Opinion
SUCV2012-1627-G 137351
05-24-2017
Pamela Matckie v. Great Divide Insurance Company
Filed May 24, 2017
MEMORANDUM OF DECISION AND ORDER ON MOTION TO AMEND COMPLAINT AND MOTION FOR SUMMARY JUDGMENT DISMISSAL
Robert L. Ullmann, Justice.
The plaintiff, Pamela Matckie (" Matckie"), moved to file a Fifth Amended Complaint that would (1) add Endurance American Specialty Insurance Company (" Endurance American") as a defendant; (2) substitute Paul Matckie, personal representative of the estate of Pamela Matckie, as plaintiff; and (3) add claims of infliction of emotional distress based on the alleged bad-faith settlement practices of the defendant, Great Divide Insurance Company (" Great Divide"), and Endurance American. (Docket #102; #111.) Great Divide cross moved for summary judgment dismissal of the G.L.c. 93A claim against it (part of Docket #104). The Court heard oral argument on May 15, 2017. For the below reasons, plaintiff's motion to amend the complaint is ALLOWED in part and DENIED in part. Plaintiff can substitute Paul Matckie, personal representative of the estate of Pamela Matckie, as plaintiff, so that the c. 93A claim against Great Divide can proceed as currently alleged. However, plaintiff cannot add Endurance American as a defendant or bring a new claim against Great Divide for infliction of emotional distress. Great Divide's cross motion for summary judgment dismissal is DENIED .
RELEVANT FACTS AND PROCEDURAL HISTORY
This case has a long and contentious history, but the facts needed to decide the pending motions are limited and undisputed.
Matckie filed her initial complaint in April 2012, alleging that she had been injured when she tripped on plywood boards that had been placed on the field at Gillette Stadium for an event called the American Food Festival. SOF 1, 3; Docket #1. In 2013, plaintiff filed a Third Amended Complaint, suing, among others, NPS, LLC (" NPS"); the owner of Gillette Stadium, which was insured by Great Divide; Great Divide; Team Ops, LLC (" Team Ops"), and Uncle Al's Production Services, Inc. (" Uncle Al's"), which was insured by Endurance American. SOF 2, 4. Plaintiff's claim against Great Divide was preceded by two demand letters, in accordance with G.L.c. 93A. J.A. Ex. 1 at GD026-035; SOF 5, 7. Neither letter describes a claim for infliction of emotional distress based on Great Divide's conduct. Id. The claim against Great Divide was stayed. SOF 6.
" SOF' refers to Great Divide's Rule 9A(b)(5) Statement, of Undisputed Facts, and " J.A. Ex." refers to exhibits to the Joint Appendix, both submitted in support of Great Divide's cross motion for summary judgment dismissal. " End. Am. Opp. Ex." refers to the exhibits submitted with Endurance American's opposition to plaintiff's motion to amend the complaint. " Plt. Ex." refers to the exhibits submitted in support of plaintiff's motion to amend the complaint.
Throughout the pretrial proceedings, and even at trial, the critical issue of who had put down the plywood boards on which Matckie fell was unclear. NPS admitted in its June 2012 Answer that it had put down the boards (Docket #8), but later asserted that another entity had put down the boards and sought to withdraw its admission. Docket #69. This Court ruled that NPS would be allowed to amend its admission, but without prejudice to any party's right to seek to offer the original admission at trial as evidence that NPS had put down the boards. Docket #75.
On November 23, 2015, plaintiff's counsel informed defendants' counsel that Matckie was experiencing liver and kidney failure that might be fatal. SOF 9. Matckie died on December 8, 2015. SOF 10. The cause of death was determined to be alcoholism. Id.
Trial against NPS, Team Ops, Uncle Al's, and two other defendants began on May 9, 2016. SOF 13. In his opening statement, plaintiff's counsel stated that Gillette Stadium's owners " have the most clear and obvious incentive to protect that field . . . The stadium has offered some testimony and suggestions that it was Mr. Fay's client's [Uncle Al's] fault in those regards . . . I suggest that it is nobody's fault but their own in those regards ." End. Am. Opp. Ex. 3 at 15-16 (emphasis added), his closing statement, however, plaintiff's counsel argued, as the sole basis of Uncle Al's liability, that Uncle Al's had put down the boards. See End. Am. Opp. Ex. 17.
On May 18, 2016, the jury returned a verdict, finding liability on the part of NPS (20%), Team Ops (40%), and Uncle Al's (40%). End. Am. Opp. Ex. 22. The jury awarded $450,000 for Matckie's medical expenses, lost earnings and pain and suffering. Id. Judgment in the amount of $670,298.40 including interest was entered on May 27, 2016. SOF 15. Great Divide promptly paid $447,089.03, two-thirds of the Judgment amount. SOF 16.
