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14-P-573 Appeals Court

RESOLUTE MANAGEMENT INC. & another1 vs. TRANSATLANTIC 

REINSURANCE COMPANY & another.2

No. 14-P-573.

Suffolk. November 13, 2014. - April 29, 2015.

Present: Green, Wolohojian, & Blake, JJ.

Practice, Civil, Motion to dismiss. Consumer Protection Act, 

Businessman's claim. Contract, Reinsurance agreement, 

Interference with contractual relations. Conflict of Laws.

Civil action commenced in the Superior Court Department on 

April 30, 2013.

A motion to dismiss was heard by Thomas P. Billings, J. 

Bryce L. Friedman, of New York (Kevin O'Connor with him) 

for the plaintiffs.

John N. Thomas, of New York (Ben T. Clements with him) for

the defendants.

GREEN, J. The plaintiffs appeal from a judgment of 

dismissal entered in Superior Court following the allowance of 

 

1 National Indemnity Company.

2 Alleghany Corporation.
2

the defendants' motion to dismiss the plaintiffs' complaint 

pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974).

3 The 

complaint asserted claims of tortious interference with 

contractual relations and violation of G. L. c. 93A. We 

conclude that the judge correctly dismissed the claims of 

Resolute Management Inc. (Resolute) for tortious interference 

with contractual relations as Resolute is not a party to the 

contracts at issue. However, we conclude that the allegations 

of the complaint do not establish as a matter of law that the 

plaintiffs cannot maintain a cause of action under G. L. c. 93A, 

or whether New York or Massachusetts law should apply to the 

claims of National Indemnity Company (National) for tortious 

interference with contractual relations. We accordingly reverse 

so much of the judgment as dismisses the plaintiffs' c. 93A 

claims and National's claims for tortious interference with 

contractual relations.

Background. We summarize the facts alleged in the 

plaintiffs' complaint which, for purposes of our review of the 

defendants' motion to dismiss, we accept as true, construing all 

 

3 The judge did not address the allegation by Alleghany 

Corporation (Alleghany), under Mass.R.Civ.P. 12(b)(2), 365 Mass. 

754 (1974), that the complaint should be dismissed for lack of 

personal jurisdiction. Alleghany does not press that ground in 

this appeal as an alternative basis to support dismissal of the 

claims against it.
3

reasonable inferences from those facts in the plaintiffs' favor. 

See Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). 

National, a Nebraska corporation with a principal place of 

business in Nebraska, is an eligible surplus lines insurer and 

reinsurer in the Commonwealth whose business includes issuing 

reinsurance contracts and contracting to manage asbestos-related 

personal injury claims for Massachusetts-based insurers. 

National's business, in part, is to enter contracts with other 

insurers' clients, pursuant to which it (or Resolute, as 

National's agent) resolves claims against those other insurers 

and collects reinsurance. 

In 2001, National entered into an administrative service 

agreement (ASA I) with two major insurers, pursuant to which 

National was appointed to adjust, handle, agree, settle, pay, 

compromise, or repudiate certain asbestos-related claims on 

behalf of a number of Massachusetts-based insurers, and also was 

appointed to collect reinsurance recoveries related to those 

claims from Transatlantic Reinsurance Company (Transatlantic), 

and other insurers. In 2011, National entered into similar 

agreements with five other major insurers (ASA II) and, in 2012, 

with another (ASA III). In each of the ASAs, Resolute, a 

Delaware corporation with a principal place of business in 

Massachusetts, was authorized as agent to carry out National's 

duties under the ASA (or ASAs).
4

Transatlantic is a reinsurer licensed to do business in 

Massachusetts, which it does on a regular basis. In March, 

2010, after decades of being a subsidiary of American 

International Group, Transatlantic became an independent, 

publicly traded company. Because of a lack of operational 

flexibility and other factors (including anticipated adverse 

developments in so-called "legacy"

4 asbestos claims), 

Transatlantic found it difficult to compete with National in the 

insurance and reinsurance markets. National and Resolute were 

so efficient in resolving claims against their insurer clients 

and in promptly collecting reinsurance that Transatlantic's 

business model was damaged and its business threatened. Despite 

a weak market, Transatlantic began to look for a merger partner.

In August, 2011, National offered to purchase Transatlantic

for approximately fifty-two dollars per share, all cash, which 

was below Transatlantic's stated book value. Transatlantic

rejected the offer, but in 2012 allowed itself to be acquired by 

Alleghany Corporation (Alleghany) (which was looking to enter 

the reinsurance market) for approximately $59.79 per share.

