40 Mass. App. Ct. 394 | Mass. App. Ct. | 1996
The plaintiff, a minor child, initially brought claims in the Superior Court for violations of the lead poisoning prevention law (G. L. c. 111, §§ 190-199A [1988 ed.]). Later, a claim under G. L. c. 93A, § 9, was added, and the case was transferred to the Housing Court pursuant to G. L. c. 21 IB, § 9. Upon a jury verdict, judgment entered in favor of the plaintiff in the amount of
Having reserved the c. 93 A claim for his decision, the judge without objection by counsel held a nonevidentiary hearing at which he heard arguments from counsel concerning the c. 93A claim. Based on the evidence presented at the jury trial and the arguments of counsel, the judge ruled that the defendants’ offer to settle the plaintiff’s claim for twenty-five dollars constituted an unreasonable refusal to grant relief made in bad faith with knowledge or reason to know that the act or practice complained of violated c. 93A. Accordingly, the judge doubled the compensatory damage award against each defendant, resulting in a collective judgment of $5,000,000 plus interest and attorneys’ fees. The defendants then filed posttrial motions for a remittitur or in the alternative for a new trial. They were denied. The defendants appealed, claiming only that the judge erred in the assessment of multiple damages; they do not contest the jury’s verdict of $1,250,000. We decide that the judge’s ultimate conclusion that the defendants’ offer of settlement in response to the plaintiff’s claim constituted an unreasonable settlement offer made in bad faith was clearly erroneous. Accordingly, we reverse that part of the judgment awarding multiple damages.
Whether the defendants’ settlement proposal was an unreasonable refusal or made in bad faith was a question of fact. Patry v. Harmony Homes, Inc., 10 Mass. App. Ct. 1, 6 (1980).
Bad faith may be either subjective or objective. Hartford Cas. Ins. Co. v. New Hampshire Ins. Co., 417 Mass. at 120. See also Massachusetts Adventura Travel, Inc. v. Mason, 27 Mass. App. Ct. 293, 297 (1989) (construing G. L. c. 231, § 6F). Subjective bad faith may be established by direct evidence that a defendant was “motivated by subjective bad faith” even where, “on an objective standard of reasonableness,” he “would have been warranted in hot settling a case.” Hartford Cas. Ins. Co. v. New Hampshire Ins. Co., 417 Mass. at 123. See also DiMarzo v. American Mut. Ins. Co., 389 Mass. 85, 97 (1983) (evidence warranted conclusion that defendant “did not have a bona fide belief in the reasonableness of its position”); Miller v. Risk Mgmt. Foundation of Harvard Med. Insts., Inc., 36 Mass. App. Ct. at 419-420. Objective bad faith may be found where a potential defendant offers “much less than a case is worth in a situation where liability is either clear or highly likely.” Guity v. Commerce Ins. Co., 36 Mass. App. Ct. at 343. See also Heller v. Silverbranch Constr. Co., 376 Mass. 621, 628 (1978) (the standard for “knowledge or reason to know” that defendant had violated c. 93A is “objective and requires the defendant to investigate the facts and consider the legal precedents”).
Against this roundup of the cases, nothing in the record supports the judge’s finding of a bad faith failure to settle. The underlying suit was commenced in 1989. On September 18, 1992, the plaintiff sent G. L. c. 93A, § 9, demand letters to each defendant with an attached neuropsychological evaluation from Dr. Francesca LaVecchio, who examined the
Before responding to the demand letter, the defendants consulted their own medical expert, Dr. Edgar Oppenheimer, a pediatric neurologist. He reviewed the two reports and medical records, as well as the plaintiff’s one year of school records from the Early Childhood Development Head Start School Program, which neither of the plaintiff’s experts had seen. Dr. Oppenheimer concluded that the plaintiff had “had mildly elevated lead levels (recorded between 01/25/89 and 07/13/89).” He stated that Dr. LaVecchio’s diagnosis of Attention Deficit Disorder was based on observations “not objectively quantitated” and therefore “unscientific” and that the diagnosis was contradicted by the observations of the plaintiff’s Head Start teachers, who had had the opportunity to observe him over an entire year. Dr. Oppenheimer further pointed out that the plaintiff’s I.Q. was “in the average range” and noted that tests of academic, cognitive, and language skills must be evaluated in the context of a child’s prior experience in and exposure to those areas, as well as his family history.
