Massachusetts Appeals Court Agrees that Insurance Company Was Entitled to Summary Judgment in Unfair Claim Settlement Practices Case

No one wants to be involved in an automobile accident in which the responsible party has no liability insurance. Well, no one wants to be in an automobile accident at all, right?

But, if an accident does happen, wouldn’t it be easier to secure a fair settlement if the responsible driver had multiple policies of liability coverage? The surprising answer is “not necessarily.”

Facts of the Case

In a recently reported case, the plaintiff was a front-seat passenger in a rental car that was involved in a one-vehicle accident in September 2013. He filed suit against the driver and the driver’s employer, alleging that the driver’s negligence and excessive speed caused the crash. The driver and his employer were insured under multiple liability insurance policies, including a primary commercial automobile insurance policy and two excess insurance policies.

After settlement negotiations did not produce an acceptable agreement, the plaintiff amended his lawsuit in March 2015 to include a claim against the defendant’s primary liability insurance carrier, alleging that it had committed unfair claim settlement practices in violation of Mass. Gen. Laws ch. 176D, § 3(9)(f) and ch. 93A, § 2. The trial court granted summary judgment in the defendant’s favor.

Decision of the Massachusetts Appeals Court

The appellate court affirmed the summary judgment order in the defendant’s favor. The court first observed that Massachusetts law prohibits unfair or deceptive acts or practices in the insurance business and that such acts include the failure of an insurance company, such as the defendant, to effectuate a prompt, fair, and equitable settlement of a claim in which liability has become reasonably clear. The court also noted that the purpose of the law is to encourage the settlement of insurance claims and discourage insurers from forcing claimants into unnecessary litigation to obtain the relief to which they are entitled.

While the court agreed with the plaintiff that there was no real dispute as to liability with regard to the accident giving rise to his claim or as to the fact that the plaintiff’s damages exceeded the limits of the policy under which the defendant was obligated, the court found merit to the defendant’s argument that it was not obligated to pay the policy limits to the plaintiff absent a release of the defendant’s insureds, which the plaintiff had refused to give during settlement negotiations.

In quoting the holding of a previous case on which the defendant relied, the court stated, “Simply put, ‘to pay without a release is not a settlement.'” The court agreed with the defendant that the presence of excess insurance did not alter the legally sound settlement position of the defendant and that summary judgment for the defendant on the plaintiff’s unfair claim settlement practices allegation was proper.

A Seasoned Car Accident Attorney on Cape Cod

At the Cape Cod Law Offices of John C. Manoog, III, we are experienced in handling a wide range of car accident claims and insurance disputes. For a free consultation in our Hyannis or Plymouth offices, call 888-262-6664. If necessary, we can come to your home or hospital room to discuss your case. Nos falamos Portugues!

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