United States District Court, D. Massachusetts
MEMORANDUM AND ORDER RE: PLAINTIFFS' MOTION TO
AMEND COMPLAINT (DOCKET ENTRY # 9)
MARIANNE B. BOWLER UNITED STATES MAGISTRATE JUDGE.
before this court is a motion to amend a complaint filed by
plaintiffs Ashan Fernando and Megan Fernando
(“plaintiffs”) under Fed.R.Civ.P. 15(a)
(“Rule 15(a)”) to add three new defendants in
lieu of defendants Chubb Group of Insurance Companies d/b/a
Chubb Personal Insurance d/b/a Chubb Masterpiece Insurance.
(Docket Entry # 9). Defendant Federal Insurance Company
(“Federal”) and proposed defendants Chubb
National Insurance Co. (“Chubb National”), the
Chubb Corporation (“Chubb Corp.”), and Chubb
Insurance Company of New Jersey (“Chubb New
Jersey”) (collectively “proposed
defendants”) oppose the motion. (Docket Entry ## 10,
14). After conducting a hearing, this court took the motion
(Docket Entry # 9) under advisement.
the original complaint, the proposed amended complaint
alleges that Federal and the proposed defendants failed to
“fulfill their obligations and to make payment of a
covered claim under” a valuable articles insurance
policy (“the Policy”) issued by Federal. (Docket
Entry ## 1, 9-1). The Policy's coverage encompassed loss
by theft for itemized jewelry items insured under the Policy
for December 11, 2015 to December 11, 2016 time period.
(Docket Entry # 9-1).
the parties rely on documents extrinsic to the Policy to
support or refute the futility of the causes of action, it is
helpful to outline the Policy's provisions. The Policy
itself states on two different pages that it consists of a
“Coverage Summary” and the “entire
Masterpiece Policy.” (Docket Entry # 10, pp. 19,
More specifically, the “Introduction” defines the
“Policy [as] “mean[ing] your entire Masterpiece
Policy, including the Coverage Summary and any
Mortgagee's Coverage Summary.” (Docket Entry # 10,
p. 22). The same “Introduction” page in the
Policy likewise states, “This is your Chubb Masterpiece
Policy. Together with your Coverage Summary, it explains your
coverages and other conditions of your insurance in
detail.” (Docket Entry # 10, p. 22). The Policy also
includes an “Itemized Articles” page, which lists
various items of jewelry covered under the Policy. (Docket
Entry # 10, p. 20); (Docket Entry # 10, p. 23) (“[t]he
amount of coverage . . . for each itemized article is shown
in your Coverage Summary”). In light of the foregoing
language in the Policy, the Policy includes the
“Coverage Summary, ” the “Itemized
Articles, ” and the “Introduction” followed
by the language of Policy. (Docket Entry # 10, pp. 19-20,
22-40). In addition, a “Table of Contents” for
the Policy confirms the contents of the Policy as the
“Introduction, ” a “Valuable Articles
Coverage, ” (presumably the “Itemized
Articles” page), the “Policy Terms, ” and a
“Policy Information Notice.” (Docket Entry #
10, p. 21).
from the Policy, a cover letter from “Chubb Personal
Insurance” to plaintiffs states that, “This
mailing contains information about your new insurance policy
with Chubb.” (Docket Entry # 10, p. 12). The cover
letter identifies and attaches various documents for
plaintiffs to review including a “Premium Summary,
” a “Privacy Notice, ” and a “Premium
Discount Summary.” (Docket Entry # 10, p. 12). The cover
letter also includes language that describes “Chubb
Group of Insurance Companies” as a “marketing
name.” (Docket Entry # 10, p. 12). Viewing the above
language defining the “Policy” as the
“entire Masterpiece Policy” and the
“Coverage Summary, ” neither this cover letter
(Docket Entry # 10, p. 12) nor another cover letter (Docket
Entry # 10, p. 13) or the “Premium Summary, ” the
“Privacy Notice, ” and the “Premium
Discount Summary” form part of the actual
Policy. (Docket Entry # 10, pp. 14-17).
to the facts surrounding the claim as set forth in the
proposed amended complaint, plaintiffs' house was
burglarized on or about the evening of March 18, 2016, and
several items of jewelry covered under the Policy were taken.
