The plaintiff insurance company (Premier) filed an action seeking a determination of its obligations as insurer of Ruben Goldberg (husband) and Julia Goldberg (wife). The wife
On February 7, 1995, former counsel for Jean E. Furtado (Furtado), administratrix of Justin’s estate, wrote the insurer demanding payment of the coverage limit of the Goldbergs’ policy. In response, Premier rejected the applicability of the rule announced in Thaler v. American Ins. Co.,
A judge in the Superior Court decided the case on cross motions for summary judgment filed by Premier and Furtado. Premier sought a declaration that it was not obliged to pay thе policy limit without obtaining releases of its insureds, and that, if it was obliged to pay the policy limits without obtaining releases, it would have no further duty to defend the Goldbergs. The Goldbergs did nоt appear. Furtado filed a counterclaim seeking a declaration that Premier violated G. L. c. 93A. The judge ordered entry of a judgment that declared that Premier had an obligation to pay Furtado the “per accident” policy limits of the automobile insurance policy without obtaining a release in favor of the Goldbеrg defendants. In addition the
In Lazaris v. Metropolitan Prop. & Cas. Ins. Co., ante 502 (1998), decided today, we overruled the prospective rule announced in the Thaler case construing G. L. c. 176D, § 3 (9) (/). Premier did not challenge the Thaler rule in the Superior Court, and we decline to accept, and need not аccept, its belated challenge to that rule on appeal. See Larson v. Larson,
The Thaler case, as it discussed its prospective rule, and the Lazaris case, as it was presented to us, involved a single claimant and a single insured. Here thеre are two insureds.
One view of the question we must decide is whether the Tha-ler rule applies only when the liability of all insureds is reasonably clear or whether it applies when the liability of only one of two or more insureds is reаsonably clear. The trial judge adopted the latter position and concluded that Premier had engaged in an unfair settlement practice in violation of G. L. c. 176D, § 3
The issue for decision could be viewed differently: May an insurer who reasonably believes that its obligation to pay a claimаnt without a release is not reasonably clear be liable for an unfair settlement practice even if it is reasonably clear that an insured is liable to the claimant and the likely damages exceed the policy limit? This is the approach that the Appeals Court took in deciding the Thaler case in favor of the insurer. “There was nо violation of G. L. c. 176D, § 3 (9) (/), because [the insurer’s] liability to the plaintiff was not ‘reasonably clear.’ ” Thaler v. American Ins. Co.,
We favor the latter approach. If an insurance company hаs a reasonable and good faith belief that it is not obliged to make a payment to a claimant who is asserting a violation of G. L. c. 93A and G. L. c. 176D, § 3 (9), asserts the point, and offers to take active steps to resolve the dispute, the company’s action, even if ultimately held to be based on a misinterpretation of the law, would not bе an unfair settlement practice. “[T]here was no applicable precedent to guide [the insurer’s] action in a matter which presented a worthy question of lаw.” Id. See Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co.,
Premier had a reasonable basis for refusing the demand that it pay over the policy limit. The Thaler case was not clear authority in support of Premier’s obligation to pay over the policy limits. Premier agreed to commence an action to obtain a determination of the disputed issue and tо place the amount of the policy limits in a bank account, agreeing to pay whatever interest it might ultimately owe in excess of interest earned in the account. Premier did not commit an unfair settlement practice in violation of G. L. c. 176D, § 3 (9) (/).
There remains the question of the disposition of the amount of the policy limits now held in an interest-bearing account. We conclude that the judgment should direct the payment of the amount of the policy limits to Furtado. Neither insured appeared in the trial court to protect his or her interests, and
We vacate the judgment. A judgment shall be entered declaring that Premier Insurance Company of Massachusetts did not violate G. L. c. 93A or G. L. c. 176D, § 3 (9) if), in declining to pay over the policy limit in the absence of releases from the plаintiffs in the underlying case; that Premier has no continuing duty to defend its insureds, the Goldbergs, once it pays the policy limit to the plaintiffs in the underlying case; and that all funds held in the account into which the amount of the policy limits were placed shall be paid to Furtado.
So ordered.
Notes
General Laws c. 231, § 85A, states that ownership of a motor vehicle is prima facie evidence that it was “being operated by and under the control of a person for whose conduct the defendant [owner] was legally responsible.” Absence of responsibility is an affirmative defense. Id. The Furtados also claimed that the husband negligently entrusted the insured vehicle to the wife.
There are three claimants (the two estаtes and Jean Furtado, the mother and wife, respectively, of the two decedents, who saw the accident from a vehicle following that driven by her husband). This case doеs not involve the allocation of the per accident policy limits among claimants.
Under the rule of Lazaris v. Metropolitan Prop. & Cas. Co., ante 502 (1998), assuming only one insured, Premier would not be obliged to make any payment in the аbsence of a release from a claimant. In this case, where there are two insureds, Premier has no obligation to settle as to the insured whose liability is not reasonably clear and would have no obligation to settle as to the insured whose liability is reasonably clear, in the absence of a release, if the rule of the Lazaris case were applicable. That rule is not applicable in this case, however, because Premier did not challenge the rule of Thaler v. American Ins. Co.,