DocketNumber: No. P.C. 00-5284
Judges: GIBNEY, J.
Filed Date: 10/12/2004
Status: Non-Precedential
Modified Date: 4/18/2021
1. Berkshire issued an automobile insurance policy to William Doherty which was in effect at the time of the accident.
2. Allstate issued an insurance policy to Arkadi Marchikov which was in effect at the time of the accident.
3. On or about October 11, 1997, Arkadi Marchikov struck Mr. Doherty's vehicle from behind, injuring Mr. Doherty's daughter.
4. As a result of the accident, Ms. Doherty was treated for back and neck injuries at Merolla Chiropractic.
5. Neither Mr. Marchikov nor Allstate dispute Mr. Marchikov's liability for the accident and resulting injuries to Ms. Doherty.
6. On December 22, 1998, Berkshire paid Merolla Chiropractic medical expenses of $5,410 for treatment of the injuries to Mr. Doherty's daughter, as required by the Personal Injuries Protection (PIP) provision of Mass. Gen. Laws Ch. 90 § 34M.
7. Mr. Marchikov and Allstate settled with Mr. Doherty's daughter. A release was signed on January 13, 1999 and Allstate issued payment on January 18, 1999.
8. On July 1, 1999, Berkshire wrote to Allstate requesting reimbursement for PIP payments.
9. Allstate has declined to reimburse Berkshire for medical expenses Berkshire paid under the PIP provision of the policy ($5,410).
10. Berkshire has not been reimbursed for the $5,410 in medical expenses it paid under the PIP provision of the policy.
Another noteworthy fact, not stipulated to by the parties, is the settlement Allstate reached with Ms. Doherty in the amount of $7,475.
In the case at bar, two insurance companies are attempting to bring final resolution to a dispute arising out of an automobile accident. The choice of law does not pertain to a dispute about which laws of negligence to apply in order to determine fault. Indeed, while Rhode Island law may apply to determine liability regarding the automobile accident in this case, there is no question of fault before this Court. The question here is whether the insurance law of Rhode Island or Massachusetts applies. Allstate challenges the applicability of the Massachusetts statute to this case, while Berkshire alleges that their compliance with M.G.L. ch. 90 § 34M grants them a right of reimbursement against Allstate. If Massachusetts law applies, Berkshire will be entitled to an award of such reimbursement.
Here, this Court must weigh the competing interests of all parties. The accident and resulting injury took place in Rhode Island Massachusetts, however, "has a more significant relationship" because both Doherty and Berkshire are Massachusetts citizens. The relationship between Doherty and Berkshire is centered in Massachusetts. Taylor,
Massachusetts citizens and their insurers must be able to count on the applicability of a statute that seeks to protect all involved and make more efficient the often tangled and confusing process of insurance reimbursement. Just as insurers and insureds in Massachusetts should be able to count on the predictability of the result in such disputes, so too should other insurance companies outside Massachusetts, which may encounter such PIP reimbursements when dealing with a Massachusetts insurer, as was the case here. See Pardey,
Allstate argues that Berkshire did not comply with statutory provisions in dispensing the PIP payment, and therefore, has no right to reimbursement. Allstate opines that Rhode Island law should apply, thereby nullifying any claim Berkshire has to PIP payment reimbursement. Allstate also suggests that in order for Berkshire to demand a decision in equity, it must have "clean hands," but arguably does not. Allstate alleges that Berkshire's allegedly "unclean hands" result from failures in communication between Allstate and Berkshire with regard to whether or not PIP payments had or would be made to Doherty.
The Court notes that the evident breakdown in or failure of communication between the Allstate and Berkshire claims representatives is a basis of this dispute. Had communications been more diligently made and carefully tracked, this matter would likely have been settled or decided much sooner. Additionally, Berkshire should have been a part of the settlement process between Allstate and Doherty.
The Supreme Court of Rhode Island recognizes that subrogation is "a device adopted by equity to compel the ultimate discharge of an obligation by the party who in good conscience ought to pay it." UnitedStates Inv. Dev. Corp. v. Rhode Island Dep't of Human Services,
This Court finds that Allstate entered into settlement and release negotiations without including Berkshire in any of the communications, even though Allstate had knowledge that Berkshire insured Doherty. The settlement reached made no mention of Berkshire, PIP payments, medical expenses, or Berkshire's right to seek reimbursement through subrogation, etc. The release cannot serve to bar Berkshire's claim for reimbursement, especially in light of the fact that Berkshire paid the medicals approximately 3-4 weeks prior to Allstate's settlement. SeeAllstate Ins. Co. v. Mazzola,
This Court also finds that Allstate had knowledge of the medical expenses, as well as knowledge of the requirement that Berkshire make PIP payments under Massachusetts law. Both Allstate and Berkshire are sophisticated companies which handle a multitude of similar claims and are charged with knowledge of standard insurance industry practices, especially those involving settlements and PIP payments. As the party conducting the settlement negotiations, Allstate had an obligation to inform Doherty's insurer, Berkshire, of pending negotiations in order to effectuate an equitable settlement. "[A]n insurer must act in a reasonable manner and in good faith in settling third-party claims against its insured." Med. Malpractice Joint Underwriting Ass'n of RhodeIsland v. Rhode Island Insurers' Insolvency Fund,
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