Stuart v. A.I.G. Domestic Claims, Inc.
| Decision Date | 21 March 2008 |
| Docket Number | 051765 |
| Citation | 2008 MBAR 032 |
| Parties | Albert Stuart et al.[1] v. A.I.G. Domestic Claims, Inc. et al.[2] |
| Court | Massachusetts Superior Court |
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Lu, John T., J.
The plaintiffs, Albert Stuart and Barbara Stuart (Stuarts), and the defendants, A.I.G. Domestic Claims, Inc. (A.I.G.) and American Home Assurance Co. (American Home), are involved in a dispute over an oil spill cleanup of the Stuarts' property. The defendants, A.I.G. and American Home, move for summary judgment. Finding that there are material issues of fact, the court denies A.I.G. and American Home's motion for summary judgment. The court allows the Stuarts to supplement their expert disclosures to include John Ankiewicz (Ankiewicz), and the court allows A.I.G. and American Home to propound interrogatories to Ankiewicz.
The Stuarts live at 4 Fern Avenue in Amesbury. Oil leaked into the ground next door at 6 Fern Avenue and migrated underground onto the Stuarts' property. The Massachusetts Department of Environmental Protection issued a Notice of Responsibility for the spill to Townsend Oil Co., the insured of American Home. A.I.G. acted as the claim coordinator in the cleanup of the affected properties.
A.I.G Technical Services, Inc. entered into an agreement (access agreement) with the Stuarts for access to perform the necessary cleanup work. The access agreement set out the expected scope of the cleanup, and established a contingency if it turned out that the oil had migrated further than expected. The cleanup required the excavation, removal, and disposal of contaminated soil from the Stuarts' property.
The yet-to-be-completed cleanup exhausted the $1,000,000 policy A.I.G. and American Home withdrew, and this lawsuit ensued.
Summary judgment shall be granted where there are no genuine issues as to any material fact and where the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Comm'r of Corr., 390 Mass. 419, 422 (1983); Cmty. Nat'l Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and that the summary judgment record entitles it to a judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). The moving party may satisfy this burden either by submitting affirmative evidence that negates an essential element of the opposing party's case or by demonstrating that the opposing party has no reasonable expectation of proving an essential element of his case at trial. Flesner v. Technical Commc'ns Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. Gen Motors Corp., 410 Mass. 706, 716 (1991).
The issue on these counts is whether A.I.G. and American Home violated G.L.c. 176D, §3(9)(a), (b), and (f)[3] in the handling of the claim when they withdrew from the cleanup after the policy limit had been reached.
General Laws, c. 176D does not itself provide a private right of action for unfair or deceptive insurance claim settlement practices. Dodd v. Commercial Union Ins. Co., 373 Mass. 72, 75 (1977), Morrison v. Toys "R" Us, Inc., 59 Mass.App.Ct. 613, 616-17 (2003). Any person whose rights have been affected by an insurance practice that violates G.L.c. 176D, §3(9) may sue under G.L.c. 93A. Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 675 (1983).
In Hopkins v. Liberty Mutual Insurance Co., the Supreme Judicial Court explained that G.L.c. 93A, §9(1) and (2) were rewritten to address the Court's decision in Dodd, 373 Mass. at 81-82, "which held that claimants in personal injury and property damage actions, who were not insureds, could not invoke G.L.c. 93A, §9, to seek redress against insurers for violations of G.L.c. 176D, §3(9)." 434 Mass. 556, 565 n.12 (2001). The revision of G.L.c. 93A, §9(1) provided that "any person... whose rights are affected by another person violating the provisions of (G.L.c. 176D, §3(9)), may bring an action under G.L.c. 93A to obtain relief." Id. "The effect of the amendment was to broaden the class of persons who could bring private causes of action for unfair insurance claim settlement practices, beyond purchasers of insurance." Id.
