The following was presented as part of a New Hampshire Continuing education program on March 25, 2011 by Attorney John C. Sullivan

SPECIAL PROVISIONS OF MASSACHUSETTS AUTO INSURANCE LAW

John C. Sullivan, Esq.

Finbury & Sullivan, P.C.

55 Ginty Boulevard

Haverhill, MA 01830

jsullivan@finburylaw.com

www.finburylaw.com

The following material is divided into three parts. The first section seeks to convey a basic understanding of Massachusetts automobile insurance coverage. The second section explains the use of two statutes, Mass. Gen. L. ch. 176D and Mass. Gen. L.. ch. 93A. 176D declares certain acts and practices by insurance companies to be illegal, and 93A is the enforcement tool which in the proper situation brings the threat of multiple damages and attorneys fees for non compliance with 176D. The last section provides some practice pointers to consider in dealing with auto cases which have a Massachusetts component.

I. MASSACHUSETTS AUTOMOBILE INSURANCE

In Massachusetts there is only one standard, non-commercial automobile insurance policy, currently the 2008 Edition. This policy must be approved by the Commissioner of Insurance. Anyone registering a vehicle in Massachusetts must buy at least the minimum compulsory insurance which consists of four parts: bodily injury(20k), personal injury protection(8k)(PIP), uninsured motorist(20k), and property damage(5k). Optional coverages are available. To the extent possible, the coverages are explained in plain language within the standard policy. The first place to look when dealing with automobile insurance issues would be the standard policy (Exhibit A).

This section covers the basic issues commonly faced when dealing with Massachusetts auto insurance. The first is the "threshold" which must be met to obtain pain and suffering damages. Next is an explanation or reasonable and necessary expenses. The third issue is PIP and Med Pay coverage, and the fourth is Uninsured and underinsured coverage.

A. THRESHOLD

Mass. Gen. L. ch. 231, §6D establishes a threshold which the injured party must meet before that party can obtain damages for pain and suffering. This applies to any accident within Massachusetts whether out-of-state drivers are involved or not. If the threshold is not met, the claimant can not recover pain and suffering damages. This applies to pedestrians and bicyclists struck by autos as well as operators and passengers of motor vehicles. The threshold does not apply to collisions outside the Commonwealth. Furthermore, the threshold does not apply to Massachusetts motorcycle operators and passengers.

To meet the threshold and be entitled to collect pain and suffering damages in a Massachusetts collision, you must meet one of the following criteria:

1. In excess of $2,000.00 in reasonable and necessary expenses incurred in treating the injury, sickness or disease; or

2. Permanent and serious disfigurement; or

3. A fracture; or

4. Loss in whole or part of a body member; or

5. Loss of sight or hearing; or

6. Death.

In most cases the question is whether there is more than $2,000 in medical bills, scarring or a fracture. Theoretically a claimant could have a soft tissue injury which is permanent in nature, but if the claimant's medical bills are $1,999.99, there would be no recovery for pain and suffering.

A New Hampshire resident injured in a Massachusetts crash must meet the tort threshold to obtain pain and suffering damages against the defendant. However, if the threshold is not met then the New Hampshire claimant has a claim against his/her insurance company. A New Hampshire resident injured in Massachusetts who does not meet the tort threshold is deemed to have been injured by an uninsured tortfeasor and therefore could pursue an uninsured claim. Green Mountain Insurance Co. v. George, 138 N.H. 10 (1993); Matarese v. N.H. Municipal Assn. Prop-Liability, 147 N.H. 396 (2002).

Therefore, if your client is a New Hampshire resident, does not meet the threshold and is covered by a New Hampshire policy of insurance, file a claim for uninsured coverage with that policy. If your client is a New Hampshire resident and has no insurance whatsoever, your client can still pursue damages other than pain and suffering as applicable. The reason for that is the tort threshold only applies to pain and suffering damages. Cyr v. Farias, 367 Mass. 720, 724 (1975).

B. REASONABLE AND NECESSARY EXPENSES

Because of the $2000.00 monetary threshold, a concern arises as to how to show that the expenses are reasonable and necessary. In Massachusetts, itemized medical bills subscribed and sworn to under the pains and penalties of perjury by the attending physician are admissible as evidence of the necessity, fairness and reasonableness of the charges. Mass. Gen. L. ch. 233 §79g. Expert medical testimony is ordinarily not required to establish the necessity of medical services. The plaintiff's own testimony may be taken into consideration along with the medical bills and reports. Scalia v. Liberty Mutual Insurance Co., 1995 Mass. App. Div. 69 (1995).

In order to prove necessity, the plaintiff must show "that the [medical] treatment rendered by a competent medical doctor was a bona fide effort to alleviate and ameliorate the injury," not that the treatment was an absolute necessity. Victum v. Martin, 367 Mass. 404, 407 (1975); Pietroforte v. Yellow Cab of Somerville, Inc., 19 Mass. App. Ct. 961, 963 (1985).

