Skiffington v. Liberty Mutual Insurance Co.

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17-P-425 Appeals Court
ANN SKIFFINGTON vs. LIBERTY MUTUAL INSURANCE COMPANY.
No. 17-P-425.
Hampden. November 9, 2017. - March 8, 2018.
Present: Meade, Shin, & Ditkoff, JJ.
Motor Vehicle, Insurance. Insurance, Motor vehicle insurance,
Construction of policy, Coverage, Settlement of claim,
Amount of recovery for loss.
Civil action commenced in the Superior Court Department on
January 25, 2016.
A motion to dismiss was heard by Constance M. Sweeney, J.
Matthew T. LaMothe for the plaintiff.
Daniel P. Tighe for the defendant.
SHIN, J. Following a motor vehicle accident, the
plaintiff, a third-party claimant, received reimbursement from
Liberty Mutual Insurance Company (Liberty Mutual) for the loss
of her vehicle. She then sought additional payment for
(1) costs arising from loss of use of her vehicle, even though
she was unable to produce any documentation to Liberty Mutual
2
that she had paid for substitute transportation, and (2) her
title and registration fees and the residual value of her
inspection sticker. When Liberty Mutual denied liability for
these claims, the plaintiff brought this putative class action,
seeking declaratory relief under G. L. c. 231A and damages for
unfair claim settlement practices under G. L. c. 93A, § 9, and
G. L. c. 176D, § 3(9). On Liberty Mutual's motion, a Superior
Court judge dismissed the complaint in its entirety under
Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), and the plaintiff
appeals. As we conclude that the plaintiff has failed to allege
compensable damages, we affirm, modifying the judgment to
declare the rights of the parties.
Background. We accept the allegations of the amended
complaint as true for purposes of this appeal. See Goodwin v.
Lee Pub. Schs., 475 Mass. 280, 284 (2016). In October of 2015,
the plaintiff's 2005 Nissan Altima was struck by a driver whose
vehicle was insured by Liberty Mutual under a standard
Massachusetts automobile policy.1 The plaintiff's vehicle was
declared to be a total loss. After determining that its insured
1 Copies of the policy and Liberty Mutual's responses to the
plaintiff's G. L. c. 93A demand letter were attached to Liberty
Mutual's motion to dismiss. The judge could consider these
documents without converting the motion into one for summary
judgment. See Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222,
224 (2011), S.C., 466 Mass. 156 (2013).
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was responsible for the accident, Liberty Mutual reimbursed the
plaintiff for the loss of her vehicle.
The plaintiff then sent Liberty Mutual a demand letter
under G. L. c. 93A, claiming that she was also entitled to
payment for loss of use, title and registration fees, and the
residual value of her inspection sticker. Liberty Mutual sent a
letter in response detailing its rationale for denying the
claims. Liberty Mutual also requested, on at least two
occasions, that the plaintiff provide "documentary or other
proof indicating that she actually incurred" costs relating to
loss of use -- such as receipts showing she rented a replacement
vehicle or took public transportation. It is uncontested that
the plaintiff never provided any such substantiation.
Discussion. We review de novo the judge's allowance of
Liberty Mutual's motion to dismiss under Mass.R.Civ.P. 12(b)(6).
See Goodwin, 475 Mass. at 284. In conducting our review, we
"accept[] as true the facts alleged in the plaintiff['s]
complaint and exhibits attached thereto, and favorable
inferences that reasonably can be drawn from them." Ibid.,
quoting from Burbank Apartments Tenant Assn. v. Kargman, 474
Mass. 107, 116 (2016).
1. Loss of use. Despite failing to plead actual costs
related to loss of use of her vehicle, the plaintiff contends
that she is still entitled to some unspecified amount of damages
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because the standard policy provides coverage whether or not she
actually incurred costs for substitute transportation. We
disagree. To determine what damages are compensable under the
standard policy, we must interpret the policy's words "in light
of their plain meaning, giving full effect to the document as a
whole." Given v. Commerce Ins. Co., 440 Mass. 207, 209 (2003)
(citation omitted). We consider "what an objectively reasonable
insured, reading the relevant policy language, would expect to
be covered." Ibid., quoting from Hazen Paper Co. v. United
States Fid. & Guar. Co., 407 Mass. 689, 700 (1990).
Furthermore, because the policy language is prescribed by the
Commissioner of Insurance, we do not construe any ambiguities in
it against the insurer. Golchin v. Liberty Mut. Ins. Co., 460
Mass. 222, 225 (2011), S.C., 466 Mass. 156 (2013).
With respect to third-party claimants, coverage is governed
by part 4 of the policy, which provides that the insurer "will
pay . . . the amounts that [the third party] is legally entitled
to collect for property damage through a court judgment or
settlement," including "the costs resulting from the loss of use
of the damaged property" (emphasis supplied). We construe the
word "costs" according to its "usual and accepted meaning."