(Docket Entry # 9-1, p. 5, ¶ 23). Plaintiffs filed a
police report with the local police and shortly thereafter
filed a claim with “defendants” for the covered
loss which has been “continuously denied.”
(Docket Entry # 9-1, pp. 5-6).
police report recounts that video from a home security system
reflects that a “male subject in a grey sweatshirt is
seen in the hall of the home” and describes a broken
window used “to gain access to the home.” (Docket
Entry # 9-1, p. 46). The police report denotes the missing
items as “stolen” and the incident as
“still under investigation.” (Docket Entry # 9-1,
p. 46). The investigation by Federal and the proposed
defendants “did not conclude with any information
sufficient to deny the” claim. (Docket Entry # 9-1, p.
6, ¶ 33).
and the proposed defendants denied the claim for several
reasons, including that a “jeweler who signed the
Appraisals was prohibited by the conditions of his probation
from engaging in the jewelry business.” (Docket Entry #
9-1, p. 7, ¶ 36). Upon information and belief, Federal
and the proposed defendants attended a probation violation
hearing for the jeweler to confirm that he “conducted
the Appraisals.” (Docket Entry # 9-1, p. 7, ¶ 43).
During the hearing, a different individual testified that
he was the appraiser as opposed to the above-noted
jeweler. (Docket Entry # 9-1, pp. 7-8). The court agreed
inasmuch as it did not issue “a probation condition
violation” against the jeweler for engaging in the
jewelry business. (Docket Entry # 9-1, pp. 7-8, ¶¶
36, 44). Also upon information and belief, Federal and the
proposed defendants had an affidavit from this individual
“confirming that he, individually, performed the
Appraisals.” (Docket Entry # 9-1, ¶ 42).
about April 20, 2016, plaintiffs sent a formal demand letter
ostensibly pursuant to section 11 of Massachusetts General
Laws chapter 93A (“chapter 93A”) and
Massachusetts General Laws chapter 176D (“chapter
176D”) to “defendants.”(Docket Entry #
9-1, pp. 6, 49-51). Plaintiffs sent a second formal demand
letter pursuant to chapter 93A and chapter 176D on September
1, 2017 but “defendants” “refused to make
payments under the Policy or provide a good faith
offer” to plaintiffs. (Docket Entry # 9-1, pp. 8,
Policy includes a provision requiring plaintiffs “to
bring” an action “within two years of the date of
loss.”(Docket Entry # 9-1, p. 23). Massachusetts
also has a two-year statute of limitations, which Federal and
the proposed defendants submit applies to the Policy.
See Mass. Gen. Laws ch. 175, § 99
(“section 99”). Plaintiffs maintain that if
section 99 applies, the proposed amended complaint relates
back to the date of the original, timely-filed complaint
under Rule 15(c)(1)(C) because the proposed defendants
received notice and will not be prejudiced. (Docket Entry ##
commenced this action when they filed the original complaint
on March 16, 2018, two days before the expiration of the
two-year limitations period “from the time the loss
occurred” on March 18, 2016 with the theft of itemized
articles from their home. On or about April 11, 2018, counsel
for Federal and the proposed defendants sent plaintiffs'
attorney an email stating that “Chubb Group of
Insurance Companies” is no longer used and “was
never an entity, corporation, partnership, unincorporated
association, or insurance company.” (Docket Entry #
9-2). Thereafter, on July 3, 2018, plaintiffs filed the
motion seeking leave to amend the complaint. (Docket Entry #
proposed amended complaint (Docket Entry # 9-1) makes no
changes to the factual allegations and the legal claims in
the original complaint. (Docket Entry # 1). Rather, the
proposed amended complaint seeks to replace defendants Chubb
Group of Insurance Companies d/b/a Chubb Personal Insurance
d/b/a Chubb Masterpiece Insurance (the “Chubb
Entities”) with the proposed defendants on the basis
that the naming of the Chubb Entities was a
“misnomer.” (Docket Entry # 9). Plaintiffs do not
assert any new claims specific to the proposed defendants.
