Topic: Massachusetts Developments

Massachusetts Appeals Court Orders That 93A Claim Against Carrier Be Severed, Reverses Trial Court

In Santacroce v. Sametz, a plaintiff brought suit against both the alleged tortfeasor for negligence, and the tortfeasor’s insurer for bad faith in violation of Mass. Gen. Laws chs. 176D and 93A. The insurer, as is often the case, moved to sever and stay the Chapter 176D and 93A claims. This motion was denied by the trial judge, who noted that “privileges [work product and attorney client] can be protected by less drastic methods than severance and staying these claims.”

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Massachusetts High Court Rules That Insurer’s Full Reimbursement of Insured’s Expenses Does Not Bar Insured’s G.L. c. 93A Claim

The Supreme Judicial Court of Massachusetts recently considered whether an insured could pursue a claim against an insurer which had breached its duty to defend for unfair or deceptive acts or practices under G.L. c. 93A, § 11, notwithstanding the insurer’s full reimbursement of the insured’s expenses, plus interest. 

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District of Massachusetts Finds Coverage Under A Professional Liability Policy In Underlying Case Centered On Unfair Competition

On October 28, the United States District Court for the District of Massachusetts denied an insurer’s motion for summary judgment in a coverage action it had brought against its insured on a professional liability policy, an insurance broker who specialized in the placement of professional liability coverage for professionals including real estate agents and brokers.

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Massachusetts Federal Court Rules That Insurer’s Decision To Commence Rescission Action Does Not Waive Attorney-Client Privilege

Insurers can take comfort that their decision to bring a rescission action against a Massachusetts insured will not itself effect a waiver of the attorney-client privilege, at least in cases where the carrier’s process for deciding whether to sue is not relevant to the rescission claim itself. The federal district court in Massachusetts recently considered that precise question in Preferred Mutual Insurance Company v. Lodigiani, No. 13-cv-30138-MGM (D.Mass. Aug. 12, 2014).

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Massachusetts Federal Court Declares Insured’s Construction Of General Liability Policy “Irrational”

The federal district court in Massachusetts recently declared that a general liability policyholder’s construction of a policy exclusion was irrational, with the result that the carrier owed no coverage for an underlying personal injury suit. In the course of its discussion, the court also highlighted First Circuit precedent for the proposition that the construction of an insurance policy should comport with “common sense.”

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Massachusetts Federal Court Rules Limits Equitable Contribution Between Insurers

Recently, a Massachusetts federal court issued an opinion limiting the ability of one insurer to seek reimbursement from another insurer under the doctrine of equitable contribution. In the insurance context, equitable contribution allows an insurer to seek contribution from a co-insurer after the insurer pays more than its proportionate share of a loss on a claim that both insurers are obligated to indemnify or defend. 

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Massachusetts Attorney General Announces Hospital’s Settlement of Data Breach Allegations Involving Massachusetts Patients

Recently, the Massachusetts Attorney General announced that Women & Infants Hospital of Rhode Island (the “Hospital”) agreed to pay $150,000 to settle data breach allegations. In April 2012, the Hospital discovered that it was missing 19 unencrypted back-up tapes from its locations in Providence, Rhode Island and New Bedford, Massachusetts. 

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Massachusetts Appeals Court Declares That Failure To Follow Contract Conditions Is Not An “Occurrence” Under Landscaper’s General Liability Insurance Policy

On July 24, 2014, the Massachusetts Appeals Court issued an opinion arising out of a subcontractor’s clear-cutting of environmentally-sensitive property in Western Massachusetts. The decision in Pacific Indemnity Company v. Lampro, et al., 86 Mass. App. Ct. 60 (2014), is notable because the court declared, as a matter of law, that the subcontractor’s erroneous actions were not a fortuitous event for which liability insurance was designed but, rather, a normal, foreseeable, and expected incident of doing business. 

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