Home NORTH SHORE CHIROPRACTIC v. SAFETY INSURANCE COMPANY

2016 Mass. App. Div. 42

February 19, 2016 - April 1, 2016

Appellate Division Northern District

Court Below: District Court, Lowell Division

Present: Swan, P.J., Coven & Singh, JJ.

Nancy E. Wheeler for the plaintiff.

Bruce Medoff and Lynn G. McCarthy for the defendant.


SWAN, P.J. Safety Insurance Company (“Safety”) prevailed in a jury trial on a complaint brought against it by North Shore Chiropractic (“North Shore”) under G.L. c. 90, § 34M, for personal injury protection (“PIP”) benefits on account of services provided to Dina Wavezwa (“Wavezwa”) arising from an automobile accident that occurred nearly six years before the action commenced. North Shore later moved for sanctions on account of discovery violations by Safety. The trial judge denied the motion with written findings. Eventually, a severed jury-waived trial was conducted before the same judge on two counts in the complaint apparently alleging violations of G.L. c. 93A, § 11, one incorporating a theory under G.L. c. 176D, § 3(9). [Note 1] Again after extensive written findings, the judge rendered judgment for Safety on the statute of limitations as well as the evidence. North Shore has appealed both the ruling on the discovery motion and the judgment on the G.L. c. 93A counts. [Note 2]

Discovery sanctions. The two-vehicle accident resulting in Wavezwa’s injuries reportedly took place on March 20, 2005. After taking statements from witnesses and conducting an examination of the vehicles, Safety concluded that the collision did not occur as described. The claim was accordingly denied.

In preparing for trial, North Shore served Safety with a request for production of documents pursuant to Mass. R. Civ. P. 34. Two requests, numbered 2 and 5, respectively, were for “[c]opies of any and all documentations which [Safety] relies

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upon to determine that it is not obligated to pay [North Shore’s] claim” and “[a]ny and all evidence which [Safety] relied upon to deny [North Shore’s] claim for payment.” After replying with the usual objections that the request was “overly broad, unduly burdensome” and not “reasonably calculated” to lead to admissible evidence, sought work product, and reached for documents “constituting defense counsel’s trial mindset,” Safety referred to documents attached “in Response No. 2.” During the jury trial on the PIP case, Safety’s adjuster from its Special Investigations Unit (“SIU”) testified that the SIU had prepared a report, with interviews of the occupants of the car in which Wavezwa was hurt and an independent witness. The report, and specifically the independent witness statement, had not been previously given to North Shore, which argues that Safety violated Rule 34 by not doing so. [Note 3]

At the outset, we note that North Shore took no action on the late disclosure until well after the jury trial concluded. The proper time to raise an objection was at the trial. [Note 4] The court would then have had the opportunity to consider “the degree of culpability of the nonproducing party; the degree of actual prejudice to the other party; whether less drastic sanctions [than default or dismissal] could be imposed; the public policy favoring disposition of the case on the merits; and the deterrent effect of the sanction,” Keene v. Brigham & Women’s Hosp., Inc., 56 Mass. App. Ct. 10 , 21 (2002), S.C., 439 Mass. 223 (2003), and, if appropriate, issue an order limiting Safety’s defense, excluding evidence, or allowing a brief continuance for review of the SIU report. Advanced Spine Ctrs., Inc. v. Commerce Ins. Co., 2011 Mass. App. Div. 91 , 94 nn. 8, 9. Instead, North Shore waited over two months after the jury verdict to seek relief, in the form of a motion that the court “access [sic] discovery sanctions against Safety for its willful, deliberate and intentional disregard for the discovery rules.” At such late date, North Shore did not then, nor does it on appeal, suggest what the appropriate sanction should be. The request by any measure was untimely.

The judge in any event addressed the motion and concluded in her findings that the response was “a literal interpretation of what was requested,” that North Shore did not specifically ask for an SIU report, and that Safety had provided “note pad entries” containing the contact information for the independent witness and the substance of his statement. Inasmuch as North Shore has included in its expedited appeal only one SIU report (there were apparently several) but not copies of the “note pad entries” for our comparison, nor for that matter indicated what Safety did in fact disclose in its Response No. 2, we cannot say that the judge erred in finding that Safety did not fail “to comply with the discovery requested” and that North Shore “made no effort to seek these materials by more specific requests.” Indeed,

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North Shore, having had access to the “note pad entries,” has not shown how it was prejudiced in not having the SIU report. [Note 5]

