Silva v. Steadfast Ins. Co.

• Decision Date: 07 August 2015
• Docket Number: No. 14–P–987.,14–P–987.
• Citation: 35 N.E.3d 401,87 Mass.App.Ct. 800
• Parties: Gary P. SILVA v. STEADFAST INSURANCE COMPANY.
• Court: Appeals Court of Massachusetts

87 Mass.App.Ct. 800

35 N.E.3d 401

Gary P. SILVA

v.STEADFAST INSURANCE COMPANY.

No. 14–P–987.

Appeals Court of Massachusetts, Hampden.

Argued March 5, 2015.

Decided Aug. 7, 2015.

Mark J. Albano, Springfield, for the plaintiff.

Timothy O. Egan, Boston, for the defendant.

Present: CYPHER, KAFKER, & GREEN, JJ.

Opinion

KAFKER

, J.

Gary P. Silva appeals from the entry of summary judgment in favor of Steadfast Insurance Company (Steadfast). In his complaint, Silva claimed that Steadfast violated G.L. c. 176D, § 3(9)

, and G.L. c. 93A, §§ 2 and 11, by failing to effectuate a prompt, fair, and equitable settlement of earlier litigation arising

out of damage to Silva's business caused by a botched demolition project by Associated Building Wreckers, Inc. (Associated), a company insured by Steadfast. Silva maintains that Steadfast should have made a settlement offer after judgment entered in the earlier litigation even though (1) Silva was appealing multiple aspects of that judgment and seeking to expand the scope of both liability and damages, and (2) postjudgment motions by both Silva and Steadfast to recalculate the amount of damages were ultimately allowed. We affirm.

Background. The city of Holyoke hired Associated to demolish an abandoned building that was adjacent to Silva's property, on which Silva operated his auto body and repair business, S & L Automotive. During demolition, which took place on January 19, 2006, the building collapsed onto Silva's property and severely damaged his business. Steadfast was Associated's liability insurer at the time. On December 29, 2006, Silva brought suit in Superior Court against Associated seeking, among other things, damages for his business and property and for personal injuries.¹ At the close of Silva's evidence in that trial, the judge directed a verdict for Associated on Silva's nuisance, strict liability, and G.L. c. 93A claims. At the conclusion of the trial on June 21, 2010, the judge awarded Silva $366,607.36 on his first breach of contract claim,² including damages for building repair, removal, and demolition costs, along with $10,000 for personal property damage. The judge ruled in favor of Associated on Silva's claims for negligence, personal injury, and trespass. Associated did not appeal. Silva appealed the directed verdicts, his trespass claim, and the amount of damages awarded. See

Silva v. Associated Bldg. Wreckers, Inc., 82 Mass.App.Ct. 1106, 2012 WL 2726940 (2012)

. The appeal was ultimately unsuccessful and the judgment was affirmed, resulting in an execution on the judgment issuing to Silva on November 9, 2012, in the amount of $671,216.74. Between the entry of the judgment on June 21, 2010, and the execution issued in November, 2012, Silva made no demands on Associated or Steadfast to pay the judgment or any portion thereof, nor were any offers made by Steadfast to settle the claims.

On November 14, 2012, Silva filed the instant action, alleging that Steadfast violated G.L. c. 176D, § 3(9)

, and G.L. c. 93A, §§ 2 and 11, by failing to effectuate a prompt, fair, and equitable settlement after the original judgment in Silva's favor entered on June 21, 2010.

On December 17, 2012, Associated filed a motion for relief from judgment in the underlying action pursuant to Mass.R.Civ.P. 60(a)

, 365 Mass. 828 (1974), because, it contended, the judgment failed to apply the setoff to the judgment amount provided for by the judge in his written findings. Associated's motion was allowed over Silva's objection.³ The judge found that Silva had already “received insurance payments [from Steadfast] in the amount of $186,464, and [Associated] may offset the award by the amount received [from] the insurance company.” Silva v. Associated Bldg. Wreckers, Inc., 87 Mass.App.Ct. 1104, 2015 WL 478671 (2015). Later, Silva moved to amend the judgment to add additional costs, and that motion was allowed in part. On March 5, 2013, an amended judgment of $342,201.53 entered for Silva, which was comprised of the principal amount of $180,143.36, with prejudgment interest of $75,660.21, postjudgment interest of $84,415.18, and costs of $1,982.79. On March 28, 2013, Steadfast paid Silva the full amount of the March 5, 2013, judgment.

In October, 2013, a judge of the Superior Court held a hearing on the parties' cross motions for summary judgment in the instant case. In January, 2014, the judge granted summary judgment to Steadfast. The judge ruled that Steadfast had not violated G.L. c. 176D because “Silva rendered uncertain the total liability of Steadfast's insured by appealing the June 21, 2010, judgment.” Judgment entered in March, 2014, dismissing Silva's complaint, and Silva filed a timely appeal.

