Stormo v. State National Insurance Company ( 2024 )

United States Court of Appeals
For the First Circuit
No. 23-1792
JOAN STORMO, as assignee of Peter T. Clark,
Plaintiff, Appellant,
v.
STATE NATIONAL INSURANCE COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. F. Dennis Saylor, IV, U.S. District Judge]
Before
Barron, Chief Judge,
Lynch and Kayatta, Circuit Judges.
Zaheer A. Samee, with whom Frisoli & Associates was on
brief, for appellant.
Sean P. Mahoney, with whom Joanna L. Young, Erica Sanders,
and Kennedys CMK LLP were on brief, for appellee.
September 19, 2024
KAYATTA, Circuit Judge. Joan Stormo and her siblings
hired attorney Peter Clark to represent them in a real estate
transaction. Clark scuttled the deal, and Stormo sued him for
malpractice. But Clark's professional-liability insurer, State
National Insurance Company ("State National"), disclaimed
coverage, contending that the claim fell under a so-called
prior-knowledge exclusion contained in Clark's policy. State
National also reserved the right to later deny coverage based on
Clark's fourteen-month delay in reporting the lawsuit.
Stormo prevailed in her lawsuit against Clark and was
assigned his claims against State National. She then sued State
National, arguing that the insurance company had breached its
contractual obligations to indemnify Clark and, in so doing,
violated Massachusetts law prohibiting unfair claim-settlement
practices. For the reasons that follow, we affirm the district
court's judgments in favor of State National.
I.
Twenty years ago, Stormo and her siblings hired Clark
to represent them in a planned real estate sale. By the time
they engaged Clark, the siblings had signed a purchase-and-sale
agreement to sell land to real estate developer KGM Custom Homes
("KGM"). Clark derailed the sale. He incorrectly believed that
a liquidated damages provision in the contract gave his clients
"a right to rescind the contract on payment of KGM's development
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costs." See K.G.M. Custom Homes, Inc. v. Prosky,
No. BRCV200401414, 2010 WL 11534424 (Mass. Super. Ct. Mar. 25,
2010). So as KGM finalized the approval process for its
development plan, Clark informed the company that "his clients
had another offer to purchase their property at a substantially
higher price" and that the Stormo siblings "did not intend to
sell the property to KGM." Id. He also behaved bizarrely at
the closing, where the deal fell through.
Despite Clark's representations to the contrary, the
Stormo siblings did intend to sell the property to KGM and did
not have a higher offer on the property. Id. The family was
reportedly stunned by the failure of the closing and Clark's
conduct leading up to it. Id. Clark's actions kicked off no
fewer than four lawsuits, the last of which is the subject of
this appeal.
A.
First, in December 2004, KGM sued the Stormo siblings,
alleging that they had wrongfully repudiated the purchase-and-
sale agreement by refusing to close the sale. See id.1 At the
trial, the Stormo siblings testified that they had no other
offer, and they did not know why Clark had represented that they
did. The trial court sided with KGM on its claims, adding that
1For consistency, we will refer to this litigation as "KGM
v. Stormo."
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Clark's actions in his representation of the siblings
"constituted a breach of both the implied covenant of good faith
and fair dealing and the express covenant to sell the land."
Id. KGM won compensatory damages. K.G.M. Custom Homes, Inc. v.
Prosky, 10 N.E.3d 117, 120 (Mass. 2014).
Second, KGM sued Clark in December 2010 in
Massachusetts Superior Court.2 In its complaint, KGM alleged
that Clark engaged in unfair and deceptive practices by making
representations that caused the transaction with the Stormo
siblings to fail. State National agreed to defend him in the
action under his professional-liability policy. It retained a
lawyer to represent Clark and settled the claim on his behalf.
In total, State National paid $694,801.40 to defend and
indemnify Clark in KGM's action against him.
Third, in October 2014, the Stormo siblings sued Clark
in Massachusetts Superior Court for malpractice and several
related claims arising out of Clark's representation of them in
the failed KGM sale. See Stormo v. Clark, No. BRCV201401015,
2017 WL 9939783 (Mass. Super. Ct. Aug. 7, 2017). The complaint
alleged that Clark had "actively worked to prevent the closing
of the sale" through his fabrication of a higher offer, his
misrepresentation of the Stormos' intentions, and his behavior
2 We will refer to this settled lawsuit as "KGM v. Clark."
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at the closing. Complaint and Jury Demand ¶¶ 13–18, Stormo,
2017 WL 9939783 (No. BRCV201401015). It also described the KGM
v. Stormo lawsuit and alleged that Clark had "misadvised the
plaintiffs by telling them that interest on KGM's damages would
not begin to accrue until after exhaustion of all appeals and
entry of final judgment in [that] litigation."3 Id. ¶¶ 22, 26,
28.
Clark did not notify State National of the Stormos'
claim against him until December 2015 -- over a year after they
filed their complaint. Once the insurance company learned of
the action, it retained attorney Peter Hermes to advise it about
its potential coverage obligations given Clark's late notice,
and because the new action appeared related to the KGM v. Stormo
complaint. Based on Hermes's advice, State National disclaimed
any coverage for Stormo v. Clark, citing the policy's prior-
knowledge exclusion. Given the KGM v. Stormo action --
particularly the Stormo siblings' testimony about Clark's
conduct leading up to the failed transaction -- State National
contended that "Clark knew or could have reasonably foreseen
before [the effective date of the policy] that his conduct might
be expected to be the basis of a claim." The company likewise
3 According to emails provided by Stormo, Clark no longer
believed this by July 2010. At that point, he sent emails
suggesting interest would have begun to accrue when the Stormo
siblings breached the agreement.
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reserved the right to later disclaim coverage based on a
provision in Clark's policy requiring that State National be
given "prompt written notice" of any claims made against the
insured. Clark objected to the denial of coverage via a demand
letter under Massachusetts's consumer-protection statute, Mass.
Gen. Laws ch. 93A, but State National held firm.
A jury found for Stormo against Clark, and the court
entered judgment totaling over $5 million. The court also
assigned to Stormo any claims of Clark's against State National.
When State National refused to indemnify Clark by paying the
judgment Stormo had won, Stormo (as Clark's assignee) sued State
National in the U.S. District Court for the District of
Massachusetts, beginning the lawsuit that ultimately gave rise
to this appeal.
B.
Before delving further into the travel of this case
and the issues presented on appeal, we describe Clark's policy
with State National. Clark was a named insured on a
"claims-made" professional-liability policy. The policy covered
claims made against Clark during a specified period (March 16,
2010, through March 16, 2011) arising from any misconduct
committed by Clark on or after March 1, 2002. The policy's
total liability limit was $1 million. It also contained the
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following provisions, the relevance of which will become
apparent:
First, it provided the "prior-knowledge exclusion"
relied upon by State National to disclaim coverage:
This policy does not apply to: . . . any
CLAIM arising out of any WRONGFUL ACT
occurring prior to the effective date of
this policy if . . . the INSURED at or
before the effective date knew or could have
reasonably foreseen that such WRONGFUL ACT
might be expected to be the basis of a
CLAIM. However, this paragraph B. does not
apply to any INSURED who had no knowledge of
or could not have reasonably foreseen that
any such WRONGFUL ACT might be expected to
be the basis of a CLAIM . . . .
