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07/19/77 SULA DODD & OTHERS *FN1 v. COMMERCIAL

July 19, 1977

SULA DODD & OTHERS *FN1
v.
COMMERCIAL UNION INSURANCE COMPANY



Suffolk. Bill in equity filed in the Superior Court on March 19, 1974. Motions to dismiss and for summary judgment were heard by Ford, J., and questions of law were reported by him to the Appeals Court. The Supreme Judicial Court granted a request for direct review.

Hennessey, C.j., Quirico, Kaplan, Wilkins, & Liacos, JJ.

SYLLABUS BY THE COURT

Consumer Protection Act. Practice, Civil, Consumer protection case. Jurisdiction, Consumer protection case. Insurance, Unfair act or practice. Statute, Construction.

The opinion of the court was delivered by: Hennessey

An action pursuant to G. L. c. 93A for unfair and deceptive practices by an insurance company was not barred by the provisions of c. 176D. [75-78]

General Laws c. 93A, § 2 (a), is applicable to insurance practices in its prohibition of unfair or deceptive acts or practices in any trade or commerce. [78-79]

Sales of motor vehicle insurance policies constitute sales of property and services within the meaning of G. L. c. 93A, § 9. [79-82]

An allegation by plaintiffs that they suffered losses of money as a result of unfair and deceptive practices by an insurance company in its sales to them of motor vehicle insurance policies stated a cause of action under G. L. c. 93A, § 9 (1). [82]

In an action against an insurance company for unfair and deceptive practices, the company was not exempt from the application of G. L. c. 93A, § 9, under § 3 (1) (b) where the transactions occurred primarily and substantially within Massachusetts. [82]

The plaintiffs, individually and on behalf of other persons similarly situated, brought this action pursuant to G. L. c. 93A, §§ 2 (a), 9, against the defendant (Commercial) in March, 1974. The complaint alleges that Commercial employed unfair and deceptive settlement practices in handling personal injury and property damage claims under the Massachusetts no-fault motor vehicle insurance laws, G. L. c. 90, §§ 34M-34O, et seq., and requests that the court grant the plaintiffs (and others similarly situated) injunctive relief, reasonable attorneys' fees, and monetary relief in the amount of actual damages multiplied by three. Commercial filed a demurrer, treated as a motion to dismiss, in May, 1974, and a motion for summary judgment in December, 1975, both alleging that the complaint fails to set forth a cause of action under c. 93A. A Judge of the Superior Court, relying on the pleadings and a stipulation of all material facts entered into by the parties solely for the purpose of deciding Commercial's motions, entered an interlocutory order denying the motions. At the request of the parties, the Judge stayed the proceedings below and reported the matter of his interlocutory order to the Appeals Court. *fn2 This court granted Commercial's application for direct appellate review.

In their complaint the plaintiffs allege the following facts. The plaintiffs all purchased compulsory motor vehicle insurance policies issued by Commercial and, while insured under these policies, they all submitted claims to Commercial for benefits due them under said policies. They all suffered monetary loss as a result of Commercial's unfair or deceptive acts or practices in settling these claims: -- to wit, (a) failing to respond promptly to claims, investigate claims and settle claims; (b) failing to comply with G. L. c. 90, §§ 34M, 34O, G. L. c. 175, § 111F, G. L. c. 176D, § 3 (9); and (c) failing to disclose adequately the manner or time employed in the handling and satisfaction of insurance claims. The plaintiffs further allege certain facts which, if proved, would substantiate the unfair and deceptive acts and practices set forth in their complaint.

For the purposes of deciding the issues raised by Commercial's motions, and not otherwise, Commercial stipulates that the plaintiff's factual allegations are true. In addition, the parties stipulate that (a) Commercial is a Massachusetts insurance company, 20% of whose gross revenue is derived from transactions in interstate commerce; (b) all claims in this case arose from transactions and actions which occurred primarily and substantially within Massachusetts; (c) the Attorney General has not proposed any action against Commercial under G. L. c. 93A concerning Commercial's claim practices and has not notified the Federal Trade Commission or Commercial of any such proposed action; and (d) the Federal Trade Commission has not sent the Attorney General any written objection to proposed Attorney General action with respect to Commercial practices, or served Commercial with a complaint concerning its business practices. The parties agree that these stipulated facts comprise all the facts material to the issues raised by Commercial in its motions.

Commercial argues that it is exempt from application of c. 93A under § 3 (1) (b) of that chapter and is therefore not subject to actions pursuant to c. 93A, § 9. In the alternative it argues that as a matter of legislative intent c. 176D alone governs unfair and deceptive insurance practices, and consequently c. 93A, and § 9 of that chapter in particular, do not apply to the insurance business. We disagree. We conclude that the provisions of c. 93A apply to unfair and deceptive insurance practices, and that the plaintiffs have stated in their complaint a cause of action pursuant to c. 93A, § 9.

1. General Laws c. 176D contains prohibitions and remedies which overlap provisions of G. L. c. 93A. Commercial maintains that c. 93A is inapplicable to activities which fall within this area of overlap because the Legislature intended that c. 176D preclude concurrent application of c. 93A and that c. 93A ...


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