Discussion. 1. Standard of review. “Summary judgment is appropriate

when there are no genuine issues of material fact and the moving party is entitled to judgment as matter of law.” Kanamaru v. Holyoke Mut. Ins. Co., 72 Mass.App.Ct. 396, 398, 892 N.E.2d 759 (2008)

, citing Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002). We view the facts in the light most favorable to Silva, against whom judgment was entered, see ibid., to determine whether he “has ‘no reasonable expectation of proving an essential element’ of his case.” Bobick v. United States Fid. & Guar. Co., 439 Mass. 652, 659, 790 N.E.2d 653 (2003), quoting from Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716, 575 N.E.2d 734 (1991). “Our review is de novo,” Auto Flat Car Crushers, Inc. v. Hanover Ins. Co., 469 Mass. 813, 820 (2014), and “we may consider any ground apparent on the record that supports the result reached in the lower court.” Demeo v. State Farm Mut. Auto. Ins. Co., 38 Mass.App.Ct. 955, 956, 649 N.E.2d 803 (1995), quoting from Gabbidon v. King, 414 Mass. 685, 686, 610 N.E.2d 321 (1993).

2. Relationship between G.L. c. 93A and G.L. c. 176D. General Laws c. 93A, the Massachusetts Consumer Protection Act, protects consumers and businesses alike from unfair business practices that are “immoral, unethical, oppressive, or unscrupulous; or within the bounds of some statutory, common-law or other established concept of unfairness.” Ellis v. Safety Ins. Co., 41 Mass.App.Ct. 630, 640, 672 N.E.2d 979 (1996)

. Similarly, “[G.L.] c. 176D, § 3, prohibits ‘unfair or deceptive acts or practices in the business of insurance,’ and § 3(9) enumerates acts and omissions that constitute unfair claim settlement practices.” Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556, 564, 750 N.E.2d 943 (2001). However, c. 176D, § 3, does not itself provide a private right of action. See Dodd v. Commercial Union Ins. Co., 373 Mass. 72, 75, 365 N.E.2d 802 (1977), superseded in part by statute as stated in Wheatley v. Massachusetts Insurers Insolvency Fund, 465 Mass. 297, 301 n. 7, 988 N.E.2d 845 (2013) ; Morrison v. Toys “R” Us, Inc., Mass., 59 Mass.App.Ct. 613, 617 n. 7, 797 N.E.2d 405 (2003), S.C., 441 Mass. 451, 806 N.E.2d 388 (2004) ; Adams v. Liberty Mut. Ins. Co., 60 Mass.App.Ct. 55, 63 n. 14, 799 N.E.2d 130 (2003). To proceed against an insurer who has violated G.L. c. 176D, § 3(9), a plaintiff must bring a claim under G.L. c. 93A, § 9 or § 11. In the present case, Silva has brought his claim pursuant to c. 93A, § 11, which governs claims by persons acting in a business context. See Frullo v. Landenberger, 61 Mass.App.Ct. 814, 821, 814 N.E.2d 1105 (2004).

It is important to recognize at the outset of our analysis that G.L. c. 93A, § 11

, does not expressly incorporate violations of G.L. c. 176D, § 3(9), in contrast to c. 93A, § 9, which has been

amended to allow consumers to bring c. 93A claims alleging violations of c. 176D without regard to whether those violations constitute an unfair business practice under c. 93A, § 2

. See Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747, 754, 610 N.E.2d 912 (1993) ; DiVenuti v. Reardon, 37 Mass.App.Ct. 73, 79, 637 N.E.2d 234 (1994). That being said, if a business establishes a relevant “business context” between it and the insurer as a prerequisite for liability under c. 93A, §§ 2 and 11, “a judge may nonetheless rely on a c. 176D violation as evidence of an unfair business practice [for the purpose of] § 11.” Northern Security Ins. Co. v. R.H. Realty Trust, 78 Mass.App.Ct. 691, 696 n. 12, 941 N.E.2d 688 (2011). However, “[t]here is no one-to-one relationship between [c.] 176D and [c.] 93A” in the c. 93A, § 11, context, as “violations of chapter 176D run the gamut from those that are somewhat technical to those that are gravely offensive. Given this range, conduct that abridges the unfair claim practice statute may or may not abridge the unfair trade practice statute.” Continental Ins. Co. v. Bahnan, 216 F.3d 150, 157 (1st Cir.2000). This distinction can be important when determining whether an alleged claim settlement practice provides grounds sufficient to overcome a motion for summary judgment in a c. 93A, § 11, action.

3. Classification of Silva's G.L. c. 93A claim. Before reaching the substance of Silva's appeal as it relates to G.L. c. 176D, we first address Steadfast's argument that Silva's G.L. c. 93A claim should be read as a claim under c. 93A, § 9

—the branch of c. 93A that provides a right of action to individual consumers—not c. 93A, § 11. If Silva's claim is determined to fall under the province of c. 93A, § 9, Steadfast argues, the claim should have been dismissed on the ground that Silva failed to send Steadfast a demand letter in compliance with the statute. See Spilios v. Cohen, 38 Mass.App.Ct. 338, 342, 647 N.E.2d 1218 (1995) (“demand letter is a condition precedent to commencing an action under G.L. c. 93A, § 9 ”). Steadfast asserts that Silva's claim falls under c. 93A, § 9, because Silva pursued both personal and business damages. Steadfast also contends that it is unprecedented for third-party claimants in an insurance context to file a claim under c. 93A, § 11, given the lack of privity between third-party claimants and insurers. We are unpersuaded by Steadfast's argument.

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