IDS Prop. Casualty Ins. Co. v. Government Employees Ins. Co.

United States Court of Appeals
For the First Circuit
No. 20-1407
IDS PROPERTY CASUALTY INSURANCE CO. D/B/A AMERIPRISE AUTO & HOME
INSURANCE,
Plaintiff, Appellee,
v.
GOVERNMENT EMPLOYEES INSURANCE CO., INC.,
Defendant, Appellant,
PHILIP L. FELDBERG, CLAUDIA B. FELDBERG, DAWN FASANI-FELDBERG,
K.F. a minor by and through her mother DAWN FASANI-FELDBERG,
JONATHAN D. SIMMS, ALYNA PHROMSOPHA, WITHLACOOCHEE RIVER
ELECTRIC COOPERATIVE, INC.,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard G. Stearns, U.S. District Judge]
Before
Howard, Chief Judge,
Lipez and Thompson, Circuit Judges.
Jeffrey H. Katzenstein, with whom Halaby Law Group, P.C. was
on brief, for the Appellee.
Michael D. Schollard, with whom Ronald E. Harding and Harding
Gurley, LLP, were on brief for the Appellant.
January 13, 2021
THOMPSON, Circuit Judge. An accident in Florida damaged
a Toyota Highlander -- insured by the plaintiff IDS Property
Casualty Insurance Co. d/b/a Ameriprise Auto & Home Insurance
("Ameriprise") -- and a Lamborghini -- insured by defendant
Government Employees Insurance Company ("GEICO") -- while also
injuring the driver of the Highlander. Instead of helping pay for
the bulk of the personal and property damage, Ameriprise rescinded
coverage, alleging that its insureds Philip and Claudia Feldberg
had breached their obligations under the policy by making material
misrepresentations when they renewed coverage in 2017. Ameriprise
then took to federal court to certify its decision, naming GEICO
and the Feldbergs, among others, as defendants.1 The district
court granted summary judgment to Ameriprise, leaving GEICO to
foot a larger share of the insurance bill than it had hoped (the
Lamborghini was worth over $100,000). GEICO appeals the summary
judgment decision as well as the court's decision to limit
discovery and to grant Ameriprise's motion for reconsideration.
Finding GEICO's arguments non-starters, we affirm.
Background
We review the summary judgment materials in the light
most favorable to GEICO, the nonmoving party, "drawing all
reasonable inferences in [its] favor" to sketch the factual
background, while reserving some details for the discussion.
1Aside from GEICO, none of the other defendants affected by
the accident have appealed.
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Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 90 (1st Cir.
1996).
Although the Feldbergs are not a party to this appeal,
GEICO's legal claims depend largely on how the Feldbergs handled
their insurance policy, so we focus on their story and the details
of Ameriprise's insurance policy in describing the factual
background.
Covering Massachusetts Snowbirds
On November 8, 2011, the Feldbergs purchased an auto
insurance policy through Ameriprise in Massachusetts, which
automatically renewed every year until 2018. The policy always
listed Philip and Claudia Feldberg as the only customary drivers
of the various vehicles covered by the policy and only described
the principal place of garaging for the various vehicles as
Peabody, Massachusetts.2 Ameriprise's Massachusetts Auto
Eligibility Guidelines, which the company claimed to enforce
strictly, contained what an Ameriprise underwriter titled the
"snowbird clause"; vehicles principally garaged in Massachusetts,
but which remain at a second home for part of the year, are covered
by Ameriprise so long as the vehicles spend at least half of the
year in the Commonwealth. With this Massachusetts insurance policy
in place, the Feldbergs would depart from their home in Peabody
2 Because Philip and Claudia Feldberg share a last name, we
refer to them (and their daughter-in-law, Dawn, whom we will
introduce soon) by their first names for clarity, and we mean no
disrespect in doing so.
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around December of each year, starting around 2015, for their condo
in Naples, Florida where the couple stayed until late May or early
June to avoid the famous (yet increasingly mild) New England
winters.
The policy contained certain compulsory coverages --
including bodily injury to others,3 personal injury protections
(such as medical expenses and lost wages), bodily injury caused by
an uninsured vehicle, and damage to someone else's property -- all
of which Massachusetts law required Ameriprise to extend in the
event of a claim. The policy also included optional coverages,
including for rental vehicles and bodily injuries, above and beyond
the baseline compulsory insurance.
Of particular interest to this appeal, the auto policy
included several paragraphs that purported to limit Ameriprise's
exposure to risk by reserving the right to cancel or rescind
portions of the policy if the company discovered the Feldbergs
provided "false, deceptive, misleading or incomplete information
in any application or policy change request" or "were responsible
for fraud or material misrepresentation when [they] applied for
[their] policy or any extensions or renewal of it." (Emphases
added.) Specifically, Paragraph 18 of the policy empowered
Ameriprise to "refuse to pay claims under any or all of the
3 This compulsory provision applied only to accidents
involving the Feldbergs' vehicles which occurred in Massachusetts,
but Ameriprise agreed to provide this protection as a "gesture of
good will" following the accident which sparked this lawsuit.
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Optional Insurance Parts of this policy" if the Feldbergs did not
accurately report "the description and the place of garaging of
the vehicles to be insured, [and] the names of all . . . customary
operators . . . ."4 The "Coverage Selections Page" within the auto
policy extended Paragraph 18's warning for any "changes that have
occurred prior to the renewal of this policy and during the policy
period." Paragraph 195 of the policy also gave Ameriprise "the
right to adjust [the Feldbergs'] premium" for the same reasons.6
On September 16, 2016, Philip added a Toyota Highlander
to this auto policy, under which he already covered a Toyota RAV4
and a Honda Accord. The paperwork formalizing the addition lists
4 We use the phrases "customary operator" and "customary
driver" interchangeably throughout the opinion. However, the
policy does not define what constitutes the primary garaging
location or who constitutes a customary driver. We address the
implications of this omission in Section II(A)(iii).
5 The whole paragraph 19 reads as follows:
"If the information contained in your application
changes before this policy expires, we have the right to
adjust your premium to reflect such changes. You must
inform us of any changes which may have a material effect
on your insurance coverage or premium charges, including
the description, ownership, type of usage and place of
garaging of your auto and the household members and
individuals who customarily operate your auto."
6 Also at issue was Ameriprise's decision to rescind a
personal umbrella policy, which, like the auto policy, started in
November 2011 and renewed every year, and which provided Philip
with additional optional coverages up to $1 million. Because the
umbrella policy has similar contractual language as the auto policy
regarding the consequences of withholding information, we will
only refer to the general policy even though our decision affirming
Ameriprise's ability to rescind coverage reaches both.
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Peabody as the Highlander's principal place of garaging and
identifies only Philip and Claudia as its customary drivers.
Massachusetts Renewals in the Florida Sun
The Feldbergs received an annual renewal notice from
Ameriprise on September 23, 2017, which included a cover letter
enclosing the "Massachusetts Renewal Form." The letter instructed
the Feldbergs that they "only need[ed] to return [the renewal form]
if the information" contained within "has changed" and it more
precisely guided the Feldbergs to "[p]lease review the Coverage
Selections Page." The enclosed Coverage Selections Page for the
Highlander, as well as for the RAV4 and Accord, listed Peabody as
the principal place of garaging and recognized only Philip and
Claudia as the customary drivers.