Second, under the heading "LIMITS OF LIABIITY AND
DEDUCTIBLE," and the subheading "MULTIPLE OF INSUREDS, CLAIMS,
AND CLAIMANTS," the policy decreed that if two or more claims
were to arise out of the same wrongful act, "[a]ll such
CLAIMS . . . shall be considered first made on the date on which
the earliest CLAIM arising out of such WRONGFUL ACT was first
made and all such CLAIMS are subject to the same limits of
liability and deductible."
Finally, under the heading "CONDITIONS," and the
subheading "INSURED'S DUTIES PRECEDENT TO COVERAGE," the policy
stated that "[i]f a CLAIM is made against any INSURED, the
INSURED must give prompt written notice to [State National]."
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C.
We return to Stormo's litigation against State
National in the District of Massachusetts. She pressed two
claims against State National: first, that the insurance company
had breached its contract with Clark; and second, that the
insurance company had done so in violation of Mass. Gen. Laws
chs. 93A and 176D, which prohibit unfair trade practices ("93A-
176D claim"). The district court found that factual questions
surrounding Stormo's breach-of-contract claim necessitated a
trial. See Stormo v. State Nat'l Ins. Co., No. CV 19-10034-FDS,
2021 WL 11652293, at *8 (D. Mass. Jan. 25, 2021). At the same
time, it found that while State National's denial of coverage
might have been based on an incorrect interpretation of its
policy, the interpretation that Clark's claim fell under the
prior-knowledge exclusion "was not unreasonable, and no evidence
exist[ed] that [State National had] acted in bad faith." Id. at
*16. Because such a showing would have been necessary to prove
Stormo's 93A-176D claim, see Bos. Symphony Orchestra, Inc. v.
Com. Union Ins. Co., 545 N.E.2d 1156, 1160 (Mass. 1989), the
district court granted summary judgment to State National on
Clark's 93A-176D claim.
Following a trial, a jury found for Stormo on her
breach-of-contract claim against State National. It awarded
Stormo $1,106,138.10 in damages, and judgment was entered
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accordingly. State National moved for judgment as a matter of
law,4 arguing that Stormo was not entitled to recover under
Clark's policy, since Clark had breached his reporting
obligations by failing to give prompt notice of Stormo's claim
against him. In opposing State National's motion, Stormo argued
that State National could not deny coverage for Clark's late
notice alone; the insurance company had to prove it had been
prejudiced by Clark's late notice. The district court sided
with State National and granted judgment as a matter of law.
Stormo v. State Nat'l Ins. Co., No. CV 19-10034-FDS, 2023 WL
5515823, at *1 (D. Mass. Aug. 25, 2023).
Stormo now appeals, urging us to reverse the judgment
as a matter of law, to reinstate the jury's verdict, and to
vacate the district court's grant of summary judgment to State
National on her 93A-176D claim.
II.
A court may grant judgment as a matter of law "if a
reasonable person could not have reached the conclusion of the
jury." White v. N.H. Dep't of Corr., 221 F.3d 254, 259 (1st
Cir. 2000); see also Fed. R. Civ. P. 50(a)(1). "We review de
We use the now-preferred phrase "judgment as a matter of
4
law" rather than the phrase "judgment notwithstanding the
verdict" used by the parties and the district court. See
9B Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2521 (3d ed. 2023).
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novo the district court's judgment as a matter of law under
Rule 50." Lawes v. CSA Architects & Eng'rs LLP, 963 F.3d 72, 90
(1st Cir. 2020). We likewise "review a district court's grant
of summary judgment de novo, viewing the record in the light
most favorable to the nonmovants and drawing all reasonable
inferences in their favor." Martínez v. Novo Nordisk Inc., 992
F.3d 12, 16 (1st Cir. 2021). Summary judgment is appropriate
"if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter
of law." Fed. R. Civ. P. 56(a). Finally, because this case is
before us by virtue of diversity jurisdiction, see 28 U.S.C.
§ 1332, "we look to the relevant state law -- here,
Massachusetts law -- to supply the substantive rules of
decision." President & Fellows of Harvard Coll. v. Zurich Am.
Ins. Co., 77 F.4th 33, 37 (1st Cir. 2023) [hereinafter Harvard
College].
III.
A.
An insurance company has two principal duties to the
insured: a duty to indemnify and a duty to defend. Bos.
Symphony Orchestra, Inc., 545 N.E.2d at 1158. Generally, an
insurance company's duty to indemnify is triggered when "a
judgment within the policy coverage is rendered against" an
insured. Id. By contrast, the duty to defend is "antecedent
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to" and "broader than" the duty to indemnify. Id. It arises
when "the allegations in a complaint are reasonably susceptible
of an interpretation that states or roughly sketches a claim
covered by the policy terms." Metro. Prop. & Cas. Ins. Co. v.
Morrison, 951 N.E.2d 662, 667 (Mass. 2011) (quoting Billings v.
Com. Ins. Co., 936 N.E.2d 408, 414 (Mass. 2010)). In its
disclaimer of coverage for Stormo's claim against Clark, State
National "deni[ed] any obligation to defend or indemnify Clark,"
effectively renouncing both duties.
Count one of Stormo's complaint challenges that
renunciation in full, alleging that State National twice
breached its insurance policy, both by denying its duty to
defend Stormo's suit against Clark and by denying its duty to
indemnify Clark. Count two then alleges that State National's
refusal to indemnify and defend Clark was so unreasonable as to
give rise to liability under Mass. Gen. Laws chs. 93A and 176D.
Count two presumes that State National's denial was
wrongful in the first place. So in order to succeed on that
count, Stormo must show (among other things) that the insurance
company breached at least one of its duties to Clark. See Home
Ins. Co. v. Liberty Mut. Fire Ins. Co., 830 N.E.2d 186, 192
(Mass. 2005). We therefore begin by assessing whether State
National was relieved of its duty to indemnify Clark by virtue
of his untimely notice. We then consider whether Stormo has
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successfully claimed that State National breached its duty to
defend.
1.
In arguing that State National breached its duty to
indemnify, Stormo contends that Clark's failure to give prompt
notice of Stormo's claims against him did not by itself absolve
the insurance company of its coverage obligations. Rather, she
asserts that State National must also show that it was
prejudiced by the late notice in order to disclaim coverage.
And since the district court found that "there is no evidence
that [State National] was prejudiced in any way," Stormo argues
that the company improperly denied coverage.
Recall that Clark's insurance policy required him as a
"condition precedent to . . . coverage" to give State National
"prompt written notice" "in the event of a claim" against him.
Massachusetts law provides that when, as here, "the provisions
of a policy are plainly and definitively expressed, the policy
must be enforced in accordance with the terms." Somerset Sav.