The merger of Alleghany and Transatlantic got off to a 

rocky start, in part because Transatlantic continued to be 

 

4 Legacy claims arise from actions conducted decades 

earlier, "leaving an unwanted 'legacy'" in the form of actual or 

alleged injury. Pitre, Jr., Legacy Litigation & Act 312 of 

2006, 20 Tul. Envtl. L.J. 347, 348 (2007).
5

plagued by its asbestos-related claims. Transatlantic sought to 

commute (i.e., pay another entity to assume responsibility for a 

risk) its asbestos-related reinsurance obligations to a group of 

clients of National and Resolute, but the price Transatlantic

was willing to pay was significantly less than the amount of its

exposure to those clients, and neither National nor Resolute was 

willing to yield to Transatlantic's demands.

For years prior to the merger between Transatlantic and 

Alleghany, Resolute promptly billed Transatlantic for 

reinsurance benefits under ASA I, and Transatlantic regularly 

reviewed and audited information and data it received from 

National's insurer-clients for compliance with the terms of ASA 

I. Prior to its merger with Alleghany, Transatlantic never 

raised a question about the amounts it was billed by Resolute,

and timely paid substantial sums to Resolute under ASA I. 

Similarly, from mid-2011 through 2012, Transatlantic routinely 

and timely paid bills submitted by Resolute pursuant to ASA II. 

However, after Alleghany purchased Transatlantic, Transatlantic 

unjustifiably refused to pay invoices Resolute submitted 

pursuant to all three ASAs. Specifically (as alleged in the 

complaint), Alleghany instructed Transatlantic to rid itself of 

its problematic legacy asbestos liabilities and to punish 

Resolute and National for failing to accept Transatlantic's 

proposed terms to commute those claims. By withholding 
6

reinsurance payments due to Resolute on behalf of National, 

Alleghany and Transatlantic sought to harm National's and 

Resolute's relationships with their clients, to impede 

National's ability to perform its contractual obligations to 

those clients, and to force National to agree to commute 

Transatlantic's obligations at the "below-market and irrational 

price" that Alleghany and Transatlantic demanded.

This litigation followed. By complaint filed April 30, 

2013, against Transatlantic and Alleghany, Resolute and National 

brought claims of tortious interference with contractual 

relations (ASA I, ASA II, and ASA III), and violation of G. L. 

c. 93A, § 11. A judge allowed the defendants' motion to dismiss 

the complaint, and the plaintiffs appealed.

Discussion. For independent but similar reasons, central 

to determination of the viability of the plaintiffs' complaint 

is an assessment of the relationship to the Commonwealth of the 

facts and circumstances giving rise to their claims. The 

plaintiffs' claims for tortious interference with contractual 

relations are viable (at least for pleading purposes) if they 

are governed by Massachusetts law, but not if they are governed 

by New York law.5 Similarly, the plaintiffs are entitled to 

 

5 Under New York law, to prevail on a claim of tortious 

interference with contractual relations a plaintiff must 

establish, among other things, that the defendant's interference 

caused an actual breach of a contract between the plaintiff and 
7

maintain a claim pursuant to G. L. c. 93A, § 11, only if the 

statute applies to the unfair or deceptive acts alleged. In 

both instances, the required determination turns principally on 

the relationship of the parties and their activities to the 

Commonwealth, as we shall discuss infra.

1. Applicability of G. L. c. 93A. "Under c. 93A, § 11, it 

is [the defendants'] burden to demonstrate that 'the center of 

gravity of the circumstances that [gave] rise to the claim' were 

not 'primarily and substantially within the Commonwealth.'" 

Skyhook Wireless, Inc. v. Google Inc., 86 Mass. App. Ct. 611, 

622 (2014), quoting from Kuwaiti Danish Computer Co. v. Digital 

Equip. Corp., 438 Mass. 459, 470, 473 (2003) (Kuwaiti Danish). 

As the Supreme Judicial Court observed in Kuwaiti Danish, supra

at 473, § 11 appears to contemplate that such an assessment 

would occur following, and based upon, findings of fact made by 

a judge. 

As a threshold matter, we note that the defendants have 

cited no appellate case in which the center of gravity of a § 11 

 

a third party. See, e.g., Lama Holding Co. v. Smith Barney 

Inc., 88 N.Y.2d 413, 424 (1996). By contrast, Massachusetts has 

adopted § 766A of the Restatement (Second) of Torts (1979), see 

Shafir v. Steele, 431 Mass. 365, 369 (2000), under which a 

plaintiff need not establish an actual breach if he can show 

that the defendant's interference either prevented the plaintiff 

from performing the contract or caused his performance of the 

contract to be more expensive or burdensome. In the present 

case, the plaintiffs do not allege that an actual breach of ASA 

I, ASA II, or ASA III has occurred.
8

claim was determined adversely to a plaintiff upon a motion to 

dismiss (as compared to a motion for summary judgment or after 

trial), and we are aware of none.

