Mass. Appeals Court Rules in Favor of Insurer in Underinsured Motorist Coverage Case

By | November 5, 2018

A Massachusetts Appeals Court has ruled in favor of an insurer in a case involving an automobile accident in which the injured plaintiff sought to obtain underinsured motorist coverage under a policy held by the mother and stepfather of his long-term partner, with whom he has a child.

The court upheld a Superior Court’s ruling that the plaintiff could not be considered a household member under the policy, as he is not related by blood to either policyholder.

This comes after a July 18, 2014 accident, when plaintiff Derrick Martins Oliveira was injured in a single-automobile crash as a passenger in a vehicle owned and operated by a third party.

He sustained fractures to his spine and ribs, tore ligaments in his knee and suffered lacerations and scarring on his scalp. He was hospitalized for four days, required long-term disability and incurred medical bills of more than $40,000.

The driver of the vehicle involved in the accident was insured under her own policy, and Oliveira accepted a settlement with the driver and the driver’s insurer to the full extent of that policy, which was $100,000.

Since 2012, Oliveira has lived with his long-term partner in a single-family unit with her mother and stepfather. He is not married to his partner, but they have a minor son together. The Commerce Insurance Co. provided coverage for the two vehicles used by the residents of Oliveira’s home – neither of which was involved in the accident – under a policy issued to his partner’s mother and stepfather.

The Commerce insurance policy provided $250,000 of coverage per person in underinsured motorist (UIM) coverage for “damages for bodily injury to people injured or killed as a result of certain accidents caused by someone who does not have enough insurance.”

Oliveira claimed coverage under the policy as a household member of the policyholders. The insurer denied the claim, however, contending that he was not eligible for coverage because he did not meet the definition of a household member under the policy.

In the policy, the term “household member” is defined as “anyone living in your household who is related to you by blood, marriage or adoption. This includes wards, step-children or foster children.”

In response to the insurer’s denial of his claim, Oliveira filed a complaint in Superior Court, alleging breach of contract and seeking a judgment declaring that he was a household member under the policy and was eligible for coverage.

Oliveira argued that he was related by blood to the policyholders through his biological son and entitled to coverage. After a hearing, a Superior Court judge denied his motion and granted Commerce’s motion. Oliveira then appealed.

Appeals Court Decision

Although in the lawsuit Oliveira requested an expanded definition of “related by blood,” the Appeals Court found that the policy language was not suited to further expansion beyond its usual and ordinary meaning.

“The plaintiff’s construction of ‘related by blood’ is breathtaking in its breadth and yet remarkably disconnected to the asserted policy goal of covering a broad range of family relationships,” Associate Justice Joseph M. Ditkoff wrote in his opinion. “Under the plaintiff’s theory, any two persons with a common blood relative are themselves related by blood. Thus, a person with a niece is a blood relative of his or her brother-in-law’s parents (and grandparents and, for that matter, any genetic relatives). Indeed, a couple with a biological child would be surprised to find themselves to be blood relatives.”

With this in mind, Ditkoff determined the words “related by blood” represent a genetic relationship. He stated in his decision that Oliveira does not have a genetic relationship with either of the policyholders, and that the Superior Court judge had properly granted summary judgment to the insurer.

In his opinion, Ditkoff added a warning that individuals need to know whether they are covered by another individual’s policy to determine whether they should obtain their own insurance, and insurance companies need to know who is covered to determine the proper premium and how to process claims.

“In the insurance context, waiting until an accident and subsequent case-by-case determination of coverage by a judge is not an adequate solution,” he wrote in his opinion.

Dissenting Opinion

Associate Justice Edward McDonough, however, offered a dissenting opinion, stating that in Massachusetts, automobile insurance is both statutory and policy driven.

In terms of who is eligible for UIM coverage, the statute does not use the phrase “household member” like the policy does, he wrote. Instead, the statute states that someone in Oliveira’s position is eligible for UIM coverage “from the policy of a resident relative,” McDonough added, stating that the word “relative” is commonly understood to refer to a person related by blood or marriage.

“It is simply wrong to suggest, as the majority effectively does, that…the court is required to view the usual and ordinary sense of the phrase ‘related by blood’ in a vacuum, without considering the underlying statute and its purpose,” he wrote. “To these ‘changing realities’ of the modern American family, the majority turns a blind eye, thereby limiting UIM coverage to accident victims belonging to conventional families…to the exclusion of Oliveira, an unmarried parent and household member victimized by an underinsured intoxicated driver.”

He stated that because modern society presents an almost infinite variety of possible domestic situations and living arrangements, the term “household member” can have no precise meaning and analysis needs to proceed on a case-by-case basis.

Although he agreed that the phrase “related by blood” seems to imply two people that share a common bloodline and are descended from a common ancestor, he added there is also a commonsense appeal to the idea that the biological father of a child is related to the maternal biological grandmother of the child, even if the father is not married to the biological mother of the child.

He stated that it can be assumed the severe injuries Oliveira suffered in the accident have had a significant impact on his family and his child.

“It would seem anomalous, therefore, that coverage for the child’s loss also could be denied merely because his father and mother did yet not marry – as recently as a day or hours before the accident,” he said.

With this in mind, McDonough called for a reversal of the appeals court’s judgment in which Oliveira’s motion for summary judgment is allowed, Commerce’s motion for summary judgment is denied and Oliveira is found to qualify as a household member under the policy issued by Commerce to the grandmother and stepgrandfather.

The case is Derrick Martins Oliveira vs. The Commerce Insurance Company.

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