NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
22-P-1120
ERIKA MCDADE 1
vs.
JUSTIN R. BENOIT & others. 2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
In this unfair settlement practices action, Erika McDade
claims that Safety Insurance Company (Safety) violated the
requirements of G. L. c. 93A and G. L. c. 176D by failing to
offer her a reasonable settlement following a car accident
between McDade and Safety's insured. After a bench trial on
these claims, a Superior Court judge found that Safety made
reasonable offers to McDade based on its assessment of her
injuries and comparative fault and thus did not engage in unfair
settlement practices. Judgment entered accordingly for Safety,
and McDade appeals. We affirm.
Background. In August 2013 Justin Benoit, a driver for
Brodie, Inc., made a left turn across McDade's lane of travel to
1 Formerly known as Erika McKenzie. 2 Brodie, Inc., and Safety Insurance Company. turn into a parking lot. McDade struck the rear side of
Benoit's truck, sustaining damage to her car. An ambulance
transported McDade to the emergency room, and she was later
treated for neck and back pain. Brodie, Inc., was insured by
Safety.
Safety opened a claim on the accident and assigned
Christina Parsons, a veteran claims adjuster, to the accident
file. Parsons took a statement from McDade, who reported that
her neck and back issues from the accident required her to quit
her part-time nannying job and seek regular chiropractic care.
McDade further reported that she missed three days of work as a
nurse before returning full time.
Parsons also spoke to two eyewitnesses, Sonja Houle and
Charles Sidden. Houle, who was driving behind McDade and saw
Benoit's truck make the left turn, stated that McDade seemed a
"little late" in applying her brakes. Sidden, who was driving
behind the truck, stated that the truck was three-quarters of
the way into the parking lot when McDade hit it. Based in part
on these statements, Parsons determined that McDade had some
liability for the accident and informed her that Safety would
pay for eighty percent of the property damage.
Upon assigning eighty-percent liability to Benoit, Parsons
set an initial loss reserve amount of $7,929 for McDade's bodily
injury claim. The loss reserve was meant to represent the
2 "worst-case scenario" for Safety. The initial loss reserve
amount was based on McDade's ambulance ride to the emergency
room, her negative x-rays, and her chiropractic care. By April
2014 Parsons increased the loss reserve to $15,000 after
McDade's insurer, Commerce Insurance Company (Commerce),
reported that McDade's medical bills exceeded $8,000. Later
that year, after Commerce made a subrogation demand, the matter
went to intercompany arbitration at which the arbitrator found
that Safety's position that its insured was eighty percent
liable was a "reasonable compromise" given the circumstances of
the accident.
In March 2015 Safety received a demand for $150,000 from
McDade. The demand included a medical report from Dr. George
Kasparyan, a nontreating orthopedic surgeon, who diagnosed
McDade with chronic pain syndrome and chronic cervical,
thoracic, and lumbar sprain. Based on the American Medical
Association (AMA) guidelines, Dr. Kasparyan opined that McDade
had a twenty-two percent "permanent partial impairment of the
whole person." The demand also included documented medical
expenses of $11,513.75 and stated that McDade had $535 in lost
earnings.
In response to the demand, Parsons increased the loss
reserve to $40,000, and Safety retained a medical expert to
review McDade's medical records. After McDade later reduced her
3 demand to $130,000, Safety countered with an offer of $12,000,
justifying that amount based on its attribution of some fault to
McDade and its disagreement with the extent of her injuries.
Soon thereafter, Safety received a report from its medical
expert, who opined that the "records provided no objective
finding of an 'anatomic abnormality' causally related to the
accident." Safety then retained a second expert, Dr. Ryan
Friedberg, to obtain an opinion regarding Dr. Kasparyan's
conclusion that McDade had a permanent whole person impairment
of twenty-two percent.
Safety was waiting to hear from Dr. Friedberg when McDade
sent a c. 93A demand letter in September 2015. A few days
later, Safety received Dr. Friedberg's report in which he
concluded that McDade's diagnoses of cervical, thoracic, and
lumbar strain were causally related to the accident, but that it
would be unusual to classify for permanency based on those
injuries. Dr. Friedberg also opined that Dr. Kasparyan's
finding of a twenty-two percent whole person impairment was
"significantly exaggerated" and that that figure would more
likely be between two and eight percent.
