Heard: November 7, 2016.
action commenced in the Superior Court Department on February
case was heard by Janet L. Sanders, J., on motions for
G. Shapiro for the plaintiff. Nelson G. Apjohn (Eric P.
Magnuson also present) for the defendant.
Michael Sloman, for Automobile Insurers Bureau, amicus
curiae, submitted a brief.
Present: Cypher, Massing, & Sacks, JJ.
plaintiff, Wrbasy Ramirez, appeals from a Superior Court
judgment entered on a motion for summary judgment filed by
Commerce Insurance Company (Commerce). The plaintiff argues
that under the standard Massachusetts automobile insurance
policy, Commerce must pay, as damages on his third-party
claim for the total loss of his automobile, not only the
actual cash value of a replacement vehicle, but also the
applicable sales tax -- even where he has not purchased a
replacement vehicle and incurred the sales tax. We
following undisputed facts are taken from the summary
judgment record. In January, 2014, the plaintiff was involved
in a motor vehicle collision in Danvers with a vehicle driven
by Edith McGuinness. Commerce insured McGuiness through a
2008 edition of the standard Massachusetts automobile
insurance policy (the policy), which contains language
approved by the Commissioner of Insurance.
policy included benefits for third-party property damage
claims where Commerce determined that its insured was legally
responsible for the collision. Specifically, part 4 of the
policy provided: "[W]e will pay damages to someone else
whose auto or other property is damaged in an accident. The
damages we will pay are the amounts that person is legally
entitled to collect for property damage through a court
judgment or settlement. . . . Damages include any applicable
sales tax and the costs resulting from loss of use of the
the policy and the regulations at issue here, damages are
calculated as follows: "Whenever the appraised cost of
repair plus the probable salvage value may be reasonably
expected to exceed the actual cash value of the vehicle, the
insurer shall determine the vehicle's actual cash
value." 211 Code Mass. Regs. § 133.05(1)
(2003). This determination shall be based on
a consideration of all the following factors: (a) the retail
value for an automobile of like kind and quality prior to the
accident; (b) the price paid for the automobile plus the
value of prior improvements to the automobile at the time of
the accident; (c) the decrease in value of the automobile
resulting from prior unrelated damage which is detected by
the appraiser or for which a claim has been paid; and (d) the
actual purchase cost of an available automobile of like kind
and quality. Ibid.
concluded that its insured was legally liable for the
accident and, using the above formula, appraised the
plaintiff's automobile as a total loss. Commerce
determined that the actual cash value for the automobile was
$5, 296. The plaintiff chose to retain the automobile in
accordance with the regulations and Commerce established the
salvage value of the vehicle accordingly. See 211 Code Mass.
Regs. § 133.05(2) ("If the claimant retains title
to the vehicle, the appraiser shall obtain bids from two
geographically convenient licensed salvage companies. The
average of the two bids shall be used as the salvage
value"). See also 211 Code Mass. Regs. § 133.06(1)
-(3) (2003). Because the plaintiff planned to retain the
automobile, Commerce offered him $4, 872.32 to satisfy his
claim. That amount represented the difference between the
automobile's salvage value of $423.68 and its actual cash
plaintiff accepted the damages amount, but objected to the
omission of the Massachusetts sales tax in the calculation of
the amount of his loss. In response, Commerce informed him
that he would be reimbursed for sales tax (applied against
his automobile's actual cash value) upon proof that he
purchased a replacement automobile and incurred the tax.
Commerce subsequently sent the plaintiff a check for a total
loss amount of $4, 872.32, and a second check for $440 in
towing and storage fees in accordance with part 11 of the