Bank v. Chi. Title Ins. Co., 649 N.E.2d 1123, 1127 (Mass. 1995).
Nevertheless, in 1977, the Massachusetts legislature codified a
notice-prejudice rule for certain types of insurance policies
(including, for example, motor-vehicle policies but not
professional-liability policies) at Mass. Gen. Laws Ann.
ch. 175, § 112. That rule effectively precludes an insurer from
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raising late notice as a defense unless the lateness prejudiced
the insurer.
In 1980, the Massachusetts Supreme Judicial Court
("SJC") extended the notice-prejudice rule to certain liability
policies not covered by the statute, holding that "where an
insurance company attempts to be relieved of its
obligations . . . on the ground of untimely notice, the
insurance company will be required to prove both that the notice
provision was in fact breached and that the breach resulted in
prejudice to its position." Johnson Controls, Inc. v. Bowes,
409 N.E.2d 185, 188 (Mass. 1980).
But this notice-prejudice rule does not occupy the
field. Ten years after Johnson Controls, in Chas. T. Main, Inc.
v. Fireman's Fund Ins. Co., the SJC determined that requiring a
showing of prejudice did not make sense in all circumstances.
551 N.E.2d 28, 30 (Mass. 1990). To that end, it distinguished
between "occurrence policies," in which "[c]overage is
effective . . . if the covered act . . . occurs within the
policy period, regardless of the date of discovery," and
"claims-made policies," like the one at issue here, which
"cover[] the insured for claims made during the policy year and
reported within that period or a specified period thereafter
regardless of when the covered act or omission occurred." Id.
at 29. "[T]he purpose of a claims-made policy," Chas T. Main
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explained, "is to minimize the time between the insured event
and the payment." Id. at 30. Because that purpose is
inherently "frustrated" by lengthy delays in reporting claims,
the SJC opined that "[p]rejudice for an untimely report" under
the claims-made policy at issue in the case was "not an
appropriate inquiry." Id.
Stormo does not dispute that the policy here is a
claims-made policy: It covers claims made against the insured
during the policy period rather than claims arising from covered
acts occurring during the policy period. Stormo also does not
contend that Clark gave State National prompt written notice of
Stormo's claim against Clark. So, Chas T. Main on its face
indicates that there is no need for State National to prove that
it was prejudiced by the late notice. Id.
Stormo contends, nevertheless, that if we more
carefully parse Massachusetts law, we will see that whether
prejudice is required to deny coverage for untimely notice
actually does not turn solely on whether the policy is a
claims-made or occurrence-based policy. Rather, Stormo says, it
turns on the type of notice requirement in the policy.
Read by itself, the SJC opinion in Chas T. Main
provides some support for this alternative reading. For in
addition to contrasting occurrence-based and claims-made
policies, the Chas T. Main court distinguished between two
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different types of reporting requirements commonly found in
insurance policies: those requiring notice within the policy
period (or shortly thereafter), and those requiring notice "as
soon as practicable."5 551 N.E.2d at 29. In so doing, Chas T.
Main linked the rationale for not requiring proof of prejudice
to the function served by "policy period" notice language in a
claims-made policy. Id. at 30.
Like claims-made policies, policy-period reporting
requirements promote "fairness in rate setting" by reducing the
amount of time between an insured event and an insurance payout.
Id. at 29–30. The SJC thus opined in Chas T. Main that "the
requirement that notice of the claim be given in the policy
period or shortly thereafter in the claims-made policy is of the
essence in determining whether coverage exists." Id. at 30.
Seizing on this discussion of reporting requirements, Stormo
contends that the notice requirement in Clark's policy with
State National ("prompt written notice") is more like an "as
5 An as-soon-as-practicable requirement "requires that
notice of the claim be given to the insurer 'as soon as
practicable' after the event which gives rise to coverage."
Chas T. Main, 551 N.E.2d 28 at 29. Under a "policy-period"
reporting requirement, insureds must report claims "during the
term of the policy or within a short period of time (thirty or
sixty days) following the expiration of the policy." Id.Occurrence-based policies almost always have "as-soon-as-
practicable" requirements, but either type of reporting
requirement may appear in a claims-made policy. Id.; see also
Jordan Plitt et al., 14 Couch on Insurance § 199.113 (3d ed.
2024).
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soon as practicable" notice requirement and that Chas T. Main's
exception to the notice-prejudice rule does not apply to the
policy at issue even though it is a claims-made policy.
The problem for Stormo is that subsequent
Massachusetts law has not viewed the language of the notice
requirement as the variable that distinguishes policies that
require proof of prejudice from those that do not. Indeed, the
SJC has held that a claims-made policy with a notice requirement
identical to Clark's -- that the insurance company receive
"prompt written notice" of new claims -- was "not materially
different" from the policy-period reporting requirement at issue
in Chas. T. Main. See Tenovsky v. All. Syndicate, Inc., 677
N.E.2d 1144, 1146 (Mass. 1997). "Surely," the SJC reasoned,
"'prompt' notice of 'claims made' requires that notice to the
insurer be given no later than sixty days following the
expiration of the policy period." Id. As in Chas. T. Main,
then, the SJC in Tenovsky concluded that the insurance company
was under no obligation to show prejudice in order to disclaim
coverage based on the insured's late reporting. Id.Though the policy at issue in this case contains the
exact same "prompt written notice" requirement, Stormo advances
a clever argument to distinguish Tenovsky. Recall that the
policy in this case provides that, if two or more claims were to
"aris[e] out of a single WRONGFUL ACT or a series of WRONGFUL
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ACTS," then "all such CLAIMS . . . shall be considered first
made on the date on which the earliest CLAIM arising out of such
WRONGFUL ACT was first made . . . ." Stormo's claim against
Clark -- which was made in 2014 -- is indisputably related to
KGM's 2010 claim against Clark. After all, both claims arose
out of Clark's conduct as the Stormo siblings' attorney during
their failed property sale to KGM. As a result, the policy
treats Stormo's claim against Clark as having been "made" at the
same time as KGM's claim against Clark: in 2010. It would have
been impossible for Clark to report Stormo's claim against him
to State National in 2010; she would not file it for four more
years. By contrast, the claim at issue in Tenovsky was made
during the policy period. 677 N.E.2d at 1146. Hence, it was
not impossible for the policyholder in Tenovsky to timely report
the claim.
Due to this difference, Stormo argues that it would be
"absurd" to treat the reporting requirement in Clark's policy
the same as the reporting requirement in Tenovsky, even though
they share the same language. Rather, since it was impossible
for Clark to report Stormo's claim during the policy period,
Stormo argues that our only option is to treat it as an as-soon-
as-practicable requirement.
But the fact remains, no one contends that Clark gave
timely notice under any formulation of the notice requirement.
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And we can find no indication that Massachusetts courts have
construed Chas. T. Main as Stormo proposes; i.e., to treat
differences in the wording of the notice requirement as
dictating whether the notice-prejudice rule applies. Rather, we
find in the case law a simple and consistent focus on whether
the insurance policy is a "claims-made" or "occurrence-based"
policy, with the latter subject to the notice-prejudice rule and
the former exempt.
