First Circuit Court of Appeals Allows c. 93A Case to Proceed Against Insurance Company; Previous State Suit Did Not Bar Claim

By David White
January 2009

The First Circuit Court of Appeals dealt with a novel issue of law late last year: Can an insured split its declaratory judgment and bad faith claims into two separate actions, or is it barred from maintaining the second action against the insurance company for failing to join all claims in the first action. The answer, to the relief of the insured, was that two separate suits can be maintained. Andrew Robinson International, Inc. v. Hartford Fire Insurance Company, 547 F.3d. 48 (Ist Cir. 2008). The special circumstances of the case made that possible, and the case reminds us that ordinarily all claims against a defendant arising from a common issue should be included in the initial action.

In the underlying case, the plaintiffs, a quartet of affiliated companies all named after Andrew Robinson, sought a declaratory judgment in the Massachusetts state court, asking the court to declare that the pollution exclusion clause of its insurance contract did not bar coverage for the damages to its premises. The damage occurred when a neighbor did renovations which caused lead-contaminated dust to infiltrate Robinson's premises. The clean-up was disruptive to the businesses and costly.

The trial court found that the pollution exclusion clause did not apply, making Hartford Fire Insurance Company liable for the claim. Hartford did not appeal; the judgment became final and the loss was paid.

Shortly thereafter, the Robinson companies brought a direct claim against Hartford for unfair and deceptive acts in violation of G.L. c. 93A, 11. Hartford removed the case to the Federal court, and claimed as one of its initial defenses that the action could not be maintained, alleging that the failure of the plaintiffs to bring the c. 93A claim in the original action was a bar to the action under principles of res judicata.  The District Court agreed with Hartford and dismissed the case. Plaintiffs appealed.

The First Circuit Court of Appeals disagreed, and reversed the judgment of dismissal. The matter, the parties and court agreed, was governed by Massachusetts law. However, no case in Massachusetts was directly on point, so the Appeals was required to determine what the Massachusetts courts would most likely do.  In its opinion, the court analyzed related Massachusetts law, examined precedents around the country, consulted scholarly literature, and weighed relevant policy rationales. The court concluded quite firmly that it believed Massachusetts would follow the majority rule: When the underlying case is a declaratory judgment action, the action does not bar the bringing of a separate, even if closely related, action. The parties were thus permitted to proceed towards trial in the Federal District Court action.

It should be noted that the holding in this case has a fairly narrow application, namely covering declaratory judgment actions, but not other actions when the claims arise from a single transaction or occurrence.

_________________

Choose a Qualified Insurance Bad Faith Lawyer

The lawyers at Breakstone, White & Gluck, P.C., are experienced in getting compensation for victims injured in car, motorcycle, bike and truck accidents and in the companion insurance bad faith cases which sometimes result from insurance company tactics.

Because the Statute of Limitations applies to bad faith insurance cases, victims have a limited timeframe in which to file their cases. If you feel you have a valid insurance bad faith case, whether it is for your business or a personal matter, it is vital that you consult an attorney immediately to protect your rights.

Please feel free to call us today for a free consultation. Call us at 617-723-7676 (or toll free at 1-800-379-1244), use our contact form
Massachusetts Injury Lawyer Blog
Client Reviews
David really cared about me as an individual…and he really cared about seeking the justice that needed to be sought in the case.
★★★★★
Ron got the insurance company to settle for the maximum on the policy. And so as a result of that, my son went back to school.
★★★★★
Marc just guided us through the whole process. He told us exactly what would happen and how we needed to go about doing everything.
★★★★★
I would recommend David…The outcome of my case, I was very pleased with it. I hope I don't have another accident, but if I do we'll be back to see David.
★★★★★
Ron was excellent. He was on top of everything. He answered every question.
★★★★★
Marc was extremely professional. I felt very confident that he knew exactly what he was doing. This is his area of practice and I had total confidence in him and I actually have recommended him to other people who have been in accidents.
★★★★★