Where a plaintiff injured in a car accident has brought a personal injury claim against the defendants allegedly responsible, the defendants must be granted summary judgment in light of the plaintiff's prior recovery in an arbitration proceeding against the insurer of the rental car that collided with hers.
Johnson v. Lapan, et al. (Lawyers Weekly No. 13-016-10) (7 pages) (Gardner, J.) (Appellate Division, Western District) Appealed from a decision by LoConto, J., in Worcester District Court. Daniel J. Shanahan for the plaintiff; Stanley A. Shea, of Hassett & Donnelly, for the defendants; Charles C. Gale for the third-party defendants (App. Div. No. 09-ADMS-70010) (March 15, 2010).
Insurance: Skiing Accident – G.L.c. 93A
Where (1) a plaintiff child skier was injured when a defendant snowboarder collided with him, (2) a tort claim filed by the plaintiff against the defendant was settled and (3) the plaintiff has sued the codefendant insurance company which sold the snowboarder's mother a homeowner's policy, claiming that the insurer violated G.L.c. 93A, I hold that judgment should enter for the codefendant insurer because the plaintiff has not demonstrated that the insurer failed to make a reasonable settlement offer at a time when liability had become clear.
Discussion
"Insurers have a statutory duty to ‘effectuate prompt, fair and equitable settlement of a claim in which liability has become reasonably clear.' ... Insurers also have a duty of good faith and fair dealing in insurance settlement negotiations. ... Violation of these duties may give rise to liability under G.L.c. 93A. ...
"In order to determine whether a defendant's liability is ‘reasonably clear,' one must employ an ‘objective test which calls upon the fact finder to determine whether a reasonable person, with knowledge of the relevant facts and law, would probably have concluded, for good reason, that the insurer was liable to the plaintiff.' ... ‘[W]hat matters ... is whether [codefendant Harleysville Worcester Insurance Company] reasonably believed that [its insured's] liability was not clear, or was unreasonable in holding that belief.' ... ‘So long as the insurer acts in good faith, the insurer is not held to standards of omniscience or perfection; it has the leeway to use, and should consistently employ, its honest business judgment.' ... ‘Good faith requires that any settlement decision be made without regard to the policy limits and that the insurer exercise common prudence to discover the facts as to liability and damages upon which an intelligent decision may be based.' ... An insurer's good faith but mistaken evaluation of a claim does not constitute a violation of G.L.c. 176D. ...
"I rule that the plaintiff has failed to prove that liability was reasonably clear in June or September of 2006. Harleysville had two very different versions of the accident from its insured and the claimant, and indeed was in possession of a statement from its insured which suggested that he had not acted negligently. Moreover, while it is true that Harleysville was in possession of the ski statute as early as March of 2004, the mere fact that a snowboarder collides with a skier below him does not conclusively establish that the snowboarder was negligent. Even during the trial of this matter, counsel for [injured skier] Kevin [Yang] conceded that G.L.c. 143, §71O is not a strict liability statute. Thus, it follows that there may be situations where a skier collides with another skier below him on the slope and where no liability results. Harleysville reasonably believed in 2006 that this may be one of those cases. Therefore, I conclude that Harleysville was justified in denying liability at that time.
"... I am not persuaded that Harleysville's adjuster told [plaintiff's counsel in the underlying tort action David R.] Cianflone in 2006 that he felt that liability was clear or that he intended to make a substantial offer. However, even if he did say those things, it is clear that his view was not shared by his superiors at Harleysville. [Claims adjuster Stephen] Strouse's request to increase the reserve at that time was denied. Christine Jaworski, a senior general liability supervisor at Harleysville who oversaw the work of both Strouse and his successor [Heather] O'Toole, agreed with O'Toole's assessment that liability was not clear. There were perfectly understandable reasons supporting her belief, including the statement of [defendant snowboarder Reed T. Wendorf-]French and the absence of any indication of negligence in the Jiminy Peak incident report There is simply no persuasive evidence of any bad faith on Harleysville's part. ... Strouse may have been wrong in his assessment of the claim, and O'Toole may have ultimately been proven wrong in hers, but a mere mistake in the evaluation of a claim, i.e., bad judgment, does not constitute bad faith or a violation of G.L.c. 176D. ...
"For the foregoing reasons, judgment shall be entered for the defendant, Harleysville Worcester Insurance Company."
Yang v. Wendorf-French, et al. (Lawyers Weekly No. 12-327-09) (9 pages) (Ford, J.) (Berkshire Superior Court) David F. Hassett and Scott T. Ober, of Hassett & Donnelly, for the defendant insurance company; Matthew Mozian, of Compoli & Monteleone, for the plaintiff (Civil Action No. 2006-326) (Dec. 22, 2009).
