Following a reference proceeding, the Massachusetts Superior Court finds insurer violated ch. 93A but awards no damages

The Business Litigation Session of the Massachusetts Superior Court has issued a ruling holding that insurer Privilege Underwriters Reciprocal Exchange (PURE) breached ch. 93A in handling a first party property damage claim, but that no 93A damages should be awarded.  

The fire and PURE's adjustment of the loss

The plaintiffs owned a large house with features such as wood construction made from American Chestnut, and fireplaces set in hand-crafted lake stone chimneys.

PURE insured the property.  The policy had a $5,679,540 dwelling limit, but the limit would not apply (meaning there would be no limit) if reconstruction was begun within two years of a loss.  

In December, 2020, the house suffered significant damage from a major fire.  PURE's internal communications showed that it knew that the cost to rebuild would far exceed the coverage limit.  It nevertheless provided the plaintiffs with a reconstruction estimate below that limit.  

In Deutschv. Privilege Underwriters Reciprocal Exchange  Judge Salinger of the Massachusetts Superior Court's Business Litigation Session found that the PURE estimate did not reflect the kind and quality of material and workmanship used to construct the house.  For example, the estimate proposed replacing maple floors with oak flooring, and replacing a hand-built stone foundation with a poured concrete foundation.  It also left out the replacement of windows and doors and underestimated the size of the dwelling by 30 percent.  When the insureds pointed out that the estimate was lacking, the PURE adjuster told them that the estimate was only a "starting point."  

PURE later offered to pay $8.2 million as a lump sum settlement of the claim.  The insureds  counteroffered that they would accept $10.4 million, and PURE responded with an offer of $8.645 million.  

At that point the insureds hired their own construction experts to prepare an estimate.  When PURE's adjusters learned of this, they became angry, even though they knew that their original estimate had been too low.  In an internal communication, one of the adjusters wrote that the plaintiffs "are pissing me off" and that he was no longer going to follow the "love our members approach."

The plaintiffs requested a total settlement package of $17.66 million, which they supported with a detailed report showing their reconstruction costs.  PURE responded with an estimate showing reconstruction costs of $7.268 million.  The plaintiffs' next demand exceeded $19 million.  

The reference proceedings

PURE moved to compel a reference proceeding, which was allowed.  The reference panel ordered PURE to pay the plaintiffs $11.5 million in reconstruction costs.

PURE subsequently moved to compel further reference proceedings, which resulted in an award of $700,000 for unpaid contents and additional living expenses.  

In total, PURE paid $11,783 million in dwelling coverage. $2.272 million in contents coverage, and $1,945 million in additional living expenses.  

The ch. 93A lawsuit: 93A violation found, but no 93A damages

After a subsequent trial on the plaintiffs' claim that PURE breached Mass. Gen. Laws ch. 93A, the court held that PURE was liable because it engaged in unfair settlement practices by making lowball offers and by compelling the plaintiffs to instigate litigation and then to participate in reference proceedings to recover amounts due under the policy.  The court noted that PURE's final offer was only 63 percent of the amount awarded at the reference proceeding.  

The court held that amounts awarded at a reference proceeding are not single damages subject to multiplication for breach of ch. 93A, because reference proceedings are a form of arbitration and the reference proceeding award was paid without being confirmed by the court.  The court then found that the plaintiffs had not met their burden of proving any damages under ch. 93A.

The court cited two cases, Bonofiglio v. Commercial Union Ins. Co. 411 Mass. 31, 37 (1991) and Murphy v. Nat'l Union Fire Ins. Co., 438 Mass. 529 (2003).  Those cases hold that unlike a court judgment, arbitration awards are not the basis for single damages under ch. 93A.  

But both those cases hold that 93A damages may be awarded after an arbitration even if the arbitration amount is not reduced to a court judgment.  While the court is correct that an unconfirmed arbitration award is not the basis for single 93A damages subject to doubling or trebling under the statute, both cases held that post-arbitration 93A damages is lost interest accrued between when the insurer should have paid the underlying damages and when it did pay those damages. 

The Superior Court held that the plaintiffs had not proved any ch. 93A damages, such as increased construction costs.  Perhaps this was a failure of advocacy, but it seems to me that the only proof required for lost interest is the date that the insurer had sufficient information to understand what the damages were and the date that the insurer actually paid those damages.  

I would like to see a legislative solution

As to an arbitration award never being the basis for single damages under ch. 93A subject to doubling or trebling, I would support a legislative solution that when arbitration is mandatory under state law – which includes reference proceedings for first party property losses as well as underinsured and uninsured motorist claims – the arbitration award should be considered single damages under ch. 93A subject to doubling or trebling.  In voluntary arbitrations, the parties can set the parameters, including choosing to allow the arbitrator to award ch. 93A damages based on the underlying award.  But an insured with a first party property damage claim is required by statute to use a reference proceeding to resolve a dispute with their insurer over the amount of their loss, and that is all that reference proceedings determine. It is arbitrary and unfair that if someone’s house burns down and they seek payment from their own insurer who engages in bad faith settlement practices, their 93A damages are limited to lost interest.  But if they seek damages from their next door neighbor who negligently started the fire and the neighbor’s insurer engages in bad faith settlement practices, they can be awarded double or treble their amount of loss.

Massachusetts Lawyers Weekly quoted me in an article about this case, here.

Invitation to my Tuesday June 2, 2026 webinar, Untangling Coverage: A Practical Guide to Your First Insurance Dispute UPDATED: FREE OR DISCOUNTED REGISTRATION FEE AVAILABLE

On June 2, 2026, from 4 to 6 PM, I will be presenting a webinar sponsored by the Social Law Library in partnership with The Insurance Library, “Untangling Coverage: A Practical Guide to Your First Insurance Dispute.” Insurance coverage disputes can feel like a maze even for seasoned practitioners, and for attorneys stepping into their first coverage matter the learning curve can be steep.

This focused, highly practical webinar is geared towards attorneys and summer associates, but is appropriate for anyone who wants to develop a deeper understanding of insurance coverage law.   I will offer a clear, usable roadmap for navigating your first coverage dispute, from making sure you are working with the correct insurance policy to understanding the obligations and pressure points of the insurer, the policyholder, and the claimant, to moving the matter toward resolution.

What You’ll Learn:

• How to identify and verify the applicable insurance policy;
• Notice requirements: occurrence vs. claims-made policies;
• Analyzing coverage: triggers, exclusions, and exceptions;
• Duties of the insurer and the policyholder;
• Claims under Mass. Gen. Laws chs. 93A and 176D;
• Reservation of rights letters; and
• Declaratory judgment actions

The program runs from 4:00 p.m. to 6:00 p.m. and is priced at $25,

Featuring Panelist Nina Kallen

The session is led by Nina Kallen, a respected Massachusetts attorney known for her deep experience in insurance coverage and bad‑faith litigation. Nina’s practice has long focused on helping insurers, policyholders, and other lawyers navigate the complexities of policy language, statutory obligations, and the strategic decisions that shape coverage outcomes. 