Boyle v. Zurich American Insurance Co. demonstrates
this approach. 36 N.E.3d 1229 (Mass. 2015). In Boyle, the SJC
looked back at Johnson Controls -- the case applying the
notice-prejudice rule to professional-liability policies -- and
stated that:
The approach to notice obligations
prescribed by Johnson Controls . . . and its
progeny concerns "occurrence"-based
liability insurance policies like the one at
issue in this case. Different
considerations apply to "claims-made"
policies. See Chas. T. Main, Inc. v.
Fireman's Fund Ins. Co., 406 Mass. 862, 863–
64, 551 N.E.2d 28 (1990).
36 N.E.3d at 1236 n.8. In other words, the SJC in Boyle clearly
implied that the insured's "notice obligations" hinged on
whether the policy is a claims-made policy or an occurrence-
based policy.
Lower courts in Massachusetts have also concluded that
this is the governing rule. See, e.g., Meadows Constr. Co. LLC
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v. Westchester Fire Ins. Co., 180 N.E.3d 1032 (Mass. App. Ct.
2022) (unpublished table decision) (describing Chas. T. Main as
holding "that an insurer need not show it was prejudiced by late
notice in the case of a 'claims made and reported' policy");
Young Men's Christian Ass'n of Greater Worcester v. Nat'l Union
Fire Ins. Co. of Pittsburgh, 843 N.E.2d 722 (Mass. App. Ct.
2006) (unpublished table decision) (citing Chas T. Main to
support the proposition that "[p]rejudice . . . is not a factor
in determining the effect of late notice under a claims-made
policy").
Just recently, our court had the occasion to survey
this same case law. See Harvard Coll., 77 F.4th at 38–39.
While our discussion of Massachusetts law in the context of
Harvard College does not control our decision here, it does
demonstrate that Massachusetts case law is most easily read as
limiting the prejudice requirement to occurrence-based policies.
In that case, we cited the "critical distinction that the SJC
has made between occurrence-based and claims-made policies," and
reiterated that "the SJC promulgated a general rule that an
insurer need not demonstrate prejudice before denying coverage
under a claims-made policy for the insured's failure to provide
timely notice." Id. at 39. No subsequent Massachusetts
decisions have called our reading into question. And this
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reading provides a more administrable rule with clarity for
insureds and insurers.
2.
Stormo suggests that "if there were any doubt" about
the application of the notice-prejudice rule to policies like
Clark's, we "should certify a question of law" to the SJC. But
it was Stormo who chose to bring this action in federal court,
asking the district court to find a prejudice requirement where
the SJC has not. As we admonished in Harvard College and cases
before it, "a plaintiff who made a deliberate choice to sue in
federal court rather than in a Massachusetts state court is not
in a position to ask us to blaze a new trail that the
Massachusetts courts have not invited." 77 F.4th at 39 (cleaned
up). Nor is such a plaintiff well positioned to seek a change
in decisionmakers after striking out with her original pick.
In sum, we agree with the district court that
prejudice is irrelevant to this case given that all parties
agree that notice of Stormo's claim against Clark was not timely
given under Clark's claims-made policy. "[B]ecause Clark's
notice to [State National] was too late, the policy does not
provide coverage." Stormo, 2023 WL 5515823, at *7. As such,
State National had no duty to indemnify Clark and therefore
could not possibly have breached that duty. Stormo is thus not
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entitled to recover based on State National's refusal to
indemnify Clark.
B.
Having found that State National had no duty to
indemnify Clark, we now consider the insurance company's
potential liability for refusing to defend him. In
Massachusetts, "a liability insurer owes a broad duty to defend
its insured against any claims that create a potential for
indemnity," Boyle, 36 N.E.3d at 1235 (quoting Doe v. Liberty
Mut. Ins. Co., 667 N.E.2d 1149, 1151 (Mass. 2015)), even if the
insurer "could eventually be determined to have no duty to
indemnify the insured," Metro. Prop. & Cas. Ins. Co., 951 N.E.2d
at 668 (quoting 14 Couch on Insurance § 200:3 (3d ed. 2005)).
"In order for the duty of defense to arise, the underlying
complaint need only show, through general allegations, a
possibility that the liability claim falls within the insurance
coverage." Billings, 936 N.E. 2d at 414 (quoting Sterilite
Corp. v. Cont'l Cas. Co., 458 N.E.2d 338, 341 (Mass. App. Ct.
1983)). Massachusetts courts have held that insurers are
relieved of the duty to defend a claimant only "when the
allegations in the underlying complaint 'lie expressly outside
the policy coverage and its purpose.'" Billings, 936 N.E.2d at
414 (quoting Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co.,
788 N.E.2d 522, 531 (Mass. 2003)).
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Explaining our disposition of the claim that State
National breached its duty to defend Clark requires that we
revisit in greater detail the travel of this case. Stormo's
first count alleged that State National committed a breach of
contract both by refusing to indemnify Clark and by refusing to
defend Clark. In count two, Stormo further alleged that both
refusals were so unreasonable as to constitute an unfair claims-
settlement practice under Mass. Gen. Laws chs. 93A and 176D.
The district court granted partial summary judgment to State
National dismissing Stormo's 93A-176D claim in its entirety, but
the contractual claim for breaches of the duties to defend and
indemnify went to trial. Following trial, the jury returned a
general verdict for Stormo on the breach-of-contract claim,
without specifying which alleged duty or duties State National
breached. But on State National's motion for judgment as a
matter of law, the court set aside the verdict and entered
judgment for State National on count one in its entirety based
on Clark's failure to give timely notice of the claim.
Stormo opposed that disposition of the jury's verdict,
but she never argued that she was entitled to hang on to the
verdict based on a breach of the duty to defend even if Clark's
late notice negated any duty to indemnify him. Rather, in
opposing the post-verdict motion for judgment as a matter of
law, she simply repeated her argument that since the late notice
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caused no prejudice, State National was obligated to provide
coverage of Clark's claim. Her opposition motion mentioned the
duty to defend only once, in service of an argument that she was
entitled to damages beyond the remaining policy balance. She
never suggested -- much less argued -- that even if Clark's late
notice defeated his indemnity coverage, State National was still
liable for its failure to defend him. And when the district
court issued its decision to enter a post-verdict judgment for
State National because of Clark's late notice, Stormo did not
complain that the court had failed to consider whether the
verdict might rest on a finding that State National breached a
duty to defend. Thus, before the district court, Stormo at
least forfeited -- if not waived -- this argument. See United
States v. Delgado-Sánchez, 849 F.3d 1, 6 (1st Cir. 2017).
