Source: https://www.bwglaw.com/tort-and-insurance-law-update-2004-by-david-w-white.html
Timestamp: 2019-04-21 08:27:39+00:00

Document:
What follows is a summary of the significant cases from 2004 in the Massachusetts Supreme Judicial Court and the Massachusetts Appeals Court. The cases summarized include medical malpractice, car accidents, insurance, consumer protection, attorney malpractice, lead paint poisoning, premises liability, and other personal injury cases. The cases are in chronological order.
Plaintiff’s wife was killed by a drunk driver, and plaintiff received workers’ compensation benefits as a result. Plaintiff brought suit against the restaurant which he alleged over-served alcohol to the driver. On the eve of trial, plaintiff amended the complaint, adding to it claims on behalf of the four sons. The claims included their claims under the wrongful death statute as well as claims on behalf of all parties for negligent infliction of emotional distress. Over $80,000 in benefits had been paid to the plaintiff, and he continued to receive weekly benefits as of the date of trial, when a settlement of $237,500 was offered. Plaintiff proposed to accept the settlement and to allocate the funds equally among the five claimants and the various claims, leaving only a small fraction of the funds to reimburse the workers’ compensation carrier. At the settlement hearing in Superior Court the plaintiff testified that he believed the allocation was fair and appropriate. Cross examination by the workers’ compensation carrier was not permitted, nor was additional extrinsic evidence, and the settlement was approved. The matter was appealed, and the Supreme Judicial Court took the case directly on its own motion.
The Supreme Judicial Court reversed. The plain language of G.L. c. 152, § 15, specifically provides that the insurer shall have an opportunity to be heard on the merits of the settlement, on the allocation, and on the proposed reimbursement to the insurer. G.L. c. 152, § 15, is designed to reimburse the insurer and prevent double recovery to the plaintiff. The insurer may not be deprived of its lien. The language of the statute means once the insurer puts forth a credible argument challenging the settlement allocation, the judge must take evidence on that issue, permit cross-examination by the insurer, and must permit the insurer to present its own evidence. The court must then make findings. The matter was remanded for further proceedings.
Plaintiff was injured when a large gate swung open into the roadway where he was riding his bicycle. The accident caused a severe traumatic brain injury resulting in paralysis and permanent cognitive impairment. Discovery revealed that the gate had the capacity to swing open into the street, and that it had been unsecured and free to blow back and forth in the wind on the morning of the accident. There was evidence of the knowledge by the landowner that the gate was open and able to move in the manner described on the date of the accident. Within two weeks of the accident, the gate was adjusted to tip the gate towards the property. Approximately one month after suit was filed, on the same day as a meeting with trial counsel, the company hired a contractor to remove the gate. The gate, its hinges, and related materials were scrapped. There was no notice to plaintiff that the material would be removed and destroyed. Plaintiff’s investigator had photographed the gate, but had been unable to test it. After hearing, the trial judge determined that the removal and destruction of the gate were at a minimum negligent spoliation of the evidence, and that the spoliation had prejudiced the plaintiff’s case. As a sanction, the judge precluded the defendant from arguing or offering evidence that the gate had been secured on the date of the accident, and from arguing that the gate had not been blowing into the street. Plaintiff’s counsel was also permitted to introduce and argue evidence regarding the removal and destruction of the gate. In his closing arguments, plaintiff’s counsel made reference to airline crashes and baseball players’ salaries. The judge immediately gave strong curative instructions, and later denied the defendant’s motion for a new trial based in part on counsel’s behavior. The defendant appealed from the large verdict in favor of the plaintiff.
The Supreme Judicial Court took the matter on direct appellate review and affirmed. The trial judge fairly considered the prejudice to plaintiff resulting from the spoliation of evidence. Trial judges have wide discretion in fashioning appropriate relief for spoliation of evidence, and there was no abuse of that discretion. The frequent reference to the spoliation by counsel during the trial and in argument was permissible; merely because evidence may be inflammatory does not mean that it must be excluded. The evidence was relevant because it assisted the jury in deciding whether to draw a negative inference against the spoliator. Counsel’s argument which made reference to baseball players’ salaries was improper, and the court admonished counsel for again crossing the line in this respect. However, the court felt that the curative instructions were adequate, and deferred to the trial judge in his assessment that the remarks made no difference in the verdict. The court also rejected plaintiff’s cross appeal that there should be G.L. c. 93A damages for spoliation of evidence. Since the court has already determined that there is no independent action for spoliation, Fletcher v. Dorchester Mut. Ins. Co., 437 Mass. 544 (2002), there should not be an independent grounds for relief for spoliation under G.L. c. 93A.