You can sign up here: https://www.socialaw.com/about/library-calendar/2026/june-2026/untangling-coverage-a-practical-guide-to-your-first-insurance-dispute/

I can provide a limited number of free and discounted registration fees.  Please reach out to me if these would be helpful to you.  

I'm presenting at a webinar on Reservations of Rights: Ethical Rules, Conflicts, Right to Independent Counsel on Wednesday, April 22, 2026 at 1 PM; discount codes available

Ethics of Insurance Defense Under a Reservation of Rights: Ethical Rules, Conflicts, Right to Independent Counsel

This CLE webinar will discuss how policyholders, insurers, and panel counsel determine whether a reservation of rights (ROR) creates a disqualifying conflict of interest for panel counsel at various stages of the case, and the possible consequences if a conflict exists. We will offer guidance and best practices for insurers, policyholders, panel counsel, and independent counsel. The program will discuss roles in the tripartite relationship, defense counsel's ethical obligation if a conflict arises, and examples of disqualifying conflicts in various jurisdictions.

Description

When an insurer agrees to defend its policyholder under a reservation of its right to later litigate or deny coverage, a particularly delicate and dynamic tripartite relationship is created. Everyone involved in this relationship needs to be aware of conflicts and potential conflicts of interest, and sometimes determine how to use them to their advantage.

What constitutes a conflict within the context of the tripartite relationship is often hotly contested. The case law continues to develop and no less than 50 American jurisdictions have issued rulings on these important issues.

An insurer's reservation of rights will necessitate panel counsel to evaluate many ethical duties: undivided loyalty (Rule 1.7), disclosure (Rule 1.4), confidentiality (Rule 1.6), and limitations on compensation from insurers (Rule 1.8). At the same time, policyholders need to make a determination of whether the convenience and known competence of panel counsel is outweighed by the advantages of independent counsel.

Listen as this esteemed panel examines the scope of the appointed defense counsel's ethical obligations, discusses the insured's right to independent counsel, reviews emerging issues in independent counsel litigation, and offers best practices for policyholders and insurers. 

You can sign up here.  https://www.barbri.com/course/professional-development/CLE/ethics-of-insurance-defense-under-ror-model-rule-17-conflict_2026-04-22

Feel free to use and share this code for 50 percent off tuition:

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If this program remains cost-prohibitive for you even at 50 percent off, please reach out to me.  I have a limited number of free tuition spots, first-come, first-served.  

Massachusetts Superior Court issues giant 93A judgment against insurer for ignoring the facts of the underlying case

Every few years, a decision comes down against an insurance company for breach of Mass. Gen. Laws ch. 93A that makes the plaintiffs' personal injury bar chortle with glee and insurance defense attorneys wipe their brow and say, thank goodness that wasn't my case.  The recent Massachusetts Superior Court decision in Peerless Insurance Co. v. Rooney is one of those, with a judgment against the insurance company of $90,771,612.00 plus attorney's fees.  But although this case seems like a crazy 93A verdict, the yikes factor here is really the underlyling judgment of $45.49 million including prejudgment interest.  Finding that she had no choice under ch. 93A, the judge ordered that the insurer pay double that judgment for its bad faith.  If the underlying judgment had been $100,000, would anyone take note of the $200,000 ch. 93A judgment?  The analysis would be exactly the same.  

The accident, and factual development during the underlying lawsuit

A consortium of contractors called JV entered into a contract to repair the Longfellow Bridge.  John Rooney worked as a mason for United Stone, JV's masonry subcontractor.  He was injured on the job on May 9, 2014, resulting in nine surgeries including cervical discectomies and cervical fusions.  He sued JV in 2015, alleging various negligence counts.  

Peerless Insurance Company issued a primary policy to JV. Liberty Mutual Fire Insurance Company and Ohio Casualty Insurance Company issued umbrella policies.  The court refers to the insurers together as "Liberty." 

Very early in the case Liberty understood that Rooney's injuries were causally related to the accident.  As to liability, Liberty's independent investigator wrote that Rooney had fallen off a plank that he himself had placed ("the single plank theory").  Liberty first concluded based on this information that there was only a 25 percent chance that Rooney would prevail at trial.  

Facts developed during discovery that showed that this initial assessment was incorrect.  There was no support for the single plank theory.  Rooney had fallen through a wide gap in scaffolding.  JV was responsible for safety at the job site.  It was supposed to inspect the scaffolding daily but failed to do so.  Rooney had complained prior to the accident of the unsafe conditions.

These facts were never conveyed from the lower level adjuster at Liberty to senior management.  As a result, Liberty continued to overestimate JV's chances of success at trial and to undervalue the claim.  

The jury awarded Rooney $26.6 million.  Judgment with interest entered in the amount of $45.49 million.  

Post-trial settlement offer and 93A demand letters

A month later, on September 15, 2021, Liberty offered in settlement the aggregate policy limits of $19.5 million.

On April 8, 2022 and June 27, 2024, Rooney sent 93A demand letters to Liberty.  Liberty did not make an offer of settlement.  

The 93A lawsuit

Liberty filed a lawsuit seeking a declaration that it had not violated Mass. Gen. Laws ch. 93A.  Rooney counterclaimed. 

Failure to make a reasonable investigation 

Rather than jumping straight to whether Liberty failed to effectual prompt, fair, and equitable settlement of a claim in which liability had become reasonably clear, the court first looked at a different section of Mass. Gen. Laws ch. 176D, requiring an insurer to conduct a prompt and reasonable investigation.  The court noted that this requires an insurer to "take basic steps toward obtaining an independent or neutral assessment of potential fault."  An insurer is not permitted to "cherry-pick facts favorable to it or disregard unfavorable evidence, and, instead, has to assess the evidence objectively."  Liability arises when, if an adequate investigation had been conducted, liability would have been reasonably clear.  

The court held that Liberty failed to make a reasonable investigation.  

Failure to make an offer of settlement when liability was reasonably clear

The court held that when liability is reasonably clear, an insurer must make an offer of settlement even if there are disputes as to comparative fault or the extent of damages.  Liability can be reasonably clear well before a verdict or judgment resolves every contested issue.  An insurer cannot turn a "blind eye" and fail to credit or give appropriate weight to readily available information related to liability while relying on defense counsel's trial strategy and assessment of trial risk.  The insurer is obligated to conduct a neutral assessment of liability separate from defense counsel's litigation strategy.  

Liability can be reasonably clear even if there are other potential tortfeasors or the possibility of comparative negligence.  

When liability is reasonably clear, an insurer must extend a reasonable settlement offer, even if the plaintiff would not accept that offer.  

