Fernando v. Fed. Ins. Co.
| Decision Date | 28 May 2019 |
| Docket Number | CIVIL ACTION NO. 18-10504-MBB |
| Parties | ASHAN FERNANDO and MEGAN FERNANDO, Plaintiffs, v. FEDERAL INSURANCE CO., and CHUBB GROUP OF INSURANCE COMPANIES d/b/a CHUBB PERSONAL INSURANCE d/b/a CHUBB MASTERPIECE INSURANCE, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM AND ORDER RE: PLAINTIFFS' MOTION TO AMEND COMPLAINT
(DOCKET ENTRY # 9)
Pending before this court is a motion to amend a complaint filed by plaintiffs Ashan Fernando and Megan Fernando ("plaintiffs") under Fed. R. Civ. P. 15(a) ("Rule 15(a)") to add three new defendants in lieu of defendants Chubb Group of Insurance Companies d/b/a Chubb Personal Insurance d/b/a Chubb Masterpiece Insurance. (Docket Entry # 9). Defendant Federal Insurance Company ("Federal") and proposed defendants Chubb National Insurance Co. ("Chubb National"), the Chubb Corporation ("Chubb Corp."), and Chubb Insurance Company of New Jersey ("Chubb New Jersey") (collectively "proposed defendants") oppose the motion. (Docket Entry ## 10, 14). After conducting a hearing, this court took the motion (Docket Entry # 9) under advisement.
Like the original complaint, the proposed amended complaint alleges that Federal and the proposed defendants failed to "fulfill their obligations and to make payment of a covered claim under" a valuable articles insurance policy ("the Policy") issued by Federal. (Docket Entry ## 1, 9-1). The Policy's coverage encompassed loss by theft for itemized jewelry items insured under the Policy for December 11, 2015 to December 11, 2016 time period. (Docket Entry # 9-1).
Because the parties rely on documents extrinsic to the Policy to support or refute the futility of the causes of action, it is helpful to outline the Policy's provisions. The Policy itself states on two different pages that it consists of a "Coverage Summary" and the "entire Masterpiece Policy." (Docket Entry # 10, pp. 19, 22).1 More specifically, the "Introduction" defines the "Policy [as] "mean[ing] your entire Masterpiece Policy, including the Coverage Summary and any Mortgagee's Coverage Summary." (Docket Entry # 10, p. 22). Thesame "Introduction" page in the Policy likewise states, (Docket Entry # 10, p. 22). The Policy also includes an "Itemized Articles" page, which lists various items of jewelry covered under the Policy. (Docket Entry # 10, p. 20); (Docket Entry # 10, p. 23) ("[t]he amount of coverage . . . for each itemized article[] is shown in your Coverage Summary").2 In light of the foregoing language in the Policy, the Policy includes the "Coverage Summary," the "Itemized Articles," and the "Introduction" followed by the language of Policy. (Docket Entry # 10, pp. 19-20, 22-40). In addition, a "Table of Contents" for the Policy confirms the contents of the Policy as the "Introduction," a "Valuable Articles Coverage," (presumably the "Itemized Articles" page), the "Policy Terms," and a "Policy Information Notice."3 (Docket Entry # 10, p. 21).
Separate from the Policy, a cover letter from "Chubb Personal Insurance" to plaintiffs states that, "This mailing contains information about your new insurance policy with Chubb." (Docket Entry # 10, p. 12). The cover letteridentifies and attaches various documents for plaintiffs to review including a "Premium Summary," a "Privacy Notice," and a "Premium Discount Summary."4 (Docket Entry # 10, p. 12). The cover letter also includes language that describes "Chubb Group of Insurance Companies" as a "marketing name." (Docket Entry # 10, p. 12). Viewing the above language defining the "Policy" as the "entire Masterpiece Policy" and the "Coverage Summary," neither this cover letter (Docket Entry # 10, p. 12) nor another cover letter (Docket Entry # 10, p. 13) or the "Premium Summary," the "Privacy Notice," and the "Premium Discount Summary" form part of the actual Policy.5 (Docket Entry # 10, pp. 14-17).
Turning to the facts surrounding the claim as set forth in the proposed amended complaint, plaintiffs' house was burglarized on or about the evening of March 18, 2016, and several items of jewelry covered under the Policy were taken.(Docket Entry # 9-1, p. 5, ¶ 23). Plaintiffs filed a police report with the local police and shortly thereafter filed a claim with "defendants"6 for the covered loss which has been "continuously denied." (Docket Entry # 9-1, pp. 5-6).
The police report recounts that video from a home security system reflects that a "male subject in a grey sweatshirt is seen in the hall of the home" and describes a broken window used "to gain access to the home." (Docket Entry # 9-1, p. 46). The police report denotes the missing items as "stolen" and the incident as "still under investigation." (Docket Entry # 9-1, p. 46). The investigation by Federal and the proposed defendants "did not conclude with any information sufficient to deny the" claim. (Docket Entry # 9-1, p. 6, ¶ 33).
