Gottlieb v. Amica Mutual Insurance Company

United States Court of Appeals
For the First Circuit
No. 22-1074
PETER GOTTLIEB, individually and on
behalf of all persons similarly situated,
Plaintiff, Appellant,
v.
AMICA MUTUAL INSURANCE COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Kayatta, Lipez, and Thompson,
Circuit Judges.
John Peter Zavez, with whom Noah Rosmarin, Brendan M.
Bridgeland, and Adkins, Kelston & Zavez, P.C., were on brief, for
appellant.
Christopher Michael Reilly, with whom Laura Meyer Gregory,
Anthony Antonellis, and Sloane and Walsh, LLP, were on brief, for
appellee.
December 30, 2022
KAYATTA, Circuit Judge. Peter Gottlieb claims that the
price he agreed to pay Amica Mutual Insurance Company to insure
his home was $16 too high because it was based on an excessive
coverage limit. Claiming as well that other Amica insureds paid
too much to insure their homes, he filed this putative class
action. After the district court dismissed part of Gottlieb's
complaint for failure to state a claim and entered summary judgment
disposing of the remainder of his claims, he filed this appeal.
For the following reasons, we affirm the judgments of the district
court.
I.
Gottlieb owns a home in Burlington, Massachusetts. In
2015, he purchased a homeowners insurance policy from Amica that
covered him from March 10, 2015, through March 10, 2016. The
coverage limit for replacing his house in the event of a loss was
$311,000, for which Gottlieb paid a $730 premium. The policy also
contained an endorsement providing additional coverage of up to
130% of the coverage limit if Gottlieb agreed to certain
conditions, including that Amica could adjust the coverage limit
and the premium "in accordance with" "property evaluations [Amica]
make[s]" and "[a]ny increases in inflation." The policy contained
no other language allowing Amica to increase coverage limits.
No loss occurred during the one-year term of the policy.
With the expiration of the policy term approaching, Amica sent
- 2 -
Gottlieb a proposed renewal policy, which contained the same
endorsement, along with a cover letter. The proposed premium for
the renewal policy was $795 ($65 more than the premium for the
original policy). Sixteen dollars of the increase was due to a
higher coverage limit for Gottlieb's house ($321,000 versus
$311,000). Amica arrived at that coverage limit based on a
multiplier calculated by a company called E2Value, Inc., which
projected costs for Gottlieb's zip code based on various data
sources. The rest of the increase in the premium was due to
changes in the base rate and other changes in Amica's public rate
filing.
The cover letter accompanying the renewal pointed out
that the increased coverage limit was partially attributable to
higher reconstruction costs, which it stated had "risen steadily
since [Amica's] last survey of [Gottlieb's] home," along with
"various other factors . . . that impact the dwelling amount."
The letter noted that Gottlieb was ultimately responsible for
determining the proper dwelling limit for his home. After calling
Amica to clarify how much coverage he would get under the
endorsement, Gottlieb accepted the 2016-2017 renewal policy, and
Amica issued the policy.
Gottlieb then sued Amica, claiming that the increased
coverage limit on his house and premium in the 2016-17 violated
the terms of his contract with Amica. Gottlieb argues that the
- 3 -
endorsement in his original policy limited how Amica could set the
coverage limit in the renewal policy; namely, Amica could change
the original limit only if it did a new home inspection, or
accounted for an increase in inflation. Because Amica did not
reinspect Gottlieb's home and because his coverage limit allegedly
increased more than the rate of inflation, Gottlieb contends that
Amica breached the policy.
