United States District Court, D. Massachusetts
BEARBONES, INC., d/b/a MORNINGSIDE BAKERY, and AMARAL ENTERPRISES LLC, Plaintiffs,
PEERLESS INDEMNITY INSURANCE COMPANY, Defendant.
AND ORDER REGARDING DEFENDANT, PEERLESS INDEMNITY INSURANCE
COMPANY'S MOTION FOR SUMMARY JUDGMENT AND BEARBONES, INC.
D/B/A MORNINGSIDE BAKERY AND AMARAL ENTERPRISES LLC MOTION
FOR PARTIAL SUMMARY JUDGMENT AGAINST PEERLESS INDEMINITY
INSURANCE COMPANY UNDER Fed.R.Civ.P. 56 (DKT. NOS. 85 &
KATHERINE A. ROBERTSON, UNITED STATES MAGISTRATE JUDGE.
case arises out of a February 19, 2013 incident in which a
frozen pipe burst causing water damage to a Pittsfield,
Massachusetts commercial bakery (the “Bakery”)
operated by plaintiff Bearbones, Inc., d/b/a Morningside
Bakery (“Bearbones”) in a commercial condominium
unit located at 283 Tyler Street, Pittsfield, MA, (“the
condominium unit”) owned and operated by plaintiff
Amaral Enterprises, LLC (“Amaral”) (collectively,
“Plaintiffs”). In their verified complaint,
Plaintiffs allege that their insurer, Peerless Indemnity
Insurance Company (“Peerless” or
“Defendant”), failed to pay for their covered
losses resulting from the incident and engaged in unfair
claims settlement practices. Plaintiffs assert claims for
breach of contract (Count II) and for unfair and deceptive
acts or practices in violation of Mass. Gen. Laws ch. 93A and
ch. 176D (hereinafter, “Chapter 93A” and
“Chapter 176D”) (Count III). The parties have
filed cross motions for summary judgment. Defendant seeks
summary judgment in its favor as to both the breach of
contract and Chapters 93A and 176D claims, while Plaintiffs
seek partial summary judgment in their favor only on their
Chapters 93A and 176D claim.
parties have consented to this court's jurisdiction (Dkt.
No. 36). See 28 U.S.C. § 636(c); Fed.R.Civ.P.
73. For the following reasons, the court DENIES
Plaintiffs' motion and ALLOWS Defendant's motion.
Standard of Review
judgment is appropriate where, “the pleadings,
depositions, answers to interrogatories and admissions on
file, together with affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.”
Carroll v. Xerox Corp., 294 F.3d 231, 236 (1st Cir.
2002) (citing Fed.R.Civ.P. 56(c)). “A factual dispute
is ‘genuine' if ‘it may reasonably be
resolved in favor of either party' and, therefore,
requires the finder of fact to make ‘a choice between
the parties' differing versions of the truth at
trial.'” DePoutot v. Raffaelly, 424 F.3d
112, 117 (1st Cir. 2005) (quoting Garside v. Osco Drug,
Inc., 895 F.2d 46, 48 (1st Cir. 1990) (citations and
internal quotation marks omitted)). “[A] fact is
‘material' ‘if its existence or nonexistence
has the potential to change the outcome of the
suit.'” Jarvis v. Village Gun Shop, Inc.,
805 F.3d 1, 7 (1st Cir. 2015) (citing Borges ex rel.
S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4 (1st Cir.
ruling on summary judgment, the court “view[s]
‘the entire record in the light most hospitable to the
party opposing summary judgment, indulging all reasonable
inferences in that party's favor.'”
Padilla-García v. Guillermo Rodríguez,
212 F.3d 69, 73 (1st Cir. 2000) (quoting Euromotion, Inc.
v. BMW of N. Am., Inc., 136 F.3d 866, 869 (1st Cir.
1998)). A party seeking summary judgment is responsible for
identifying those portions of the record, “which it
believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). The movant can meet this burden either
by “offering evidence to disprove an element of the
plaintiff's case or by demonstrating an ‘absence of
evidence to support the non-moving party's
case.'” Rakes v. United States, 352
F.Supp.2d 47, 52 (D. Mass. 2005) (quoting Celotex,
477 U.S. at 325). If the moving party meets its burden,
“‘the nonmoving party must come forward with
facts that show a genuine issue for trial.'”