Mount Vernon Fire Ins. Co. v. Visionaid, Inc., 477 Mass. 343,
348 (2017), quoting from Federal Natl. Mort. Assn. v. Rego, 474
Mass. 329, 334 (2016). In ordinary usage "cost" refers to "the
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amount or equivalent paid or charged for something," Merriam-
Webster's Collegiate Dictionary 282 (11th ed. 2007); it means,
in other words, an expense that is actually incurred. "As the
plain meaning of the word . . . is clear, we do not deviate from
it." Mount Vernon Fire Ins. Co., supra at 348.
Attempting to sidestep this plain language, the plaintiff
asserts that the standard policy conflicts with G. L. c. 90,
§ 34O, as appearing in St. 1976, c. 266, § 7, which requires
"[e]very policy of property damage liability insurance [to]
provide that the insurer will pay on behalf of the insured all
sums the insured shall become legally obligated to pay as
damages because of injury to or destruction of property,
including loss of use thereof" (emphasis supplied). The
plaintiff's assertion of a conflict is based on the fact that
the statute does not refer explicitly to "costs." But that
omission does not create any conflict with the policy because
the statute also does not define what constitutes "loss of use
thereof." It was therefore within the authority of the
Commissioner of Insurance to fill in that gap when "decid[ing]
what the terms of a standard policy will be." Colby v.
Metropolitan Property & Cas. Ins. Co., 420 Mass. 799, 806
(1995). See Given, 440 Mass. at 213-214.
The tort decisions cited by the plaintiff do not aid her
cause. None of those decisions directly addressed the question
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whether a plaintiff can recover loss of use damages absent proof
of any actual out-of-pocket expenses. And as a more general
matter, the plaintiff does not explain why common-law tort
principles should trump the plain language of the standard
policy. See id. at 210-211 ("[T]he issue before us is not
whether, in some other context, diminution in market value would
be an appropriate method by which to calculate monetary damages
for some form of injury to property," but whether "that is the
form or measure of 'damage' that the standard policy is intended
to cover").
Even assuming, moreover, that tort law informs our
analysis, the plaintiff fares no better in light of our recent
decision in Ramirez v. Commerce Ins. Co., 91 Mass. App. Ct. 144
(2017). At issue there was the provision in part 4 of the
standard policy requiring reimbursement of "applicable sales
tax." We held that the plaintiff was not automatically entitled
to such reimbursement but, rather, had to "provide to the
insurer proof of the payment of sales tax on a replacement
automobile." Id. at 148. Citing tort cases, we reasoned that
the insurer "is only responsible for placing the plaintiff in
the same position as he was before suffering the loss." Id. at
147-148. Thus, the plaintiff had to "establish[] that [sales
tax] is an element of the damages he incurred or will incur"
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before he could recover "applicable sales tax" from the insurer.
Id. at 148.
We similarly conclude that the plaintiff had to
substantiate to the insurer that she incurred actual damages --
i.e., actual costs for substitute transportation -- to recover
for loss of use under part 4 of the standard policy. As the
plaintiff does not dispute that she did not incur actual costs,
she is not entitled to loss of use damages.
2. Title, registration, and inspection fees. We decline
to consider the plaintiff's claim that Liberty Mutual is liable
for her title and registration fees and the residual value of
her inspection sticker. The plaintiff does not point to any
provision in the standard policy that would entitle her to
reimbursement of those fees. Instead, she relies exclusively on
tort law. But again, the scope of Liberty Mutual's obligation
to pay is governed by the policy. See Given, 440 Mass. at 210-
211. The plaintiff does not contend that title, registration,
and inspection fees constitute "property damage" under part 4 of
the policy or that they are covered by some other provision of
the policy. As she has thus failed to make an adequate argument
based on the language of the policy, we do not consider her
claim.2
Our rejection of the plaintiff's arguments necessarily
2
disposes of her claims that Liberty Mutual engaged in unfair
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Conclusion. Although there was no error in the judge's
allowance of Liberty Mutual's motion to dismiss the complaint,
the judge was required to make a declaration of the rights of
the parties. See Boston v. Massachusetts Bay Transp. Authy.,
373 Mass. 819, 829 (1977). The judgment below shall therefore
be modified to declare that Liberty Mutual is not obligated to
pay the plaintiff damages for loss of use, title or registration
fees, or the residual value of her inspection sticker. As so
modified, the judgment is affirmed.
So ordered.
claim settlement practices in violation of G. L. c. 93A and
G. L. c. 176D. See Ramirez, 91 Mass. App. Ct. at 145 n.2.