Gottlieb also argues that even if Amica did not
explicitly breach the policy, it breached the implied covenant of
good faith and fair dealing. In his view, Amica acted in bad faith
by adjusting his coverage limit based on impermissible factors
(including projected future inflation and reconstruction costs),
attempting to rewrite the contract, and deceiving him about why
the limit was increasing. As to the claimed deception, Gottlieb
contends that Amica lied to him by stating in the cover letter
that one reason for the proposed increase in his dwelling limit
was a rise in reconstruction costs. According to Gottlieb, those
costs had not increased, or at least not as much as reflected in
the proposed increase to Gottlieb's coverage; thus, Gottlieb
contends Amica's statement was untrue and deceptive. As a result
of this allegedly fraudulent adjustment to his coverage limit,
Gottlieb asserts that Amica sold him illusory coverage he could
never use, because Amica would never pay more than actual
replacement costs and his replacement costs would always be less
- 4 -
than Amica's estimate. Because Amica received the benefit of
Gottlieb's additional premium but provided no additional practical
benefit to Gottlieb, he argues, he is also entitled to relief for
unjust enrichment, money had and received, and violation of
Massachusetts law prohibiting deceptive business practices, Mass.
Gen. L. c. 93A ("Chapter 93A").
Gottlieb filed his complaint in Middlesex Superior
Court. Amica then removed the case to the United States District
Court for the District of Massachusetts. The district court
dismissed the breach of contract and implied covenant of good faith
and fair dealing claims. The court found that the 2015-16 and
2016-17 policies were two separate contracts, so setting the
initial coverage limit in the latter could not have violated the
former. Moreover, the initial contract imposed no restrictions on
how the new coverage limit in the renewal contract could be set.
Likewise, the court ruled, no covenant of good faith and fair
dealing extended or created a freestanding obligation to use the
within-term rules contained in the first policy for selecting the
starting point of the renewal policy. Following discovery and an
amendment to the complaint, the district court granted summary
judgment for Amica on the unjust enrichment, money had and
received, and Chapter 93A claims. The court found that the
equitable claims were unavailable because there was an adequate
remedy at law and a valid contract. It also concluded that there
- 5 -
was no Chapter 93A violation because although Gottlieb had been
charged a higher premium, he had received the benefit of additional
coverage. Gottlieb appeals from both the denial of the motion to
dismiss and the grant of summary judgment for Amica.
II.
We review a district court's grant of a motion to dismiss
de novo. Legal Sea Foods, LLC v. Strathmore Ins. Co., 36 F.4th
29, 34 (1st Cir. 2022). In doing so, we take all of Gottlieb's
well-pled allegations as true and view the facts in the light most
favorable to him. Id. We affirm if, having done so, the complaint
does not provide "enough factual detail to make the asserted claim
plausible on its face." Id. at 33 (internal quotation marks
omitted) (quoting Cardigan Mountain Sch. v. N.H. Ins. Co., 787
F.3d 82, 84 (1st Cir. 2015)). We also review a district court's
grant of summary judgment de novo, drawing all inferences in favor
of Gottlieb. Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir.
2009). Following the lead of both parties, we apply Massachusetts
law.
A.
Gottlieb's breach of contract claim begins with the
original policy's limitation on Amica's unilateral ability to
change the coverage limit of $311,000 and the corresponding premium
upon which the parties had agreed when they entered the contract.
Such a limitation makes sense: A homeowner who agrees to receive
- 6 -
one year of coverage for a set premium hardly expects that, during
that year, the insurer could jack up the premium for that year's
coverage beyond that to which the homeowner agreed by declaring a
unilateral increase in the coverage limit.
Amica, though, did no such thing. After agreeing to
issue the original policy with a one-year term, Amica provided a
full year of coverage for the agreed-upon premium without making
any adjustments that would increase the premium (even those that
would have been allowed under the policy endorsement). Had the
parties gone their separate ways upon expiration of the policy, it
is clear that no breach could have been claimed.
The parties did not go their separate ways. Instead,
they entered into a new policy -- the renewal policy. In so doing,
they agreed upon a new, slightly higher coverage limit of $321,000
(as compared to $311,000 in the prior year) and a corresponding
premium of $795. During the term of that renewal policy, Amica
never sought to charge Gottlieb more than that agreed-upon $795.