Practically speaking, for purposes of meeting the threshold, insurance companies at the pre litigation level do not commonly challenge the "face amount" of the medical bills. Also a recent challenge to the "face amount" of the medical bills at trial was rejected in Law v. Griffith, 457 Mass. 349 (2010). In that case the Plaintiff at trial submitted medical bills totaling $112,269. 94, certified as required under Mass. Gen. Laws., Ch. 233, §79g. Despite that, the trial judge only allowed evidence of what the Plaintiff's insurance coverage paid, which was $16, 387.14. The Supreme Court reversed, stating that the collateral source rule prohibited introduction of insurance payments, and Mass. Gen. L. ch. 233, §79g allowed introduction of the "face amount" of the bills.

C. PERSONAL INJURY PROTECTION (PIP) AND MEDICAL PAYMENT COVERAGE (MED PAY)

In New Hampshire, a claimant often has Medical Payments coverage available. In Massachusetts, while many people still purchase Medical Payments coverage, the primary coverage for medical expenses is Personal Injury Protection (PIP). The statutes pertaining to Personal Injury Protection are Mass. Gen. L. ch. 90, §34A, which defines PIP in detail and Mass. Gen. L. ch. 90, §34M, which makes it a mandatory requirement in insurance policies and elaborates on its enforcement and coverage. To get a plain language explanation of what PIP covers, see the standard Insurance policy at

Exhibit A.

PIP coverage can be waived for the named insured and any persons living in the insured's household but cannot be waived for other occupants or pedestrians. It is compulsory.

Attorneys can not charge a contingent fee for obtaining PIP benefits for their clients. At best they can charge an administrative fee, but most practitioners do not charge any fee at all.

1. PIP Benefits.

PIP provides coverage for the following benefits:

(a) Medical expenses (including eye glasses, prosthetic devices, funeral services and professional nursing);

(b) Seventy five (75%) percent of lost wages or lost earning power if unemployed; and,

(c) Payment to non-family members for necessary services they rendered to the household which the injured party would have performed without pay (i.e., cleaning, etc.)

The expenses or losses must be incurred within two (2) years from the date of the collision.

2. Individuals covered under PIP.

The following individuals are covered under PIP.

(a) Any person occupying the insured vehicle with consent;

(b) The insured or person living in the household who is injured while occupying an automobile not having PIP coverage or if struck as a pedestrian by an automobile not having PIP coverage; and

(c) Any pedestrian struck by the insured automobile in Massachusetts or any Massachusetts resident struck by the insured automobile outside Massachusetts (New Hampshire pedestrians are not covered by PIP if struck in New Hampshire by a Massachusetts vehicle).

PIP does not cover motorcycles or their passengers and is not payable if worker's compensation benefits are available to the claimant. There is no coverage in other situations including OUI, intentional harm or where a person is injured in the commission of a felony.

3. Amount of PIP Coverage Available.

PIP is available up to $8,000. However, if the claimant has health insurance, a different rule applies. In that situation, once $2,000 in medical expenses is paid by PIP, the claimant must submit the rest of the medical expenses to his/her health insurer. Then, whatever amount is not paid by the health insurer will be re-submitted to PIP. Medicare, Medicaid, Massachusetts state provided health insurance, and fully funded ERISA plans are not included in this scheme so that for claimants having those health insurance plans, PIP is primary up to $8,000. Massachusetts residents who are injured in Massachusetts accidents where no PIP insurance is available may apply to a fund under Mass. Gen. L. ch. 90, §34N.

4. PIP Reimbursement.

Pure Massachusetts Situation. In a pure Massachusetts situation, whatever is received in PIP reduces the eventual personal injury recovery. If the case is tried to a judgment, the judge reduces the verdict by the amount of PIP paid. The PIP carrier is entitled to reimbursement from the defendant's insurance company. Therefore, any offers to settle made by the defendant's insurance company have already taken into consideration the fact that it must make PIP reimbursement.

The tortfeasor's insurance company only has a duty to pay up to its policy limits. Therefore, if the tortfeasor's insurance company pays the policy limits to the claimant, it is under no duty to reimburse the claimant's insurance company for PIP.

The above point becomes important in a case which is valued close to the policy limit. For example, assume that PIP has paid $8,000 and the tortfeasor's total policy is $20,000. Because the liability of the insurance company is only $20,000, the policy will be exhausted if the claimant is paid as little as $12,000, because the remaining $8,000 must go to PIP. Therefore, you have a powerful argument that the insurance company should pay you the policy limit because if it pays at least $12,000 to you it has to pay the entire policy anyway. By paying the $20,000 to you it ensures that it has settled the case and has protected its insured from potential excess liability.

New Hampshire Defendant. PIP reimbursement is different when a New Hampshire insurance company (insuring the tortfeasor) is involved. A New Hampshire insurance company may be involved because its insured caused injury to a person covered under PIP and the injury occurred either in Massachusetts or New Hampshire. There is no statute authorizing a New Hampshire insurance company to withhold from a personal injury settlement that amount necessary to reimburse PIP benefits (Mass. Gen. L., ch. 90, §34M does require Massachusetts companies to do that.)

