A recent Massachusetts trial court decision serves as a stark reminder that insurance companies face potentially devastating financial consequences when they fail to properly investigate and settle personal injury claims. In a case the court itself described as resulting in a “grossly excessive punitive damages award,” an insurance carrier learned the hard way that cutting corners on claims investigation can lead to liability far exceeding the original injury verdict.
The Underlying Personal Injury Case
John Rooney worked as a mason on the Longfellow Bridge Repair project in 2014 when his life changed in an instant. He tripped on scaffolding and fell approximately five feet before his fall suppression device stopped him. While Rooney initially reported feeling fine, he soon experienced severe pain and swelling in his legs and went to the hospital.
What seemed like a minor incident turned into a medical nightmare. Rooney returned to work three days later but eventually had to go out on leave and collect workers’ compensation as his back injuries progressively worsened. Over the following years, he underwent nine surgeries, including cervical discectomies and spinal cord fusions, leaving him in constant pain and permanently unable to return to work.
When the case went to trial in Middlesex County in 2021, Rooney demanded $5 million based on $1.3 million in lost wages, $400,000 in medical expenses, a $1 million workers’ compensation lien, and compensation for his decreased quality of life, constant hospitalizations, and ongoing pain and suffering.
Settlement Offers That Fell Woefully Short
The parties attempted mediation, but the insurance carrier’s only offer was less than Rooney’s medical expenses. During trial, the carrier made several attempts to settle:
- A high-low offer of $500,000 to $2.5 million (rejected)
- An offer of $1 million (rejected)
- An offer of $5 million (rejected)
A six-person jury found the general contractor 100% at fault and awarded Rooney:
- $1 million for medical expenses
- $2.1 million in lost earning capacity
- $23.5 million for pain and suffering
- Total verdict: $26.6 million
When the court added Massachusetts’ statutory 12% annual prejudgment interest, the total judgment ballooned to $45 million.
The Bad Faith Insurance Claim Under Chapter 93A and 176D
After resolving the underlying judgment, Rooney pursued a separate legal action against Peerless Insurance Company for violations of Massachusetts General Laws Chapter 93A and Chapter 176D, which regulate unfair claims handling and bad faith settlement practices.
Following a bench trial on the bad faith claim, the trial court issued scathing findings of fact. The court found that Peerless failed to make a reasonable settlement offer because it did not conduct a reasonable investigation.
What Went Wrong: Failures in Claims Investigation
The court’s order scrutinized in detail the carrier’s failures in the claims handling process, particularly its reliance on a theory of the case that lacked any admissible evidence. In particularly harsh language, the court wrote that the carrier’s claims handling process “typified the three wise monkeys. It refused to see, hear, or speak the evidence that established that [the general contractor] breached its duty of care to those who worked on the interior scaffolding.”
The court found that “for the next six years, [the carrier] never revised its theory of causation despite contradictory evidence and, importantly, never grasped that its theory was consistent with [its insured’s] liability.”
Among the specific failures the court identified:
- Failure to review the plaintiff’s expert report
- Failure to review contractual documents related to the construction project
- Failure to read and be familiar with the safety portions of the construction contract
- Failure to review the insured’s safety manual
- Failure to review applicable OSHA regulations
The court specifically stated that “the standard of care for claims handlers adjusting a claim involving a construction accident includes that they read and be familiar with the safety portions of the construction contract; the insured’s safety manual, if any; applicable OSHA regulations; and the plaintiff’s expert reports.”
The Devastating Consequences
The court found the carrier’s shortcomings to be willful under Chapter 93A and 176D. Massachusetts law requires courts to impose multiple damages (double or triple the underlying award) along with attorneys’ fees and litigation costs when violations are found to be willful.
In a remarkable statement, the court acknowledged the severity of the penalty it was required to impose: “Given the remarkably large judgment in the underlying case, a finding of willfulness results in a grossly excessive punitive damages award against [the carrier] far in excess of the goals the statute is designed to achieve. However, the statute and controlling precedent offer no discretion.”
The court stated it was “required by law to issue what [it] finds to be an excessive punitive damages award.”
Understanding Massachusetts Bad Faith Insurance Law
Chapter 93A is Massachusetts’ Consumer Protection Act, which provides powerful remedies for unfair or deceptive business practices. Chapter 176D, Section 3(9)(f) specifically addresses insurance companies and requires them to “effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.”
When an insurance company violates these laws, injured parties can recover:
- Double or triple damages (if the violation was willful or knowing)
- Attorney’s fees
- Litigation costs
- Interest
This case joins a line of significant Massachusetts decisions holding insurers accountable for bad faith practices, including Rhodes v. AIG Domestic Claims, Inc. (awarding $22 million in Chapter 93A damages), Chiulli v. Liberty Mutual (finding that an intentional delay strategy constituted bad faith), and Capitol Specialty Insurance Co. v. Higgins (affirming trebled damages of $5.4 million).
What This Means for Injury Victims
This case demonstrates that Massachusetts law provides strong protections for personal injury victims when insurance companies act in bad faith. If you’ve been injured and believe an insurance company is not handling your claim fairly, you may have additional legal remedies beyond your underlying injury claim.
Common signs of bad faith insurance practices include:
- Unreasonable delays in investigating your claim
- Failure to conduct a thorough investigation
- Refusing to review important evidence like expert reports
- Making settlement offers that are obviously inadequate given clear liability and serious injuries
- Ignoring or dismissing evidence that supports your claim
- Failing to respond to communications in a timely manner
The Importance of Thorough Claims Investigation
For those involved in serious workers’ compensation cases or other significant injury claims, this decision underscores the critical importance of proper claims handling. Insurance companies must:
- Conduct reasonable and thorough investigations
- Review all relevant evidence, including expert reports
- Understand applicable safety regulations and contractual obligations
- Make settlement decisions based on facts and evidence, not unsupported theories
- Revise their position when contradictory evidence emerges
Protecting Your Rights
If you’ve suffered a serious injury and the insurance company is not treating your claim fairly, it’s important to understand that Massachusetts law is on your side. The law recognizes that insurance companies have a duty to investigate claims properly and make fair settlement offers when liability is clear.
At Weigand Law, we have extensive experience handling both personal injury claims and bad faith insurance cases. We understand the tactics insurance companies use to minimize claims, and we know how to hold them accountable when they fail to meet their legal obligations.
If you or a loved one has been seriously injured and you have questions about how your claim is being handled, contact our office for a free consultation. We can review your case, explain your rights under Massachusetts law, and help ensure you receive the full compensation you deserve.
Attorney Blair E. Weigand — Helping those with legal questions for 35 years and counting.