River Farm Realty Trust et al v. Farm Family Casualty Insurance Co. ,

Filing 34

Judge Douglas P. Woodlock: ELECTRONIC MEMORANDUM AND ORDER entered granting 18 Motion for Summary Judgment. The Motion 27 for Leave to File Document is granted in part and denied in part, the summary argument presented in the motion itself is received, there is no need for an additional 5 page brief. (Woodlock, Douglas)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

RIVER FARM REALTY TRUST,
PAUL DERENSIS, and
LINDA DERENSIS

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Plaintiffs,

FARM FAMILY CASUALTY
INSURANCE CO.
Defendant.

CIVIL ACTION NO.
16-cv-12386-DPW

MEMORANDUM AND ORDER
February 4, 2019
Plaintiffs bring suit against their insurance company for
breach of contract and for violations of the Massachusetts
Consumer Protection Act, M.G.L. c. 93A, based on a dispute
between them concerning an insurance claim for losses caused by
the formation of ice dams and subsequent water leakage into
their residence.

The insurer now seeks summary judgment.
I. BACKGROUND

A.

Factual Background
1.

The Parties and the Policies

Plaintiff River Farm Realty Trust (“River Farm”) is a
nominee realty trust established to hold title to real property
located at 262 South Main Street in Sherborn, Massachusetts
(“the insured premise”).

Plaintiffs Paul and Linda DeRensis

reside at the insured premise.

Defendant Farm Family Casualty Insurance Company (“Farm
Insurance” or “the insurance company”) is licensed to transact
the business of insurance in the Commonwealth of Massachusetts.
Farm Insurance issued Special Farm Package “10” Policy No.
2011G1237 (“the River Farm policy”), effective for the period
November 15, 2014 to November 15, 2015, to River Farm as the
insured entity.

The policy provided coverage for the insured

premise subject to a limit of liability of $729,987.00 and a
$500.00 deductible.

This policy did not, however, provide

coverage for household contents.1
2.

The River Farm Policy

The River Farm policy specified that, in the event of a
loss or a claim, “[p]roperty losses are settled on the basis of
actual cash value,” and, for loss to property, the company would
only be liable for the least of the following:
(a) the applicable limit of liability; (b) an amount not
greater than [the insured’s] interest in the property;
(c) the cost of repairing or replacing the property with
materials of equivalent kind and quality to the extent
practicable; (d) the amount computed after applying the
deductible or other limitation applicable to the loss; or
(e) the ACTUAL CASH VALUE of the property at the time of
loss (except as provided under the Replacement Cost
Provision, if applicable).

1

Farm Insurance separately issued Homeowners Policy No. 20-X303-52L-6 (“the Homeowners policy”), effective for the policy
period November 15, 2014 to November 15, 2015, to Mr. DeRensis
as the named insured party. The Homeowners policy provided
coverage for both personal property and for loss of use. The
terms of that policy, and the coverage it provides, are not at
issue in this case.
2

The term “actual cash value” is defined in the contract to
mean “the amount it would currently cost to repair or replace
the covered property with new material of like kind and quality,
less allowance for physical deterioration and depreciation,
including obsolescence.”

In addition, the policy also required

that, if the insured premise was a residence – as is the case
here – the insurance company would pay for additional living
expenses for at most 24 months “for the necessary and reasonable
increase in living costs [the insured party] incur[s] to
maintain the normal standard of living” if “a loss covered by
this policy makes the [insured premise] uninhabitable.”
If the insured party and the insurance company disagree on
the amount of loss, “either one can demand that the amount of
the loss be set by appraisal.”

In that event, both the insured

party and the insurer will select a “competent, independent
appraiser” to assess the amount of loss.

If the appraisers

agree on the amount of loss, “the amount agreed upon shall be
the amount of loss” for which the company is liable.

If the

appraisers do not agree, the disagreement shall be submitted to
an impartial umpire selected by the appraisers, and the umpire
shall determine the amount of loss.

Once the amount of loss is

determined, the insurance company is obligated to make a payment
for the loss within thirty days.

If the insurance company fails

to timely pay the claim once the amount of loss is determined,

3

it is also liable for “the payment of interest to the [insured
party] at a rate of one percent over the prime interest rate on
the agreed figure.”
The policy also included a Massachusetts-specific amendment
that allowed the insured parties to seek a Reference under
M.G.L. c. 175 § 99, et seq., in the event of a disagreement
about the value of the claim.

The Reference process required

the value of the claim to be decided by three uninterested
individuals, with the insurance company and the insured party
each choosing one Referee, and the two jointly choosing the
third.

The Reference process was an alternative to the

procedure outlined in the policy and carried the same conditions
regarding payment once the process was completed.
3.

The Triggering Incident

As a result of a series of snowstorms, ice dams began
forming at the insured premise on February 5, 2015.

Due to the

freezing and thawing of these ice dams through March 3, 2015,
water leaked into and throughout the insured premise.
Plaintiffs did not initially call a water mitigation service,
though Mr. and Mrs. DeRensis sought help from their employees to
shovel snow off their roof and used buckets and towels to
contain the flood of water into the premise.
4.

