Tort and Insurance Law Update – 2005

Tort and Insurance Law Update – 2005

David W. White
Breakstone, White & Gluck, PC
Two Center Plaza , Suite 530
Boston , MA 02108

What follows is a summary of the significant cases from 2005 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.

Campbell v. Boston Housing Authority
443 Mass. 574 (2005)

Lead Poisoning; Mass. Tort Claims Act

[BHA statements that do not specifically mention lead paint or exact measures that will be taken to eliminate lead paint are general representations for the purposes of G.L. c. 258, § 10(j)(1) and cannot give rise to liability for negligence.]

Plaintiff was a former tenant in two federally subsidized residential assistance programs. Plaintiff sued the Boston Housing Authority (BHA), seeking damages for injuries caused by lead paint. Plaintiff argued that BHA breached its duty to inspect for lead paint and enforce elimination of lead paint hazards. In order to receive funds for the housing assistance programs, BHA entered into Annual Contributions Contracts with U.S. Department of Housing and Urban Development, and Housing Assistance Payments contracts with the owners of the subject housing units. The housing assistance programs imposed contractual and regulatory obligations on the BHA to inspect the leased premises for lead-based paint hazards. Plaintiff’s mother had several communications with BHA inspectors, who made statements such as “[plaintiff was] entitled to safe, affordable, and decent housing, and the apartment would be inspected…” and “it would be taken care of.” The inspectors never told plaintiff’s mother what exactly they were going to do in response to her complaints about lead paint in the apartment. Plaintiff sued BHA and the owners of the two residential units, including claims for negligence and breach of contract. BHA moved for summary judgment, arguing the exemptions set forth in G.L. c. 258, §10(f) & (j), which were enacted in 1994, protected it from plaintiff’s claims. The Superior Court judge allowed BHA’s motion for summary judgment.

The SJC rejected plaintiff’s contention that a genuine issue of material fact exists concerning whether the BHA’s various verbal assurances to her mother about the condition of the leased premises were the kind of “explicit and specific assurances of safety or assistance” contemplated under G.L. c. 258, § 10(j)(1). Statements such as “[plaintiff is] entitled to safe, affordable, and decent housing, and the apartment would be inspected…” and “it would be taken care of” did not constitute “explicit and specific assurances” that the “premises [were] free of lead paint hazards.” The responses given to plaintiff’s mother by the BHA had no definitiveness, were not fixed, and did not state what BHA was going to do about the lead paint, and do not specifically mention lead paint; therefore, the statements are only “general representations” under § 10(j)(1) and cannot give rise to liability for negligence. Thus, summary judgment in favor of BHA on plaintiff’s negligence claims was affirmed.
Otis v. Arbella Mutual Ins. Co.
443 Mass. 634 (2005)

Insurance; Legal Malpractice; Consumer Protection Act

[Judicial estoppel precludes a party from taking a position in a legal proceeding that is contrary to the position he/she took in a previous proceeding, even when the party is asserting another’s claims that were assigned to him/her.]

Otis and O’Malley, pedestrians, were seriously injured when Cusick’s motor vehicle struck them. Cusick plead guilty to drunk driving and leaving the scene of an accident. Otis filed a claim against Cusick, the case was tried, and the jury returned a verdict in favor of Otis for $4 million. At the trial, the evidence showed that, although plaintiff was not in a crosswalk when he was struck by Cusick’s vehicle, plaintiff had yielded the right of way Cusick’s automobile by stopping in the opposite lane of traffic to allow Cusick to proceed. After the verdict, Cusick’s attorney filed a motion for a new trial on grounds that he trial court erred in allowing evidence that Cusick ran over O’Malley’s head because such evidence was irrelevant to Otis’s claim and was too prejudicial. Otis opposed the motion for a new trial, which was denied. No appeal was taken and execution issued in the amount of $6,585,195.30. Cusick’s motor vehicle insurance policy limit was $50,000. When Otis realized that Cusick had insufficient funds to satisfy the judgment, Otis released Cusick from liability in exchange for an assignment of Cusick’s legal malpractice and 93A claims against his lawyer and insurer in defense of Cusick in the underlying action. Otis contended that defendants were negligent in not introducing evidence at trial of Otis’ comparative negligence and that the attorney failed to file a meritorious appeal. Otis claimed that the judge erred in admitting evidence that Cusick ran over O’Malley’s head. Otis alleged that these failures caused a judgment to enter against Cusick and that the judgment was obtained as a result of the defendant lawyer’s negligence. The defendants both moved for summary judgment on the grounds that Otis’ position in this case was opposite of his position in the underlying case and the doctrine of judicial estoppel barred his negligence and 93A claims.