Dr. Oppenheimer’s report questioned each of Dr. LaVecchio’s conclusions. The defendants submitted in their re
At the hearing before the judge on the c. 93A claim, the plaintiff argued two discrete points. First was his contention that the defendants denied liability when they “clearly knew they were liable.” Second, the plaintiff maintained that the defendants’ response letter was a “complete misrepresentation” of what Dr. Oppenheimer eventually testified to at trial. Neither argument is supported by the record.
The first argument is disingenuous in its use of the term “liable.” Although summary judgment on the element of liability was entered against the defendants,
As to the second argument, Dr. Oppenheimer’s testimony at trial, if at all different from what was projected, differs in such minor respects that it cannot be said that the representations in the response letter were made in bad faith. The plaintiffs counsel points to only three examples where the testimony contradicts earlier representations. We address these seriatim.
The first involves Dr. Oppenheimer’s notation in his report that the child was only lead poisoned for six months, but the records clearly indicate that he was lead poisoned over a period of from fifteen to seventeen months. While his report did state that the plaintiff had mildly elevated lead levels recorded during a six-month interval, Dr. Oppenheimer was not questioned on this point at trial, leaving uncontested the plaintiffs figure of from fifteen to seventeen months. There is no indication that, if cross-examined on the point, Dr. Oppenheimer would have testified differently than represented in the letter. The issue is not as straightforward as the plaintiff suggests, since, by the plaintiffs own expert testimony, in 1991 the Center for Disease Control officially changed the levels at which lead is considered toxic from twenty-five micrograms per deciliter to ten micrograms per deciliter. Thus, on the dates the plaintiff was tested (from January 25, 1989, until April 18, 1990), his blood lead levels would only have been considered toxic during the six-month period identified by Dr. Oppenheimer.
The plaintiffs second example of inconsistency is that in the response letter Dr. Oppenheimer “rejected] the diagnosis of attention deficit disorder and hyperactivity” and claimed that “lead was not a cause,” but “at trial he acknowledged the child had attention deficit disorder.” Again, the record does not permit the construction offered by the plaintiff. The response letter and the attached report do not state that Dr. Oppenheimer rejected the diagnosis, but rather that he “rejected] the conclusion” that a diagnosis of attention deficit disorder has a scientific basis, given that the test for attention deficit disorder is subjective. The portion of the transcript upon which the plaintiff relies reveals that at trial, although he acknowledged that Dr. LaVecchio diagnosed attention def
Finally, the plaintiff claims that Dr. Oppenheimer “reject [ed] the notion that [the plaintiff] had language disabilities” but gave no testimony to that effect at trial. In his report, Dr. Oppenheimer does not “reject” the plaintiff’s test results, but points out that some of the test scores were unreliable given his young age, some of the results indicating disability were contradicted by the Head Start records, and some fell within the low average, but normal, range. At trial, he reiterated that low scores on spelling and mathematical ability were not indicative of brain function in a child as young as five years old, that Head Start records showed a child of normal development, and that his I.Q. on verbal skills was in the normal range. It cannot be said that his testimony differed significantly from what it was purported to be in the re
There is no evidence that the defendants acted in a deliberate attempt to derail the settlement process, or to litigate a claim in which causation and damages were clear. Faced with limited information about causation, the defendants had consulted a qualified physician who questioned the plaintiffs contentions that he had suffered any damages, or that such damages had been caused by the elevated levels of lead in his blood. The plaintiff’s demand letter did not indicate that his alleged developmental delays were either long-term or permanent. At trial, the plaintiff pegged his case on subsequent and more conclusive evaluations made by Drs. LaVecchio and Rosen one year after the demand letter and on three notes from the Head Start program discovered at the beginning of the first trial, which were the only indication that the plaintiff was having trouble in school.
In our decision today, we keep company with cases that have examined the definition of bad faith in other contexts and have similarly concluded that it is only in the rare and exceptionally egregious case that such a finding should be made. It has been held that bad faith is “not simply bad judgment.” Spiegel v. Beacon Participations, Inc., 297 Mass. 398, 416 (1937), and cases cited. “It is not merely negligence. It imports a dishonest purpose or some moral obliquity. It implies conscious doing of wrong. It means a breach of a
In sum, it is apparent from the record that the defendants satisfied their burden of showing that their response to the plaintiffs demand letter was reasonable and not made in bad faith based on the attendant circumstances. As a result, the judge’s conclusion to the contrary was clearly erroneous. In light of our decision, it is unnecessary to reach the other issues regarding the assessment of multiple damages raised by the defendants.