The renewal forms (one for the RAV4 and Accord, and one
for the Highlander) built upon the cover letter and reiterated the
theme of the initial auto policy: "It will not be necessary to
return this form to your agent or company representative unless
you wish to make any changes or unless the information contained
on the Coverage Selections Page and in this form," including the
principal place of garaging and the customary drivers, "is
inaccurate or obsolete." The form instructed the Feldbergs to
check the information for accuracy, and to return the form if it
was incorrect, warning them that the failure to do so "may have
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very serious consequences." The Feldbergs did not return the 2017
renewal form.7
Accidents in Florida + Massachusetts Insurance = Investigation
The Feldbergs' vehicles had a rough year in 2018,
enduring three incidents leading to claims with Ameriprise. The
first occurred in January when the Feldbergs' RAV4 suffered some
damage in a Florida Walmart parking lot. It was in the course of
covering the claim when Ameriprise learned the Feldbergs owned a
condo in Naples, Florida, however the company did not investigate
the details of the Feldbergs' Florida life further because, as far
as the company knew, the couple only dwelled in Florida for less
than half of the year and the RAV4 returned to Massachusetts with
them, conditions which satisfied Ameriprise's policy guidelines
(remember, individuals who own a second home outside of the
Commonwealth can be covered by Ameriprise so long as their cars
stay in the Bay State for 6 months or more each year). Ameriprise
also learned from its constrained investigation that the
Highlander (the added vehicle) likewise spent some time tanning in
the Sunshine State.
Later, in March or April of 2018, the Feldbergs' grandson
borrowed their Honda Accord in Massachusetts and promptly got into
an accident within the Commonwealth's boundaries.
7
The Feldbergs received the same renewal form in 2016, which
they also did not return. We limit our discussion to the 2017
renewal because its coverage began on November 8, 2017 and it was
in effect at the time of the Highlander's accident.
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Continuing the bad luck streak of other drivers damaging
the Feldbergs' cars, a speeding Lamborghini hit their Highlander
in Wesley Chapel, Florida on July 24, 2018 while their daughter-
in-law, Dawn Fasani-Feldberg, was at the wheel. The crash totaled
the Highlander, damaged the Lamborghini, and injured Dawn. Fault
was disputed (Dawn says she got cited for a right of way violation
and the Lamborghini driver got cited for speeding). The Feldbergs
were not in Florida at the time of the accident, but they filed a
claim with Ameriprise; meanwhile, GEICO got involved to deal with
the Lamborghini. The day after the accident, Ameriprise extended
five days of rental car coverage to the Feldbergs, which was an
optional coverage under the policy. The company also later paid
for certain medical care for Dawn's injuries as per the compulsory
portions of the auto policy. The accident, however, spurred
Ameriprise to investigate where the Highlander was actually
garaged and who customarily drove it.
The investigation included a number of recorded calls
with Philip and Dawn, as well as an examination under oath of
Philip, in which both admitted key details. Philip told
Ameriprise's investigator he brought the Highlander to Florida
"almost immediately" after leasing it in Massachusetts and adding
it to the auto policy in September 2016. Philip's kids had
encouraged him to lease the Highlander so that there would be an
extra car in Florida: in case Philip could not make the return
drive to the frigid north due to his poor health, he could fly to
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Florida the next winter and have the Highlander waiting for him at
Dawn's house, which, in Philip's words "[was] what we did." Philip
intended to drive the Highlander back to Peabody, but he never
ended up feeling well enough to do so.
As for information regarding the customary drivers of
the Highlander, Philip informed Ameriprise's investigator about
Dawn's "standing permission . . . to use the vehicle" whenever
"she needs to" for the about six or "seven months of the year"
when Philip returned to the more temperate north. In furtherance
of Dawn's unlimited access to the Highlander, Philip provided her
with her own set of keys. Dawn estimated she drove the vehicle
about "three times a week." Indeed, the car remained with Dawn
the entire time the Feldbergs retired to Peabody.
Driving the Road to Our Court
The company informed the Feldbergs on November 2, 2018
that they had violated the terms and conditions of their auto
insurance policy by failing to inform Ameriprise about the
Highlander's principal place of garaging in Florida and about Dawn
being a customary driver. Ameriprise therefore concluded it would
limit the coverage for the Highlander's July accident to the
compulsory requirements and coverage for bodily injury to others
(extended as a courtesy), rescinding all optional coverages and
leaving GEICO to pay for the damage to the Lamborghini -- which
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GEICO claimed was totaled -- without Ameriprise's help.8
Ameriprise thereafter sought declaratory relief in federal
district court in Massachusetts against GEICO and the other
defendants, based on diversity jurisdiction, to approve the
company's rescission and to confirm Ameriprise had satisfied its
compulsory coverage requirements under Massachusetts law (meaning
it would not have to pay for any other damages to any defendants,
including damage done to the pricey Lamborghini) because of the
Feldbergs' alleged material misrepresentations.
Ameriprise subsequently filed for summary judgment,
attaching an affidavit from a senior underwriter, which summarized
Ameriprise's baseline company policy: "[v]ehicles must be garaged
at named insured's permanent residen[ce]" and vehicles are "[n]ot
eligible [for coverage] if the[y are] kept outside of the state
where the policy is written," as Ameriprise alleged the Feldbergs
had done with the Highlander.9 The affidavit also calculated that
the Feldbergs' auto premium would have increased anywhere from $85
to $338 if the company had known Dawn was a customary driver. For
his part, Philip submitted an affidavit informing the court he
8
Ameriprise also refused to pay for any of the umbrella
coverage, and it refused to cover the Highlander moving forward.
The record is silent as to whether Ameriprise continued coverage
for the other two vehicles.
9
As a reminder, Ameriprise's Massachusetts Auto Eligibility
Guidelines also contained a "snowbird clause," allowing coverage
for vehicles that are principally garaged in Massachusetts but
remain at a second home outside of Massachusetts for less than
half of the year.
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never intended to deceive or to knowingly make false statements -
- he simply did not know the Highlander's principal place of
garaging or how frequently Dawn drove the Highlander mattered for
his coverage or his premium. Philip also asserted that even if he
had given "serious thought" to the topic in November 2016 or 2017
(when the policy renewed), he would have considered the Highlander
"to be garaged principally at our residence in Peabody" and that
he "did not know and still [was] not sure about what constitutes
a usual and customary driver of an insured vehicle" under the
policy. Philip continued that he "would have taken corrective
action" if someone alerted him to this erroneous belief.
GEICO opposed summary judgment for reasons following
along Philip's answers; the company contended Ameriprise had not
put forward sufficient evidence to prove the Feldbergs materially
misrepresented the Highlander's principal place of garaging or its
customary drivers, or that Ameriprise sufficiently or clearly
demanded such information in the renewal form. In continuing to
argue Ameriprise could not rescind the Feldbergs' coverage, GEICO,
invoking principles of waiver and estoppel, alleged "Ameriprise
has acted in a manner contrary to its right to" rescind "all
optional coverages" because "it has voluntarily provided optional
coverages" following "the July 24, 2018 Florida accident,
including rental coverages and agreeing to indemnify the Feldbergs
for damages up to the compulsory limits . . . ."