Like the original complaint, the proposed amended complaint
asserts the following claims: (1) breach of contract (Count
I); (2) breach of the implied covenant of good faith and fair
dealing (Count II); and (3) unfair and deceptive acts and
practices under section 11 of chapter 93A and chapter 176D
(Count III). (Docket Entry # 9-1). The original
complaint and the proposed amended complaint assert
jurisdiction based on diversity. (Docket Entry ## 1, 9-1); 28
U.S.C. § 1332(a)(1).
and the proposed defendants oppose the motion on the basis of
untimeliness and futility. (Docket Entry ## 10, 14). They
argue that plaintiffs are seeking to add new defendants, not
merely rectify a mistake concerning the identity of the
proper parties after the applicable limitations period
expired. (Docket Entry # 10, p. 7). They assert that if
“[n]one of the [proposed] defendants are parties to
[the Policy], ” the proposed amended complaint is
futile. (Docket Entry # 10, p. 4). If, on the other hand, the
proposed defendants are “subject to the terms and
conditions” of the Policy, the two-year limitations
period in the Policy as well as the applicable statute of
limitations under section 99 render the “claims against
the [proposed] defendants” untimely, according to
Federal and the proposed defendants. (Docket Entry # 10, p.
4) (Docket Entry # 14, p. 4).
15(a) instructs that leave to amend a complaint
“‘shall be freely given when justice so
requires.” Foman v. Davis, 371 U.S. 178, 182
(1962) (internal citation omitted). “[T]he grant or
denial of an opportunity to amend is within the discretion of
the District Court” but absent a showing of
“undue delay, bad faith” or “futility of
amendment” should not be denied. Id.
the relation back requirements under Rule 15(c) are met,
Federal and the proposed defendants contend that the claims
against the proposed defendants are futile because
“[n]one of the [proposed] defendants are parties to
[the Policy]” or “involved in the underwriting,
adjustment or handling of the plaintiffs'
claim.” (Docket Entry # 10, pp. 4-5) (Docket
Entry # 14, p. 4). Plaintiffs maintain that the argument
“that Chubb has had no relationship to the
[p]laintiffs” and “was not involved in the
handling of the claim is without merit.” (Docket Entry
# 13, p. 2).
well settled that futility constitutes an adequate basis to
deny amendment. See Universal Commc'ns Sys., Inc. v.
Lycos, Inc., 478 F.3d 413, 418 (1st Cir. 2007);
Maine State Bldg. and Construction Trades Council,
AFL-CIO v. United States Dep't of Labor, 359 F.3d
14, 19 (1st Cir. 2004). “In assessing futility, the
district court must apply the standard which applies to
motions to dismiss under [Rule 12(b)(6)].” Adorno
v. Crowley Towing and Transp. Co., 443 F.3d 122, 126
(1st Cir. 2006). “‘In assessing futility, the
district court must apply the standard which applies to
motions to dismiss under Fed.R.Civ.P. 12(b)(6).'”
Morgan v. Town of Lexington, MA, 823 F.3d 737, 742
(1st Cir. 2016) (citation omitted). To survive a Rule
12(b)(6) motion to dismiss, the complaint must include
factual allegations that when taken as true demonstrate a
plausible claim to relief even if actual proof of the facts
is improbable. See Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555-558 (2007); see, e.g.,
Kenney v. State Street Corp., Civil Action No.
