Justia Insurance Law Opinion Summaries

The plaintiffs, Jeffrey Cubberley and Philip Seaver, filed a lawsuit against The Commerce Insurance Company, seeking declaratory relief and compensation for alleged breach of contract. They claimed that Commerce was obligated to cover "inherent diminished value" (IDV) damages to their vehicles, which were damaged in collisions caused by Commerce's insured drivers. Commerce paid for the repairs but refused to compensate for IDV damages, leading the plaintiffs to argue that their vehicles were worth less in the resale market post-repair.The plaintiffs initially filed their lawsuit in the Superior Court, which was later transferred to the business litigation session. The case was stayed pending the outcome of McGilloway v. Safety Ins. Co., which held that IDV damages were recoverable under the 2008 standard Massachusetts automobile policy. After the stay was lifted, the plaintiffs filed a second amended complaint. Commerce moved to dismiss the claims, arguing that the 2016 standard policy excluded IDV damages. The motion judge granted the dismissal, concluding that the policy did not cover IDV damages and that the plaintiffs failed to allege facts suggesting an entitlement to relief. The plaintiffs appealed, and the Supreme Judicial Court granted direct appellate review.The Supreme Judicial Court affirmed the dismissal, holding that the plaintiffs lacked standing to pursue their breach of contract claims because they had not obtained final judgments against the insureds, as required by G. L. c. 175, § 113, and G. L. c. 214, § 3 (9). Additionally, the court found that part 4 of the 2016 standard policy explicitly excluded coverage for IDV damages to third-party vehicles. The court also determined that neither G. L. c. 90, § 34O, nor the decision in McGilloway provided a legal basis requiring insurers to cover IDV damages under the 2016 standard policy. Thus, the plaintiffs' complaint did not plausibly establish an entitlement to relief. View "Cubberley v. The Commerce Insurance Company" on Justia Law

A severe thunderstorm caused significant damage to Norwood Hospital, owned by Medical Properties Trust, Inc. (MPT) and leased to Steward Health Care System LLC (Steward). The storm led to extensive flooding in the hospital's basements and rainwater accumulation on the rooftop courtyard and parapet roofs, which then seeped into the building, causing further damage. MPT and Steward sought coverage from their insurers, Zurich American Insurance Company (Zurich) and American Guarantee and Liability Insurance Company (AGLIC), respectively. Both policies had high overall coverage limits but lower sublimits for flood damage. The insurers argued that all the damage was due to "Flood" as defined in the policies, which included "surface waters," and thus subject to the lower sublimits.The United States District Court for the District of Massachusetts granted partial summary judgment to the insurers, interpreting "surface waters" to include rainwater accumulated on the roofs. The court allowed an interlocutory appeal, recognizing the substantial ground for difference of opinion on this legal issue. The United States Court of Appeals for the First Circuit then certified the question to the Supreme Judicial Court of Massachusetts, asking whether rainwater accumulating on a building's rooftop courtyard or parapet roof constitutes "surface waters" under Massachusetts law.The Supreme Judicial Court of Massachusetts concluded that the term "surface waters" is ambiguous in this context. The court noted the lack of a clear definition in the policies and the divided case law on the issue. Given this ambiguity, the court ruled in favor of the insureds, determining that rainwater accumulating on the rooftop courtyard and parapet roofs does not unambiguously constitute "surface waters" under the policies. Therefore, the damage from such water infiltration is not subject to the flood sublimits. View "Zurich American Insurance Company v. Medical Properties Trust, Inc." on Justia Law

In this case concerning the term "physical abuse" as used in an "abuse and molestation" policy exclusion the Supreme Judicial Court reversed the order of the superior court granting summary judgment in favor of Insurer on its action for declaratory relief, holding that the abuse and molestation exclusion did not exempt coverage under the circumstances of this case.The homeowners' insurance policy at issue precluded coverage under a policy exclusion exempting coverage for "[b]odily injury...arising out of sexual molestation, corporal punishment or physical or mental abuse." Insured initiated an unprovoked attack on Leonard Miville by punching and kicking him repeatedly. When Insurer denied coverage Miville commenced an action against Insured. Insurer brought this action seeking a judgment declaring that it had no duty to defend or indemnify Insured for the personal injury claims. The judge granted summary judgment for Insurer. The Supreme Judicial Court reversed, holding that a reasonable insured would not expect the abuse and molestation exclusion to preclude coverage for the incident. View "Dorchester Mutual Insurance Co. v. Miville" on Justia Law

The Supreme Judicial Court reversed the order of the superior court allowing Plaintiff's motion for summary judgment in this lawsuit brought against the Executive Office of Health and Human Services and Nationwide Life Insurance Company in this dispute over the remainder of an annuity issued by Nationwide, holding that the superior court erred.Robert Hamel purchased the annuity at issue to help Joan Hamel, his wife, become eligible for Medicaid benefits, which was necessary to pay for her long-term care. Robert named the Commonwealth as the primary remainder beneficiary to the "extent benefits paid" and Plaintiff, his daughter, as the contingent remainder beneficiary. Before the end of the annuity period Robert died. Plaintiff filed this lawsuit alleging that she was entitled to the remainder. The superior court entered summary judgment in favor of Plaintiff and denied the Commonwealth's motion for summary judgment as to Plaintiff's claim for declaratory judgment. The Supreme Judicial Court vacated and reversed the judgment below, holding that, upon Robert's passing, the remainder of the annuity properly belonged to the Commonwealth up to the amount it paid for Joan's care. View "Dermody v. Executive Office of Health & Human Services" on Justia Law