The SJC affirmed. “Judicial estoppel is an equitable doctrine that precludes a party from asserting a position in one legal proceeding that is contrary to a position it had previously asserted in another proceeding.” The application of judicial estoppel is to be decided on a case by case basis. The SJC found that Otis’ present case is barred by judicial estoppel because the claims are diametrically contrary to the position he took in his original suit against Cusick. In the underlying case, Otis took the position that he was not comparatively negligent and he as a pedestrian yielded the right of way to Cusick. In the present case, Otis argues that he was comparatively negligent and had not yielded the right of way to Cusick. Also, in the underlying case, Otis successfully opposed Cusick’s motion for a new trial based on wrongful admission of evidence that Cusick ran over O’Malley’s head. In the present action, Otis argues that it was error for such evidence to be admitted and that it was a reversible error. This case does not involve any factors, such as inadvertent mistake or newly discovered evidence, that might, on equitable grounds, relieve Otis from the application of judicial estoppel. Accordingly, the SJC held that the trial judge did not abuse his discretion in applying judicial estoppel. Additionally, the SJC rejected Otis’ arguments that judicial estoppel should not be applied because: (1) Otis is bringing the present suit as an assignee of Cusick and is therefore presenting Cusick’s claims, not his own; (2) Otis himself did not make inconsistent statement under oath concerning his comparative negligence; and (3) the SJC previously rejected use of judicial estoppel in cases of assignment of legal malpractice claims.

Rodriguez v. Cambridge Housing Authority
443 Mass. 697 (2005)

Negligence; Emotional Distress; Damages

[Post-traumatic stress disorder, nightmares, depression, and hospitalization constituted sufficient objective evidence of emotional distress after home invasions.]

Carmen leased an apartment from Cambridge Housing Authority (CHA) for her family in 1985. On May 12, 1994, Carmen was attacked in her home by an intruder. The police investigation revealed no forced entry. On May 18, 1994, Carmen was attacked in her bedroom by an intruder. During the second attack, Carmen was bound, gagged, and slashed all over her body. Carmen’s son, Samuel, heard her moaning and made his way to Carmen’s bedroom. When the intruder heard Samuel, he fled. Samuel was unable to untie Carmen and had to wait for police to come. Both Carmen and her son were admitted to Cambridge Hospital for 17 days as a result of the attack. Doctors diagnosed Carmen with post-traumatic stress disorder and major depression. Doctors diagnosed Samuel with post-traumatic stress disorder, nightmares, and suicidal thoughts. On June 4, 1994, plaintiff returned to their apartment and heard breaking glass and a slamming of the back door. Carmen fled to a neighbor’s home. Carmen’s older son, Carlos, confronted Joaquin Luciano, who was in the vicinity of the building and who Carmen had a protective order against. Luciano pulled a knife on Carlos and severely injured his hand. The jury found that CHA had been comparatively negligent regarding the maintenance of the premises by failing to change the door locks, and that such negligence proximately caused two of the three home invasions. The trial judge allowed CHA’s motion for JNOV and entered a final judgment dismissing the plaintiff’s complaint.