6 In light of the multiple 

factors to be applied, and the nuanced and flexible approach to 

assessing them, as articulated in Kuwaiti Danish, see ibid., we 

find it difficult to imagine how such an assessment might be 

made on the basis of the allegations of the complaint alone --

at least where, as in the present case, the loss occurred in 

Massachusetts, and substantial numbers of the claims upon which 

the bills Resolute submitted to Transatlantic were based related 

 

6 In support of their argument, the defendants cite several 

unpublished decisions of the Superior Court dismissing a c. 93A 

complaint on a motion to dismiss. To the contrary is a line of

published opinions of the United States District Court for the 

District of Massachusetts. See Workgroup Technology Corp. v. 

MGM Grand Hotel, LLC, 246 F. Supp. 2d 102, 118 (D. Mass. 2003)

(center of gravity decision must be based on factual findings 

not made on motion to dismiss); Berklee College of Music, Inc. 

v. Music Indus. Educators, Inc., 733 F. Supp. 2d 204, 213 (D.

Mass. 2010) ("absent some extraordinary pleading concession by a 

claimant" challenge to c. 93A claim "cannot be resolved on Rule 

12 motions"). See also In Re TJX Cos. Retail Security Breach 

Litigation, 524 F. Supp. 2d 83, 93 (D. Mass. 2007) (allegations 

of complaint adequate to survive motion to dismiss), aff'd in 

part by 564 F.3d 489 (1st Cir. 2009); Hertz Corp. v. Enterprise 

Rent-A-Car Co., 557 F. Supp. 2d 185, 197 (D. Mass. 2008)

(reserving ruling on motion to dismiss c. 93A claim pending 

completion of trial on jury claims). Contrast Iantosca v. 

Benistar Admin Servs., Inc., 738 F. Supp. 2d 212, 220 (D. Mass. 

2010) (dismissing c. 93A complaint without prejudice where all 

deceptive acts alleged in complaint [other than commencement of 

litigation] occurred in Pennsylvania).
9

either to Massachusetts insurers or claimants.7 Though the 

defendants assert that many of the activities upon which the 

plaintiffs' claims are based occurred outside the Commonwealth, 

the complaint includes no allegation or other indication to 

support the assertion.8

To be sure, in light of the defendants' principal physical 

presence in New York (of which the judge took judicial notice, 

see note 8, supra), it is entirely possible that the principal 

communications between the defendants concerning their 

determination to refuse further payments to Resolute took place 

outside the Commonwealth. Less influential, in our view, is the 

fact that certain of the insurers with which National contracted 

under the ASAs were headquartered outside Massachusetts -- at 

 

7 We also note that paragraph 10 of the complaint alleges 

that "Transatlantic's tortious conduct at issuer [sic] here 

occurred substantially in Massachusetts," paragraph 11 alleges 

that "Alleghany's tortious conduct at issue here occurred 

substantially in Massachusetts," and paragraph 58 alleges that 

the "unfair and deceptive acts [by the defendants] took place 

primarily and substantially within the Commonwealth of 

Massachusetts."

8 In his order allowing the defendants' motion, the judge 

took judicial notice that Transatlantic is a New York 

corporation headquartered in New York, that Alleghany is a 

Delaware corporation headquartered in New York, and that neither 

defendant maintains a place of business in Massachusetts. He 

also took judicial notice of the headquarters locations of the 

insurers that were counterparties to National under the ASAs, 

observing that several are headquartered outside Massachusetts. 

However, the complaint includes no detailed information about 

where the defendants' allegedly tortious or deceptive acts 

occurred, other than the general allegation that they occurred 

in Massachusetts. See note 7, supra.
10

least if, as alleged in the complaint, the claims National (or 

Resolute acting as National's agent) sought to adjust for them 

were based in Massachusetts. In any event, we are aware of no 

rule requiring a § 11 plaintiff to plead facts with 

particularity sufficient to withstand a claim by the defendant 

that the center of gravity of his claim is not within the 

Commonwealth. In our view, the allegations of the complaint are 

sufficient to warrant discovery and development of a factual 

record adequate to allow a judge to conduct that assessment. In 

the present procedural posture of the case, it was error to 

dismiss the plaintiffs' claims under G. L. c. 93A, § 11.