Typically the case with an out of state liability insurer would be settled for full value without any deduction. During the settlement process, the PIP carrier would be contacted by the claimant's attorney who would negotiate a payback figure. Typically the payback amount would be reduced by a third to one-half. Do not assume that the Defendant's out of state insurance company will reimburse the PIP carrier in addition to paying a settlement to your client. Make sure to clarify this with the liability carrier. In this situation you want to get a full value settlement without a PIP offset. If the Defendant's insurance company is concerned with the PIP carrier's right to reimbursement, deal with PIP yourself so that you can negotiate a lower payback figure, and then present the deal to the liability carrier.

Do not ignore the PIP carrier's right to be reimbursed. It is a potential claim against your client that would be left open after the settlement.

5. Medical Payment Coverage.

Many people buy Medical Payments coverage (Med Pay) in addition to PIP coverage. It is seen in multiples of $5,000.

Med Pay covers anyone occupying the insured motor vehicle with consent. It also covers the insured and any person living in the household if occupying someone else's automobile or if struck as a pedestrian.

Med Pay coverage applies only to medical expenses and not to wages. Also, they must be incurred within two years of the collision.

Coordination of Benefits for PIP, Health Insurance and Medical Payments Coverage.

Consider the following scenarios:

PIP, No Health Insurance, No Med Pay.

In this case PIP pays up to eight thousand ($8,000) dollars in the medical expenses.

PIP and Health Insurance but No Med Pay.

PIP pays the first two thousand ($2,000) dollars in medical expenses. After that, the medical expenses must be submitted to the health insurance. Whatever the health insurance will not pay can be resubmitted to PIP (Medicaid, Medicare, Massachusetts state provided health insurance, and fully funded ERISA plans are not considered health insurance and therefore the full $8,000 in PIP would be applicable to medical expenses).

PIP, Health Insurance and Med Pay.

Some insurers contend that Med Pay is only available after PIP and health insurance have paid whatever they will pay. Mejia v. Am. Cas. Co., 55 Mass. App. Ct. 461, 466 (2002). Others may make payments on Med Pay that duplicate the amounts that are covered by health insurance based on the Mass. Division of Insurance Bulletin B-90-2. The issue is currently on appeal.

6. Duty to Cooperate.

PIP benefits are contractual in nature. The policy requires the claimant to cooperate in terms of giving a statement as well as submitting to medical exams. The use of IME exams in PIP practice is standard. Non-cooperation is a defense, and insurance companies commonly refuse to pay once a claimant has missed two scheduled IME exams. Even though the PIP carrier has an IME exam stating that no further treatment is necessary, you can still litigate the issue of further PIP payments.

D. UNINSURED AND UNDERINSURED COVERAGE

Uninsured and underinsured coverage is governed by Mass. Gen. L. ch. 175, §113(L).

1. Stacking.

There is no stacking of UM or UIM claims in Massachusetts after 1989. Mass. Gen. L., ch. 175, §113(L)(5).

2. Statute of Limitations.

The statute of limitations for underinsured and uninsured coverage is six years from the time the contract was breached. Berkshire Mutual Insurance Co. v. Burbank, 422 Mass. 659, 660 (1966). The insurance contract is not breached until one party or the other declines to arbitrate. However, late notice is still a defense. Goodman v. American Casualty Co., 419 Mass. 138, 142 (1994).

3. Which Policy Applies.

In any uninsured situation, regardless of how the claimant was hurt, you first look to any policy where the claimant is a named insured. If the claimant is a named insured, that is the exclusive policy available for uninsured coverage.

If the claimant is not a named insured on any policy, but is in the same household of a person having automobile insurance, then that is the sole policy available.

If the claimant is not a named insured on a policy, and if there is no insurance policy in the household, then the policy applicable would be the vehicle the claimant is riding in.

4. Notice.

The standard insurance policy requires prompt notice, and in the case of a hit and run, notice within 24 hours. However, the insurance company will not be successful in denying the claim unless it shows that it was prejudiced, and it has the burden of proof in that regard. Goodman v. American Casualty Company, 419 Mass. 138, 142 (1994); Lighter v. Lumberman's Mutual Casualty Insurance Co., 43 Mass. App. Ct. 415 (1997).

5. Timing.

In an underinsured claim, there is no need to exhaust the tortfeasor's policy first, nor is there a requirement that you must resolve the tortfeasor's case first before applying for underinsurance. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220, 228-29 (1988). Therefore, you can proceed with a lawsuit against the tortfeasor as well as an underinsured claim against the policy that applies. Of course, your recovery in the underinsured claim is only the value of the case above the tortfeasor's full policy.