The court held that the standard for whether liability is reasonably clear is not whether "no reasonable insurer would have failed to settle," as articulated in Hartford Casualty Ins. Co. v. New Hampshire Ins. Co., 417 Mass. 115 (1994).  Rather, the standard is set forth in Demeo v. State Farm Mut. Auto. Ins. Co., 38 Mass. App. Ct. 855 (1995) as "whether a reasonable person, with knowledge of the relevant facts and law, would probably have concluded, for good reason, that the insured was liable to the plaintiff."  The court held, however, that the two standards are essentially the same.  Under the Hartford test, once liability is reasonably clear, "no reasonable insurer, acting in good faith, would fail to make a prompt, fair, and equitable offer of settlement.  No reasonable insurer would knowingly violate chapter 176D (and face the risk of significant punitive damages) by perpetrating litigation where there is no legitimate dispute  to the insured's fault or the scope of the claimant's injury."  

Based on that standard, Liberty failed to make an offer of settlement after liability was reasonably clear.  JV's liability became obvious during discovery.  Although there was a comparative negligence defense, defense counsel never advised Liberty that a jury would likely find Rooney more than 51 percent liable for the accident.  

Failure to adopt and implement reasonable standards for the investigation of claims

The judge rejected Rooney's claim that Liberty had failed to adopt and implement reasonable standards for the investigation of claims.  She held that Liberty trained its claims professionals and had written protocols and procedures.  The failure in this case was the adjusters', but it did not stem from a lack of protocols and procedures.  

Liberty's violation of ch. 93A was willful and knowing

The court held that it "cannot conclude otherwise" than that Liberty’s conduct was willful or knowing.  "Liberty deliberately closed its eyes to known and available information, in order to hold fast to its premature, yet somehow cast in concrete, theory of the case."

The court held that the question was not "whether, on the roll of the dice, a defense verdict was possible.  . . .  The question does not depend on trial counsel's assessment of the potential jury verdict.  If the possibility of a defense verdict -- whether forty percent or twenty-five percent-- was alone sufficient to avoid making a reasonable offer of settlement when liability was reasonable clear, no insurer would settle. Ever.  Jury trials are, by definition, unpredictable."

93A damages

I wrote here a few weeks ago about Gretzky v. AmGuard, 2025 WL 3140762 (D. Mass. 2025) (unpublished), in which the United States District Court for the District of Massachusetts held that single damages under ch. 93A is lost interest, not the amount of the underlying verdict.  I wrote that in that case the measure of damages seemed to be based on the timing of the 93A demand letter, which was sent after the insurer had paid its policy limits after the verdict.

The court in Rooney seems to disagree.  The court held that single damages under ch. 93A is always lost interest, but that where damages are multiplied because the violation was willful or knowing, the damages to be multiplied is the underlying judgment.  Although the court does not provide a complete analysis, its method could actually result in a larger award.  Liberty should be liable for the trial verdict up to the policy limit as actual damages, lost interest as 93A single damages, and double the entire trial verdict as 93A damages.   

The judge ruled that, given the size of the underlying judgment, an award of double damages resulted in a "grossly excessive punitive damages award . . . far in excess of the goals the statute is designed to achieve."  However, the statute and controlling precedent offer no discretion.  She issued an award of $90,971,612 plus attorney's fees.  

What happens next 

Entry of judgment has been stayed pending a determination of attorney's fees, which means that the clock for Peerless to file an appeal has not yet begun to run.  

Takeaways

There are number of important points in this 68 page decision, but from the point of view of an insurance litigator I'll focus on the relationship between the insurer and insurance defense counsel.

The decision carefully outlines what happened in each step of the underlying litigation, including communications between insurance defense counsel and the insurer.  At one point, insurance defense counsel asked his supervisor if the insurer was reviewing his reports, because it continued to rely on old analyses.  The decision also states at various points that the insurer should not rely only on communications from defense counsel, who may be biased in favor of the client, and that the insurer should instruct defense counsel to provide more information.  

From a practical standpoint, that's an instruction that goes both ways.  Insurance defense counsel has an obligation to make sure that an insurer is receiving the message they are sending.  The rules of tripartite relationship (sorry for jargon -- this term means that insurance defense panel counsel fully represents both the insurer and the insured) means that insurance defense counsel does not dictate settlement strategy and needs to be careful not to back the insurer into a corner.  But if you're insurance defense counsel and you've sent a written report to an adjuster that you're concerned is not being read, it's time to pick up the phone.  

Update: webinar is being rescheduled. I'm moderating a webinar on insurance policy interpretation on Tuesday, January 22, 2026 at 1 PM; discount codes available

Update:  One of the other panelists had an emergency, so this webinar is being rescheduled.  

This is a full description of the webinar: 

Insurance Policy Interpretation: Recurring Issues, Ambiguities, Exclusions, Plain Meaning, Burdens of Proof, and More

This CLE webinar will discuss the interpretation of some of the most fiercely and frequently litigated words and phrases in insurance policies in the context of coverage disputes. The program will review the rules for construing insurance policies with respect to ambiguities, exclusions, plain meaning, burdens of proof, and more, and then consider whether these rules are evolving to produce unexpected coverage decisions that are changing insurance law. The speakers will offer both insurer and policyholder perspectives. 

Description 

Resolving coverage disputes and interpreting policies requires applying both traditional principles of contract interpretation and unique insurance-related rules of construction about ambiguities, exclusions, reasonable expectations, unconscionable advantage, illusory coverage, duty of utmost good faith, and much more. Notwithstanding that many policies have standard language and phraseology, policyholders, courts, and insurers often have difficulty ascertaining a policy's plain meaning in a given factual or procedural context, leading to seemingly inconsistent outcomes and unpredictability. 

Insurance policies are long, complex, and labyrinthine documents that may not have been precisely drafted for a variety of reasons. Coverage can turn on the meaning of a single word or phrase, perhaps located paragraphs or pages away from the main provision. Some words and phrases get debated and interpreted over and over: arising out of, because of, connected or related to, accident, any, an, of, and for are just a few examples. As courts tweak or modify interpreting policies, the law can evolve about what is or is not covered under particular language. 

Listen as this accomplished panel of insurance coverage attorneys reviews the rules for policy interpretation, discusses frequently litigated issues in the policy language, and offers insights into whether the law is evolving with respect to these often-disputed provisions.

You can sign up here.   https://www.barbri.com/course/professional-development/cle/insurance-policy-interpretation-recurring-issues-ambiguities_2026-01-13   

Feel free to use and share this code for 50 percent off tuition:

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If this program remains cost-prohibitive for you even at 50 percent off, please reach out to me.  I have a limited number of free tuition spots, first-come, first-served.  

 

 

Massachusetts Lawyers: Want to Build a Career Litigating Insurance Bad Faith and Coverage Issues? Hit Me Up.

I’m in the fortunate position of having an embarrassment of riches right now: my insurance coverage and bad-faith caseload is full to overflowing. I’m having to turn down good cases from good clients simply to ensure that the clients I already serve receive the attention they deserve.

Which is to say: I’m looking for help. Maybe from you.

If you’re a Massachusetts attorney who’s interested in building—or further building—a litigation specialty where:

• you can genuinely help people,

• you can do real justice,

• the work is plentiful, and

• the issues are intellectually engaging,

you may want to come on board with me.

