Posts tagged "National"

Philadelphia Indemnity Insurance Company v. National Union Fire Insurance Company of Pittsburgh, PA (Lawyers Weekly No. 12-083-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
NO. 2016-00045 BLS1
PHILADELPHIA INDEMNITY INSURANCE COMPANY
vs.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA
MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
Plaintiff Philadelphia Indemnity Insurance Company (PIIC) and defendant National Union Fire Insurance Company (National Union) each issued insurance policies to North Suffolk Mental Health Associated, Inc. (North Suffolk). PIIC issued a Commercial General Liability (CGL) policy; and National Union issued a Workers’ Compensation and General Liability (Workers’ Comp.) policy. In a case filed in the Middlesex Superior Court in 2011, captioned Estate of Stephanie Moulton v. Nicholas Puopolo, et al. (the Underlying Action), the plaintiff estate brought suit against eighteen directors of North Suffolk (the Director Defendants) asserting claims arising out of the work related death of Ms. Moulton, a North Suffolk employee. The Director Defendants tendered the claim to both PIIC and National Union. PIIC defended the claim (under a reservation of right) and National Union declined coverage. The Director Defendants’ motion to dismiss the Underlying Action was eventually allowed, after appeal to the Supreme Judicial Court (SJC). See Estate of Moulton v. Puopolo, 467 Mass. 478 (2014) (Moulton). In this action, PIIC has filed suit against National Union asserting claims for
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declaratory judgment and equitable subordination and seeking to recover the cost of its successful defense of the Underlying Action. The case is now before the court on the parties’ cross-motions for summary judgment. For the reasons that follow, National Union’s motion is ALLOWED, and PIIC’s motion is DENIED.
ADDITIONAL FACTS
The following additional facts are undisputed.
Ms. Moulton was an employee of North Suffolk, a charitable corporation that provides mental health and rehabilitation services. She was assaulted and killed by a patient while performing her job. As explained in Moulton, her estate (the Estate) filed the Underlying Action against the directors of North Suffolk and others. It alleged claims for willful, wanton, reckless, malicious and grossly negligent conduct and, also, as to the Director Defendants, breach of fiduciary duty. The complaint alleged that the Director Defendants “effectuated” policies and failed to “effectuate” other policies that caused Ms. Moulton’s death. Id. at 480. They “moved to dismiss the complaint chiefly on the grounds that, with respect to the wrongful death action, they are immune from suit, as Ms. Moulton’s employer, under the exclusive remedy provision, G.L.c. 152, § 24 of the Workers’ Compensation Act (act), and, with respect to the breach of fiduciary duty claim, they owed Moulton no such duty.” Id. The Superior Court denied the motion to dismiss; the director defendants sought interlocutory review under the doctrine of present execution; and the case was transferred to the SJC.
As relevant to this case, the SJC found that: “The complaint, fairly read, alleges that the Director Defendants, acting qua directors rather than in any other capacity, set and enforced misguided and wrongful corporate policies that resulted in Mouton’s death while in the course of
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her employment. There is no allegation that the directors undertook any action without a formal board meeting or vote, . . . to the extent that the complaint alleges that Moulton’s death arose from the adoption of or failure to adopt corporate policies, it alleges conduct by the charitable corporation that could have been occasioned only by the vote of its directors acting collectively as a board.” Id. at 488-489. It then held that, “we conclude that the director defendants were Moulton’s employer for purposes of the exclusivity provision of the act. As Moulton’s employer, the director defendants are therefore immune from suit for workplace injuries due to actions taken by the board.” Id. at 490-491.1
The Worker’s Comp. Policy
The National Union Workers’ Comp. policy was in effect when the Moulton claim was asserted. It is a standard form of Worker’s Comp. policy issued in Massachusetts. It has two coverage parts. Part One provides for payment of any benefits “required of you by the workers compensation law;” and that National Union has “the right and duty to defend at our expense any claim, proceeding or suit against you for benefits payable by this insurance. . . . We have no duty to defend a claim, proceeding or suit that is not covered by this insurance.”
Part Two provides Employers’ Liability Insurance. As explained by the SJC in HDH Corporation v. Atlantic Charter Ins. Co., 425 Mass. 433, (1997) (Atlantic Charter), the seminal decision addressing the coverage provided under a workers’ compensation policy, discussed at greater length infra: “Part Two, the employers’ liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out [of the workers’ compensation benefits system at the time of hire] brings a tort action for personal injuries.” Id. at 439 n.11.
1 The SJC also held that, “as Moulton’s employer, the director defendants, acting as a board, had no fiduciary duty to her.” Id. at 493.
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The declarations page of the Workers’ Comp. policy identifies North Suffolk as the named insured. There are no policy provisions or endorsements that broaden the definition of named insured to include directors, officers, or employees.
DISCUSSION
PIIC first argues that since, in Moulton, the SJC held that “the director defendants were Moulton’s employer for purposes of the exclusivity provision of the act,” they might also be insureds under the Workers’ Comp. policy, even though the policy terms do not extend coverage to them; or, at least, there is a “possibility” that they would be held to be insureds in a declaratory judgment action addressing coverage issues under the Workers’ Comp. policy. PIIC next argues that there then also exists a “possibility” that the claims asserted by the Estate in the Underlying Action were covered under either Part One or Part Two of the Workers’ Comp. policy coverage provisions. PIIC then goes on to cite Billings v. Commerce Ins. Co., 458 Mass. 194, 200-201 (2010) for the long established principle that: “In order for the duty of defense to arise, the underlying complaint need only show through general allegations, a possibility that the liability claim falls within the insurance coverage.” (Emphasis supplied.) According to PIIC, given this possibility of coverage, National Union had a duty to defend the Director Defendants in the Underlying Action.