6. Consent to Settle.

You must obtain the written permission of the underinsurance carrier to settle before settling the underlying claim against the tortfeasor. An insurer's consent to settle may not be unreasonably withheld. In addition, an insurer must prove material prejudice resulted if a claimant fails to obtain consent. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220; Lighter V. Lumberman's Mutual Casualty Insurance Co., 43 Mass. App. Ct. 415 (1997).

Once an underinsured carrier is requested to give consent to settle, it usually performs an asset check on the tortfeasor. In Massachusetts, the underinsured carrier cannot refuse to give consent because the tortfeasor has sufficient assets over and above the insurance policy to satisfy any claim. The insurance company must make a decision to either give consent to the settlement, thus releasing the tortfeasor, or to pay the underlying claim to the claimant plus the underinsured benefits and then go after the tortfeasor itself. MacInnis v. Aetna Life & Casualty Co., 403 Mass. 220, 228 (1988).

7. Deductions.

Deductions from coverage are made for any amounts recovered from the legally responsible person or insurance company, PIP, and workers' compensation, but not Med Pay.

In New Hampshire, a worker's compensation insurer has a lien against UM benefits. In Massachusetts, there is no such lien; rather, the UM benefits are reduced by the amount of worker's compensation paid, including compensation payments that will continue to be made in the future. Mayo v. Aetna Cas. & Sur. Co., 419 Mass. 596 (1995). This can lead to a hybrid situation where the claimant may obtain a double recovery. A New Hampshire resident receiving Massachusetts worker's compensation benefits who seeks UM benefits under his New Hampshire policy may recover full worker's compensation benefits and full damages under his UM coverage. This is because a Massachusetts worker's compensation carrier has no lien against UM benefits and a New Hampshire UM carrier does not reduce its payment by the amount of worker's compensation received.

II. UNFAIR SETTLEMENT PRACTICES

Insurance companies in Massachusetts have a statutory duty to deal fairly with claimants and their own insureds. Mass. Gen. L. ch. 176D entitled "Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance," is the statute that creates this duty. Section 2 of 176D states that:

"No person shall engage in this Commonwealth in any trade practice which is defined in this chapter as, or determined pursuant to section six of this chapter to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance."

The portion of the statute that would apply to auto insurance cases is set out in EXHIBIT B attached. The most pertinent provisions are 176D § 3(9) (f) and (g) set out here:

§ 3(9) Unfair Claims Settlement Practices: an unfair claim settlement practice shall consist of any of the following acts or omissions:

(f) Failing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;

(g) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.

A. Duty of Insurance Company to Settle with the Claimant.

Mass. Gen. L., ch. 176D §3(9)(f) places a duty on insurance companies to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear. In Demeo v. State Farm Mutual Auto Insurance Co., 38 Mass. App. Ct. 955 (1995), the Appeals Court interpreted that language to require an objective test in determining whether liability is reasonably clear ( the term liability includes both fault and damages):

"That objective test calls upon the fact finder to determine whether a reasonable person, with knowledge of the relevant facts and law, would probably have concluded, for good reason, that the insurer was liable to the plaintiff. Id. at 956-57. "

Insurance companies must be given the time to investigate claims thoroughly to determine their liability. Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 677 (1983).

In Clegg v. Butler, 424 Mass. 413 (1997), liability was found based on a violation of Mass. Gen. L. ch. 176D, §3(9)(f). The court determined that the insurance company failed to effectuate a prompt, fair and equitable settlement of the claim in which liability had become reasonably clear. The injury occurred on May 4, 1991. The policy limits were $250,000. By January 23, 1992 the plaintiff had demanded an amount in excess of the policy limits. Not until May, 1994 did the insurance company offer its policy limits of $250,000. The court found that liability was never at issue and further found that by June, 1992 the insurance company should have known that damages exceeded the $250,000 policy limit. The judge further found the insurance company's previous offers were unreasonably low, unrealistic and unjustified. The case was remanded because the judge applied the wrong measure of damages. Damages will be discussed in detail below.

It is clear that under Mass. Gen. L. ch. 176D, §3(9)(f) insurance companies must make reasonable offers within a reasonable period of time.

B. Duty of Insurance Company to its Own Insured.

In Hartford Casualty Insurance Company v. New Hampshire Insurance Company, 417 Mass. 115 (1994), the Supreme Court established the standard that an insurance company has toward its own insured. The standard is as follows:

"The test is not whether a reasonable insurer might have settled the case within the policy limits, but rather no reasonable insurer would have failed to settle the case within the policy limits. Hartford Casualty, 417 Mass. at 120-121."

Under Hartford, the insured would have to prove that the plaintiff would have settled the claim within the policy limits and that no reasonable insurer would have refused the settlement offer extended, or would have refused to respond to the offer extended. This standard would be applied where a claimant obtains a judgment in excess of the policy limits and then contemplates obtaining an assignment of rights from the tortfeasor in order to go after that tortfeasor's insurance company for the excess.