Parsons conducted an updated valuation of McDade's claim
based on Dr. Friedberg's report. Parsons estimated the claim
range to be between $11,405 and $16,182 considering McDade's
comparative negligence, the soft tissue nature of her injuries,
4 the lack of objective diagnostic testing, and the fact that she
missed only three days of work. The approved range was up to
$18,000. After crediting certain amounts based on Dr.
Friedberg's assessment of McDade's whole body impairment,
Parsons recommended increasing the offer to $15,000. William
Bradley, Parsons's supervisor, reviewed and approved the offer.
When the parties were unable to reach a settlement, McDade
filed suit in October 2015. Id. During discovery Dr. Friedberg
performed a medical examination of McDade, after which he
concluded that her medical treatment was reasonable through
March 2014, when she came to a "medical endpoint." Dr.
Friedberg again opined that Dr. Kasparyan's finding of a
permanent whole person impairment of twenty-two percent was
"significantly exaggerated" and not consistent with the AMA
guidelines. In addition, Dr. Friedberg explained in his
deposition that the permanency designation under the AMA
guidelines means that improvement is not expected over a one-
year timeframe, not that the impairment will necessarily persist
over a person's lifetime.
The underlying tort claim proceeded to a jury trial in
January 2018. The jury found that the defendants were negligent
and that McDade was not comparatively negligent and awarded her
damages of $225,000.
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NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
22-P-1120
ERIKA MCDADE 1
vs.
JUSTIN R. BENOIT & others. 2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
In this unfair settlement practices action, Erika McDade
claims that Safety Insurance Company (Safety) violated the
requirements of G. L. c. 93A and G. L. c. 176D by failing to
offer her a reasonable settlement following a car accident
between McDade and Safety's insured. After a bench trial on
these claims, a Superior Court judge found that Safety made
reasonable offers to McDade based on its assessment of her
injuries and comparative fault and thus did not engage in unfair
settlement practices. Judgment entered accordingly for Safety,
and McDade appeals. We affirm.
Background. In August 2013 Justin Benoit, a driver for
Brodie, Inc., made a left turn across McDade's lane of travel to
1 Formerly known as Erika McKenzie. 2 Brodie, Inc., and Safety Insurance Company. turn into a parking lot. McDade struck the rear side of
Benoit's truck, sustaining damage to her car. An ambulance
transported McDade to the emergency room, and she was later
treated for neck and back pain. Brodie, Inc., was insured by
Safety.
Safety opened a claim on the accident and assigned
Christina Parsons, a veteran claims adjuster, to the accident
file. Parsons took a statement from McDade, who reported that
her neck and back issues from the accident required her to quit
her part-time nannying job and seek regular chiropractic care.
McDade further reported that she missed three days of work as a
nurse before returning full time.
Parsons also spoke to two eyewitnesses, Sonja Houle and
Charles Sidden. Houle, who was driving behind McDade and saw
Benoit's truck make the left turn, stated that McDade seemed a
"little late" in applying her brakes. Sidden, who was driving
behind the truck, stated that the truck was three-quarters of
the way into the parking lot when McDade hit it. Based in part
on these statements, Parsons determined that McDade had some
liability for the accident and informed her that Safety would
pay for eighty percent of the property damage.
Upon assigning eighty-percent liability to Benoit, Parsons
set an initial loss reserve amount of $7,929 for McDade's bodily
injury claim. The loss reserve was meant to represent the
2 "worst-case scenario" for Safety. The initial loss reserve
amount was based on McDade's ambulance ride to the emergency
room, her negative x-rays, and her chiropractic care. By April
2014 Parsons increased the loss reserve to $15,000 after
McDade's insurer, Commerce Insurance Company (Commerce),
reported that McDade's medical bills exceeded $8,000. Later
that year, after Commerce made a subrogation demand, the matter
went to intercompany arbitration at which the arbitrator found
that Safety's position that its insured was eighty percent
liable was a "reasonable compromise" given the circumstances of
the accident.
In March 2015 Safety received a demand for $150,000 from
McDade. The demand included a medical report from Dr. George
Kasparyan, a nontreating orthopedic surgeon, who diagnosed
McDade with chronic pain syndrome and chronic cervical,
thoracic, and lumbar sprain. Based on the American Medical
Association (AMA) guidelines, Dr. Kasparyan opined that McDade
had a twenty-two percent "permanent partial impairment of the
whole person." The demand also included documented medical
expenses of $11,513.75 and stated that McDade had $535 in lost
earnings.