“Decisions on the scope of discovery are committed to the sound discretion of the trial judge. See Solimene v. B. Grauel & Co., K.G., 399 Mass. 790 , 799 (1987). The burden is on an appellant to demonstrate a ‘prejudicial error resulting from an abuse of discretion.’ Id.” Adoption of Paula, 420 Mass. 716 , 734 (1995). “The judge is not without experience and [her] management of the discovery issues is entitled to weight. Noble v. Mead-Morrison Mfg. Co., 237 Mass. 5 , 16 (1921). Mowat v. DeLuca, 330 Mass. 711 , 712 (1953). Bishop v. Klein, 380 Mass. 285 , 288 (1980). 8 Wright & Miller, Federal Practice and Procedure § 2205 (2d ed. 1970).” Beninati v. Beninati, 18 Mass. App. Ct. 529 , 534 (1984). A “judge’s discretionary decision constitutes an abuse of discretion where we conclude the judge made ‘a clear error of judgment in weighing’ the factors relevant to the decision, see Picciotto v. Continental Cas. Co., 512 F.3d 9, 15 (1st Cir. 2008) (citation omitted), such that the decision falls outside the range of reasonable alternatives. See Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 168-169 (2d Cir. 2001); Adoption of Mariano, 77 Mass. App. Ct. 656 , 660 (2010).” L.L. v. Commonwealth, 470 Mass. 169 , 185 n.27 (2014). We find no abuse.

Statute of limitations - G.L. c. 93A. At the second, jury-waived trial on the G.L. c. 93A violations, the judge first found that the action was barred by the statute of limitations. Without the benefit of the complaint (see note 1, supra), we can only surmise, and the judge so found, that the basis of the allegation was Safety’s denial of the PIP claim. We have held in Advanced Spine Ctrs., Inc. v. Commerce Ins. Co., 2011 Mass. App. Div. 253 , that G.L. c. 90, § 34M “allows an unpaid party . . . to commence an action after the passage of thirty days without the claim being paid. As the G.L. c. 93A claim arises from the PIP claim, the cause of action for both claims accrued, at the latest, on the thirty-first day after the last bill was received,” here, a date in October, 2005. Id. at 256. The trial judge posited the accrual date a bit later, as October 7, 2005, when the denial letter was sent to North Shore. “A G.L. c. 93A action must be commenced ‘within four years next after the cause of action accrues.’ G.L. c. 260, § 5A. Because this action was not commenced within four years [to wit, on February 18, 2011], [North Shore’s] G.L. c. 93A claim was untimely.” Id. The judge was correct.

Findings - G.L. c. 93A. Despite her rulings on the statute of limitations, the judge went on to decide the G.L. c. 93A counts on the merits, and made the following findings, which are unchallenged on appeal.

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Rasi Chau (“Chau”), the owner and driver of a car insured by Safety, reported his involvement in an accident in New Hampshire on March 20, 2005, in which he, Wavezwa, and another were injured. Safety set up a PIP file for Chau, but received no PIP application from Wavezwa. North Shore treated Wavezwa from March 31 to July 21, 2005, and Safety received its medical bills the following October, but could not obtain medical reports because Wavezwa had not signed a medical authorization to Safety. Nor did Wavezwa, who was represented by the same attorney for Chau and the second passenger, provide medical records to Safety. During this time, the SIU was interviewing the three occupants (who gave conflicting accounts of the event) and conducting a crash analysis (which concluded that the damage to the involved vehicles was inconsistent with Chau’s version of the accident), and in October, 2005, Safety denied the PIP claim in a letter detailing its reasons to Wavezwa’s attorney, at the same time referring North Shore to the attorney.

Nearly four years later, in May, 2009, North Shore, through its counsel, sought payment for Wavezwa’s bills from Safety, which replied that the PIP claim had been denied in October, 2005, and again referred North Shore to Wavezwa’s attorney. Again, North Shore demanded payment and reasons for the denial, and Safety similarly responded, adding that a release from Wavezwa was required to give details of the denial. North Shore sent the same demand letter, enclosing an assignment of benefits signed by Wavezwa. Safety wrote back in June, stating that, due to privacy issues, it could not discuss the matter without a signed release from Wavezwa. [Note 6] In December, 2009, the details were provided, and North Shore commenced this action the following February.

The trial judge ruled, on the basis of these findings, that Safety committed no violations of G.L. c. 93A, § 11, and G.L. c. 176D, § 3(9), as incorporated in G.L. c. 93A, § 11, and promptly notified North Shore in October, 2005, of the denial and directed North Shore to Wavezwa’s attorney for details.

North Shore complained of violations of G.L. c. 93A, § 11, which prohibits unfair and deceptive acts by one business against another, and G.L. c. 176D, § 3(9), prohibiting unfair settlement practices by insurers, such as “[r]efusing to pay claims without conducting a reasonable investigation based upon all available information,” “[f]ailing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear,” and “[c]ompelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts

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ultimately recovered in actions brought by such insureds.” G.L. c. 176D, § 3(9)(d), (e), and (g). [Note 7] Again, without the complaint before us, we cannot discern what the actual allegations were, and thus on which enumerated unfair practices North Shore “stakes [its] case.” Guity v. Commerce Ins. Co., 36 Mass. App. Ct. 339 , 343 (1994). [Note 8] But overall, as Safety asserted from its first reply to North Shore and Wavezwa, liability was not “reasonably clear,” Boston Symphony Orchestra, Inc. v. Commercial Union Ins. Co., 406 Mass. 7 , 14 (1989), and may not have been clear at all. A “good faith dispute as to whether money is owed, or performance of some kind is due, is not the stuff of which a c. 93A claim is made.” Duclersaint v. Federal Nat’l Mtge. Ass’n, 427 Mass. 809 , 814 (1998). Finally, if a plaintiff fails to prevail on the case underlying a G.L. c. 93A claim, to wit, the PIP case, as occurred here, it can hardly prevail on a c. 93A claim. See Townsends, Inc. v. Beaupre, 47 Mass. App. Ct. 747 , 755 (1999). Given that a jury found against North Shore on its PIP case, based on evidence of a prompt SIU undertaking, it can hardly be asserted that Safety refused to pay without a reasonable investigation (conducted quickly after the accident), or that Safety refused settlement once liability became clear (which it was not), or that Safety compelled North Shore to litigate by offering less than the amount recovered in the PIP trial (the recovery being, in a word, nothing). The judge’s ultimate rulings were without error.

