Unfair Settlement Practices Claim Fails in Massachusetts Court Despite Large Difference Between Initial Offer and Jury’s Verdict – Villanueva v. Commerce Insurance Company

When an individual is hurt in a motor vehicle collision or other accident, he or she is at a significant disadvantage when negotiating with insurance company professionals who deal with issues such as negligence, comparative fault, and damages on a routine basis.

Massachusetts Gen. Laws ch. 93A (the Massachusetts Consumer Protection Act) and ch. 176D do provide potential avenues of relief for those who believe they have been treated unfairly in dealings with an insurance company, but the burden of proof is on the consumer.

Facts of the Case

In a recent (unreported) case from the Commonwealth of Massachusetts Appeals Court, Villanueva v. Commerce Insurance Company, the plaintiff was a pedestrian who was seriously injured when he was struck by a car. The defendant was the insurance company that provided liability coverage to the driver who struck the pedestrian. In the underlying negligence lawsuit that the pedestrian filed against the driver, the insurance company’s initial investigation into the accident yielded only a nominal settlement offer of $5,000.

Eventually, the insurance company tendered a policy limits offer of $100,000 to the pedestrian, but she refused the offer. A jury trial resulted in a verdict of $414,500 in the plaintiff’s favor and a determination that the pedestrian was 35% at fault in the accident. Between the verdict and post-trial motions, the insurance company paid the full policy limits of $100,000 to the pedestrian.

The pedestrian then filed the current action against the insurance company, asserting that the insurance company had engaged in unfair claims settlement practices in violation of Mass. Gen. Laws. chs. 93A and 176D. The trial court granted the insurance company’s motion to dismiss, finding that the insurance company had not breached its statutory duty.

The Court’s Ruling on Appeal

On an appeal by the pedestrian, the court affirmed. According to the court, the insurance company believed at all times pertinent to the action that the pedestrian was more than 50% at fault and that its insured would prevail in the underlying tort action. The court noted that there were several facts and matters of evidence that supported this belief. The fact that the insurance company had set its reserve at $100,000 was not evidence of a liability assessment but instead merely the insurance company’s “worst-case scenario” assessment.

In light of the jury’s verdict in the underlying lawsuit, the pedestrian’s contributory negligence, the lack of expert testimony to support the pedestrian’s unfair settlement practices claim, and the overall facts of the case, the court was not persuaded to find that the insurance company had acted unreasonably.

For Help with a Massachusetts Car Accident Claim

If your family has been affected by a negligent or reckless motorist, and you need help investigating, negotiating, or litigating your claim against that driver’s insurance company (or your own), the knowledgeable Cape Cod pedestrian and motor vehicle accident attorneys at the Law Offices of John C. Manoog, III, will be glad to discuss your concerns. To schedule a free consultation at either our Hyannis or Plymouth offices, call us today at (888) 262-6664. Nos Falamos Portugues!

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