The Reported Claim

Sometime in March 2015, Mr. DeRensis contacted Farm

4

Insurance to notify it about the ice dam and water damage.

On

April 27, 2015, Mark Chilton, an adjuster with Farm Insurance,
sent Mr. DeRensis correspondence, which stated:
Mr. DeRensis, I must apologize. Unfortunately when
your claim arrived at Farm Family they were set up as
one singular claim where in fact there are two
separate and distinct claims being asserted. Once I
had recognized the issue of two claims and separated
them a record keeping issue came to light. . . .
[T]he independent claim numbers became interchanged.
As you can see one minor issue led to a number of
problems. . . . I will work to see you receive our
coverage determination ASAP. Again, I apologize for
the confusion and delay.
Farm Insurance assigned Scott Howard to handle Plaintiffs’
claim.

On May 4, 2015, Mr. Howard sent Mr. DeRensis a letter

with the subject line, “Claim Report Acknowledgment.”
letter did not indicate when the claim was made.

This

Farm Insurance

then assigned Dineley Claims Service, an independent insurance
adjusting firm that Mr. Howard had hired in the past, to perform
the initial field investigation and loss adjustment.

In turn,

Dineley Claims Service assigned Mark Whidden to handle the
claim.
On May 20, 2015, Mr. Whidden visited the insured premise
and met with Mr. DeRensis.

He inspected the areas of damage

brought to his attention, including the roof, and took
photographs of the insured premise.

Following his visit, Mr.

Whidden prepared an estimate of the costs he believed were
necessary to repair the damage he observed, which he mailed to
5

Mr. and Mrs. DeRensis in June of 2015.

Mr. DeRensis did not

agree with the estimate of damage prepared by Mr. Whidden, and
testified that his first reaction to the estimate was that “it
was a fraud” because the estimate was so low.

On November 13,

2015, Mrs. DeRensis sent a letter to Mr. Whidden regarding the
claim.

In her letter, she enclosed three estimates from local

contractors for the work she deemed necessary to fix the damage
caused by the ice dams and the water leakage.

When Mr. Whidden

did not immediately respond to the November 15, 2015 letter,
Mrs. DeRensis contacted him by telephone.
On November 24, 2015, Mr. Howard sent Mr. DeRensis an email
acknowledging receipt of the estimates that Plaintiffs ”were
able to obtain within the last couple of weeks.”

In response,

Mr. DeRensis stated: “Given how badly this claim handling has
been botched, I am consulting an attorney this morning,
notwithstanding [sic] the requests from the adjuster to ‘start
over’ and forget the past.”
Concomitantly, Mrs. DeRensis sent an email to Richard
Dineley, the President of Dineley Claims Service, about her
dissatisfaction with the handling of Plaintiffs’ claim, to which
he responded: “Dear Ms. DeRensis: I had your claim confused with
another we have [sic] with a ‘Linda’ in NJ. . . .
for the confusion.”

My apologies

In this email, Mr. Dineley reported Bryan

Grandmont had been assigned as the new adjuster.

6

That same day,

Mr. Grandmont followed up with Mrs. DeRensis, acknowledging that
Plaintiffs had retained legal counsel, and again apologizing for
any confusion there may have been.
On February 16, 2016, after several communications with
Farm Insurance, Plaintiffs’ legal counsel sent Mr. Howard a
preliminary statement of loss and associated estimates, totaling
$236,437.60.

The scope and pricing reflected in the new

contractor’s estimates exceeded the estimates previously
furnished to Farm Insurance.
A second inspection of the insured premise occurred on
March 2, 2016.

On March 18, 2016, Farm Insurance received an

updated estimate for interior damage from Dineley Claims
Service, which it sent to Plaintiffs’ legal counsel.

On March

23, 2016, Farm Insurance issued payment for the interior damage
in the amount of $28,005.21.

Plaintiffs’ were dissatisfied with

this second estimate; Mr. DeRensis thought it was a “joke.”
5.

The Reference

On March 28, 2016, Plaintiffs’ legal counsel demanded a
Reference pursuant to M.G.L. c. 175 § 99 et seq.

From June to

July of 2016, a two-day hearing was conducted before a threemember panel of Referees to hear the evidence and determine the
extent of loss.

On July 20, 2016, the panel issued a unanimous

7

award, which entitled the Plaintiffs to at most $183,848.00.2
Farm Insurance has paid Plaintiffs a total of $137,887.99 - the
actual cash value of the loss to the building set forth in the
award and the amount to which Plaintiffs were entitled under the
terms of the insurance policy.
Plaintiffs have not alleged that they incurred any
additional living expenses; nor have they submitted any
documentation to Farm Insurance to show that repairs have been
performed to the dwelling in excess of the actual cash value
paid or signed a proof of loss statement.
6.

The Demand Letter

In a letter dated September 22, 2016, Plaintiffs’ counsel
wrote to the insurance company, invoking M.G.L. c. 93A.