Here’s what my ideal collaborator looks like (but please reach out even if you don’t check every box):

• You have excellent legal research and writing skills.

• You’re already set up in solo practice. For the time being, I’m looking for a contract-basis relationship, not an associate role (and the amount of work will vary based on my caseload and your availability) - though that could evolve. You should have access to Westlaw or Lexis, malpractice insurance, a secure computer setup, a conflict-check system, etc.

• You have at least two years of Massachusetts civil litigation experience and have had primary responsibility for cases. You can explain Superior Court Rule 9A without breaking a sweat. Insurance defense experience is a plus.

• You have at least a general understanding of basic insurance coverage concepts: the difference between the duty to defend and the duty to indemnify, how to tell if a policy is complete, that sort of thing.

• You’re familiar with Chapter 93A in the insurance context.

• You’re not just looking to fill spare hours—you’re looking to build a long-term specialty.

• You want to form a sustained professional relationship as you develop that specialty.

About my practice:
I represent policyholders, claimants, and insurers in coverage and bad-faith matters. On the policyholder and claimant side, I work with both consumers and businesses. My work includes everything from consultations to coverage opinions to full-scale litigation, in both first- and third-party contexts. I’ve been doing this for a long time, and - honestly - I’m still having fun.

What I offer:

• Mentorship: I will teach you this practice area.

• Introductions: I will connect you with people you should know as you build your practice.

• Fair compensation for your billable work, based on your skills and experience.

• Referrals: I will send you appropriate cases with fair referral fees, and I will advise you on them.

If this piques your interest, send me an email. Eventually I’ll need a résumé, a writing sample, and references, but you’re welcome to start with a brief note of interest. If you don’t hear back from me right away, it just means I’m very busy - not that I’m not interested. Please feel free to circle back.

U.S. District Court holds that even after court judgment in underlying case, measure of 93A damages is lost interest -- and my advice to both sides for handling 93A claims

Victoria Gretzky was injured when she fell on a staircase at an apartment building owned by the Arrudas.  In September 2022 she sued the Arrudas, who were insured by AmGuard.  AmGuard made a number of settlement offers, each of which Gretzky declined.  She demanded the policy limit of $1 million, plus interest.

On the second day of trial the parties settled, with a consent judgment that Gretsky was entitled to $2,250,000 plus interest and costs, and she reserved her right to bring first and third party claims against AmGuard.  AmGuard paid its policy limit of $1 million.  

The 93A Demand and the Safe Harbor Provision Argument

Gretzky then sent a 93A demand letter to AmGuard.  In response, AmGuard offered $232,769, which represented prejudgment interest from the date the lawsuit was filed through the date of the accepted check.  Gretzky rejected the proffer and sued AmGuard for breach of ch. 93A.  

AmGuard filed a motion to limit the damages to the interest payment it had offered, arguing that the offer was reasonable and entitled it to the safe harbor provisions of ch. 93A.  Gretzky argued that prejudgment interest was the wrong measure of economic damages, and that damages for mental anguish and unnecessary prolongment of the litigation should have been included in the offer.  

Mass. Gen. Laws ch. 93A §9 provides that if a recipient of a 93A demand letter timely responds with a written settlement offer that is rejected, damages may be limited to the amount of the offer if the court finds that the relief tendered was reasonable in relation to the injury actually suffered.  This is called the safe harbor provision. 

AmGuard argued that "injury actually suffered" in the safe harbor provision is the loss of use of money (the interest) wrongfully withheld.   Gretzky argued that loss of use of money is not the correct standard when there is an actual judgment in the underlying tort case and the insurer committed a willful violation of ch. 93A.  

Court Agrees that Safe Harbor Provision Applies 

In Gretzky v. AmGuard, 2025 WL 3140762 (D. Mass. 2025) (unpublished),  the United States District Court for the District of Massachusetts sided with AmGuard.  The court held that that AmGuard's offer was to settle the 93A claim only, because the underlying tort action had already been settled.  It then turned to what the 93A loss was.  Prejudgment, AmGuard never had an obligation to settle for more than the $1 million policy limit.  So  Gretzky was deprived of use of the $1 million as a result of AmGuard's failure to timely settle.  Her damages were the interest accrued on that amount.  AmGuard's settlement offer was reasonable relative to the prejudgment injuries.  

Gretzky argued that, after the judgment, AmGuard was obligated to pay the prejudgment interest, and that since it wrongfully withheld that amount, it also owed interest on the interest.  The court held that failure to pay that interest over a two month period resulted in a de minimis $5000 in loss of use damages.  

The court rejected Gretzky's argument that she was entitled to damages for the emotional distress she suffered from loss of use of the funds, because she did not include a request for such damages in her 93A demand letter.  

What to make of this case

Damages under ch. 93A can be very confusing.  This decision is not a model of clarity, but the most important part of the decision is the court’s analysis of why the case is different from Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486 (2012).  In Rhodes, the SJC had held that single damages to be multiplied when an insurer willfully acted in bad faith was the underlying tort judgment. But in that case, after receiving a post-judgment 93A demand letter the insurer offered less than the tort judgment (and less than the policy limit) to settle both the underlying claim and the 93A claim.  That’s different than in Gretzky, where the insurer had already paid its policy limit before it received the post-judgment 93A demand letter.  The policy limit was the most that the plaintiff could be entitled to under the insurance policy itself. After receiving the 93A demand letter the insurer offered loss of use damages (interest) as 93A damages.  In other words, if the insurer had paid its policy limit at the beginning of the case, the plaintiff would have had use of the money earlier.  The court held that the insurer’s offer was reasonable, so under the safe harbor provisions of 93A the damages would not be multiplied.

My advice to someone who is contemplating bringing a ch. 93A claim against an insurer for bad faith settlement practices is that they should send the 93A demand letter as soon as liability and damages are reasonably clear, laying out in detail in the letter exactly why they are reasonably clear, supported by exhibits.  That provides the evidence they need down the road that the insurer failed to make a reasonable offer of settlement based on the information available to it.  The last paragraph of the Gretzky decision is telling here.  The court rejected a claim of emotional distress damages because those damages were not included in the 93A demand letter.

And of course, on the other side, I would advise any insurer receiving a 93A demand letter to take it seriously.  A large verdict does not retroactively prove that an insurer violated ch. 93A by not meeting the plaintiff’s settlement demand, but the insurer should be prepared to show why the information it had with respect to liability and damages did not justify the settlement sought.

Lawyer's Weekly quoted my comments about the case here.

 

Suffolk Superior Court applies continuous trigger and pro rata allocation to asbestos coverage dispute

Timothy Ross was exposed to asbestos from 1965 to 1977 while employed by NEIC.  He developed symptoms related to the exposure in 2012, and died from mesothelioma in 2013.  