Even on appeal, Stormo does not argue that the jury
verdict can stand based on a breach of the duty to defend even
if there was no duty to indemnify. Rather, she focuses on (or
rather, briefly mentions) the duty to defend only in the context
of challenging the district court's decision granting partial
summary judgment dismissing the 93A-176D claim. Stormo has thus
waived any standalone argument that State National breached its
duty to defend Clark. See id. We must therefore affirm the
judgment as a matter of law on the count-one claim that State
- 23 -
National breached its policy either by failing to indemnify
Clark or failing to defend him.
C.
In light of the foregoing, we have (1) a judgment by
the district court on all aspects of the count-one breach-of-
contract claim; (2) the assertion below and on appeal of only
one argument for reversing that judgment (the notice-prejudice
rule); (3) our rejection of that argument given that the
relevant policy is a claims-made policy; and (4) the resulting
affirmance of the judgment in favor of State National on count
one, including the claim for breach of the duty to defend.
This all means that the count-two 93A-176D claim for
unreasonably breaching the policy lacks the necessary predicate:
that there was such a breach in the first place. Because of the
lack of timely notice under the claims-made policy, there was no
duty to indemnify. And because Stormo has waived any objection
to the dismissal of the contractual duty-to-defend claim, we
find no breach of that contractual duty. Massachusetts law is
clear that the 93A-176D claims in count two must therefore fail.
See Home Ins. Co., 830 N.E.2d at 192 ("An insurer does not
commit a violation of [chapter 93A] when it rightfully declines
to defend a claim that is not covered by its policy."); see also
Dryden Oil Co. of New England v. Travelers Indem. Co., 91 F.3d
278, 290 (1st Cir. 1996) (holding that where "defendants neither
- 24 -
breached a contractual duty to defend . . . nor a duty to
indemnify," there was "[c]onsequently" no claim to be made under
chapters 93A and 176D). So we therefore need not address
Stormo's other arguments, all contingent on there being a
section 93A claim.
IV.
For the foregoing reasons, we affirm the district
court's judgments in favor of State National.
- Concurring and Dissenting Opinion Follows -
- 25 -
BARRON, Chief Judge, dissenting in part and concurring
in the judgment in part. I disagree with the majority's
decision to affirm the grant of summary judgment to the insurer
on the wrongful-denial-of-coverage claim that is before us in
this appeal. The proper course, in my view, is to certify the
novel state-law question on which that portion of the motion for
summary judgment depends to the Supreme Judicial Court of
Massachusetts ("SJC"). I thus, respectfully, dissent in part
but otherwise concur in the judgment.
I.
This case involves a dispute over what is known as a
claims-made insurance policy. Claims-made policies generally
cover only claims made against the insured during the policy
period. Chas. T. Main, Inc. v. Fireman's Fund Ins. Co., 551
N.E.2d 28, 29 (Mass. 1990). This claims-made policy is no
different, save for one exception, the relevance of which will
become apparent. Claims-made policies also always have
provisions that require the insured to provide notice of the
covered claims to the insurer. Id. This claims-made policy is,
again, no different. In fact, it has two such provisions, a
fact which, as I will explain, potentially bears on the proper
resolution of this case.
One of the notice provisions -- which I shall refer to
as the "within-policy-period" notice provision -- appears in the
- 26 -
section of the policy that defines the scope of this policy's
coverage. It provides that, within sixty days of the policy
period's end, the insured must provide the insurer with notice
of any claim made against the insured within the policy period.
The other notice provision -- which I shall refer to as the
"prompt-written" notice provision -- appears in the section of
the policy that identifies the insured's responsibilities prior
to receiving payment, rather than the section outlining what is
covered. It requires the insured to provide the insurer with
"prompt-written" notice of any claim against the insured,
without regard to when that claim was made against the insured.
The claim for which the insured here seeks coverage
was first made against him only after the policy period had
expired. One might think that the insured is therefore barred
from obtaining coverage for that claim for reasons that have
nothing to do with this policy's notice provisions. After all,
as I have noted, claims-made policies generally cover only
claims made against the insured during the policy period, and
this one was not.
This claims-made policy, however, has an express
provision that broadens the policy's scope of coverage. It does
so by treating a claim made against the insured outside the
policy period as having been made against the insured within
that period whenever that claim is "related" to a prior
- 27 -
within-the-policy-period claim. Moreover, the parties agree
that the claim that is at issue here is such a "related" claim.
They thus agree that -- for purposes of this claims-made policy
-- the insured is seeking coverage for a claim that is deemed to
have been made against the insured within the policy period,
though in fact it was not.
That being so, the coverage dispute over this claim
turns on the insured's compliance -- or noncompliance -- with
the policy's notice provisions. To be sure, the insurer does
not contend that the insured failed to comply with the policy's
"within-policy-period" notice provision. The insurer does not
even contend that this notice provision applies to such a
"related" claim -- and, understandably so. In their nature,
claims of that sort may not become known to the insured until
much later than sixty days after the end of the policy period.
It thus makes little sense to read the provision to require that
notice of those claims be provided to the insurer within that
period or sooner than sixty days thereafter. To provide such
notice in that time frame, as to many "related" claims, would be
factually impossible.
The insurer does contend, however, that this policy's
separate "prompt-written" notice provision applies to "related"
claims, and the insured does not argue otherwise. Moreover, the
insured does not dispute the insurer's contention that he failed
- 28 -
to comply with that provision, given that he first provided
written notice to the insurer of this "related" claim more than
a year after he had first learned of the claim's existence.
Thus, in the end, this coverage dispute turns on
whether the insurer is required to show that it was prejudiced
by the undisputed violation of the "prompt-written" notice
provision. The insurer contends that it need not do so, while
the insured contends the opposite.
The majority resolves this dispute in the insurer's
favor. It does so based on the SJC's decision in Tenovsky v.
Alliance Syndicate, Inc., 677 N.E.2d 1144 (Mass. 1997). It
reads that decision to establish a general rule that an insurer
need not show prejudice to deny coverage based on an insured's
violation of a claims-made policy's "prompt-written" notice
provision. I do not read Tenovsky, however, to establish this
rule. Nor do I read it to address, more narrowly, whether
prejudice must be shown to deny coverage based on an insured's
violation of a claims-made policy's "prompt-written" notice
provision that -- like the one at issue here -- stands alongside
a separate and express "within-policy-period" notice provision
in the same policy.
To explain why, I will first review the precedent on
which Tenovsky relied, Chas. T. Main. I will then return to
Tenovsky itself. Finally, I will examine sources of authority
- 29 -
beyond Massachusetts, which, as I will explain, themselves do
little to assist us in predicting how the SJC would resolve what
neither Tenovsky nor Chas. T. Main do.
II.
In Chas. T. Main, the SJC noted that there are
generally two types of notice provisions to be found in
insurance policies: "within-policy-period" notice provisions and
"as-soon-as-practicable" notice provisions. 551 N.E.2d at 29.
The SJC noted, too, that there are generally two types of
insurance policies: claims-made policies and occurrence
policies. Id. Finally, the SJC explained that there is a
relationship between each type of notice provision and each type
of insurance policy and that this relationship is of some
relevance in determining whether and when an insurer must show
prejudice to deny coverage based on an insured's failure to
comply with an insurance policy's notice provision. Id. at 29–
30.