The

letter demanded Farm Insurance pay certain sums of money to
Plaintiffs, including the sum of $129,443.00 as an “Additional

2

The award valued the replacement cost of the building at
$153,208.00 and the building’s actual cash value at $137,888.00.
It also valued the personal property lost as a result of the
damage at $4,240.00 and stated that the Plaintiffs were entitled
to any living expenses they actually incurred for up to four
months while repairs were taking place, not to exceed $6,600 per
month. The $4,240.00 valued the loss to the contents of the
insured premise and falls outside the scope of the policy at
issue. The contents are, instead, covered by the homeowner’s
insurance policy, referenced supra in n. 1. The $183,848.00
value represents the absolute maximum amount to which Plaintiffs
could have been entitled; it is the sum of the building’s
replacement value ($153,208.00), the cost to replace the lost
personal property ($4,240.00), and four months living expense at
$6,600 per month (for a total of $26,400.00).
8

Reference Award.”

Farm Insurance responded to the demand letter

on October 21, 2016.

Farm Insurance tendered the sum of

$7,766.58 for the loss of use of the money during the pendency
of the dispute, reflecting interest at 6% on the sum of
$129,443.00, the difference between the Reference award and the
earlier payment.

Though requested by Farm Insurance, there is

no evidence in the record that Plaintiffs signed a release in
exchange for this amount.
B.

Procedural Background
On November 23, 2016, Plaintiffs filed this complaint

against Farm Insurance.
3, 2017.

They amended their complaint on March

The complaint alleges that Farm Insurance breached its

contract and violated of M.G.L. c. 93A.
In due course, Farm Insurance filed the present motion for
summary judgment.

Farm Insurance argues that it complied fully

with its obligations under the insurance contract at issue here
and that the evidence of record does not show an absence of good
faith or the presence of extortionate tactics giving rise to
liability under chapter 93A.
II. STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. Pro. 56(a).

Fed. R.

“As a prerequisite to summary judgment, a

9

moving party must demonstrate ‘an absence of evidence to support
the non-moving party’s case.’”

Barbour v. Dynamics Research

Corp., 63 F.3d 32, 37 (1st Cir. 1995) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 325 (1986)).

“Once the moving party has

properly supported its motion for summary judgment, the burden
shifts to the non-moving party, who ‘may not rest on mere
allegations or denials of his pleading, but must set forth
specific facts showing there is a genuine issue for trial.’”
Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986)).

The facts are viewed “in the light most favorable to

the non-moving party, drawing all reasonable inferences in that
party’s favor.

Id. at 36.
III. ANALYSIS

Farm Insurance argues that it did not breach the insurance
contract because it has paid everything owed under the contract
when those amounts became due.

It further contends that

Plaintiffs’ claims under c. 93A fail as a matter of law because
the conduct at issue is not, in and of itself, actionable under
c. 93A and because Plaintiffs have suffered no distinct injury
or harm.
The interpretation of an insurance contract is a question
of law.

Allmerica Fin. Corp. v. Certain Underwriters at

Lloyd’s, London, 871 N.E.2d 418, 425 (Mass. 2007).

“An

insurance contract is to be interpreted ‘according to the fair

10

and reasonable meaning of the words in which the agreement of
the parties is expressed.’”

Id. (quoting Cody v. Connecticut

Gen. Life Ins. Co., 439 N.E.2d 234, 237 (Mass. 1982)).
Ambiguities in the insurance contract are interpreted against
the insurance company, and the insurer “has the burden of
proving the applicability of a particular exclusion.”

Id.

However, “[the] insured generally bears the burden of proving
that a particular claim falls within a policy’s coverage.”

Id.

(internal citations omitted).
A.

Breach of Contract Claim
To recover under a breach of contract claim, a plaintiff

must prove that “(1) an agreement was made between the plaintiff
and the defendant supported by valid consideration . . . (2) the
plaintiffs have been ready, willing, and able to perform;
(3) the defendant’s breach has prevented them from performing
. . .; and (4) the plaintiffs have suffered damage.”

Singarella

v. City of Boston, 173 N.E.2d 290, 291 (Mass. 1961) (internal
citations omitted).
Under the terms of the policy, as amended to conform with
Massachusetts law, the insurance company is not required to pay
the loss in the absence of an agreement or an award pursuant to
a Reference.

Because the parties here were unable to come to an

immediate agreement with respect to the amount of loss due to
Plaintiffs, Plaintiffs demanded a Reference that produced a

11

total award of $183,848.00, categorized by the type of loss.
Specifically, the Reference award indicates that the “Building
Actual Cash Value” is $137,888.00, and the parties do not
dispute that Farm Insurance paid Plaintiffs this amount.
However, Farm Insurance is not liable for any value above
the actual cash value of the building under the terms of the
policy, which states that “[p]roperty losses are settled on the
basis of ACTUAL CASH VALUE” and which specifically excludes
personal property from its scope of coverage.3

Moreover, under

the policy, the insurance company is liable for additional
living expenses only when the residence is uninhabitable.

The

Reference award valued these expenses, if applicable, at $6,600
per month for at most four months.

Plaintiffs concede that they

have not incurred any additional living expenses.

Consequently,

Farm Insurance is not obligated to pay this amount.
Accordingly, Farm Insurance satisfied its payment
obligations under the policy.

