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Calandro v. Sedgwick Claims Management Services

United States District Court, D. Massachusetts

April 25, 2017

GARRICK CALANDRO, AS ADMINISTRATOR OF THE ESTATE OF GENEVIEVE CALANDRO, Plaintiff,
v.
SEDGWICK CLAIMS MANAGEMENT SERVICES, Defendant.

          MEMORANDUM AND ORDER

          Patti B. Saris Chief United States District Judge

         INTRODUCTION

         Plaintiff Garrick Calandro, as administrator of the estate of Genevieve Calandro, alleges that Sedgwick Claims Management Systems, Inc. (“Sedgwick”) violated Massachusetts General Laws Chapter 176D (“Chapter 176D”) and Massachusetts General Laws Chapter 93A (“Chapter 93A”) by failing to make any kind of reasonable attempt both pre-judgment and post-judgment to settle the negligence and wrongful death case involving his mother who died at a nursing home. Defendant Sedgwick has moved for summary judgment on the ground that it did make a prompt, fair, and equitable settlement offer within the “safe harbor” provided by Chapter 93A. After hearing, Defendant's Motion for Summary Judgment (Docket No. 65) is DENIED.

         FACTUAL BACKGROUND

         The facts below are interpreted in the light most favorable to the non-moving party and are undisputed except where stated.

         On August 12, 2011, Plaintiff filed a wrongful death action against the Radius Group (“Radius”) alleging that his 92 year-old mother's death was caused by negligence on August 16, 2008 at a nursing home. Radius, the nursing home operator, was under a liability insurance policy issued by Pacific Insurance Company.[1] The policy is an occurrence policy in the amount of $1 million covering the period from June 1, 2008 to June 1, 2009. Pacific Insurance Company is a member of the Hartford Insurance Group (“Hartford”).

         Hartford engaged Sedgwick to be a third party administrator (“TPA”) for the underlying wrongful death case. As a TPA, Sedgwick was authorized to handle claims under Hartford's policies and provide claims adjusting and administrative services. Mary Blair was Sedgwick's claim handler and supervisor for the underlying wrongful death claim. Ms. Blair's settlement authority was capped by Hartford at $125, 000. She needed to get authority from Hartford to settle above that amount.

         While the case was pending, Plaintiff made the following settlement demands:

1. October 12, 2011: $500, 000;
2. November 12, 2013: $500, 000;
3. March 2014: $1, 000, 000;
4. July 3, 2014: $1, 000, 000.

         In early July 2014, a co-defendant physician settled with Plaintiff for $250, 000.

         The case went to trial. On July 21, 2014 the jury returned a verdict of $1, 425, 000 in compensatory damages and made a finding of gross negligence. On July 22, 2014, following additional testimony, the jury awarded Plaintiff $12, 514, 605 in punitive damages. On July 31, 2014, Hartford offered to settle for $1 million, Plaintiff rejected this offer. On August 1, 2014, the Court entered judgment in the amount of $14, 447, 906.51 including pre-judgment interest and costs.

         On September 30, 2014, Plaintiff sent a demand letter under Chapter 93A section 9 to Sedgwick demanding $40 million. Sedgwick received the letter on October 2, 2014 and responded to the letter on October 30, 2014 by offering $1, 990, 197. This offer represented the $1, 425, 000 compensatory award, prejudgment interest entered in the amount of $504, 966, post-judgment interest through November 1, 2014 of $58, 375 on the compensatory award, and the costs awarded to Plaintiff of $1, 856. Plaintiff rejected this offer and filed this suit on December 5, 2014. In November of 2014, Hartford settled with Plaintiff for $16 million, reflecting the $1 million policy limit and an additional $15 million. Of the total, $1, ...


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