In Clegg v. Butler, the Supreme Judicial Court held that G.L.c. 176D, §3(9)(g) by its text is explicitly restricted to insureds. 424 Mass. 413, 419 n.5 (1997). The Stuarts allege violations of G.L.c. 176D, §3(9)(a), (9)(b), and (9)(f), none of which contain language restricting relief to insureds. Additionally, the Court stated that subsection (f) is "read to apply to any party whose legal interests might be adversely affected by an insurer's failure to effectuate settlement where liability is reasonably clear." Id. Thus, the Stuarts can maintain a cause of action under c. 93A for alleged violations of c. 176D.
There are material issues of fact as to whether A.I.G. and American Home violated G.L.c. 176D, §3(9) as it applies to the Stuarts' G.L.c. 93A count. However, the Stuarts do not have a separate and specific private cause of action under 176D, §3(9). The motion for summary judgment must be denied on Counts I and Count VI.
The Stuarts allege that A.I.G. and American Home breached the terms of the access agreement by failing to fulfill their obligations to return the Stuarts' property to its pre-loss condition. A.I.G. and American Home argue that the unambiguous language of the access agreement does not obligate them to return the Stuarts' property to its pre-loss condition.
"The contract is to be interpreted as a whole." King Features v. Cape Cod Broad., 317 Mass. 652, 654 (1945) (citing Bielanski v. Westfield Savings Bank, 313 Mass. 577, 581 (1943); Murray v. Edes Manuf. Co., 309 Mass. 395, 401 (1941)). "If possible, reasonable effect must be given to all its provisions." Id. (citations omitted). The agreement's "main purpose should be promoted where its language permits." Id. (citing Eustace v. Dickey, 240 Mass. 55, 72 (1921)).
There are material issues of fact as to whether the Stuarts' demand letter was a revised estimate under the access agreement, and whether the disruption to the Stuarts' property was sufficient to bring it within the terms of the access agreement. The motion for summary judgment must be denied on Count II.
The Stuarts allege that A.I.G. and American Home made false statements during the cleanup process which they relied on to their detriment. The Stuarts have made a claim for negligent misrepresentation and not fraudulent misrepresentation.
A.I.G. and American Home allege that there is no issue of material fact as to fraudulent misrepresentation because A.I.G. and American Home met their contractual obligations. Alternatively, A.I.G. and American Home argue that even if they did not perform their contractual obligations, the Stuarts would have to prove A.I.G. and American Home had no intention of performing under the access agreement when they agreed to it, and they cannot do so.
(a) Negligent Misrepresentation
The "plaintiff must show that the defendant, in the course of his business, supplied false information for the guidance of another upon which the plaintiff justifiably relied to his financial detriment and that the defendant failed to exercise reasonable care or competence in obtaining or communicating the information." Cole v. New England Mut. Life Ins., 49 Mass.App.Ct. 296, 300 (2000) (citing Golber v. BayBank Valley Trust Co., 46 Mass.App.Ct. 256, 257 (1999)).
There are material issues of fact whether A.I.G. and American Home supplied false information to the Stuarts during A.I.G. and American Home's performance under the access agreement, whether the Stuarts justifiably relied on that information to their detriment, and whether A.I.G. and American Home failed to exercise reasonable care in communicating information to the Stuarts during its performance. Summary judgment on Count III Negligent Misrepresentation must be denied.
General Laws c. 242, §7 states:
A person who without license wilfully cuts down, carries away, girdles or otherwise destroys trees, timber, wood or underwood on the land of another shall be liable to the owner in tort for three times the amount of the damages assessed therefor; but if it is found that the defendant had good reason to believe that the land on which the trespass was committed was his own or that he was otherwise lawfully authorized to do the acts complained of, he shall be liable for single damages only.
A license is "permission, usually revocable, to commit some act that would otherwise be unlawful; especially, an agreement (not amounting to a lease or profit à prendre) that it is lawful for the licensee to enter the licensor's land to do some act that would otherwise be illegal." Black's Law Dictionary (8th ed. 2004). The access agreement was a license that gave A.I.G....
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