Tuesday, June 11, 2013

US District Court stays bad faith claim until after reference proceeding

As I wrote about here, as required by statute Massachusetts homeowners policies require that a dispute about the value of first-party property damages go to an arbitration called a reference procedure.

In Santos v. Preferred Mut. Ins. Co., __ F. Supp. 2d __, 2013 WL 1633107 (D. Mass.), the plaintiff insured filed suit over damages as well as bad faith practices prior to a reference procedure. 

The insurer argued that summary judgment should enter for it on all counts due to the failure to begin with a reference procedure even though the reference procedure would not determine the bad faith counts.  The court took a much more reasonable approach, holding that the case should be stayed until after a reference proceeding. 

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