After Ross's death, his widow sued NEIC.  Liberty Mutual insured NEIC from 1973 to 1983.  It asserted that a continuous trigger and pro rata allocation theory applied.  Under a continuous trigger theory, coverage is triggered from the time of exposure to a hazardous substance to the time when physical harm from such exposure becomes manifest.  In pro rata allocation, in a long-tail loss the loss is allocated among all insurers who provided insurance during any time the loss was occurring, and the loss is frequently allocated to the insured for periods where it had no or insufficient insurance.  So Liberty Mutual was arguing that where it provided coverage for ten years out of 47 years of total exposure, it was liable for about a fifth of the total damages.

In Ross v. Liberty Mutual Insurance Co. (behind a paywall) (Suffolk Superior Ct. May 14, 2025, Kazanjian, J.) a judge of the Suffolk Superior Court agreed with Liberty Mutual.  The court accepted expert testimony that damage from asbestos fibers is continuous—from initial exposure through latency, diagnosis, and death.  Relying on Boston Gas Co. v. Century Indem. Co., 454 Mass. 337 (2009) and New England Insulation Co. v. Liberty Mut. Ins. Co., 83 Mass. App. Ct. 631 (2013), the court held that coverage is triggered across all policy years during which injury occurred. It rejected Ross’s argument that injury was not continuous during the latency period and found that Liberty Mutual’s pro-rata allocation was consistent with Massachusetts law.

The court rejected Ross’s claim that Liberty Mutual owed post-judgment interest on the full judgment. It ruled that the insurer was responsible for interest only on the portion of the judgment that was allocable to its coverage periods. 

United States District Court for the District of Massachusetts finds coverage for water loss resulting from roof drain system, holding that policy itself creates ambiguity over the meaning of "drain"

I asked my assistant Nikki to read a draft of this post and make suggestions, and she was like, um, is there any way that you could make this post . . . interesting?  Maybe start with a joke or a riddle as a hook? So we both took to AI to find some jokes about roof drains.  This was Nikki's best shot:  

What's a roof drain's favorite type of music?
Anything with a good flow... unless it's clogged, then it's all about the backup beats!

I went down a rabbit hole and eventually ended up at this Roofer's Joke Book, which is not exactly on point, but, nevertheless, these are from the back cover blurb:  

Want to hear a roof joke? Well, the first one is on the house.

I just signed up to an online dating site for roofers. It's called LocalShingles.com

Did you hear about the miracle of the blind roofer? Well, he picked up a hammer and saw.

And now onto our post:  

The Loss

148 High Street owns and operates an apartment building located in Medford, Massachusetts.   On August 19, 2021, a pipe in the building’s roof drain system, situated between the building’s roof deck and the ceiling of the top floor, cracked or broke apart at a joint, allowing water from a rainstorm to infiltrate the building.  The break or crack was caused by some combination of normal use and latent wear of the joint.

Insurer Asserts that Coverage is Limited to $10,000 Because Only Expanded Property Coverage Endorsement Applies

148 High submitted a claim to its insurer, Wesco Insurance Company, for a replacement cost value of $413,689.21.  Wesco issued a check for $10,000, asserting that that amount was the limit under an Extended Property Endorsement for loss caused by discharge of a drain.*  That endorsement provides that the insurer “will pay for direct physical loss or damage to Covered Property, caused by or resulting from discharge of water . . . from a sewer, drain or sump located on the described premises.  . . . For the purpose of this coverage, the term drain includes a roof drain and related fixtures.” 

The insurer asserted that coverage was otherwise excluded in the policy under water and wear-and-tear exclusions. 

* The correct name of this endorsement appears to be the Expanded Property Coverage Endorsement. 

The United States District Court for the District of Massachusetts Holds that Water Exclusion Does Not Apply 

The water exclusion excludes damage caused directly or indirectly by water, regardless of any other cause or event that contributes concurrently or in any sequence to this loss.  (For budding insurance geeks, this is called an anti-concurrent causation clause.)  The definition of water for the exclusion includes, “Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump, or related equipment.” 

The water exclusion further provides that the exclusion applies regardless of whether the water loss is caused by an act of nature or is otherwise excluded. The exclusion states, as an example, that it would apply to a situation where a dam, levee, seawall or other boundary or containment system fails, in whole or in part, for any reason, to contain the water. 

In 148 High Street, LLC v. Wesco Insurance Company, __ D. Mass. __, 2025 WL 1586239 (D. Mass. 2025), Judge Young held that the water exclusion did not apply.  He noted that the Expanded Property Coverage Endorsement adds coverage for "Discharge from Sewer, Drain or Sump,” and in that endorsement clarifies that for the purpose of the endorsement, “the term drain includes a roof drain and related fixtures.”  Judge Young held that the language strongly suggests that, in the absence of the clarification, the word “drain” might not plainly include a roof drain.  “In other words, the Policy itself recognizes that the word 'drain' could be understood in more than one way.”  As ambiguous language is resolved in favor of the insured, the policy must be interpreted to find that a roof drain is not a drain. 

Judge Young distinguished the case before him from a New York case that interpreted coverage for a sink drain, because a sink drain is part of a plumbing system, but a roof drain is not.  He cited a number of other extra-jurisdictional cases that provide various definitions of the word “drain.” 

The Court Holds that the Wear-and-Tear Exclusion Does Not Apply Because of an Exception for Specified Causes of Loss

The Wear-and-Tear exclusion excluded coverage for damage caused by:

(1)       Wear and tear; [or]

(2)       Rust or other corrosion, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself[.]

Judge Young agreed that the exclusion would exclude coverage for the loss, absent an exception that provides that if an excluded cause of loss (such as wear and tear) results in a “specified cause of loss,” the insurer will cover the loss caused by that specified cause of loss.  Specified causes of loss included “water damage.”  The applicable definition of water damage in turn included “[a]ccidental discharge or leakage of water  . . . as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance . . . .”

Judge Young held that the broken roof drain pipe fit squarely within the definition of water damage. 

The Court Holds that the Expanded Property Coverage Endorsement has a $10,000 limit . . .

Both parties agreed that the Expanded Property Coverage Endorsement applied, but they disagreed as to whether the $10,000 sublimit of that endorsement was the maximum limit available. 

The endorsement provided, “[t]he most we will pay for Discharge from Sewer, Drain or sump in any policy year is $10,000, unless a higher amount is shown in the Declarations.” 

148 High argued that this clause meant that the $10,000 sublimit did not apply, because the policy’s declarations page showed only a higher general liability policy limit, far in excess of $10,000.  Wesco argued that the Declarations page did not list a specific higher sublimit for the expanded coverage endorsement, so the $10,000 sublimit applied.

The court agreed with Wesco, holding that a higher sublimit for the endorsement would apply only if such a higher sublimit were specifically shown on the declarations page.  

. . . But That Coverage is Not Limited to $10,000 for This Loss 

The court concluded that the endorsement provided an additional $10,000 in coverage for drain-related water losses.  The policy had a provision stating that “if two or more of this policy’s coverages apply to the same loss or damage, we will not pay more than the actual amount of the claim, loss or damage sustained.”  Apparently the total loss was less than the general property limit, so the endorsement simply had no effect.  But if the loss exceeded the general property limit, the limit would be increased by $10,000. 

