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Tiede v. Seneca Specialty Insurance Co.

United States District Court, D. Massachusetts

March 15, 2019

MARK TIEDE, Plaintiff, Counterclaim Defendant,
v.
SENECA SPECIALTY INSURANCE COMPANY, Defendant, Counterclaimant.

          MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

          ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE

         Plaintiff Mark Tiede claims that, in March 2010, he was assaulted by two bouncers working at James Joyce, Inc. d/b/a Kitty O'Shea's (“Kitty O'Shea's”), an Irish tavern in Boston. [ECF No. 7 (“Amended Complaint” or “Am. Compl.”) ¶ 4]. He sued Kitty O'Shea's for the assault, and on December 6, 2011, obtained a default judgment for $160, 000, plus interest. On January 17, 2017, having been unable to collect from Kitty O'Shea's, Tiede filed this action against Kitty O'Shea's insurer, Seneca Specialty Insurance Company (“Seneca”). Tiede brings claims against Seneca for unfair and deceptive practices in violation of Massachusetts Chapters 93A and 176D (Count I), as a third-party beneficiary and injured claimant pursuant to the insurance policy (Count II), and to “reach and apply” the insurance policy to his default judgment pursuant to Massachusetts Chapter 175, Sections 112 and 113, and Chapter 214, Section 3(9) (Count III). See generally Am. Compl. Seneca brings one counterclaim for declaratory relief and requests a declaration that Seneca is not liable under the insurance policy issued to Kitty O'Shea's. [ECF No. 10 at 21]. Before the Court are Seneca's Motion for Summary Judgment, [ECF No. 26], and Tiede's Cross Motion for Summary Judgment, [ECF No. 36]. For the reasons discussed below, Seneca's motion is GRANTED and Tiede's motion is DENIED.

         I. FACTS[1]

         Seneca issued an insurance policy to Kitty O'Shea's that was effective from February 11, 2010 to February 11, 2011. Seneca Facts ¶ 1. The policy covered inter alia sums that Kitty O'Shea's became obligated to pay for “bodily injury.” Id. ¶ 2. The policy also provided:

If a claim is made or “suit” is brought against any insured, you must:
(1) Immediately record the specifics of the claim or “suit” and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or “suit” as soon as practicable.
You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or “suit.” Id. The policy defined “you” and “your” as “the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy.” Tiede Facts ¶¶ 29-31; [see also ECF No. 37-1].

         Tiede claims that on the evening of March 20, 2010, for no apparent reason, two bouncers employed by Kitty O'Shea's dragged him out of the tavern and repeatedly punched him in the face and head. Seneca Facts ¶ 3. On December 29, 2010, Tiede's attorney, Charles Pappas, asked Kitty O'Shea's to put its insurance carrier on notice of Tiede's claim. Id. ¶ 4. Kitty O'Shea's notified its insurance broker, which in turn notified Seneca about the incident involving Mr. Tiede. Id. ¶¶ 5-6. On February 8, 2011, Seneca acknowledged the claim and informed Kitty O'Shea's that it was undertaking an investigation under a reservation of rights. Id. ¶¶ 8, 17. On February 17, 2011, Seneca also wrote to Attorney Pappas and informed him that Seneca had received his December 29, 2010 letter of representation and was investigating the claim. Id. ¶ 10. Seneca contracted Mark Adjustment Service, Inc. (“Mark Adjustment”) to conduct the investigation. Id. ¶¶ 19-21. Mark Adjustment interviewed witnesses, spoke to Tiede's attorneys about his version of events, and then produced a 12-page initial report. Id. ¶¶ 21, 29. The report indicates that Kitty O'Shea's management denied that any of their employees had assaulted Tiede and found weaknesses in the facts asserted by a friend of Tiede's who was present on the night in question. Id. ¶ 21; [see generally ECF No. 28-15]. The report concluded that a lawsuit “may be the only way the true facts will come out.” [ECF No. 28-15 at 10].

         On February 14, 2011, Tiede filed a lawsuit against Kitty O'Shea's in Worcester Superior Court (“Superior Court”). Seneca Facts ¶ 9. Tiede's attorneys claim that they informed Seneca that they had filed suit in February 2011, and that they also informed Karen Downing of Mark Adjustment that they had filed the lawsuit. ECF No. 37 at 6; Tiede Facts ¶ 16. Additionally, the report prepared by Mark Adjustment shows that as of March 1, 2011, Kitty O'Shea's believed that Tiede was planning to or had filed suit, but that it had not been served with the complaint or summons. Seneca Facts ¶ 22.[2]

         On April 23, 2011, Tiede served Kitty O'Shea's registered agent, Thomas Medaglia, Jr., with the complaint and summons. Id. ¶ 32. Mr. Medaglia did not pass the complaint and summons along to Kitty O'Shea's management or to Seneca, and Tiede did not inform Seneca that it had served Kitty O'Shea's or send Seneca a copy of the complaint. Id. ¶¶ 27-28, 33-34. On June 16, 2011, the Superior Court entered a default against Kitty O'Shea's. Id. ¶ 36. Tiede did not notify Seneca that he had obtained the default against Kitty O'Shea's. Id. ¶¶ 37-38. On October 5, 2011, Tiede filed a Motion for an Assessment of Damages Hearing and entry of a Final Judgment against Kitty O'Shea's. Id. ¶ 39. On November 17, 2011, Tiede served Kitty O'Shea's registered agent and Kitty O'Shea's officers with his Motion for an Assessment of Damages Hearing and informed them of the assessment of damages hearing scheduled for November 29, 2011 before the Worcester Superior Court. Id. ¶ 40. Tiede did not notify Seneca of the hearing. Id. ¶ 41.