Nor did it ever deny him any promised coverage.
Gottlieb nevertheless contends that Amica wronged him
when it proposed a coverage limit of $321,000 in negotiating the
renewal policy. His principal argument is that the limitation for
adjusting the coverage limit in the original policy applied to the
setting of the coverage limit in the renewal policy. Like the
district court, we disagree.
- 7 -
The 2015-16 policy was a separate contract from the 2016-
17 renewal. See Epstein v. Nw. Nat'l Ins. Co., 166 N.E. 749, 750–
51 (Mass. 1929) (renewal policies are new contracts). Nothing in
the 2015-16 policy's terms indicated that anything in that policy
prevented Amica from proposing a new coverage limit for the 2016-
17 policy. Gottlieb attempts to evade this hole in his breach of
contract claim by highlighting abstract references to renewal
policies in the 2015-16 agreement.1 He claims that these
references show that his initial policy governed the terms of any
renewal. But the references to renewals govern different
procedures for canceling the contract depending on whether the
contract is an initial policy or a renewal. They do not suggest
that the first policy governs any future renewals. Rather, they
simply indicate that some terms of a particular policy apply
differently depending on whether the policy itself is a renewal or
an initial policy.
Nor does it help Gottlieb that the cover letter
accompanying the proposed renewal policy referred to the new
1 For example, the policy provides that it may be cancelled
for certain reasons "[w]hen this policy has been in effect for
60 days or more, or at any time if it is a renewal with us." Other
references to renewal or nonrenewal indicate what will happen if
there is a nonrenewal, e.g., "[i]f we decide to cancel or not renew
this policy, that loss payee will be notified in writing," and
procedures for renewal or nonrenewal, e.g., "[o]rdinarily we will
renew this policy automatically" and "[w]e may elect not to renew
this policy . . . by delivering to you . . . written notice."
- 8 -
coverage limit as an adjustment. That reference says nothing about
whether the initial policy itself limited Amica in setting the
coverage limit for a subsequent policy. The language in the cover
letter sent along with the renewal policy does not turn the
renewal, which is clearly a new policy, into an "adjust[ment]" as
that phrase is used in the language of the endorsement in the first
policy.
Gottlieb also claims in passing that "[t]he Homeowners
Information Insurance Digest included in Plaintiff's policy also
expressly provides the terms of the Endorsement apply to renewal
policies." In describing various coverage options, the Digest
(which is not a part of the contract) states that policyholders
will get the benefit of the endorsement's increased coverage if
they "[a]llow [Amica] to issue your policy (and subsequent
renewals) in accordance with a current property evaluation."
Gottlieb did not mention this Digest in either his initial or
amended complaint, nor did he mention it in his briefing on the
motion to dismiss. As such, we consider it waived when evaluating
his appeal of the district court's decision on the motion to
dismiss. See, e.g., P.R. Hosp. Supply, Inc. v. Bos. Sci. Corp.,
426 F.3d 503, 505 (1st Cir. 2005). Even if we were to consider
Gottlieb's argument, we see no breach of contract. The Digest's
language does not require Amica to base the premium of a renewal
policy on a current property evaluation. Rather, it states that
- 9 -
an insured will get the benefit of the endorsement if they "comply
with" three conditions, including "[a]llow[ing] [Amica] to issue
[the] policy (and subsequent renewals) in accordance with a current
property evaluation." That the insured may allow Amica to do that
does not mean that Amica must do it.
In sum, because the original policy did not limit Amica's
freedom in proposing a coverage limit for the renewal policy,
Gottlieb's breach of contract claim fails. Gottlieb was not
entitled under the initial contract to a proposed renewal coverage
limit reflecting only inflation or a new property evaluation.2
B.
