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Calandro v. Sedgwick Claims Management Services, Inc.

United States Court of Appeals, First Circuit

March 18, 2019

GARRICK CALANDRO, as Administrator of the Estate of Genevieve Calandro, Plaintiff, Appellant,


          David J. Hoey, with whom Daniel T. Landry and Law Offices of David J. Hoey, P.C. were on brief, for appellant.

          Allen N. David, with whom Jane A. Horne, Catherine M. Scott, and Peabody & Arnold LLP were on brief, for appellee.

          Before Kayatta, Circuit Judge, Souter, [*] Associate Justice, and Selya, Circuit Judge.

          SELYA, Circuit Judge.

         A Massachusetts statute, familiarly known as Chapter 176D, requires firms that are "in the business of insurance" to handle claims in good faith and to respond reasonably to the exigencies of the settlement process. Mass. Gen. Laws ch. 176D, § 3. But every case has twists and turns, and an insurance carrier is not to be held to a duty of prescience.

         This case illustrates the point. In it, plaintiff-appellant Garrick Calandro, suing in his capacity as administrator of the estate of Genevieve Calandro (his late mother), won a multi-million dollar jury verdict for wrongful death and conscious pain and suffering against a nursing home. Attempting to add to the spoils of that victory, the plaintiff then sued a claims-management firm, defendant-appellee Sedgwick Claims Management Services, Inc. (Sedgwick), contending that Sedgwick's actions, both pre- and post-verdict, violated Chapter 176D.[1] That suit was tried to the district court which entered a take-nothing judgment. The plaintiff appeals, arguing that the district court erred in holding that Sedgwick's actions did not constitute unfair claims settlement practices.

         Bench trials evoke a deferential standard of review. Applying this respectful standard, we affirm the judgment below.

         I. BACKGROUND

         The case at hand involves a tangled web of facts and a complicated procedural history. For ease in exposition, we offer only a barebones sketch and refer the reader who hungers for the full anthology to the district court's opinions. See Calandro v. Sedgwick Claims Mgmt. Servs. (Calandro I), 264 F.Supp.3d 321 (D. Mass. 2017); Calandro v. Sedgwick Claims Mgmt. Servs. (Calandro II), No. 15-10533, 2017 WL 5593777 (D. Mass. Nov. 21, 2017).

         Sedgwick is a claims-management firm, that is, a third-party administrator of insurance claims. At the times material hereto, Hartford Insurance Company (Hartford) insured the Radius Danvers nursing facility (Radius), located in Danvers, Massachusetts. Hartford retained Sedgwick to handle claims arising out of Radius's operations.

         During this period, Genevieve Calandro was a resident at Radius. While there, she fell from her wheelchair and was taken to a local hospital. She never returned to Radius and died at a hospice facility on August 16, 2008.

         After securing letters of administration, the plaintiff sued Radius in a Massachusetts state court. His complaint adumbrated claims for negligence and wrongful death. Sedgwick learned of the suit on October 12, 2011. On the same day, it received a letter from the plaintiff's attorney demanding $500, 000 to settle the plaintiff's claims. According to Sedgwick, no information that might have facilitated settlement was received along with the demand letter.

         Sedgwick engaged Attorney Lawrence Kenney as Radius's defense counsel. It also engaged an independent adjuster, Paul Bistany, and instructed him to "assess the liability and injuries for possible resolution." Bistany's first report, dated October 24, 2011, noted that the cause of death seemed to be related to ongoing medical conditions and, thus, did not necessarily evince any negligence on Radius's part. In the same report, Bistany noted that some of the documents that he expected to find (such as the incident report following the fall) were missing from Radius's files. Finally, Bistany explained that he had experienced difficulty in locating witnesses (apparently because Radius's parent company was in the process of closing the facility).

         Bistany furnished a second report to Sedgwick in January of 2012. This report recounted, inter alia, his success in locating and interviewing two nurses who had cared for Genevieve Calandro. Their information proved unhelpful, though, as they offered inconsistent recollections of what transpired before and after Genevieve fell from her wheelchair. In July of 2012, the plaintiff added Dr. David Wahl, who was both Radius's medical director and Genevieve's attending physician, as a defendant in the state-court suit.

         We fast-forward to May 1, 2013. On that date, a hearing was held before a medical malpractice tribunal (MMT). See Mass. Gen. Laws ch. 231, § 60B. During the MMT proceeding, the plaintiff tendered an offer of proof, which included Genevieve's death certificate and some form of opinion evidence from a retained expert, Dr. Paul Genecin. The record of the MMT proceeding is not in evidence, and the parties dispute what quantum of information Sedgwick received at that time. Sedgwick maintains that the plaintiff's offer of proof was simply an outline of Dr. Genecin's opinion and, as such, was insufficient to make liability reasonably clear. It adds that it did not receive Dr. Genecin's full report until April 27, 2014. The plaintiff disagrees: he asserts - based on his interpretation of a note handwritten by Mary Blair (the Sedgwick official in charge of the case) - that Sedgwick was given Dr. Genecin's full report in anticipation of the MMT proceeding (May of 2013) and that, therefore, the MMT proceeding yielded information that established Radius's liability for the death of Genevieve Calandro.

         The MMT allowed the state-court suit to proceed, see Mass. Gen. Laws ch. 231, § 60B, and discovery continued. During Dr. Wahl's deposition, taken on November 13, 2013, the plaintiff offered to settle all claims against Radius and Dr. Wahl for $500, 000. The defendants responded on February 6, 2014, extending a joint settlement offer of $275, 000. Of this amount, Radius was to contribute $125, 000. Around the same time (February 7, 2014), Attorney Kenney wrote a report to Sedgwick, in which he forecast the defendants' exposure at verdict to be in the $300, 000 to $500, 000 range.

         The plaintiff rejected the defendants' February 6 counter-offer, but the parties persisted in their efforts to settle the state-court suit. Nevertheless, the gap grew wider when, in April of 2014, the plaintiff increased his demand to $1, 000, 000. The next month, the defendants put a joint counter-offer of $300, 000 on the table. In a letter dated June 4, 2014, Attorney David Hoey, representing the plaintiff, rejected this counteroffer and began efforts to get separate offers from each of the defendants.

         In mid-June of 2014, Blair called Attorney Hoey and voiced her desire to settle the matter. Before Blair got around to proposing a settlement amount, Attorney Hoey ended the call, saying that he needed to speak with his client. Blair heard back, albeit indirectly, when Attorney Hoey emailed Attorney Kenney on June 17, that the case could not be resolved in the range of the last previous offer. Dr. Wahl's counsel found a more receptive audience: he settled the plaintiff's claims against his client for $250, 000 - a settlement in which the plaintiff reserved all rights against Radius. Neither Sedgwick nor Attorney Kenney was privy to these negotiations.

         On July 3, 2014, one of Attorney Hoey's associates emailed Attorney Kenney, informed him of the separate settlement with Dr. Wahl, and demanded $1, 000, 000 to settle the plaintiff's claims against Radius. The e-mail indicated that unless an offer exceeding $500, 000 was extended by July 9, settlement negotiations would be terminated and the case would proceed to trial. Due to the July 4 holiday, Attorney Kenney did not see the e-mail until July 8. No counter-offer was made within the stipulated time frame. On July 14, though, Attorney Kenney offered the ...

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