 Mass. at 356-357, an automobile insurance policy in the present case. It does not matter whether the insurer initiated the declaratory action in good or bad faith, id. at 359-360, or whether the question tendered for decision was a close question or one not subject to legitimate dispute. Id. at 360. There appear to be no special refinements about the particular question of insurer’s responsibility on which a declaration is sought: the question in the present case of the insurer’s right under the policy to discharge its duty to defend and indemnify the insured upon payment of the policy limit, is just as amenable to the rule as the question of the meaning of an exclusion for “an intentional act of an insured” in Gamache (426 Mass. at 94). It should not matter whether (as in Gamache) the insurer announces withdrawal from the third-party action and sues for a declaration, or (as in the present case) brings a declaratory action and provisionally maintains defense of the third-party action pending instruction by the declaration. In either case the insured deserves reimbursement for his reasonable outlay “in successfully establishing the insurer’s duty to defend under the policy.” Rubinstein, 429 Mass. at 359.
Hanover argues that Gamache should not be applied “retroactively,” but Rubinstein holds squarely to the contrary.
The application of Gamache-Rubinstein to the antecedent facts in the instant case is fair and warranted. Hanover could not have been in doubt that the Goldens (foretelling Gamache
Conclusion. The judgment on the counterclaim for Hanover (defendant in counterclaim) is affirmed except insofar as it failed to direct Hanover to pay the Goldens (plaintiffs in counterclaim) the reasonable attorney’s fees and expenses incurred by them in defending against the declaratory judgment action, and in that respect the judgment is reversed. Accordingly, the case is remanded to the Superior Court to determine the reasonable amount of such fees and expenses and for entry
So ordered.
The record contains an affidavit of the Goldens’ counsel itemizing the work done.
The record does not particularize this representation.
Hanover’s counsel evidently were unaware of Rubinstein, decided shortly before they served and filed their brief.
Gamache was decided by the Supreme Judicial Court on November 7, 1997. The Goldens’ notice of appeal in the present case was dated the same day.
There was nothing remote or arcane about the Gamache decision. As appears in the opinion (426 Mass. at 96-97), decisions around the country had divided into “schools” with the Gamache view already well supported in the decided cases and the literature.
Note the statements in the Goldens’ motion to dismiss the declaratory action and in their supporting memorandum, in count in of the counterclaim (mentioned above), in their brief supporting their motion for summary judgment of the case apart from the counterclaim, in the opening speech and testimony on their behalf and in colloquy at the trial of the counterclaim.