C. Remedy and Damages.

While Mass. Gen. L. ch. 176D establishes certain duties on the part of insurance companies, the way to enforce the remedy is by use of Mass. Gen. L. ch. 93A. 93A has been extensively applied to the insurance industry. In fact, a violation of 176D is an automatic violation of 93A.

Chapter 93A is entitled the "Massachusetts Consumer Protection Act." Basically, the Act declares unfair or deceptive acts in the conduct of a business to be unlawful. It allows a private person to bring an action for up to triple damages and attorney's fees for damages arising out of the unfair or deceptive conduct. The statute is useful in many areas aside from insurance.

93A, §2(a) states that unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

93A, §2(b) provides that courts are to be guided by the interpretations given by the Federal Trade Commission and the Federal Courts concerning the language above.

93A, §2(c) enables the Attorney General to make rules and regulations interpreting the language above. See generally 940 Code of Massachusetts Regulations Sec. 3.00 et seq. The Attorney General has enacted regulations covering many subjects including motor vehicles, landlord-tenant rights, debt collection, etc. While no specific regulations have been promulgated for the insurance industry, 940 CMR Sec. 3.16(c) states that a violation of an existing statute, rule, regulation or a law meant for the protection of the public's health, safety and welfare is an unfair and deceptive trade practice and therefore a violation of 93A.

Under §9(3) damages may be awarded in the amount of actual damages, or $25.00, whichever is greater, or up to three but not less than two times those amounts if the court finds that the use or employment of the act or practice was a willful or knowing violation of said §2 or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said §2.

Attorney's fees are routinely given upon a finding of violation of 93A.

1. Demand Letter.

Before a lawsuit can be filed under 93A, a demand letter must first be sent to the offending party. The demand letter should contain the following information:

a. A reference to Mass. Gen. L. ch. 93A;

b. A description of the of the unfair or deceptive trade practice relied upon;

c. A reasonable description of the injuries suffered;

d. A statement that the defendant has thirty days to respond;

e. A statement that the claimant reserves his/her right to pursue multiple damages and attorney's fees if relief is not provided within the time period;

f. A specific demand in money damages; and,

g. Any citation to the statute alleged to be violated.

Mass. Gen. L. ch. 93A, §9; Thorpe v. Mutual of Omaha Insurance Company, 984 F.2d 541 (1^st Cir. 1993); Cassano v. Gogos, 20 Mass. App. Ct. 348 (1985); Entrialgo v. Twin City Dodge, Inc., 368 Mass. 812 (1975).

Attached is a sample demand letter under Mass. Gen.L. ch. 93A which is labeled Exhibit C at the end of this Section.

2. Damages.

Mass. Gen. L. ch. 93A provides a remedy for actual damages caused by the violation and for two or three times actual damages in cases where the violation was a knowing or willful one or where the refusal to grant relief was made in bad faith with knowledge or reason to know that the act violated 93A.

Under 93A damages can vary depending on several factors.

a. If the judge in his discretion finds a violation of 93A but no bad faith or willful or knowing violation then there would only be single damages and attorney's fees.

b. If the judge in his discretion finds a violation of ch. 93A, along with bad faith or a knowing or willful violation, then double or triple damages can be awarded plus attorney's fees.

How to calculate damages?

a. If the underlying case has not gone to judgment then damages are measured by the loss of use of the money at a reasonable interest rate. For example, assume the underlying case finally settles after a 93A demand letter is sent. The claimant releases the tortfeasor but not the insurance company. The claimant then pursues a 93A action against the insurance company. If the claimant prevails he will get a damage award equal to the loss of use of the money until he received it. If the judge finds bad faith or a knowing or willful violation, that amount can be doubled or tripled.

b. If the underlying case goes to trial and judgment, and if the judge finds that there has been bad faith or a knowing or willful violation, then the underlying judgment can be doubled or tripled. However, if the insurance company at some point before the judgment does make a tardy, but reasonable offer to settle, which is refused, then damages would be for the loss of money up to when the reasonable offer was made and refused. Rodes v. AIG Domestic Claims, Inc., 77 Mass. App. Ct. 299 (2010).

An arbitration award is not a judgment. Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 37 (1991). A consent judgment, if reasonable and not collusive, is a judgment. Gore v. Arbella Insurance Company, 77 Mass. App. Ct. 518 (2010).

D. Practical Uses of Mass. Gen. L. ch. 93A.

In automobile insurance practice, the following instances are probably the most common in which a 93A demand letter is sent:

a. When an insurance company has failed to make payments under PIP or Med Pay. It will commonly argue that an IME exam serves as a cut-off date for medical treatment.

b. Where an insurance company has not made a response to a demand for settlement, or has made an unreasonably low offer.

c. In a policy limits case where you make clear to the insurance company that you are willing to accept the policy limits. This sets up the scenario where a future judgment above the policy limits may be recoverable if the insurance company breached its duty to its own insured by failing to settle within the limits. At that point the Plaintiff could either go after the Defendant for the excess, or attempt to obtain an assignment of rights from the Defendant and then sue the insurance company under Ch. 93A, alleging a violation of Ch. 176D for failing to protect the Defendant by settling within the policy limits.