Takeaway

Even as an insurance coverage specialist I could not completely follow the court’s reasoning.  I would need to have the policy in front of me and really study it.  This leads to my main takeaway from this case: Layers of revisions to insurance policies and added forms and endorsements can cause policies to become Gordian knots. When that happens, courts properly cut through the knot with the sword that ambiguities are interpreted in favor of the insured. That’s what Judge Young did here.

With respect to the Expanded Property Coverage Endorsement:  Policies often have endorsements in which the insurer says, we are adding an exclusion, and we are adding definitions that are applicable to the exclusion, and then we are adding back some limited coverage for the loss we are otherwise excluding.  For example, property policies often have a mold endorsement that states that all mold losses are excluded, then define mold, and then say, but we will pay up to $10,000 for a mold loss.  (Pro tip:  The mold endorsement limit is one of the few things that can be negotiated in a typical  homeowner's policy.  Always ask to go up to a $50,000 mold limit.)  

The Expanded Property Coverage Endorsement in this case appears to have skipped the step of adding an exclusion.  Instead, the insurer relied on the water exclusion in the main property coverage form of the policy.  That gave the court an opportunity to read the endorsement together with the main property coverage form to find an ambiguity.  And, as I said, ambiguities are interpreted in favor of coverage. 

Massachusetts Lawyers Weekly quoted my thoughts on this case here.  

Massachusetts Appeals Court gives sensible interpretation of contractual interest statute

 

Certain Underwrites of Lloyd's London issued a builder's risk policy to Historic Round Hill Summit covering two buildings, Rogers Hall and Hubbard Hall, that Historic had purchased to renovate.  PeoplesBank, which held an mortgage on the property, was an additional insured under a mortgage holder endorsement.  

A fire destroyed Rogers Hall and caused extensive damage to Hubbard Hall.  Lloyd's asserted that the damage to Hubbard Hall was not covered because it was occupied by tenants at the time of the fire.  PeoplesBank argued that it was entitled to coverage for the loss, even if Historic was not. In June 2018 it submitted a proof of loss to Lloyd's seeking $2.8 million.  Lloyd's rejected the claim, on the basis that PeoplesBank could not submit a claim independent of Historic's claim.  PeopleBanks sued, and the trial judge found that Lloyd's was obligated to cover the loss.  

On April 27, 2021, the parties entered a stipulation that the cost to repair the damage was $2,274,194.07, exclusive of work performed by a contractor, Complete Restoration Solutions (CRS), as Historic was disputing CRS's bills.  Historic and CRS eventually settled, after which Lloyd's and PeoplesBank stipulated that the fair value of the work done by CRS was $236,000.  

PeoplesBank sought prejudgment interest from July 3, 2018, the date Lloyd's had denied coverage to it.  Lloyd's asserted that interest should run from 30 days after the date of the stipulations, under a policy provision that stated:

We will pay or make good any "loss" covered under this Coverage Part within 30 days after:

1.    We reach an agreement with you;

2.    The entry of final judgment; or

3.    The filing of an appraisal award. 

In PeoplesBank v. Certain Underwrites at Lloyd's London, 105 Mass. App. Ct. 476 (2025), the Massachusetts Appeals Court interpreted the dispute under Mass. Gen. Laws ch. 231 §6C, which provides for interest for breach of contract from the date of the breach.  The court held that Lloyd's owed interest from the date it denied coverage, except that interest on the CRS payments was due from the date payment was made to CRS.  That was because the amount sought, except for the CRS payments, had already been paid before Lloyds denied coverage.  Prejudgment interest would not result in a windfall to PeoplesBank and failure to award it would result in a windfall to Lloyd's, which had use of the money it had owed to PeoplesBank.  Absent Lloyd's breach of contract, it would have paid the amount due at the time of the demand.  Lloyd's could not rely on the contractual payment provision when it had breached the contract.  Interest was due for the CRS payment from the date payment was made to CRS, because otherwise PeoplesBank would receive a windfall -- interest on funds that it had not paid.  

Advice for people who are facing property losses in the Los Angeles fires: Hire a public adjuster

I recently saw on a Facebook group I belong to advice for victims of the California fires and how they can maximize their insurance claims. The advice was dreadful. It included, "Make from memory the most detailed list you can of every item in your house that was destroyed, and its value."

This is terrible advice.

One of my specialties as an attorney is representing people with property damage claims against their insurers (Massachusetts only).  I also represent insurers in these losses, more on this at the end.  I have seen from both sides people who have suffered this type of terrible loss who received this advice and got completely caught up in futilely trying to make a complete inventory of their destroyed personal property and its value on their own. Of course, because these items represent their life and have huge value to them, and they get lost in that.

The good news is: there is an entire profession devoted to helping people with this type of insurance claim. Their job is to advocate with an insurance company for the insured for the value of the property damage loss, including personal property claims. They have specialists who will make lists of personal property inventory and value it.  Yes, you will need to work with them and provide them the information, which may include lists, but they will help you and they will provide the valuation.

They are called public adjusters. They get paid by contingency fee, typically ten percent (at least in Massachusetts; maximum percentage is set by state law), so cost nothing up front, and for any major loss are well worth the cost because you will recover more working with them even with their fee than you would trying to do it yourself, and they will act as a buffer between you and the insurer and reduce your stress in this aspect of your loss significantly.

In all honesty, some public adjusters are terrible and some are great (and most are in between). As with any professional doing something major for you, you will want referrals if possible. Meet with several. Ask for references. Google them. But a good public adjuster will save you time and aggravation and help you move forward. Even a not very good (but not terrible) public adjuster is better than you trying to do this yourself.

My advice for anyone who may need to evacuate but is currently safe (and everyone else, do this while you are thinking about it): Go around your house and take pictures of everything. The exterior walls. Everything you own inside. Appliances. Bookshelves. Open your closets, your cabinets, and your drawers and take pictures. (Not of each item, but of the inside of each drawer.  I am not trying to make you crazy here. Maybe individual photos of items you own of high monetary value.) Hopefully you will never need to look at them, but if you do need to show what you owned, this is a good way to do it. (I do this every couple of years. It takes 30 minutes or so.) You can hand the photos to the public adjuster, who can use them as a basis for their inventory (along with conversations with you).

Why is it terrible advice for you to try to inventory and value your own goods?  Because unfortunately sentimental value has nothing to do with insurance coverage.  The items you love the most – your photo albums, the souvenirs you picked up on your travels, your paperback copy of The Lord of the Rings trilogy that first belonged to your father that you have carried around since you were 12 (yes I’m projecting here) – you will obsess over their loss, they will make you sad,  you will mourn them, all of which is understandable, but they have little value in an insurance claim.  Your ergonomic chair in your home office that you never think about may be worth something.  You will obsess over that as well.  Even if you don’t, your lists will not be put together in a way that an insurer can easily work with.  (You will also need to understand the difference between actual cash value and replacement cost value.  Actual cash value broadly speaking is the value of the item you own today.  My beloved copy of Lord of the Rings is falling apart and has no value; even a thrift shop would just throw it out.  But its replacement cost value is $26.38, because that's what I would spend for it on Amazon.  I will get that amount from the insurer if I timely actually purchase a new copy.)  This will take your attention from where it needs to be, which is working with a contractor to rebuild your house within the amount the insurer will pay. 