2. Tortious interference with contractual relations. A 

similar (though not identical) concern shapes our view of the 

judge's conclusion that New York law should be applied to the 

plaintiffs' claims of tortious interference with contractual 

relations. "Massachusetts generally follows a functional 

approach to resolving choice of law questions on substantive 

matters, eschewing reliance on any particular choice-of-law 

doctrine." Lou v. Otis Elevator Co., 77 Mass. App. Ct. 571, 583 

(2010). We look to the Restatement (Second) of Conflict of Laws 

for guidance; it in turn articulates several factors for 

consideration. See id. at 584-585 & n.22. As a general 

principle, the "rights and liabilities of the parties with 

respect to an issue in tort are determined by the local law of 
11

the state which, with respect to that issue, has the most 

significant relationship to the occurrence and the parties under 

the principles stated in § 6." Restatement (Second) of Conflict 

of Laws § 145 (1971).

9

For reasons quite similar to those discussed supra, the 

allegations of the complaint, standing alone, are inadequate to 

determine as a matter of law whether New York or Massachusetts 

law should be applied. The complaint does not state where the 

ASAs were entered into or, except in the most general terms, 

describe the rights and obligations of the parties to them. Nor 

does the complaint describe with particularity the claims that 

National undertook to resolve, including how many of those 

 

9 Restatement (Second) of Conflict of Laws § 6 (1971), in 

turn, states:

"(1) A court, subject to constitutional restrictions, will 

follow a statutory directive of its own state on choice of 

law.

"(2) When there is no such directive, the factors relevant 

to the choice of the applicable rule of law include (a) the 

needs of the interstate and international systems, (b) the 

relevant policies of the forum, (c) the relevant policies 

of other interested states and the relative interests of 

those states in the determination of the particular issue, 

(d) the protection of justified expectations, (e) the basic 

policies underlying the particular field of law, (f) 

certainty, predictability and uniformity of result, and (g) 

ease in the determination and application of the law to be 

applied."

Paragraph (1) of § 6 is inapplicable, as no Massachusetts 

statute governs choice of law on a claim for tortious 

interference with contractual relations.
12

claims have a substantial connection to Massachusetts. Again, 

though it appears that many of the parties (if not their 

activities relevant to the complaint) are headquartered outside 

the Commonwealth, it is impossible for us to conclude as a 

matter of law on the basis of the complaint alone that New York 

(or any particular State, for that matter) has the most 

significant contacts with, and greatest interest in, the 

plaintiffs' claims of tortious interference with the ASAs. As 

in our c. 93A discussion, discovery and development of a factual 

record are required to conduct the functional assessment

envisioned by the Restatement. We accordingly must reverse the 

judgment insofar as it dismissed National's claim of tortious 

interference with contractual relations based on the premise 

that it failed to allege an element of that claim that is 

essential under New York law but not under Massachusetts law. 

See note 5, supra.

However, even without resolution of the choice of law 

question we conclude that the judge correctly dismissed 

Resolute's claims because it was not a party to any of the 

contracts with which the defendants allegedly interfered, and it 

does not otherwise claim a cognizable legal interest on its own 

behalf in their enforcement.10 Resolute thus is unable to 

 

10 Resolute's suggestion that it may maintain its claims

because it acts as National's agent with respect to the ASAs is 
13

demonstrate the first of the elements described in Harrison v. 

NetCentric Corp., 433 Mass. 465, 476 (2001): "that [it] had a 

contract with a third party."11

Conclusion. So much of the judgment as dismisses the 

plaintiffs' claims under G. L. c. 93A, § 11, and National's 

claims for tortious interference with contractual relations 

under ASA I, ASA II, and ASA III is reversed, and those claims 

are remanded for further proceedings consistent with this 

opinion. In all other respects, the judgment is affirmed.

So ordered.

 

unavailing. Resolute's rights and obligations as National's 

agent all relate to enforcement of the ASAs on National's 

behalf. Resolute claims no right to enforce the contracts for 

its own benefit. In the present case, we need not consider 

whether an intended or third-party beneficiary of a contract 

might have standing to claim tortious interference with a 

contract to which it is not a party. See, e.g., CSY Liquidating 

Corp. v. Harris Trust & Sav. Bank, 162 F.3d 929, 932-933 (7th 

Cir. 1998).

11 We reject Resolute's alternative contention that the 

complaint should be construed broadly to assert a claim for 

tortious interference with advantageous relations; put simply, 

the several counts of the complaint speak specifically and 

exclusively of interference with contractual relations. In any 

event, we note that Resolute does not allege that the defendants 

"knowingly induced a breaking of the [advantageous] 

relationship" between it and any third party, a required element 

of the alternative claim of tortious interference with 

advantageous relations. Blackstone v. Cashman, 448 Mass. 255, 

260 (2007).