Source: https://finburylaw.com/seminar-on-mass-auto-law/
Timestamp: 2019-04-24 00:50:35+00:00

Document:
The following material is divided into three parts. The first section seeks to convey a basic understanding of Massachusetts automobile insurance coverage. The second section explains the use of two statutes, Mass. Gen. L. ch. 176D and Mass. Gen. L. ch. 93A. 176D declares certain acts and practices by insurance companies to be illegal, and 93A is the enforcement tool which in the proper situation brings the threat of multiple damages and attorneys fees for non compliance with 176D. The last section provides some practice pointers to consider in dealing with auto cases which have a Massachusetts component.
In Massachusetts the standardized automobile insurance policy is currently the 2008 Edition. Anyone registering a vehicle in Massachusetts must buy at least the minimum compulsory insurance which consists of four parts: bodily injury(20k), personal injury protection(8k)(PIP), uninsured motorist(20k), and property damage(5k). Optional coverages are available. To the extent possible, the coverages are explained in plain language within the standard policy. The first place to look when dealing with automobile insurance issues would be the standard policy (Exhibit A).
This section covers the basic issues commonly faced when dealing with Massachusetts auto insurance. The first is the “threshold” which must be met to obtain pain and suffering damages. Next is an explanation of reasonable and necessary expenses. The third issue is PIP and Med Pay coverage, and the fourth is Uninsured and Underinsured coverage.
Mass. Gen. L. ch. 231, §6D establishes a threshold which the injured party must meet before that party can pursue damages for pain and suffering. This applies to any accident within Massachusetts whether out-of-state drivers are involved or not. If the threshold is not met, the claimant can not recover pain and suffering damages. This applies to pedestrians and bicyclists struck by autos as well as operators and passengers of motor vehicles. The threshold does not apply to collisions outside the Commonwealth. Furthermore, the threshold does not apply to Massachusetts motorcycle operators and passengers.
A New Hampshire resident injured in a Massachusetts crash must meet the tort threshold to obtain pain and suffering damages against the defendant. However, if the threshold is not met then the New Hampshire resident injured in Massachusetts who does not meet the tort threshold is deemed to have been injured by an uninsured tortfeasor and therefore could pursue an uninsured claim against his/her insurance company. Green Mountain Insurance Co. v. George, 138 N.H. 10 (1993); Matarese v. N.H. Municipal Assn. Prop-Liability, 147 N.H. 396 (2002).
Therefore, if your client is a New Hampshire resident, does not meet the threshold and is covered by a New Hampshire policy of insurance, file a claim for uninsured coverage with that policy. If your client is a New Hampshire resident and has no insurance whatsoever, your client can still pursue damages other than pain and suffering as applicable because the tort threshold only applies to pain and suffering damages. Cyr v. Farias, 367 Mass. 720, 724 (1975).
Because of the $2000.00 monetary threshold, a concern arises as to how to show that the expenses are reasonable and necessary. In Massachusetts, itemized medical bills subscribed and sworn to under the pains and penalties of perjury by the attending physician are admissible as evidence of the necessity, fairness and reasonableness of the charges. Mass. Gen. L. ch. 233 §79G. Expert medical testimony is ordinarily not required to establish the necessity of medical services. The plaintiff’s own testimony may be taken into consideration along with the medical bills and reports. Scalia v. Liberty Mutual Insurance Co., 1995 Mass. App. Div. 69 (1995).
In order to prove necessity, the plaintiff must show “that the [medical] treatment rendered by a competent medical doctor was a bona fide effort to alleviate and ameliorate the injury,” not that the treatment was an absolute necessity. Victum v. Martin, 367 Mass. 404, 407 (1975); Pietroforte v. Yellow Cab of Somerville, Inc., 19 Mass. App. Ct. 961, 963 (1985).
Practically speaking, for purposes of meeting the threshold, insurance companies at the pre-litigation level do not generally challenge the “face amount” of the medical bills. A recent challenge to the “face amount” of the medical bills at trial was rejected in Law v. Griffith, 457 Mass. 349 (2010). In that case the Plaintiff at trial submitted medical bills totaling $112,269. 94, certified as required under Mass. Gen. Laws., Ch. 233, §79G. Despite that, the trial judge only allowed evidence of what the Plaintiff’s insurance coverage paid, which was $16,387.14. The Supreme Judicial Court reversed, stating that the collateral source rule prohibited introduction of insurance payments, and Mass. Gen. L. ch. 233, §79G allowed introduction of the “face amount” of the bills.
