Williamson-Green v. Interstate Fire and Casualty Company (Lawyers Weekly No. 12-062-17)

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1684CV03141-BLS2 ____________________ MICHELLE WILLIAMSON-GREEN, as Administratrix of the Estate of James W. Williamson IV v. INTERSTATE FIRE AND CASUALTY COMPANY ____________________ MEMORANDUM AND ORDER DENYING DEFENDANT’S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS James W. Williamson IV died from injuries sustained while he was inspecting a roof from a bucket lift that tipped over. His estate brought a wrongful death action against both the lift manufacturer and the company that had had rented out the lift, Equipment 4 Rent, Inc. (“E4R”). The jury found that the manufacturer and E4R were both negligent and awarded compensatory damages of $ 4.3 million. It also found that “E4R’s conduct was grossly negligent, willful, wanton, or reckless” and awarded additional punitive damages of $ 5.9 million, as allowed under G.L. c. 229, § 2. Interstate Fire and Casualty Company had insured E4R. It paid E4R’s share of the compensatory damages but refused to pay any part of the punitive damage award. In this action Plaintiff claims that Interstate failed to settle the claims against E4R after its liability had become reasonably clear. She asserts one claim on behalf of Mr. Williamson’s estate and four claims as E4R’s assignee. The assigned claims allege that E4R’s damages include “being exposed to an uncovered punitive damages award that would have been avoided had Interstate settled the Underlying Action.” Interstate has moved for judgment on the pleadings on the assigned claims. It argues that requiring an insurer to pay any part of a punitive damages award, even as consequential damages arising from the insurer’s failure to settle a meritorious claim, would be against public policy. The Court must DENY Interstate’s motion because Massachusetts law does not insulate an insurer from liability for damages incurred because its insured caused bodily injury, engaged in reckless or grossly negligent misconduct, or did both. The limitation on insurers’ liability sought by Interstate would be inconsistent with G.L. c. 175, § 47, cl. Sixth (b), which “codifies the entire public policy” of Massachusetts regarding the insurability of losses – 2 – resulting from reckless misconduct. Andover Newton Theological Sch., Inc. v. Cont’l Cas. Co., 409 Mass. 350, 353 n.2 (1991).1 1. Insurers’ Liability for Failing to Settle Claims. Once an insured’s liability for a particular claim has become reasonably clear, the insurer has a duty under Massachusetts law to make a fair offer to settle the claim and to do so promptly. This duty is imposed on all insurers by statute. See G.L. c. 176D, § 3(9)(f); Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556, 566-567 (2001). In many cases it is also an implicit part of the insurer’s contractual obligations. When an insurance policy […]

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