The Massachusetts Appeals Court has upheld a Superior Court decision that defendant, Norfolk & Dedham Mutual Fire Insurance Co., did not engage in unfair settlement practices in its handling of a personal injury claim. The court also reversed the portions of an amended judgment awarding damages, prejudgment interest, costs and attorney’s fees for Norfolk & Dedham’s failure to offer postjudgment interest.
The case, Mark Silva vs. Norfolk & Dedham Mutual Fire Insurance Company, comes after a series of events leading the plaintiff, Mark Silva, to file a personal injury claim against Norfolk & Dedham’s insured, Dorothy McQuinn, which Norfolk & Dedham refused to pay after investigating the claim.
On March 9, 2005, Silva, a tow truck operator, was assisting a vehicle stuck in a snow drift in Provincetown, Mass., according to the court decision document. Silva had pulled his truck to the side of the road and hooked up a tow line to the disabled car. The road conditions were “snowy, slushy, and icy,” the court document said.
McQuinn was driving with her windshield fogged up, obstructing her view of the road, when she rear-ended Silva. The next day, Norfolk & Dedham, McQuinn’s insurer, was informed of the collision and opened a claim. McQuinn had bodily injury coverage of $250,000 per person and $500,000 per accident.
However, the court decision stated that Norfolk & Dedham’s initial efforts to obtain information regarding Silva and his injuries were mostly fruitless.
Silva’s automobile insurance carrier and his workers’ compensation carrier were initially reluctant to disclose to Norfolk & Dedham any information from their own investigations, the decision document said, adding that Norfolk & Dedham did not obtain access to Silva’s medical records until more than three years after the accident and after Silva filed his personal injury suit against McQuinn.
As Norfolk & Dedham gathered information, it began to cast doubt on the genuineness of Silva’s claimed injuries.
“The question…is whether [Norfolk & Dedham] refused to pay the claim without conducting a reasonable investigation based on all available information,” according to the Superior Court judge.
Six days after learning of the accident, Norfolk & Dedham assigned an independent adjuster to investigate the claim. Through its own claims adjusters and other sources, including private investigators, Silva’s workers’ compensation carrier, Silva’s automobile insurance carrier and Silva’s discovery responses and deposition testimony, Norfolk & Dedham also acquired information that gave it “a reasonable basis for regarding as suspicious” Silva’s claim, the court document said.
Norfolk & Dedham looked to the opinions of Dr. David Gushue, a biomechanical engineer, and Dr. Mark Weiner, a neurologist, regarding the cause and extent of Silva’s injuries. After Gushue and Weiner reviewed evidence of the accident and Silva’s medical records, Gushue stated the accident’s impact would have generated the same force Silva experiences in his daily routine.
“Silva’s injury was revealed to be three herniated disks, two of which resolved themselves,” the court document said.
Eight days later, Norfolk & Dedham learned that after the accident, Silva not only towed McQuinn’s car from the scene, but also returned to complete the original tow he had been working on when the accident occurred, the court document added.
A private investigator also informed Norfolk & Dedham that within one month of the accident, Silva was observed at his automobile service station working a full schedule.
The court document stated that “there was no testimony at trial identifying specific steps that Norfolk & Dedham should have taken but did not in investigating Silva’s bodily injury claim,” and that Norfolk & Dedham “had a reasonable basis for resisting liability.”
Silva argued, however, that some of the evidence relied on by the judge was not known to Norfolk & Dedham until after the judgment in the underlying personal injury trial and could not have been part of Norfolk & Dedham’s basis for doubting Silva’s claim.
Specifically, Silva complained the Superior Court judge should not have considered certain bank and tax records showing wages and benefits Silva received in 2005, as well as investigative reports and summaries of surveillance indicating Silva continued to work after the accident.
The Appeals Court found the judge was not wrong to consider this evidence. When Silva and Norfolk & Dedham agreed to the terms of a settlement of Silva’s claims against McQuinn, Norfolk & Dedham paid the postjudgment interest due to Silva.
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