PIP coverage can be waived for the named insured and any persons living in the insured’s household but cannot be waived for other occupants or pedestrians. It is compulsory.
Attorneys can not charge a contingent fee for obtaining PIP benefits for their clients but they can charge an administrative fee. However, most do not charge any fee at all.
The expenses or losses must be incurred within two (2) years from the date of the collision.
(c) Any pedestrian struck by the insured automobile in Massachusetts or any Massachusetts resident struck by the insured automobile outside Massachusetts (New Hampshire pedestrians are not covered by PIP if struck in New Hampshire by a Massachusetts vehicle).
PIP does not cover motorcycles or their passengers and is not payable if worker’s compensation benefits are available to the claimant. There is no coverage in other situations including OUI, intentional harm or where a person is injured in the commission of a felony.
Amount of PIP Coverage Available for Medical Expenses.
PIP is available for medical expenses up to $8,000 unless the claimant has private health insurance. In that situation, once $2,000 in medical expenses is paid by PIP, the claimant must submit the rest of the medical expenses to his/her health insurer. Then, whatever amount is not paid by the health insurer will be re-submitted to PIP. Medicare, Medicaid, Massachusetts state provided health insurance, and fully funded ERISA plans are not included in this scheme and for claimants having those health insurance plans, PIP is primary up to $8,000. Additionally, Massachusetts residents who are injured in Massachusetts accidents where no PIP insurance is available may apply to a fund under Mass. Gen. L. ch. 90, §34N.
Pure Massachusetts Situation. In a pure Massachusetts situation, whatever is received in PIP reduces the eventual personal injury recovery. If the case is tried to a judgment, the judge reduces the verdict by the amount of PIP paid. The PIP carrier is entitled to reimbursement from the defendant’s insurance company. Therefore, any offers to settle made by the defendant’s insurance company have already taken into consideration the fact that it must make PIP reimbursement.
Exception. The tortfeasor’s insurance company only has a duty to pay up to its policy limits. Therefore, if the tortfeasor’s insurance company pays the policy limits to the claimant, it is under no duty to reimburse the claimant’s insurance company for PIP.
The above point becomes important in a case which is valued close to the policy limit. For example, assume that PIP has paid $8,000 and the tortfeasor’s total policy is $20,000. Because the liability of the insurance company is only $20,000, the policy will be exhausted if the claimant is paid as little as $12,000, because the remaining $8,000 must go to PIP. Therefore, you have a powerful argument that the insurance company should pay you the policy limit because if it pays at least $12,000 to you it has to pay the entire policy anyway. By paying the $20,000 to you it ensures that it has settled the case and has protected its insured from potential excess liability.
New Hampshire Defendant. Assume that you represent a Massachusetts insured plaintiff for whom you obtained PIP benefits. Assume that the defendant is insured in New Hampshire. Regardless of where the collision occurred, when settling the case, there is no law requiring or allowing the Defendant’s insurance company to reimburse PIP. Distefano vs. Jovet, 2012 Mass. App. Div. 197 (2012). The case should be settled for full value without any PIP reduction by the Defendant’s company. But, where the Plaintiff receives a settlement the Plaintiff’s insurance company has a right under the Massachusetts policy to seek reimbursement directly from the Plaintiff, minus a pro rata share of costs of collection, for what it paid out in PIP benefits. See page 26 of policy, Exhibit A. The proper way to handle this settlement would be for the Plaintiff’s attorney to contact the PIP carrier and negotiate a payment. Otherwise, there is a risk that the Plaintiff will be pursued directly for PIP reimbursement. Do not assume that the Defendant’s insurance company is going to settle with you and pay back the PIP carrier. Clarify the point with the company.
Some people buy Medical Payments coverage (Med Pay) in addition to PIP coverage. It is seen in multiples of $5,000.
Med Pay covers anyone occupying the insured motor vehicle with consent. It also covers the insured and any person living in the household if occupying someone else’s automobile or if struck as a pedestrian.
Med Pay coverage applies only to medical expenses and not to wages. Also, they must be incurred within two years of the collision.
Coordination of Benefits for PIP, Health Insurance and Medical Payments Coverage.
PIP, No Health Insurance, No Med Pay.
In this case PIP pays up to eight thousand ($8,000) dollars in the medical expenses.
PIP and Health Insurance but No Med Pay.
PIP pays the first two thousand ($2,000) dollars in medical expenses. After that, the medical expenses must be submitted to the health insurance. Whatever the health insurance will not pay can be resubmitted to PIP (Medicaid, Medicare, Massachusetts state provided health insurance, and fully funded ERISA plans are not considered health insurance and therefore the full $8,000 in PIP would be applicable to medical expenses).