I have seen advice that if a house suffers a total loss don’t waste your ten percent on a public adjuster because you will get your policy limits. This is an oversimplification.  There are various coverages that a policyholder may not know about on their own, that insurers may ignore. Everything from code upgrades, which is huge (you have to rebuild to current code, which is an extra expense and an extra coverage but the amount has to be proven based on local codes) to landscaping coverage. (These coverages are often but not always in addition to your building coverage limit.)   Again, the difference between actual cash value that you get paid up front and replacement cost value, that you get paid after the rebuild is complete if you have that coverage, can be significant, and you need ACV to pay your contractor to do the work. (Some contractors understand insurance claims; most don’t -- they just want to build houses.)  And don't forget loss of use coverage, which is rent while your house is being rebuilt.  (In my experience public adjusters generally don't charge their percentage for this but if needed they will help you advocate for a suitable place to live.)  With personal property (your stuff) you have to show the value of your destroyed property, which may or may not reach the coverage limit. Many public adjusters are not interested in coming into a loss late. So, if you are someone who can read and understand an insurance policy and advocate effectively for yourself with the overworked insurance adjusters who will be flooding into California from other states, and you have the time and emotional wherewithal to do this on your own, sure, go for it. As an attorney in the industry, I would 100 percent hire a public adjuster in this situation.

Very important note: I don’t want to make it sound like I think insurers are evil. Quite the opposite.  I represent insurers as well as policyholders, and many insurance adjusters are wonderful people with integrity who do their absolute best to be fair.  But if you get off on the wrong foot with a claim it can be very difficult to course correct. Some insurance adjusters will advise you not to hire a public adjuster.  Some will be happy if you do because they know they will receive information in a form that is easiest for them to analyze.  Ultimately the choice is yours, but you know where I stand.  

 

United States District Court for District of Massachusetts holds that insurer breached ch. 93A by denying fire coverage for new homeowner because she had not yet moved into her house

Fire at house homeowner had just purchased and not yet moved into

Awilda Pimental closed on a new home on June 28, 2022.  She purchased a homeowner's policy from AmGuard Insurance Company that went into effect on the closing date, that included coverage for fire losses.

On July 22, 2022, before Pimental moved into her house, a fire significantly damaged it.  

Policy's definition of residence premises, and denial of coverage

The policy provided coverage for the "residence premises," which it defined as the "dwelling where you reside."  An endorsement to the policy amended the definition to "the dwelling where you reside . . . on the inception date of the policy period." The term "reside" was not defined by the policy.  (The decision did not address that the declarations page of the policy almost certainly would have listed the address as the residence premises or the insured location or similar language.)  

AmGuard denied Pimental's claim on the ground that she did not reside on the premises at the time of the fire, as she had not yet moved in.  

U.S. District Court holds that the insurer's interpretation of policy was not plausible, and was a 93A violation

In Awilda Pimental v. AmGuard Ins. Co., the United States District Court for the District of Massachusetts held that there were "multiple problems" with AmGuard's position.

First, according to the court, coverage applied to the dwelling where Pimental resided on the inception date of the policy, not the date she moved her belongings in and set up a household.  The inception date was June 28.  AmGuard ignored the "inception date" language entirely. 

Second, the policy had a vacancy exclusion that excluded coverage if the property was vacant for more than 60 consecutive days.   According to the court, that meant that a homeowner had 60 days from the closing date to move in before the vacancy exclusion applied.  AmGuard's position rendered the exclusion a nullity.  

The court pointed out that if AmGuard's position prevailed, there would never be insurance coverage between the day of a closing and the day the purchaser moves in sometime after that. "No reasonable purchaser of a new homeowner's policy would anticipate that gaping hole in her insurance coverage."  Moreover, under AmGuard's position coverage would never attach at all because the purchaser of a home does not reside in the home on the date of purchase, the inception date of the policy.  

The court held that the policy should be interpreted "sensibly" -- that it covered the dwelling beginning on the closing date, provided that the insured purchased the property intending it as her residence, and did not wait more than 60 days to move in. 

The court further held that AmGuard's interpretation of the policy was not plausible, and was therefore a violation of Mass. Gen. Laws ch. 93A.  However, the violation was not knowing or willful, so multiple damages were not awarded.  

My take 

In my view the decision was results-oriented.  The word "reside," for example, does not strike me as ambiguous.  Coverage was not illusory, because there would be circumstances where the coverage would come into play under the insurer's interpretation -- but not, as the court pointed out, for a new homeowner.  For that reason the court was correct that its interpretiation was "sensible" -- it would indeed by absurd for there to be no property coverage between the closing date and the date the homebuyer moves in.  

60 Minutes report on fraud by Florida homeowners insurers following Hurricane Ian two years ago

Here's the link:  

Supreme Judicial Court of Massachusetts holds that term "surface waters" in policy is ambiguous, so does not apply to water on surface of a roof

Sure, Steward Health Care has created a public health care emergency, but at least it has prevailed in an insurance coverage dispute. 

A storm in June 2020 caused an accumulation of rainwater on a rooftop courtyard and on roofs of Norwood Hospital. The rainwater seeped into the interior of the hospital buildings, causing significant damage.

Norwood Hospital's owner, Medical Properties Trust, Inc., which is insured by Zurich, and Steward, the hospital's operator, insured by AGLIC, sought coverage from their respective insurers.  

Both policies had sublimits (meaning, limited coverage) for damage caused by "Flood," which the policies defined as "a general and temporary condition of partial or complete inundation of normally dry land areas or structures caused by the unusual and rapid accumulation or runoff of surface waters." 

The insurers and insureds disagreed about whether water that accumulated on roofs and infiltrated the buildings was "surface water" and therefore subject to the flood sublimits rather than the higher policy limits.  

The insureds argued that the plain meaning of "surface waters" is waters at ground level or on a ground-level surface -- waters on the surface of the earth.  The insurers argued that the phrase means waters accumulating naturally on any surface whether or not at ground level.

In Zurich Am. Ins. Co. v. Medical Properties Trust, Inc., __ N.E.3d __, 2024 WL 3504060 (Mass. 2024), the Supreme Judicial Court of Massachusetts held that the meaning of "surface waters," and therefore of "Flood," under the policies is ambiguous with respect to accumulation of rainwater on roofs.  As ambiguous terms are interpreted in favor of policyholders, the court held that there was coverage for the loss.  

Even Whitey Bulger's crimes end in insurance coverage disputes: Town of Braintree sues multiple insurance carriers for coverage for wrongful conviction claim by man framed by Bulger

 

On May 24, 2024, the Town of Braintree filed a lawsuit in Suffolk County Superior Court against fifteen insurers, as well as insurance companies Does 1 though 50, for refusing to defend and indemnify it in a massive wrongful conviction lawsuit.

