Tort and Insurance Law Update – 2004 – Part Three

Tort and Insurance Law Update – 2004 – Part Three

Herbert v. Enos,
60 Mass. App. Ct. 817 (2004)

Negligence, Foreseeability of Harm

[Defendant’s faulty repair to a toilet in his home, which resulted in flooding that reacted with the home’s electrical system and caused plaintiff to receive a severe electric shock when he touched an outside faucet, was the but for cause of the plaintiff’s injuries; however, the harm to the plaintiff was not a reasonably foreseeable consequence of the defendant’s conduct.]

Plaintiff brought an action to recover for personal injuries he suffered as a result of receiving a severe electric shock when he attempted to water his neighbor’s flowers while the defendant neighbor was on vacation. The defendant had undertaken a plumbing repair in his house, which had failed, resulting in a leak which shorted out the electrical system in the home. The Superior Court allowed the defendant’s motion for summary judgment on the ground that the injury sustained by the plaintiff was not a reasonably foreseeable consequence of the defendant’s alleged negligence, thus precluding a finding that the alleged negligence caused the injury.  Plaintiff appealed.

The Appeals Court affirmed.  Viewing the facts in the light most favorable to the plaintiff, the Appeals Court concluded that the plaintiff had shown sufficient evidence to establish that the defendant made faulty repairs to the toilet, which repairs resulted in flooding, which flooding created an electrical current in the plumbing and resulted in the plaintiff sustaining a severe electric shock when he touched the outside faucet.  Although the plaintiff had established that the defendant’s conduct was the but for cause of the plaintiff’s injuries, he had not established that those injuries were foreseeable. The plaintiff’s injuries were a “‘highly extraordinary’ consequence of a defective second-floor toilet.”  Id. at 822.

Mass. Property Ins. Underwriting Assoc. v. Wynn,
60 Mass. App. Ct. 824 (2004)

Homeowner’s Insurance, All-terrain Vehicle, Adjacent Premises

[Where accident between two all-terrain vehicles occurred at a beach near the home of the driver and owner of one of the vehicles, homeowner’s policy did not afford defense or indemnity coverage for any liability of the driver/owner in connection with the accident.]

Defendant Wynn brought an action against defendant Spina for personal injuries he sustained when the all-terrain vehicle Wynn was operating collided with the all-terrain vehicle operated by Spina, allegedly as the result of Spina’s negligence.  The accident occurred on a beach near the premises on which Spina resided.  The premises was covered by a homeowner’s insurance policy issued by the plaintiff insurer.  The coverage provided by the policy excluded accidents arising out of the use of motorized land conveyances, with an exception for, among other things, motorized land conveyances that are “designed for recreational use off public roads, not subject to motor vehicle registration and … owned by an ‘insured’ and on an ‘insured location.’”  Plaintiff insurer sought a declaration that the policy did not obligate it to defend or indemnify Spina in the action brought by Wynn.  The Superior Court allowed plaintiff insurer’s motion for summary judgment, declaring that the policy did not afford Spina coverage in this case.  Wynn appealed.

The Appeals Court affirmed.  The only disputed issue on summary judgment was whether the policy language “on an ‘insured location’” extended coverage to this accident because either (1) Spina’s all-terrain vehicle was garaged at the “insured location,” regardless of where the accident occurred, or (2) the definition of “insured location” extended to the beach where the accident occurred, as a premises used in connection with the insured premises.  The Appeals Court disagreed with both interpretations of the policy.  The exception to the exclusion would apply in this case only if the accident occurred on an insured location, regardless of the location where the vehicle was garaged.  The term “insured location,” as defined in the policy, was not meant to encompass “adjacent, non-owned land on which an ATM might be used,” such as the beach.  Id. at 829.

Opara v. Mass. Mut. Life Ins. Co.,
441 Mass. 539 (2004)

Life Insurance, Reinstatement, Misrepresentation

[Insurer properly denied coverage where insured deceased misrepresented his medical status in an application for reinstatement of his life insurance policy that had previously lapsed for nonpayment of the premium.]

