Warren Bingham as Executor of the Estate of Marion Bingham v. Supervalu Inc.

Filing 107

Judge Indira Talwani: ORDER entered. ORDER ON REPORT AND RECOMMENDATIONS for 62 Motion for Summary Judgment filed by Supervalu Inc.; 78 Motion for Miscellaneous Relief filed by Warren Bingham. Action on motion: 78 MOTION Ce rtify Questions of Law to the Massachusetts Supreme Judicial Court filed by Warren Bingham DENIED; 62 MOTION for Summary Judgment filed by Supervalu Inc., GRANTED. ; ADOPTING 102 Report and Recommendations.(MacDonald, Gail) Modified on 3/25/2015 (MacDonald, Gail).

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
WARREN BINGHAM AS EXECUTOR
OF THE ESTATE OF MARION
BINGHAM,
Plaintiff,
v.
SUPERVALU INC.,
Defendant.

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Civil Action No. 13-cv-11690-IT

ORDER
March 25, 2015
TALWANI, D.J.
An entity engaged in the business of insurance engages in unfair insurance practices under
Massachusetts General Laws chapters 93A and 176D by failing to effectuate a prompt, fair, and
equitable settlement of claims in which liability has become reasonably clear. Plaintiff Warren
Bingham, as Executor of the Estate of Marion Bingham (the “Estate”), filed suit against Defendant
Supervalu, Inc. (“Supervalu”) under these statutory provisions after Supervalu delayed paying a
judgment against its former subsidiary, Shaw’s Supermarkets, Inc. (“Shaw’s”), until after an
unsuccessful appeal from the judgment. Supervalu moved for summary judgment on the ground
that Supervalu was not an entity engaged in the business of insurance. The Estate urged the court
to deny Supervalu’s motion, or alternatively to certify two questions relating to this threshold issue
to the Massachusetts Supreme Judicial Court (“SJC”). The magistrate judge to whom these
motions were referred concluded that the record failed to create a genuine dispute of material fact
as to whether Supervalu was engaged in the business of insurance, and recommended granting
Supervalu’s motion for summary judgment and denying the Estate’s motion for certification. See

Report & Recommendation Def.’s Mot. Summ. J. & Pl.’s Mot. Certify Questions Massachusetts
Supreme Judicial Ct. [#102] [hereinafter Report & Recommendation]. The Estate raised four
objections to the Report and Recommendation. After considering the Estate’s objections and
reviewing the objected-to portions of the Report and Recommendation de novo, see Fed. R. Civ.
P. 72(b), the court finds that the Estate’s objections are without merit. Accordingly, the court
ADOPTS the Report and Recommendation and provides the following discussion as to several of
the objections raised by the Estate.
1.

Plaintiff’s Objection to the Magistrate Judge’s Finding that the Estate Failed to Put Forth
Evidence Showing that Supervalu was Engaged in the Business of Insurance
The Estate contends that the magistrate judge wrongly rejected the Estate’s argument that

evidence of how Supervalu pooled and allocated risk supports a finding that Supervalu was
engaged in the business of insurance. Pl.’s Objection 5 [#103]. The Estate’s contention fails in
light of Morrison v. Toys “R” Us, Inc., 806 N.E.2d 388 (Mass. 2004).
In Morrison, a customer brought suit against Toys “R” Us for unfair claim settlement
practices under Chapter 93A. Morrison, 806 N.E.2d at 388. The record in that case “indicate[d]
that, when a claim of less than $1 million [was] made against Toys, or one of its subsidiaries, the
company handle[d] that claim internally, through a risk management department in its national
office designed exclusively to administer such claims.” Id. at 389. The SJC held that Toys “R”
US could not be held liable for unfair settlement practices because Toys “R” US—as a selfinsured company—was not engaged in the business of insurance. Id. at 390-91. The SJC focused
on the legislative concern underlying the statutory provision, namely that “entities that profit from
selling insurance policies not abuse exclusive rights and duties to control litigation vested through
those same policies.” Id. The SJC reasoned that such a concern “cannot legitimately be extended
to a self-insurer such as Toys “R” US, which had no contractual obligation to settle the plaintiff’s