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In the course of the proceeding, the district court,
acting on a discovery dispute, denied in part and granted in part
a protective order filed by Ameriprise, which, relevant to this
appeal, prevented GEICO (and the other defendants) from
discovering anything about the accident involving the Feldbergs'
grandson. Later, the court initially denied Ameriprise's motion
for summary judgment before reversing direction and granting it
once it acted favorably upon Ameriprise's motion for
reconsideration. The undisputed evidence demonstrates, the court
concluded, that as a matter of law, the Feldbergs materially
misrepresented the principal place of garaging and the customary
drivers of the Highlander in violation of the auto policy and the
renewal forms. The court also found GEICO's affirmative defenses
-- that Ameriprise's behavior prohibited it from rescinding
coverage -- meritless. GEICO filed a motion for reconsideration,
which the district court denied, thus detouring GEICO to our
appellate door.
Discussion
GEICO raises several arguments here hoping to prevent
Ameriprise from rescinding the Feldbergs' optional coverage, but
they all crumbled along the way.10 We take GEICO's contentions in
the following order, grouping the first set as pre-summary judgment
10Ameriprise does not contend that it can or would rescind
the compulsory coverage under Massachusetts law, only that it could
do so for the optional coverage and for the umbrella policy.
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decisions and the latter set as issues involving the district
court's decision on summary judgment, to determine whether the
district court: (1) abused its discretion by (a) preventing GEICO
from conducting pretrial discovery into the accident involving the
Feldberg's grandson and (b) granting Ameriprise's motion for
reconsideration11; and (2) erred by finding that, as a matter of
law, (a) the Feldbergs materially misrepresented the Highlander's
principal place of garaging and its customary drivers and
(b) GEICO's affirmative defenses of estoppel and waiver had no
merit. And so we begin.
I. Pre-Summary Judgment Decisions
As previewed, GEICO's first two appeals concern
decisions made by the district court prior to summary judgment --
partially granting Ameriprise's protective order and granting
Ameriprise's motion for reconsideration. We examine the court's
decision on each topic for an abuse of discretion. See Ruiz Rivera
v. Pfizer Pharm., LLC, 521 F.3d 76, 81 (1st Cir. 2008) (motion for
reconsideration reviewed for "manifest abuse of discretion");
Ayala-Gerena, 95 F.3d at 91 ("It is well settled that the trial
judge has broad discretion in ruling on pre-trial management
11 GEICO's notice of appeal mentioned appealing the denial
of its motion for reconsideration, but the opening brief before us
only addresses the district court's decision to grant Ameriprise's
motion for reconsideration. We therefore do not address the
court's denial of GEICO's motion. See Vázquez-Rivera v. Figueroa,
759 F.3d 44, 46–47 (1st Cir. 2014) (arguments not raised in opening
brief on appeal are waived).
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matters, and we review the district court's denial of discovery
for abuse of its considerable discretion.").
A. The Secret Accident
The district court granted Ameriprise's motion for a
protective order pursuant to Fed. R. Civ. P. 26(c) so as to
prohibit discovery into the accident involving the Feldberg's
grandson, which occurred in Massachusetts in March or April of
2018. GEICO argues the discovery order "deprived" the company "of
potentially relevant information regarding [Ameriprise]'s conduct
in adjusting claims brought under [the] Feldberg policy" because
how Ameriprise handled the grandson's accident could have affected
GEICO's affirmative defenses of waiver and estoppel.
Specifically, GEICO argues the district court deprived the
defendants of the chance to investigate whether Ameriprise acted
consistently when it rescinded coverage for the July 2018 accident
involving an "unlisted operator" based on how it handled the
accident involving the Feldbergs' "unlisted" grandson. If
Ameriprise treated the claims differently, GEICO postulates, then
the company could either have waived its right to rescind coverage
or be estopped from rescinding coverage. We will delve into the
heart of these defenses later. But first, we consider whether the
district court erred in its discovery ruling granting the
protective order.
Although we generally favor broad discovery, we will
impinge upon the district court's considerable discretion in
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limiting disclosures only "upon a clear showing of manifest
injustice," such that "the lower court's discovery order was
plainly wrong and resulted in substantial prejudice to the
aggrieved party." Ayala-Gerena, 95 F.3d at 91 (quoting Mack v.
Great Atl. and Pac. Tea Co., Inc., 871 F.2d 179, 186 (1st Cir.
1989)). Even if district courts provide limited or no reasoning
for their orders, we allow them broad discretion to rule on
discovery motions in order to design protective orders that prevent
unnecessarily burdensome or problematic discovery requests. See
FDIC v. Ogden Corp., 202 F.3d 454, 460 (1st Cir. 2000) ("Although
a lower court's elucidation of its reasoning invariably eases the
appellate task, motions often are decided summarily" and "we are
aware of no authority that would allow us automatically to vary
the standard of review depending on whether a district court has
taken the time to explain its rationale."); Poliquin v. Garden
Way, Inc., 989 F.2d 527, 532 (1st Cir. 1993) (explaining the need
for broad discretion) (quoting Seattle Times Co. v. Rhinehart, 467
U.S. 20, 36 (1984)).
The opposition to Ameriprise's motion for protective
order argued for the right to discovery regarding "at least three
[] prior insurance claims related to [the Feldbergs'] vehicles,
not including the July 24, 2018 accident." The district court
entered an electronic order, which only briefly concluded that it
would "allow discovery . . . relating to the prior January 2018
claim" (the RAV4's incident in a Florida Walmart parking lot) and
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into "damages relating to the loss which is the subject of this
action" (the Highlander's July accident).12
Although the discovery order did not directly address
the grandson's accident, it reasoned that only the January and the
triggering July 2018 accidents were relevant to determine whether
the Feldbergs materially misrepresented the principal place of
garaging and the customary drivers of the Highlander, which
impliedly meant that information about the other claims sought by
GEICO, including the grandson's, were not, in the court's view,
relevant to the dispute. This tacit reasoning is sufficient for
us to conclude there was no abuse of discretion, see Ogden Corp.,
202 F.3d at 460, but the record contains facts which clearly
informed the district court's decision. Philip let his grandson
borrow the Accord from his garage in Peabody, not from his condo
in Florida, so Ameriprise had no need to explore any garaging
issues related to the vehicle. Moreover, Philip testified that
his grandson was not a customary driver; the only time he ever
drove Philip's car was on the day of the accident and Philip swore
never to let his grandson drive one of his vehicles again. Yes,
the grandson, like Dawn, was an unlisted driver, but, as Philip
testified, the grandson was not someone who, like Dawn, drove the
Feldbergs' vehicle often and who had standing permission to do so.
12 The order also prohibited discovery into Ameriprise's
"general policies and procedures concerning claims investigation
and settlement," a decision which GEICO has not appealed.
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Therefore, how Ameriprise responded to the grandson's accident
does not, contrary to GEICO's assertion, necessarily bear on how
the insurance company responded to an incident involving an
individual like Dawn. In other words, the district court
determined that how Ameriprise handled the grandson's
Massachusetts-based accident had no relevance for how Ameriprise
viewed the Feldbergs' material misrepresentation of the
Highlander's principal place of garaging or customary drivers.