Gottlieb's claim for breach of the implied covenant of
good faith and fair dealing fares no better. The covenant of good
faith and fair dealing is implied in all contracts under
Massachusetts law. Guldseth v. Fam. Med. Assocs. LLC, 45 F.4th
526, 537 (1st Cir. 2022). It provides that "neither party shall
do anything that will have the effect of destroying or injuring
the right of the other party to receive the fruits of the
contract." Latson v. Plaza Home Mortg., Inc., 708 F.3d 324, 326
(1st Cir. 2013) (quoting Anthony's Pier Four, Inc. v. HBC Assocs.,
583 N.E.2d 806, 820 (Mass. 1991)). The implied covenant is not,
however, a catch-all for altering the terms or scope of a contract.
2 We therefore do not address Gottlieb's various claims that
Amica used the wrong measure of inflation.
- 10 -
"Because the implied covenant is all about the expectations
concerning the obligations actually in the contract, the scope of
the covenant is only as broad as the contract that governs the
particular relationship." Guldseth, 45 F.4th at 537; see also Uno
Rests, Inc. v. Bos. Kenmore Realty Corp., 805 N.E.2d 957, 964
(Mass. 2004) ("The covenant may not, however, be invoked to create
rights and duties not otherwise provided for in the existing
contractual relationship, as the purpose of the covenant is to
guarantee that the parties remain faithful to the intended and
agreed expectations of the parties in their performance.").
As we concluded above, the limitation on Amica's changes
to the dwelling limit during the term of the original policy did
not apply to the setting of the initial coverage limit in the
renewal policy. Given that conclusion, Gottlieb cannot claim to
have had any reasonable expectation to the contrary. Guldseth, 45
F.4th at 537–38. The covenant of good faith and fair dealing
therefore does not secure this benefit that the contract never
guaranteed in the first place. Nor did Amica do anything to
deprive Gottlieb of the reasonably expected benefits of the policy.
Gottlieb lists several other acts that he contends show
that Amica breached the implied covenant of good faith and fair
dealing. As an initial matter, some of these contentions have no
footing in either the complaint or the response filed in the
district court to the motion to dismiss, so those arguments are
- 11 -
not part of our review of the dismissal of Gottlieb's claim for
breach of the implied covenant of good faith and fair dealing.
But the rest merely restate Gottlieb's claim that the contract
guaranteed a specific methodology to set his renewal coverage
limit, and that Amica failed to follow that methodology. Having
rejected the first premise, we also reject the second.
In particular, we do not find (as Gottlieb argues) that
any contractual language obligated Amica to set Gottlieb's
coverage limit for an upcoming policy year based only on "current"
inflation (i.e., not based on any projection of future inflation).
Gottlieb points to the language in the endorsement allowing Amica
to increase the Coverage A limit based on "any increases in
inflation," but the word "current" does not appear in this excerpt.
He also points to the Digest, which he says requires Amica to issue
the Coverage A limit in accordance with "'current' reconstruction
costs." But as we have already concluded, the Digest does not
require Amica to do anything. And the absence of any restriction
on Amica's ability to use future projections in calculating
coverage limits makes sense, because Amica must insure the covered
dwelling up to the end of the coming policy year. So we cannot
say it was a breach either of the contract or the implied covenant
of good faith and fair dealing for Amica to set the limit using a
projection for the anticipated year.
- 12 -
Finally, Gottlieb contends that Amica sold him illusory
coverage that he could never use. We will address this argument
in analyzing Gottlieb's remaining claims, to which we turn next.
We begin with Gottlieb's claims for unjust enrichment and money
had and received, and then move to his claim for unfair trade
practices in violation of Chapter 93A.
C.
Gottlieb's equitable claims must fail as well.