Chas. T. Main acknowledged that, under an occurrence
policy, an insurer must show prejudice before denying coverage
based on an insured's failure to comply with an "as-soon-as-
practicable" notice requirement, which, Chas. T. Main observed,
is the type of notice provision that occurrence policies "almost
always" have. Id. In doing so, the SJC reaffirmed its earlier
decision in Johnson Controls, Inc. v. Bowes, 409 N.E.2d 109- 30 -
(Mass. 1980). There the SJC held, in the context of an
occurrence policy, that such a notice provision is subject to
the notice-prejudice rule that Massachusetts law generally
applies to notice provisions in insurance policies, even when a
policy expressly makes compliance with that notice provision a
condition precedent to coverage. Johnson Controls, 409 N.E.2d
at 188.
Chas. T. Main went on to explain, however, that the
notice-prejudice rule that applies to an "as-soon-as-
practicable" notice provision does not apply to a claims-made
policy's express "within-policy-period" notice provision. 551
N.E.2d at 30. And that is so, Chas. T. Main concluded, because
of the role that "within-policy-period" notice provisions play
in claims-made policies. Id.In an occurrence policy, Chas. T. Main explained,
"[c]overage is effective . . . if the covered act or covered
omission occurs within the policy period, regardless of the date
of discovery." Id. at 29. As a result, in offering an
occurrence policy, the insurer is necessarily accepting the risk
that inflation poses to accurate rate-setting for such a policy.
See id. Chas. T Main explained that, for this reason, a
"within-policy-period" notice provision is "never" found in an
occurrence policy, as that type of policy contemplates coverage
- 31 -
for claims that the insured might discover only long after the
policy period has expired. See id.
In contrast, Chas. T. Main explained, coverage works
very differently in a claims-made policy. The whole object of a
claims-made policy, Chas. T. Main noted, is to protect the
insurer from the risk of inflation that inheres in insuring
claims made long after the policy period. Id. at 30. And so,
as Chas. T. Main put it, "the purpose of a claims-made policy"
-- unlike the purpose of an occurrence policy -- "is to minimize
the time between the insured event and the payment." Id.
Therefore, Chas. T. Main explained, a "within-policy-
period" notice provision is "always" found in a claims-made
policy, as the purpose of that kind of policy is to ensure
"fairness in rate-setting." Id. at 29. Indeed, Chas. T. Main
went on to conclude, because the receipt of such notice "is of
the essence in determining whether coverage exists," a claims-
made policy -- "[f]or that reason" -- defines the "insured event
[as both] . . . the claim being made against the insured during
the policy period and the claim being reported to the insurer
within that same period or a slightly extended, and specified,
period." Id. at 30 (emphases added).
In other words, Chas. T. Main reasoned, a notice
provision of the "within-policy-period" kind in a claims-made
policy is not -- like an "as-soon-as-practicable" notice
- 32 -
provision in an occurrence policy -- merely useful to the
insurer. See id. Because the "within-policy-period" notice
provision supports the very reason that an insurer chooses to
offer a claims-made policy rather than an occurrence policy, a
claims-made policy would be "frustrated" if that kind of notice
provision were not included in it. See id. at 30. Chas. T.
Main therefore upheld the insurer's denial of coverage for
noncompliance with the policy's express "within-policy-period"
notice provision -- notwithstanding an absence of any showing of
prejudice -- because "[p]rejudice for an untimely report in this
instance . . . is not an appropriate inquiry." Id. (emphasis
added).
In so ruling, Chas. T. Main never directly addressed
-- at least in so many words -- whether "as-soon-as-practicable"
notice provisions in claims-made policies are subject to the
same notice-prejudice rule that applies when they are found in
occurrence policies. But Chas. T. Main did observe that while
such notice provisions are "almost always" in occurrence
policies, they also are "frequently" found in claims-made
policies. Id. at 29. Moreover, as I have noted, in describing
"as-soon-as-practicable" notice provisions, Chas T. Main noted
that they enable the insurer's investigation of "facts and
occurrences relating to liability." Id. Chas. T. Main also for
that reason contrasted such notice provisions with "within-
- 33 -
policy-period" provisions, which Chas. T. Main described as
serving the very different and essential purpose of ensuring
"fairness in rate-setting" in claims-made policies. Id. at 29–
30.
In my view, then, it is hard to read Chas. T. Main to
indicate that a "prompt-written" notice provision is "not
materially different from," Tenovsky, 677 N.E.2d at 1146, a
"within-policy-period" notice provision when both types of
notice provisions are included in the same claims-made policy.
Chas. T. Main suggests to me that, in such a policy, there is
good reason to treat the "prompt-written" notice provision the
same as the "as-soon-as-practicable" type of notice provision
that Chas. T. Main describes as being only "frequently" in
claims-made policies but "almost always" in occurrence policies.
551 N.E.2d at 29. In that situation, the "prompt-written"
notice provision -- if it is not to be redundant of the "within-
policy-period" notice provision -- would appear to be merely
serving the nonessential end of facilitating the insurer's
investigatory capacity rather than ensuring the essential end of
"fairness in rate-setting."6
6Consistent with that conclusion, this policy's "prompt-
written" notice provision, unlike this policy's inapplicable
express "within-policy-period" notice provision, appears in the
policy's section outlining conditions precedent to payment and
not in its section defining the scope of its coverage. And the
- 34 -
Based on Chas. T. Main's own analysis, in other words,
there would appear to be a strong case for concluding that,
because the "prompt-written" notice provision here is a
companion to an express "within-policy-period" notice provision,
it merely serves such a nonessential end, rather than the
essential end of "fairness in rate-setting." See id. at 29–30.
Accordingly, again based on Chas. T. Main's own analysis, there
would appear to be a strong case for concluding that this
"prompt-written" notice provision is not "of the essence" to
this claims-made policy. It would therefore appear to follow
that, under Chas. T. Main, this notice provision is just as
subject to the notice-prejudice rule as an "as-soon-as-
practicable" notice provision in an occurrence policy. See id.
at 30.
III.
If Chas. T. Main fails to show that the insurer here
is not required to show prejudice before denying coverage based
on the insured's violation of this policy's "prompt-written"
notice provision, what does? The answer, according to the
majority, is Tenovsky.
policy expressly states that "[n]othing contained [in the
'prompt-written' notice provision] shall be construed as
limiting the reporting requirements of [the 'within-policy-
period' notice provision]," further reinforcing the two
provisions' distinct functions.
- 35 -
The majority reads that case to make clear that a
"prompt-written" notice provision in a claims-made policy is
always exempt from the notice-prejudice rule in the exact same
way that Chas. T. Main deemed a "within-policy-period" notice
provision to be exempt. It is for that reason -- and that
reason alone -- that the majority holds that this insurer need
not show prejudice to deny coverage based on the insured's
violation of this claims-made policy's "prompt-written" notice
provision. I cannot agree with that view of Tenovsky.
