Massachusetts General Laws Chapter 93A and 176D have long provided the plaintiffs’ personal injury bar with an exceptionally sharp check on insurance carriers’ settlement practices. While many claims under Chapter 93A/176D appear from the outset to be pro forma, a recent Massachusetts Appeals Court in Chiulli v. Liberty Mutual Insurance, Inc., 97 Mass. App. Ct. 248 (2020) illustrates the perils of Chapter 93A/176D violations in settlement practices and the substantial penalties that may be imposed in the event of a finding of willful and/or knowing violation of good faith and equitable settlement practices.

 

Factual Background

Chiulli arose from a physical altercation at a prominent Boston restaurant in 2008. Shortly before the altercation, restaurant staff separated two groups of individuals involved in a spirited argument over the occupancy of a certain barstool but allowed both groups to remain on the premises. Unfortunately, the argument soon turned violent. Chiulli was knocked unconscious and sustained a traumatic brain injury. 

 

Chiulli, in turn, filed suit against the Restaurant, its parent company, and the opposing combatant seeking medical damages in excess of $600,000. He asserted a negligent security claim against the Restaurant and its operating group claiming they failed to reasonably address the initial altercation by not removing the respective parties from the premises and failing to ensure that the factions did not leave the premises together which was bolstered by expert testimony. The Restaurant did not offer its own expert and instead argued that it conducted itself in a reasonable manner in addressing the argument and altercation.

 

The case went to trial in 2012. The only settlement offer extended prior to or during trial was an offer for $150,000 made by the Restaurant’s primary insurance carrier. The three-week trial ended in a plaintiff’s verdict finding that both the Restaurant and its operating company were each 45% at fault for the altercation. The jury awarded Chiulli approximately $4.5 Million in damages.

 

Post-Verdict Claims Handling

After confirming that the primary carrier did not tender its policy limits of $1 Million to the Restaurant’s excess carrier, Chiulli served Chapter 93A demand letters on both carriers 16 days after the verdict. There, Chiulli alleged that both insurers failed to effectuate a fair and prompt settlement of the underlying tort action despite the fact liability was reasonably clear vis-à-vis the jury verdict. Chiulli sought $5.7 Million “to resolve the [underlying tort] case, and to avoid further litigation” wherein he would seek multiple damages under Chapter 93A.

 

Twenty-two days after the underlying verdict, the Restaurant’s primary carrier still had not tendered its policy limits, which resulted in the excess carrier serving its own demand upon the primary carrier. The primary carrier soon acquiesced and tendered its $1 Million policy limit to the excess carrier. During this timeframe, Chiulli served a second Chapter 93A demand on both carriers. This time, he sought $5.7 Million to resolve the tort case and an additional $10 Million demand to resolve putative bad faith settlement claims against both insurers.

 

The excess carrier, taking


Continue Reading Lessons to the Wise in Unfair Settlement Practice Litigation – Recent Massachusetts Appeals Court Decision Illustrates Austere Potential of Chapter 93A/176D Claims

The COVID-19 crisis has had an impact on every court across the nation, both at the state and federal levels, postponing and delaying countless civil litigation hearings and trials. There is still a great deal of uncertainty as to when social distancing guidelines will be relaxed and when states will begin to resume normal business activities. The continued postponement of hearings and trials will result in a tremendous backlog of cases vying for the attention of the courts, as litigators across the nation do their best to zealously advocate for their clients.

As this country battles the continued wave of COVID-19 cases and prepares for the possibility of a second wave of COVID-19 infections in the United States at some point in the not so distant future, litigation has already commenced as a result of the COVID-19 pandemic.

Princess Cruise Lines

At least a dozen lawsuits have been filed against Princess Cruise Lines as a result of passengers affected by the COVID-19 outbreak, and that number continues to climb.

On March 7, 2020, Plaintiffs Ronald Weissberger and Eva Weissberger filed suit in the United States District Court for the Central District of California, alleging negligence and gross negligence by the Defendant, Princess Cruise Lines Ltd., for its “lackadaisical approach” to the COVID-19 pandemic. The Complaint detailed that one of Princess Cruise Lines’ ships, the Grand Princess, departed out of San Francisco on February 21, 2020, and returned to Oakland on March 4, 2020, where it was forced to dock until all passengers could be moved to military bases for quarantine.

On March 13, 2020, Plaintiffs Brian Sheedy and Melanie Sheedy filed an identical complaint against Princess Cruise Lines Ltd., also in the United States District Court for the Central District of California.

Under California law, the elements that must be met to show negligence are “(1) defendant’s obligation to conform to a certain standard of conduct for the protection of others against unreasonable risks (duty); (2) failure to conform to that standard (breach of duty); (3) a reasonably close connection between the defendant’s conduct and resulting injuries (proximate cause); and (4) actual loss (damages).” Corales v. Bennett, 567 F.3d 554, 572 (9th Cir.2009) (quoting McGarry v. Sax, 158 Cal.App.4th 983, 994, 70 Cal.Rptr.3d 519 (2008); Lawman v. City & Cty. of San Francisco, 159 F. Supp. 3d 1130, 1152 (N.D. Cal. 2016).