Massachusetts law "does not allow litigants to override an express
contract by arguing unjust enrichment." Reed v. Zipcar, Inc., 883
F. Supp. 2d 329, 334 (D. Mass. 2012) (quoting Platten v. HG Bermuda
Exempted Ltd., 437 F.3d 118, 130 (1st Cir. 2006)); Guldseth, 45
F.4th at 541 (unjust enrichment not available as a remedy when a
valid contract governs the relationship between the parties and
sets out their obligations). This also applies to money had and
received claims, which have "the same elements" as unjust
enrichment, but are limited to enrichment by money or its
equivalent. Jelmoli Holding, Inc. v. Raymond James Fin. Servs.,
Inc., 470 F.3d 14, 17 n.2 (1st Cir. 2006). Despite Gottlieb's
argument to the contrary, the policy plainly governs the
relationship between the parties and the subject matter of the
dispute (Gottlieb's premium), so Gottlieb's equitable claims are
foreclosed here.
- 13 -
D.
That leaves Gottlieb's Chapter 93A claim. Chapter 93A
prohibits unfair or deceptive acts or practices in trade and
commerce. In determining whether a practice is unfair, courts
look to "(1) whether the practice . . . is within at least the
penumbra of some common-law, statutory, or other established
concept of unfairness; (2) whether it is immoral, unethical,
oppressive, or unscrupulous; [and] (3) whether it causes
substantial injury to consumers (or competitors or other
businessmen)." Mass. Eye & Ear Infirmary v. QLT Phototherapeutics,
Inc., 412 F.3d 215, 243 (1st Cir. 2005) (alterations in original)
(quoting PMP Assocs., Inc. v. Globe Newspaper Co., 321 N.E.2d 915,
917 (Mass. 1975)). Courts consider "[a]n act or practice . . .
deceptive if it 'has the capacity to mislead consumers, acting
reasonably under the circumstances, to act differently" than they
otherwise would have. Tomasella v. Nestlé USA, Inc., 962 F.3d 60,
71 (1st Cir. 2020) (quoting Aspinall v. Philip Morris Cos., 813
N.E.2d 476, 488 (Mass. 2004)). To succeed on a claim based on a
deceptive act or practice, a consumer must show "(1) a deceptive
act or practice on the part of the seller; (2) an injury or loss
suffered by the consumer; and (3) a causal connection between the
seller's deceptive act or practice and the consumer's injury."
Id. (quoting Casavant v. Norwegian Cruise Line, Ltd., 919 N.E.2d
165, 169 (Mass. App. Ct. 2009)). Importantly, in order to obtain
- 14 -
relief under this statute for either an unfair or a deceptive act,
plaintiffs must show that they were injured by the conduct at
issue, and that the conduct caused some loss beyond the mere fact
that a violation occurred. Shaulis v. Nordstrom, 865 F.3d 1, 10
(1st Cir. 2017); Hershenow v. Enterprise Rent-A-Car Co. of Bos.,
840 N.E.2d 526, 528 (Mass. 2006).
The only arguably deceptive statement by Amica to which
Gottlieb points is Amica's statement that "[r]econstruction costs
have risen steadily since our last survey of your home." Gottlieb
claims that Amica's consultant reported a decrease in costs rather
than an increase, rendering false the statement that costs had
risen, and the district court credited this statement in its order
on the motion granting summary judgment. Thus, Amica's statement
in the cover letter that reconstruction costs had "risen steadily"
may well have been deceptive.3
3 Gottlieb also claims that Amica's statements in the cover
letter to him would violate Massachusetts General Laws
Chapter 176D, § 3(1)(a), which classifies "[m]isrepresent[ing] the
benefits, advantages, conditions, or terms of any insurance
policy" as an "unfair or deceptive act[] or practice[] in the
business of insurance." The district court correctly noted that
there is no private right of action for violations of Chapter 176D,
§ 3(1)(a). However, courts have held that plaintiffs may "attempt
to state a claim under Chapter 93A, section 2 by alluding to
conduct that is impermissible under chapter 176D." United States
ex rel. Metric Elec., Inc. v. Enviroserve, Inc., 301 F. Supp. 2d
56, 70 (D. Mass. 2003) (quoting M. DeMatteo Constr. Co. v. Century
Indem. Co., 182 F. Supp. 2d 146, 163 (D. Mass. 2001)); see also M.