III. MISCELLANEOUS PRACTICE POINTERS RELATED TO AUTOMOBILE LIABILITY PRACTICE

A. Where a Massachusetts vehicle causes injury in the State of New Hampshire, and has a minimum policy for bodily injury ($20,000 per person), the coverage is automatically increased to $25,000 per person so that it meets the minimum insurance required in New Hampshire.

B. Where a New Hampshire resident is injured in Massachusetts and does not meet the tort threshold, that individual would have an uninsured claim with his/her insurance policy in New Hampshire. Green Mountain Insurance Co. v. George, 138 N.H. 10 (1993).

C. In a collision occurring in New Hampshire where you represent the Massachusetts insured, make sure you obtain PIP benefits first before filing suit since Mass. Gen. L. ch. 90, §34M is clear that once suit is filed the PIP carrier can withhold further payments.

D. In a pure Massachusetts situation, it is standard procedure to reserve any and all claims for PIP or Med Pay in the release. The reason is because the claimant's own insurance company has a right of action against the tortfeasor's insurance company to recover the PIP benefits paid and you do not want to create the unpleasant issue of extinguishment of that right.

E. There are occasions when you must search for any policies applicable to the tortfeasor. Most common would be a situation where the tortfeasor is driving a car not owned by him or anyone in his household. In that instance you may be able to stack liability coverage. Therefore, you would want to find out the identity of every person living in the tortfeasor's household and what policies exist for the tortfeasor himself and his household members. A local town or city office may give you a listing of persons who live in the household and have registered cars. Then you could check with the Registry of Motor Vehicles as to the insurance companies. You could also use a CD-ROM program called WorldWide Information (Worldwide Information, Inc., 400 Cummings Center, Beverly, MA 01915) which basically contains the Massachusetts Registry of Motor Vehicle records. You may search the program by using an address and find out every occupant of the household who has a registered vehicle along with the insurance company assigned.

G. In regard to obtaining medical records, medical providers are governed by law as to what they can charge for the copies.

MASSACHUSETTS: Pursuant to Mass. Gen. L., ch. 111, §70, medical providers shall provide copies of records at the following rate: Base Charge of $15.00 plus .50 cents per page up to 100 pages and .25 cents per page after the first 100 pages.

NEW HAMPSHIRE: Pursuant to RSA 151:21, X and RSA 322-I:1, medical providers shall provide copies of records at the following rate: $15.00 for the first 30 pages or .50 cents per page, whichever is greater.

H. Massachusetts State Police Reports can be obtained online at http://www.mass.gov/rmv/express/inst_crrequest.htm.

I. Upon settlement, Massachusetts Insurance Companies are required to check with the Department of Revenue to see if any Massachusetts Claimant owes money for child support, public benefits, taxes or any other type of money owed to the Commonwealth. Giving the client advance notice of this fact may save the agony of explaining to the client why the insurance company withheld money from the settlement to pay the Commonwealth back.

J. Attached as EXHIBIT D is an explanation for the client as to how liens affect the case. EXHIBIT E explains how the medical bills get paid.

RESOURCES

MCLE, Inc., Massachusetts Motor Vehicle Torts: Liability and Litigation, 2^nd Edition w/ Supp. 2008, Supp. 2010, 636 pages. (Available from Massachusetts Continuing Legal Education, Inc., Ten Winter Place, Boston, MA 02108-4751 tel. (800) 966-6253);

MCLE, Inc., Chapter 93A Rights and Remedies, 2010, 754 pages. (Available from Massachusetts Continuing Legal Education, Inc., Ten Winter Place, Boston, MA 02108-4751 tel. (800) 966-6253).

EXHIBIT B

Mass. Gen. L. ch. 176D § 3(9)

§ 3. Unfair methods of competition and unfair or deceptive acts or practices

(9) Unfair claim settlement practices: An unfair claim settlement practice shall consist of any of the following acts or omissions:

(a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;

(b) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;

(c) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;

(d) Refusing to pay claims without conducting a reasonable investigation based upon all available information;

(e) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

(f) Failing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;

(g) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;

(h) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;

(i) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;

(j) Making claims payments to insured or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made;

(k) Making known to insured or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements of compromises less than the amount awarded in arbitration;

(l) Delaying the investigation or payment of claims by requiring that an insured or claimant, or the physician of either, submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;

(m) Failing to settle claims promptly, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; or

(n) Failing to provide promptly a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.

EXHIBIT C

November 30, 2010

Ms.

ENCOMPASS

P.O. Box 9184

Quincy, MA 02269

• Re: __________________
  Your Insured: ___________________
  Date of Loss: 10/16/08
  Claim No.: xxxxx
  Dear Ms.

Please consider this letter a formal demand letter under Mass. Gen. L., ch. 93A, the Consumer Protection Statute.