PIP, Health Insurance and Med Pay.
Many health insurance policies now state that they are secondary to Med Pay. If that is the case, Med Pay should be available after PIP pays the first $2,000 in medical expenses. If the health insurance company does not have such a provision, then health insurance may have to pay first. In that case there is an argument that Med Pay should then reimburse the amount of the health insurance lien. Kirby v. Liberty Mutual Insurance Co. 2014 Mass. App. Div. 190. Also see Golchin v. Liberty Mutual Insurance Co. 460 Mass. 222, 226 (2011)(Golchin I); Golchin v. Liberty Mutual Insurance Co. 466 Mass. 156 (2013) )(Golchin II).
PIP benefits are contractual in nature. The policy requires the claimant to cooperate in terms of giving a statement as well as submitting to medical exams. The use of IME exams in PIP practice is standard. Non-cooperation is a defense, and insurance companies commonly refuse to pay once a claimant has missed two scheduled IME exams. Even though the PIP carrier has an IME exam stating that no further treatment is necessary, you can still litigate the issue of further PIP payments.
Uninsured and underinsured coverage is governed by Mass. Gen. L. ch. 175, §113(L).
There is no stacking of UM or UIM claims in Massachusetts after 1989. Mass. Gen. L., ch. 175, §113(L)(5).
The statute of limitations for underinsured and uninsured coverage is six years from the time the contract was breached. Berkshire Mutual Insurance Co. v. Burbank, 422 Mass. 659, 660 (1966). The insurance contract is not breached until one party or the other declines to arbitrate. However, late notice is still a defense. Goodman v. American Casualty Co., 419 Mass. 138, 142 (1994).
In any uninsured situation, regardless of how the claimant was hurt, you first look to any policy where the claimant is a named insured. If the claimant is a named insured, that is the exclusive policy available for uninsured coverage.
If the claimant is not a named insured on any policy, but is in the same household of a person having automobile insurance, then that is the sole policy available.
If the claimant is not a named insured on a policy, and if there is no insurance policy in the household, then the policy applicable would be the vehicle the claimant is riding in.
The standard insurance policy requires prompt notice, and in the case of a hit and run, notice within 24 hours. However, the insurance company will not be successful in denying the claim unless it shows that it was prejudiced, and it has the burden of proof in that regard. Goodman v. American Casualty Company, 419 Mass. 138, 142 (1994); Lighter v. Lumberman’s Mutual Casualty Insurance Co., 43 Mass. App. Ct. 415 (1997).
In an underinsured claim, there is no need to exhaust the tortfeasor’s policy first, nor is there a requirement that you must resolve the tortfeasor’s case first before applying for underinsurance. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220, 228-29 (1988). Therefore, you can proceed with a lawsuit against the tortfeasor as well as an underinsured claim against the policy that applies. Of course, your recovery in the underinsured claim is only the value of the case above the tortfeasor’s full policy.
You must obtain the written permission of the underinsurance carrier to settle before settling the underlying claim against the tortfeasor. An insurer’s consent to settle may not be unreasonably withheld. In addition, an insurer must prove material prejudice resulted if a claimant fails to obtain consent. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220; Lighter V. Lumberman’s Mutual Casualty Insurance Co., 43 Mass. App. Ct. 415 (1997).
Once an underinsured carrier is requested to give consent to settle, it usually performs an asset check on the tortfeasor. In Massachusetts, the underinsured carrier cannot refuse to give consent because the tortfeasor has sufficient assets over and above the insurance policy to satisfy any claim. The insurance company must make a decision to either give consent to the settlement, thus releasing the tortfeasor, or to pay the underlying claim to the claimant plus the underinsured benefits and then go after the tortfeasor itself. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220, 228 (1988).
Deductions from coverage are made for any amounts recovered from the legally responsible person or insurance company, PIP, and workers’ compensation, but not Med Pay.
In New Hampshire, a worker’s compensation insurer has a lien against UM benefits. In Massachusetts, there is no such lien; rather, the UM benefits are reduced by the amount of worker’s compensation paid, including compensation payments that will continue to be made in the future. Mayo v. Aetna Cas. & Sur. Co., 419 Mass. 596 (1995).
Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.
Duty of Insurance Company to Settle with the Claimant.
“That objective test calls upon the fact finder to determine whether a reasonable person, with knowledge of the relevant facts and law, would probably have concluded, for good reason, that the insurer was liable to the plaintiff.” Id. at 956-57.