The Supreme Judicial Court held that there is no common-law duty for insurers to cover costs incurred by an insured to prevent imminent covered loss when the plain, unambiguous terms of the insurance policy speak directly to the question of mitigation and reimbursement and do not provide coverage and the costs are otherwise excluded by other policy provisions.Insured sought recovery from Insurer for various costs it incurred after a wastewater treatment system at its manufacturing facility malfunctioned, claiming coverage under its pollution liability policy. In dispute were costs incurred that were not cleanup costs or costs necessary to avoid imminent endangerment to public health or welfare but necessary to avoid a business interruption. The district court held that the costs at issue were not recoverable and that there was no basis to impose a common-law duty that was inconsistent with the policy's coverages and exclusions. View "Ken's Foods, Inc. v. Steadfast Insurance Co." on Justia Law

The Supreme Judicial Court reversed the judgment of the superior court in favor of Insureds in this insurance dispute over attorney's fees, holding that attorney's fees under Mass. Gen. Laws ch. 93A are not awarded as "damages because of 'bodily injury' and are not 'costs taxed against the insured.'"At issue was whether Insureds' insurance policy, which covered "sums that the insured becomes legally obligated to pay as damages because of 'bodily injury,'"included Insureds' liability for attorney's fees under chapter 93A, section 9(4) in an action for breach of warranty resulting in bodily injury. After paying the substantive damages on the claim, Insurer brought this declaratory judgment action to determine whether it was also responsible for attorney's fees. The superior court concluded that the policy did cover attorney's fees. The Supreme Judicial Court reversed, holding that Insureds' policy did not cover the award of attorney's fees under chapter 93A. View "Vermont Mutual Insurance Co. v. Poirier" on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court concluding that the insurance policies of three restaurants (Plaintiffs), which suffered reductions in revenues during the COVID-19 pandemic and the resulting government restrictions on public gatherings, did not unambiguously cover Plaintiffs' losses, holding that there was no error.Plaintiffs brought a declaratory judgment action to determine the scope of their policies. The superior court granted judgment against Plaintiffs, finding that there was no "direct physical loss or damage" resulting from the COVID-19 virus. The Supreme Judicial Court affirmed, holding that Plaintiffs' claims were properly dismissed. View "Verveine Corp. v. Strathmore Insurance Co." on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court entering summary judgment in favor of Joann Parker and dismissing this interpleader action, holding that summary judgment was properly allowed.When Sean Parker purchased a life insurance policy he named his then-wife, Dawn Diana-Parker, as the primary beneficiary and Joann, his mother, as alternative beneficiary. After Sean and Dawn divorced Sean did not amend his beneficiary designation. Following Sean's death, American Family Life Assurance Company of Columbus, Sean's insurer, brought this interpleader action to determine whether Mass. Gen. Laws ch. 190B, 2-804, the Massachusetts Uniform Probate Code's revocation of probate and nonprobate transfers by divorce provision, terminated Dawn's beneficiary status by operation of law. The judge held that section 2-804 applied to Sean's policy and granted summary judgment for Joann. The Supreme Judicial Court affirmed, holding that Dawn's arguments on appeal were unavailing. View "American Family Life Assurance Co. of Columbus v. Parker" on Justia Law

The Supreme Judicial Court affirmed the superior court's judge's denial of Plaintiff's motion for a preliminary injunction, holding that the judge did not commit an abuse of discretion in denying Plaintiff's motion.Plaintiff, a professor at Harvard University, was indicted on two counts of making false statements to a government agency. Plaintiff made. Written request for indemnification and advance payment of his legal fees and expenses pursuant to Harvard's indemnification policy, which provides for the indemnification of qualified persons against liabilities and expenses incurred in connection with, inter alia, the defense of criminal proceedings the person may be threatened with by reason of serving in a "covered role." Harvard denied indemnification. Thereafter, Plaintiff brought this action asserting several claims with respect to the failure to provide indemnification. Plaintiff also filed a motion seeking a preliminary injunction requiring Harvard to provide advancement of his legal fees and expenses. A superior court judge denied the motion. The Supreme Judicial Court affirmed, holding that the motion judge did not abuse her discretion in concluding that Plaintiff did not establish a likelihood of success on the merits of his claims seeking advancement of fees and expenses. View "Lieber v. President & Fellows of Harvard College" on Justia Law

The Supreme Judicial Court affirmed the order of a single justice denying Petitioner's petition for extraordinary relief pursuant to Mass. Gen. Laws ch. 211, 3 and under the doctrine of present execution, holding that Petitioner failed to demonstrate an appropriate occasion for exercise of the extraordinary power of general superintendence.Respondent filed a complaint against Petitioner, her insurer, alleging, among other things, that Petitioner violated Mass. Gen. Laws ch. 93A and Mass. Gen. Laws ch. 176D (count three). The district court granted summary judgment for Respondent on all counts except for count three. Petitioner brought this petition arguing that requiring it to go forward on count three compelled it to engage in frivolous litigation. The single justice denied relief. The Supreme Judicial Court affirmed, holding that relief was not appropriate under the facts of this case. View "Liberty Mutual Insurance Co. v. Salaman" on Justia Law