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Summary Judgment – Duties of Excess Insurance Carriers

Attorneys Involved | Tanya T. Austin, Michael C. Palermo

In a decision that solidifies Massachusetts courts’ stance on the duties of excess insurance carriers, Boyle | Shaughnessy Law attorneys Tanya T. Austin and Michael J. Palermo recently obtained summary judgment on behalf of their client, Everest National Insurance Company, in Chiulli v. Everest National Ins. Co., et al., pending in the Suffolk Superior Court. In Chiulli, the plaintiff (who had been injured in a bar fight and subsequently obtained a $4.5 million judgment against the bar) alleged that Everest, the bar’s excess insurance carrier, had committed unfair claims handling practices in violation of G.L. c. 93A and 176D by failing to settle Chiulli’s claims against its insured where liability was reasonably clear. The plaintiff sought punitive damages in excess of $13.5 million based on Everest’s allegedly willful and knowing violation of G.L. c. 93A.

Everest moved for Summary Judgment, taking the position that as an excess carrier it had had no obligation to settle until the primary carrier had tendered its policy limits and therefore could not, as a matter of law, have violated G.L. c. 93A by failing to settle prior to the tender. Rejecting the plaintiff’s arguments that Everest’s obligation to settle was triggered once it became apparent that the verdict would exceed the primary carrier’s $1 million policy limits, the Court held that Everest had no obligation to settle until the primary limits were in fact tendered. While the plaintiff additionally argued that Everest had improperly used post-verdict motions as leverage to achieve a more favorable settlement, the Court found that there was no evidence that Everest had engaged in such conduct, or that any such motions had resulted in any damage to the plaintiff in light of the ultimate settlement value of the case.

The Chiulli decision confirms the limited scope of an excess carrier’s rights and obligations where the primary carrier has failed to tender its policy limits, reiterating that an excess carrier cannot be found independently liable for failure to settle if a primary carrier is delinquent in tendering its own policy limits.


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