Massachusetts Courts Uphold Dismissal of Claim Based On Scope of Self-Insured Provisions

D-7.5.3

When it comes to personal injury cases, there is little dispute over the duty of an insurance company to provide prompt, fair, and equitable representation and services to their insureds. This is especially true in situations when someone makes a claim against one of the insurance company’s policyholders, and the insured’s liability for the injuries and damages complained of is clear. In a recent case, a more nuanced question regarding insurance companies’ duties arose:  whether the defendant was actually in the business of providing insurance and subject to Massachusetts’ laws governing insurers’ duties at all.

In Bingham v. Supervalu, an elderly women was struck by a motorized shopping car while shopping at a Shaw’s Supermarket location, resulting in severe lacerations to her Achilles tendon. At the time, Shaw’s was a subsidiary store of Albertson’s, a major national grocery retailer. The woman filed a lawsuit against the supermarket, claiming that the store was negligent. At some point during the pendency of the litigation, Supervalu acquired Shaw’s. According to the relationship between Supervalu and Shaw’s, Supervalu possessed the authority to settle and negotiate claims on behalf of Shaw’s.

Due to her elderly condition, the woman was unable to survive the injuries and associated issues that the ankle injury caused, leading to her death in the fall of 2006. Shaw’s failed to provide timely responses to the plaintiff’s interrogatories, and a judgment was entered against Shaw’s. The court also awarded damages to the decedent’s estate.

Supervalu appealed, and in 2010 the Appeals Court of Massachusetts affirmed the trial court’s ruling and damages award. Supervalu responded by threatening an appeal to the Massachusetts Supreme Court, and the decedent’s estate accepted a settlement offering an amount just shy of the trial court’s original damages award.

In 2013, the decedent’s estate filed a claim against Supervalu in state court, which Supervalu quickly removed to federal court. The estate alleged that the company violated Massachusetts General Laws Chs. 176D and 93A through its “frivolous” and “willful” delay in negotiating a resolution to the lawsuit between the decedent’s estate and Shaw’s. Supervalu moved for summary judgment, and the district court granted the motion.

The estate appealed to the federal circuit appeallate court, which affirmed the district court’s holding. The circuit court concluded that Supervalu satisfied the definition of a self-insured because it chose to bear the entire risk of loss associated with uninsured claims brought against Supervalu and its subsidiary businesses. Status as a self-insured meant that Supervalu was exempted from complying with Ch. 176D. Additionally, although Supervalu owned an insurance company, the circuit court determined that the insurer was completely uninvolved with the negotiation, adjustment, or resolution of the decedent’s claim.

If you or someone you love has suffered injuries as a result of another person’s negligence, you may be entitled to compensation. At the Law Offices of John S. Moffa, our premises liability lawyers have provided dedicated and compassionate legal representation to victims throughout Massachusetts and are ready to help you fight for what you deserve. We offer a free consultation to help you learn about the options available to you. Call us now at 508-362-5554 or contact us online to set up your free consultation.

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