The SJC reversed. The SJC found there was sufficient objective evidence of Samuel’s emotional distress to satisfy the temporal, spatial, and relational requirements of negligent infliction of emotional distress as a result of the May 18 attack. Samuel discovered his mother in their apartment, bound, gagged, slashed, and suffocating. Samuel could not untie her had had to watch her struggle to breath until police could arrive. This trauma caused him to be hospitalized for 17 days and he has suffered from post-traumatic stress disorder, nightmares, depression and suicidal thoughts. Accordingly, Samuel was entitled to recover damages for negligent infliction of emotional distress. The SJC also found Carmen presented sufficient objective evidence of emotional distress to recover for the June 4, 1994 incident even though she did not witness Luciano’s attack on Carlos. After the June 4 incident, plaintiff’s physician noted she was having increased post-traumatic stress disorder, nightmares, insomnia, and dissociative episodes. There was sufficient evidence for a jury to infer that a reasonable person would have experienced emotional distressed as a result of the June 4 incident.

Reardon v. Parisi
63 Mass. App. Ct. 39 (2005)

Snow and Ice

[Summary judgment cannot be granted on a tort claim involving a slip and fall where the construction of the parking lot is at issue because it becomes a question of fact]

Plaintiff alleged that the defendants’ negligence caused an unnatural accumulation of snow and ice to form on a private parking lot, resulting in her injuries when she slipped on the ice and fell on her way to work. Concluding that, under the common law, a natural accumulation of ice on property is not an actionable defect, the judge determined that “there is no evidence that grading of the parking lot caused the runoff to be collected in an artificial channel. The existence of a slope leading to a drain is not a defect. . . . As a matter of law, the evidence in the record is insufficient to create a question of material fact as to negligence on the part of any defendant.” Defendant’s summary judgment motion was allowed.

The Appeals Court reversed. The court concluded that the issue of whether the icy surface that formed on the parking lot as a result of runoff from snow that was plowed was a condition that was created or heightened by the way the parking lot was constructed was a question of fact. The court was persuaded by plaintiff’s expert who opined that the slope of the parking lot required constant vigilance by the defendant to maintain a safe site through regular application of salt and sand to melt the ice which was sure to accumulate, given the conditions. The court noted that if the trier of fact believed the plaintiff’s expert, the evidence would be sufficient to support a finding that some act or failure to act has changed the condition of naturally accumulated snow and ice. The matter was remanded for trial.

Delaney v. Reynolds
63 Mass. App. Ct. 239 (2005)

Negligence; Causation; Forseeability

[Whether plaintiff intended to kill or injure herself, whether defendant was negligent in leaving a loaded gun accessible to plaintiff, and whether suicide is foreseeable are questions of fact.]

Delaney shot and injured herself with Reynolds’ gun. Delaney brought this action against Reynolds, alleging that Reynolds knew of her serious emotional and mental problems, including her thoughts of suicide, and that he was negligent in storing his loaded gun in a place where Delaney could access it. The judge granted Reynolds’ motion for summary judgment on the grounds that Delaney’s act of shooting herself was a superseding cause of injury, relieving Reynolds of liability for negligence.

The question before the court is whether suicide, as a matter of law, is such an extraordinary event that it is not reasonably foreseeable and breaks the causal chain between Reynolds’ negligence and Delaney’s injury. The historical view is that a purposeful act of suicide or self-inflicted injury will be deemed the proximate cause of death or injury unless the defendant’s negligence rendered the decedent unable to appreciate the self-destructive nature of his/her act. A review of Massachusetts cases revealed that Massachusetts does not have a bright line rule regarding suicide or intentionally self-inflicted injury constituting an intervening and superseding act. Plaintiff argued that she believed the gun was not loaded and that her state of mind was a question of fact. Based on the summary judgment record, the Appeals Court found that whether Delaney intended to injure or kill herself was a question of fact and whether Reynolds was negligent in leaving a loaded gun accessible to Delaney was also a question of fact.

Twomey v. Commonwealth
444 Mass. 58 (2005)

Negligence; Governmental Immunity

[There is no governmental immunity for negligent maintenance of a stop sign erected pursuant to G.L. c. 85, § 2.]