It is my understanding that the previous attorney in this case made an offer for settlement in the amount of $25,000.00 which would be your policy limits. My client would still be willing to execute a Release in favor of your insured for that amount. I attended the last Conciliation with 1^st Assistant Clerk Magistrate Joseph Kattar in Newburyport. It is my understanding that you have made an offer of $1,100.00 to settle this claim.

Discovery has revealed that your insured rear-ended Mr. ________. He had a duty under Massachusetts law to operate his vehicle in a reasonably careful and prudent manner as to both its speed and distance from other vehicles. Furthermore, under Massachusetts law, he had a duty to anticipate that another vehicle might be required to stop for various reasons incident to traffic.

The medical records reveal treatment totaling $8,667.99 for visits to his primary care physician and for physical therapy and prescriptions. The medical records detail a history of injury from the auto collision with continuous discomfort going forward. You have been presented with a report from Dr. Richard Warnock, an orthopedic physician, who opines that his complaints are causally related to the motor vehicle collision of October 16, 2008. He acknowledges that Mr. ________continued to have some low grade symptoms which persisted since the motor vehicle collision and he assessed a 6% whole person impairment with permanent lifting restrictions of no greater than 25 pounds on a regular basis and 50 pounds maximum, all related to his auto collision injury.

You obtained an IME exam from Dr. Marvin Rosen. Dr. Rosen noted positive physical findings, although minimal on examination. Mr. ________ had mild hypertonicity of the paralumbar muscles going from a flex to an extended position. Your doctor felt that he was at maximum medical improvement. He questioned Dr. Warnock's assessment of permanent disability. Your own doctor would place the impairment rating at 2% of his whole body. Therefore, it is clear that Mr. ___________has a permanent impairment concerning his back. Your doctor describes causality as "less clear."

I would note that Mr. __________ was symptom free prior to this collision. There is no biomechanical correlation between the amount of damage and injury to a person. In summary, we have a collision with damage to Mr. _______'s vehicle, and complaints of pain for which medical treatment was received. A review of his life for two years prior to this collision up to the time of the collision does not reveal any treatment whatsoever for the area of injuries he suffered in this collision.

You are well aware of the fact that Mr. ________'s medical bills are $8,667.99. There is no offset involved in this case. The jury will consider medical bills and pain and suffering. Your offer of settlement is approximately one-eighth of the total amount of medical bills and does not provide for any amount of pain and suffering.

As stated above, my client would be willing to execute a release in favor of your insured for the policy limits. If my client obtains a judgment in court in excess of your policy limits, he has the full intention of pursuing your insured for personal liability over and above the amount covered by your insurance. It would be reasonable for a jury to award in excess of $25,000.00, where there is competent medical opinion assessing permanent disability. Under the actuarial tables, Mr. ________'s life expectancy is approximately 28 years. Some consideration, regardless of how large or small, should be given to each individual year of disability.

The Unfair Claim Settlement Practices Act, Mass. Gen. L., ch. 176 D, § 3(9), and under Mass. Gen. L., ch. 93(A) obligates insurers to make a reasonable offer of settlement when liability and damages become reasonably clear. Bobbick v. United States Fidelity and Guaranty Trust, 439 Mass, 652, 659 (2003). Mass. Gen. L., ch. 176D, § 3(9) provides that it is an unfair claim settlement practice to fail to effect a prompt, fair and equitable settlement of claims in which liability has become reasonably clear. It is our belief that your offer amounts to an unfair settlement practice given the facts of this case. Please note that a violation of Mass. Gen. L., ch. 176D is a violation of Mass. Gen. L., ch. 93(A), which entitles the injured person to the remedies available, including the possibility of treble damages and attorney's fees.

Demand is made upon you for payment of the amount of your policy limits. Mass. Gen. L., ch. 93(A) gives you the opportunity to make a good faith response to this letter within 30 days. It is our intention to seek relief under Mass. Gen. L., ch. 93(A) in court if we fail to resolve this matter. Your failure to respond to this letter within 30 days could subject you to triple the amount of the underlying judgment, attorney's fees and costs.

May I hear from you at your earliest convenience.

Very truly yours,

Finbury & Sullivan, P.C.

John C. Sullivan

Email: jsullivan@finburylaw.com

JCS/kbc

Certified Mail # 70041160000155482976

Return Receipt Requested

EXPLANATION OF LIENS EXHIBIT D

Certain liens may be placed on personal injury cases and may require payment out of the proceeds of such case to the lien holder.
Whenever a personal injury case is settled in Massachusetts, the insurance company is required by law to check with the Department of Revenue to see if the person receiving the settlement has any outstanding obligation(s) for child support, public benefits of any kind or any other type of money owed to the Department of Revenue such as taxes. See Mass. Gen. L. ch. 175. If so, then the insurance company is obligated to pay that portion of the settlement directly to the Department of Revenue after deduction of attorney's fees and costs. If you have any outstanding obligations to the Department of Revenue as described above you must understand that the attorney has no power or ability to avoid that lien. New Hampshire may also attempt to assert a lien for child support owed, taxes or other obligations. Any child support obligations should be rectified by the client to avoid an unpleasant surprise at the time of settlement.