Sensing v. Outback Steakhouse of Fla., LLC, 575 F.3d
145, 152 (1st Cir. 2009) (quoting Carroll, 294 F.3d
at 236). “‘[T]he nonmoving party may not rest
upon mere allegations or denials of [the movant's]
pleading, but must set forth specific facts showing that
there is a genuine issue of material fact as to each issue
upon which he would bear the ultimate burden of proof at
trial.'” Id. (second alteration in
original) (quoting DeNovellis v. Shalala, 124 F.3d
298, 306 (1st Cir. 1997)). “‘The test is whether,
as to each essential element, there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict
for that party.'” Id. at 152-53 (quoting
DeNovellis, 124 F.3d at 306). “Cross-motions
for summary judgment require the district court to
‘consider each motion separately, drawing all
inferences in favor of each non-moving party in
turn.'” Green Mountain Realty Corp. v.
Leonard, 750 F.3d 30, 38 (1st Cir. 2014) (quoting D
& H Therapy Assocs., LLC v. Boston Mut. Life Ins. Co.,
640 F.3d 27, 34 (1st Cir. 2011)).
Findings of Fact 
held a commercial business insurance policy with Peerless
(“the Policy”) effective from October 1, 2012
through October 1, 2013. On February 19, 2013, a frozen pipe
burst in the Bakery causing water damage to the Bakery's
equipment, as well as to the realty. Plaintiffs timely
notified Peerless of the loss.
days later, on February 21, 2013, Matthew Mitchell, an
adjustor for Peerless who was assigned to the loss, and
Martin Scovill, an estimator from Interstate Restoration,
inspected the loss. The following day, Mr. Scovill prepared a
loss estimate of $5, 912.32 relative to some of the water
damage to the building; Mr. Scovill noted in his estimate
that “[m]itigation, drying, and cleaning work [was]
being completed by others, ” and the “[p]roperty
owner has plumber repairing the frozen lines.”
Accordingly, Mr. Scovill noted that the repair scope was
limited and might have to be revisited upon completion of the
February 25, 2013, Plaintiffs forwarded Mr. Mitchell an
estimate from Paul J. Murphy Plumbing & Heating regarding the
cost to repair the plumbing and heating at the Bakery. The
estimate was $5, 631.47 for the plumbing and $4, 297.38 for
February 27, 2013, Plaintiffs forwarded Mr. Mitchell an
invoice from Catamount Response for emergency water
mitigating and drying services rendered following the loss
and an estimate from Catamount to finish remediation and
cleanup of the claimed water damage. The invoice was for $1,
821.20, and the estimate was for $2, 273.79.
document dated March 29, 2013, James Munoz, a commercial HVAC
claims consultant with CIS who Peerless retained to review
Mr. Murphy's estimates, indicated that he had determined
that the estimates prepared by Mr. Murphy for the repairs to
the plumbing and heating systems were in line with national
standards and represented a fair and reasonable estimate to
repair the damage to the HVAC systems.
April 15, 2013, Plaintiffs' counsel, who is also counsel
in the instant litigation, mailed a letter to Defendant
notifying Defendant that he was representing Plaintiffs.
April 16, 2013, Defendant issued a claim payment in the
amount of $11, 672.94, representing $15, 841.17 in building
damage less $3, 168.23 in recoverable depreciation and a $1,
000.00 deductible. The $15, 841.17 figure is the sum of Mr.
Scovill's $5, 912.32 estimate and Mr. Murphy's $5,
631.47 and $4, 297.38 estimates.