Endurance American had at least some participation in settlement negotiations before trial, but it did not receive a G.L.c. 93A demand letter until June 23, 2016. See Plt. Ex. 12; End. Am. Opp. Ex. 23, 27. On July 15, 2016, Endurance American issued a check for $223,209.37, the unpaid one-third amount of the Judgment, which was cashed on July 20, 2016. End. Am. Opp. Ex. 26.
DISCUSSION
A. Endurance American Cannot Be Sued in this Action
Under the highly unusual facts of this case, Endurance American cannot be sued because (1) its liability was not reasonably clear until the jury returned its verdict (2) it paid the full unpaid amount of the Judgment within 30 days of receiving its first G.L.c. 93A demand letter, and (3) adding Endurance American as a defendant after Matckie's death would be futile and cause undue prejudice.
1. Endurance American's Liability Was Not Reasonably Clear Until the Jury's Verdict
Endurance American had no responsibility to offer plaintiff a settlement until its liability was reasonably clear. See Bobick v. United States Fidelity & Guaranty Co., 439 Mass. 652, 660, 790 N.E.2d 653 (2003); Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 676-77, 448 N.E.2d 357 (1983). The first time Endurance American's liability in this case became reasonably clear was when the jury returned a verdict, against its insured Uncle Al's, implicitly finding that Uncle Al's had some responsibility for putting down the plywood boards on which Matckie fell. Before that time, Uncle Al's liability, and therefore Endurance American's liability, was completely unclear. A party other than Uncle Al's had admitted that it put down the boards. In his opening statement, plaintiff's counsel directed liability away from Uncle Al's and toward the owners of Gillette Stadium. See supra at 2-3. Under these circumstances, the predicate for G.L.c. 93A liability based on unfair settlement practices does not exist.
2. Endurance American Paid the Full Unpaid Amount of the Judgment Within 30 Days of Receiving a Demand Letter
G.L.c. 93A provides, in relevant part:
At least thirty days prior to the filing of any [G.L.c. 93A, § 9] action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any perspective respondent. Any person receiving such a demand fur relief who, within thirty days of the mailing or delivery of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning its rejection and thereby limit any recovery to the relief tendered if the court finds that the relief tendered was reasonable in relation to the injury actually suffered by the petitioner.G.L.c. 93A, § 9, par. 3. The literal language of this statutory provision does not apply in this case, because plaintiff accepted the demand. However, the policy reasons underlying the provision militate in favor of limiting Matckie's recovery against Endurance American to the amount that it has already paid. The Supreme Judicial Court (" SJC") has stated:
the purpose of the [demand] letter are twofold: (1) to encourage negotiation and settlement by notifying prospective defendants of claims arising from allegedly unlawful conduct, and (2) to operate as a control on the amount of damages which the complainant can ultimately recover.Spring v. Geriatric Authority of Holyoke, 394 Mass. 274, 288, 475 N.E.2d 727 (1985) (internal quotation omitted). Endurance American's prompt payment of the full unpaid amount of the Judgment furthered the purposes of the demand letter requirement set forth in Spring . Therefore, Endurance American's payment of the full unpaid amount of the Judgment within 30 days of receiving a demand letter precludes a lawsuit against it.
3. Allowing Amendment of the Complaint to Add Endurance American Would be Futile and Would Create Undue Prejudice
A third reason why plaintiff should not be allowed to add Endurance American as a defendant is the futility of the amendment and the undue prejudice that would result. Under Mass.R.Civ.P. 15(a), leave to amend " shall be freely given when justice so requires " (emphasis added). Leave may properly be denied, however, when a late amendment would be futile or cause undue prejudice to the opposing party. See Walsh v. Chestnut Hill Bank & Trust Co., 414 Mass. 283, 286, 607 N.E.2d 737 (1993); Castelluci v. United States Fidelity & Guarantee Co., 372 Mass. 288, 290, 361 N.E.2d 1264 (1977).
Applying this standard, the Court cannot allow plaintiff to amend its Complaint by adding Endurance American as a defendant, for at least two reasons. First and foremost, adding Endurance American as a defendant would be futile, because, as explained above, its liability was not reasonably certain until after the verdict, and therefore it cannot be found liable under G.L.c. 93A. Second, subjecting Endurance American to damages for Matckie's medical expenses, lost earnings and pain and suffering would be unduly prejudicial. Endurance American had no reason to obtain discovery on these issues front Matckie during her lifetime, as she had not sued the company.
B. The Existing G.L.c. 93A Claim Against Great Divide May Proceed, But a New Claim for Infliction of Emotional Distress Cannot Be Added
1. Plaintiff's Existing Claims Against Great Divide Survive Matckie's Death
The SJC has not decided whether a G.L.c. 93A claim against an insurer alleging unfair settlement practices survives the death of a plaintiff who obtains a judgment against the insurer's customer. However, the cases most closely on point all suggest that the SJC would allow such a claim to proceed.