Because Farm Insurance has shown

that there is no genuine dispute as to any material fact
regarding this claim, it is entitled to judgment as a matter of
law with respect to Plaintiffs’ breach of contract claim.

3

Personal property is covered by a separate homeowner’s
insurance policy. See supra n. 1.
12

B.

The Chapter 93A Claim
In their amended complaint, Plaintiffs allege that Farm

Insurance “violated the provisions of G.L. c. 176D § 3(9) and,
as a consequence, has violated the provisions of G.L. c.93A § 9
and 11.”
1.

Chapter 93A

Massachusetts General Laws chapter 93A section 2(a)
provides that “[u]nfair methods of competition and unfair or
deceptive acts or practices in the conduct of any trade or
commerce” are unlawful.4

To enforce this prohibition,

Massachusetts law provides private parties with a right of
action for damages.

The statute, however, distinguishes between

two classes of plaintiffs who may bring suit, and the two
sections creating these rights of action are mutually exclusive.
“[S]ection 11 entitles ‘[a]ny person who engages in the conduct
of any trade or commerce’ to bring an action for unfair or
deceptive practices, whereas section 9 grants essentially the

4

By its plain text, the statute requires that, for Plaintiffs to
recover, the Defendant must be engaged in trade or commerce,
even if the underlying transaction between the parties is not in
the ordinary course of the Defendant’s business. See e.g.,
Lantner v. Carson, 373 N.E.2d 973, 976-77 (Mass. 1978); Begelfer
v. Najarian, 409 N.E.2d 167, 176 (Mass. 1980). Here, the
parties do not contest that the Defendant, an insurance company,
was engaged in “trade or commerce” when it sold Plaintiffs the
insurance policy, and subsequently when it assessed their claim.
Farm Insurance’s conduct therefore falls within the scope of
chapter 93A.
13

same entitlement to aggrieved consumers.”5

Cont’l Ins. Co. v.

Bahnan, 216 F.3d 150, 156 (1st Cir. 2000).

As potentially

relevant here, there are two material differences between an
action brought under section 9 and one brought under section 11.
First, under section 11, the plaintiff must show that it
suffered a “loss of money or property, real or personal.”
M.G.L. c. 93A § 11.
section 9.

There is no parallel requirement under

M.G.L. c. 93A § 9.

Second, “[a] violation of

chapter 176D may form the predicate for a cause of action under
section 9 . . . but not under section 11.”
F.3d at 156.

Cont’l Ins., 216

Otherwise, the standard for determining whether

conduct was “unfair or deceptive” remains the same.
The question whether a party is engaged in trade or
commerce, and therefore whether a party must sue under
section 11, “is a question of fact.”
588 F.3d 1, 16 (1st Cir. 2009).

Kunelius v. Town of Stow,

For a suit under chapter 93A to

fall under section 11, rather than under section 9, the
underlying transaction must have “occurred in a business
context,” as determined by the “circumstances in each case, such
as the frequency of similar transactions, the motivation behind
the transaction, and the role of the participant in the

5

Indeed, section 9 specifically gives a private right of action
to “[a]ny person, other than a person entitled to bring action
under section 11 . . . who has been injured” by an unfair or
deceptive trade practice. M.G.L. c. 93A § 9
14

transaction.”

Id. at 16 (citing Begelfer v. Najarian, 409

N.E.2d 167, 175 (Mass. 1930)).
Here, neither party has specifically addressed the question
whether the Plaintiffs were engaged in “trade or commerce;”
indeed, the Plaintiffs did not specify which of the two
provisions they were invoking when filing their Amended
Complaint, choosing instead simply to list both sections.

Nor

is the kind of relief Plaintiffs seek barred by either
provision; the Plaintiffs, at least at the pleading stage,
alleged sufficient facts to show they suffered “loss of money or
property” as a result of the Defendant’s actions.
The record before me nevertheless raises a dispute about
the proper characterization of the Plaintiffs’ operations at
River Farm.

On the one hand, Mr. and Mrs. DeRensis lived at the

insured property; it was their primary residence, and a realty
trust is a relatively common instrument in Massachusetts through
which individuals can hold title to real property without using
that property for a commercial purpose.

See Discover Realty

Corp. v. David, 2003 Mass. App. Div. 172, 2003 WL 22387138 at *2
(Mass. App. Div. Oct. 14, 2003).
However, the property was, by the terms of the insurance
agreement, at least nominally being used as a farm, though the
farm was run by a separate LLC.

In this connection, Mr.

DeRensis referenced his “employees” being present on the

15

property when the damage took place.

At least part of the

property was also offered for rent, meaning the Plaintiffs were,
at least in part, engaged in trade or commerce under
Massachusetts law.

Con’l Ins., 216 F.3d at 156 (citing

Linthicum v. Archambault, 398 N.E.2d 482, 487 (Mass. 1979) (“[A]
person who rents real property is engaged in ‘trade’ or
‘commerce.’”), overruled on other grounds by Knapp Shoes, Inc.
v. Sylvania Shoe Mfg. Corp., 640 N.E.2d 1101 (Mass. 1994)).
In any event, if I find, as I do below, that Farm Insurance
did not, in fact, engage in unfair or deceptive practices, I
need not resolve the question of whether the Plaintiffs were
engaged in “trade or commerce” under the statute.