The court finds it doubtful that the SJC’s holding that, under the “so-called exclusivity provision of the act,” the directors of a corporation cannot be sued for work place injuries in the Superior Court, when they were alleged to have done nothing more than vote on corporate policies, could be interpreted to mean that the directors were additional insureds under a workers’ compensation policy. However, the court declines to address that argument. This is
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because the SJC’s decision in Atlantic Charter clearly establishes that National Union’s Workers’ Comp. policy did not provide coverage for the claims asserted by the Estate in the Underlying Action.
Claims Asserted under Part One of the Workers’ Comp. Policy
In Atlantic Charter, an employee sued its former employer HDH Corporation (HDH) for personal injuries arising from her allegedly wrongful termination; her husband also asserted claims for loss of consortium. HDH tendered the claim to its workers’ compensation carrier, Atlantic Charter, which declined coverage. The case went to arbitration and the plaintiff employee recovered. HDH then sued Atlantic Charter, claiming coverage under Part One of the policy. The SJC explained the extent of coverage provided under Part One of a workers’ compensation policy as follows:
The terms of Part One of the policy clearly limit defense and indemnity of the employer to claims for benefits required by the workers’ compensation statute. However, the employee brought a civil action seeking monetary damages, and made no claim for workers’ compensation benefits. Indeed, no matter what the allegations of the complaint, as a matter of law, workers’ compensation benefits cannot be recovered by instituting a civil action. A claim for benefits must be brought before the department and adjudicated through the statutorily prescribed workers’ compensation system. See Neff v. Commissioner of the Dep’t of Indus. Accs., 421 Mass. 70, 74 (1995) (describing procedural course for the adjudication of workers’ compensation dispute through the Department of Industrial Accidents). See also Alecks’ Case, 301 Mass. 403, 404 (1938) (under the workers’ compensation statute, an employee “acquires a right to compensation for personal injury as provided in that act, to be enforced by claim against the insurer filed with the Industrial Accident Board…. [T]he policy of the act is to deprive [the employee] of all right of action in tort against his employer for damages for an injury within the scope of the [workers’] compensation act”).
The record demonstrates that a claim for benefits was never initiated by the employee, as mandated by G.L. c. 152, § 10. Accordingly, Atlantic is correct that it had no duty to defend the civil action because the complaint did not state a claim that could result in liability which Atlantic would be obligated to pay under any reasonable interpretation of Part One of the policy. See, e.g., Jimmy’s Diner, Inc. v. Liquor Liab. Joint Underwriting Ass’n of Mass., 410 Mass. 61, 65 (1991).
425 Mass. at 433.
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In Atlantic Charter, the SJC also explained the important public policy considerations underlying the legislation that it was interpreting:
Public policy also supports our decision. The fundamental purpose of the workers’ compensation system is to make funds more readily available to injured employees. Accordingly, the Commonwealth requires all employers to provide workers’ compensation benefits to their employees. See G.L. c. 152, § 25A. As amici point out, the cost of mandatory workers’ compensation insurance is a significant aspect of the business climate of the Commonwealth. Recent legislative reforms have sought to lower the insurance rates employers must pay to provide the security of workers’ compensation benefits to their employees. See St.1991, c. 398. Requiring workers’ compensation insurers to defend civil actions outside the workers’ compensation system would represent an unwarranted expansion of coverage historically understood as provided under this mandatory form of insurance, a result which would increase insurance costs for employers, and could gut the legislative scheme for workers’ compensation. See, e.g., La Jolla Beach & Tennis Club, Inc., supra at 44, 36 Cal.Rptr.2d 100, 884 P.2d 1048.
Id. at 440.
In the present case, Moulton’s estate made no claim to recover workers’ compensation benefits2; indeed, it did not sue North Suffolk, but rather its directors, in an obvious and unsuccessful attempt to recover damages and not the benefits provided under the act.3 PIIC’s argument that the SJC’s decision in Moulton overruled the express holding in Atlantic Charter that Part One of a workers’ compensation policy only provides coverage for workers’
2 The workers’ compensation act has long been held to provide the exclusive remedy by which the estate of deceased employee can recover from his employer. See McDonnell v. Berkshire St. Ry. Co., 243 Mass. 94, 95
(1922) (“The employer who is insured under the workmen’s compensation act is relieved of all
statutory liability, including that for death of an employee under the employers’ liability act”);
Cozzo v. Atlantic Refining Co., 299 Mass. 260, 262 (1938) (“Nor can an action at law be
maintained against such employer [i.e., one who is insured under the workers’ compensation law] to recover for the death of an employee resulting from such injury [i.e., one arising out of and in
the course of his employment],” citing G. L. c. 152, 68); Ferriter v. Daniel O’Connell’s Sons,
Inc., 381 Mass. at 528 (“We acknowledge that G. L. c. 152, 1[4] and 68, bar a deceased
employee’s dependents from recovering under G. L. c. 229, 2 and 2B, for loss of consortium,
as against an employer covered by G. L. c. 152”).
3 In Peerless Ins. Co. v. Hartford Ins. Co., 48 Mass. App. Ct. 561 (2000), decided shortly after Atlantic Charter, the Appeals Court addressed a coverage dispute between an employer’s general liability insurer and its workers’ compensation insurer very much like the dispute presented by this case. There the estate of a deceased employee sued the employer. The workers compensation carrier denied coverage and the general liability carrier defended the claim. The Appeals Court held that because the estate could not bring a claim against the employer for workers compensation benefits or for wrongful death, the workers’ compensation carrier had no duty to defend and no obligations to the general liability carrier.