After reviewing the record before us, we cannot say that the lower
court's discovery order was plainly wrong or that it resulted in
substantial prejudice to GEICO such that GEICO suffered a manifest
injustice. See Saldana-Sanchez v. Lopez-Gerena, 256 F.3d 1, 8
(1st Cir. 2001); Ayala-Gerena, 95 F.3d at 91. Thus, we espy no
abuse of discretion.
B. Reconsidering a Motion for Reconsideration
Moving along, GEICO alludes, in a cursory two paragraphs
without citations to the record, that the district court erred by
allowing Ameriprise's motion for reconsideration of the court's
denial of the company's motion for summary judgment because it was
nothing but "a plain regurgitation of [Ameriprise's] arguments
made within the [earlier] summary judgment motion. . . ." Putting
aside our authority to disregard such perfunctory appellate
claims, we disagree. See, e.g., Charles v. Rice, 28 F.3d 1312,
1319 (1st Cir. 1994).
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Where the district court believes with good reason that
it based its initial decision on an "error of law," or if its
ruling "patently misunderstood a party" or misapprehended the
question before it, we will not disturb the court's discretion to
allow a motion for reconsideration. Ruiz Rivera, 521 F.3d at 82.
And this is precisely what happened here. Initially, the district
court denied Ameriprise's motion for summary judgment, finding
"factual disputes over whether material misrepresentations were
made to" Ameriprise "and, if so, whether such misrepresentations"
were material. After considering Ameriprise's motion for
reconsideration, which argued "the Defendants’ opposition filings
make clear that the undisputed material facts warrant summary
judgment in Ameriprise’s favor," the district court reversed
course and explained why it had changed its mind. It granted the
motion for reconsideration because it had, "[a]fter further review
of the record and the pleadings, . . . conclude[d] that its denial
of Ameriprise's motion [for reconsideration] was in error."
Therefore, regardless of whether Ameriprise's motion for
reconsideration "regurgitated" its motion for summary judgment13
we analyze the district court's revamped reasoning in granting the
motion. Because the district court articulated that it had
13
For the record, the motion for reconsideration did no such
thing. Ameriprise responded to the arguments put forward in
opposition to summary judgment, and marshalled some of the evidence
submitted in opposition, including the Feldbergs' own statement of
facts, to demonstrate why the court erred initially.
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misapprehended the facts and (inadvertently) made a manifest error
of law, there was no abuse of discretion. See Palmer v. Champion
Mortg., 465 F.3d 24, 30 (1st Cir. 2006) (citation omitted). Now
onto the next stretch of GEICO's claims.
II. Appeals from Summary Judgment
The district court denied GEICO's remaining claims by
ruling against the company on summary judgment based on
Massachusetts law, and GEICO takes issue.14 The particular path
(or legal posture, as we say) demands that we investigate the
district court's decision in a specific, well-trodden manner known
as de novo review, where we start from scratch with the record and
legal arguments, see Norton v. Rodrigues, 955 F.3d 176, 183 (1st
Cir. 2020), examining the facts in the light most favorable to and
granting all reasonable inferences for the nonmovant (GEICO), see
Theriault v. Genesis HealthCare LLC, 890 F.3d 342, 348 (1st Cir.
2018). We will affirm a grant of summary judgment where "we are
satisfied that there is no genuine issue of material fact" and the
non-moving party (Ameriprise) "is entitled to judgment as a matter
of law." Mason v. Telefunken Semiconductors Am., LLC, 797 F.3d
14 In a case brought to us on diversity jurisdiction, we
frame the standard of review relying on federal law, while
resolving the legal questions based on the law of the state whose
law governs the dispute. See Mason v. Telefunken Semiconductors
Am., LLC, 797 F.3d 33, 38 (1st Cir. 2015). Neither party contests
that Massachusetts law controls whether Ameriprise had authority
to rescind. See Dumont v. Reily Foods Co., 934 F.3d 35, 40 (1st
Cir. 2019) (sitting in diversity jurisdiction, "we look to state
law, as articulated by the Supreme Judicial Court of Massachusetts,
for the substantive rules of decision").
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33, 37-38 (1st Cir. 2015). To overcome the summary judgment
roadblock, GEICO therefore must illustrate specific evidence "to
demonstrate that a trialworthy issue exists" such "that a
reasonable factfinder could resolve the [disputed] point in favor
of" GEICO, possibly "affect[ing] the outcome of the suit under the
applicable law." Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19
(1st Cir. 2003). GEICO cannot rely on "conclusory allegations,
improbable inferences, and unsupported speculation." Medina-Munoz
v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990). On
to the relevant law.
A. Driving Home a Duty to Inform
The dispute compresses to a simple premise. If the
renewal form sent by Ameriprise created a duty on the Feldbergs to
inform Ameriprise about updates to the Highlander's principal
place of garaging and customary drivers, and if the Feldbergs
failed to do so, then they would have committed a material
misrepresentation sufficient for Ameriprise to rescind coverage
according to Massachusetts law (at least so long as GEICO failed
to present any viable affirmative defenses, to which our journey
arrives next). GEICO contends there are sufficient and genuine
factual disputes such that the jury must decide whether Ameriprise
should have covered the Feldbergs (meaning Ameriprise would have
to pick up some of the tab for the Lamborghini and its driver that
racked up from the July accident because the Feldbergs had no such
duty to inform as claimed nor did they materially misrepresent
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anything). To assemble our conclusion, we follow a roadmap that
takes us first through the applicable Massachusetts law, then to
the language of the renewal form (which incorporated the original
auto policy) to see if the form imposed a duty to inform upon the
Feldbergs, and finally to see if any dispute of material fact
exists in the record about whether the Feldbergs breached their
duty.
i. Whether Massachusetts law creates a duty to inform
Massachusetts General Law ch. 175 § 186 codified the
common law rule that if an "insured makes a material
misrepresentation during the application or renewal period for an
insurance policy, the insurer may be able to deny [or rescind]
coverage on that basis." Commerce Ins. Co. v. Gentile, 36 N.E.3d
1243, 1246 (Mass. 2015) (per curiam); Barnstable Cty. Ins. Co. v.
Gale, 680 N.E.2d 42, 44 (Mass. 1997) (recognizing § 186 "is
declaratory of long-standing common law principles defining the
sort of false representations that can serve to avoid an insurance
policy"); see also Fed. Ins. Co. v. HPSC, Inc., 480 F.3d 26, 33-
34 (1st Cir. 2007) (describing insurance companies' right to
rescind under § 186). Timing is key because a misrepresentation
may become material during "the negotiation of a policy of
insurance." Mass. Gen. Laws ch. 175, § 186.15 So, we must
15 The full pertinent provision reads as follows:
No oral or written misrepresentation or warranty made in
the negotiation of a policy of insurance by the insured
or in his behalf shall be deemed material or defeat or
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determine whether the renewal forms sent by Ameriprise to the
Feldbergs constituted a negotiation under § 186.