Conclusion. We return to the discovery dispute to make a final observation. Undeniably, Safety failed to turn over the SIU report in answering the request for those documents it relied on to deny the PIP claim. While, as noted, we accept the judge’s finding that Safety’s response was “a literal interpretation of what was requested,” the idea that Safety did not did rely on the report of its own SIU in determining whether to deny the claim strains the most generous limit of credulity. Clearly, Safety did so rely. It said so in its letter of denial to Wavezwa’s attorney, written seven months after the accident and nearly eight years before trial. We have expressed our disapproval of such sharp discovery tactics in Advanced Spine Ctrs., Inc. v. Commerce Ins. Co., supra at 93, and referred to them in Advanced Spine Ctrs., Inc. v. Commerce Ins. Co., 2011 Mass. App. Div. 197 , 201, as “steer[ing] very close to pettifoggery and gamesmanship.” This went further. This was gamesmanship, and it was wrong.

Judgment affirmed.


FOOTNOTES

[Note 1] We say “apparently” because North Shore has not included a copy of the complaint in its appeal. North Shore has proceeded on an expedited appeal under Dist./Mun. Cts. R. A. D. A. 8A, but has included a partial transcript of the jury trial on the PIP case, in the nature of an appeal on the record of proceedings under Rule 8C. Yet as a Rule 8C appeal, much is missing, such as the complaint and a transcript of the jury-waived G.L. c. 93A trial as well as other material discussed herein, not to mention a table of contents, making our ability to decipher North Shore’s claims difficult at best.

[Note 2] According to the judge’s findings, there was a fourth count, which was dismissed prior to trial, and is not a subject of this appeal.

[Note 3] North Shore also complains that it subpoenaed for trial Safety’s entire claim file, but the adjuster brought only the “litigation file.” The difference between the two files is not articulated, and we do not address the question.

[Note 4] At oral argument, counsel for North Shore stated that a sidebar conference was held on this matter, but not transcribed. There is no indication that North Shore attempted to reconstruct the record. See, e.g., Dist./Mun. Cts. R. A. D. A. 8C(e). Thus, we cannot determine on the record presented whether or how any objection to the late disclosure was made.

[Note 5] Two other facts are significant, both set forth in the judge’s findings in the G.L. c. 93A trial. First, in October, 2005, Safety sent two letters, one to Wavezwa’s attorney outlining the SIU’s findings and the other to North Shore referring it to this attorney for information about the PIP denial. (A copy of the letter to Wavezwa’s attorney is actually included in North Shore’s appendix.) Second, on January 10, 2011, a trial was conducted on a small claims complaint for PIP benefits brought by North Shore against Safety on account of injuries to another occupant of the Wavezwa car: there, the judge found, Safety “presented its reasons, developed in the SIU investigation and collision reconstruction analysis, for denial.” Thus, by the time this action was commenced on February 18, 2011, North Shore had the ability to obtain, and indeed at the small claims trial had full knowledge of, the contents of the SIU report.

[Note 6] Safety’s response in June, 2009, perhaps could have been more specific as to the type of release it needed, since Wavezwa’s assignment of benefits addressed to North Shore, signed at the time of treatment, did authorize “the release of any information pertinent to my [i.e., Wavezwa’s] case to any insurance company, adjuster, attorney or physician involved in this case.” Protection of privacy being a legitimate concern, see, e.g., G.L. c. 214, § 1B, Safety, presumably in the exercise of caution, was seeking a release addressed directly to Safety, as opposed to North Shore, to allow Safety to discuss Wavezwa’s case with North Shore’s lawyer. Better practice might have been for Safety to include in its response a form of release for Wavezwa to sign. Of course, for North Shore to locate Wavezwa for his signature, once waiting four years after treating him to demand payment, may have been an insurmountable task. But that problem was chargeable to North Shore, not Safety.

[Note 7] An “action to recover for the generic unfair insurance settlement practice [under G.L. c. 176D, § 3(9)] should be equally available to a business [under G.L. c. 93A, § 11] as to a consumer.” Byron V. Hartunian, M.D., P.C. v. Pilgrim Ins. Co., 2012 Mass. App. Div. 208 , 213.

[Note 8] North Shore in its brief expends much effort on the trial judge’s determination that Safety did not breach the cooperation clause in the insurance policy, but the court actually did not address or even mention that issue, nor has North Shore shown that the issue was preserved below.