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compensation benefits, and those benefits can only be claimed in the Department of Industrial Accidents, simply does not parse. In holding that the Estate could not bring an action against the Director Defendants based on allegations that they had voted to adopt corporate policies that allegedly contributed to Ms. Moulton’s death, the SJC was clearly not expanding the coverage provided by workers’ compensation policies. It was also not seeking to “gut” the public policy considerations underlying the statutory scheme, which were intended to reduce the costs of this mandatory insurance coverage, by saddling workers compensation insurers with potential additional costs unrelated to the employee benefits mandated by the act. Indeed, in Moulton, the SJC was not addressing insurance at all. It was only concerned with whether the Director Defendants were subject to suit at common law by an injured employee.
In a somewhat round about argument, PIIC suggests that the Appeals Court’s decision in Norfolk & Dedham Mutual Fire Ins. Co. v. Cleary Consultants, Inc., 81 Mass. App. Ct. 40 (2011) (Norfolk & Dedham) supports its position. In furtherance of its arguments that the claims asserted in the Underlying Action were not covered, National Union quoted the following sentence from Atlantic Charter: “Indeed, no matter what the allegations of the complaint, as a matter of law, workers’ compensation benefits cannot be recovered by instituting a civil action.” 425 Mass. at 439. PIIC argues that in Norfolk & Dedham, the Appeals Court noted that an insurer that provided coverage for slander, libel, and invasion of privacy could not disclaim coverage just because these common law claims were asserted together with claims for sexual harassment before the Massachusetts Commission Against Discrimination (MCAD). In fact, in that case, the Appeals Court held that those claims could be asserted as part of a claim for sexual harassment, because they are compensable under an award for emotional distress. The Court did go on to comment that even if the claims were “viewed as a misguided effort to adjudicate
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claims of slander and invasion of privacy in an improper forum, that would not affect Norfolk’s duty to defend. An insurer’s obligation to defend is not limited to valid claims; it extends even to claims potentially dismissible for lack of subject matter jurisdiction.” 81 Mass. App. Ct. at 48-49. This comment, of course, has no bearing on the statutory scheme for workers’ compensation benefits, in which a workers compensation policy insures only those benefits provided by the act, benefits that can only be awarded by the Department of Industrial Accidents. Obviously, a covered claim filed in the wrong court still gives rise to a duty to defend. An insurer could not disclaim a duty to defend because a plaintiff mistakenly filed an action in federal court, when there was no federal jurisdiction, but the policy covered the injury alleged in the complaint. A worker’s compensation insurer does not have a duty to defend a claim filed in Superior Court for damages that are expressly not covered under the workers’ compensation system.
Claims Asserted under Part Two of the Workers’ Comp. Policy
At oral argument, PIIC acknowledged that its principle argument that the “possibility” of coverage existed and this triggered National Union’s duty to defend was based on Part One of the coverage provisions. It nonetheless also asserted that a duty to defend arose under Part Two. Here, PIIC does not argue that Moulton overturned that part of Atlantic Charter in which the SJC stated that: “Part Two, the employers’ liability portion of the insurance policy, is intended to provide coverage in the rare circumstance in which an employee who has affirmatively opted out brings a tort action for personal injuries.” Rather, PIIC argues that the Estate’s amended complaint “included claims for funeral expenses, as well as for wrongful death and pain and suffering without reference to the Wrongful Death Act, and did not indicate whether Moulton’s parents were dependent upon her for financial support. Those claims arguably fell within the
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scope of claims subject to G.L. c. 152, §§ 33, 31 and/or 32, respectively, but were presumably intended to circumnavigate the Workers’ Compensation statute entirely and therefore [because there was no allegation that Moulton had waived her rights to workers’ compensation benefits] left open the question whether Moulton had preserved her common law rights in lieu of accepting Worker’s Compensation benefits.” In consequence, until it could be established that Ms. Moulton had not affirmatively opted out of workers’ compensation coverage when she began work at North Suffolk, the possibility that claims asserted in the amended complaint were covered by the Workers’ Comp. policy existed.
However, in Moulton, the SJC summarily dismissed the suggestion that an employer/defendant had to assert non-waiver of workers’ compensation benefits as an affirmative defense. It explained that the statute (G.L. c. 152, § 24) expressly provides that the employee “shall be held to have waived his right of action at common law,” if he does not provide a written notice that he is claiming his right to opt out at the beginning of his employment. Therefore, non-waiver is not an affirmative defense, but rather it is the plaintiff that must allege in the complaint that the “right to payment under the act” was waived. 467 Mass. at 484 n. 12. This was not pled in the Estate’s amended complaint (nor could it be,) and therefore the complaint alleged no facts even suggesting a claim covered by workers’ compensation insurance. “When the allegations in the underlying complaint lie expressly outside the policy coverage and its purpose, the insurer is relieved of the duty to investigate and defend the claimant.” Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass 387, 394-395 (2003) (Internal citations and quotations omitted.)
Moreover, the issue now before the court is not whether the Estate stated a cause of action against the Director Defendants that could possibly survive a motion to dismiss. This is a
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coverage case between two insurers. PIIC issued a comprehensive general liability policy to its insured, North Suffolk. It is claiming a right to equitable subrogation or contribution from National Union in its capacity as North Suffolk’s workers’ compensation carrier. Its rights to recover against National Union are no greater than North Suffolk’s rights to demand that National Union defend the Underlying Action. Clearly, North Suffolk could not demand coverage based on the absence of an allegation that Ms. Moulton had affirmatively opted out of her rights for workers’ compensation benefits, knowing full well that she had not.
ORDER
For the foregoing reasons, National Union’s motion for summary judgment is ALLOWED and PIIC’s moiton for summary judgment is DENIED. Final judgment shall enter dismissing the complaint.
_______________________
Mitchell H. Kaplan Justice of the Superior Court
Dated: June, 13 2017