The plaintiffs’ son was killed after a driver of a vehicle in which he was a passenger failed to stop at a stop sign that was obscured by trees and brush. The question was whether the Commonwealth had a duty to maintain a stop sign erected pursuant to G.L. c. 85, § 2 that included the duty to ensure that the sign was visible and unobstructed, and whether provisions of G.L. c. 258, §10 (f) provide governmental immunity for negligent performance of that duty. G.L. c. 258, §10(j)(3) provides that the Commonwealth has no immunity from “any claim based on negligent maintenance of public property.” The SJC found that the stop sign was designed, installed, and maintained by the Commonwealth, and even though it was on town land, the Commonwealth was liable for damage cause by the failure to maintain it in a safe condition. Accordingly, the Commonwealth is not shielded from liability for negligent maintenance of the stop sign.

Miller v. Volk
63 Mass. App. Ct. 303 (2005)

Professional Negligence; Damages

[Plaintiff failed to demonstrate accountant negligence or damages.]

Miller hired defendant Volk to prepare his 1995 individual and 1996 personal service corporation (PSC) taxes. The PSC tax year ended on July 31, 1006 and taxes were due on October 31, 1996. In 1999, the IRS audited the PSC 1996 return and assessed a deficiency of $23,335 plus $7,606 in interest. The Superior Court entered a judgment in those amounts against the defendant for negligent tax preparation and against Millier for his claims of breach of warranty and unfair and deceptive acts under G.L. c. 93A, and the defendant appealed.

The Appeals Court reversed. The case involved the complicated provisions of § 280H of the Tax Code, and their application to the plaintiff’s business, and the timing of certain payroll expenses. First, the court found, there was no evidence to determine whether Miller was required to apply the § 280H calculation. Furthermore, the plaintiff could not sustain his burden on the question of damages; he had the use of the funds for a period of time, and there was no evidence that the interest charged by the IRS was not a fair charge for the use of the money. Finally, the plaintiff failed to demonstrate that the defendant in any way participated in his payroll decisions or timing.

Dilbert v. Hanover Ins. Co.
63 Mass. App. Ct. 327 (2005)

Insurance; Trespass

[Insurer had duty to defend insured in claim for wrongful entry.]

Dilbert and Kilgore purchased a condominium unit from Remsen. Two years later there was a dispute over the ownership of the parking space that accompanied the condominium unit. Remsen filed an action against the plaintiffs alleging that plaintiffs were using the parking space in derogation of her rights and to her exclusion and that she retained “equitable title” to the space. The plaintiffs demanded that their homeowner’s insurance carrier, Hanover Insurance Company, defend them in Remsen’s action. Hanover refused. Plaintiffs settled the dispute with Remsen without the assistance of Hanover and then filed the present action against Hanover seeking damages for breach of contract and declaratory judgment under the policy. Plaintiffs’ policy provided coverage for claims against the insured for bodily injury, which was defined to include personal injury arising out of invasion of privacy, wrongful eviction, or wrongful entry. Hanover never made any inquiry of either plaintiff concerning the Ramsen allegations.

The Appeals Court determined that wrongful entry equates to trespass, and rejected Hanover ‘s argument that wrongful entry is a tort recognized only in landlord-tenant situations. The allegations in Remsen’s complaint met the elements of trespass under common law, as Remsen alleged that she was in possession of the parking space at the time plaintiffs entered, that they occupied the space, and that they failed to vacate the space when asked to do so. The court rejected Hanover ‘s argument that there was no trespass found that Hanover had a duty to defend its insured. The judgment of the lower court was reversed.

Doe v. Harbor Schools, Inc.
63 Mass. App. Ct. 337 (2005)

Statute of Limitations

[There were genuine issues of material fact as to whether plaintiff had a fiduciary relationship with defendant and at what date plaintiff became aware that such relationship had been breached; therefore, Superior Court grant of summary judgment in favor of the defendants was reversed.]

In 1992, plaintiff was 17 ½ years old and living in a transitional home for troubled teens. Freeman was plaintiff’s counselor at the transitional home. Plaintiff alleged that the counselor-counselee relationship eventually progressed into an inappropriate relationship, including encounters of a sexual nature which caused her emotional and psychological harm. Plaintiff acknowledged that the encounters were consensual, but maintained that she participated because she wanted to please Freeman.

