United States Trust Co. v. Safety Insurance

1990 Mass. App. Div. 59, 1990 Mass. App. Div. LEXIS 31

• Court: Massachusetts District Court, Appellate Division
• Decided: April 20, 1990
• Status: Published

Opinion

Meagher, J.

The plaintiff, U.S. Trust Company, lent money to Christine Peterson for the purchase of a motor vehicle, a 1987 Hyundai, and as a result the plaintiff obtained a security interest in the car. The car was stolen and damaged but was recovered and repaired after being inspected by the defendant Safety Insurance Company. The Insurance Company reinspected the car after the repairs; it determined that the repairs were completed in "a good and workmanlike manner” and then paid the owner of the car, Ms.Peterson, $2,822.49.

The issue in this case is to whom should the insurance company have issued the check for the repairs to the automobile.

The plaintiff claims that because it was named as a lender in the insurance policy (although it, the lender, was not a party to the contract of insurance and although it did not pay for the insurance) the check should have been made out to both it, U.S. Trust Company, and the owner of the car, Ms. Peterson.

The defendant, Safety Insurance Company, on the other hand, notes that the insurance policy states: “We will make payments... according to the legal interests of each party.”

The Insurance Company argues that the “legal interest of each party” is determined by M.G.L. c. 90, sec. 34 O, which stated in relevant part in 1987, at the time of the loss (as it does presently): “In all instances where the insurer so reinspects the vehicle prior to making payment, the check for payment shall notinclude a third party loss payee”. (Underlining added)

The Insurance Company complied with the statute. The purpose of this section of the statute is to make certain that the automobile is repaired without fraud on the Insurance Company and to return the parties who have an interest in the automobile to the position they were in before the loss occurred. In this instance, the car was repaired in a workmanlike manner after inspection by the Insurance Company; the Insurance Company was satisfied that the car was repaired and satisfied with the amount that the repairs cost and the plaintiff lender did not lose its security interest in the repaired car.

The trial corn! found for the defendant, Safety Insurance Company.

We find no error by the trial judge and order the Report dismissed.