Defendant insurer issued a whole life insurance policy to insured, but insured only paid the premiums on the policy for the first three months after the policy was issued and the policy lapsed without value.  Several months after the policy lapsed, insured began experiencing intestinal discomfort and saw his doctor about the symptoms in March 1996.  The symptoms persisted, and on October 10, 1996, insured was diagnosed with terminal cancer.  Sometime between March 1996 and October 17, 1996, insured sought to have the policy reinstated and converted to a term life policy.  On his undated application for reinstatement, insured indicated that he had seen his doctor in March 1996 for a routine physical, denied that he had ever experienced intestinal discomfort, and denied that he was being treated for any medical disorder.  The application was approved in late November 1996.  After the death of insured, defendant insurer denied coverage on the basis of the decedent’s misrepresentations in his application for reinstatement, and the beneficiaries filed a complaint in the Superior Court seeking the proceeds.  The Superior Court allowed defendant’s motion for summary judgment.  The beneficiaries appealed, and the Supreme Judicial Court transferred the case on its own motion.

The Supreme Judicial Court affirmed.  It is an established principle of law that the requirements of G.L. c. 175, §§ 131 and 132(3), which prevent insurers from denying coverage based on alleged misrepresentations in an application for life insurance when the application is not attached to the policy when issued, do not apply to applications for reinstatement of a lapsed life insurance policy.  Holden v. Metropolitan Life Ins. Co., 188 Mass. 212 (1905).  Regardless of the exact date on which the deceased signed the application for reinstatement, and despite the fact that after reinstatement the policy was converted from whole life to term life, the insured nonetheless made false representations in his application for reinstatement and, pursuant to the terms of reinstatement, those false representations rendered the policy ineffective.

Coastal Orthopaedic Institute, P.C. v. Bongiorno,
61 Mass. App. Ct. 55 (2004)

Attorney Malpractice, Expert Opinion

[Legal malpractice claim failed where lawyers gave competent opinion on defensibility of underlying claims, and where plaintiff failed to demonstrate loss caused by attorney’s malpractice.]

Plaintiff was the defendant in the underlying suit brought by a former employee. The employee had claimed age discrimination, breach of contract, and breach of the implied covenant of good faith and fair dealing. After arbitration, the employee prevailed only on the age discrimination claim, and was awarded $446,491.11. Plaintiff brought suit against its attorney for legal malpractice on the theories that he had negligently advised that the claims were defensible and that he had failed to convey an offer in a timely manner which might have resulted in a settlement and avoided legal costs and expenses. Summary judgment was granted in favor of the defendant, and the plaintiff appealed.

The Appeals Court affirmed. The attorney had offered legal advice which, according to his expert, was within the standard of care. No attorney is the guarantor of the outcome of a case, particularly where, as here, the outcome turned on the credibility of a witness (this witness was a principal of the plaintiff company). Further, the attorney’s advice had been correct on two of the three counts, which buttressed his contention that his advice had been reasonable and proper. The plaintiff had failed to counter the defendant’s experts with expert opinions on its own behalf, and expert testimony is usually required to demonstrate that an attorney failed to meet the standard of care. With regard to the contention that the defendant had failed to timely convey the offer of settlement conveyed during the arbitration, the court found that the plaintiff had failed to demonstrate any damages as a result thereof, since the offer was larger than the ultimate award made by the arbitrator, and since the offer was made near the conclusion of the arbitration proceedings.

Savers Property & Casualty Ins. Co. v. Admiral Ins. Agency, Inc.,
61 Mass. App. Ct. 158 (2004)

Negligence, Agency, Damages, Misrepresentation

[Sub-agent of insurance company not liable for damages arising from coverage it allegedly improperly bound on theories of negligence, misrepresentation, or common law indemnity.]

Plaintiff insurer wrote specialty risk coverage, including excess snow accumulation policies. In 1995, Massport bought such coverage through an agent, the defendant Admiral Insurance Agency, Inc., which was a sub-agent to the plaintiff through an intermediary insurance agency. The intermediary’s authority was in many respects limited, but that was not know to the defendant. When the Massport coverage was bound, it did not comply with many of the restrictions placed by the plaintiff on the intermediary agent. However, plaintiff never disclaimed the coverage, and never obtained, even though it had a clear chance to do so, re-insurance. After a blizzard in January 1996, Massport sought, and obtained, the insurance from plaintiff. Plaintiff then arbitrated its claims against the intermediary agent (in a separate action, in which it partially prevailed), and against the defendant, Admiral Insurance Agency. After trial, and in relevant pre- and post-trial rulings, judgment entered for the defendant on all counts. Plaintiff appealed.

