2018 Mass. App. Div. 23

October 7, 2016 - February 20, 2018

Appellate Division Western District

Court Below: District Court, Pittsfield Division

Present: Hadley, P.J., Noonan & Despotopulos, JJ. [Note 1]

Scott W. Ellis for the plaintiff.

Jodi Conners for the defendant.

PER CURIAM. On March 12, 2014, Tracy Pierce ("Pierce") and Shannon Klose ("Klose") purchased an automobile insurance policy from Progressive Direct Insurance Company ("Progressive"). The policy stated that coverage began on March 12, 2014 and would end on September 12, 2014 at 12:01 A.M.

On August 19, 2014, Progressive sent Pierce a document entitled, "Auto Insurance Coverage Summary." It stated that coverage for another automobile policy beginning on September 12, 2014 at 12:01 A.M. and ending on March 12, 2015 would apply "only if you pay for this policy to renew." On August 27, 2014, Progressive sent a "Renewal Reminder" to Pierce and Klose advising that their automobile insurance policy was set to expire on September 12, 2014, at 12:01 A.M. On August 28, 2014, Progressive sent a "Reminder" to Pierce by e-mail, advising that a renewal payment was due on September 12, 2014. It stated, "To avoid a lapse in coverage, we must receive your payment by 12:01 a.m. EST on 09/12/2014."

On September 11, 2014, Pierce contacted Progressive by telephone and advised that he would not be renewing the automobile policy with Progressive and that he was going to secure insurance coverage from a different carrier. On September 12, 2014, Progressive contacted Klose and advised her that a payment would have to be made that day to ensure that she still had insurance coverage with Progressive. Klose advised Progressive that she had sought insurance coverage from Plymouth Rock Assurance Corporation ("Plymouth Rock"). Neither Pierce nor Klose made any payment to Progressive to renew the coverage on the insured vehicle. Pierce and Klose secured automobile insurance coverage from Plymouth Rock with coverage beginning September 13, 2014.

Unfortunately, on the afternoon of September 12, 2014, Klose was involved in a motor vehicle accident while operating the vehicle that had been insured by Progressive. She incurred medical expenses as a result of injuries sustained in the accident, and she sought payment for those medical expenses under the personal injury protection ("PIP") provisions of the Progressive insurance policy. Progressive

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denied her claim, asserting that Klose did not have an active policy with Progressive at the time of the accident. This civil action followed for breach of contract, violation of G.L. c. 90, § 34M, and violation of G.L. c. 93A and G.L. c. 176D.

Following the exchange of written discovery, Progressive filed a motion for summary judgment, and Klose filed a cross motion for summary judgment. Following a hearing, the motion judge determined that there were no genuine issues of material fact in dispute and held that Progressive was entitled to judgment as a matter of law pursuant to Mass. R. Civ. P. 56. This appeal followed.

Klose asserts that the motion judge erred in awarding summary judgment to Progressive. She contends that the automobile insurance policy issued by Progressive remained in effect at the time of the accident because Progressive failed to terminate the policy in compliance with procedures for cancellation and nonrenewal of motor vehicle insurance policies set out in 211 Code Mass. Regs. § 97.00.

Section 97.06(1)(f) of 211 Code Mass. Regs. provides, "An Insurer must comply with all Massachusetts laws and regulations relating to non-renewal of a Motor Vehicle Insurance Policy. An Insurer that issues a Notice of Non-renewal must state the reason for the Non-renewal. An Insurer may not use phrases such as 'underwriting reasons' as the reason for Non-renewal. An Insurer must inform the Policyholder of the specific facts on which the Insurer based its decision not to renew the Motor Vehicle Insurance Policy."

In addition, the regulations provide that a notice of nonrenewal by an insurer must include language prescribed by the Commissioner of Insurance, which includes a statement to the insured that he or she "must have compulsory motor vehicle insurance in order to keep [his or her] motor vehicle registered in Massachusetts" and that the insurer has notified the Registrar of Motor Vehicles of the insurer's "intent to non-renew [the subject] motor vehicle insurance policy." Id. at § 97.06(2). The insurer must also advise the insured that he or she must replace his or her policy "as soon as possible." Id.