Dematteo Constr. Co., 182 F. Supp. 2d at 160 (concluding that
although there is no private right of action under Chapter 176D,
that does not end the inquiry as to whether a plaintiff can recover
- 15 -
However, Gottlieb has not shown that he was injured by
this statement. He argues that he has been injured because the
higher coverage he purchased was illusory. Amica, he claims,
overestimated his reconstruction costs and charged him a
correspondingly higher premium, but would only ever pay actual
reconstruction costs far below this overestimate. It could
therefore pocket the difference, enriching itself and harming
Gottlieb. He asserts that Amica would never pay the full amount
of the coverage limit, because the actual reconstruction costs
would never be that high. In so arguing, however, Gottlieb assumes
that Amica's very first estimate of reconstruction costs was
correct, and that such costs not only decreased during the year
covered by that policy (or, at the very least, increased less than
the increase represented by the new coverage limit), but could not
possibly rise during the year to be covered by the second policy.
Without evidence that such a risk was essentially nonexistent at
the time of contracting, he cannot prove that insurance coverage
protecting him from that risk was illusory. And Gottlieb has
failed to show that he was entitled to a policy accounting only
for changes in costs in the previous year, as opposed to changes
through the upcoming year for which he would be insured.
under Chapter 93A for a violation of Chapter 176D). However, we
decline to determine whether Amica's statements would violate
Chapter 176D, § 3(1)(a) because Gottlieb's failure to show injury
would nonetheless prove fatal to a Chapter 93A claim.
- 16 -
Gottlieb attempts to sidestep the gap in his evidence by
claiming that the approximately $16 increase in his premium
resulting from the allegedly wrongfully calculated increase in his
Coverage A liability limit represents his damages from Amica's
wrongful acts. But this merely states the amount by which his
premium increased due to the higher coverage limit. It does not
itself show why Amica's estimate was so high that it would never
have to pay the full amount of the coverage limit.
The closest Gottlieb comes to estimating what his
coverage limit should have been is to assume that his "correct"
reconstruction costs were the original coverage limit, to which he
adds "any increase due to inflation allowed under the terms of the
Policy." But as we have already explained, Gottlieb is not
entitled to such a calculation under the Policy. And there is no
evidence that this calculation would have produced the "true" cost
of reconstruction.
Gottlieb also points to Amica's rate filing with the
Massachusetts Department of Insurance, which reported a "premium
trend factor" of approximately 1%. At oral argument, Gottlieb's
counsel argued that this estimate premium trend factor represented
inflation, and he pointed out that it was far lower than the amount
by which Gottlieb's premium had increased. This argument was
raised for the first time on reply, and thus, absent exceptional
circumstances, we consider it waived. See, e.g., Alamo-Hornedo v.
- 17 -
Puig, 745 F.3d 578, 582 (1st Cir. 2014). We see no exceptional
circumstances here. Moreover, Amica's counsel explained that the
premium trend factor measures Amica's losses across the board,
rather than general reconstruction cost increases or inflation.
We cannot find any indication in the record that this premium trend
factor estimates inflation. And, in any event, evidence that
replacement costs may have increased less than Amica's estimate
does not suffice to show that Gottlieb's coverage limit was so
high as to provide illusory coverage.
Finally, to the extent Gottlieb argues that he was
fraudulently induced to renew the policy based on the deceptive
statement that reconstruction costs had risen, he has not pointed
to any evidence that he would have done anything differently, such
as seeking alternative coverage or forgoing coverage altogether
absent this statement.
In sum, we are unable to conclude that Amica by deception
sold Gottlieb coverage he could never use. He has thus not shown
that he was injured as required for a 93A claim.
III.
For the foregoing reasons, we affirm the orders of the
district court.
- 18 -