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Posted by Stephen Sandberg - July 3, 2017 at 10:06 pm

Categories: News   Tags: , , , , , , , , , ,

George, et al. v. National Water Main Cleaning Company, et al. (Lawyers Weekly No. 10-110-17)

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

SJC-12191

ROBERT GEORGE & others[1]  vs.  NATIONAL WATER MAIN CLEANING COMPANY & others.[2]

Suffolk.     February 14, 2017. – June 26, 2017.

Present:  Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

Supreme Judicial Court, Certification of questions of law.  Massachusetts Wage Act.  Labor, Wages, Failure to pay wages, Damages.  Damages, Interest.  Interest.  Judgment, Interest.  Practice, Civil, Interest, Judgment, Damages.

Certification of a question of law to the Supreme Judicial Court by the United States District Court for the District of Massachusetts.

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Posted by Stephen Sandberg - June 26, 2017 at 2:48 pm

Categories: News   Tags: , , , , , , , ,

New England Patriots Fans v. National Football League, et al. (Lawyers Weekly No. 12-060-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1684CV03929-BLS2
____________________
NEW ENGLAND PATRIOTS FANS
v.
NATIONAL FOOTBALL LEAGUE, ROGER GOODELL, and ROBERT KRAFT
____________________
MEMORANDUM AND ORDER DENYING MOTION SEEKING RECONSIDERATION OF THE ORDER DISMISSING PLAINTIFF’S APPEAL
Final judgment dismissing this action was entered on February 27, 2017. Plaintiffs filed a notice of appeal on April 12, 2017. The Court allowed Defendants’ motions to dismiss the appeal as untimely because it was filed more than thirty days after the entry of judgment. See Mass. R. App. P. 4(a). In its prior ruling, the Court explained that Plaintiffs’ post-judgment motion for findings did not toll the deadline for filing a notice of appeal because that motion was not served within ten days of the entry of judgment. See Mass. R. Civ. P. 52(b). The Court has no power to extend this time limit. See Mass. R. Civ. P. 6(b).
Plaintiffs seek reconsideration of the order dismissing their appeal. They argue that they are entitled to the benefit of the “mailbox rule” because the final judgment was mailed to their counsel. Plaintiffs contend that their Rule 52(b) post-judgment motion for findings was timely because the deadline for serving that motion was automatically extended by three days under Mass. R. Civ. P. 6(d).
This argument is incorrect. Rule 6(d) only adds more time to deadlines that allow or require a party to do something “within a prescribed period after the service of a notice or other papers upon him.” But the ten-day deadline for serving post-judgment motions for findings does not start to run upon “service” of anything. Instead, such a motion must be served “not later than 10 days after entry of judgment.” Rule 52(b).
The three-day grace period after mailing provided in Rule 6(b) therefore does not apply to Plaintiff’s deadline for filing post-judgment motions under Rule 52(b). See Commonwealth v. White, 429 Mass. 258, 261-262 (1999) (since period for filing notice of appeal starts to run upon entry of judgment, not upon service, mailbox rule in Mass. R. App. P. 14(c) does not apply); Goldstein v. Barron, 382 Mass. 181, 182-
– 2 –
185 (1980) (since period for posting medical practice bond starts to run upon entry of tribunal’s finding, not upon service, mailbox rule in Mass. R. Civ. P. 6(d) does not apply); Flint v. Howard, 464 F.2d 1084, 1087 (1st Cir. 1972) (per curiam) (since deadline for filing post-judgment motion for findings under Fed. R. Civ. P. 52(b) “begins to run from ‘entry of judgment’ rather than from receipt of notice,” mailbox rule in Fed. R. Civ. P. 6 does not apply); see also Smaland Beach Ass’n, Inc. v. Genova, 461 Mass. 214, 228 (2012) (judicial construction of federal rules of civil procedure applies to parallel state rules).
The Court concludes that Plaintiffs’ other argument in support of the motion for reconsideration are also without merit.
ORDER
Plaintiffs’ motion for reconsideration of the dismissal of their notice of appeal is DENIED
May 16, 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court

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Posted by Stephen Sandberg - June 1, 2017 at 3:00 am

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Federal National Mortgage Association v. Gordon, et al. (Lawyers Weekly No. 11-060-17)

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-441                                        Appeals Court

FEDERAL NATIONAL MORTGAGE ASSOCIATION  vs.  HEATHER GORDON & another.[1]

No. 15-P-441.