According to the Weissberger and Sheedy Complaints, none of these Plaintiffs have tested positive for COVID-19. The only alleged damages include exposure to the risk of immediate physical injury, emotional distress and trauma from the fear of developing COVID-19. A cause of action for negligence requires damages in the form of “detrimental physical changes to the body” and this physical injury “for the purposes of parasitic emotional distress damages required actual harm.” Macy’s California, Inc. v. Superior Court, 41 Cal. App. 4th 744 (1995). A plaintiff must prove detrimental change to his or her body to be able to recover for parasitic emotional
Continue Reading COVID-19 Litigation – Fear of Injury and Emotional Distress Claims

We are all feeling the impact that COVID-19 is having on our lives, both personally and professionally. In an effort to assist our clients as they navigate the myriad of business and legal challenges they are facing during this difficult time, MG+M has prepared a report summarizing the actions taken by state and court systems as a result of the COVID-19 pandemic. This report contains comprehensive information concerning court orders and individual state’s emergency orders from across the country.  We update this report every day to ensure that our clients have the latest information from all jurisdictions. Please click here to request a copy of this report.

We will also continue to post blog articles regarding various legal topics, including how the COVID-19 pandemic is impacting the legal system and various areas of the law.  Please watch for articles on these topics during the next few weeks as we hope they will help you better understand how this pandemic may impact legal issues related to your business.

Stay safe and healthy.

 
Continue Reading MG+M’s Resources Related to COVID-19

Talk is cheap…until lawyers get involved.

“Lawyers: are persons who write a 10,000 word document and call it a brief.” – Franz Kafka

Mouthpiece: n. old-fashion slang for one’s lawyer. Burton’s Legal Thesaurus, 4E. (2007). Retrieved August 8, 2018, from https://legal-dictionary.thefreedictionary.com/mouthpiece

There are thousands of sated comedians in the world who make a living off the caricature of loquacious litigators. Indeed, it is probably a fair statement that attorneys like to talk. Attend any bar event anywhere in the country and, more likely than not, you will find a group attorneys exchanging war stories. Lawyers, especially trial attorneys, relish opportunities to reminisce about trials won, how incomprehensible it is that they lost a “slam dunk” motion, or the occasional client they never want to see again.

Most of the time, idle attorney chatter over rubber chicken bar association dinners is entirely benign. However, public statements made by an attorney during a trial or the pendency of case that may go to trial is consequential all of the time. This is because, as Chief Justice Rehnquist observed, “a lawyer’s extrajudicial statements pose a threat to the fairness of a trial due to an attorney’s special access to information.” Gentile v. State Bar of Nevada, 501 U.S. 1031, 1071 (1991). In theory, an attorney’s comments on the scope of evidence or a case’s merits could predispose a jury pool and, thus, unintentionally (or deliberately) prejudice a judicial outcome.


Continue Reading Trial Publicity: Public Statements Made by an Attorney during Court Proceedings have Limits

Have you ever taken a deposition where nearly every single one of your questions is met with a barrage of seemingly meritless objections?  How about one where your opponent decides to take a more laissez faire approach and repeatedly instructs their witness not to answer?

If you answered yes, rest assured you are not alone.  Personally, there is nothing that interrupts the “flow” of my deposition more than when I am on the receiving end of these scenarios.  The former scenario is at least somewhat manageable to the extent that it may result in having to reword or repeat a few questions.  The latter scenario, however, is much more disruptive as it effectively stops the deposition in its tracts.

So what should you do when opposing counsel instructs their witness not to answer?

First, you should ask yourself whether your question is in proper form.  You generally do not want to ask the deponent “contention” questions, i.e., those seeking all facts, witnesses, and document that support a legal contention.  Such questions are proper in interrogatories, but not in depositions.

In Rifkind v. Superior Court (1994) 22 Cal.App.4th 1255, the deponent was instructed not to answer various “contention” questions. In response, the deposing party brought a motion to compel, which the court denied.  The court held that such questions were unfair in the context of a deposition because “they call upon the deponent to sort out the factual material in the case according to specific legal contentions, and to do this by memory and on the spot.” (Id. at 1262.) It further noted that such questions should be posed in the form of interrogatories so that the party, with the aid of its counsel, can “apply the legal reasoning involved in marshaling the facts relied upon for each of its contentions.” (Id.)

In light of the above, if an opponent instructs their client not to answer, look at your question first and see if it passes muster under Rifkind.  If your question is something along the lines of “Why do you believe you are entitled to damages” or “tell me everything that happened that day,” then you might want to rephrase the question.

Assuming your question is proper, you should next evaluate whether opposing counsel asserted a valid objection.  Under California law, you can only instruct your witness not to answer when the information sought is privileged (e.g., “attorney-client” (Evid. Code § 950-962),”work-product” (CCP §§2018.010-2018.080)).

In Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006, the defense attorney instructed his witness not to answer on the grounds that the information sought was not relevant.  The plaintiff brought a motion to compel.  The court granted the motion, and ordered defense counsel as follows: “you are ordered not to instruct the witness not to answer a question during any deposition in this case unless the matter is privileged.  The proper procedure is to adjourn the deposition and move for protective
Continue Reading When Can An Attorney Instruct Their Witness Not To Answer During A Deposition, And What Should You Do In Response In Order To Obtain An Answer?