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Martins v. Vermont Mutual Insurance Co.

United States District Court, D. Massachusetts

August 14, 2019

JONATHAN MARTINS, individually and on behalf of all others similarly situated, Plaintiff,
v.
VERMONT MUTUAL INSURANCE COMPANY, Defendant.

          MEMORANDUM AND ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

          F. DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE.

         This is a putative class action concerning the scope of coverage of standard Massachusetts automobile policies. Jurisdiction is based on diversity of citizenship.

         Plaintiff Jonathan Martins alleges that defendant Vermont Mutual Insurance Company improperly failed to pay damages for the “inherent diminution in value” of his automobile after an accident caused by one of its insureds. “Inherent diminution in value” refers to the fact that a vehicle involved in an accident typically has a lower market value, even after repairs have been made, due to a stigma attaching to such vehicles. Martins contends that an insurer is required to compensate for such a loss under Part 4 of the 2008 Standard Massachusetts Automobile Policy.

         Martins has filed a motion for partial summary judgment, essentially seeking a declaration that Vermont Mutual is required to pay inherent diminution in value damages to third-party claimants. Vermont Mutual has filed a cross-motion for summary judgment, contending that it has no such obligation.

         For the following reasons, the Court concludes that Part 4 of the Standard Massachusetts Automobile Policy does not provide coverage for inherent diminution in value, and therefore summary judgment will be granted for Vermont Mutual on all claims.

         I. Background

         A. Factual Background

         On June 18, 2016, Jonathan Martins purchased a 2015 Nissan Altima for $20, 472.00. (Pl. Ex. 1).

         On January 23, 2017, Martins's vehicle was damaged when it collided with a vehicle being driven by Elhadjmamado Dansoko. (Pl. SUF ¶ 9). At the time of the collision, Dansoko was insured under a policy issued by Vermont Mutual Insurance Company. (Pl. SUF ¶ 17).

         Dansoko's policy provided coverage for the period from January 20, 2017, to January 20, 2018. (Murray Aff. Ex. 2). The policy used the 2008 edition of the Standard Massachusetts Automobile Insurance Policy. (Id. Ex. 3). Part 4 of the standard policy, titled “Damage to Someone Else's Property, ” provided that the insurer would

pay damages to someone else whose auto or other property is damaged in an accident. The damages we will pay are the amounts that person is legally entitled to collect for property damage through a court judgment or settlement. . . . Damages include any applicable sales tax and the costs resulting from the loss of use of the damaged property.

(Id. Ex. 3 at 13).

         Martins reported the accident to his insurer, Safety Insurance Company. Safety paid Martins $11, 711.80 to cover the full costs of repairs to his vehicle. (Pl. SUF ¶¶ 19, 20; Murray Aff. Ex. 1).

         In February 2017, Safety presented a subrogation claim to Vermont Mutual for the repairs to the vehicle. (Murray Aff. Ex. 1). After determining that Dansoko was liable for the accident, Vermont Mutual paid Safety $12, 942.80, which included $11, 711.80 for repairs, $331 for towing and storage, and $900 for a rental car. (Pl. SUF ¶¶ 11, 20).[1]

         B. Procedural Background

         On June 26, 2017, an attorney for Martins sent a letter to Vermont Mutual demanding payment of $6, 129.00 for the “inherent diminished value” of the car. (Pl. SUF ¶ 21-22; Michelle Martin Aff. ¶ 4). On July 11, 2017, Michelle Martin, a Vermont Mutual Senior ...


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