See infra.

Because the issue has not been raised or briefed by the parties,
I have no need to resolve it to decide the motion before me.
Although Massachusetts law does not provide a “static
definition of the term ‘deceptive’,” the Supreme Judicial Court
has consistently held that a practice is unlawful under the
statute if “it ‘could reasonably be found to have caused a
person to act differently from the way he [or she] otherwise
would have acted.’”

Aspinall v. Philip Morris Cos., 813 N.E.2d

476, 486 (Mass. 2004) (quoting Purity Supreme, Inc. v. Attorney
Gen., 407 N.E.2d 297, 307 (Mass. 1980)).

A practice is “unfair”

if “it is (1) within the penumbra of a common law, statutory, or
other established concept of unfairness; (2) immoral, unethical,

16

oppressive, or unscrupulous; or (3) causes substantial injury to
competitors or other business people.”

Morrison v. Toys “R” Us,

Inc., 806 N.E.2d 388, 392 (Mass. 2004) (quoting Heller Fin. v.
Ins. Co. of N. Am., 573 N.E.2d 8, 12-13 (Mass. 1991)).
For conduct to be actionable under Chapter 93A, it “must
rise to the level of an ‘extreme or egregious’ business wrong.”
Peabody Essex Museum, Inc. v. U.S. Fire Ins. Co., 802 F.3d 39,
54 (1st Cir. 2015).

“Simple breach of contract is not

sufficiently unfair or deceptive to be alone a violation of
Chapter 93A.”
Cir. 2007).

Incase Inc. v. Timex Corp., 488 F.3d 46, 56 (1st

There must be something more.

In deciding whether

conduct is “unfair” or “deceptive” under the statute, the
Supreme Judicial Court has made clear that the focus on the
inquiry should be “on the nature of the challenged conduct and
on the purpose and effect of that conduct,” and on whether the
conduct “had a coercive quality that, with the other facts,
warranted a finding of unfair acts or practices.”

Mass.

Employers Insurance Exchange v. Propac-Mass, Inc., 648 N.E.2d
435, 438 (Mass. 1995).6

6

For a period beginning in 1979, courts in the Commonwealth held
that, to constitute a violation of chapter 93A, “[t]he
objectionable conduct must attain a level of rascality that
would raise an eyebrow of someone inured to the rough and tumble
of the world of commerce.” Levings v. Forbes & Wallace, Inc.,
396 N.E.2d 149, 153 (Mass. App. Ct. 1979) (Kass, J.); see also,
e.g. Spence v. Boston Edison Co., 459 N.E.2d 80, 88 (Mass.
1983). The Supreme Judicial Court in 1995 rejected this
17

Even under section 11, which requires some “concrete
monetary or property loss,” a plaintiff who succeeds in showing
that the defendant engaged in an “unfair or deceptive” practice
does not also “[have] to prove that the loss remains
uncompensated.”

Auto Flat Car Crushers, Inc. v. Hanover

Insurance Co., 17 N.E.3d 1066, 1075-76 (Mass. 2014).

Though

“acceptance of a defendant’s tender of payment may affect the
continued viability of a plaintiff's contract claims, such
acceptance does not vitiate a claim under G.L. c. 93A as a
matter of course, unless the latter claim has been expressly
settled.”

Id. at 1076 (internal citations omitted).

Therefore,

”[t]o the extent that a plaintiff already has received
compensation for its underlying loss prior to the resolution of
its G.L. c. 93A claim, such compensation has been treated as an
offset against any damages ultimately awarded, rather than as a
bar to recovery.”
2.

Id. at 1077.

Chapter 176D

While chapter 93A applies broadly to all business
relationships, chapter 176D sets forth a specific prohibition

formulation as “uninstructive,” and instead required courts to
“focus on the nature of challenged conduct and on the purpose
and effect of that conduct.” Mass. Employers Insurance Exchange
v. Propac-Mass, Inc., 648 N.E.2d 435, 438 (Mass. 1995). The
First Circuit has similarly abrogated the “rascality” standard.
See e.g., NASCO, Inc. v. Public Storage, Inc., 127 F.3d 148, 152
(1st Cir. 1997); Baker v. Goldman, Sachs & Co., 771 F.3d 37, 51
(1st Cir. 2014).
18

against the use of “an unfair method of competition or an unfair
or deceptive act or practice in the business of insurance.”
M.G.L. c. 176D, §2.

The statute defines “unfair methods of

competition and unfair or deceptive acts or practices in the
business of insurance” to include “[u]nfair claim settlement
practices.” Van Dyke v. St. Paul Fire and Marine Ins. Co., 448
N.E.2d 357, 360 (Mass. 1983) (quoting M.G.L. c. 176D § 3(9)).7
The statute was specifically “‘designed to remedy a host of
possible violations in the insurance industry’ [and] ‘to subject
insurers committing violations to the remedies available to an
injured party under G.L. c. 93A.’”