Suffolk.     March 8, 2016. – May 17, 2017.

Present:  Hanlon, Sullivan, & Massing, JJ.

Trespass.  Real Property, Trespass, Mortgage, Lease.  Mortgage, Foreclosure.  Landlord and Tenant, Control of premises.  Housing Court, Jurisdiction.  Jurisdiction, Housing Court.  Summary Process.  Practice, Civil, Summary judgment, Summary process.

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Posted by Stephen Sandberg - May 17, 2017 at 3:58 pm

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Federal National Mortgage Association v. Marroquin, et al. (Lawyers Weekly No. 10-074-17)

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

SJC-12139

FEDERAL NATIONAL MORTGAGE ASSOCIATION  vs.  ELVITRIA M. MARROQUIN & others.[1]

Essex.     January 9, 2017. – May 11, 2017.

Present:  Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

Mortgage, Foreclosure, Real estate.  Real Property, Mortgage, Sale.  Notice, Foreclosure of mortgage.

Summary process.  Complaint filed in the Northeast Division of the Housing Court Department on June 18, 2012.

The case was heard by David D. Kerman, J., on motions for summary judgment.

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Posted by Stephen Sandberg - May 12, 2017 at 12:00 am

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Anderson, et al. v. National Union Fire Insurance Company of Pittsburgh PA, et al. (Lawyers Weekly No. 10-022-17)

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

SJC-12108

ODIN ANDERSON & others[1]  vs.  NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA & others.[2]

Middlesex.     October 6, 2016. – February 2, 2017.

Present:  Gants, C.J., Botsford, Lenk, Hines, Gaziano, & Lowy, Budd, JJ.

Consumer Protection Act, Insurance, Unfair or deceptive act, Offer of settlement, Damages.  Insurance, Settlement of claim.  Damages, Consumer protection case, Interest, Punitive.  Interest.  Judgment, Interest.  Practice, Civil, Judgment, Damages, Interest.

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Posted by Stephen Sandberg - February 2, 2017 at 6:14 pm

