Massachusetts Appellate Tribunal Affirms Dismissal of Bad Faith Case Against Insurer Following Car Accident

When someone is injured in a Cape Cod car accident, the insurance company that insures the at-fault motorist has certain responsibilities to the injured individual(s). If these obligations are not met, there is a possibility of litigation against the company later on.

In many instances, it is the insured motorist who brings suit against his or her own insurance company. For example, a person whose insurance company had an opportunity to settle a lawsuit against him or her for policy limits but refused to do so might seek money damages after a jury awards a substantially higher verdict at trial.

There are also some situations in which someone else might bring suit against the insurance company. One way that this can happen is through an assignment of rights from the insured person to a third party, perhaps a person injured in the accident.

Facts of the Case

In an unreported case recently considered on appeal, the plaintiff was a man who was injured in an automobile accident in November 2015. His attorney sent a letter to the allegedly at-fault driver’s insurance company soon thereafter, demanding that the insurance company pay the at-fault driver’s liability insurance policy limits of $20,000 to settle the plaintiff’s personal injury claim for damages resulting from the accident. The letter contained a provision that, if the settlement offer was not accepted within 30 days, it would be withdrawn, and the plaintiff would file suit against the at-fault driver. The case was not settled, the suit was indeed filed, and the case eventually went to trial before a jury, who awarded the plaintiff $50,000.

The at-fault driver assigned his rights to the plaintiff, and the plaintiff filed suit against the insurance company, asserting claims under Massachusetts General Laws chs. 93A and 176D and demanding that the insurance company pay the total amount of the judgment. After the parties waived a jury trial, the trial court dismissed the plaintiff’s complaint. He appealed, seeking review.

The Decision of the Appellate Court

On appeal to the Massachusetts Appeals Court, the court affirmed the lower tribunal’s dismissal of the plaintiff’s complaint. Although the plaintiff maintained that the insurance company had acted in bad faith by failing to settle the case for policy limits within the 30-day period set forth in the plaintiff’s attorney’s demand letter, the appellate court found that the insurance company had responded to the demand letter within a reasonable amount of time. Even though the response did not come within the 30-day period demanded by the plaintiff’s counsel, the court found that the insurance company had nevertheless effectuated a “prompt, fair, and equitable” settlement and was thus not liable under the relevant bad faith statutes.

In so holding, the court of appeals pointed out that the insurance company’s 10-day delay had been due to an “internal transmittal glitch.” Although the plaintiff contended that the insurance company should have been more expeditious, the court found that, under the circumstances, the 10-day delay did not amount to a violation of Massachusetts insurance law.

To Speak to Massachusetts Counsel About a Personal Injury Case

A Cape Cod car accident case can seriously impact a litigant’s physical, emotional, and financial health for many years to come. At the Law Offices of John C. Manoog III, we work hard to get a fair settlement or judgment on behalf of each and every client that we represent. To talk to a member of our team about how we can be of service in your case, call us now at 888-262-6664.