The important dates are as follows: In the spring of 1993, Freeman kissed plaintiff for the first time and shortly thereafter, plaintiff twice engaged in oral sex with Freeman. In approximately June 1993, a different Harbor Schools employee informed plaintiff that Freeman had been told to end his relationship with her but he had elected to continue it; receipt of this information lead plaintiff to attempt suicide. In July 1993 plaintiff viewed her relationship with Freeman as negative. In September 1994, plaintiff began seeing a psychotherapist for treatment of depression, panic disorder, and post-traumatic stress disorder.

Plaintiff filed her complaint on January 23, 1997, with claims for assault and battery, negligence, intentional infliction of emotional distress, negligent supervision, and negligent breach of fiduciary duty. Both Freeman and the Harbor Schools filed motions for summary judgment, arguing that the three year statute of limitations on all claims had expired, as the claims accrued in the spring or summer of 1993 or at the latest in November 1993. Plaintiff argued that the claim did not accrue until after January 23, 2004, when she first discovered the nexus between her relationship with Freeman and her emotional difficulties.

There is a three year statute of limitations for tort actions. Under the “discovery rule,” the limitations period will not start to run until the connection between the cause of the harm and the injuries suffered is known or becomes knowable. The court held that the statutes of limitations had expired and barred all claims except plaintiff’s claim for negligent beach of fiduciary duty. The court found sufficient facts that plaintiff knew or should have know that the relationship with Freeman was causing her emotional harm by November 1993.

Regarding the claim for negligent breach if fiduciary duty, the court stated that the limitations period begins to run when the beneficiary actually knows that the fiduciary breached the trust. In this case, whether a fiduciary relationship existed is a question of fact. The court found the record here created a genuine issue of material fact as to whether a fiduciary relationship existed and when plaintiff actually knew the fiduciary duty had been breached. Thus, regarding the claim for negligent breach of fiduciary duty, the Superior Court grant of summary judgment in favor of defendants was reversed.

Roukounakis v. Messer
63 Mass. App. Ct. 482 (2005)

Negligence; Doctor; Duty to Disclose Risk

[Held plaintiff cannot assert claims for both negligence and lack of informed consent based upon the same facts.]

Plaintiff had a routine mammogram in February 1993 and was informed that it was normal. In February 1994, plaintiff was diagnosed with cancer in her left breast and underwent a mastectomy. During her cancer treatment, plaintiff obtained the 1993 mammogram report, which noted a “questionable nodular area” in her left breast. Plaintiff filed medical malpractice action against the radiologist who read the 1993 film for failing to diagnose cancer and for failing to obtain her informed consent by not disclosing to her all significant medical information material for her to make an intelligent decision, including failing to inform her there was a “questionable nodular area.” The case was tried and the jury returned a defense verdict. The plaintiff appealed based on the trial judge’s refusal to charge the jury on informed consent.

The Appeals Court affirmed. Courts in other jurisdictions have precluded claims for informed consent based on the same facts as the negligence claims for failure to diagnose. The Appeals Court noted plaintiff’s claims for negligence and for informed consent were based on the same facts, and held there cannot be a second cause of action of informed consent based upon the same facts as negligence for failure to diagnose and treat.

John Doe v. Mary Moe
63 Mass. App. Ct. 516 (2005) – May 16

Negligence; Duty to Prevent Harm; Wanton or Reckless Conduct

[Summary judgment in favor of defendant affirmed after court found defendant’s behavior during consensual sexual relations was not wanton or reckless.]

Plaintiff, John Doe, suffered serious physical injury during consensual sexual intercourse with the defendant, Mary Moe. While the couple was engaged in intercourse, the plaintiff changed her position, landed awkwardly on the defendant, and caused him to sustain a penile fracture. The complaint, initially filed in Superior Court, was remanded to the District Court. The District Court judge dismissed the case, and the case was retransferred to the Superior Court, which granted the defendant’s motion for summary judgment.