Morrison, 806 N.E.2d at 390

(quoting Hopkins v. Liberty Mut. Ins. Co., 750 N.E.2d 943, 952
(Mass. 2001)).

The goal was to “‘encourage settlement of

insurance claims . . . and discourage insurers from forcing
claimants into unnecessary litigation to obtain relief.’”
(quoting Hopkins, 750 N.E.2d at 948).

Id.

As a consequence, “[a]

right of action under c. 93A for a violation of G.L. c. 176D,
reflects ‘the commonplace ethical view that a claims facilitator

7

M.G.L. c. 176D § 3(9) lists several specific acts that can form
the basis for liability, and a single act, in violation of one
subsection of section 3(9), is sufficient. Van Dyke v. St. Paul
Fire and Marine Ins. Co., 448 N.E.2d 357, 360-61 (Mass. 1983 ).
However, the decisions of the Supreme Judicial Court in this
area suggest that, because of its structure, the individual
subsections of section 3(9) will be read narrowly. See, e.g.,
id. at 361-62; Morrison v. Toys “R” Us, Inc., 806 N.E.2d 388,
390-91 (Mass. 2004).
19

ought not wear out the claimant by unduly delaying settlement
when liability is clear.’”

Pacific Indem. Co. v. Lampro, 12

N.E.3d 1037, 1044 (Mass. App. Ct. 2014) (quoting Miller v. Risk
Management Foundation of the Harvard Med. Institutions, Inc.,
632 N.E.2d 841, 846 (Mass. App. Ct. 1994)).
Consequently, a consumer bringing a claim under chapter 93A
“may recover for violations of [M.G.L. c. 176D] without regard
to whether the violation was [independently] unlawful under G.L.
c. 93A § 2.”

Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d

912, 917 (Mass. 1993).

However, when suit is filed under M.G.L.

c. 93A § 11 by a party engaged in “trade or commerce,” there is
no independent right to recover for violations of M.G.L.
c. 176D.

Id.

Violations of M.G.L. c. 176D “constitute[ ] only

probative evidence, not per se proof, of egregious business
misconduct.”

Peabody Essex Museum, Inc., 802 F.3d at 54; see

also Cont’l Ins., 216 F.3d at 156 (“A violation of chapter 176D
may form the predicate for a cause of action under section 9 of
chapter 93A, but not under section 11.”).
As stated above, I need not decide whether Plaintiffs are
entitled to seek relief under M.G.L. c. 93A § 9 and
consequently, whether they can claim an independent right of
action under M.G.L. c. 176D.

Rather, I focus my attention on

whether the facts, as alleged, could lead a reasonable factfinder to conclude that the insurer’s conduct violated the

20

mandates of M.G.L. c. 176D and therefore, constituted an
“extreme or egregious business wrong” giving rise to liability
under chapter 93A.
3.

See Peabody Essex Museum, 802 F.3d at 54.

The Present Dispute

In the present matter, the Plaintiffs alleged four specific
violations of G.L. c. 176D § 3(9): They allege that the insurer
“(1) [failed] to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance
policies;” (2) “[refused] to pay claims without conducting a
reasonable investigation based upon all available information;”
(3) “[failed] to affirm or deny coverage of claims within a
reasonable time after proof of loss statements have been
completed;” and, (4) “[failed] to effectuate prompt, fair and
equitable settlements of claims in which liability has become
reasonably clear.”
Reading these statutory provisions narrowly, see supra
n. 7, I address each allegation in turn.
a.

Failing to acknowledge and act reasonably
promptly upon communications with respect to
claims arising under insurance policies

Although an insurance adjuster was not sent to the insured
premise until May 20, 2015, several months after the damage
occurred, Farm Insurance reasonably explained the delay; the
insurance company inadvertently interchanged the numbers
associated with two different policies and had accidentally

21

merged Plaintiffs’ claims into a single one.

Mr. Chilton’s

correspondence with Mr. DeRensis indicated that Farm Insurance
inadvertently misplaced Plaintiffs’ claim.

Not only did he

apologize for the confusion and delay; he also stated, “I will
work to see you receive our coverage determination ASAP.”
Though these record-keeping errors at the outset delayed the
insurance company in sending an adjuster and resolving the
claims, it does not descend to the level of an “‘extreme or
egregious’ business wrong” that can give rise to liability under
section 93A.

Peabody Essex Museum, Inc., 802 F.3d at 54.

The Plaintiffs later discovered a similar record-keeping
error when, in response to Mrs. DeRensis’s email to Mr. Dineley
about her dissatisfaction with the handling of Plaintiffs’
claim, he stated that he had her claim confused with another
“Linda” in NJ.
confusion.

For his part, Mr. Dineley apologized for the

Following this communication, a new adjuster, Mr.

Grandmont, was appointed who immediately followed up with Mrs.
DeRensis, and again apologized for any confusion there may have
been.

Though the insurer was certainly careless and perhaps

subcompetent in processing the Plaintiffs’ claims, there is no
indication the insurance company appointed Dineley Claim
Services in other than good faith, and Farm Insurance timely
responded to the communications from the Plaintiffs.

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The statute requires nothing more in this setting.

