Hopkins v. Liberty Mutual Insurance

11 Mass. L. Rptr. 106
Massachusetts Superior Court·Decided December 10, 1999·No. No. 950053·Published

Opinion

Sweeney, J.

The plaintiff, Linda Hopkins, brought this action against Liberty Mutual Insurance Company (“Liberty”), alleging unfair settlement practices in violation of G.L.c. 176D, §3(9)(f) and G.L.c. 93A. On August 4, 1998, this court issued a memorandum of decision finding that the defendant had engaged in unfair settlement practices as claimed by the plaintiff, which caused her damages in the amount of Eighty-Three Thousand Seven Hundred Thirty-Three ($83,733) Dollars. In addition, the defendant was assessed punitive damages in the amount of One Hundred Sixty-Seven Thousand Four Hundred Sixty-Six ($167,466) Dollars. The defendant was ordered to pay the reasonable attorneys fees and costs incurred by the plaintiff in prosecuting her 93A claim.1

On August 20, 1998, the plaintiff filed her Affidavit of Services and Fees seeking $18,670.21. On August 28, 1998, the defendant filed an objection on the grounds that plaintiff was entitled only to those attorneys fees attributable to her G.L.c. 93A claim, and not those attributable to the underlying tort claim against Liberty’s insureds. The court conducted a hearing on the issue and reviewed memorandums submitted by the parties.

As detailed in the court’s original memorandum of decision, on February 7, 1992, the plaintiff was seriously injured in a multi-car accident on East Street in Pittsfield, Massachusetts. Robert Jones, who was operating a truck owned by Tire Center Incorporated (“Tci”), was involved in the accident. Liberty Mutual insured both Mr. Jones and TCI at the time of the accident. Investigations clearly indicated that the accident was caused, in part, by Jones following too closely behind another vehicle that struck Ms. Hopkins’ car. On October 14, 1994, after updating Ms. Hopkins’ medical bills, her attorney presented to Liberty a settlement demand of Seven Hundred Thousand ($700,000) Dollars. By December 1994, both TCI and Jones were clearly liable and Ms. Hopkins’ damages were reasonably established.

Liberty nonetheless declined to offer a settlement and Ms. Hopkins’ lawyers sent a 93A demand letter to Liberty on December 29, 1994. No offer was received and the plaintiff filed this lawsuit on February 2, 1995.

[107] The complaint alleged negligence against TCI, Jones, and other drivers and sought damages for injuries sustained in the accident. Count VI of the complaint alleged that Liberty violated both Chapter 176D and Chapter 93A of the General Laws and sought damages under 93A.

Liberty’s first settlement offer, on behalf of TCI and Jones, was not made until April 24, 1996, when it offered a combined settlement of Four Hundred Thousand Dollars contingent upon the plaintiff releasing all the defendants. The plaintiff rejected this offer, and on August 21, 1996, TCI and Jones made the plaintiff an Offer of Judgment in the amount of Four Hundred Thousand ($400,000) Dollars, which plaintiff accepted, thereby releasing TCI and Jones, but reserving her 176D and 93A claims against Liberty. Those claims were tried before this court jury-waived in July 1998, and resolved in Ms. Hopkins’ favor. Liberty was accordingly ordered, among other things, to pay the reasonable attorneys fees incurred in prosecuting Ms. Hopkins’ 93A claims against Liberty. That order is the sole issue before the court for resolution.

The plaintiffs attorney submitted an Affidavit of Counsel for Services and Fees totaling 115.7 hours, including time spent both on Ms. Hopkins’ personal injury claim, which was ultimately settled, and her 93A claim. Liberty objects to the affidavit on the grounds that (1) Ms. Hopkins’ attorney represented her on a contingent fee basis, which she was obligated to pay regardless of when the case settled and (2) Ms. Hopkins’ 93A action was separable from her personal injury claim, with a total of 45.8 hours attributable to the 93A claim. Her attorneys fees, Liberty argues, should be limited to those attributable to her 176D and 93A claims.

The amount of a reasonable attorneys fee is largely discretionary, and the judge should consider “the nature of the case and the issues presented, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation and ability of the attorney, the usual price charged for similar services by other attorneys in the same area, and the amount of awards in similar cases.” Linthicum v. Archambault, 379 Mass. 381, 388-89 (1979). Section 9(4) of G.L.c. 93A authorizes the award of legal fees “incurred in connection with said action” (i.e. the action under Chapter 93A), but not for other actions. Miller v. Risk Management, 36 Mass.App.Ct. 411, 421 (1994). In Miller, the plaintiff pursued a 93A claim subsequent to the conclusion of a malpractice action, alleging unfair settlement practices in the business of insurance, G.L.c. 176D, based upon the company’s failure to make a reasonable offer of settlement where liability of the hospital appeared plain. See id. at 412. The trial judge concluded that attorneys fees for the work done on the Millers’ behalf in the malpractice action were recoverable in the 93A suit. See id. at 421. The Appeals Court found that the trial judge had applied the customary factors, such as hours spent, reasonable hourly rates, and the results obtained, and that the figures reached by the judge could therefore be justified. See id. The court remanded the case, however, since the judge’s award could have been read differently. See id.

Although the trial judge in Miller found that the expense of the malpractice action was a foreseeable consequence of the defendant’s unfair or deceptive act or practice, the plaintiffs retained the attorney on a contingency fee basis, with the plaintiffs obligated to pay the attorney one third of the amount collected and reasonable expenses. See id. The plaintiffs’ additional expense in litigating the malpractice claim, rather than receiving an early settlement, “was only in the way of expenses and disbursements occasioned by the litigation.” See id. The Appeals Court accordingly remanded the case for recomputation or reconsideration. See id. at 423.

In the negligence claim against Liberty’s insured, Ms. Hopkins’ attorney represented her on a contingency fee basis. To require Liberty to pay the same attorney fees that Ms. Hopkins was contractually obligated to pay her attorney, regardless of whether a later bad faith claim arose against Liberty, would result in a windfall to the plaintiff.2

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Hopkins v. Liberty Mutual Insurance, 11 Mass. L. Rptr. 106 (Mass. Ct. App. 1999).

11 Mass. L. Rptr. 106 (Hopkins v. Liberty Mutual Insurance) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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