2020 Mass. App. Div. 120

October 25, 2019 - September 21, 2020

Appellate Division Northern District

Court Below: District Court, Lawrence Division

Present: Coven, P.J., Nestor & Flynn, JJ.

Walter H. Jacobs and Alexandria A. Jacobs for the plaintiff.

Jeffrey E. Dolan and Mark W. Shaughnessy for the defendant.

FLYNN, J. Mary T. McLellan ("McLellan") sued her homeowner's insurance company, The Hanover Insurance Group, Inc. ("Hanover"), for breach of contract, breach of the covenant of good faith and fair dealing, and violation of G.L. c. 176D and G.L. c. 93A. [Note 1] Both parties moved for summary judgment. The trial court allowed Hanover's motion for summary judgment on all counts. We affirm.

On July 4, 2014, an electrical surge damaged several appliances at McLellan's condominium in Plymouth, Massachusetts. Hanover provided casualty insurance covering the property. McLellan notified Hanover of her loss the same month. During the following months, Hanover received information about the claim and then made a payment of $848 to McLellan on September 24, 2014. [Note 2] In early October, Hanover sent McLellan a notice that it would not renew her policy. In November of 2014, McLellan's daughter, Kathleen Geezil, acting on McLellan's behalf (her authority to do so was not challenged by Hanover), sent additional information supporting a claim for $4,209.86 in damages beyond the HVAC repairs to Hanover's senior property adjuster, Joan P. Moore. [Note 3]

Thereafter, time passed without response from Hanover. Almost three years later, in May of 2017, McLellan's attorney sent a letter to Hanover pursuant to G.L. c. 93A demanding the additional sum supported by the November, 2014 missive. In addition to the claim amount, McLellan demanded payment of attorney's fees. By check dated June 28, 2017, Hanover paid $4,409.86, [Note 4] but not the attorney's fees sought. McLellan sent a second G.L. c. 93A demand letter in October of 2017 for interest and attorney's fees that Hanover had declined to pay. McLellan's lawsuit followed in November of 2017.

We review a decision granting summary judgment de novo. Boazova v. Safety Ins. Co., 462 Mass. 346, 350 (2012). In review of a decision of cross motions for summary judgment, we inspect the record in the light most favorable to the losing party. Welch v. Barach, 84 Mass. App. Ct. 113, 119 (2013). Summary judgment is appropriate where there are no genuine issues as to any material fact, and where

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the moving party is entitled to judgment as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983). A party moving for summary judgment is entitled to it if that party demonstrates by reference to material described in Mass. R. Civ. P. 56(c), unmet by countervailing materials, that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).

Breach of contract. The tender statute, G.L. c. 232A, § 1, provides in pertinent part: "The payment or tender of payment of the whole amount due on a contract for the payment of money after it is due and payable and before action is commenced shall, if pleaded, have the same effect as if made at the time provided in the contract." The recipient may reject the tender. See, e.g., Barron Chiropractic & Rehabilitation, P.C. v. Norfolk & Dedham Group, 469 Mass. 800 (2014).

It is undisputed that Hanover paid all amounts due under the policy before McLellan filed suit. In November, 2014, McLellan sent support for over $4,000 in damage to various appliances beyond the initial payment she received for HVAC repairs. In May, 2017, her attorney sent formal demand for it. Hanover paid it in full by check dated June 28, 2017. McLellan filed suit in November of 2017. McLellan did not reject the tender; she accepted the payment. Acceptance of that payment precludes McLellan's breach of contract claim. G.L. c. 232A, § 1. Summary judgment was proper.

Breach of implied covenant of good faith and fair dealing, G.L. c. 93A, and G.L. c. 176D claims. "The duty of fair dealing in insurance settlement negotiations is established by statute under G.L. c. 176D, § 3(9)." Silva v. Steadfast Ins. Co., 87 Mass. App. Ct. 800, 806 (2015), quoting Clegg v. Butler, 424 Mass. 413, 419 (1997). The applicable remedy for an insurer's violation of G.L. c. 176D (or for its breach of fair dealing as set forth therein) is an action pursuant to G.L. c. 93A. Moreover, while G.L. c. 176D, § 3(9) sets forth conduct that is considered a violation of G.L. c. 93A, it does not provide a separate cause of action. Polaroid Corp. v. Travelers Indem. Co., 414 Mass. 747, 754 (1993). We therefore consider McLellan's three separately pleaded causes of action as one brought pursuant to G.L. c. 93A.