The Supreme Judicial Court of Massachusetts has settled
that initial policy applications and certain renewal applications
-- those where an insurance company will not renew the policy
without the insured returning the form -- qualify as negotiations
under § 186. See Commerce, 36 N.E.3d at 1246 (citing Barnstable
Cty Ins. Co., 680 N.E.2d at 44). It is also clear that so-called
"ministerial renewals" -- those where the insurer sends a pro-
forma letter to insureds informing them of the pending renewal
that will occur without the insureds doing anything -- fall outside
of the negotiation definition. See Quincy Mut. Fire Ins. Co. v.
Quisset Props., Inc., 866 N.E.2d 966, 968 (Mass. App. Ct. 2007).
GEICO contends the renewal applications sent by Ameriprise fall
into the latter bucket because Ameriprise renewed the auto policy
yearly without the Feldbergs returning the renewal form; and, since
the unclear renewal letter allowed the Feldbergs to continue their
policy without reporting anything, GEICO argues the Feldbergs had
no duty to inform. For its part, Ameriprise maintains that its
renewal form fell within the first bucket because the company
clearly required the Feldbergs to report specific information
avoid the policy or prevent its attaching unless such
misrepresentation or warranty is made with actual intent
to deceive, or unless the matter misrepresented or made
a warranty increased the risk of loss.
Mass. Gen. Laws ch. 175, § 186(a).
- 22 -
about the Highlander's principal place of garaging and its
customary drivers, thereby creating a duty to inform about any
relevant material changes from the last policy term. To place
Ameriprise's renewal form in its proper category, we, as the
parties do, look to Quincy and cases interpreting its
characterization of Massachusetts insurance law before turning to
the language within the renewal form. See Blevio v. Aetna Cas. &
Sur. Co., 39 F.3d 1, 3 (1st Cir. 1994) (binding us to "intermediate
appellate state court decisions construing state law unless we are
convinced that the highest court of the state would decide
otherwise.").
Contrary to how GEICO interprets Quincy, the case is
clear that not every automatic policy renewal letter is a
ministerial renewal which would not qualify as a negotiation under
§ 186. If the insurer "requires the insured to provide updated
information to the insurer" and if the insurer identifies with
specificity "the information that it considers material and
request[s] from the insured updated information concerning any
changes," then the policy renewal letter is a policy renewal
application that qualifies as a negotiation under § 186. Quincy,
866 N.E.2d at 971. On the other hand, where the insurer provides
no such specific request, there is "no duty to identify changes
that are material," id. at 968, and the "insured's silence is not
a misrepresentation within the meaning of" § 186, id. at 971. The
insurer therefore "sets the parameters of the negotiation" by
- 23 -
"advis[ing] the insured of matters that are important to it." Id.
at 972. In other words, if the insurer solicits certain
information at the renewal, it creates a duty to inform about that
information because the renewal form constitutes a negotiation and
any nondisclosures by the insured pertinent to that request
constitute a material misrepresentation within § 186 such that the
insurer could rescind coverage after the insurance policy has taken
effect. See id.; see also Commerce Ins. Co. v. Gentile, 5 N.E.3d
960, 965-66 (Mass. App. Ct. 2014) (summarizing Quincy), aff'd on
other grounds, Commerce, 36 N.E.3d at 1246; 6 Plitt, Maldonado,
Rogers, & Plitt, Couch on Ins. § 81:21 (3d ed. Dec. 2020 update)
(silence does not constitute "concealment" without a specific
inquiry by the insurer). Therefore, to determine if Ameriprise's
policy renewal form falls into the category of negotiation and
imposes a duty to inform upon the Feldbergs, we must look to the
language of the renewal form.
ii. Whether the renewal form created a duty to inform
Because § 186 asks whether a material misrepresentation
occurred during the negotiation of a policy (aka before both
parties had agreed to its terms), we must, according to
Massachusetts's rules of construction, "examine and interpret the
relevant [renewal form] language," as a matter of law, prior to
addressing the alleged misrepresentation so that we can "identify
- 24 -
the [appropriate] information sought" by Ameriprise.16 Schultz v.
Tilley, 76 N.E.3d 1051, 1054 (Mass. App. Ct. 2017) (applying rules
of construction for insurance policies to insurance applications
16 Ameriprise urges us to affirm summary judgment because the
Feldbergs had a continuing duty to inform the company of material
changes throughout the policy period, and not solely at the
renewal. The Massachusetts Supreme Judicial Court has yet to
resolve whether insureds have such a duty. See Commerce, 36 N.E.3d
at 1246 ("We leave for another day the issue whether the duty of
continuing representation applies within the coverage period.").
We also need not reach the question considering that we conclude
the Feldbergs had a duty to inform at the 2017 renewal stage.
However, we pause to address a related argument by GEICO,
which contends that the proper response by Ameriprise to learning
about the Highlander's principal place of garaging and its
customary driver would not have been to rescind coverage, but to
increase the premium as allowed under paragraph 19 of the original
auto policy. This argument is premised on GEICO's assertion that
the Feldbergs' policy in 2018 was the same one as existed when
Philip added the Highlander on September 16, 2016; without a
continuing duty to inform of changes once coverage begins, as GEICO
contends, the district court could not have found the Feldbergs
materially misrepresented anything given their knowledge and
intent as of the initial 2016 policy application. This argument
hydroplanes into a snowbank. For one, Ameriprise renewed the
policy yearly on November 8 for a one year term, as indicated on
the coverage selections page. Even if the policy provided the
same substantive coverage, a new policy came into effect each year.
Therefore, the initial representations by the Feldbergs mattered
only as a baseline for what Ameriprise proposed the renewed policy
would cover, terms which the company would negotiate depending on
whether the Feldbergs reported any material changes. And, to
hammer home our point, paragraph 19 of the auto policy allows
Ameriprise to alter premiums based on changes "before th[e] policy
expires" (i.e. during the coverage period). As noted, this dispute
involves material misrepresentations made on the renewal form
after each year-long policy expired, meaning paragraph 19 does
GEICO no good. For another, Ameriprise would not have simply
increased the premium after learning about the Highlander's
Florida domain because its policy guidelines prohibit Ameriprise
from covering a vehicle principally garaged in another state.
- 25 -
and interpreting language as a matter of law) (quoting Hingham
Mut. Fire Ins. Co. v. Mercurio, 878 N.E.2d 946, 949 (Mass. App.
Ct. 2008)); see Performance Trans., Inc. v. Gen. Star Indem. Co.,
No. 20-1022, 2020 WL 7414202, at *3 (1st Cir. Dec. 18, 2020)
(applying Massachusetts rules of interpretation to examination of
insurance policy). We must pay careful attention to the presence
of ambiguities in the language Ameriprise used on the renewal form
to request the information, because an answer (or lack of an
answer) to an ambiguous question on an insurance renewal form, one
that "lends itself to more than one reasonable interpretation[,]
. . . cannot be labeled a misrepresentation." Mercurio, 878 N.E.2d
at 949. To determine whether an ambiguity exists, we look at the
"fair meaning of the language used." Schultz, 76 N.E.3d at 1054
(quoting Winbrook Commc'n Servs., Inc. v. U.S. Liab. Ins. Co., 52
N.E.3d 195, 201 (Mass. App. Ct. 2016)); see also Vicor Corp. v.