The

statute prevents insurance companies from ignoring their clients
but does not require the company to respond in a particular way.
While the company’s response can give rise to liability under a
different section of M.G.L. c. 176D § 3, it does not under this
particular provision.

See, e.g., Capitol Specialty Insurance

Corp. v. Higgins, 203 F. Supp.3d 200, 209 (D. Mass. 2016).
Indeed, here, Mr. and Mrs. DeRensis waited several months
before contacting Scott Howard and Farm Insurance after getting
the initial estimate from Dineley Claim Services.

There is also

no contention by Plaintiffs here that the insurance company
dragged its feet and refused to participate in the Reference
once Plaintiffs had invoked that procedure (as was their right
under Massachusetts law), or that the insurance company
otherwise failed to act in good faith as part of that procedure.
Indeed, Plaintiffs also concede that, once the Reference award
was final, the insurance company paid what was owed under the
insurance contract in a timely fashion.
The company’s conduct also does not constitute an “extreme
or egregious business wrong;” nor does it “have a coercive
quality” that would suggest an intent to extort the policy
holder.

See Mass. Employers Insurance Exchange, 648 N.E.2d at

438; Peabody Essex Museum, Inc., 802 F.3d at 54.

23

At all points,

the Plaintiffs could control the timing of restitution by
calling for a reference.
b.

Refusing to pay claims without conducting a
reasonable investigation based upon all
available information

Plaintiffs have also failed to present evidence to show
that Farm Insurance’s investigation was unreasonable.

At most,

the Plaintiffs have shown that the parties disagreed about the
amount owed under the insurance policy.

Plaintiffs, of course,

contend that the discrepancy between the estimates is evidence
that the insurer’s investigation was unreasonable.
The record shows that Farm Insurance undertook what would
constitute a reasonable investigation in contested
circumstances.

Indeed, following the May 4, 2015 “Claim Report

Acknowledgment” letter, Farm Insurance assigned Dineley Claims
Service, an independent company, which then assigned Mr. Whidden
to perform the initial field investigation and loss adjustment
later that same month.
Even if Mr. Whidden’s initial investigation and assessment
of the damage could itself somehow be characterized as
unreasonable, as Plaintiffs contend, Farm Insurance still sought
a second inspection of the premise once Plaintiffs made their
dissatisfaction with the original estimate known.

Indeed, there

was a second inspection and a second estimate, with which
Plaintiffs again disagreed.

24

When the parties could not come to an agreement about the
proper amount owed, a Reference was conducted, as anticipated by
both the insurance contract and by state law.

Plaintiffs could

have sought a Reference once it was clear that the parties
disagreed about the value of the claim, here at the latest by
November 24, 2015.

See Employer’s Liability Assur. Corp. v.

Traynor, 237 N.E.2d 34, 34 (Mass. 1968) (rescript) (holding that
an insured party must seek a reference before filing suit in
court over an insurance dispute); Kiley v. Metropolitan Property
and Casualty Ins. Co., 159 F. Supp. 3d 135, 142-43 (D. Mass
2016) (same, and also holding that the insured has the right to
invoke the reference procedure when there is a significant
disagreement as to the loss amount).

Plaintiffs do not suggest

that the insurance company acted in bad faith during the
Reference, or otherwise prevented them from seeking a Reference
to resolve the dispute under Massachusetts law.
Farm Insurance abided by the mandate of the Reference award
and paid Plaintiffs the amount it was obligated to pay under the
policy.

It also paid an additional $7,766.58, representing the

interest which would have accrued on the amount owed under the
award during the pendency of the dispute after Plaintiffs’
counsel sent a demand letter with the hope of resolving any
lingering dispute without litigation.

This amount was tendered

even though Plaintiffs did not sign a release, as requested by

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Farm Insurance.

Based on the record before me, Farm Insurance

can hardly be held liable for failing to conduct a reasonable
investigation or pay claims based on the outcome of that
investigation.
c.

Failing to affirm or deny coverage of claims
within a reasonable time after proof of loss
statements have been completed

It is undisputed that Plaintiffs never furnished Farm
Insurance with a signed, sworn statement of proof of loss, as
required by M.G.L. c. 175, § 99.

Because this document was

never completed, Farm Insurance cannot be held liable for
failing to affirm or deny coverage of a claim that depends on
the document, even if it may be liable under other provisions of
chapter 176D.
d.

See M.G.L. c. 176D § 3(9)(e).
Failing to effectuate prompt, fair and equitable
settlements of claims in which liability has
become reasonably clear

Massachusetts law recognizes that an insurer is “not
required to put a fair and reasonable offer on the table until
liability and damages [are] apparent.”

Bobick v. U.S. Fidelity

and Guar. Co., 790 N.E.2d 653, 659 (Mass. 2003).

It is clear

from the record that, until the Reference award was issued,
there was an unresolved difference of opinion about the level of
Farm Insurance’s damages, especially because of the disparity
between the various estimates proposed by different adjusters.
Nonetheless, even if the final loss measurements were lower than

26

initially proposed by Farm Insurance, the figures were the
product of not one, but two on-site field visits and further
discussions with the Plaintiffs through counsel.