The judgment insofar as it awards multiple damages and attorneys’ fees to the plaintiff under G. L. c. 93A is reversed. The judgment is otherwise affirmed.
So ordered.
A reasonable settlement offer limits a landlord’s liability. Hartford Cas. Ins. Co. v. New Hampshire Ins. Co., 417 Mass. 115, 121 (1994). An offer found to be unreasonable or made in bad faith would not only fail to limit liability but would also expose the landlord to multiple damages. G. L. c. 93A, § 9(3).
After the plaintiff was referred to Dr. LaVecchio, and after the plaintiff rejected the defendants’ response to the demand letter, the complaint was amended (three years after filing) to include a claim under c. 93A.
GeneraI Laws c. Ill, § 199, provides for strict liability, and a violation occurs where it is shown that a plaintiff suffered elevated lead levels due to exposure to lead on the owner’s premises. These facts were ultimately conceded by the defendants, and partial summary judgment entered. However, injury consists not of elevated lead levels but of cognitive difficulties caused by those levels. The questions thus remained open as to whether the plaintiff suffered any developmental problems and, if so, whether those problems were caused by the lead.
Dr. Oppenheimer was asked, “Based upon Dr. LaVecchio’s report, would you agree she diagnosed attention disorders, isn’t that correct?” (emphasis supplied). He responded, “That’s correct.”
Indeed, the first trial, begun on June 8, 1993, was declared a mistrial when the notes came to light for the first time on the second day of the trial. The letters were deemed particularly vital evidence because they “showed behavior problems that were not indicated, and in fact were inconsistent with the child’s pre-school head-Start program records.”
See Kohl v. Silver Lake Motors, Inc., 369 Mass. 795 (1976) (purchase of automobile requiring “excessively frequent and extensive repairs”); Burnham v. Mark IV Homes, Inc., 387 Mass. 575 (1982) (leaky roofs and frozen pipes in modular homes); Calimlim v. Foreign Car Center, Inc., 392 Mass. 228 (1984) (purchase of used car requiring extensive repairs); Briggs v. Carol Cars, Inc., 407 Mass. 391 (1990) (purchase of car that required considerable repair work); Giannasca v. Everett Aluminum, Inc., 13 Mass. App. Ct. 208 (1982) (faulty roof work and installation of vinyl siding); Bachman v. Parkin, 19 Mass. App. Ct. 908 (1984) (faulty construction of solar-heated house); Brown v. LeClair, 20 Mass. App. Ct. 976 (1985) (landlord/tenant dispute involving leaks, flooding, cockroaches, and an assault on the premises); Squeri v. McCarrick, 32 Mass. App. Ct. 203 (1992) (wrongful eviction); Miller v. Risk Mgmt. Foundation of Harvard Med. Insts., Inc., 36 Mass. App. Ct. 411 (1994) (bums to leg caused by accidental
Indeed, case law suggests, in the context of insurance claims, that courts be vigilant to ensure that plaintiffs not engage in “reverse bad faith” conduct. See Twin City Fire Ins. Co. v. Country Mut. Ins. Co., 23 F.3d 1175, 1180 (7th Cir. 1994), citing Transit Cas. Co. v. Spink Corp., 94 Cal. App. 3d 124 (1979) (“duty of good faith between insured and insurer is a reciprocal one”). Here too, the plaintiff has a reciprocal duty to be straightforward and forthcoming in providing the information necessary to the defendant’s evaluation of the case. We note with dismay that a supplemental answer to interrogatories was mailed to the defendants one day after the settlement offer was made, fully ten months after the interrogatories were first propounded. This supplemental answer set forth for the first time the identity and expected testimony of all of the plaintiff’s expert witnesses, including new testimony by Dr. Rosen concerning the “causal relationship between low level childhood lead poisoning and future educational and vocational success,” as well as the testimony of an economist and a vocational expert concerning the monetary cost of the plaintiff’s injuries.