Insurance companies must be given the time to investigate claims thoroughly to determine their liability. Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 677 (1983).
In Clegg v. Butler, 424 Mass. 413 (1997), liability was found based on a violation of Mass. Gen. L. ch. 176D, §3(9)(f). The court determined that the insurance company failed to effectuate a prompt, fair and equitable settlement of the claim in which liability had become reasonably clear. The injury occurred on May 4, 1991. The policy limits were $250,000. By January 23, 1992 the plaintiff had demanded an amount in excess of the policy limits. Not until May, 1994 did the insurance company offer its policy limits of $250,000. The court found that liability was never at issue and further found that by June, 1992 the insurance company should have known that damages exceeded the $250,000 policy limit. The judge further found the insurance company’s previous offers were unreasonably low, unrealistic and unjustified. The case was remanded because the judge applied the wrong measure of damages. Damages will be discussed in detail below.
It is clear that under Mass. Gen. L. ch. 176D, §3(9)(f) insurance companies must make reasonable offers within a reasonable period of time.
Duty of Insurance Company to its Own Insured.
“The test is not whether a reasonable insurer might have settled the case within the policy limits, but rather no reasonable insurer would have failed to settle the case within the policy limits.” Hartford Casualty, 417 Mass. at 120-121.
Under Hartford, the insured would have to prove that the plaintiff would have settled the claim within the policy limits and that no reasonable insurer would have refused the settlement offer extended, or would have refused to respond to the offer extended. This standard would be applied where a claimant obtains a judgment in excess of the policy limits and then contemplates obtaining an assignment of rights from the tortfeasor in order to go after that tortfeasor’s insurance company for the excess.
While Mass. Gen. L. ch. 176D establishes certain duties on the part of insurance companies, the way to enforce the remedy is through Mass. Gen. L. ch. 93A. Ch. 93A has been extensively applied to the insurance industry. A violation of 176D is an automatic violation of 93A.
Chapter 93A is entitled the “Massachusetts Consumer Protection Act.” Basically, the Act declares unfair or deceptive acts in the conduct of a business to be unlawful. It allows a private person to bring an action for up to triple damages and attorney’s fees for damages arising out of the unfair or deceptive conduct. The statute is useful in many areas aside from insurance.
93A, §2(a) states that unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
93A, §2(b) provides that courts are to be guided by the interpretations given by the Federal Trade Commission and the Federal Courts concerning the language above.
93A, §2(c) enables the Attorney General to make rules and regulations interpreting the language above. See generally 940 Code of Massachusetts Regulations Sec. 3.00 et seq. The Attorney General has enacted regulations covering many subjects including motor vehicles, landlord-tenant rights, debt collection, etc. While no specific regulations have been promulgated for the insurance industry, 940 CMR Sec. 3.16(c) states that a violation of an existing statute, rule, regulation or a law meant for the protection of the public’s health, safety and welfare is an unfair and deceptive trade practice and therefore a violation of 93A.
Under §9(3) damages may be awarded in the amount of actual damages, or $25.00, whichever is greater, or up to three but not less than two times those amounts if the court finds that the use or employment of the act or practice was a willful or knowing violation of said §2 or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said §2.
Attorney’s fees are routinely given upon a finding of violation of 93A.
Any citation to the statute alleged to be violated.
Mass. Gen. L. ch. 93A, §9; Thorpe v. Mutual of Omaha Insurance Company, 984 F.2d 541 (1st Cir. 1993); Cassano v. Gogos, 20 Mass. App. Ct. 348 (1985); Entrialgo v. Twin City Dodge, Inc., 368 Mass. 812 (1975).
Attached is a sample demand letter under Mass. Gen.L. ch. 93A which is labeled Exhibit C at the end of this Section.
Mass. Gen. L. ch. 93A provides a remedy for actual damages caused by the violation and for two or three times actual damages in cases where the violation was a knowing or willful one or where the refusal to grant relief was made in bad faith with knowledge or reason to know that the act violated 93A.
If the judge in his discretion finds a violation of 93A but no bad faith or willful or knowing violation then there would only be single damages and attorney’s fees.
If the judge in his discretion finds a violation of ch. 93A, along with bad faith or a knowing or willful violation, then double or triple damages can be awarded plus attorney’s fees.