Plaintiff sued defendant insurance company, alleging that its failure to send a notice of termination of coverage violated G.L. c. 93A. In a separate action, plaintiff sought declaratory and injunctive relief as well as damages on behalf of a class. Both cases were consolidated for trial. The judge denied plaintiff’smotion for class certification, but allowed the matter to proceed as a “test case.” The judge found a violation of 93A but that this violation was not the cause of plaintiff’s loss. The judge awarded $25 plus $9,000 in attorneys’ fees and $2,170 in costs. The Appeals Court affirmed in part and reversed in part, holding that plaintiff could not recover because the defendant’s practice of not sending notices of termination was not the cause of plaintiff’s loss and that plaintiff was not entitled to attorney’s fees.
Plaintiff obtained from Commercial Union Insurance Company insurance coverage with respect to a 1986 Nissan. He failed to pay a premium that was due November 5, 1991. Pursuant to defendant’s policy, plaintiff’s property damage policy was placed in suspension. Plaintiff then transferred the policy to another vehicle. Plaintiff was required by statute to have the vehicle inspected by a representative of the insurer within seven days after the effective date of the coverage or the policy would be terminated. Plaintiff never had this inspection. Defendant then sent plaintiff a letter stating that coverage would be terminated for non-payment of the premium. Because the plaintiff’s policy was in suspension due to non-payment of the premium, the defendant, pursuant to its policy, never notified plaintiff that his policy would be terminated for failure to have the inspection. 211 Code Mass. Regs. § 94.09 required insurance companies to notify insureds of the termination of their policy for failure to have this type of inspection.
Plaintiff paid the overdue premium, and defendant sent him a notice of termination of coverage for failure to pay the premium and a notice of reinstatement of coverage. Plaintiff then sustained property damage to the vehicle in the amount of $3,000. The Court held that the defendant’s policy of not sending notices regarding the inspection requirement when a policy was in “suspension” violated Chapter 93A. The Court held that the judge erred in awarding $25 in damages. The Court noted the controversy surrounding the language in c. 93A, § 9(3), that “if the court finds for the petitioner, recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater.” The court considered whether this meant that the plaintiff is entitled to recover $25 (plus attorneys’ fees) whenever a violation of c. 93A has been shown irrespective of causation being shown, or if the $25 comes into play when damages are shown but they amount to less than $25. The Court noted that although the matter is not “free from doubt,” c. 93A plaintiffs are not allowed to recover anything unless they can show actual injury caused by the unfair or deceptive practice. Because plaintiff was entitled to no damages, the award of attorneys’ fees was also inappropriate.
The Appeals Court held that the judge did not abuse his discretion in denying the motion for class certification. Parties’ stipulation to treat this as a test case could be enforced. The defendants’ practice of not sending required notices to policyholders whose coverage was “in suspension” was found to be a violation of c. 93A, and other policy holders could avail themselves of this finding. The Appeals Court held that the judge properly denied plaintiff’s request for injunctive relief. The plaintiff had sought an order that the defendant make use of a computer program that would result in the mailing of notices of suspension of physical damage coverage immediately after the twenty-first day after the effective date of coverage. This injunction would directly conflict with the provision of 211 Code Mass. Regs. § 94.09(2), which permits the insurer to mail notices at any time between the twenty-first and thirtieth day after the effective date of the coverage, and so the judge was correct in declining to grant it.
Plaintiff child, through her father and next friend, sued her mother for negligence, alleging the mother was responsible for injuries caused by her negligent operation of a motor vehicle while she was pregnant with the child. The Superior Court allowed the mother’s motion for summary judgment, concluding that, as a matter of law, the mother did not owe a legal duty to plaintiff. The Supreme Judicial Court transferred the case on its own motion and affirmed the judgment.
Christine MacDonald, when she was thirty-two weeks pregnant with the plaintiff, was operating a motor vehicle and was struck by another car. The plaintiff was born by emergency caesarian section four days later. Plaintiff experienced multiple breathing difficulties associated with her premature birth, and in the first few years of her life she has had, and continues to have, respiratory distress and asthma. The Court accepted, for purposes of its decision, that plaintiff’s illness was caused by her mother’s negligent driving.
Plaintiff parents sued Thomas, a teenage driver, the owner of the car, and his daughter for negligence and loss of consortium, alleging that defendants were responsible for the car accident that resulted in the deaths of their teenage children. The defendant’s insurance company, Commerce, filed a declaratory judgment action seeking a ruling that it had no duty to defend or indemnify the defendants. The Superior Court judge allowed the summary judgment motions of defendants, and of Commerce in its declaratory judgment action. The cases were consolidated in the Superior Court. The Appeals Court affirmed in part and reversed in part.
Two cars, a Toyota Avalon and a Toyota Corolla, were carrying teenage friends to a common destination. Defendant Thomas was driving the Avalon and carrying one female passenger, Samantha Pearlman. Thomas possessed only a learner’s permit; he did not have a drivers’ license. The Avalon was leased by Samantha’s father, David Pearlman, for Samantha’s use and was insured by Commerce Insurance Company. The Toyota Corolla, while attempting to pass the Avalon, spun out of control, traveled off the road, and struck two trees before coming to a stop. Two of the passengers in the Corolla were killed, and the other was seriously injured.
