Wilson v. Sentry Ins. Co.

Decision Date25 February 2022
Docket Number21-P-399
Citation182 N.E.3d 348 (Table),100 Mass.App.Ct. 1126
Parties Daniel WILSON v. SENTRY INSURANCE A MUTUAL COMPANY & others.
CourtAppeals Court of Massachusetts
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

After he was convicted of workers’ compensation fraud, plaintiff Daniel Wilson filed a civil complaint alleging that representatives of his former employer, Southworth-Milton, Inc. (SMI), conspired to extort him while negotiating the settlement of his workers’ compensation claim. The defendants in the civil action included Attorney Teresa Brooks Benoit,4 who represented Wilson during settlement negotiations; SMI; SMI's workers’ compensation claims coordinator, Camille Kantorski; SMI's insurer, Sentry Insurance a Mutual Company (Sentry); one of Sentry's attorneys, Thomas G. Bradley; Attorney Bradley's law firm; and a Sentry claims adjuster, Jodie Driscoll. On appeal, Wilson claims error in rulings on (1) SMI and Kantorski's motion to dismiss, (2) multiple discovery and scheduling orders, and (3) the defendantsmotions for summary judgment. For the reasons that follow, we affirm.

Factual background. We draw the undisputed material facts from the summary judgment record, reserving some facts for our discussion of the issues raised. Wilson was employed by SMI in August 2006, when he sustained a workplace injury for which SMI paid workers’ compensation benefits.5 Following the injury, Wilson earned income from self-employment which he did not report on financial statements he submitted to SMI and Sentry in connection with his workers’ compensation claim.6 While Kantorski, Driscoll, and Attorney Bradley had suspected since July 2007 that Wilson was working and not reporting his income, it was not until October 7, 2008, that Attorney Bradley obtained invoices which confirmed Wilson's unreported income.

On October 8, 2008, Attorney Bradley and Kantorski met Attorney Benoit and Wilson at the Department of Industrial Accidents (DIA) to negotiate a lump sum settlement of Wilson's workers’ compensation claim. At Attorney Bradley's request, Wilson executed an updated earnings report under the pains and penalties of perjury. Again, Wilson failed to disclose his self-employment income. Attorney Bradley then confronted Attorney Benoit with the invoices, told her that SMI had "no interest" in reporting Wilson to the insurance fraud bureau (IFB), and offered a lump sum of $1.00 to settle the case. Wilson rejected the offer, but after further negotiations agreed to a lump sum payment of $2,500. SMI agreed to waive its right to recoup any overpayment or workers’ compensation benefits. In a side agreement not reflected on the settlement form submitted to the DIA, Kantorski also agreed that she would not report Wilson to the IFB and that SMI would pay Attorney Benoit a $5,000 fee. Wilson's principal motivation in settling the workers’ compensation claim was avoiding a fraud investigation and a lawsuit seeking to recoup the overpayments. On October 17, 2008, a judge of the DIA approved the lump sum settlement.

After the settlement was approved, Kantorski consulted with another Sentry attorney, Leonard Nason, who told her that the agreement not to report Wilson's fraudulent conduct was a violation of law. Based on that consultation, Kantorski reported Wilson's false statements to the IFB. Ultimately, after a jury trial in the Superior Court, Wilson was convicted on an indictment for workers’ compensation fraud.7 See G. L. c. 152, § 14 (3). After an evidentiary hearing, the sentencing judge declined to order restitution, concluding that the Commonwealth had not proved that "anyone other than the defendant himself is out of pocket as a result of his fraud." Wilson's conviction was affirmed on appeal. See Commonwealth v. Wilson, 83 Mass. App. Ct. 1116 (2013).

Procedural history. Approximately four months after he was convicted of workers’ compensation fraud, Wilson filed a complaint seeking damages from the defendants. Wilson generally alleged that (1) the lump sum settlement of his workers’ compensation claim was a product of extortion, and (2) the defendants breached the agreement not to report Wilson to the IFB and not to seek to recoup overpayments. More specifically, Wilson alleged claims of intentional and negligent infliction of emotional distress, violations of G. L. c. 93A, breach of fiduciary duty, breach of contract, negligence, and loss of consortium.

A Superior Court judge (motion judge) ruled on three motions from which Wilson appeals. First, the motion judge allowed a motion by SMI and Kantorski (together, the SMI defendants) to dismiss the claims for negligent infliction of emotional distress and violation of G. L. c. 93A. Second, the motion judge denied a motion by Wilson for reconsideration of the order of dismissal. Third, the motion judge denied a motion for reconsideration of an order denying, in part, Wilson's motion to compel Attorney Bradley's answers to interrogatories and production of documents.