The Town alleges that the insurers have each either refused to acknowledge or outright denied their contractual obligations under liability policies issued to the Town over the course of nearly four decades for claims that the Town is liable for the wrongful conviction and 36 year imprisonment of Frederick Weichel.  Weichel has sued the Town in federal court and has demanded tens of millions of dollars in damages. 

The complaint summarizes Weichel's allegations:  In 1980, Robert LaMonica was murdered in the Town.  The Town police investigated.  A composite sketch from details provided by a witness bore a likeness to a convicted murderer named Rocco Balliro, who had failed to return from a prison furlough.  A police report, the "Leahy report," containing this information was stored by the town in a "Basement Archive" and was not turned over to the prosecutors, Mr. Weichel, or Mr. Weichel's defense counsel.  

Mr. Weichel was convicted of the murder in 1981.  He alleges that if the Leahy report had been produced he would not have been convicted.  He was sentenced to life without the possibility of parole, and spent over 36 years in prison.  In 2017, after he obtained the Leahy Report and moved for a new trial, he was released and all charges against him were dropped.  In a 2018 lawsuit against the Commonwealth, a jury found that Mr. Weichel had been innocent of the murder.  

Mr. Weichel sued the Town, alleging that it had a continuing obligation to disclose disculpatory evidence throughout the entire period between 1980 and 2017, and that it was deliberately indifferent to, and breached, that duty throughout his incarceration.  He alleges that he suffered bodily injury and personal injury during each year of his incarceration.  

During these years the defendant insurers had issued law enforcement, general liability, and umbrella policies to the Town.  Most of the insurers have refused to defend and indemnify the Town.  According to the complaint, some of the insurers have asserted that the events that led to Mr. Weichel's injury took place in 1980, and therefore the only applicable insurance coverage would be a 1980 policy.

The Town asserts that the Weichel lawsuit is a "paradigmatic example of the claims that the Town's liability policies were supposed to protect it against: a suit seeking tens of millions of dollars in damages, brought against the Town by an individual who accuses the Town, its police officers, and its other managers and officials, of being responsible for his bodily injury and personal injury foreseeably resulting from him having spent thirty-six years in prison for a crime he did not commit."  

It's interesting that the complaint (as well as Weichel's complaint in federal court) does not mention his claim that he was framed by Whitey Bulger.   

Insurance Claims for Damage to Buildings in Massachusetts (my new brochure)

THE LIFECYCLE OF A MASSACHUSETTS PROPERTY DAMAGE CLAIM

• The property damage occurs.
  
  
• The insured submits the claim to the insurer.
  
  
• The insured chooses and retains a public adjuster.

The role of the public adjuster: to determine all applicable coverages under the insurance policy, prepare estimates, and advocate with the insurer over the amount of loss.

The public adjuster is paid by contingency fee, typically ten percent of the amount recovered.

• The insurer may raise defenses to coverage.  If so, the insured should hire an attorney immediately.  The public adjuster is not an attorney and cannot argue with the insurer about coverage issues. 
  
  
• If there is no dispute over coverage, there will usually be back and forth between the public adjuster and the insurer about the amount of loss. 
  
  
• If the public adjuster/insured and the insurer cannot agree over the amount of loss, the case goes to a reference proceeding. 
  
  
• A reference proceeding is similar to an arbitration, with three referees who decide the amount of loss based on evidence submitted by both sides.
  
  

THE INSURED SHOULD CONSULT WITH AN ATTORNEY:

• At any time, to answer questions about the process and whether the claim seems to be proceeding on track. 
  
  
• If the public adjuster advises the insured to consult with an attorney.
  
  
• If the insurer raises defenses to coverage.
  
  
• If the public adjuster and the insurer are unable to agree on the amount of loss.
  
  
• If the insurer has demanded a reference proceeding or the public adjuster advises the insured that a reference proceeding is necessary.
  
  
• If the loss occurred 18 months ago and the claim remains open.
  
  

Important:  The statute of limitations on property damage claims in Massachusetts is generally two years, but if you wait until close to two years to hire an attorney you can lose crucial rights.

HOW A PUBLIC ADJUSTER AND ATTORNEY WORK TOGETHER:

• If the insurer raises defenses to coverage, the attorney will take the lead.
  
  
• If the public adjuster and insurer are in the negotiating phase, the public adjuster will take the lead.  The attorney will be available to answer questions from both the insured and the public adjuster, and to provide advice, usually behind the scenes. 
  
  
• If the public adjuster and insurer are unable to agree on the amount of loss, the public adjuster and attorney will work closely together.  The attorney will draft formal “demand letters” to the insurer, prepare the case for a reference proceeding, and represent the insured at the reference proceeding.  The public adjuster will support claims about the amount of loss, will prepare or help prepare exhibits, and will be an expert witness at the reference proceeding.
  
  

TYPES OF COVERAGE IN MOST POLICIES

• Building damage
  
  
• Other structures 
  
  
• Personal property
  
  
• Loss of use / additional living expenses (residential) / business interruption (lost profits) (commercial)
  
  
• Code upgrades
  
  
• Mold
  
  
• Additional coverages such as landscaping, etc.
  
  

Special issues in condominium buildings:

• The master policy is issued to the condominium trust and provides coverage for common elements of the building (for example, the roof and common areas).
  
  
• The unit-owners policy (often called the HO-6 policy) provides coverage for the interior of a unit.
  
  
• Different master policies and unit-owners’ policies have different definitions of common elements.
  
  
• In condominiums, a unit-owners’ personal property and loss of use is typically covered by their unit-owner’s policy, not by the master policy. 
  
  
• Insurance proceeds from the master policy are disbursed to the condominium trust. 

VOCABULARY

• Actual cash value (ACV): 
  The value of an item on the date of loss.  This is paid immediately.
  
  
• Replacement cost value (RCV): 
  The cost to replace an item.  
  
  
• Depreciation:
  The difference between ACV and RCV,  This is paid upon completion of the work or when the item is replaced.
  
  
• Code upgrades: 
  The cost to bring a building in line with current state and local building code requirements.  This is paid upon completion.
  
  

Material presented in this brochure is for informational purposes only. It is not intended as professional advice and should not be construed as such. Unless and until you enter into a formal agreement with Attorney Kallen, she is not your attorney and you do not have an attorney-client relationship with her.

Let me Introduce Myself!

I have been an attorney in Massachusetts since 1994. I practice in general litigation and focus on insurance coverage and bad faith issues. I am available to assist claimants and insureds who have a dispute over property, homeowners, general liability, motor vehicle, and other insurance policies.

You can learn more about me on my website: www.kallenlawyer.com

 

40 FLORIAN STREET
ROSLINDALE, MA 02131
Phone: (617) 363-0547
nkallen@kallenlawyer.com
www.kallenlawyer.com

 Blog: 
Insurance Coverage Law in Massachusetts
http://insurancecoveragemassachusetts.blogspot.com