09-10750-DJC, 2011 WL 4344452, at *2 (D. Mass. Sept. 15,
2011) (applying Rule 12(b)(6) Twombly standard in
assessing futility of proposed amendment).
conducting a futility analysis, this court's review is
confined to the proposed amended complaint and the attached
documents (Docket Entry # 9-1) as well as external documents
that fall into certain narrow exceptions applicable to review
of a Rule 12(b)(6) motion to dismiss. See Jaundoo v.
Clarke, 690 F.Supp.2d at 22 (recognizing, in context of
motion to amend based on futility, that court may not
consider documents “outside of the [proposed amended]
complaint, or not expressly incorporated therein”
unless they fall within an “exception ‘for
documents sufficiently referred to in the
complaint'”) (brackets in original) (internal
citation omitted); accord In re Atl. Power Corp. Sec.
Litig., Civil Action No. 13-10537-IT, 2015 WL 13679766,
at *4 (D. Mass. Oct. 21, 2015) (in considering Rule 12(b)(6)
or Rule 15 motion, “court may properly consider
‘only facts and documents that are part of or
incorporated into the complaint'”) (citation
omitted); Leahy-Lind v. Maine Dep't of Health and
Human Servs., Civil Action No. 13-00389-GZS, 2014 WL
4681033, at *10 n.6 (D. Me. Sept. 19, 2014); see also
Newman v. Lehman Bros. Holdings Inc., 901 F.3d 19, 25
(1st Cir. 2018) (in reviewing motion to dismiss, court may
consider “‘documents the authenticity of which
are not disputed by the parties; official public records;
documents central to the plaintiff's claim; and documents
sufficiently referred to in the complaint'”)
(ellipses, brackets, and citations omitted). In opposing the
motion to amend, Federal and the proposed defendants filed a
number of documents extraneous to the proposed amended
complaint. Turning to each of the documents, it is
appropriate to consider the Policy, which is central to the
claims and referenced in the proposed amended complaint. It
is also appropriate to consider the court decisions attached
to Federal and the proposed defendants' opposition
(Docket Entry # 10, pp. 46-49) and sur-reply (Docket Entry #
14, pp. 26-29) as documents subject to judicial notice.
See Mississippi Pub. Employees' Ret. System v. Boston
Sci. Corp., 523 F.3d 75, 86 (1st Cir. 2008)
(“‘sources courts ordinarily examine when ruling
on Rule 12(b)(6) motions to dismiss'” include
“‘matters of which a court may take judicial
notice'”) (internal citations omitted);
see, e.g., Bluetarp Fin., Inc. v.
Matrix Constr. Co., Inc., 709 F.3d 72, 78 n.4 (1st Cir.
2013) (taking “judicial notice that neither the South
Carolina state-court case or the Maine state-court case has
gone to final judgment”); Ezra Charitable Trust v.
Tyco Int'l, Ltd., 466 F.3d 1, 9 n.7 (1st
Cir. 2006). Neither the letters by Federal's
counsel and plaintiffs' counsel (Docket Entry # 10, pp.
42, 44-45) (Docket Entry # 14, pp. 10-22, 24-25) nor the
affidavits by Daniel I. Jaeger (Docket Entry # 10, pp. 51-52)
and Rider (Docket Entry # 14, p. 8), however, fall within one
of the recognized exceptions and, accordingly, are not part
of the record in examining the futility of the proposed
Breach of Contract
allege Federal and the proposed defendants breached the
Policy by: (a) denying coverage for the claim; (b) failing to
make payment for the covered loss under the Policy; and (c)
conducting an investigation for the loss in an unfair and
deceptive manner. (Docket Entry # 9-1, ¶¶ 48-52).
As previously noted, Federal and the proposed defendants
submit that Federal issued the Policy and “[n]one of
the [proposed] defendants are parties to [the Policy].”
(Docket Entry # 10, p. 4). Plaintiffs maintain that certain
statements in the Policy and in various documents extraneous
to the Policy refute Federal's and the proposed
defendants' argument that none of the proposed defendants
are parties to the Policy. (Docket Entry ## 9, 13).
stated in the proposed amended complaint, “Chubb Corp.
is the parent company of Federal” and “Chubb
National and Chubb New Jersey are subsidiaries of
Federal.” (Docket Entry # 9-1, ¶ 8). The Policy
denotes Federal as the company that issued the Policy.