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Everest National Insurance Company v. Berkeley Place Restaurant Limited Partnership (Lawyers Weekly No. 12-155-16)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
CIVIL ACTION
No. 2011-1470
EVEREST NATIONAL INSURANCE COMPANY
vs.
BERKELEY PLACE RESTAURANT LIMITED PARTNERSHIP
ORDER ON POST-VERDICT ISSUES AND FOR JUDGMENT
This action was commenced by Everest National Insurance Company as subrogee of three
persons: Timothy J. Barletta (“Timothy”), Barletta Engineering Corporation (“Barletta Corp.”)
and Osprey Equipment Corporation (“Osprey”). The action is one for contribution under G.L. c.
231B, § 1(d ). Everest, as insurer for all three persons, paid a settlement amount to a state trooper
who was seriously injured in a car accident when he was struck from behind by a car driven by
Timothy. Everest asserted in this case that defendant, Berkeley Place Restaurant Limited
Partnership, d/b/a Grill 23 (“Grill 23″), is jointly liable to the state trooper as a result of
negligently serving Timothy alcohol in the hours before the accident. Following a jury verdict in
favor of Everest that determined that Grill 23 is liable as a joint tortfeasor and that the settlement
reached by Everest with the state trooper and his wife was reasonable, the parties address two
issues: (1) how many tortfeasors bear responsibility for a pro rata share of the settlement, and (2)
what amount is Everest entitled to receive as contribution from Grill 23? Both questions involve
application of the contribution statute. For the first question, the court must determine whether
“if equity requires, the collective liability of some as a group shall constitute a single share.” G.L.
1
c. 231B, § 2(b). The second question is whether, under G.L. c. 231B, §1, Everest may obtain
contribution for more than a pro rata share of what it paid in settlement?
FACTS
On Saturday night, September 27, 2008, Timothy attended a private birthday party at the
Grill 23 restaurant in Boston. The person being celebrated was Timothy’s sister-in-law, Laura
Barletta, and the person throwing the party was her husband, Timothy’s brother, Vincent
Barletta. Approximately 40 people attended the party and the guests were, generally, friends and
family of Laura Barletta. The party was held in a function room, separate from the rest of the
restaurant.
There was evidence before the jury sufficient to show that at the party Timothy was
served alcohol after it had been recognized by the Grill 23 manager on duty that Timothy was
visibly intoxicated. Timothy left the party with his girlfriend, got into a motor vehicle, and drove
west on the Mass Pike. Several minutes later, Timothy, while operating under the influence of
alcohol, smashed into the rear of a state police vehicle parked on the edge of the Pike to assist a
stopped car. State Trooper Christopher Martin was inside the state police vehicle. As a result of
the collision, Trooper Martin suffered serious personal injuries. Subsequently, Timothy pleaded
guilty to the criminal charge of operating under the influence of alcohol.
On September 18, 2009, Trooper Martin and his wife commenced a lawsuit against
Timothy, Barletta Corp. and Osprey. The lawsuit alleged the negligence of Timothy as the driver.
The lawsuit also alleged that the vehicle Timothy was driving at the time of the accident was
“owned, controlled and maintained by” Barletta Corp. “and/or” Osprey. Therefore, “as owner(s)
of the vehicle, [the companies] were responsible for the negligent operation, ownership, control
2
and maintenance of the motor vehicle.” Complaint, ¶s 12 and 15.1
On May 3, 2010, the lawsuit commenced by Trooper Martin and his wife was settled. In
connection with the settlement, a Settlement Agreement and Release (the “Release”) was
executed. Exhibit 3. Pursuant to the Release, Everest and Travelers Insurance Company, as
liability insurers of all three of Timothy, Barletta Corp. and Osprey, agreed to pay a total of
$ 3,750,000, present value, to the Martins as part of a structured settlement to be paid over twenty
years. In return, the Martins released Timothy, Barletta Corp. and Osprey from any and all claims
arising out of the accident.2
The evidence at the trial of this case established that at the time of the accident, Timothy
was employed by Barletta Corp. Barletta Corp. was a family business. The president of Barletta
Corp. was Vincent Barletta.
Osprey was a wholly-owned subsidiary of Barletta Corp. Osprey owned the vehicles and
equipment used by Barletta Corp. Certain employees of Barletta Corp., including Timothy, were
provided with cars owned by Osprey. Pursuant to company policy, employees provided with
company cars were allowed to utilize the cars for personal use as well as for company business.
There was no restriction on the use of a company car. Vincent Barletta had no direct involvement
1 The Complaint also alleged that “[u]pon information and belief, at all relevant times
hereto, Timothy Barletta was acting in furtherance of his companies’ business.” Complaint ¶ 7.
Neither party in this lawsuit asserts that Timothy was acting in furtherance of the companies’
business on the night of the accident. The Complaint was not marked as an exhibit to be
submitted to the jury. Instead, the Complaint has been provided to the court by Grill 23, without
objection, for the purpose of its argument regarding how the court should exercise its equitable
discretion under G.L. c. 231B, § 2(b).
2 The Release also released any and all claims against Grill 23 arising from the accident,
and all claims against the insurers under G.L. c. 93A.
3
in supervising the use of company cars. On the night of the accident, Timothy was driving a car
owned by Osprey and provided to him by his employer.
Vincent Barletta testified that, at the birthday party, he had very little contact with
Timothy. He did not see Timothy show any signs of intoxication. To the extent he did observe
Timothy, nothing in his behavior stood out. The testimony from several witnesses confirmed that
Timothy was seated at a table for six to eight people, away from the head table where Vincent
Barletta was seated with his wife. Vincent Barletta had no memory of observing Timothy
consume alcohol. I find Vincent Barletta’s testimony to be credible.
Before the settlement, counsel for Trooper Martin wrote two demand letters to the
insurers. In the first letter (Exhibit 28), counsel stated that “I understand from our conversations
that liability in this matter is admitted (at least for purposes of mediation).” The letter focused
upon the damages suffered by Trooper Martin and requested $ 7,500,000 to settle. The second
letter (Exhibit 29), stated more specifically that “[t]he evidence of clear liability against
[Timothy] Barletta is undisputed.” The rest of the letter focused on damages and the additional
claim that the insurers were acting in violation of G.L. c. 93A and c. 176D by not yet agreeing to
settle. A demand for settlement of $ 11,000,000 was asserted. Neither letter asserted a theory of
liability against Barletta Corp. or Osprey, other than that Timothy was allegedly a “principal” of
those companies.
At trial, Everest called as a witness Robert A. DeLello. Mr. DeLello was counsel on the
Complaint filed for the Martins to commence the lawsuit against Timothy, Barletta Corp. and
Osprey. He continued as counsel to the Martins in connection with the negotiation of the
settlement. As a result of the determination that the question of pro rata shares of tortfeasors is an
4
issue to be decided based upon principles of equity (see G.L. c. 231B, § 2(b)), Mr. DeLello gave
the following testimony to the court, outside of the hearing of the jury.
Mr. DeLello testified that the theory of the Martins’ case against Barletta Corp. and
Osprey was to hold the companies liable under G.L. c. 231, § 85A; that is, as the owner of the
vehicle Timothy was driving on the night of the accident. Mr. DeLello testified that the police
report listed both companies as the owner of the vehicle. While he acknowledged that if the
litigation had not settled he would have taken discovery regarding possible other theories of
liability of the companies such as negligent entrustment or negligent maintenance, his intent was
to hold the companies vicariously liable as the owner(s) of the vehicle. In fact, the Martins’ case
settled before any discovery was taken.
ANALYSIS
Pro Rata Shares
General Laws c. 231B, § 2 provides as follows:
In determining the pro rata shares of tortfeasors in the entire liability (a)
their relative degrees of fault shall not be considered; (b) if equity
requires, the collective liability of some as a group shall constitute a
single share; and ( c) principles of equity applicable to contribution
generally shall apply.
Accordingly, I must decide, using principles of equity, whether Timothy, Barletta Corp. and
Osprey constitute three tortfeasors and, if they do, whether they should be grouped into a single
share. The consequences of that determination are significant to the parties. If Timothy, Barletta