The Appeals Court affirmed on all counts. The defendant, Admiral, as a sub-agent, owed only a duty of care to the intermediary agent. Plaintiff was not entitled to common-law tort-based indemnity, which is limited to exceptional circumstances where the plaintiff is entirely free from fault; since the plaintiff was found comparatively negligent, this remedy was unavailable. The instructions given relating to the failure to procure reinsurance were not impermissible collateral source instructions. It was proper to allow the jury to make the final damages assessment with particularity, and the trial judge did not improperly refuse to add damages to the judgment. The plaintiff failed to mitigate damages. The negligence of the intermediary agent could be imputed to the plaintiff, and the evidence of the intermediary’s negligence supported the finding that the plaintiff was more than fifty percent at fault, thus barring recovery.


Nierman v. Hyatt Corp.,
441 Mass. 693 (2004)

Negligence; Statute of Limitations; Conflict of Laws

[Conflicts of law analysis favored use of Texas statute of limitations over Massachusetts.]

A Massachusetts resident filed a negligence action for personal injuries sustained at a Hyatt Regency Hotel in Texas while climbing aboard a transport cart.  Plaintiffs filed an action in Massachusetts, asserting claims for negligence, loss of companionship, society, and support.  The trial court granted summary judgment in favor of the defendant on the grounds that the action was barred by Texas’ two-year statute of limitations.  The Appeals Court reversed and the Supreme Judicial Court granted further appellate review. The Supreme Judicial Court affirmed the summary judgment in favor of the defendant.

The parties agreed that the substantive negligence law of Texas should apply to the action and the sole issue before the court was whether the Massachusetts or the Texas statute of limitations controls the claims.  The Supreme Judicial Court analyzed the matter in light of the Restatement (Second) of Conflict of Laws, § 142, and its holding in New England Tel & Tel Co. v. Goudreau Constr. Co., 419 Mass. 658 (1995). The court concluded that the two-year Texas statue of limitations should apply to this action for two reasons.  First, Texas has a more significant relationship to the parties and to the lawsuit because the incident took place in Texas.  Second, although Massachusetts has a general interest in ensuring its residents are compensated for personal injuries, Massachusetts does not have a substantial interest in the timeliness of such action.  Thus, the Texas two-year statute of limitation applied.

Beals v. Commercial Union Ins. Co.,
61 Mass. App. Ct. 189 (2004)

Consumer Protection, Res Judicata, Underinsured Motorist Claims

[Arbitration of underinsured claim did not preclude subsequent claims against insurer arising from G.L. c. 93A and G.L. c. 176D claims.]

The case arose from an automobile accident which resulted in injuries to the plaintiff. The underlying case was settled with the permission of the defendant insurance company, and plaintiff sought additional damages under her policy for underinsured motorist coverage. Plaintiff was dissatisfied with the offers of settlement, and pursued arbitration through a suit for arbitration pursuant to G.L. c. 175, § 111D. The arbitration award was in excess of her insurance coverage, and the insurer tendered the limits after the arbitration decision was rendered. Plaintiff brought a separate claim against Commercial Union for its failure to promptly settle the underinsured claim, pursuant to G.L. c. 93A and G.L. c. 176D. Defendant moved for summary judgment, claiming the G.L. c. 93A claim should have been raised in the complaint for arbitration, and claiming that the subsequent case was barred by res judicata. The Superior Court justice agreed, finding that the plaintiff knew of the claims for bad faith while the arbitration matter was pending and that the plaintiff should have amended the complaint.  Summary judgment entered for the defendant and the plaintiff appealed.

The Appeals Court reversed. In order to prevail on the theory of true res judicata, or claim preclusion, the defendant was required to demonstrate (1) that there was an identity of parties; (2) that there was an identity of the cause of action; and (3) that there was a final judgment on the merits of the claim. The statute governing underinsured motorist claims, G.L. c. 175, § 111D, required the plaintiff to seek arbitration, but the statute did not require her to join claims for violations of G.L. c. 93A or G.L. c. 176D. A person is not required to arbitrate a G.L. c. 93A claim, or to join that claim in a pending action, although one may do so if the parties agree. Since the plaintiff did not intend to join her G.L. c. 93A claims in the arbitration action, she was not precluded from pursuing them separately.

