Neustadt v. Employers Liab. Assur. Corp.

• Decision Date: 07 June 1939
• Citation: 21 N.E.2d 538,303 Mass. 321
• Parties: NEUSTADT v. EMPLOYERS LIABILITY ASSUR. CORPORATION, Limited, et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

303 Mass. 321

21 N.E.2d 538

NEUSTADT

v.EMPLOYERS LIABILITY ASSUR. CORPORATION, Limited, et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 7, 1939.

Action by Maurice S. Neustadt against the Employers Liability Assurance Corporation and others for an injunction. From decrees dismissing the bill, plaintiff appeals.

Interlocutory decree sustaining demurrers affirmed. Final decree affirmed.Appeal from Superior Court, Suffolk County; Hanify, Judge.

E. W. Hadley, of Boston, for appellant.

J. T. Hargraves, of Boston, for appellee Employers Liability Assur. Corporation, Limited.

R. P. Baldwin, of Boston, for appellee Massachusetts Bonding & Ins. Co.

E. R. Langenbach, of Boston, for appellee Preferred Accident Ins. Co. of New York.

COX, Justice.

The plaintiff appealed from the decrees sustaining the several demurrers of the defendants and from the final decree dismissing his bill.

The allegations of the bill fall into two classifications. Material allegations of the first classification are to the effect that the plaintiff, since March 30, 1936, has been an insurance broker in this Commonwealth, duly licensed to negotiate contracts of insurance; that the defendant insurance companies are legally bound to accept and issue policies on applications for insurance procured by the plaintiff from members of the public desiring insurance, unless the defendants have a just and reasonable cause for refusal; that the businesses of the plaintiff and the defendants, particularly with reference to compulsory motor vehicle liability insurance, are affected with the public interest; that the defendants have refused, for no reason, to accept applications secured by the plaintiff for insurance, including compulsory motor vehicle liability insurance, but have dealt directly with the plaintiff's customers, whereby the plaintiff has suffered damage to his business; and that the defendants have informed the plaintiff that they will continue to refuse to accept applications from him.

Allegations of the second classification, based upon information and belief, are to the effect that the defendants have unlawfully combined with each other and with other insurance companies unknown to the plaintiff to destroy his business, and to restrain free trade and competition in the business of insurance brokerage, and to restrain such free trade by the plaintiff. The material allegations are that the defendants have combined and agreed to establish ‘approved lists of brokers,’ through whom they will write insurance, and to write no insurance through other brokers, and that the defendants have refused to include the plaintiff and many other duly licensed brokers in such lists, whereby the plaintiff's business has been damaged. It is also alleged in this connection that the conduct of the defendants has made it difficult or less expeditious for many members of the public to obtain insurance. The bill is brought for the benefit of the plaintiff, other duly licensed brokers, and the public, and prays for an injunction against the various acts of the defendants, as alleged, the assessment of damages, and general relief.

The separate demurrers of the defendants allege among other grounds that the bill does not state concisely and with certainty the acts necessary to constitute a cause of action and to entitle the plaintiff to equitable relief. We are of the opinion that the demurrers were rightly sustained on this ground, and it is, therefore, unnecessary to consider the other grounds; nor is it necessary to deal with the pleas in bar which were not passed upon in the Superior Court.

The basis of the ground for equitable relief contained in the first part of the plaintiff's bill is that the defendants owed the plaintiff a duty to accept applications for insurance presented by him, unless there was a just and reasonable cause for refusal, and that the defendants are guilty of a breach of such duty. It is true that under the provisions of G.L.(Ter.Ed.) c. 175, § 113D, as amended by Sts.1933, c. 119, §§ 2, 3; 1933, c. 146; 1934, c. 379 (see St.1938, c. 311), applicants for insurance are provided with the machinery to compel the issuance of a policy where an insurer, without just cause, has refused to issue a policy of compulsory motor vehicle liability insurance. See Factory Mutual Liability Ins. Co. of America v. Justices of the Superior Court, Mass., 16 N.E.2d 38. But there is nothing in the statute to indicate that the duty to issue such policies is owed not only to applicants for insurance but also to brokers who present such applications. Indeed, a reading of the statute seems to indicate that the right to enforcement is given only to applicants for insurance. In fact the statute provides that ‘The board [of appeal on motor vehicle liability polices and bonds] shall * * * make a finding as to whether or not the complainant is a proper and suitable person to whom to issue such a policy * * *.’ G.L. (Ter.Ed.) c. 175, § 113D, par. 4, as amended by St.1933, c. 146, § 1. It has heretofore been pointed out, moreover, that the express terms of the statute giving applicants the right to compel companies to issue such policies constitute serious limitations upon customary methods of conducting the insurance business. Opinion of the Justices, 251 Mass. 569, 613, 147 N.E. 681. In such circumstances any implication of rights in favor of brokers is not to be favored. Commonwealth v. Beck, 187 Mass. 15, 17, 72 N.E. 357;Wilson v. Grace, 273 Mass. 146, 154, 173 N.E. 524. But even if we assume that the plaintiff had the same rights as an applicant, the bill fails to show that recourse to the remedies provided by the statute for the enforcement of rights is not available to him. Compare Cosmopolitan Trust Co. v. Cohen, 244 Mass. 128, 134, 138 N.E. 711.

It follows that the allegations of the bill contained in the first classification do not set forth a ground for relief in equity in so far as they are based upon the provisions of statutes dealing with insurance, nor does the allegation that the defendants dealt directly with the plaintiff's customers add anything in this respect. Not only does this allegation rebut other allegations in the bill to the effect that it is difficult for the plaintiff's customers to obtain insurance, but it goes no farther than to allege a possible wrong, for the redress of which an action at law to recover commissions earned is, as far as the bill discloses, available to the plaintiff. Compare McAuslan & Nutting, Inc. v. Futurity Thread Co., 254 Mass. 216, 218, 150 N.E. 96.

The basis of the ground for relief set out in the allegations of the second classification is the unlawful conspiracy or combination of the defendants and others causing damage to the plaintiff's business. But the effect of the charge that the defendants...