Whether persons engaged in consensual sexual intercourse own one another a legal duty of care was the threshold issue. The Appeals Court held that the reasonable care standard was not an appropriate standard for consensual sexual relations because there are no commonly accepted customs or values that determine reasonable behavior during private, consensual sexual relations. Thus, there is no legal duty to use reasonable care during consensual sexual conduct. The Appeals Court did find, however, that there is a legal duty not to engage in wanton or reckless conduct during consensual sexual relations. The Appeals Court held the facts in this case do not amount to wanton or reckless conduct and affirmed summary judgment in favor of defendant.

Fistel v. Favaloro
63 Mass. App. Ct. 651 (2005)

Legal Malpractice; Duty to Non-client

[Lawyer does not owe a duty to someone who is not his/her client.]

Plaintiff buyer signed agreement to purchase a building together with six deeded parking spaces at the rear of the lot. Despite having been informed by her lending bank that she should obtain her own counsel, she did not do so. At the closing, buyer questioned seller’s broker as to whether the parking spaces were included in the sale and the broker assured her that they were; the lender’s attorney, defendant Favaloro, was present and said nothing. The deed did not in fact convey the parking spaces. Buyer then sued attorney Favaloro, claimed he is liable to her as a non-client given the congruity of the bank’s and buyer’s interests with respect to the parking spaces. The court held that there was no basis for the buyer to rely on Favaloro, as there was no attorney-client relationship; Favaloro did not owe buyer a duty because she was not his client.

Vining v. Commonwealth
63 Mass. App. Ct. 690 (2005)

Mass. Tort Claims Act

[G.L. c. 258, § 10(d) is a broad grant of immunity; as such, the Commonwealth is immune from liability where the negligence of a court officer causes another’s property to be lost.]

Plaintiff was arrested and taken into custody by an officer of the Somerville police department and his personal property, which included two rings and a watch, were inventoried and removed from him. After his trial, acquittal, and release from custody, the plaintiff sought return of his property; the rings and the watch, however, were never located. Plaintiff filed a complaint against the officer, the City of Somerville, and the Commonwealth; the Superior Court dismissed the complaint on the ground that the Commonwealth had not waived its sovereign immunity under the “detention of goods” exception G.L. c. 258, § 10(d).

The Appeals Court affirmed. The question was whether the loss by court officers of property seized from a person in their custody gives rise to a cause of action under the Massachusetts Tort Claims Act. G.L. c. 258, § 10(d) bars “any claim arising in respect of the assessment or collection of any tax, or the lawful detention of any goods or merchandise by any law enforcement officer.” The court held that § 10(d) was not to be read narrowly so as to include only law enforcement officers engaged in tax or customs duties or authorized to take property or restrain transfer of funds in civil actions. Rather, the Appeals Court held that § 10(d) is a broad grant of immunity. Where property is lost as a result of negligence of court officers, the Commonwealth is immune from liability.

Greenwood v. Town of Easton
444 Mass. 467 (2005)

Mass. Tort Claims Act; Negligence; Governmental Immunity

[Decision to use telephone poles as parking barrier fell under the discretionary function exception of the Massachusetts Tort Claims Act; however, manner in which poles were installed in parking lot was not a discretionary function.]

Plaintiff was seriously injured in a high school parking lot, owned by the town of Easton , when a vehicle struck a horizontal telephone pole that was being used as a parking barrier, causing the pole to roll forward, knocking plaintiff to the ground, and rolling over her. The telephone poles had been placed on, but not secured into, the ground to separate the parking lot from the surrounding property. Plaintiff filed a negligence action against the town (and the driver) alleging, inter alia, it was negligent in placing barriers on the ground and failing to secure them. The town moved for summary judgment, arguing that it was entitled to immunity under the discretionary function exception of the Massachusetts Tort Claims Act because the decision to use telephone poles as parking barriers involved policy making and planning. The trial court denied the motion and the Appeals Court reversed.