Corp. and Osprey constitute a single share then the pro rata apportionment is 50% for Everest’s
insureds and 50% for Grill 23. Grill 23 argues that Everest’s share is on behalf of three
tortfeasors so that Grill 23’s liability for contribution is 25% (as one tortfeasor among four).
5
The parties take disparate positions with respect to which party bears the burden of proof
on this issue. While it is clear that Everest bears the burden to prove that Grill 23 was a
tortfeasor, and that the settlement Everest reached with the Martins was reasonable, the parties
cite no authority with respect to which party has the burden to prove how the court should
exercise its equitable authority under § 2(b). Grill 23 says that Everest must prove a negative; i.e.,
that Barletta Corp. and Osprey were not directly liable for their own active negligence. Logic
suggests, on the other hand, that if Grill 23 wishes the court to find that the corporations are
liable as direct tortfeasors (and not merely liable vicariously as the owner(s) of the vehicle), then
Grill 23 should prove their liability. For purposes of my conclusion based on the evidence in this
case, I assume that Everest bears the burden of proof..
The first question is whether there was sufficient evidence to conclude that Barletta Corp.
and Osprey were tortfeasors. As described above, Mr. DeLello testified that the theory of the
action he commenced on behalf of the Martins against the two corporations was that the
corporations were vicariously liable under G.L. c. 231, § 85A. Under that statute, an evidentiary
presumption is imposed to make the owner of a vehicle liable. “[E]vidence of a [owner’s] ownership of a motor vehicle shifts the burden of persuasion to the [owner] to show that the
driver was not a person for whose conduct the [owner] was legally responsible.” Thompson v.
Auto Credit Rehabilitation Corp., 56 Mass. App. Ct. 1, 5 (2002). The statute “is a rule of
evidence that makes no change in the substantive law of negligence.” Id. The substantive law is
that the driver’s actions may be imputed to the owner if, at the time of the accident, the owner
had the authority and means to control the driver’s conduct. Id. “Like the responsibility of a
principal for the negligence of his agent, or a master for that of his servant, the liability of the
6
registered owner is not joint and several, but derivative.” Gangl v. Ford Motor Credit Co., 37
Mass. App. Ct. 561, 563 (1994). In sum, absent evidence in rebuttal, § 85A makes an owner
vicariously liable for the conduct of the driver. As a practical matter, the statute provides a good
faith basis for a plaintiff to sue the owner of a vehicle involved in an accident caused by the
driver of the vehicle.
Consequently, Grill 23’s argument that the existence of the Martin’s Complaint against
Barletta Corp. and Osprey demonstrates that the corporations were tortfeasors is rejected. The
fact that the corporations were sued was, according to Mr. DeLello, based on vicarious liability.
A party held vicariously liable is not a party who is “jointly liable in tort” as required by G.L. c.
231B, § 1 to be classified as a tortfeasor. Lastly, Mr. DeLello’s testimony that he would have,
absent settlement, pursued discovery to determine if there was a basis to hold the corporations
directly liable as tortfeasors proves nothing.3 He did not conduct discovery and he offered no
evidence to support a claim that the corporations were directly liable.
At the trial of this action there was no evidence, offered by either side, to support a
conclusion that Barletta Corp. or Osprey were directly negligent for their own conduct. Grill 23
argues that Vincent Barletta, as president of Barletta Corp., the parent company of Osprey,
should have stopped Timothy from operating a company vehicle that evening. I am not
persuaded. As described above, there was insufficient evidence to suggest negligence by Vincent
Barletta, and therefore insufficient evidence to find that Barletta Corp. and/or Osprey were
3 Similarly, the fact that the corporations were included as released parties in the
settlement Release does not help Grill 23. Having been named as defendants in the Martin
lawsuit, a lawyer would be guilty of malpractice if he or she did not name the defendants as
parties to be released.
7
tortfeasors.
Under § 2(b), the court may apply equitable principles to “group” tortfeasors into a single
share. I could find little authoritative guidance regarding the exercise of that equitable authority.
The authority apparently applies to the situation where an alleged tortfeasor is only vicariously
liable. See Comment to § 2, Uniform Contribution Among Tortfeasors Act (1955 Revised
Act)(“[I]t invokes the rule of equity which requires class liability, including the common liability
arising from vicarious relationships, to be treated as a single share”). Of course, if a company is
held liable based solely on vicarious liability, the company is not a tortfeasor at all and cannot be
held liable for contribution. Elias v. Unisys Corporation, 410 Mass. 479, 481 (1991)(vicarious
liability arises only by operation of law; it is derivative of the wrongful act of the agent; employer
is not, therefore, a joint tortfeasor under c. 231B). Nevertheless, the Comment makes clear that
vicariously liable parties should be grouped with the actual tortfeasor as a single share.4
In this case, I find that the evidence compels the conclusion that Barletta Corp. and
Osprey were not negligent actors. As a result, as a matter of equity, I group Timothy Barletta,
Barletta Corp. and Osprey as representing a single share of the entire liability for the accident
based upon the negligence of Timothy.
Everest’s Right to Contribution
In order to obtain contribution, the settling tortfeasor must have “agreed while action is
pending against him to discharge the common liability and has within one year after the
4 The Comment also suggests that it is appropriate to “group” tortfeasors into a single
share where, for example, there is allocation of liability between several actors (such as owners
of a building), on the one hand, and a tortfeasor having no connection with the actors, on the
other hand.
8
agreement paid the liability and commenced his action for contribution.” G.L. c. 231B, § 3(d)(2).
The Release (Exhibit 3) indicates that the “Insurers” agreed to pay the Martins in a
structured settlement over twenty years amounts having a present value of $ 3,750,000. “Insurers”
is defined as both Everest and Travelers Insurance Company.
Grill 23 does not challenge the calculation of the present value of what the Insurers
agreed to pay. The agreement to pay the amounts with a present value of $ 3,750,000 triggers the
Insurers right to contribution. LeBlanc v. Logan Hilton Joint Venture, 78 Mass. App. Ct. 699,
711 (2011)(“To preserve a right to contribution against codefendants, that provision [§ 3(d)] requires a settling party either to make payment discharging the common liability of all
defendants, or to agree to make such a payment, and then to pursue the claim for contribution
within a year after the payment”). It was the agreement to pay amounts with a present value of
$ 3,750,000 to the Martins that was put in evidence before the jury, by agreement, for the jury to
determine whether the settlement was “reasonable” under G.L. c. 231B, § 1(c).
Grill 23 does challenge, however, whether Everest may obtain contribution for the
portion of the $ 3,750,000 that was paid by Travelers, not Everest. According to Everest, its
portion of the present value payment, as the excess carrier for the liability of Timothy, Barletta
Corp. and Osprey, was $ 2,787,000. Travelers’ portion was $ 963,000. Grill 23 agrees with that
description of the Insurers respective shares. Bench Memorandum Regarding Legal Framework,
submitted by Grill 23, p.2 (September 13, 2016).
It is readily apparent that Travelers is not a party to this action. Everest presented no
evidence to support an argument that it is an assignee or otherwise the holder of Travelers’ right
of contribution. Indeed, at this late date, Travelers has waived any claim for contribution.
9
The statute, G.L. c. 231B, §1(d), could not be more clear that the right of contribution
runs “to the extent of the amount it has paid in excess of the tortfeasor’s pro rata share of the
common liability.” (Emphasis added). The “it” in that phrase refers to the insurer seeking
contribution. Here, Everest is the only insurer with a claim. Everest paid $ 2,787,000, 50% of
which is in excess because it proved that Grill 23 was jointly liable and that the amount paid in
settlement was reasonable. As a result, Grill 23 is liable to Everest for 50% of $ 2,787,000, or
$ 1,393,500.
CONCLUSION
Based on the verdict returned by the jury, and my findings described herein regarding pro
rata share and the amount recoverable by Everest, judgment shall enter in favor of Everest
against Grill 23 in the amount of $ 1,393,500, plus prejudgment interest.
By the Court,
Edward P. Leibensperger
Justice of the Superior Court
Date: November 7, 2016
10