If the underlying case has not gone to judgment then damages are measured by the loss of use of the money at a reasonable interest rate. For example, assume the underlying case finally settles after a 93A demand letter is sent. The claimant releases the tortfeasor but not the insurance company. The claimant then pursues a 93A action against the insurance company. If the claimant prevails he will get a damage award equal to the loss of use of the money until he received it. If the judge finds bad faith or a knowing or willful violation, that amount can be doubled or tripled.
If the underlying case goes to trial and judgment, and if the judge finds that there has been bad faith or a knowing or willful violation, then the underlying judgment can be doubled or tripled. Rhodes v. AIG Domestic Claims, Inc., 461 Mass 486 (2012).
An arbitration award is not a judgment. Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 37 (1991). A consent judgment, if reasonable and not collusive, is a judgment. Gore v. Arbella Insurance Company, 77 Mass. App. Ct. 518 (2010).
Practical Uses of Mass. Gen. L. ch. 93A.
When an insurance company has failed to make payments under PIP or Med Pay. It will commonly argue that an IME exam serves as a cut-off date for medical treatment.
Where an insurance company has not made a response to a demand for settlement, or has made an unreasonably low offer when liability is reasonably clear.
In a policy limits case where you make clear to the insurance company that you are willing to accept the policy limits. This sets up the scenario where a future judgment above the policy limits may be recoverable if the insurance company breached its duty to its own insured by failing to settle within the limits. At that point the Plaintiff could either go after the Defendant for the excess, or attempt to obtain an assignment of rights from the Defendant and then sue the insurance company under Ch. 93A, alleging a violation of Ch. 176D for failing to protect the Defendant by settling within the policy limits.
Where a Massachusetts vehicle causes injury in the State of New Hampshire, and has a minimum policy for bodily injury ($20,000 per person), the coverage is automatically increased to $25,000 per person so that it meets the minimum insurance required in New Hampshire.
Where a New Hampshire resident is injured in Massachusetts and does not meet the tort threshold, that individual would have an uninsured claim with his/her insurance policy in New Hampshire. Green Mountain Insurance Co. v. George, 138 N.H. 10 (1993).
In a collision occurring in New Hampshire where you represent the Massachusetts insured, make sure you obtain PIP benefits first before filing suit since Mass. Gen. L. ch. 90, §34M is clear that once suit is filed the PIP carrier can withhold further payments.
In a pure Massachusetts situation, it is standard procedure to reserve any and all claims for PIP or Med Pay in the release. This is because the claimant’s own insurance company has a right of action against the tortfeasor’s insurance company to recover the PIP benefits paid and you do not want to create the unpleasant issue of extinguishment of that right.
There are occasions when you must search for any policies applicable to the tortfeasor. Most common would be a situation where the tortfeasor is driving a car not owned by him or anyone in his household. In that instance you may be able to stack liability coverage. Therefore, you would want to find out the identity of every person living in the tortfeasor’s household and what policies exist for the tortfeasor himself and his household members. A local town or city office may give you a listing of persons who live in the household and have registered cars. Then you could check with the Registry of Motor Vehicles as to the insurance companies. You could also use a CD-ROM program called WorldWide Information (Worldwide Information, Inc., 400 Cummings Center, Beverly, MA 01915) which basically contains the Massachusetts Registry of Motor Vehicle records. You may search the program by using an address and find out every occupant of the household who has a registered vehicle along with the insurance company assigned.
In regard to obtaining medical records, medical providers are governed by law as to what they can charge for the copies.
MASSACHUSETTS: Pursuant to Mass. Gen. L., ch. 111, §70, medical providers shall provide copies of records at the following rate: Base Charge of $20.59 plus .70 cents per page up to 100 pages and .36 cents per page after the first 100 pages.
Massachusetts State Police Reports can be obtained online at http://www.mass.gov/rmv/express/inst_crrequest.htm.
Upon settlement, Massachusetts Insurance Companies are required to check with the Department of Revenue to see if any Massachusetts claimant owes money for child support, public benefits, taxes or any other type of money owed to the Commonwealth. Giving the client advance notice of this fact may save the agony of explaining to the client why the insurance company withheld money from the settlement to pay the Commonwealth back.
Attached as EXHIBIT D is an explanation for the client as to how liens affect the case. EXHIBIT E explains how the medical bills get paid. EXHIBIT F is proposed legislation that is similar to Massachusetts Law allowing admission of medical bills and reports.
MCLE, Inc., Chapter 93A Rights and Remedies, 3rd Edition 2014(Available from Massachusetts Continuing Legal Education, Inc., Ten Winter Place, Boston, MA 02108-4751 tel. (800) 966-6253).

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