Dodd v. Commercial Union Ins. Co.

• Decision Date: 19 July 1977
• Citation: 365 N.E.2d 802,373 Mass. 72
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 802

365 N.E.2d 802

373 Mass. 72

Sula DODD et al. ¹ v. COMMERCIAL UNION INSURANCE COMPANY Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 3, 1977.

Decided July 19, 1977.

Philander S. Ratzkoff, Boston, for defendant.

Ralph A. Donabed, Brookline, for plaintiffs.

Francis X. Bellotti, Atty. Gen., amicus curiae, Paula W. Gold and Richard A. Gross, Asst. Attys. Gen., submitted a brief.

Before HENNESSEY, C. J., and QUIRICO, KAPLAN, WILKINS and LIACOS, JJ.

HENNESSEY, Chief Justice.

The plaintiffs, individually and on behalf of other persons similarly situated, brought this action pursuant to G.L. c. 93A, §§ 2(a ), 9, against the defendant (Commercial) in March, 1974. The complaint alleges that Commercial employed unfair and deceptive settlement practices in handling personal injury and property damage claims under the Massachusetts no-fault motor vehicle insurance laws, G.L. c. 90, §§ 34M-34O, et seq., and requests that the court grant the plaintiffs (and others similarly situated) injunctive relief, reasonable attorneys' fees, and monetary relief in the amount of actual damages multiplied by three. Commercial filed a demurrer, treated as a motion to dismiss, in May, 1974, and a motion for summary judgment in December, 1975, both alleging that the complaint fails to set forth a cause of action under c. 93A. A judge of the Superior Court, relying on the pleadings and a stipulation of all material facts entered into by the parties solely for the purpose of deciding Commercial's motions, entered an interlocutory order denying the motions. At the request of the parties, the judge stayed the proceedings below and reported the matter of his interlocutory order to the Appeals Court. ² This court granted Commercial's application for direct appellate review.

In their complaint the plaintiffs allege the following facts. The plaintiffs all purchased compulsory motor vehicle insurance policies issued by Commercial and, while insured under these policies, they all submitted claims to Commercial for benefits due them under said policies. They all suffered monetary loss as a result of Commercial's unfair or deceptive acts or practices in settling these claims: to wit, (a) failing to respond promptly to claims, investigate claims and settle claims; (b) failing to comply with G.L. c. 90, §§ 34M, 34O, G.L. c. 175, § 111F, G.L. c. 176D, § 3(9); and (c) failing to disclose adequately the manner or time employed in the handling and satisfaction of insurance claims. The plaintiffs further allege certain facts which, if proved, would substantiate the unfair and deceptive acts and practices set forth in their complaint.

For the purposes of deciding the issues raised by Commercial's motions, and not otherwise, Commercial stipulates that the plaintiff's factual allegations are true. In addition, the parties stipulate that (a) Commercial is a Massachusetts insurance company, 20% Of whose gross review is derived from transactions in interstate commerce; (b) all claims in this case arose from transactions and actions which occurred primarily and substantially within Massachusetts; (c) the Attorney General has not proposed any action against Commercial under G.L. c. 93A concerning Commercial's claim practices and has not notified the Federal Trade Commission or Commercial of any such proposed action; and (d) the Federal Trade Commission has not sent the Attorney General any written objection to proposed Attorney General action with respect to Commercial practices, or served Commercial with a complaint concerning its business practices. The parties agree that these stipulated facts comprise all the facts material to the issues raised by Commercial in its motions.

Commercial argues that it is exempt from application of c. 93A under § 3(1)(b ) of that chapter and is therefore not subject to actions pursuant to c. 93A, § 9. In the alternative it argues that as a matter of legislative intent c. 176D alone governs unfair and deceptive insurance practices, and consequently c. 93A, and § 9 of that chapter in particular, do not apply to the insurance business. We disagree. We conclude that the provisions of c. 93A apply to unfair and deceptive insurance practices, and that the plaintiffs have stated in their complaint a cause of action pursuant to c. 93A, § 9.

1. General Laws c. 176D contains prohibitions and remedies which overlap provisions of G.L. c. 93A. Commercial maintains that c. 93A is inapplicable to activities which fall within this area of overlap because the Legislature intended that c. 176D preclude concurrent application of c. 93A and that c. 93A exclude the insurance business from the scope of its prohibitions and its remedies.