Federal and the proposed defendants denied the claim for several reasons, including that a "jeweler who signed the Appraisals was prohibited by the conditions of his probation from engaging in the jewelry business." (Docket Entry # 9-1, p. 7, ¶ 36). Upon information and belief, Federal and the proposed defendants attended a probation violation hearing for the jeweler to confirm that he "conducted the Appraisals." (DocketEntry # 9-1, p. 7, ¶ 43). During the hearing, a different individual testified that he was the appraiser as opposed to the above-noted jeweler. (Docket Entry # 9-1, pp. 7-8). The court agreed inasmuch as it did not issue "a probation condition violation" against the jeweler for engaging in the jewelry business. (Docket Entry # 9-1, pp. 7-8, ¶¶ 36, 44). Also upon information and belief, Federal and the proposed defendants had an affidavit from this individual "confirming that he, individually, performed the Appraisals." (Docket Entry # 9-1, ¶ 42).
On or about April 20, 2016, plaintiffs sent a formal demand letter ostensibly pursuant to section 11 of Massachusetts General Laws chapter 93A ("chapter 93A") and Massachusetts General Laws chapter 176D ("chapter 176D") to "defendants."7 (Docket Entry # 9-1, pp. 6, 49-51). Plaintiffs sent a second formal demand letter pursuant to chapter 93A and chapter 176D on September 1, 2017 but "defendants"8 "refused to make payments under the Policy or provide a good faith offer" to plaintiffs. (Docket Entry # 9-1, pp. 8, 53-55).
The Policy includes a provision requiring plaintiffs "to bring" an action "within two years of the date of loss."9 (Docket Entry # 9-1, p. 23). Massachusetts also has a two-year statute of limitations, which Federal and the proposed defendants submit applies to the Policy. See Mass. Gen. Laws ch. 175, § 99 ("section 99").10 Plaintiffs maintain that if section 99 applies, the proposed amended complaint relates back to the date of the original, timely-filed complaint under Rule 15(c)(1)(C) because the proposed defendants received notice and will not be prejudiced. (Docket Entry ## 9, 13).
Plaintiffs commenced this action when they filed the original complaint on March 16, 2018, two days before the expiration of the two-year limitations period "from the time the loss occurred" on March 18, 2016 with the theft of itemized articles from their home. On or about April 11, 2018, counselfor Federal and the proposed defendants sent plaintiffs' attorney an email stating that "Chubb Group of Insurance Companies" is no longer used and "was never an entity, corporation, partnership, unincorporated association, or insurance company." (Docket Entry # 9-2). Thereafter, on July 3, 2018, plaintiffs filed the motion seeking leave to amend the complaint. (Docket Entry # 9).
The proposed amended complaint (Docket Entry # 9-1) makes no changes to the factual allegations and the legal claims in the original complaint. (Docket Entry # 1). Rather, the proposed amended complaint seeks to replace defendants Chubb Group of Insurance Companies d/b/a Chubb Personal Insurance d/b/a Chubb Masterpiece Insurance (the "Chubb Entities") with the proposed defendants on the basis that the naming of the Chubb Entities was a "misnomer." (Docket Entry # 9). Plaintiffs do not assert any new claims specific to the proposed defendants. Like the original complaint, the proposed amended complaint asserts the following claims: (1) breach of contract (Count I); (2) breach of the implied covenant of good faith and fair dealing (Count II); and (3) unfair and deceptive acts and practices under section 11 of chapter 93A and chapter 176D (Count III).11 (Docket Entry # 9-1). The original complaint andthe proposed amended complaint assert jurisdiction based on diversity. (Docket Entry ## 1, 9-1); 28 U.S.C. § 1332(a)(1).
Federal and the proposed defendants oppose the motion on the basis of untimeliness and futility. (Docket Entry ## 10, 14). They argue that plaintiffs are seeking to add new defendants, not merely rectify a mistake concerning the identity of the proper parties after the applicable limitations period expired. (Docket Entry # 10, p. 7). They assert that if "[n]one of the [proposed] defendants are parties to [the Policy]," the proposed amended complaint is futile. (Docket Entry # 10, p. 4). If, on the other hand, the proposed defendants are "subject to the terms and conditions" of the Policy, the two-year limitations period in the Policy as well as the applicable statute of limitations under section 99 renderthe "claims against the [proposed] defendants" untimely, according to Federal and the proposed defendants. (Docket Entry # 10, p. 4) (Docket Entry # 14, p. 4).
Rule 15(a) instructs that leave to amend a complaint "'shall be freely given when justice so requires." Foman v. Davis, 371 U.S. 178, 182 (1962) (internal citation omitted). "[T]he grant or denial of an opportunity to amend is...
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