Metropolitan Property & Casualty Ins. Co. v. Westberg,
61 Mass. App. Ct. 247 (2004)

Underinsured Motor Vehicle Benefits

[Passengers injured in a motor vehicle accident were not entitled to underinsurance benefits under the terms of the policy issued by plaintiff insurer.]

Defendant passengers were injured in a motor vehicle accident in Rhode Island.  All occupants of the vehicle were Massachusetts residents, plaintiff insurer did business in Massachusetts, and the vehicle was insured under a standard Massachusetts liability policy issued by plaintiff.  The bodily injury limits of the policy were insufficient to compensate fully for the defendants’ injuries, and the underinsurance coverage was for an equal amount.  Plaintiff insurer sought a declaration whether it owed underinsurance benefits to the defendants.  The Superior Court held that the plaintiff did not owe any such benefits.  The defendants appealed.

The Appeals Court affirmed.  Because the accident occurred in Rhode Island, a portion of the policy was implicated that addressed out-of-state injuries in states not requiring insurance as a prerequisite to registration.  Even if that portion of the policy entitled the defendants to underinsurance coverage for this accident, which the Court found unlikely, the limits of the underinsurance benefits were equal to the bodily injury limits and Massachusetts law would not permit recovery above that limit.  Despite some Rhode Island law indicating that recovery of underinsurance benefits could be stacked onto the recovery of bodily injury benefits, it was unlikely that Rhode Island law would apply to a Massachusetts liability insurance policy.

Sonin v. Mass. Turnpike Auth.,
61 Mass. App. Ct. 287 (2004)

Negligence, Public Agency, Statute of Repose

[An action against a public agency for negligent design of improvements to a roadway must be brought within six years following the completion of the improvements, and those improvements must amount to more than routine maintenance.]

Plaintiff was driving on the Massachusetts Turnpike at night in foggy conditions.  He struck a disabled vehicle in the right travel lane.  There was no breakdown lane in that part of the Turnpike.  Plaintiff did not see the disabled vehicle until he was too close to avoid it.  Plaintiff sustained severe injuries in the accident.  He brought suit against the Massachusetts Turnpike Authority, owner of the Turnpike, for negligent design of the roadway and negligent failure to warn of the absence of a breakdown lane.  At the close of evidence, on the Turnpike Authority’s motion for directed verdict, the Superior Court found that plaintiff’s claim for negligent design was time-barred by G.L. c. 260, § 2B.  Although improvements had been made to the Turnpike within the last six years, those improvements ended approximately two miles from the location of the accident.  Also, although some work had been done at the location of the accident within the last six years, that work amounted to no more than routine maintenance.  The Superior Court allowed the Turnpike Authority’s motion for a directed verdict on the claim for negligent design and allowed the claim for negligent failure to warn to go to the jury.  The jury found in favor of the defendant on the latter claim.  Plaintiff appealed only the dismissal of the claim for negligent design.

The Appeals Court affirmed.  G.L. c. 260, § 2B, bars a claim for negligent design of improvements to real property brought against any public agency more than six years after the completion of those improvements.  The plaintiff argued that the Turnpike Authority was not afforded the protection of the six-year statute of limitation in this case because it was merely an owner of the property, and not an architect, engineer, or contractor directly involved in the making of the improvements.  The plaintiff reasoned that the language of § 2B extended protection only to a class of protected actors, including those directly involved in the design and planning of the improvements to real property and excluding owners and tenants not so involved.  The Appeals Court disagreed, finding that § 2B, by its clear and express terms, bars a claim for negligent design of improvements to real property brought against any public agency more than six years after the completion of improvements, regardless of the agency’s degree or form of involvement in the making of improvements.  Regardless, the mere fact that a claim can be brought against the public agency for negligent design demonstrates that the public agency is sufficiently involved to be afforded the protection of the statute of limitations in § 2B.

Costa v. The Boston Red Sox Baseball Club,
61 Mass. App. Ct. 299 (2004)

Duty to Warn, Open and Obvious Danger

[The danger of a foul ball causing injury is open and obvious, and does not require further warning by owner of a baseball stadium.]

