Supreme Judicial Court of Massachusetts, Middlesex
Heard: October 6, 2016.
Protection Act, Insurance, Unfair or deceptive act,
Offer of settlement, Damages. Insurance, Settlement
of claim. Damages, Consumer protection case,
Interest, Punitive. Interest. Judgment,
Interest. Practice, Civil, Judgment, Damages,
action commenced in the Superior Court Department on
March 13, 2003.
case was heard by Brian A. Davis, J., and motions to
alter or amend the judgment were also heard by him.
review by the Appeals Court, the Supreme Judicial Court
granted leave to obtain further appellate review.
Kathleen M. Sullivan for National Union Fire Insurance
Company of Pittsburgh PA.
Leonard H. Kesten (Richard E. Brody also present) for the
Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, &
Lowy, Budd, JJ.
appeal, we consider the proper measure of punitive damages to
be assessed against defendants who engage in unfair or
deceptive insurance settlement practices in violation of G.
L. c. 176D, § 3, and G. L. c. 93A, § 9 (3). The
plaintiffs -- Odin Anderson, his wife, and his daughter --
filed a personal injury action in the Superior Court for
serious injuries Odin suffered after being struck by a bus
owned by Partners Healthcare Systems, Inc. (Partners), that
was being driven by one of its employees. The plaintiffs
filed a separate action, under G. L. c. 176D, and G. L. c.
93A, against Partner's insurers and claims
representatives; proceedings in that action were stayed
pending resolution of the underlying tort claims. After a
trial, a Superior Court jury awarded Anderson $2, 961,
000in damages in the personal injury
action, and awarded his wife and daughter $110, 000 each. At
a subsequent, jury-waived trial, a different Superior Court
judge found that the insurers and claims representatives
violated G. L. c. 93A and G. L. c. 176D by their
"egregious, " "deliberate or callously
indifferent" actions, "designed to conceal the
truth, improperly skew the legal system and deprive the
Andersons of fair compensation for their injuries for almost
a decade." Based on these findings, the judge concluded
that the insurers' and claims representatives'
"misconduct warrants the maximum available sanction . .
., both as punishment for what transpired and as a deterrent
to similar conduct in the future." He awarded the
plaintiffs treble damages, using as the "amount of the
judgment" to be multiplied the combined amount of the
underlying tort judgment and the accrued postjudgment
interest on that judgment. See G. L. c. 93A, § 9 (3); G.
L. c. 176D, § 3 (9) (f) (where violation of G. L. c.
176D is wilful, damages are to be multiplied pursuant to G.
L. c. 93A, § 9 ). The Appeals Court affirmed the
judgment of liability and the amount of the award of damages,
in an unpublished memorandum and order issued pursuant to its
rule 1:28. See Anderson v. National Fire Ins. Co. of
Pittsburgh PA, 88 Mass.App.Ct. 1117 (2015).
granted the defendants' application for further appellate
review, limited to the issue whether postjudgment interest
was included properly in the "amount of the
judgment" to be multiplied under G. L. c. 93A, § 9
(3). We conclude that in a case where the amount of actual
damages to be multiplied due to a wilful or knowing violation
of G. L. c. 93A or G L. c. 176D are based on the amount of an
underlying judgment, that amount does not include
September 2, 1998, while crossing Staniford Street in Boston,
Odin was struck and injured by a bus owned by Partners and
operated by Partners' employee Norman Rice. As a result
of the collision, he sustained serious injuries, including a
fractured skull and intracerebral hemorrhage, that ultimately
required more than one year of medical treatment.
time of the accident, Partners and Rice were insured under
primary and excess policies issued by National Union Fire
Insurance Company of Pittsburgh PA. American International
Group Claims Services, Inc., the primary insurer, and
American International Group Technical Services, Inc., the
excess insurer, were responsible for adjusting claims on
plaintiffs, through counsel, sought to reach a settlement
agreement with the defendants. The defendants rejected the
plaintiffs' demand for settlement and declined to enter
into settlement negotiations. As a result, in May, 2001, the
plaintiffs filed a personal injury action against Partners
and Rice, claiming negligent operation of a motor vehicle,
negligent infliction of emotional distress, and loss of
consortium. In March, 2003, the plaintiffs filed a separate
action against all of the defendants under G. L. c. 176D,
§ 3, and G. L. c. 93A, § 9 (3), alleging wilful and
egregious failure to conduct a reasonable investigation of
the plaintiffs' claims, and failure to effectuate a
prompt, fair, and equitable settlement, notwithstanding that
liability had become "reasonably clear" by the time
the plaintiffs filed their initial complaint. Proceedings in
the second action were stayed, on the parties' joint
motion, pending resolution of the underlying tort action.
in the tort case took place in June and July of 2003. The
jury found that Odin had suffered $2, 961, 000 in damages but
that he was comparatively negligent for forty-seven per cent
of his injuries, thereby reducing the award of damages to $1,
569, 330. Judgment entered for Odin on July 10,
2003, in the amount of $2, 244, 588.93; the total amount
included costs and ...