The SJC reversed, and reinstated the order denying summary judgment. The SJC noted that the discretionary function exception is narrow and only provides immunity for discretionary conduct involving policy making or planning. However, if negligent conduct arises from the implementation of policies or plans, governmental immunity does not apply. Here, the SJC found that the decision to use telephone poles as parking barriers was part of planning and policy making. However, the manner in which telephone poles were installed did not fall under the discretionary conduct exception, as the town did not demonstrate that “social, political, or economic policy considerations” were involved in the installation of telephone poles or any decision not to secure the telephone poles to prevent movement. Stated simply, execution of an established policy is not discretionary conduct that is immune from liability. Town also contended it was immune from liability under G. L. c. 258, § 10(j) because no act or omission by a town employee was the original cause of plaintiff’s injuries and the town did not commit an “affirmative act.” The SJC rejected this argument because §10(j)(3) specifically states that §10(j) shall not apply to “any claim based on a negligent maintenance of public property.”

Audette v. Commonwealth
63 Mass. App. Ct. 727 (2005)

Mass. Tort Claims Act; Governmental Immunity; Strict Liability; Dog; Forseeability; Negligence

[Where state trooper took affirmative action of allowing police dog to be off leash, there is no immunity from suit; actions for personal injury caused by police dog will be analyzed under the dog bite common law, whether the owner of the dog knew or should have known of the dog’s vicious propensities, as the Massachusetts Tort Claims Act does not permit actions under strict liability.]

Plaintiff, a Randolph police officer, was bitten by State Trooper Tasker’s police dog, while on the scene of a motor vehicle search. During the search, the trooper allowed the dog to be off leash. The Commonwealth moved for summary judgment, arguing that it was immune from liability under G. L. c. 258, § 10(b) & (j), and the Superior Court granted summary judgment in favor of the Commonwealth on those grounds.

The Appeals Court held that the Commonwealth was immune from liability for any claim based on the Trooper’s failure to train or supervise the dog, pursuant to the “discretionary function” exclusion found in G. L. c. 258, § 10(b). However, the court also found that there was no immunity for a claim based on the Trooper’s affirmative act of allowing the dog to be off leash during the search; thus, plaintiff’s claim is not barred by G. L. c. 258, §10(j). The Appeals Court then stated that the Massachusetts Tort Claims Act does not permit actions under strict liability; therefore, plaintiff could not make a claim under the dog bite statute, G.L. c. 140, § 155. Therefore, the court looked to dog bite common law. Under common law, the owner or keeper of dog is liable for injuries caused by the dog if the owner or keeper knew or should have known of the dog’s vicious propensities. Here, plaintiff provided no evidence of prior dog bite or vicious behavior, and the mere fact that dog was a police dog does not establish the owner’s knowledge of the dog’s vicious propensities. Therefore, the grant of summary judgment was affirmed, but on the grounds that there was no evidence to support a common law claim for injuries caused by a dog.

Atlas Metals Products Co., Inc. v. Lumbermans Mutual Casualty Co.
63 Mass. App. Ct. 738 (2005)


[Employee Dishonesty Protection policy did not extend to thefts from the independent business entity.]

Atlas employee misappropriated funds from Atlas and from R&R Realty Trust (R&R) (Atlas has access to R&R checks pursuant to arrangement between Atlas and R&R) through a check cashing scheme. Lumbermans denied the claim for the misappropriation R&R funds, but paid the claim for the misappropriation of Atlas funds. The question before the court was whether employee dishonesty protection policy (EDP) issued to Atlas, as the named insured, by Lumbermans ,covers thefts by an Atlas employee in a fraudulent scheme involving the cashing of checks from a separate business entity. EDP policy provisions germane to this case were the following: (1) policy covered direct losses of property to named insured, Atlas; (2) policy excluded from coverage any indirect loss; and (3) covered property must be (a) held or owned by the insured, or (b) be property for which insured was legally liable and payments under this provision are only to return a direct benefit to the insured, not to a third party.

