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Calandro v. Sedgwick Claims Management Services

United States District Court, D. Massachusetts

November 21, 2017



          Patti B. Saris Chief United States District Judge.


         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 reasonable attempt -- both pre-verdict and post-verdict -- to settle the negligence and wrongful death claims involving his mother who died at a nursing home in Danvers, Massachusetts.

         After a four-day bench trial, the Court finds that Sedgwick did not violate Chapters 176D and 93A. The evidence presented at trial showed that, although both sides engaged in tough litigation tactics, the element of causation on Calandro's wrongful death claim was never reasonably clear. Even though causation was reasonably clear on Calandro's conscious pain and suffering claim, Sedgwick made two reasonable settlement offers when causation on that claim was reasonably clear. Sedgwick also attempted to engage in negotiations one month before trial, but was rebuffed by Calandro's attorney. Calandro also alleges statutory violations stemming from post-verdict or post-judgment settlement offers. For the reasons set forth below, Sedgwick's conduct at those times did not violate Chapters 176D and 93A.

         Therefore, the Court finds that Sedgwick did not violate Chapters 93A and 176D. Judgment shall enter for Defendant.

         FINDINGS OF FACT[1]

         I. Background

         A. The Parties

         The plaintiff, Garrick Calandro (“Calandro”), is the administrator of his mother Genevieve Calandro's estate. Sedgwick Claims Management Services, Inc. (“Sedgwick”) is a third-party administrator (“TPA”) of insurance claims. Hartford Insurance Company, through its subsidiary, Pacific Insurance Company (“Hartford”), issued a liability insurance Policy No. 2Y0004802 naming four out of five of the “Radius Entities” as insureds excluding Roush & Associates, Inc. The policy was an occurrence policy in the amount of $1 million, covering the period June 1, 2008 to June 1, 2009.

         There were five “Radius Entities”: Radium Management Services, Inc., Radius Management Services II, Inc., Roush & Associates, Inc., Radius Danvers Operating, LLC, and Radius BD. For convenience, the Court refers to the entities collectively as “Radius”. In connection with its healthcare line of business, Hartford engaged Sedgwick as a TPA pursuant to written contract(s). Under the terms of those written contracts, Sedgwick must undertake certain actions in adjusting claims, and has contractual reporting requirements vis-à-vis a claim involving a fatality. The operative contract at the time of Calandro's claim set forth a list of standards for handling and adjusting that claim and others similar to it.

         Dr. David Wahl was Ms. Calandro's personal physician at all times relevant to Calandro's underlying negligence claims.

         B. Genevieve Calandro's Death

         Genevieve Calandro died on August 16, 2008 at age 91, five weeks after she last resided at Radius Danvers, a long-term skilled nursing facility where Ms. Calandro had lived for a six-month period between late December 2007 and July 10, 2008.

         On July 10, 2008, at the Radius Danvers facility, Ms. Calandro fell from her wheelchair, hit her head, and was taken by ambulance to Beverly Hospital. Upon her admission to Beverly Hospital, Ms. Calandro was dehydrated, had undiagnosed acute appendicitis, renal failure, uncontrolled diabetes, a severe bed sore, a urinary tract infection (“UTI”), and a high white blood cell count. She also had dementia. She was discharged from Beverly Hospital on July 22, 2008 and admitted to a different nursing home. Ms. Calandro died on August 16, 2008. Her death certificate lists congestive heart failure and acute renal failure as the causes of death, along with various other conditions that contributed to her death.

         II. Timeline of Sedgwick's Pre- and Post-Judgment Conduct

         A. The Underlying Lawsuit

         On August 16, 2011, Calandro filed suit against Radius alleging negligence, gross negligence, and wrongful death. The complaint included a prayer for punitive damages. Calandro served the summons and complaint on Radius in October 2011. In July 2012, the plaintiff amended the complaint to add Dr. Wahl as a defendant. Calandro's lead trial counsel was David Hoey.[2]

         B. Sedgwick Claims Management Services

         The terms under which Sedgwick acted as a TPA for Hartford are set out in a Third Party Administrator Agreement and the Service Requirements in that Agreement. After Radius received service of the summons and complaint in October 2011, Sedgwick assigned Mary Blair (“Blair”), an experienced claims adjuster at Sedgwick who had previously worked at Hartford, to adjust the claim. Blair engaged Bistany Adjustment Service (“Bistany”) to investigate the claim. Hartford, via Blair, hired attorney Lawrence Kenney (“Kenney”) to serve as counsel for the insureds in the litigation.

         Bistany filed two investigative reports. At the time of its investigation, Radius, including the Danvers facility, was winding up operations or in the process of sale. This fact made the investigation difficult, both in terms of securing documents and identifying witnesses. Indeed, no incident report of Ms. Calandro's fall from her wheelchair was ever found.

         Bistany conducted interviews with two nurses who worked at the Danvers facility at the time of Ms. Calandro's fall, one of whom told him that she remembered the fall and stated that a contemporaneous incident report was prepared. Bistany found the names of the two nurses in Ms. Calandro's clinical chart, which Calandro's attorney already had in his possession.

         Although Bistany conducted interviews with the two nurses, Radius -- via Blair and Kenney -- did not disclose their names in response to Calandro's very-late filed interrogatories in the underlying case. Instead, Kenney objected to the interrogatories as untimely (they were), separately writing a letter to Hoey advising him of the difficulty of obtaining responsive information in light of the winding up of Radius ...

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