The essence of McLellan's claims of bad faith is that it took three years for Hanover to respond to her November, 2014 supplemental claim information letter, and it was then only upon receipt of the G.L. c. 93A demand from her attorney that Hanover responded. [Note 5] For that sin and for the failure to pay interest or attorney's fees, McLellan cited violations of G.L. c. 176D, § 3(9)(b), (e), (f), (g), (j), and (n).

The failure to respond to a letter in support of a claim until receipt of a second letter, however, is not a per se violation of G.L. c. 93A or G.L. c. 176D. Doe v. Liberty Mut. Ins. Co., 423 Mass. 366, 372 (1996). In Doe, the insurer's failure to respond to an initial letter until it received another letter some six months later was not a violation of G.L. c. 93A or G.L. c. 176D where there was "nothing in the record to show that any delay in responding to the plaintiff's claim was the result of bad faith or ulterior motives." Id. See also Silva v. Norfolk & Dedham Mut. Fire Ins. Co., 91 Mass. App. Ct. 413 (2017), quoting Peckham v. Continental Cas. Ins. Co., 895 F.2d 830, 835 (1st Cir. 1990) ("So long as the insurer acts in good faith, the insurer is not held to standards

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of omniscience or perfection."); Boehm v. Premier Ins. Co., 2006 Mass. App. Div. 53, 56 (inadvertent failure to pay amounts due as result of "oversight" would not constitute violation of G.L. c. 93A). Under the Kourouvacilis standard, as applied here, it is the plaintiff's burden to produce in opposition to summary judgment actual evidence of bad faith or ulterior motive for the delay. McLellan has produced evidence of a substantial delay without response to her November, 2014 letter, [Note 6] but she did not produce fact evidence that the delay was the result of bad faith or an ulterior motive. Nor did she produce expert opinion evidence that it was below the standard of care owed to her by a reasonable insurer. Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass. 387, 403 (2003) (expert opinion required to establish applicable standard for good faith insurance practices and to demonstrate breach of such standard). Hanover established that McLellan had no reasonable expectation of proving an essential element of her case. Kourouvacilis, supra at 716. Summary judgment was proper.

Interest and attorney's fees. In her G.L. c. 93A demand letter, McLellan demanded interest for the nearly three-year delay. Even if there had been a breach of contract, McLellan cited no provision in the insurance policy for an award of interest upon a breach by Hanover, and any statutory basis for her demand was premature. Statutory prejudgment interest may be calculated from the date of a breach of contract only upon an award of damages. G.L. c. 231, § 6C. See Henry v. Morris, 62 Mass. App. Ct. 714, 717 (2004). Without a breach and without an award of damages, there was no claim for interest.

McLellan also demanded attorney's fees in her G.L. c. 93A demand letters. Generally, attorney's fees may not be awarded except in accordance with a statute or pursuant to a valid contractual provision. See generally Yorke Mgt. v. Castro, 406 Mass. 17, 18-19 (1989). McLellan cited no contractual provision in the insurance policy in support of her G.L. c. 93A demand for attorney's fees. Her statutory claim also fails because where there is no violation of G.L. c. 93A, there can be no award of attorney's fees. G.L. c. 93A, § 9(4). [Note 7]

Judgment affirmed.


[Note 1] She sought injunctive relief as well, but has not pressed that claim on appeal.

[Note 2] The check notes that it is for "HVAC Repairs Less $500 Deductible."

[Note 3] McLellan also sent letters to an insurance agency in 2014; there was no evidence that any of these letters were also sent to Hanover.

[Note 4] The check noted that it was for "Cov A: Power Surge Damages."

[Note 5] There can be no bad faith for the complained-of breach of contract as there was no breach of contract. See supra.

[Note 6] We note that there was no evidence in the record of any actual or attempted communication by McLellan with Hanover between her November, 2014 supplemental claim submission and her May, 2017 demand letter.

[Note 7] See also Fascione v. CNA Ins. Cos., 435 Mass. 88 (2001) (interpreting provision in G.L. c. 90, § 34M for award of attorney's fees and costs in personal injury protection benefits claims as not applicable where benefits were paid in full before judgment entered).