(Docket Entry # 10, pp. 19-20).
viable breach of contract claim requires the existence of
“a valid contract between the
parties.” Bose Corp. v. Ejaz, 732 F.3d at
21. As explained below, Federal is a party to the Policy
because it issued the Policy, as stated in the Coverage
Summary of the Policy and the list of Itemized Articles in
the Policy, and the Policy unequivocally states it is a
contract between plaintiffs and Federal. (Docket Entry # 10,
pp. 19-20, 22, 39-40). The determination of whether the
proposed defendants are parties to the Policy entails an
interpretation of the Policy.
Massachusetts law, interpretation of an insurance policy
adheres to “‘the general rules of contract
interpretation, beginning with the actual language of the
polic[y], given its plain and ordinary meaning.'”
Easthampton Congregational Church v. Church Mut. Ins.
Co., 916 F.3d 86, 91 (1st Cir. 2019) (internal citation
omitted); AIG Prop. Cas. Co. v. Cosby, 892 F.3d 25,
27 (1st Cir. 2018) (same); accord Metro. Prop. and Cas.
Ins. Co. v. Morrison, 951 N.E.2d 662, 671 (Mass. 2011)
(“interpretation of language in an insurance contract
‘is no different from the interpretation of any other
contract, '” with words construed “‘in
their usual and ordinary sense'”) (citation
omitted). A court interprets words in an insurance
“policy in light of their plain meaning, considering
the document as a whole.” Sanders v. Phoenix Ins.
Co., 843 F.3d 37, 42 (1st Cir. 2016); accord 116
Commonwealth Condominium Trust v. Aetna Cas. & Surety
Co., 742 N.E.2d 76, 78 (Mass. 2001) (words in insurance
policy are “construe[d] in their usual and ordinary
sense'”) (internal citation omitted).
“‘Every word'” is
“‘“presumed to have been employed with a
purpose and must be given meaning and effect whenever
practicable.”'” Metro. Prop. and Cas.
Ins. Co. v. Morrison, 951 N.E.2d at 671 (internal
“construction must be consistent with what an
objectively reasonable insured, reading the relevant policy
language, would expect the words to mean.” Sanders
v. Phoenix Ins. Co., 843 F.3d at 42; see Metro.
Prop. and Cas. Ins. Co. v. Morrison, 951 N.E.2d at 671
(“‘[i]f in doubt, [a court] “consider[s]
what an objectively reasonable insured, reading the relevant
policy language, would expect to be
covered”'”) (internal citations omitted). In
the event “this analysis yields two reasonable (but
conflicting) interpretations of the policy's text, the
insured must be given the benefit of the interpretation that
redounds to his benefit.” Sanders v. Phoenix Ins.
Co., 843 F.3d at 43; see AIG Prop. Cas. Co. v.
Cosby, 892 F.3d at 27 (“‘[a]mbiguity exists
when the policy language is susceptible to more than one
meaning'”) (internal citation omitted); United
States Liab. Ins. Co. v. Benchmark Constr. Servs., Inc.,
797 F.3d 116, 119-20 (1st Cir. 2015) (“[i]f a term is
‘susceptible of more than one meaning and reasonably
intelligent persons would differ as to which meaning is the
proper one,' the term is ambiguous”) (internal
citation omitted); Certain Interested Underwriters at
Lloyd's, London v. Stolberg, 680 F.3d 61, 66 (1st
Cir. 2012) (“policy provision ‘is ambiguous only
if it is susceptible of more than one meaning and reasonably
intelligent persons would differ as to which meaning is the
proper one'”) (internal citation omitted). Thus,
when presented with ambiguous language, the policy is
construed “in favor of the insured and against”
the insurer. Metro. Prop. and Cas. ...