On January 17, 2019, a different Superior Court judge (second motion judge) entered a scheduling order which imposed a discovery deadline of April 30, 2019. Wilson appeals that order and the denial of a related motion for reconsideration. Wilson also challenges a July 12, 2019 scheduling order entered by a third Superior Court judge (third motion judge).

All defendants also moved for summary judgment on the remaining claims. After the claims against Attorney Benoit were dismissed by agreement of the parties, the third motion judge issued a written decision allowing summary judgment for the remaining defendants.8

Discussion. 1. Motion to dismiss. The motion judge dismissed Wilson's c. 93A claims against the SMI defendants, reasoning that "[t]his dispute between employer and employee does not involve trade or commerce." Our review of the order of dismissal is de novo. See Ryan v. Holie Donut, Inc., 82 Mass. App. Ct. 633, 635 (2012).9

Chapter 93A liability for unfair and deceptive business practices requires "an arm's-length commercial transaction between distinct business entities." Manning v. Zuckerman, 388 Mass. 8, 11 (1983). The statute "does not provide a remedy for disputes arising out of an employer-employee relationship, or for disputes that occur within a single company" (citations and quotations omitted). Psy-Ed Corp. v. Klein, 459 Mass. 697, 719 (2011).

Here, the conduct alleged in the complaint, even if true, arose from Wilson's employment with SMI and the administration of his workers’ compensation claim.10 Such allegations are "fundamentally encompassed within the overarching workers’ compensation framework," Fleming v. National Union Fire Ins. Co., 445 Mass. 381, 383 (2005), and fall outside the scope of G. L. c. 93A. See Maxwell v. AIG Domestic Claims, Inc., 460 Mass. 91, 109 (2011) ("where there is overlap, the remedies of G. L. c. 152 are exclusive of those provided by G. L. c. 93A"). Accordingly, there was no error in the dismissal of Wilson's c. 93A claim against the SMI defendants.

2. Discovery rulings. a. Motion to compel. In 2015, Wilson filed a motion to compel discovery from Sentry, Driscoll, Attorney Bradley, and Attorney Bradley's firm (together, the Sentry defendants) that the Sentry defendants asserted was protected by the attorney-client privilege or work product doctrine. Wilson argued that the judge should order the discovery of the privileged information because Attorney Bradley and Sentry extorted Wilson and, therefore, the crime-fraud exception to the attorney client privilege applied. On August 23, 2016, the motion judge allowed the motion, in part, ordering production of privileged documents and communications created on or after October 8, 2008, the day of the settlement conference.11

Wilson filed a motion for reconsideration in December of 2016. In March 2019, the motion judge allowed the motion for reconsideration, in part, by extending the crime-fraud exception to work product created on or after October 8, 2008.12 The motion judge limited discovery to work product on or after that date because "[t]he untested allegations of extortion provide a reasonable basis to believe only that wrongful intent and conduct occurred at the October 8, 2008 hearing."

Wilson first contends that the motion judge's delay in deciding the motion for reconsideration deprived him of due process because he was unable to conduct depositions before the close of discovery. We are not persuaded. Wilson's choice to wait over two years before pursuing depositions or a ruling on the motion for reconsideration "is no basis to ascribe reversible error to the [motion] judge." Matter of a Grand Jury Investigation, 437 Mass. 340, 360 (2002). Moreover, the decision on the motion to compel did not prevent Wilson from conducting depositions. It merely limited the subject matter of those depositions. There was no due process violation.

Next, Wilson claims that the motion judge misapplied the crime-fraud exception when he limited discovery to information created on or after October 8, 2008. We review the motion judge's decision regarding the application of the crime-fraud exception de novo. Commissioner of Revenue v. Comcast Corp., 453 Mass. 293, 302 n.18 (2009). The crime-fraud exception applies where "the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud" (quotations omitted). Purcell v. District Attorney for the Suffolk Dist., 424 Mass. 109, 112 (1997). The party invoking the exception must prove by a preponderance of the evidence that it applies. Matter of a Grand Jury Investigation, 437 Mass. at 357. This requires a showing that (1) the client was engaged in or planning criminal or fraudulent activity when the privileged communications took place, and (2) "the communications were intended by the client to facilitate or conceal the criminal or fraudulent activity." United States v....

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