The Appeals Court held that coverage under the EDP policy did not include thefts from the independent business entity. Where an employee dishonesty policy has provisions which limit coverage to direct property losses and exclude both indirect losses and the payment of damages to third parties, the policy cannot be deemed to cover general legal liability for damages due to independent third-party entities. The R&R checking account from which the checks were drawn was not property of Atlas. Additionally, the “legally liable” provision does not trigger coverage because any payment made under that provision would not provide a direct benefit to the named insured, Atlas, but rather would be the payment of damages to a third party. The term “legally liable” was not ambiguous, and therefore would not be construed in favor of Atlas. Finally, although the EDP covers “dishonest acts committed by an employee,… acting with manifest intent to: (1) cause you to sustain loss…”, the dishonest employee in this case knew she was stealing funds from R&R and that R&R was separate from Atlas. Thus, it could not be said that employee had the “manifest intent” to cause Atlas (rather than R&R) to sustain a loss.

Valley Forge Ins. Co. v. Katz
63 Mass. App. Ct. 759 (2005)

Motor Vehicle Insurance; Underinsured Motorist

[A minor passenger injured in automobile accident could not recover under the transportation company’s underinsurance policy because she was not a named insured and could not be considered one based on a special relationship between the transportation company and the passenger; the fact that defendant was covered under her mother’s underinsurance policy precluded recovery under plaintiff’s underinsurance policy; the statutory scheme in G.L. c. 175, §113L(5) will prevail even in the face of equitable considerations.]

An automobile driven by Richard Spicer struck a van driven by Maria Bililies, in which the defendant, Katz, a minor, was a passenger. The van was owned by Alternative Leisure Co., Inc. Spicer was insured under a standard Massachusetts liability policy issued with policy limits of $100,000. Katz’ mother had a car insurance policy which provided underinsurance coverage for Katz as a relative living in the household; Katz, however, could not recover any money from her mother’s policy because its underinsured motorist coverage limit, $100,000, did not exceed the bodily injury limit in Spicer’s policy. Katz brought a negligence action against Spicer, Alternative, and the driver of the van. Katz settled the claim against Spicer for $70,000; a jury returned a verdict of no negligence against Alternative and the driver of the van. Katz then made a demand upon Valley Forge , Alternative’s Insurer, for underinsured motorist benefits in excess of $100,000. Valley Forge denied the demand because the injuries did not exceed the $100,000 available under Spicer’s policy. Valley Forge brought a declaratory judgment action seeking a declaration that Katz was not a named insured under Alternative’s policy, could not be a “household member” of Alternative, and was not entitled to underinsured motorist coverage because she had underinsurance coverage under her mother’s policy as a household member. Superior Court ruled in favor of Valley Forge . Katz appealed.

Katz not covered under the Valley Forge policy because she is not a named insured, she is not a household member, and she is covered as a household member on her mother’s policy, which provides underinsurance coverage. Katz asserted a novel set of arguments for how and why she should be covered by the Valley Forge policy. First, she argued that because the insured, Alternative, was in a special relationship to its passengers, who included children and adults with disabilities, and had essentially merged identities with its passengers, the courts should treat passengers as “named insured.” The court found that Katz had not merged her identity with Alternative and was not a named insured on Alternative’s policy. Second, Katz asserted that she should be entitled to make a claim under Alternative’s underinsurance policy as a passenger not “covered” by a household member’s policy because she did not actually receive any benefits under her mother’s policy because its limits did not exceed those of the tortfeasor’s. The court the court stated that coverage was a statutory issue, that Katz was covered by her mother’s policy, and that Katz was precluded from collecting under Alternative’s policy. Third, Katz asserted a public policy argument that coverage should be extended to her, given Alternative’s high duty of care in transporting young children, and that it was inequitable to afford her fewer benefits than passengers whose parents failed to purchase insurance coverage. The court held that, at the appellate court level, the statutory scheme will prevail, even in the face of equitable considerations. The court also rejected the argument that Alternative had a higher duty of care because such a finding would, in effect, hold Alternative strictly liable for anything that happens to its passengers and to impose a requirement that all professional transportation companies provide underinsurance to all passengers

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Tort and Insurance Law Update – Part Two

Tort and Insurance Law Update – Part Three