McLaughlin, et al. v. American States Insurance Company (Lawyers Weekly No. 11-099-16)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us 15-P-729 Appeals Court DANIEL McLAUGHLIN & another[1] vs. AMERICAN STATES INSURANCE COMPANY. No. 15-P-729. Middlesex. May 19, 2016. – August 12, 2016. Present: Kafker, C.J., Cohen, & Green, JJ. Consumer Protection Act, Insurance, Offer of settlement, Unfair act or practice, Attorney’s fees, Damages. Insurance, Settlement of claim, Unfair act or practice. Damages, Attorney’s fees. Practice, Civil, Attorney’s fees. Civil action commenced in the Superior Court Department on February 21, 2008. The case was heard by Paul D. Wilson, J. John F. Brosnan (James E. Harvey, Jr. with him) for the defendant. Matthew N. Kane for the plaintiffs. GREEN, J. After the well installed by Shaun Harrington began pumping salt water through the plaintiffs’ (McLaughlins) irrigation system, causing extensive damage to their landscaping, the McLaughlins sought recovery from Harrington and his insurer, the defendant, American States Insurance Company (ASIC). Both denied liability, and the McLaughlins eventually filed an action against Harrington and two others.[2] After the McLaughlins obtained a judgment in their favor against Harrington, they commenced this action against ASIC, claiming unfair insurance settlement practices. A judge of the Superior Court entered judgment against ASIC, and awarded the McLaughlins damages based on the legal expenses they incurred in prosecuting their suit against Harrington, but declined to award multiple damages as permitted by the statute. See G. L. c. 93A, § 9(3). On the parties’ cross appeals, we conclude that the judge correctly determined that ASIC failed to conduct a reasonable investigation of the McLaughlins’ claim, and that it failed to make a reasonable offer of settlement after liability of its insured became reasonably clear. We also discern no error of law or abuse of discretion by the judge in his refusal to award the McLaughlins multiple damages. However, we conclude that the judge erred in his failure to award the McLaughlins damages based on the loss of use of the funds ASIC should have offered in settlement once Harrington’s liability became reasonably clear. Background. We summarize the written findings of fact entered by the judge in his detailed and thorough memoranda of decision.[3] In 2003, Assurance was nearing completion of construction of a home for the McLaughlins in Osterville. The home is on a peninsula, surrounded on three sides by salt water bodies connected to Nantucket […]