Tenovsky did hold that the insurer in the case before
it was not required to show prejudice to deny coverage based on
the insured's violation of the "prompt-written" notice provision
in the claims-made policy at issue there. 677 N.E.2d at 1146.
And it is true that the words of the "prompt-written" notice
provision here are "identical" to the words in the "prompt-
written" notice provision in Tenovsky itself. See id. But,
although the majority seizes on that fact, I fail to see why
that fact necessarily means that the two provisions are
"identical" in any way that matters for purposes of determining
whether prejudice need be shown to deny coverage based on the
violation at issue here.
As was the case in Tenovsky, the inquiry into whether
the insurer needs to show prejudice here necessarily hinges on
the function -- rather than the formal language -- of the notice
- 36 -
provision that the insured has violated. Because this notice
provision appears in a claims-made policy that also has a
"within-policy-period" notice provision, it seems most logical
to treat this notice provision as an "as-soon-as-practicable"
notice provision, notwithstanding that this provision does not
use those precise words in describing when notice must be given.
Indeed, it would be hard to see how else to treat the provision
if it is to have any function independent of -- and not
superfluous to -- the "within-policy-period" notice provision in
this policy, which the parties agree has no application to the
claim for which coverage is being sought here.
Nonetheless, the majority concludes that Tenovsky
instructs that an insurer may deny coverage based on an
insured's violation of a "prompt-written" notice provision
without showing prejudice so long as -- and simply because --
that provision is in a claims-made policy. Of course, in the
case before us, the insured reported the claim long after the
policy period ended. But I do not understand the majority to
suggest that its understanding of Tenovsky's exemption is
limited to a circumstance in which notice is provided even later
than the period that the "within-policy-period" itself gives for
providing notice. The majority appears to be adopting a general
rule for "prompt-written" notice provisions in claims-made
policies -- and so to be adopting a rule that applies even to a
- 37 -
claims-made policy that, like this one, already independently
requires notice to be given no later than sixty days after the
policy period's end. The majority's logic therefore necessarily
suggests that it would read Tenovsky to establish that an
insurer could deny coverage without showing prejudice under a
claims-made policy when the insured provides the insurer with
notice within the policy period, but simply fails to do so as
soon as practicable.7
It is hard for me to see, though, how a "prompt-
written" notice provision is ensuring "fairness in rate-setting"
-- rather than merely facilitating the insurer's investigatory
interest -- in requiring prompt notice of a claim not only made
but also reported during the policy period. As a result, it is
hard for me to see how the majority's view of Tenovsky accords
with Chas. T. Main.
As I have explained, Chas. T. Main strongly indicates
that notice provisions that serve only that investigatory --
rather than "fairness in rate-setting" -- end are not "of the
essence" to either occurrence or claims-made policies. I thus
7 To the extent the majority means to suggest that a
different case would be presented by a claims-made policy with a
"within-policy-period" provision and a companion notice
provision that expressly requires notice to be provided "as soon
as practicable," I cannot see why we would think the SJC would
make the notice-prejudice rule's application in such a case turn
on that formal difference in the wording of the companion notice
provision.
- 38 -
do not see why we would interpret Tenovsky to embrace a rule
that Chas. T. Main suggests makes little sense when nothing in
Tenovsky so much as hints at an intention to deviate from Chas.
T. Main. Nor do I see any language in Tenovsky that purports in
any clear way to adopt the broad rule the majority derives from
that case.8
Beyond that, the facts of Tenovsky gave the SJC no
reason to even contemplate -- let alone adopt -- the categorical
no-prejudice rule for "prompt-written notice" provisions that
the majority attributes to that decision. Unlike the claims-
made policy here, the one at issue there had no express "within-
policy-period" notice provision. 677 N.E.2d at 1145. Thus, the
8 Indeed, to the extent that Tenovsky can be read to
suggest that the language of the "prompt-written" notice
provision is itself outcome determinative, adhering to its
literal interpretation would counsel an exceedingly odd result
here. That is so because Tenovsky held that "[i]t is apparent
from the language of the [claims-made insurance policy at issue
in Tenovsky] just as it is apparent from the policy considered
in Chas. T. Main, Inc., that the purpose of both policies'
notice provision is to produce 'fairness in rate setting' by
minimizing 'the time between the insured event and the
payment.'" 677 N.E.2d at 1146. As such, Tenovsky held that
"prompt," as used in that policy, must be interpreted to
"require[] that notice to the insurer be given no later than
sixty days following the expiration of the policy period." Id.
If we applied the same interpretation to the "identical"
language of the "prompt-written" notice provision at issue here,
that provision would be identical to, and wholly redundant of,
the existing "within-policy-period" notice provision that all
agree does not apply to this specific claim. Insofar as the
majority views Tenovsky as controlling, taking that holding to
its logical conclusion would seem to exempt the insured from
having had to provide any notice at all.
- 39 -
"prompt-written" notice provision at issue in that case was not
a mere companion notice provision, easily read to be akin to the
kind of "as-soon-as-practicable" notice provisions that Chas. T.
Main took such pains to distinguish from "within-policy-period"
notice provisions. 551 N.E.2d at 29–30. It was the only notice
provision in that policy at all. As such, it was the only
provision in the policy that could have functioned to impose the
kind of "within-the-policy" period reporting requirement that
Chas. T. Main explained claims-made policies "always" have, see
551 N.E.2d at 29 (emphasis added).
Thus, in applying Chas. T. Main in Tenovsky, the SJC
had distinct reasons -- not present here -- to treat the
"prompt-written" notice provision there as if it were
functionally "identical" to a "within-policy-period" notice
provision, at least with respect to a claim made against the
insured within the policy period (such as was at issue in that
case) but only reported years after that period's end. 677
N.E.2d at 1145. And so, in applying Chas. T. Main in Tenovsky,
the SJC had reasons -- not present here -- to conclude that the
insurer must not have needed to show prejudice to deny coverage
based on the insured's failure to satisfy the "prompt-written"
notice provision there at issue.
I recognize there is also nothing in Tenovsky to
suggest that the SJC was contemplating a policy, like this one,
- 40 -
with a relating-back provision that would allow a claim, itself
made long after the expiration of the policy period, to
nevertheless be treated as having been made within that period.
I thus suppose, in consequence of this unique feature of this
case, the SJC could be moved to conclude that the insurer here
would not need to show prejudice to deny coverage based on the
insured's failure to provide "prompt-written" notice, even if
the insurer would indeed have to show prejudice to deny coverage
on that basis if the claim at issue were not such a "related"
one and instead had been made dilatorily but within the policy
period in its own right.
But the majority does not suggest that feature of this
case is relevant to the prejudice inquiry, given the categorical
nature of the no-prejudice rule that it attributes to Tenovsky.
And, in any event, there is good reason to doubt that the SJC
would so rule. To do so, the SJC would have to overlook this
insurer's choice, in agreeing to this claims-made policy's
relating-back provision, to provide coverage for some late-
discovered claims. The SJC thus would have to ignore this
insurer's seeming choice -- through that provision -- to bargain
away, at least as to such "related" claims, the interest in
- 41 -
ensuring fairness in rate-setting that Chas. T. Main recognized
that claims-made policy insurers generally have.9
IV.