Farm

Insurance’s conduct does not evidence a failure to effectuate
the prompt settlement of claims after liability was reasonably
established.

It certainly does not evidence an absence of good

faith or the presence of extortionate tactics.
Consequently, Farm Insurance cannot be held liable for
failing to promptly settle the insured’s claims once the amount
of damages became apparent.
e.

Conclusion

Because Farm Insurance has shown that there is no genuine
dispute as to any material fact regarding this claim, it is
entitled to judgment as a matter of law with respect to
liability regarding Plaintiffs’ chapter 93A claims.
4.

Damages

Because I have determined that Plaintiffs cannot prevail as
to liability on the unfair practices claims, Plaintiffs’
arguments as to damages also must necessarily fail.

In the

interest of completeness, I will only observe briefly that even
if the Plaintiffs’ unfair practice claims could go forward,
Plaintiffs would not be entitled to the kind of recovery sought.
Plaintiffs here seek reimbursement of the fees and expenses
they incurred as a result of the “unnecessary” Reference, the

27

difference between the insurance company’s original loss
calculation and the aggregate award ultimately issued by the
Referees, and both punitive damages and attorney’s fees for the
insurance company’s violations of M.G.L. c. 93A.

I note at the

outset that the Reference, of course, far from being
unnecessary, was a mandated procedure for resolving disputes in
this context.

Thus, damages are not available for necessary

recourse to the mandated procedure.
More particularly, there is no allegation here that the
Reference process violated the requirements set forth in the
contract, so there is no basis for concluding Plaintiffs would
be entitled to recover costs associated with that process.
Moreover, Plaintiffs agree that the insurance company paid the
full amount of the actual cash value of the building, plus
interest, so any entitlement to the difference between that
value and the insurance company’s initial estimate would be a
form of double recovery without independent justification as a
damage issue.
Finally, Plaintiffs would only be entitled to punitive
damages for a violation of M.G.L. c. 93A if the alleged
deception giving rise to liability was “willful or knowing.”
Incase Inc., 488 F.3d at 58.

Even if what might be

characterized as the insurance company’s initial subcompetence
could be considered so egregious as to constitute some form of

28

unfair trade practice, it certainly was not akin to “coercion or
extortion, . . . fraud and similar forms of misrepresentation
. . . or [ ] abusive litigation.”
omitted).

Id. (internal citations

Plaintiffs would therefore not be entitled to

punitive damages.
At most, Plaintiffs could recover attorneys’ fees under the
statute had their chapter 93A claims been successful.

See,

e.g., RFF Family Partnership, LP v. Link Development, LLC, 2015
WL 1672253 at *3 (D. Mass. March 31, 2015).

However, even

though chapter 93A would entitle Plaintiffs, were they to
prevail, to “reasonable attorney’s fees and costs”, the amount
of attorney’s fees “is largely discretionary” and is based, at
least in part, on the amount of damages involved and the nature
of the case and issues presented.

Linthicum, 398 N.E.2d at 488.

Plaintiffs would also be entitled only to any fees associated
with the present chapter 93A claims and could not recover any
costs associated with the Reference.

See Shultz v. Subaru of

America, Inc., 553 N.E.2d 893, 893-94 (Mass. 1990) (rescript).
Nothing in the record of this case seems to justify awarding
anything more than nominal fees to Plaintiffs.8

8

The SJC has been clear that a plaintiff is only entitled to
reasonable attorney’s fees incurred in the process of litigating
the chapter 93A claim, meaning Plaintiffs are not entitled to
any fees or costs associated with the Reference, even if there
is a dispute about whether, in forcing the plaintiff to a
reference, the insurance company engaged in an unfair business
29

IV. CONCLUSION
For the reasons set forth above, it is hereby ordered that
Farm Insurance’s motion for summary judgment be GRANTED.

/s/ Douglas P. Woodlock_____
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE

practice. See Shultz v. Subaru of America, Inc., 553 N.E.2d
893, 893_94 (Mass. 1990) (rescript). In the § 11 context, the
SJC has also held that “a plaintiff must be entitled to some
relief in some other respect in order to be entitled to an award
of attorney’s fees.” Jet Line Servs., Inc. v. American
Employers Insurance Co., 537 N.E.2d 107, 115 (Mass. 1989)
(referencing, and disapproving of, the approach taken in Shapiro
v. Public Service Mutual Insurance Co., 477 N.E.2d 146 (Mass.
App. Ct. 1985), where attorney’s fees were awarded though
plaintiffs filing suit under § 11 had not proven damages). This
“other relief” need not be damages if the plaintiffs sought, and
had been awarded, injunctive relief, and the plaintiffs must
only show that the unfair business practices had some “adverse
effect upon the plaintiff, even if it is not quantifiable in
dollars.” Id. In the § 9 context, the statute sets a minimum
amount of damages if a violation is found, so the same problem –
where the plaintiff shows an unfair business practice but cannot
prove damages – does not arise. In all events, even if the
Plaintiffs were somehow to prevail on liability, as I found they
do not, limited attorney’s fees would be the only relief they
could recover.
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