The plaintiff was attending her first baseball game. She was hardly a fan, and professed little knowledge of the sport, having watched only what she happened to see from time to time as she changed TV channels. She claimed, among other things, that she was unaware that a foul ball might be driven into the stands. Within ten minutes of having taken her seat behind the Red Sox dugout, she was struck in the head by foul ball and suffered serious injuries. She claimed, in her suit, that the defendant had failed to warn her of the dangers of being struck by a foul ball, and that if properly warned, she would have chosen to avoid the risk associated with the seat she had been in. The defendant moved for summary judgment, claiming it had no such duty. The motion was allowed by the Superior Court justice and the plaintiff appealed.

The Appeals Court affirmed. The court noted that injuries from foul balls are frequent (occurring between thirty-six and fifty-three times per year, as revealed by several years of data), and that the danger itself should be obvious to a person of ordinary intelligence. Following the majority of jurisdictions, the court held that there was no additional duty on the defendant to warn of the danger. The court noted that the majority of the risk was eliminated by screening in the area behind home plate. Clearly not pleased with the unfortunate result of an innocent fan being required to bear the entire costs of the injures “even though they played no role in causing them except by choosing to attend the game,” Justice Cohen suggested that major league baseball elect to internalize the costs of unavoidable injuries to the fans.

Heinricher v. Volvo Car Corp.,
61 Mass. App. Ct. 313 (2004)

Motor Vehicle, Negligence, Federal Preemption

[State common-law negligence claim against car manufacturer preempted by Federal law setting forth car safety standards.]

Plaintiff in this case was injured in a motor vehicle accident while riding in the back seat of a 1990 Volvo sedan.  She was wearing the two-point lap seatbelt in the rear center seat of the vehicle at the time of the accident.  All of the other seats were equipped with three-point lap-shoulder harnesses.  Plaintiff brought a claim against Volvo Car Corporation sounding in negligence and breach of warranty, asserting that the Volvo was defective because it lacked three-point lap-shoulder harness in the rear center seat.  A Superior Court judge granted the defendants’ motion for summary judgment ruling that plaintiff’s claims were preempted by Federal statute and safety regulations promulgated thereunder.

The Appeals Court upheld the lower court judgment in favor of the defendants.  The National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. §§ 1381-1431 (1988), and Federal Motor Vehicle Safety Standard 208, 49 C.F.R. § 571.208 (1990), impliedly preempt State common-law claims for damages sustained as a result of an alleged automotive defect.  At the time the Volvo was manufactured, Standard 208 permitted manufacturers to install either a two-point lap belt or a three-point lap-shoulder harness in the rear center seat.  Although the Federal motor vehicle safety standard “does not exempt any person from liability under common law,” Federal law preempts State law when a conflict exists.  Here, the Appeals Court found that the Federal safety standards are a comprehensive safety scheme providing manufacturers with an option for installing seatbelts.  As a result, the court reasoned that any finding of liability against Volvo would conflict with and stand as an obstacle to the implementation of the comprehensive safety scheme promulgated in Standard 208.  Therefore, the State common-law claims were preempted as a matter of law.

White v. Blue Cross and Blue Shield of Mass., Inc.,
442 Mass. 64 (2004)

Libel, Slander

[Court refused to recognize the doctrine of compelled self-publication defamation and, therefore, plaintiff’s case was dismissed.]

Plaintiff, a former employee of the defendant, Blue Cross and Blue Shield of Massachusetts, sought to hold his employer responsible for allegedly defamatory statements made to him while he was employed and which he subsequently communicated to prospective employers.  Plaintiff claimed that he was fired for divulging confidential information of which he did not even have knowledge.  In addition, plaintiff alleged that he was discharged without any investigation by the defendant.  Plaintiff applied for numerous jobs following his discharge and he stated that he “refused to lie” and was “compelled” to disclose to the prospective employers his reason for leaving Blue Cross.  The Superior Court judge granted defendant’s motion to dismiss because it did not communicate the defamatory statements to any third party.

The Supreme Judicial Court transferred the case from the Appeals Court on its own initiative and then affirmed the lower court judgment.  First, the Court found that the defendant’s actions did not meet the standard of defamation because it did not communicate the defamatory statement to a third party.  Secondly, although some courts have recognized compelled self-publication as an exception, the Supreme Judicial Court refused to adopt the doctrine.  The Court cited the doctrine’s unpredictable effect on at-will employment, an employer’s privilege to disclose defamatory information concerning an employee when reasonably necessary, and statute of limitations concerns as reasons for rejecting the exception.

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