The Court held that the motion judge erred in allowing summary judgment on the negligence claim against the Pearlmans where there were issues of material fact whether Samantha knowingly permitted Thomas to operate her car in violation of a provision of G.L. c. 90 and whether that violation was causally related to the accident.
The Court held that the motion judge correctly ruled that where there was no evidence that Thomas was incompetent or unfit to drive a car or that Samantha knew him to be unfit or incompetent, Samantha was entitled to summary judgment with respect to the negligent entrustment claim. The motion judge correctly ruled that, where there was no evidence that David Pearlman was in control of the vehicle at the time of the accident or that he gave his consent to Thomas’ operation of the vehicle, he was entitled to summary judgment with respect to the negligence claim against him.
The Court held that the motion judge properly ruled that Commerce had no duty to defend or indemnify Thomas. The insurance policy stated that damages would be paid to people injured by the vehicle if the policyholder or someone operating the vehicle with the policyholder’s consent was legally responsible for their injuries. Samantha Pearlman was listed as an operator of the vehicle, but she did not have permission to allow anyone else to drive the car except in an emergency. Thus, Thomas was not driving the car with the express or implied consent of David Pearlman as required by the policy.
Plaintiff insurance company sought a declaratory judgment that a personal excess liability policy did not cover the injuries sustained by the defendants in an auto accident where their adult son was the driver. The term “insured” in the policy was defined as “you, or a relative residing in your household.” The issue was whether the son was a member of the father’s household, where the father lived apart from the house that was occupied by his wife and sons.
Beginning in 1992, Michael Morel purchased and renewed both primary and excess insurance policies from Metropolitan covering his home at 72 Cottage Street and various family automobiles. Later, in 1996, Morel and his wife separated, and Morel moved out, but he maintained a close connection with the Cottage Street house. He never divorced his wife, and he retained joint ownership of the property with her. He filed joint tax returns with his wife using the 72 Cottage Street address on the filings. Morel kept his own key to the house, and he visited the house several times per week. He received mail at the residence (including mail from Metropolitan). He also took the family trash to the dump each week, kept a workbench and tools in the basement, and did maintenance and remodeling on the house. Morel intended during the entire time of separation to maintain the excess policy to protect the Cottage Street house and all family members residing there.
Morel’s son never lived with his father at his new residence. Since he was in high school, he lived at various places but by 1999 he had moved back into the Cottage Street house with his mother. He did not pay rent or contribute to household expenses, and he had to borrow a car from his father in order to commute to work when his own car was repossessed.
The motion judge found that on these facts, Morel’s son was a “household member” and was thus covered by the policy. The Appeals Court affirmed. The Court first found that the Cottage Street house constituted the “household” of Morel. The Court stated that “determining whether someone is a member of a ‘household’ must proceed on a case-by-case basis with an evaluation and balancing of all relevant factors” and that “it is possible to have more than one residence at the same time.” The Court also rejected Metropolitan’s contention that Morel’s son should not be considered a resident of the Cottage Street house because he was an emancipated adult. The Court noted that the policy contained no age or dependency restriction, and that even if dependency were relevant, the uncontested evidence was that Morel’s son was not financially autonomous. Morel’s son was an “insured” under the excess policy, and his estate was entitled to its protection.
Liggett Group, Inc., a manufacturer of tobacco products, purchased liability insurance policies, “occurrence” policies, from American Mutual Liability Insurance Company (AMLICO) from 1911 through 1979 but not thereafter. In the 1980’s, AMLICO incurred substantial financial losses, ultimately resulting in the appointment of the Commissioner as temporary receiver on January 17, 1989. Following a petition by the temporary receiver to liquidate AMLICO on the grounds of insolvency, the court issued an order of notice. Although notice was mailed to all known creditors, in-force policyholders, and published in newspapers across the country, Liggett was never notified of the liquidation. On January 21, 2000, Liggett submitted a claim for alleged losses, which the receiver determined was untimely. Liggett contended that it was a “policyholder” and/or “known creditor” and should have received notice of the liquidation. In addition, it argued that its claim was timely when considering the lack of notice.
The Supreme Judicial Court ruled, under the Insurance Liquidation Act, G.L. c. 175, §§ 180A-180L, that the term “policyholders” is limited to parties with in-force policies at the time of the appointment of the receiver. Therefore, former purchasers are not, at the time of the commencement of a receivership proceeding, covered for future occurrences. The court also found that the extension of the claim filing deadline would only be an appropriate remedy where the specific failure bears directly on the fairness of the liquidation or the claim filing process. A violation of the § 180D notice requirement does not rise to that level. Finally, the court held that a policyholder does not become a “creditor” for the purpose of § 180C notice until that policyholder files a claim with the insurer. The case was remanded to the single justice for further proceedings consistent with the opinion.

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 § 94
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 § 94
 § 180
 § 180