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claim and is not otherwise regulated by the Commonwealth for insurance activities.” Id.
Morrison underscores the importance, in determining whether an entity is engaged in the
business of insurance, of insurance policies, sold for profit, which give rise to contractual
obligations to settle claims. Here, there is no evidence that Supervalu sold an insurance policy to
Shaw’s that would give rise to a contractual obligation to settle the Estate’s claim. Nor is there
evidence that Supervalu was otherwise regulated by the Commonwealth for insurance activities.
The Estate further contends that Miller v. Risk Mgmt. Found. of the Harvard Med. Insts.,
Inc., 632 N.E.2d 841 (Mass. App. Ct. 1994) supports its argument that Supervalu was engaged in
the business of insurance. The court’s decision in Miller, however, is inapposite. In Morrison,
the SJC explained that the “significance of the holding of the Appeals Court in the Miller case is
that an insurance company cannot evade its statutory duties imposed by G.L. c. 176D by
delegating its work.” Morrison, 806 N.E.2d at 391. Unlike in Miller, this case does not involve a
situation in which an insurance company delegated its work to an outside entity. The undisputed
facts in the record show that Supervalu did not handle claims on behalf an insurance company, but
handled claims on behalf of itself and its former subsidiary, Shaw’s.
Additionally, the Estate contends that the magistrate judge overlooked evidence that
“Supervalu self-reported its role in Shaw’s claim as an insurer.” Pl.’s Objection 3 (emphasis
in original). The Estate directs the court to a document entitled “ISO ClaimSearch” in which
Supervalu is listed as both the “Insured” and “Insuring Company” in relation to a claim by Marion
Bingham. Gizmunt Aff. Ex. R [#71-5]. The Estate contends that the ISO report constitutes an
“admission” by Supervalu and creates a triable issue as to whether Supervalu was engaged in the
business of insurance. The Estate, however, fails to provide a foundation for the report, including
who created and supplied the information for the report. Without any information as to the source
of the statements contained in the report, the court cannot find that the report constitutes an
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“admission” by Supervalu or other admissible evidence that Supervalu was engaged in the
business of insurance.
2.

Plaintiff’s Objection that It Should Be Permitted Additional Time to Present Expert
Testimony to Further Support its Opposition
The Estate contends next that the court should defer ruling on the summary judgment

motion to allow for disclosure of an expert report. Pl.’s Objection 8, 10. The magistrate judge
correctly found that the deadline for the Estate to disclose experts had expired on April 30, 2014,
and that it was the Estate’s responsibility to have sought an extension from the court if it needed
additional time. See Docket #55 (“Requested changes as to [non-fact discovery] scheduling
deadlines shall be made by motion, with Rule 7.1 certificate.”). Contrary to the Estate’s assertion,
the April expert deadline was never vacated. See Docket #47. Moreover, the magistrate judge
properly found that the Estate failed to satisfy the requirements of Rule 56(d). Report &
Recommendation 13, n.49. The Estate did not provide an affidavit or other authoritative
submission that “‘(i) explain[ed] his or her current inability to adduce the facts essential to filing
an opposition, (ii) provide[d] a plausible basis for believing that the sought-after facts can be
assembled within a reasonable time, and (iii) indicate[d] how those facts would influence the
outcome of the pending summary judgment motion.’” Jones v. Secord, 684 F.3d 1, 6 (1st Cir.
2012) (citation omitted).1

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See Pl.’s Objection 7 (“Because the Court must resolve disputes in favor of the Estate, expert
testimony is not needed at this juncture . . . .”); see also Am. Mem. in Opp’n to Summ. J. 5 n.4
[#87] (“The Estate reserves the right to retain an expert to opine on the self-evident fact that
Supervalu’s conduct was akin to that of an insurer and/or a TPA. The Estate has not had the
ability to seek an expert at this juncture in light of Supervalu’s belated compliance with duly
issued discovery requests and depositions that did not take place until August 20, 2014. To the
extent an expert would be useful to further establish these facts for purposes of summary
judgment, a request is made pursuant to Fed. R. Civ. P. 56(d) that the Court defer a ruling on this
motion to allow for disclosure of an expert report.” (emphasis added)).
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3.

Plaintiff’s Objection to the Magistrate Judge’s Finding that Supervalu’s Insurance-Related
Activities Concerning Risk Planners, Inc. Were Irrelevant
The Estate argues that Supervalu was engaged in the business of insurance because Risk

Planners, Inc., Supervalu’s wholly owned subsidiary, was engaged in the business of insurance.
Pl.’s Objection 11-12. The Estate’s argument ignores a basic tenet of corporate law that
“corporations—notwithstanding relationships between or among them—ordinarily are regarded as
separate and distinct entities.” Scott v. NG U.S. 1, Inc., 881 N.E.2d 1125, 1131 (Mass. 2008).
The record does not provide evidence that an exception to this basic tenet applies such that Risk
Planners’s insurance-related activities can be attributed to Supervalu. Moreover, as the magistrate
judge found, “‘there is no relationship between Risk Planners and the investigation, defense,
settlement, appeal, or payment of the judgment in the Underlying Action.’” Report &
Recommendation 15.
4.

Plaintiff’s Objection to Denying the Motion to Certify Questions of Law To the SJC
The court agrees with the magistrate judge’s finding that it “is able to determine with

reasonable clarity the course that the SJC would take in this case” and that certification is not
appropriate. Report & Recommendation 17.
5.

Conclusion
For the foregoing reasons, the court ADOPTS the magistrate judge’s Report and

Recommendation [#102]. Supervalu’s Motion for Summary Judgment [#62] is GRANTED and
the Estate’s Motion to Certify Questions of Law to the Supreme Judicial Court [#78] is DENIED.
IT IS SO ORDERED.
/s/ Indira Talwani
United States District Judge

Date: March 25, 2015

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