Vigilant Ins. Co., 674 F.3d 1, 11 (1st Cir. 2012) (applying
Massachusetts law to interpret insurance policy language as
"plainly expressed").
We both read the language and resolve any ambiguity by
interpreting the renewal form as a reasonable insured would
comprehend it. See Dorchester Mut. Ins. Co. v. Krusell, 150 N.E.3d
731, 738 (Mass. 2020); Bos. Gas Co. v. Century Indem. Co., 910
N.E.2d 290, 305 (Mass. 2009). A term of an insurance contract is
ambiguous under Massachusetts law if "reasonably intelligent
persons would differ" over the language's correct meaning,
- 26 -
Dorchester Mut. Ins. Co., 150 N.E.3d at 738 (quoting Citation Ins.
Co. v. Gomez, 688 N.E.2d 951, 953 (Mass. 1998)), and the "policy
language is susceptible to more than one rational interpretation,"
Valley Forge Ins. Co. v. Field, 670 F.3d 93, 97 (1st Cir. 2012)
(applying Massachusetts law) (quoting Brazas Sporting Arms, Inc.
v. Am. Empire Surplus Lines Co., 220 F.3d 1, 4-5 (1st Cir. 2000)).
With the rules of the road laid out, let's look to the insurance
renewal form sent by Ameriprise.
Ameriprise used language as precise as a GPS
tracker: it told the Feldbergs to report any changes to the
Highlander's principal place of garaging and to its customary
drivers.17 Unlike the ministerial renewal form in Quincy, which
generically asked the insured to check whether any information
contained within the policy had changed (and to notify the insurer
if so), 866 N.E.2d at 969, the renewal forms sent by Ameriprise
mirrored and incorporated the initial auto policy in specifying
the importance of accurate information concerning the Highlander's
principal place of garaging and customary drivers. The renewal
17 GEICO mistakenly applies a rule of Massachusetts
contractual interpretation that courts resolve ambiguities in
insurance contracts in favor of the insured because of the power
differential between the insurance company and the individual.
See Boston Gas Co., 910 N.E.2d at 305 ("Any ambiguities in the
language of an insurance contract are interpreted against the
insurer who used them and in favor of the insured.") (quoting
Allmerica Fin. Corp. v. Certain Underwriters at Lloyd's, London,
871 N.E.2d 418, 425 (Mass. 2007)). That rule, however, does not
apply to circumstances where, like here, the contract language is
ineluctably unambiguous. See Metro. Prop. & Cas. Ins. Co. v.
Morrison, 951 N.E.2d 662, 671 (Mass. 2011).
- 27 -
form's cover letter instructed the Feldbergs to "review the
Coverage Selections Page," which listed Peabody, Massachusetts as
the Highlander's principal place of garaging and the Feldbergs as
the vehicle's only customary drivers for "any application."
(Emphasis added.) The renewal form, in turn, required the
Feldbergs to return it only if "the information contained on the
Coverage Selections Page and in this form . . . is inaccurate or
obsolete" and stated that the Feldbergs "must inform [Ameriprise]
of any changes which may have a material effect on [the Feldbergs']
insurance coverage or premium charges, including" the Highlander's
principal place of garaging and customary operators. In several
other places on the renewal form, Ameriprise drove this message
home with language warning the Feldbergs of the risks of
nondisclosure, specifically that Ameriprise could rescind optional
coverages if the couple did not comply with Ameriprise's reporting
requirements outlined in the renewal letter.
Because Ameriprise solicited this specific information
from the Feldbergs as unambiguously stated in the renewal form,
the renewal form was a negotiation under § 186 as a matter of law,
thus establishing a duty upon the Feldbergs to inform Ameriprise
about, at the very least, the Highlander's principal place of
garaging and its customary drivers before Ameriprise automatically
renewed their policy, a duty to which the Feldbergs admittedly did
not conform. See Schultz, 76 N.E.3d at 1054-55 (no ambiguity where
- 28 -
language susceptible to only one interpretation); Cf. Quincy, 866
N.E.2d at 968.
iii. Whether the Feldbergs breached their duty to inform
Citing to Hanover Ins. Co. v. Leeds, 674 N.E. 2d 1091 (Mass.
App. Ct. 1997), RLI Ins. Co. v. Santos, 746 F. Supp. 2d 255 (D.
Mass. 2010), and Progressive Direct Ins. Co. v. Martin, 425 F.
Supp. 3d 48 (D. Mass. 2019), GEICO's briefing acknowledges that
information about vehicle garaging and customary drivers is
ordinarily material information which must be disclosed during
insurance contract negotiation, and the failure to do so triggers
an insurer's rescission rights.18 See also Mercurio, 878 N.E.2d
at 949 ("A material misrepresentation in an application for an
insurance policy will give the insurer the right to rescind it.")
(citing Barnstable Cty Ins. Co., 680 N.E.2d at 44); cf. Christy v.
Travelers Indem. Co. of Am., 810 F.3d 1220, 1227 (10th Cir. 2016)
18 "A 'material fact' is one which would 'naturally influence
the judgment of [an] underwriter in making the contract at all, or
in estimating the degree and character of the risk, or in fixing
the rate of the premium.'" Leeds, 674 N.E.2d at 1094 (quoting
Emp'rs' Liab. Assur. Corp. v. Vella, 321 N.E.2d 910, 913 (Mass.
1975)); see also Fed. Ins. Co., 480 F.3d at 34 (material fact one
which would "naturally influence" underwriter). An Ameriprise
underwriter stated during a deposition that the company would not
have covered the Highlander if it knew the principal place of
garaging was in Florida, and that Ameriprise would have increased
the Feldbergs' premium if it knew Dawn was a customary driver
because such activity increased the risk of loss to Ameriprise.
See Mass. Gen. Laws ch. 175 § 186 (information deemed material if
it would increase the risk of loss); Commerce, 5 N.E.3d at 965
("If knowledge of a fact would naturally influence the judgment of
the underwriter in the formation of the contract at all, or in the
estimation of the character or degree of risk, or in the
calculation of the premium, the fact is material.").
- 29 -
(assessing whether insurance renewal contract imposed affirmative
duty upon insured to inform insurer about changes in business
form).
But GEICO rolls out an argument as to why nondisclosure
here should not trigger Ameriprise's legal right to rescind
coverage of the Feldbergs' policy which boils down to this. The
Feldbergs could not have misrepresented the Highlander's principal
place of garaging and its customary drivers because they either
did not intend to misinform or they did not know that the
circumstances of the Highlander's time in Florida fell within any
duty imposed by the renewal form.19 We are not persuaded.
First, § 186 allows insurance companies to rescind
coverage for any material misrepresentation which increased the
insurer's risk of loss, no matter if the insured intended to
deceive or knew they were deceiving the insurer. See Mass. Gen.
Laws ch. 175, § 186; Progressive Direct Ins. Co., 425 F. Supp. 3d
at 53 ("an insurer may void a policy even if the policyholder made
an innocent misrepresentation of material fact if the disclosure
19GEICO also argues that it would be impossible for the
Feldbergs to have materially misrepresented the principal place of
garaging and customary drivers of the Highlander in 2016 when they
initiated the policy because Philip intended to return the
Highlander to Peabody for more than half the year at that time.
