Reicher v. Berkshire Life Ins. Co. of America, 03-1559.
| Court | United States Courts of Appeals. United States Court of Appeals (1st Circuit) |
| Citation | 360 F.3d 1 |
| Docket Number | No. 03-1559.,03-1559. |
| Parties | David L. REICHER, D.P.M.; Affiliated Podiatrists, P.A., Plaintiffs, Appellants, v. BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA; The Guardian Life Insurance Company of America, Defendants, Appellees. |
| Decision Date | 23 February 2004 |
Page 1
v.
BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA; The Guardian Life Insurance Company of America, Defendants, Appellees.
Page 2
Michael K. Mattchen, with whom Edward T. Dangel, III was on brief for appellants.
Edward K. Kimball, with whom David L. Kalib was on brief for appellees.
Before BOUDIN, Chief Judge, LOURIE* and LYNCH, Circuit Judges.
LOURIE, Circuit Judge.
David Reicher and Affiliated Podiatrists appeal from the decision of the United States District Court for the District of Massachusetts dismissing their claims asserting unfair claims settlement practices in violation of Chapter 93A of the Massachusetts General Laws. That decision was based on the district court's finding that the alleged unfair practices had not been conducted "primarily and substantially" within the Commonwealth of Massachusetts, as required by Massachusetts General Laws, Chapter 93A, § 11. We affirm, but on a different ground, concluding that the laws of the State of Maryland apply and bar the appellants' claims.
David Reicher, a resident of Maryland, practiced podiatric surgery with two partners at Affiliated Podiatrists, a professional association incorporated under Maryland law. Berkshire Life Insurance Company was a Massachusetts insurer whose main offices were located in Pittsfield, Massachusetts. Berkshire merged with The Guardian Life Insurance Company of America in July 2001.
Between 1980 and 1991, Reicher purchased a total of seven disability insurance policies from Berkshire. In addition,
Page 3
Reicher and Affiliated Podiatrists purchased two overhead expense policies and two disability buyout policies from Berkshire between 1984 and 1991.
In June 2000, Reicher became disabled and shortly thereafter both Reicher and Affiliated Podiatrists requested disability benefits from Berkshire pursuant to their policies. Over the next several months, Berkshire sought to establish the nature and extent of Reicher's disability at a pace that the claimants deemed too lethargic. As a result, in December 2001, Reicher and Affiliated Podiatrists filed a complaint against Berkshire and Guardian (collectively "Berkshire") in Maryland state court seeking declaratory relief.
The plaintiffs sued on the legal theory of breach of contract, arguing that Berkshire had engaged in "artful neglect" in handling their claims through a lengthy and drawn-out process. Berkshire asserted in response that it had not yet been able to make a benefits eligibility determination. Eventually, on April 24, 2002, the parties reached an agreement and all accrued benefits plus interest under the disability and overhead expense policies were paid. Following a brief trial on the remaining policies, all benefits payable under the disability buyout policies were also paid with interest. On May 9, 2002, the parties entered a stipulation resolving all issues in the lawsuit, and the court issued an order stating that all claims had been fully and finally adjudicated.
Meanwhile, before the conclusion of the settlement agreements and trial in the Maryland action, Reicher and Affiliated Podiatrists indicated to Berkshire their desire to sue in Massachusetts. Seeking attorney fees and damages beyond the insurance policy limits, they claimed that the insurance company also had violated Massachusetts unfair trade practices law, codified in Chapter 93A, § 9, of the Massachusetts General Laws. Berkshire responded that those statutory provisions were inapplicable because the insurance policies were governed by Maryland law.
On April 8, 2002, Reicher and Affiliated Podiatrists initiated suit against Berkshire in Massachusetts state court alleging violations of Chapter 93A. Specifically, the plaintiffs claimed that Berkshire's treatment of their insurance claims, the same activity upon which the Maryland action was based, amounted to unfair claims settlement practices actionable under Massachusetts consumer protection laws. Berkshire promptly removed the case to the United States District Court for the District of Massachusetts based on diversity of citizenship, and it filed a motion to dismiss based on res judicata or, alternatively, failure to state a claim upon which relief could be granted.
Although the district court held that res judicata did not bar the plaintiffs' claims, it did agree with Berkshire that the plaintiffs had failed to state a claim under Chapter 93A. Relying on § 11 of that chapter, the court stated that plaintiffs had not established that Berkshire had engaged in wrongful conduct which occurred "primarily and substantially" within Massachusetts. Reicher and Affiliated Podiatrists moved for reconsideration, arguing that they had brought their case under Chapter 93A § 9, not § 11, and that the "primarily and substantially" language had been purposefully removed from § 9. The district court denied that motion, and the plaintiffs timely appealed.
On appeal, Reicher and Affiliated Podiatrists renew their argument that the district court relied on the wrong section of Chapter 93A, § 11. Instead, they urge an application of § 9, asserting that the case
Page 4
should be decided on the merits under Massachusetts law because § 9 does not contain the "primarily and substantially" language found in § 11. Berkshire, however, responds that the laws of Maryland, not Massachusetts, should apply because Maryland has the stronger interest in the present litigation and issues therein. We address the question of choice of law as a threshold matter.
Choice of law determinations are legal questions over which courts of appeal have plenary review, see Crellin Techs., Inc. v. Equipmentlease Corp., 18 F.3d 1, 4 (1st Cir.1994), and we accordingly review the issue de novo, see In re San Juan Dupont Plaza Hotel Fire Litig., 45 F.3d 569, 576 (1st Cir.1995). It is axiomatic that state substantive law must be applied by a federal court sitting in diversity jurisdiction. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The question of which state's law applies is resolved using the choice of law analysis of the forum state — in this case,...
To continue reading
Request your trial
-
Fine v. Guardian Life Ins. Co. of Am., Case No. 3:19-cv-30067-KAR
...whether an actual conflict exists between the substantive laws of the interested jurisdictions." Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 4 (1st Cir. 2004). See Auctus Fund, LLC , 405 F. Supp. 3d at 226 ("Before deciding which law to apply, Massachusetts courts ‘consider wheth......
-
Ayyadurai v. Floor64, Inc., Civil Action No. 17–10011–FDS
...to the interests of the parties, the States involved, and the interstate system as a whole.’ " Reicher v. Berkshire Life Ins. Co. of Am. , 360 F.3d 1, 5 (1st Cir. 2004) (quoting Bushkin Assocs., Inc. v. Raytheon Co. , 393 Mass. 622, 631, 473 N.E.2d 662 (1985) ). That approach is guided by t......
-
Duggan v. Martorello
...Life Ins. Co. of Am. & Park Ave. Sec., LLC, 450 F.Supp.3d 20, 27 (D. Mass. 2020) (quoting Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 4 (1st Cir. 2004)). If so, “Massachusetts courts will uphold the parties' choice as long as the result is not contrary to public policy.” Id. at 3......
-
Citizens Ins. Co. of Am. v. Phx. Bay State Constr. Co., SUPERIOR COURT CIVIL ACTION DOCKET NO. CV-17-097
...be governed by Maine law such that Massachusetts claims would be barred. 455 A.2d at 918; see Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 6 (1st Cir. 2004). Plaintiff's motion to dismiss was filed shortly after MMC's answer and counterclaims were filed, however, and the parties c......