Summary
This First Circuit opinion reviews a district court's grant of summary judgment in favor of an insurance company in a lawsuit alleging unfair claims settlement practices under Massachusetts law. The court analyzes whether the insurer failed to conduct a reasonable investigation and whether it delayed making a fair settlement offer after the claimant's damages became reasonably clear. While affirming summary judgment on the investigation claim, the appellate court vacates and remands the settlement claim, finding genuine disputes of material fact regarding when liability became clear and whether the insurer's offers were prompt and fair.
Topics
Practice areas
Questions Presented
- Whether the defendants violated Mass. Gen. Laws ch. 176D §3(9)(f) by failing to make a prompt, fair settlement offer after liability and damages became reasonably clear.
- Whether the defendants violated Mass. Gen. Laws ch. 176D §3(9)(d) by failing to conduct a reasonable investigation of the claim.
Holdings
- The district court's grant of summary judgment on the §3(9)(f) claim is vacated and the case is remanded for trial.
- The district court's grant of summary judgment on the §3(9)(d) claim is affirmed.
Key quotations
“We conclude that a reasonable jury could find that AIG's failure to increase its settlement offer of $2.65 million for almost a year after it received multiple estimates placing likely damages at about $7.5 million was unreasonable.” (*22)
“We affirm the district court's grant of summary judgment to the defendants as to Appleton's section 3(9)(d) claim.” (*28)
Factual background
In January 2015 Paula Appleton was injured when a pickup truck struck her car from behind. She filed an insurance claim against the driver’s employer, whose liability policy was administered by AIG. Over the next four years Appleton and AIG exchanged settlement offers and participated in three mediations, but no settlement was reached. A Massachusetts state‑court jury later awarded Appleton $7.5 million in damages. Appleton then sued AIG and National Union in federal court alleging violations of Massachusetts statutes governing unfair claims settlement practices.
Procedural history
The district court concluded that the defendants conducted a reasonable investigation and that no liability became reasonably clear, thus granting summary judgment on both the investigation and settlement‑offer claims. Appleton appealed.
Remand instructions
For further proceedings consistent with this opinion.