         Attorney Mahaney appeared at the hearing for Tiede and was asked by Judge McCann if an insurer was involved in the matter. Id. ¶¶ 42-43. Mahaney replied-despite the February and March 2011 communications between Tiede's attorneys and Seneca-that he “had not heard and was surprised.” Id. ¶ 44. On Friday, December 2, 2011, Seneca received notice of the assessment of damages hearing from Kitty O'Shea's insurance agent, and responded by retaining counsel “to attempt to vacate the default judgment and the assessment.” Tiede Facts ¶ 39. On December 6, 2011, the Superior Court assessed damages against Kitty O'Shea's in the amount of $160, 000. Seneca Facts ¶ 46.

         On December 12, 2011, Seneca informed Kitty O'Shea's that it had received its first notice about service of the complaint, had retained counsel, and would proceed under a continuing reservation of its rights. Id. ¶ 48. On April 13, 2012, an attorney for Seneca filed a motion to vacate the default judgment on behalf of Kitty O'Shea's. Id. ¶ 52. Seneca determined in May 2012 that it would deny coverage if Kitty O'Shea's was unable to vacate the default, and recognized that further litigation had little to no chance of success. Tiede Facts ¶¶ 61-64. Tiede successfully opposed the motion to vacate, and an execution on the judgment was issued on July 11, 2012. Seneca Facts ¶¶ 53-55.

         On August 27, 2012, Kitty O'Shea's filed a motion for reconsideration, which the Superior Court denied on October 2, 2012. See Tiede v. James Joyce, Inc., No. 13-P-136, 2013 WL 6633811, at *1, 999 N.E.2d 503 (Table) (Mass App. Ct. 2013). Kitty O'Shea's then filed an appeal, and on December 18, 2013, the Appeals Court found that the Superior Court judge had not abused her discretion in declining to vacate the default. Id. On February 3, 2014, the Supreme Judicial Court (“SJC”) denied further appellate review. Tiede v. James Joyce, Inc., 3 N.E.3d 81 (Table) (Mass. 2014); see also Seneca Facts ¶¶ 57-65. The day after the SJC denied further review, Seneca notified Kitty O'Shea's and Tiede that it was denying coverage. Seneca Facts ¶¶ 66-67.

         On June 3, 2013, during the pendency of Seneca's appeal attempts, Kitty O'Shea's assets were sold. Tiede Facts ¶ 81. Tiede's attorneys attest that, if Seneca had provided Tiede with a statement that coverage was being denied earlier, they would have pursued attachment of Kitty O'Shea's assets. Id. ¶ 83. Although the default judgment currently has a nominal value in excess of $350, 000, Seneca has not offered more than $20, 000 to Tiede to settle his claims. Tiede Facts ¶ 92.

         II. STANDARD OF REVIEW

         Summary judgment is appropriate where the movant can show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A fact is material if its resolution might affect the outcome of the case under the controlling law.” Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st Cir. 2003) (citation omitted). “A genuine issue exists as to such a fact if there is evidence from which a reasonable trier could decide the fact either way.” Id. (citation omitted).

         “To succeed in showing that there is no genuine dispute of material fact, ” the moving party must point to “specific evidence in the record that would be admissible at trial.” Ocasio-Hernandez v. Fortuño-Burset, 777 F.3d 1, 4 (1st Cir. 2015). “That is, it must ‘affirmatively produce evidence that negates an essential element of the non-moving party's claim,' or, using ‘evidentiary materials already on file . . . demonstrate that the non-moving party will be unable to carry its burden of persuasion at trial.'” Id. (quoting Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000)). “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Once the movant takes the position that the record fails to make out any trialworthy question of material fact, “it is the burden of the nonmoving party to proffer facts sufficient to rebut the movant's assertions.” Nansamba v. No. Shore Med. Ctr., Inc., 727 F.3d 33, 40 (1st Cir. 2013).

         In reviewing the record, the Court “must take the evidence in the light most flattering to the party opposing summary judgment, indulging all reasonable inferences in that party's favor.” Cochran, 328 F.3d at 6 (citation omitted). The First Circuit has noted that this standard “is favorable to the nonmoving party, but it does not give him a free pass to trial.” Hannon v. Beard, 645 F.3d 45, 48 (1st Cir. 2011). “The factual conflicts upon which he relies must be both genuine and material, ” Gomez v. Stop & Shop Supermarket Co., 670 F.3d 395, 397 (1st Cir. 2012), and the Court may discount “conclusory allegations, improbable inferences, and unsupported speculation, ” Cochran, 328 F.3d at 6 (quoting Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). ...


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