DocketNumber: No. 03-P-422
Citation Numbers: 61 Mass. App. Ct. 337
Judges: Doerfer
Filed Date: 6/18/2004
Status: Precedential
Modified Date: 6/25/2022
The plaintiff, MJ. Flaherty Company, a subcontractor, and R.W. Granger & Sons, Inc. (Granger), the general contractor (for whom the defendant, United States Fidelity & Guaranty Company [USF&G], had provided a surety bond), were engaged in litigation commenced in 1998 over moneys allegedly owed to the plaintiff under the HVAC (heating, ventilat
In September, 2002, the plaintiff took the position that USF&G, as surety for the contractor, was refusing to make a reasonable offer of settlement after liability had become reasonably clear. The plaintiff filed a complaint alleging that the defendant had breached obligations it allegedly had under G. L. c. 176D, § 3(9)(f), by engaging in unfair settlement practices and thus was in violation of G. L. c. 93A.
The defendant moved to dismiss the new action under Mass.R.Civ.P. 12(b)(9), 365 Mass. 754 (1974), on the ground of prior action pending. In view of the separate and distinct claims raised in the second action, it was error to allow that motion.
Facts. In the underlying dispute the complaint alleged that Granger wrongfully refused to pay the plaintiff $89,412.14 that Granger allegedly admitted was due on the subcontract and that Granger owed the plaintiff an additional $32,451.86, as well as damages for delay of the project. The complaint sought payment from the defendant based on the payment bond it had issued under G. L. c. 149, § 29.
In the present action, the plaintiff sought to recover multiple damages and attorney’s fees under G. L. c. 93A, based on the defendant’s failure to reasonably investigate and settle its claims after liability became reasonably clear. The complaint recited standard allegations relevant to an unfair settlement practices complaint, invoking G. L. c. 176D, § 3(9)(f), as a ground (and the only ground) for a claim under G. L. c. 93A, § 11.
In its motion under Mass.R.Civ.P. 12(b)(9), the defendant argued that, since the first lawsuit involved the same parties and the same facts and circumstances, the second suit should be dismissed as a prior pending action.
Although the two actions both relate to the performance of a contract between the plaintiff and Granger for work on the Tsongas arena project, there is a fundamental difference between the claims against the surety in the first and second actions. In the first action, the surety stands in the shoes of Granger, and is liable only to the extent that Granger is liable. See Mestek, Inc. v. United Pac. Ins. Co., 40 Mass. App. Ct. 729, 731 (1996); John W. Egan Co. v. Major Constr. Mgmt. Corp., 46 Mass. App. Ct. 643, 646 (1999). In the subsequent action, the liability of the surety is claimed to derive from the requirements of a statute, G. L. c. 176D, § 3(9)(f), that allegedly applies to a surety on a public construction contract. See R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. 66, 71 n.8 (2001) (where the statute was assumed to apply and its application was not an issue in the case).
Furthermore, although the second action involves a consideration of the merits of the breach of contract claim, that consideration is once removed from the actual resolution of the merits. The issue in the second case is not who must prevail on the contract claim as a matter of law and fact, but rather whether the defendant made a reasonable assessment of the merits of the claim and, in the light of that reasonable assessment, was required to and did make a reasonable offer of settlement if liability and damages were reasonably clear.
Judgment reversed.
The defendant also moved in the alternative to consolidate the actions and to issue a new tracking order. See Mass.R.Civ.P. 42(a), as amended, 423 Mass. 1402 (1996). However, as the parties tried the first action in November and December, 2002, before the motion judge heard the motion to dismiss the second action, this request was moot at the time of decision. The outcome of that trial and the status of any judgment resulting therefrom is not revealed in the record. The parties do not address the relevance to this appeal of the
The situation is somewhat confused by the fact that in the original action the plaintiff had claimed that Granger was in violation of G. L. c. 93A because one part of the plaintiff’s claim was not disputed by Granger. But the liability, if any, of the defendant on this claim derived from its status as a stand-in for Granger, not as an insurer of Granger’s liability.
Consolidation of the two cases in such a situation, however, would further the goal of judicial economy and possibly lead to a speedier end to litigation. See Mass.R.Civ.P. 42(a), as amended, 423 Mass. 1402 (1996); Hurwitz v. Bocian, 41 Mass. App. Ct. 365, 369 (1996). The trial judge could regulate the litigation of the two claims in a consolidated action to avoid prejudicing the underlying contract claim by revelations of facts that are relevant only to the unfair settlement claim. Here, it appears the parties did not discuss the option of consolidation with the trial judge, even though the defendant had asked for consolidation, in the alternative, in its motion to dismiss. Trying the one claim after the first has gone to final judgment and with a different judge is an “undesirable” circumstance. Wyler v. Bonnell Motors, Inc., 35 Mass. App. Ct. 563, 564 n.2 (1993).
This was the approach taken in Bobick v. United. States Fid. & Guar. Co., 439 Mass, at 654-655.