Martins v. Vt. Mut. Ins. Co.

662 F.Supp.3d 55

Jonathan MARTINS, individually andon behalf of all others similarly situated, Plaintiff, v. VERMONT MUTUAL INSURANCE COMPANY, Defendant.

Civil Action No. 17-12360-FDS

United States District Court, D. Massachusetts

Signed March 13, 2023

David J. Relethford, John R. Yasi, Kevin J. McCullough, Michael C. Forrest, Robert E. Mazow, Forrest, LaMothe, Mazow, McCullough, Yasi & Yasi, Salem, MA, for Plaintiff.

Michael S. Batson, Michael C. Kinton, Clyde & Co. U.S. LLP, Boston, MA, for Defendant.

MEMORANDUM AND ORDER ON PARTIES' MOTIONS FOR SUMMARY JUDGMENT, PLAINTIFF'S MOTION FOR CLASS CERTIFICATION, AND PLAINTIFF'S MOTION FOR LEAVE TO AMEND

SAYLOR, Chief Judge

This is a putative class action concerning the scope of coverage of standard Massachusetts automobile policies. Jurisdiction is based on diversity of citizenship.

Plaintiff Jonathan Martins alleges that defendant Vermont Mutual Insurance Company improperly failed to pay damages for the "inherent diminution in value" of his automobile after an accident caused by one of its insureds. "Inherent diminution in value" ("IDV") refers to the stigma attached to a vehicle involved in an accident, which typically lowers the vehicle's market value even after repairs have been made. He seeks money damages and a declaratory judgment that Massachusetts law requires insurers such as Vermont Mutual to pay such claims to third-party claimants. He also seeks to represent a class of similarly situated individuals.

In August 2019, the Court granted summary judgment in favor of Vermont Mutual on the ground that the standard Massachusetts Automobile Policy did not provide coverage to third parties for IDV damages. Plaintiff appealed that decision to the First Circuit. In October 2021, while that appeal was pending, the Massachusetts Supreme Judicial Court held the standard policy did, in fact, provide such coverage. McGilloway v. Safety Ins. Co., 488 Mass. 610, 614, 174 N.E.3d 1191 (2021). The First Circuit then vacated the grant of summary judgment and remanded the case for reconsideration in light of McGilloway.

After that remand, plaintiff voluntarily dismissed his claims under Mass. Gen. Laws ch. 93A and 176D, which were based on the actions of Vermont Mutual before the McGilloway decision. He now has moved for leave to amend the complaint to add new claims under Chapters 93A and 176D, based on the insurer's actions after McGilloway.

When the Court granted summary judgment in 2019, it did not address all of the issues raised by the parties, and did not reach plaintiff's motion for class certification. Although neither party has formally renewed those motions, both sides have agreed that the Court should resolve them, and have filed supplemental memoranda as to the remaining issues.

Accordingly, both parties are deemed to have cross-moved for summary judgment as to the two remaining counts (for breach of contract and for declaratory relief), and plaintiff is deemed to have moved for class certification, as he seeks to represent other claimants whose vehicles have been damaged by drivers insured by Vermont Mutual and who have not been paid IDV damages. As noted, plaintiff also seeks to amend his complaint to add claims under Chapters 93A and 176D.

For the following reasons, the Court will deny plaintiff's motion to amend; deny plaintiff's motion for summary judgment; grant defendant's motion for summary judgment; and deny plaintiff's motion for class certification.

I. Background

On June 18, 2016, Jonathan Martins purchased a 2015 Nissan Altima for $20,472. (Pl. Ex. 1).

On January 23, 2017, Martins's vehicle was damaged when it collided with a vehicle being driven by Elhadjmamado Dansoko. (Pl. SUF ¶ 9). At the time of the collision, Dansoko was insured under a policy issued by Vermont Mutual Insurance Company. (Pl. SUF ¶ 17).

Dansoko's policy provided coverage for the period from January 20, 2017, to January 20, 2018. (Murray Aff. Ex. 2). The policy used the 2008 edition of the Standard Massachusetts Automobile Insurance Policy. (Id. Ex. 3). Part 4 of the standard policy, titled "Damage to Someone Else's Property," provided that the insurer would

pay damages to someone else whose auto or other property is damaged in an accident. The damages we will pay are the amounts that person is legally entitled to collect for property damage through a court judgment or settlement . . . . Damages include any applicable sales tax and the costs resulting from the loss of use of the damaged property.

(Id. Ex. 3 at 13).

Martins reported the accident to his insurer, Safety Insurance Company. Safety paid him $11,711.80 to cover the full costs of repairs to his vehicle. (Pl. SUF ¶¶ 19, 20; Murray Aff. Ex. 1).