Chapter 176D, § 2, as appearing in St.1972, c. 543, § 1, prohibits "unfair or deceptive act(s) or practice(s) in the business of insurance." Sections 5-7 authorize the Commissioner of Insurance to investigate insurance company affairs, to hold hearings to determine the legality of their practices, and to order insurance companies to cease and desist from engaging in acts or practices found to be unfair or deceptive. ³ Although c. 176D provides no remedy for individuals injured by unfair or deceptive insurance practices, c. 176D, § 8, provides that "(n)o order of the commissioner under this chapter or order of a court to enforce the same shall in any way relieve or absolve any person affected by such order from any liability under any other laws of this commonwealth." ⁴

Chapter 93A, § 2, inserted by St.1967, c. 813, § 1, prohibits "unfair or deceptive acts or practices in the conduct of any trade or commerce " (emphasis added). The Attorney General may investigate business practices he believes may be unfair or deceptive, and may bring an action in the name of the Commonwealth against any person he believes is using such practices. In addition, c. 93A, § 9(1), as amended through St.1973, c. 939, provides that "(a)ny person who purchases . . . services or property . . . primarily for personal, family or household purposes and thereby suffers any loss of money or property . . . as a result of the use or employment by another person of an unfair or deceptive act or practice . . . may . . . bring an action . . . for damages and such equitable relief, including an injunction, as the court deems to be necessary and proper." The Legislature added this private remedy provision to c. 93A by St.1969, c. 690, so that individual consumers could obtain relief through their own actions for injuries caused by violations of § 2. The Attorney General had been unable effectively to obtain relief for individual consumers because of the tremendous volume of complaints his office received after the enactment of c. 93A. Slaney v. Westwood Auto, Inc., 366 Mass. 688, 698-699, 322 N.E.2d 768 (1975).

Chapter 93A, § 3(1)(a ) (inserted by St.1967, c. 813, § 1), also provides that nothing in c. 93A applies to "transactions . . . otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of the commonwealth." Consequently, neither the Attorney General nor an individual consumer can maintain an action under c. 93A based on practices permitted under c. 176D. See SDK Medical Computer Servs. Corp. v. Professional Operating Management Group, Inc., --- Mass. ---, --- ^a, 354 N.E.2d 852 (1976) (procedure for ensuring lack of conflict). The provisions of cc. 176D and 93A, thus, overlap but do not conflict.

Chapter 176D on its face does not exclude application of c. 93A to unfair and deceptive insurance practices. Section 8 of that chapter clearly contemplates concurrent application of "other laws of this commonwealth." One such applicable law is G.L. c. 90, § 34M, a portion of the no-fault motor vehicle insurance statutory scheme, which provides that a person to whom benefits are due under a no-fault policy shall be deemed a party to a contract with the insurer responsible for payment if the benefits due remain unpaid for more than thirty days. This right of action in contract cannot constitute the only other law contemplated by c. 176D, § 8, because c. 176D, § 3, prohibits acts and practices which need not result in delay of no-fault claims payment (and therefore do not necessarily make available the contract remedy provided by c. 90, § 34M) and because c. 176D, § 8, makes applicable to illegal insurance practices "other laws," not "other law." ⁵

Nothing in c. 176D by implication excludes c. 93A from the phrase "other laws." The legislative failure to enact a private remedy for c. 176D violations does not show an intent to bar all private remedies for unfair and deceptive insurance practices. Like the Attorney General, the Commissioner of Insurance has limited resources with which to vindicate individuals' wrongs, so he too must focus his attention on insurance practices he finds most deleterious to the public interest, leaving small but valid claims unattended. Commercial argues that, although a private right of action would protect such claims, the Legislature did not enact such a remedy in its 1972 amendment to c. 176D. However, one can infer that this omission stemmed from the Legislature's knowledge that such a consumer right of action already existed pursuant to c. 93A, § 9, rather than from a desire to bar such actions. See note 3 supra. Indeed, the Legislature's reenactment of the § 8 saving clause in the 1972 statute makes this inference most logical, and supports our conclusion that c. 176D does not bar application of c. 93A to unfair and deceptive insurance practices.

The mere existence of one regulatory statute does not affect the applicability of a broader, nonconflicting statute, particularly when both statutes provide for concurrent coverage of their common subject matter. See Marshal House, Inc. v. Rent Control Bd. of Brookline, 358 Mass. 686, 697-699, 266 N.E.2d 876 (1971). Cf. SDK Medical Computer Servs. Corp. v. Professional...