Sometimes in personal injury cases the plaintiff has health insurance. Health insurance may pay some or all of the medical bills. Any time that is done, health insurance has the ability to put a lien on the file. Normally, in health insurance contracts, it is explicitly stated that if the plaintiff receives any settlement or judgment from the person at fault, then the health insurance company is entitled to be reimbursed for the amount they paid out for medical expenses. The theory is that the defendant reimburses the plaintiff for medical expenses and therefore, if health insurance also pays the medical expenses, then the plaintiff is reimbursed twice for the same expenses Health insurance providers may put a lien on the file by notifying the client, the attorney or the defendant's insurance company or all three. Once that is done that attorney has no discretion in the matter and must reserve a sufficient amount for the health insurance lien. It is important that you inform the attorney of any notice from a health insurance carrier. If the health insurance carrier does not put a lien on the file, the attorney has not obligation to contact them in regard to any potential lien.

On occasion the health insurance carrier will not place a lien on the file before settlement. However, after all of the funds have been disbursed, they will seek reimbursement of the amount they paid. In this case, the attorney is holding no funds and everything has been disbursed. It would be the client's responsibility to deal with the health insurance provider at that point. Although this is an infrequent occurrence, it may happen.

If the client is aware that health insurance paid any bills, there are two choices. One is to notify the health insurance carrier so that they are dealt with and satisfied. In that instance they will definitely put a lien on the file. The other is to not notify the health insurance carrier. In that instance, if the health insurance carrier has not placed the attorney or client on notice of a lien, then the settlement proceeds would be disbursed as if there were no lien. If the health insurance carrier later seeks to be reimbursed, it would be the client's responsibility to do so out of the proceeds he/she received.

Please make sure to ask your attorney

whatever questions are necessary so that you fully understand this issue.

PAYMENT OF YOUR MEDICAL BILLS EXHIBIT E

If you were injured in an automobile accident while you occupied a Massachusetts insured car, the law requires procedures for payment of your medical bills.

Every car insured in Massachusetts carries as part of its insurance a benefit known as "Personal Injury Protection" (P.I.P.). These PIP benefits will pay the medical bills (incurred within two years of the collision), up to a certain limit, of anyone occupying that car, even though the driver of that car is not at fault. The insurance company paying these benefits then is reimbursed by the insurance company of the driver who was at fault.

Some of the rules regarding PIP coverage are complicated and we encourage you to ask questions. In general, PIP benefits provide payment of your medical bills as follows:

1. IF YOU HAVE NO HEALTH INSURANCE: If you are not covered by any health insurance at all, or if you are covered by Mass Health or Medicare then the PIP benefits will cover $8,000.00 of your medical bills. Part of that $8,000.00 may be used to reimburse you for lost wages instead of being applied to medical bills.

2. IF YOU HAVE HEALTH INSURANCE THAT DOES NOT REQUIRE A REFERRAL OR AUTHORIZATION FOR MEDICAL TREATMENT: Where you have health insurance that does not require a referral or authorization in advance for medical treatment, PIP will pay the first $2,000.00 of your medical bills regardless of who the medical provider is. After that, you are required to submit the remaining medical bills to your health insurance. Whatever they do not cover will generally be covered by PIP benefits until you have exhausted $8,000.00 in PIP benefits.

3. IF YOU BELONG TO AN HMO OR HAVE HEALTH INSURANCE WHICH REQUIRES AN AUTHORIZATION FOR MEDICAL TREATMENT, A REFERRAL OR APPROVAL BY A PRIMARY CARE PHYSICIAN BEFORE OBTAINING MEDICAL BENEFITS: In this situation PIP again will cover the first $2,000.00 of medical bills regardless of who the provider is. HOWEVER, AFTER THAT, YOU MUST COORDINATE YOUR MEDICAL TREATMENT THROUGH YOUR HEALTH INSURANCE PLAN. If you obtain medical treatment outside of your plan, it MAY not be covered either by your medical insurance or by PIP. The ultimate result will be that your settlement will be reduced because your medical bills will have to be paid out of settlement.

The first step is to check with your health insurance immediately to see they require prior approval, authorization or a referral for medical treatment. You need to find out what they require and tell us as soon as possible. ALSO, IF THE DOCTOR YOU ARE TREATING WITH REFERS YOU TO OTHER DOCTORS, YOU SHOULD FIRST CHECK WITH YOUR HEALTH INSURANCE TO GET A REFERRAL SO THAT ANY TESTS, PROCEDURES AND EXAMS ARE COVERED.

THE GOAL IS TO GET AS MUCH MEDICAL TREATMENT COVERED AS POSSIBLE BY EITHER PIP OR THROUGH YOUR HEALTH INSURANCE.