Claims and Bad Faith Law Blog

When Unfair Claims Settlement Practice Violates Consumer Protection Statute.

The Supreme Judicial Court of Massachusetts has found an interplay between an Unfair Claims Settlement Practices Act, on the one hand, and a Consumer Protection Statute, on the other.  In Massachusetts, a violation of Massachusetts General Laws Chapter 176D or the equivalent of an Unfair Claims Settlement Practices Act, is in law the same thing as an "unfair or deceptive act or practice" as that term figures in claims made under a Consumer Protection Statute, Massachusetts General Laws Chapter 93A.[1]  As the Court has held:

          Recovery under G.L. c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely when "[a]n insurance company ... in good faith denies a claim of coverage on the basis of a plausible interpretation of its insurance policy."[2]  

[1] McGilloway v. Safety Ins. Co., 468 Mass. 610, 618, 174 N.E.3d 1191, 1199 (Mass. 2021).

[2] McGilloway, 488 Mass. at 618, 174 N.E.3d at 1200.  Accord, Marandino v. Utd. States Fire Ins. Co., No. 23-cv-40072-DJC, 2025 WL 902352, at *6 (D. Mass. March 25, 2025).

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

UNFAIR & DECEPTIVE PRACTICES ACTIONS AND IMPLIED COVENANT BREACH ACTION TOGETHER.

(Aurora From ISS Image Courtesy of Captain Kelly & NASA)

In a decision that has just been published, Precision Cranes, Inc. v. Tester Drilling Serv's, Inc., No. 4:18-cv-00019-JMK, 2020 WL 13538683 (D. Alaska Nov. 18, 2020), the plaintiff Precision was allowed to amend its complaint against two defendant insurance carriers that issued payment bonds on a project in the Arctic.  Precision had already sued on what is generically known as a UDAP (Unfair & Deceptive Practices) statutory claim, in this case, specifically under the Alaska Unfair Trade Practices and Consumer Protection Act (“UTPCPA”).  Now Precision requested leave to add a claim for breach of the implied covenant of good faith and fair dealing, apparently at common law.

The District Court granted Precision's motion for leave to amend its complaint even though the motion came late and over the objections of the defendant carriers.  Precision, 2020 WL 13538683, at *3.  This case involved Alaska substantive law, which the federal Court clearly read as allowing both a UDAP action and a bad faith action based on the same facts, even though the two causes of action are similar but distinct on the law.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.