In response to the demand, Parsons increased the loss
reserve to $40,000, and Safety retained a medical expert to
review McDade's medical records. After McDade later reduced her
3 demand to $130,000, Safety countered with an offer of $12,000,
justifying that amount based on its attribution of some fault to
McDade and its disagreement with the extent of her injuries.
Soon thereafter, Safety received a report from its medical
expert, who opined that the "records provided no objective
finding of an 'anatomic abnormality' causally related to the
accident." Safety then retained a second expert, Dr. Ryan
Friedberg, to obtain an opinion regarding Dr. Kasparyan's
conclusion that McDade had a permanent whole person impairment
of twenty-two percent.
Safety was waiting to hear from Dr. Friedberg when McDade
sent a c. 93A demand letter in September 2015. A few days
later, Safety received Dr. Friedberg's report in which he
concluded that McDade's diagnoses of cervical, thoracic, and
lumbar strain were causally related to the accident, but that it
would be unusual to classify for permanency based on those
injuries. Dr. Friedberg also opined that Dr. Kasparyan's
finding of a twenty-two percent whole person impairment was
"significantly exaggerated" and that that figure would more
likely be between two and eight percent.
Parsons conducted an updated valuation of McDade's claim
based on Dr. Friedberg's report. Parsons estimated the claim
range to be between $11,405 and $16,182 considering McDade's
comparative negligence, the soft tissue nature of her injuries,
4 the lack of objective diagnostic testing, and the fact that she
missed only three days of work. The approved range was up to
$18,000. After crediting certain amounts based on Dr.
Friedberg's assessment of McDade's whole body impairment,
Parsons recommended increasing the offer to $15,000. William
Bradley, Parsons's supervisor, reviewed and approved the offer.
When the parties were unable to reach a settlement, McDade
filed suit in October 2015. Id. During discovery Dr. Friedberg
performed a medical examination of McDade, after which he
concluded that her medical treatment was reasonable through
March 2014, when she came to a "medical endpoint." Dr.
Friedberg again opined that Dr. Kasparyan's finding of a
permanent whole person impairment of twenty-two percent was
"significantly exaggerated" and not consistent with the AMA
guidelines. In addition, Dr. Friedberg explained in his
deposition that the permanency designation under the AMA
guidelines means that improvement is not expected over a one-
year timeframe, not that the impairment will necessarily persist
over a person's lifetime.
The underlying tort claim proceeded to a jury trial in
January 2018. The jury found that the defendants were negligent
and that McDade was not comparatively negligent and awarded her
damages of $225,000. The c. 93A claim against Safety then
5 proceeded to the bench trial, after which an amended judgment
entered dismissing McDade's complaint against Safety.
Discussion. On appeal from a decision after a bench trial,
we accept the judge's findings of fact unless they are clearly
erroneous and review the judge's legal conclusions de novo. See
Cavadi v. DeYeso, 458 Mass. 615, 624 (2011). Whether particular
conduct is unfair or deceptive under G. L. c. 93A is a question
of fact, but whether that unfair or deceptive conduct rises to
the level of a c. 93A violation is a question of law. See H1
Lincoln, Inc. v. South Washington St., LLC, 489 Mass. 1, 13-14
(2022). The parties agree that, because the judge's decision
was based solely on documentary evidence, we may draw our own
conclusions from the record. See U.S. Bank Nat'l Ass'n v.
Schumacher, 467 Mass. 421, 427 (2014).
1. Failure to effectuate reasonable settlement. "General
Laws c. 93A and c. 176D operate in tandem 'to encourage the
settlement of insurance claims . . . and discourage insurers
from forcing claimants into unnecessary litigation to obtain
relief.'" Terry v. Hospitality Mut. Ins. Co., 101 Mass. App.
Ct. 597, 604 (2022), quoting Caira v. Zurich Am. Ins. Co., 91
Mass. App. Ct. 374, 381 (2017). The touchstone of c. 176D is
its requirement that an insurer "effectuate [a] prompt, fair,
and equitable settlement" when liability is "reasonably clear."
G. L. c. 176D, § 3 (9) (f). "[L]iability encompasses both fault
6 and damages." Clegg v. Butler, 424 Mass. 413, 421 (1997). In
assessing the adequacy of a settlement offer, we must determine
"whether, in the circumstances, and in light of the
complainant's demands, the offer [was] reasonable," id., quoting
Calimlim v. Foreign Car Ctr., Inc., 392 Mass. 228, 234 (1984),
judged at the time it was made, see Silva v. Norfolk & Dedham
Mut. Fire Ins. Co., 91 Mass. App. Ct. 413, 417-418 (2017). Even
a serious undervaluation of a claim may not render an insurer
liable without evidence that the insurer acted "deliberately to
derail the settlement process." Parker v. D'Avolio, 40 Mass.