The argument fails the driver's test because the Feldbergs renewed
the auto policy in 2017 when they had updated information about
the principal place of garaging and customary drivers. Philip's
intent in 2016 (or 2017 for that matter) does not affect the facts
at the time of renewal in 2017.
- 30 -
of the truth would have affected the insurer's decision in fixing
the rate of premium") (internal quotation marks and citations
omitted); Leeds, 674 N.E.2d at 1094 ("A misrepresentation in an
application for insurance will enable the insurer to avoid the
policy if the misrepresentation was made with actual intent to
deceive, or [if] it is material."). Therefore, even if Philip may
have believed he garaged the Highlander at his primary residence
in Peabody, his claims of nescience are irrelevant. Plus, having
reviewed Philip's recorded phone calls with Ameriprise and his
examination under oath (not to mention the rest of the record),
color us skeptical. After adding the Highlander to his policy in
September 2016, Philip "almost immediately" moved it to Florida
and the undisputed evidence proves the vehicle never returned to
Massachusetts before the July 2018 accident. It also does not
matter if Philip intended, as he claims, to eventually return the
Highlander to Massachusetts once his health improved; the vehicle,
as the Feldbergs were aware, remained constantly garaged in Florida
at the time the Feldbergs opted not to send back the renewal form
to Ameriprise in September 2017. Cf. Vaiarella v. Hanover Ins.
Co., 567 N.E.2d 916, 920 (Mass. 1991) (intentions to move in with
son did not mean mother was a member of son's household for
purposes of insurance claim).
As to the customary driver nondisclosure, the record
makes clear Philip parked the Highlander at Dawn's house for the
months he and Claudia returned to Massachusetts, leaving Dawn a
- 31 -
set of keys and permitting her to drive the vehicle as she pleased,
which Dawn admitted to doing about three times a week. As for the
plea of definitional naivete, although the auto policy did not
define customary operator and the Feldbergs never expressly stated
they knew Dawn was a customary driver, a reasonable insured would
interpret the renewal form's phrase "customary operators" to
include drivers, like Dawn, who drove an insured vehicle at least
three times a week for the more than half the year the Feldbergs
resided in Massachusetts. See Boston Gas Co., 910 N.E.2d at 305.
The undisputed facts therefore lead us to only one
conclusion; the Feldbergs misrepresented information, which was
material, regardless of whether the Feldbergs did so
intentionally. And absent the successful application of one of
GEICO's affirmative defenses, Ameriprise could, as the district
court found, rescind the Feldbergs' coverage as a matter of law
after the policy took effect because the misrepresentation
breached the Feldbergs' duty under § 186.20 See Christy, 810 F.3d
at 1230-31 (nondisclosing party must know or have reason to know
20
GEICO also alleges the district court drew impermissible
factual inferences in favor of Ameriprise because, according to
GEICO, there was no evidence the Feldbergs knew Dawn was a
customary driver or that they intended to deceive Ameriprise
concerning the principal place of garaging, at least as of 2016
when they added the Highlander to the policy. GEICO's arguments
provide imprecise direction at best. As outlined, the district
court in its ruling merely restated the undisputed facts; it drew
no inferences, let alone impermissible ones in favor of the moving
party about material facts. See Theriault, 890 F.3d at 348.
- 32 -
nondisclosure will affect insurer's decision making) (citing
Quincy, 866 N.E.2d at 968-74).
B. GEICO Attempts to Change Lanes (Affirmative Defenses)
In Massachusetts, GEICO can only rest its claims that
Ameriprise's conduct "bars it from disclaiming coverage . . .
either on [the affirmative defense of] estoppel or [] waiver."
Merrimack Mut. Fire Ins. Co. v. Nonaka, 606 N.E.2d 904, 906 (Mass.
1993). Such defenses are legal arguments GEICO can assert to
defeat Ameriprise's otherwise lawful right to rescind the
Feldbergs' auto insurance after it took effect. GEICO can only
succeed at blocking Ameriprise's rescission rights (and summary
judgment in Ameriprise's favor) if we conclude the district court
mistakenly determined GEICO put forth insufficient evidence to
support its affirmative defenses. Examining the facts once more
in the light most favorable to GEICO to determine whether either
defense can carry the day, we find neither succeeds. See
Theriault, 890 F.3d at 348.
i. Estoppel
Estoppel is a legal term with several applications,
including as an affirmative defense. See Nat'l Med. Care, Inc. v.
Zigelbaum, 468 N.E.2d 868, 874 (Mass. App. Ct. 1984) (citing Mass.
R. Civ. P. 8(c)). GEICO relies on estoppel to mean Ameriprise
made certain representations which induced the Feldbergs not to
report the Highlander's principal place of garaging or to disclose
Dawn as a customary driver (in other words, the Feldbergs only
- 33 -
breached their duty because of Ameriprise's actions). If
Ameriprise's conduct indeed induced the Feldbergs "to do something
different from what otherwise would have been done and which has
resulted" in Ameriprise rescinding coverage, then Ameriprise would
be estopped from rescinding the Feldbergs' policy. Royal-Globe
Ins. Co. v. Craven, 585 N.E.2d 315, 319 (Mass. 1992); see also
Kanamaru v. Holyoke Mut. Ins. Co., 892 N.E.2d 759, 766 (Mass. App.
Ct. 2008) ("Estoppel is appropriate where a party can demonstrate
'(1) a representation intended to induce reliance on the part of
a person to whom the representation is made; (2) an act or omission
by that person in reasonable reliance on the representation; and
(3) detriment as a consequence of the act or omission.'") (quoting
Sullivan v. Chief Justice for Admn. & Mgmt. of the Trial Court,
858 N.E.2d 699, 711 (Mass. 2006)).
Specifically, GEICO contends that: (1) Ameriprise's
renewal cover letter only directed the Feldbergs to review
"coverages, deductibles[,] and benefits" without mention of the
principal place of garaging or the customary operators; and
(2) Ameriprise did not "advise the Feldbergs of the potential
coverage issue, or advise them that they should inform [Ameriprise]
of the exact time periods they traveled to Florida or the identity
of the vehicles that would be in Florida with them" following the
January 2018 claim involving damage sustained by the Feldbergs'
RAV4 in a Florida Walmart parking lot. The theories fail to spark
the ignition.
- 34 -
As discussed above, the undisputed facts show Ameriprise
provided plenty of notice in its renewal cover letter and renewal
form that the company required the Feldbergs to check the accuracy
of the policy's information regarding the Highlander's principal
place of garaging and its customary drivers. See Mundy v.
Lumberman's Mut. Cas. Co., 783 F.2d 21, 23 (1st Cir. 1986) ("even
'a casual reading of the mailed [insurance] material' would have
given the plaintiffs adequate notice" of changed coverage
limitations) (quoting Gov't Emps. Ins. Co. v. United States, 400
F.2d 172, 175 (10th Cir. 1968)); Cass v. Lord, 128 N.E. 716, 717
(Mass. 1920) ("It is of no consequence that the plaintiff did not
read the policy . . . . He is bound by the contract into which he
voluntarily entered."). As we earlier discussed, the renewal form
was not ambiguous, as GEICO contends, so as to estop Ameriprise
from rescinding based on the Feldbergs' decision not to return the
2017 renewal form with updated information about the Highlander's
principal place of garaging and its customary drivers. See Vicor
Corp., 674 F.3d at 11 (reading clear insurance policy language for
express meaning).