In February 2017, Safety presented a subrogation claim to Vermont Mutual for the repairs to the vehicle. (Murray Aff. Ex. 1). After determining that Dansoko was liable for the accident, Vermont Mutual paid Safety $12,942.80, which included $11,711.80 for repairs, $331 for towing and storage, and $900 for a rental car. (Pl. SUF ¶¶ 11, 20). It appears that Vermont Mutual later paid Martins an additional $635.91 to cover the full expense of the rental car. (Murray Aff. Ex. 1).

On June 26, 2017, an attorney for Martins sent a letter to Vermont Mutual demanding payment of $6,129 for the "inherent diminished value" of the car. (Pl. SUF ¶ 21-22; Michelle Martin Aff. ¶ 4). On July 11, 2017, Michelle Martin, a Vermont Mutual Senior Claim Representative, responded by e-mail and made a settlement offer. (Id. Ex. 5).

Martins does not appear to have responded to the offer. He next contacted Vermont Mutual on August 23, 2017, when his attorney sent a demand letter under Mass. Gen. Laws ch. 93A. (Pl. SUF ¶ 23; Martin Aff. Ex. 6). Essentially, the letter contended that Vermont Mutual had a practice of intentionally and knowingly making unfair and unreasonably low offers to cover claims for IDV damages of third-party claimants. (Martin Aff. Ex. 6 at 2-3). The letter demanded that Vermont Mutual "immediately pay all reasonable diminution in value damages owed to [Martins] and [the other] class members." (Id. at 4-6).

On August 23, 2017 (the same day that the Chapter 93A demand letter was sent), Martins filed an action against Vermont Mutual in Suffolk Superior Court. The complaint asserted a claim for breach of contract and sought declaratory judgment.

On September 22, 2017, Vermont Mutual responded to the Chapter 93A demand letter, denying any liability to Martins or the putative class. However, Vermont Mutual made an increased settlement offer to resolve the claim. (Murray Aff. Ex. 7). Martins rejected that offer.

On October 13, 2017, Martins filed an amended complaint in the Suffolk County Superior Court asserting breach of contract (Count 1); five claims under Chapter 93A, four of which were based on alleged violations of Mass. Gen. Laws ch. 176D, §§ 3(9)(c), (d), (f), and (n) (Counts 2-6); and a claim for declaratory relief (Count 7). Vermont Mutual then removed the case to this court.

On August 14, 2019, the Court granted summary judgment for Vermont Mutual. That decision was based on a finding that Part 4 of the Standard Massachusetts Automobile Policy did not provide coverage for IDV damages. Martins appealed to the First Circuit.

On October 19, 2021, while that appeal was pending, the Supreme Judicial Court held that Part 4 of the Standard Massachusetts Automobile Policy did, in fact, provide coverage to third parties for IDV damages. McGilloway v. Safety Ins. Co., 488 Mass. 610, 614, 174 N.E.3d 1191 (2021).

Nine days later, on October 28, 2021, Martins sent a demand letter to Vermont Mutual under Mass. Gen. Laws ch. 176D and Mass Gen. Laws ch. 190, § 34O. (Pl. Mem. Amend. at 3). That letter requested that Vermont Mutual adjust both his claim seeking IDV damages and those of other potential class members. (Id.). Vermont Mutual responded on November 18, 2021, with an offer to adjust only Martins's personal claim by the payment of his original demand, plus $500; he refused the offer. (Id.).

On November 9, 2021, the First Circuit vacated the grant of summary judgment and remanded the case for reconsideration in light of McGilloway.

On January 11, 2022, Martins stipulated to the dismissal of Counts 2, 3, 4, 5, and 6 (his claims under Chapter 93A and Chapter 176D).

The parties have submitted supplemental briefing concerning class certification and summary judgment. On March 4, 2022, Martins followed up his October 2021 demand letter with another letter demanding adjustment and payment for his claim and those of the putative class; in response, Vermont Mutual again offered to adjust only Martins's claim.

Both parties have cross-moved for summary judgment as to Count 1 and Count 7, the remaining claims in the amended complaint. Martins has also moved for class certification and to amend his complaint to include new claims under Chapter 93A and Chapter 176D.¹

II. Amendment of the Complaint

A. Legal Standard

Under the Federal Rules of Civil Procedure, a motion to amend the complaint is subject to different degrees of scrutiny depending on when it is filed. Under Rule 15(a)(2), leave to amend a complaint shall be granted "freely . . . when justice so requires." However, when, as here, a party moves to amend a pleading after the deadline prescribed by a written scheduling order, the party must establish "good cause" for modifying the deadline under Rule 16(b)(4). See O'Connell v. Hyatt Hotels of P.R., 357 F.3d 152, 153-54 (1st Cir. 2004). And when, as here, the motion to amend is filed after a motion for summary judgment has been filed and briefed, "a plaintiff is required to show 'substantial and convincing evidence' to justify a belated attempt to amend a complaint." Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 231 (1st Cir. 2005) (quoting Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004)). Leave to amend may generally be denied on the basis of "undue...