The parties agree that claims sounding in contract and claims sounding in tort for " damage to the person" survive a party's death. See Kraft Power Corp. v. Merrill, 464 Mass. 145, 150, 981 N.E.2d 671 (2013); Pine v. Rust, 404 Mass. 411, 417, 535 N.E.2d 1247 (1989). Not surprisingly, the SJC held in Kraft Power that G.L.c. 93A claims which are contractual in nature survive plaintiff's death. 464 Mass. at 149-50.
In Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 987 N.E.2d 1247 (2013), the SJC held that a G.L.c. 93A claim based on a restaurant's building code violations causing death to the plaintiff survived the plaintiff's death, even though the jury had returned a verdict in favor of defendants on plaintiff's wrongful death claims. 465 Mass. at 178-79. Addressing the Massachusetts survival statute, G.L.c. 228, § 1, the SJC stated:
" other damage to the person" was intended by the Legislature to be flexible, and clearly leaves room to accommodate other torts which the court might deem to involve damage to the person. Thus the statute is sufficiently dynamic to allow for a change in judicial conceptions of what types of harm constitute legally redressable damage to the person.465 Mass. at 179 (additional internal quotations omitted).
In Curtis v. Herb Chambers I-95, Inc., 75 Mass.App.Ct. 662, 915 N.E.2d 1121 (2009), the Appeals Court held that the multiple damages provision of a c. 93A claim survives the plaintiff's death. The Appeals Court noted that the " multiple damages provisions of c. 93A are part of a legislative scheme designed to serve a broad public interest in the eradication of unfair and deceptive practices in trade or commerce." 75 Mass.App.Ct. at 677. To support its argument, the Appeals Court relied on Gasior v. Massachusetts General Hospital, 446 Mass. 645, 846 N.E.2d 1133 (2006), in which the SJC held that the punitive damages provision of G.L.c. 151B survived the plaintiff employee's death, in significant part due to the statute's public policy purposes. 446 Mass. at 653-55.
In light of this extensive precedent, including the public policy purposes of G.L.c. 93A, it seems almost certain that, if faced with the precise issue in this case, the SJC would hold that a claim against an insurer for unfair settlement practices survives the death of a plaintiff who has obtained a judgment against the insured's customer. Therefore, Matckie's existing claims against Great Divide survive her death.
2. Plaintiff Cannot Amend the Complaint to Add a Claim of Infliction of Emotional Distress
As discussed above, at least 30 days prior to the filing of a c. 93A the Plaintiff must make a written demand for relief " reasonably describing the unfair or deceptive act or practice relied upon the injury suffered." G.L.c. 93A, § 9, par. 3. A plaintiff cannot obtain c. 93A relief for claims and alleged injury that were not timely presented in a demand letter. See, e.g., Entrialgo v. Twin City Dodge, Inc., 368 Mass. 812, 813, 333 N.E.2d 202 (1975); Bressel v. Jolicoeur, 34 Mass.App.Ct. 205, 211, 609 N.E.2d 94 (1993). The demand letters sent to Great Divide made no mention of any claim for infliction of emotional distress based on Great Divide's alleged unfair settlement practices. See supra at 2. And, it would be particularly unfair to require Great Divide to defend such a claim after Matckie's death, when it has no ability to depose her on the subject. Therefore, plaintiff may not amend its Complaint to include a claim of infliction of emotional distress against Great Divide.
Calandro v. Sedgwick Claims Management Service, KAVITA 2017 WL 1496915 (D.Mass. April 25, 2017), which the parties brought to the Court's attention after oral argument, has no bearing on the outcome of the pending motions. Dispositive factors in this case, including lack of notice in a G.L.c. 93A demand letter, payment of the full unpaid amount of the Judgment within 30 days of receiving a demand letter, unclear liability until the verdict, and death of the plaintiff, ware not present in that case.
CONCLUSION AND ORDER
Plaintiff's motion for leave to file a Fifth Amended Complaint (Docket #102, #111) is ALLOWED in part and DENIED in part. Plaintiff can substitute Paul Matckie, personal representative of the estate of Pamela Matckie, as plaintiff, so that the existing claim against Great Divide Insurance Company may proceed as currently alleged. However, plaintiff cannot add Endurance American Specialty Insurance Company as a defendant to bring a new claim against Great Divide Insurance Company for infliction of emotional distress. Great Divide's cross motion for summary judgment dismissal (part of Docket #104) is DENIED, in accordance with the court's rulings on plaintiff's motion to amend the Complaint.