Massachusetts high court affirms lower court ruling that insurance company is liable for failure to defend auto repair shop against mechanic’s personal injury lawsuit

by Michael Heygood

The Massachusetts Supreme Judicial Court has ruled that Zurich American Insurance Company is liable for a $2.3 million default judgement entered against a Massachusetts auto repair shop in a lawsuit filed by a mechanic who was injured while working there. The mechanic, Joseph Boyle, filed a personal injury lawsuit against C&N Corporation after he was severely injured by an exploding tire at the auto repair shop.

According to the original lawsuit, Boyle agreed to help a friend who worked at C&N fix a truck that was at the auto repair shop. While they were making repairs to the vehicle, Boyle’s friend revved the engine, causing one of the truck’s tires to explode. Boyle suffered severe injuries, causing him more than $100,000 in medical bills and more than $250,000 in lost earnings.

Following the accident, C&N notified its insurance company, Zurich American Insurance Company, about the accident. Although Zurich opened a claim regarding the accident, the insurance company failed to take any action in regard to the claim for several years. An attorney representing Boyle and his wife also contacted the insurance company, but failed to receive any response.

When Zurich finally reviewed the claim in Boyle’s case, the insurer concluded that the mechanic’s injuries exceeded the $50,000 limit on C&N’s policy. Zurich neither communicated this conclusion to Boyle or C&N, nor did it make any kind of settlement offer to the two parties.

A default judgement in the case was entered against C&N for $2.6 million. Because the auto repair shop had become insolvent by this time, it assigned its rights against Zurich to Boyle, who filed a lawsuit against the insurance company in Massachusetts superior court seeking a default judgement.

Zurich argued that it had no duty to defend C&N against Boyle’s claim because it alleged that the auto repair shop had failed to provide the insurance company with any notice of the mechanic’s lawsuit. Although the court agreed with Zurich’s argument that C&N had failed to fulfill the notice condition of the insurance policy, it ruled that the insurer was still obligated to defend the auto repair shop because it had received notice of the lawsuit from Boyle’s attorney. “Since C&N had previously told Zurich about Mr. Boyle’s injury and likely claim, when Zurich learned of the lawsuit,” the court ruled, “it had every reason to believe that C&N would want Zurich to defend it. At that point, Zurich had to either step in and provide a defense, or at least contact C&N and confirm whether C&N wanted Zurich to defend the suit.”

The court ruled that Zurich had breached its duty to defend C&N by failing to settle Boyle’s lawsuit within the repair shop’s policy limit. As a result, the court ruled, Zurich was liable for the excess portion of the judgment obtained by the Boyles plus post-judgment interest, which totaled approximately $2.3 million.

Zurich appealed the superior court’s ruling to the Massachusetts Supreme Judicial Court. However, the high court affirmed the lower court ruling in the case, stating that it had ruled correctly in finding Zurich liable for the judgment in Boyle’s lawsuit.

Legal Help For Victims of Personal Injury or Wrongful Treatment by an Insurance Company

Individuals who suffer serious personal injuries as a result of the wrongful conduct or negligence of others have a right to receive fair compensation for their injuries. When corporations or individuals fail to honor their responsibilities to the parties who were injured by their wrongful conduct, these individuals have a right to file a lawsuit and seek compensation in a court of law.

Insurance companies also have an obligation to defend their policyholders against personal injury claims or other litigation they may face. When an insurance company accepts a policyholder’s premiums when no claims are made, that insurer should be equally willing to support the policyholder when a claim is made. When the company refuses to do so willingly, it may be necessary to compel them to do so by taking legal action.

The lawyers at Heygood, Orr & Pearson, have tried hundreds of personal injury cases to verdict and settled hundreds of additional claims. We have also represented numerous clients in insurance litigation cases involving some of the largest corporations in the world.

Our law firm has the financial resources to handle insurance litigation and personal injury cases—including those involving accidents in the workplace—from start to finish. In many instances, we have invested hundreds of thousands of dollars in order to take a case to trial on behalf of our client. At Heygood, Orr & Pearson, we are committed to achieving justice for our clients, whatever the cost.

If you or a loved one have been the victim of an accident, or if your insurance company has failed to honor its obligation to settle your insurance claim, contact the law firm of Heygood, Orr & Pearson to learn more about how we can help with your case. For a free legal consultation and to find out more about whether you may qualify to file a lawsuit, please call us toll-free at 1-877-446-9001. You can also contact our office by following the link to our free case evaluation form and answering a few simple questions about your case to get started.

by Michael Heygood

Michael Heygood is a licensed attorney and partner at HO&P who focuses on insurance and corporate litigation, and other civil arenas. Michael has been named multiple times to the Super Lawyers List.