April 19, 2013, Mr. Mitchell directed email correspondence to
Plaintiffs inquiring whether Plaintiffs planned to replace or
repair the oven damaged in the loss and requesting
documentation of Plaintiffs' efforts to find a
replacement oven or repair the existing one. In the same
correspondence, Mr. Mitchell indicated that, for Peerless to
consider a claim for business income, Bearbones would have to
submit financial documentation in order for Peerless to
calculate a business income loss. Specifically, Mr. Mitchell
requested a 2012 year tax return (or 2011 if 2012 was not yet
available), monthly profit and loss or income statements,
monthly or weekly sales records for the prior year through
the period of restoration of business operations, and
documentation of payroll if Bearbones was claiming payroll
continued through the period of restoration.
April 22, 2013, Defendant issued payment to Catamount
Response in the amount of $4, 094.99, representing the sum of
the $1, 821.20 invoice and the $2, 273.79 estimate.
April 26, 2013, Arthur Knight, an employee of Peerless,
directed a letter to Plaintiffs' counsel advising that he
was in receipt of Plaintiffs' counsel's April 15,
2013 letter of representation. Mr. Knight indicated that
Plaintiffs' claim remained open while Peerless awaited
documentation to support the business income and business
personal property claims.
10, 2013, Peerless issued a second check to Bearbones and Lee
Bank, the mortgage holder on the condominium unit, for $11,
672.94. The “remarks” accompanying the check
state that it is the “re-issue of prior payment:
replacement cost $15, 841.17, less recoverable depreciation
of $3, 168.23, less $1, 000 deductible. This represents
payment for building repairs.” The Policy provides that
Defendant “will pay for covered loss or damage to real
estate to each mortgageholder shown in the Declarations, or
in an attached schedule, in the order of precedence, as may
appear.” While it is undisputed that Lee Bank was the
mortgage holder, the commercial property coverage part
declarations page of the Policy lists the mortgage holder as
“none, ” and there is no attached schedule
listing Lee Bank as a mortgage holder.
16, 2013, Mr. Mitchell directed correspondence to
Plaintiffs' counsel requesting documents supporting
Plaintiffs' business personal property claim concerning
damage to the oven and Plaintiff's business income claim,
specifically including days and hours of operation, daily
sales for the period 1/1/13 to the present, payroll by pay
period for the period 1/1/13 to the present, monthly sales
tax returns for the period 1/1/12 to the present, monthly
profit and loss statements for the period 1/1/11 to the
present, and 2011 and 2012 income tax returns. The letter
also advised that Peerless had retained the services of LWG
Forensics to inspect the oven in question and provide an
evaluation and indicated that Paul Mullen would be reaching
out to arrange for the inspection.
16, 2013, Plaintiffs' counsel emailed Mr. Mitchell the
2011 income tax return.
following day, May 17, 2013, Mr. Mitchell emailed
Plaintiffs' counsel, referencing and attaching the May
16, 2013 letter and indicating that Peerless “cannot
properly calculate the Business Income loss without the
required documentation.” Mr. Mitchell also requested
that Plaintiff's counsel cooperate with Mr. Mullen to set
up an appointment to allow inspection of the oven.
Mullen inspected the oven on July 2, 2013, and issued a
report on July 18, 2013, indicating that damage to the oven
and two proofing boxes was consistent with exposure to water
due to a frozen pipe bursting. The estimated cost to replace
the oven and proofing boxes was $33, 456.30.
25, 2013, Defendant issued payment in the amount of $16,
728.15 to Bearbones. The “remarks” accompanying
the check state “reimbursement for actual cash value of
business personal property claim damages, reflecting
recoverable depreciation of $16, 728.15.” On August 6,
2013, Plaintiffs' counsel emailed Peerless a monthly
summary of Plaintiffs' business from 2012. Debra Allen
Bok, an employee of Peerless, responded the following day,
indicating that additional information was required to
calculate a loss measure for the business income claim.
August 30, 2013 and October 2, 2013, Mr. Mitchell sent
letters to Plaintiffs' counsel indicating that Defendant
had not received the requested documentation to compute
Plaintiffs' loss of business income and again requesting
the same list of materials requested in his May 16, 2013
correspondence. In the October 2, 2013 letter, Mr. Mitchell
also indicated that, if Defendant did not receive the
requested documentation by October 30, 2013, the claim would
days later, on October 4, 2013, Plaintiffs filed a lawsuit
against Defendant in the Suffolk ...