App. Ct. 394, 395 (1996).
At trial Safety did not contest that it had some liability
for the accident and was therefore obligated to tender a
reasonable settlement offer to McDade. The issue was whether
Safety's offer of $15,000 was a reasonable assessment of
McDade's damages. We agree with the judge that it was.
As set forth by the judge, there were multiple
circumstances supporting the reasonableness of Safety's offer.
At the time of the offer in September 2015, McDade's medical
bills were less than $12,000 and subject to an approximate
offset of $8,000 in personal injury protection benefits. Dr.
Friedberg provided an expert opinion that McDade's injuries,
which were soft-tissue in nature, were likely not permanent and
that she had only a small percentage of impairment. It was
7 reasonable for Safety to rely on Dr. Friedberg's opinion,
especially given that most of McDade's medical expenses were for
chiropractic treatment, she had not sought treatment for over a
year since March 2014, and she returned to her rigorous job as a
nurse within days after the accident. Moreover, given the
eyewitness statements and the arbitrator's decision, Safety had
a basis to believe that McDade was partly at fault for the
accident. In light of all this information, we agree with the
judge that Safety had legitimate reasons to be skeptical of
McDade's characterization of the extent of her injuries and that
its offer was thus reasonable under c. 176D. See Silva, 91
Mass. App. Ct. at 418.
We are unpersuaded by McDade's argument that Safety's offer
was unreasonable because it failed to factor in her life
expectancy. This argument appears to be based on Bradley's
deposition testimony that he would typically consider life
expectancy when evaluating a permanent impairment claim. But
even assuming that this testimony established that a reasonable
insurer would have considered life expectancy in these
circumstances, Bradley further testified that he did in fact
consider McDade's life expectancy when approving Parsons's
offer. Although Parsons testified, somewhat ambiguously, that
she looked at McDade's life expectancy but did not "consider
that as part of [the] permanency value," Bradley explained that
8 the settlement value of claims is determined according to an
"experience-based evaluation" under which the adjuster "can look
at permanency in terms of the life expectancy or . . . can also
take into account . . . other variables depending on the person
and the situation." Thus, even if Parsons did not "directly
factor" in McDade's life expectancy, Bradley still believed that
the "number that she came up with [was] reasonable" given all
the information known to him, which, as he expressly testified,
included life expectancy. McDade's argument therefore fails if
for no other reason than it is refuted by Bradley's testimony.
We are also unpersuaded by McDade's argument that the judge
erred by declining to credit her insurance expert. In his
deposition testimony, the expert opined that Safety's offer was
unreasonably low and that the settlement value of the case was
approximately $125,000. But as the judge explained, the expert
did not base his opinion on information in the record and failed
to review documents used by Safety to support its valuation of
McDade's claim. Furthermore, when asked, the expert was unable
to identify any industry standards or guidelines that he used to
form his opinion. Because the expert's opinion was conclusory
and not based on any identified reliable methodology, we discern
no error in the judge's decision not to credit his testimony.
See Palandjian v. Foster, 446 Mass. 100, 110 (2006).
9 2. Failure to train. In passing, McDade suggests that
Safety independently violated c. 176D by failing to train its
adjusters on how to handle permanent impairment cases. But
McDade fails to explain why any inadequacy in training is
relevant if the offer itself was reasonable under c. 176D, as we
have determined it was. She cites no legal authority to support
her position, nor does she point to any credible evidence in the
record showing that Safety's training was not in line with
industry standards. As her conclusory assertions do not rise to
the level of appellate argument, we need not consider them. See
Halstrom v. Dube, 481 Mass. 480, 483 n.8 (2019).
3. Failure to investigate. Likewise, McDade has not
adequately developed her argument that Safety violated c. 176D
by failing to conduct a reasonable investigation, purportedly by
engaging in improper tactics with respect to Houle's eyewitness
statement. In any event the judge carefully explained
why Safety did not act improperly and why its investigation was
10 otherwise reasonable. We agree with the judge's reasoning. 3
Amended judgment dated June 10, 2021, affirmed.
By the Court (Wolohojian, Shin & Ditkoff, JJ. 4),
Clerk
Entered: November 6, 2023.
3 McDade's request for double or treble damages and attorney's fees is denied. 4 The panelists are listed in order of seniority.