When someone is injured in a Cape Cod car accident, the responsible party’s insurance company has certain responsibilities toward the injured individual. When the insurance company fails in this regard, the plaintiff may have a separate legal action against the insurer.
As with a traditional tort case, the plaintiff has the burden of proving that the insurance company acted wrongfully. Due to the punitive nature of the statute, a successful case can result in substantial damages, including up to three times the amount in controversy.
Facts of the Case
In a recent (unreported) Massachusetts Appeals Court case, the plaintiff was a woman who was injured in an automobile accident in 2009. While the plaintiff did not seek medical treatment immediately after the accident, she eventually complained of headaches, insomnia, back pain, forgetfulness, irritability, and other symptoms that she related to the accident; her medical expenses were about $12,000. She agreed to arbitrate her claims against the allegedly negligent driver and the driver’s liability insurance company. Notably, the arbitration agreement included a high and low amount and excluded the plaintiff’s bad faith claims against the insurer made under Mass. Gen. Laws ch. 93A.
The arbitrator, who was not aware of the high/low amounts of $35,000/$250,000, awarded the plaintiff $905,000. The insurance company promptly paid the plaintiff $250,000, which represented the liability limits of the driver’s insurance policy. The trial court confirmed the arbitration award in the amount of $250,000 and went on to hold that the insurance company had violated ch. 93A and awarded the plaintiff treble damages (three times $250,000) for the insurance company’s refusal to pay the plaintiff’s claim without conducting a reasonable investigation and failure to effectuate a prompt, fair, and equitable settlement when liability was reasonably clear.
Decision of the Court
The appeals court reversed the trial court’s decision. Both parties disputed the trial court’s confirmation of the $250,000 arbitration award – the plaintiff argued that the lower tribunal should have confirmed the entire $905,000 award rather than the $250,000 amount, while the defendant maintained that the award should not have been confirmed in any amount because the previously agreed upon high of $250,000 had already been paid in full. The court of appeals agreed with the defendant, holding that it was an error for the lower court to confirm the arbitration award because the defendant’s prompt payment of $250,000 rendered the issue moot and deprived the trial court of jurisdiction to confirm the award.
The court of appeals also agreed with the defendant on the ch. 93A issue, ruling that the defendant’s decision to hire a neurologist to review the plaintiff’s medical records after obtaining three independent medical evaluations fulfilled the insurance company’s investigatory obligation. The court observed that the insurance company had also relied on the experience and opinion of its attorney, who had at least 20 years of experience, noting that a “plausible, reasoned legal opinion” that turned out to be unsuccessful was outside the punitive aspects of ch. 93A.
Speak to a Massachusetts Personal Injury Attorney
If you have recently been injured in an automobile accident, you need to speak to an attorney who can help you assert your legal rights. To schedule a free consultation with a Cape Cod car accident lawyer, call the Law Offices of John C. Manoog, III, at 888-262-6664 and request an appointment. Timeliness is very important in auto accident cases, since claims not filed within the Massachusetts statute of limitations are usually dismissed.
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