The regulations also state, "An Insurer must give written Notice that it will not renew an existing Motor Vehicle Insurance Policy 45 days in advance of the policy expiration date." Id. at § 97.06(3)(a). Finally, pursuant to the regulations, "An Insurer that fails to comply with the statutory requirements related to a Notice of Non-renewal . . . must, at the Policyholder's request, issue motor vehicle insurance coverage of at least the same type and amount as existed on the non-renewed Motor Vehicle Insurance Policy." Id. at § 97.06(3)(d)(1). See G.L. c. 175, § 113F.

In Commercial Union Ins. Co. v. Connors, 42 Mass. App. Ct. 538 (1997), the Appeals Court addressed similar circumstances. In that case, an umbrella liability insurance policy expired the day before a serious automobile accident occurred. Shortly before the accident occurred, the plaintiff-policyholder advised the defendant-insurer that he was not going to renew the policy and would be securing homeowner's coverage from a different insurance company. After the accident, the plaintiff nonetheless asserted that coverage remained in effect based on a provision in the policy that required the insurer to deliver written notice of a decision not to renew the policy at least thirty days before the expiration date of the policy. The insurer in that case did not send the plaintiff this written notice, and the plaintiff argued that this had the effect of leaving coverage in place after the expiration of the policy. Id. at 538-541.

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The Appeals Court rejected this argument and found that the clause that the plaintiff relied upon did not provide for automatic renewal or extension of coverage. The Court affirmed the Superior Court judge's decision allowing the defendant's motion for summary judgment. Id. at 541.

In the case before us, the plaintiff correctly points out that we are not solely dealing with a provision in an insurance policy and a question of contract interpretation. The instant case involves a motor vehicle insurance policy and we must also determine whether the cited regulations apply. We find, however, that the reasoning behind the Connors decision is applicable here. The contract provision in issue in Connors addressed an insurance company's decision not to renew a policy and required at least thirty days written notice prior to the expiration date of the policy. The regulations relied upon by the plaintiff in this case similarly address an insurer's obligation to give notice of its intent not to renew a policyholder's automobile insurance policy forty-five days in advance of the policy's expiration date. The purpose of both the policy provision and the regulations is to provide policyholders the opportunity to secure coverage from another insurer in a timely manner when an insurer decides not to renew coverage, and to avoid a lapse in coverage.

In this case, as in Connors, however, it was not the insurer that made the decision not to renew the expiring insurance policy. Here, the policyholders chose not to renew the policy issued by Progressive, and they notified Progressive of their intentions on September 11 and 12, 2014. Following the plaintiff's view, in order to comply with 211 Code Mass. Regs. § 97.06(3), Progressive would have been obligated to provide the plaintiff with a written notice of nonrenewal forty-five days prior to September 12, 2014, stating its reasons for not renewing the plaintiff's policy, at a point in time when the insurer actually intended to renew the policy. Imposing such a requirement on an insurer that intends to renew a policy would serve no legitimate purpose and would require an unreasonable interpretation of the cited regulations.

Having determined that the regulations the plaintiff relies upon do not apply to the circumstances of this case, we find that the District Court judge who decided the motions for summary judgment committed no error. By its terms, the insurance policy issued by Progressive expired at 12:01 A.M. on December 12, 2014, and was not in effect at the time of the plaintiff's accident. Therefore, Progressive had no legal obligation to provide PIP benefits. Without a recovery due under the PIP statute, and with no additional evidence of any G.L. c. 176D violation, Klose's G.L. c. 93A claim must also fail.

Judgment affirmed.


[Note 1] The Honorable David P. Despotopulos participated in the hearing of this appeal, but completed his Appellate Division service prior to the issuance of this opinion.