Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—Mass. App.: Insurance company evades consumer’s deceptive acts claims, (Aug 7, 2015)

By Greg Hammond, J.D.

A consumer failed to demonstrate that his insurance company violated Massachusetts consumer protection and deceptive acts or practices laws by failing to effectuate a prompt, fair, and equitable settlement of earlier litigation arising out of damage to the consumer’s business. The Massachusetts Appeals Court in Boston determined that the amount of damages was not reasonably clear once the consumer chose to appeal multiple claims previously found to be without merit (Silva v. Steadfast Insurance Co., August 7, 2015, Kafker, S.).

After a botched demolition of an adjacent building caused the building to collapse on consumer Gary Silva’s auto body and repair business, Silva sued the demolition company, obtaining judgment in the amount of $671,216. Silva, however, made no demands on the demolition company or his insurance company—Steadfast Insurance Co.—to pay the judgment. Instead, he appealed directed verdicts, his trespass claim, and the amount of damages awarded. Silva subsequently filed a separate suit alleging that Steadfast violated Massachusetts consumer protection and deceptive acts or practices laws by failing to effectuate a prompt, fair, and equitable settlement after the original judgment in Silva’s favor. The lower court found that Steadfast did not violate Massachusetts law because Silva rendered uncertain Steadfast’s liability by appealing the underlying judgment.

The appeals court affirmed the lower court’s decision, first noting that Silva did not seek to enforce the judgment, make a settlement request, or demand for payment. Instead, he appealed the judgment on multiple grounds, opening up the scope of liability and the amount of damages. An additional complicating matter, according to the court, was that Steadfast previously paid Silva $186,464, which was the subject of Silva’s second round of appellate litigation. Because the amount of damages was not reasonably clear once Silva chose to appeal multiple claims, Steadfast did not as a matter of law engage in unfair and deceptive practices, the court concluded. Further, the subsequent appellate and post-judgment litigation confirmed the reasonableness of Steadfast’s actions, because Silva’s claims were once again determined to be without merit and the amount of damages required multiple adjustments in the trial court.

The case number is 14-P-987.

Attorneys: Mark J. Albano (Albano LLC) for Gary P. Silva. Timothy O. Egan (Peabody & Arnold LLP) for Steadfast Insurance Co.

Companies: Steadfast Insurance Co.

Cases: StateUnfairTradePractices MassachusettsNews