Massachusetts Appeals Court holds that ch. 93A s. 11 claim can include personal injuries and that insurer did not violate s. 11 when it did not settle verdict that was appealed

Associated Building Wreckers contracted to demolish an abandoned building adjacent to property owned by Gary Silva.  Silva operated an auto body and repair business on his property. 


During the demolition the abandoned building collapsed onto Silva's property


Silva sued Steadfast for damages to his business and property and for personal injuries.  After trial the judge awarded Silva $366,607.36 as damages on a breach of contract claim and $10,000 for personal property damage. 


The trial judge ruled in favor of Associated on Silva's other claims.


Silva appealed the rulings on some of the claims and on the amount of damages awarded.  The appeal was unsuccessful and the judgment was affirmed.


Associated then filed a motion for relief from judgment in the underlying action on the ground that the judgment failed to apply the setoff as provided by the judge in his original findings.  The motion was allowed, with the judge finding that Silva had already received insurance payments in the amount of $186,464 which would offset the award.  Judgment entered in the amount of $342,201.53, which included interest and some costs.  Steadfast paid the judgment three weeks later.


Silva sued Associated's insurer, Steadfast Insurance Company, asserting that it had violated Mass. Gen. Laws chs. 93A and 176D by failing to effectuate a prompt, fair, and equitable settlement after the original judgment in Silva's favor.


A trial court judge granted summary judgment to Steadfast, holding that  Steadfast had not violated ch. 176D because Silva rendered uncertain the amount of total liability by appealing the underlying judgment.


On appeal, in Silva v. Steadfast Ins. Co., __ N.E.3d __, 2015 WL 4661296, the Massachusetts Appeals Court first addressed whether the claim came under §9 or §11 of ch. 93A.  Section 9 claims are filed by consumers against businesses.  In most circumstances a demand letter must be sent 30 days before a §9 claim can be filed.  A violation of ch. 176D is automatically a violation of §9.


Section 11 claims are filed by businesses against businesses.  No demand letter is required.  A violation of ch. 176D is not an automatic violation of §11.


Steadfast argued that the claim came under §9 because it included a claim for both personal and business injuries.  The Massachusetts Appeals Court rejected that argument, holding that current case law does not prevent Silva, as a matter of law, from bringing suit under §11 simply because he pursued damages relating to both personal and business injuries.  Moreover, Silva, Associated, and Steadfast were all engaged in trade or commerce during the claims, incidents and transactions at issue.  Silva's business was damaged by Associated's conduct of business.  Assocaited's business was insured by Steadfast's business insurance.


The court also held that third-party claimants can bring suit under both §9 and §11. 


The court next examined whether Steadfast had failed to effectuate prompt, fair and equitable settlement of claims in which liability had become reasonably clear.  Silva's argument was based solely on Steadfast's failure to settle the claim after the original underlying verdict. 


The court held that when Silva appealed the verdict, he "open[ed] up both the scope of liability and the amount of damages."  However, because Associated did not cross-appeal, some amount of liability and damages had, at that point, been established. 


The court held that Steadfast did not as a matter of law violate ch. 93A §11.  It drew that conclusion because the amount of damages was not reasonably clear once Silva chose to appeal.  In addition, after Silva lost the appeal the amount of damages required multiple adjustments in the trial court.