That Tenovsky does not compel, and Chas. T. Main
indeed points against, the majority's view of Massachusetts
insurance law would seem sufficient to demonstrate that we
confront the kind of state-law ambiguity that favors
certification. I must consider, though, whether our own
precedents or other sources of authority might nonetheless bring
the clarity that is missing from the SJC's own precedents. They
do not.
Starting with our own precedents, we have twice
addressed how Chas. T. Main applies when it comes to the
violation of a claims-made policy's notice provision. But each
time we considered only a failure to comply with an express
"within-policy-period" notice provision of the kind addressed in
Chas. T. Main itself. See President & Fellows of Harvard Coll.
v. Zurich Am. Ins. Co. ("Harvard College"), 77 F.4th 33, 38 (1st
9 The other precedents the majority cites do not conflict
with my understanding of the state of Massachusetts law, as they
either did not involve a claims-made policy at all, see Boyle v.
Zurich Am. Ins., 36 N.E.3d 1229 (Mass. 2015), or concerned an
insured's breach of a "within-policy-period" notice requirement,
see Meadows Constr. Co. v. Westchester Fire Ins., 180 N.E.3d
1032 (Mass. App. Ct. 2022) (unpublished table decision); Young
Men's Christian Ass'n of Greater Worcester v. Nat'l Union Fire
Ins. Co. of Pittsburgh, 843 N.E.2d 722 (Mass. App. Ct. 2006)
(unpublished table decision).
- 42 -
Cir. 2023); Gargano v. Liberty Int'l Underwriters, Inc., 572
F.3d 45, 50 (1st Cir. 2009). Thus, in neither case did we have
any reason to address -- let alone endorse -- the approach the
majority here derives from Tenovsky. Nor have we otherwise had
occasion to address this area of Massachusetts insurance law.
There are high-court rulings from other states that
have addressed this area of insurance law. But, if anything,
they only cast further doubt on the soundness of the majority's
approach, because those precedents suggest that a "prompt-
written" notice provision is subject to the notice-prejudice
rule when it appears alongside a claims-made policy's express
"within-policy-period" notice provision.10 Indeed, one of those
decisions expressly relied on Chas. T. Main in so holding. See
Prodigy, 288 S.W.3d at 381–82.
That said, I am aware of one state high court that has
gone the other way. But it hardly shows that the SJC would rule
for the insurer here, as that court held no prejudice needed to
10 See Prodigy Commc'ns Corp. v. Agric. Excess & Surplus
Ins. Co., 288 S.W.3d 374, 382 (Tex. 2009) ("In a claims-made
policy, when an insured gives notice of a claim within the
policy period or other specified reporting period, the insurer
must show that the insured's noncompliance with the policy's 'as
soon as practicable' notice provision prejudiced the insurer
before it may deny coverage."); Sherwood Brands, Inc. v. Great
Am. Ins. Co., 13 A.3d 1268, 1288 (Md. 2011) (holding that the
prejudice requirement "does apply . . . to claims-made policies
in which the act triggering coverage occurs during the policy
period, but the insured does not comply strictly with the
policy's notice provisions").
- 43 -
be shown only while emphasizing "the importance of the
characteristics of [the insured in that case:] . . . an
incorporated business entity that engaged in complex financial
transactions" and had negotiated for and procured the commercial
liability policy at issue there through an insurance broker.
Templo Fuente de Vida Corp. v. Nat'l Union Fire Ins. Co. of
Pittsburgh, 129 A.3d 1069, 1080 (N.J. 2016); see also id. at
1081 ("In this instance we need not make a sweeping statement
about the strictness of enforcing the 'as soon as practicable'
notice requirement in 'claims made' policies generally.").
Finally, there is some federal precedent -- albeit not
binding on us -- suggesting that a showing of prejudice is
sometimes required when an insurer seeks to deny coverage based
on an insured's noncompliance with a claims-made policy's "as-
soon-as-practicable" notice requirement. See TRT Dev. Co. v.
ACE Am. Ins. Co., 566 F. Supp. 3d 118, 127 (D.N.H. 2021)
(predicting New Hampshire law); Craft v. Phila. Indem. Ins. Co.,
560 F. App'x 710, 715 (10th Cir. 2014) (certifying question to
the Colorado Supreme Court). I note, too, that treatise writers
have consistently endorsed the view that prejudice must be shown
in such a circumstance.11
11See Restatement of the Law of Liability Insurance § 35
cmt. h (2019) ("Prejudice is required when notice is late but
given before the end of the reporting period."); 13 Steven
- 44 -
Based on this survey of authorities beyond the SJC, I
would not go so far as to say that -- at least given the novelty
of the question presented -- it is evident that the SJC would
rule against the insurer here. But I certainly cannot say,
based on this survey, that I am confident the SJC would, as the
majority predicts, rule in the insurer's favor.
V.
The majority is right that we have stated that "a
plaintiff who made a deliberate choice to sue in federal court
rather than in a Massachusetts state court is not in a position
to ask us to blaze a new trail that the Massachusetts courts
have not invited." Harvard Coll., 77 F.4th at 39 (cleaned up).
Here, however, we have come to a fork in the road, and the
plaintiff is merely asking us to choose one as-yet untrod state-
law path over another. Thus, rather than make that choice
Plitt, Daniel Maldonado, Joshua D. Rogers & Jordan R. Plitt,
Couch on Insurance § 186:13 (3d ed. 2017) ("As a general
statement, the prompt notice of claim requirement and the
'claims made' within the policy period requirement serve such
different purposes, and are of such different basic character,
that the principles applied to one should have little or nothing
to do with the principles applied to the other."); John H.
Mathias, John D. Shugrue & Thomas A. Marrinson, Insurance
Coverage Disputes § 2.02[1][b] (2002) (concluding that an "as
soon as practicable" notice requirement in claims-made policies
"like . . . in occurrence policies, is not an integral part of
the insuring agreement itself. Rather, its purpose is to permit
an insurer the opportunity to investigate facts relating to
liability, and like similar notice requirements in occurrence
policies, should not be read to bar coverage unless the insurer
can show prejudice from noncompliance).
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unaided, I think it sensible to do what any prudent trekker
would: ask for directions from an unusually reliable guide,
especially when that guide's own map suggests reasons to be wary
of opting for the road less traveled. Accordingly, because I
would certify the underlying question of Massachusetts law to
the SJC, I respectfully dissent from the decision to affirm the
grant of summary judgment to the insurer on the insured's
wrongful-denial-of-coverage claim.12
12 Because the majority's decision about the notice-
prejudice issue is antecedent to its decision affirming the
grant of summary judgment on the plaintiff's Mass. Gen. Laws
chs. 93A and 176D claim, I concur only in the judgment as to
that claim, as I do agree with the district court's reasons for
granting summary judgment on that claim.
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