Second, the record reveals no evidence from which we
could determine Ameriprise failed to comply with any duty it owed
the Feldbergs so as to estop the company from rescinding coverage.
Generally, an insurance company in Massachusetts can rely on the
representations made by the insured when providing coverage
without needing to conduct independent investigations, and GEICO
- 35 -
does not clarify why Ameriprise would have had any duty to ask the
Feldbergs for information about vehicles not involved with the
January 2018 accident when investigating that claim. See Gen.
Star Indem. Co. v. Duffy, 191 F.3d 55, 59 (1st Cir. 1999)
("Massachusetts law does not impose an affirmative obligation on
an insurer to investigate and verify the accuracy of an insured's
representations."). Although Ameriprise flagged the January 2018
claim as a coverage risk because it occurred in Florida where the
Feldbergs owned a second home, and although the company may have
learned at that time that the Highlander was in the Sunshine State
and that Dawn sometimes drove it, Ameriprise ultimately closed its
investigation without incident for the Feldbergs after determining
the couple garaged the RAV4 at their Florida home for less than 6
months of the year, a time frame which accorded with Ameriprise's
insurance policy guidelines. GEICO has not alleged any fact from
which we could conclude Ameriprise's January 2018 investigation
into the RAV4, which the Feldbergs properly listed as garaging in
Peabody, Massachusetts, triggered either a duty to investigate
whether the Feldbergs garaged the Highlander in Florida for more
than half of the year, or a duty to advise the Feldbergs of a
potential coverage issue Ameriprise did not think existed.
Ameriprise's failure to do either therefore could not estop it
from rescinding the Feldbergs' coverage.
- 36 -
ii. Waiver
On the final stretch of this appellate journey, we
examine a doctrine known as waiver, GEICO's second affirmative
defense to the rescission of the Feldbergs' insurance policy. See
Duffy, 191 F.3d at 59. Ameriprise could have waived its right to
rescind coverage through an "express and affirmative act" or
implicitly by "conduct . . . consistent with and indicative of an
intent to relinquish voluntarily a particular right [such] that no
other reasonable explanation of [the] conduct is possible." KACT,
Inc. v. Rubin, 819 N.E. 2d 610, 616 (Mass. App. Ct. 2004)
(alterations in original) (citation and internal quotation marks
omitted); see also Nonaka, 606 N.E.2d at 906 ("intention to waive
a ground for not providing coverage may be inferred from the
circumstances"). An insurer also waives its right to rescind (or
disclaim) coverage and must provide coverage despite a breach by
the insured where the company "kn[ows] the facts, fail[s] to
disclaim within a reasonable time, and act[s] in a way inconsistent
with an intention to disclaim." French King Realty Inc. v.
Interstate Fire & Cas. Co., 948 N.E.2d 1244, 1256 n.19 (Mass. App.
Ct. 2011) (quoting Nonaka, 606 N.E.2d at 906 n.5). Whether waiver
occurred is a heavily factual inquiry, so we peek under the hood
- 37 -
one more time to examine the record evidence. See M.J.G. Props.,
Inc. v. Hurley, 537 N.E.2d 165, 167 (Mass. App. Ct. 1989).
GEICO alleges Ameriprise waived its right to disclaim
optional coverages by providing the Feldbergs with a rental car
and by paying for a limited amount of medical care.21
Recall, Ameriprise provided the Feldbergs with five days
of rental car coverage on July 25, 2018, the day after the
Highlander's accident, which predated Ameriprise's investigation
of the claim. GEICO, however, has not adduced any facts suggesting
Ameriprise knew the Feldbergs had principally garaged the
Highlander in Florida or that Dawn was a customary driver at the
time of extending the option of a rental car. Even though
Ameriprise knew the Feldbergs brought their RAV4 to Florida for
less than half of the year and that the Highlander spent some time
in Florida prior to July 24, such information does not support a
21 GEICO also restructures its estoppel defenses as waiver
defenses, first arguing Ameriprise waived its right to rescind
because it did not "insist upon the return of a completed renewal
form or application as a condition of a renewal of the policy."
Next GEICO contends Ameriprise waived its right to rescind coverage
because "it had specific information that the Highlander may have
been garaged in Florida at least as early as January 2018, yet it
took no action to investigate further or require the Feldbergs to
execute a renewal application reaffirming the information within
their policy." For the same reasons as discussed for estoppel,
Ameriprise has not waived its right to rescind coverage because
its conduct in the renewal letter and in investigating the January
2018 claim could not possibly indicate a wish to disclaim that
right. KACT, 819 N.E.2d at 616 ("where waiver is not explicit, it
must be premised on 'clear, decisive and unequivocal conduct.'"
(quoting Glynn v. City of Gloucester, 401 N.E.2d 886, 892 (Mass.
App. Ct. 1980)).
- 38 -
reasonable inference that Ameriprise knew or should have known the
crucial details about the Highlander upon which the company would
later rely to rescind the policy at the time that it extended
optional rental car coverage. See Niagara Fire Ins. Co. v. Lowell
Trucking Corp., 56 N.E.2d 28, 31 (Mass. 1944). On the record, the
earliest Ameriprise could reasonably have been expected to
discover the truth justifying its decision to rescind was when the
company first interviewed Philip and Dawn on July 27, two days
after Ameriprise extended the five days of optional rental car
coverage. Because an insurance company in Massachusetts cannot
waive its right to rescind by providing optional coverages before
it has the "full knowledge of the circumstances attendant upon the
loss . . . in question," id. at 31, as a matter of law, Ameriprise
did not waive its right to rescind, whether implicitly or
explicitly, by extending optional rental coverage in these
circumstances, see French King Realty, 948 N.E.2d at 1256 n.19.
As for the extension of medical coverage, GEICO alleges
Ameriprise "voluntarily waived its right to rescind the totality
of the optional bodily injury coverages under the policy" because
it acted inconsistently by tendering certain medical coverage for
Dawn to the Feldbergs in a November 2, 2018 letter, while refusing
to provide other optional bodily coverage. GEICO misses the finish
line. In the letter, Ameriprise extended compulsory coverage as
required by Massachusetts law and offered certain additional
coverage as a courtesy, while simultaneously denying any optional
- 39 -
coverage. The choice to rescind optional bodily coverage due to
the Feldbergs' material misrepresentations is neither inconsistent
with Ameriprise's legal requirement to provide compulsory
insurance, see Mass. Gen. Laws ch. 90, §§ 34A-34R, nor is
Ameriprise's decision to offer courtesy coverages inconsistent
with its intent to disclaim the optional coverages, see French
King Realty, 948 N.E.2d at 1256 n.19 (quoting Nonaka, 606 N.E.2d
at 907 n.5. GEICO's waiver arguments fail as a matter of law, and
the district court properly granted summary judgment. See Mason,
797 F.3d at 37-38.
Conclusion
We have driven the length of the appellate arguments
only to discover GEICO could not get its car out of park. The
district court's decision is affirmed. Each side shall bear its
own costs.
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