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Posted by Stephen Sandberg - December 6, 2016 at 12:36 am

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U.S. Bank National Association v. Bolling (Lawyers Weekly No. 11-116-16)

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-1259                                       Appeals Court

U.S. BANK NATIONAL ASSOCIATION, trustee,[1]  vs.  WENDY BOLLING.

No. 15-P-1259.

Hampden.     June 9, 2016. – September 1, 2016.

Present:  Grainger, Meade, & Wolohojian, JJ.

Contract, Choice of law clause.  Mortgage, Assignment, Foreclosure.  Real Property, Mortgage.  Practice, Civil, Standing.  Conflict of Laws.

Summary process.  Complaint filed in the Western Division of the Housing Court Department on April 17, 2012.

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Posted by Stephen Sandberg - September 1, 2016 at 9:59 pm

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Santos v. U.S. Bank National Association, et al. (Lawyers Weekly No. 11-081-16)

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-334                                        Appeals Court

MILTON R. SANTOS[1]  vs.  U.S. BANK NATIONAL ASSOCIATION, trustee,[2] & others.[3]

No. 15-P-334.

Suffolk.     February 24, 2016. – July 8, 2016.

Present:  Katzmann, Milkey, & Blake, JJ.

Bank.  Loan.  Mortgage, Real estate, Foreclosure.  Real Property, Mortgage.  Notice.  Practice, Civil, Motion to dismiss, Summary judgment, Summary process.  Summary Process.

Civil action commenced in the Superior Court Department on March 28, 2011.

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Posted by Stephen Sandberg - July 8, 2016 at 6:12 pm

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National Grid USA Service Company, Inc. v. Commissioner of Revenue (Lawyers Weekly No. 11-065-16)

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

14-P-1861                                       Appeals Court

NATIONAL GRID USA SERVICE COMPANY, INC.  vs.  COMMISSIONER OF REVENUE.

No. 14-P-1861.

Suffolk.     December 11, 2015. – June 8, 2016.

Present:  Cypher, Carhart, & Blake, JJ.

Taxation, Abatement, Corporate excise.  Public Utilities.

Appeal from a decision of the Appellate Tax Board.

John S. Brown (Donald-Bruce Abrams with him) for the taxpayer.

Brett M. Goldberg for Commissioner of Revenue.

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Posted by Stephen Sandberg - June 8, 2016 at 7:04 pm

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