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Court of Appeals Upholds Claim Against Insurance Company for Its Conduct During Settlement Negotiations of Wrongful Death Claim

Dealing with an insurance company while seeking fair compensation for personal injuries or a loved one’s wrongful death can be extremely frustrating, especially for someone who has not yet retained counsel. Even when attorneys are involved, however, the insurance company may still hold tightly to its purse strings, refusing to offer a settlement that the plaintiff and his or her counsel believe is reasonable.

Under Massachusetts wrongful death law, there are consequences for insurance companies that refuse to negotiate claims in good faith, as well as for those that engage in unfair or deceptive acts. However, defining what is or is not good faith in a given situation can be even more contentious that the claim itself.

Facts of the Case

In a recent case, the plaintiff was the administrator of the estate of a woman (his deceased mother) who allegedly perished as a result of the negligence of a certain nursing home. The plaintiff filed a wrongful death lawsuit against the nursing home, and the case proceeded to trial. The jury found in favor of the plaintiff, and the trial court entered judgment upon a multi-million dollar verdict in favor of the plaintiff, finding that the nursing home was liable to the plaintiff for his mother’s wrongful death and her conscious pain and suffering.

Thereafter, the plaintiff filed suit against the defendant claims management firm in the United States District Court for the District of Massachusetts, asserting that the firm had violated Massachusetts General Laws Chapter 176D in its dealings both pre-trial and post-verdict with regard to the plaintiff’s suit against the nursing home. The district court entered a take-nothing judgment, and the plaintiff appealed.

Holding of the United States Court of Appeals for the First Circuit 

The circuit court affirmed the ruling of the lower tribunal. Although the plaintiff argued that the district court had committed reversible error in holding that the defendant’s actions did not constitute unfair settlement practices, the court found that plaintiff had failed to show that the district court had either misapplied the applicable law or that it had clearly erred in its finding of the facts.

In so holding, the court acknowledged that Chapter 176D requires firms that are in the
business of insurance to handle claims in good faith and to respond reasonably to the exigencies of the settlement process. However, the court also noted that “every case has twists and turns” and that an “insurance carrier is not to be held to a duty of prescience.” In so holding, the court of appeals agreed with the trial court that the defendant’s pre-trial offers of settlement, while not in agreement with the plaintiff’s pre-trial opinion of the value of the case, were sufficient to inoculate it against liability under Chapter 176D.

Contact a Massachusetts Wrongful Death Attorney

If you have recently lost a loved one, the Law Offices of John C. Manoog, III, in Cape Cod, is here to help guide you through the process of filing a wrongful death claim against the individual, business, or governmental entity whose negligence resulted in your loved one’s loss of life. To schedule a free, no-obligation case evaluation, call us at 888-262-6664.