Opinion
11-P-683
12-19-2011
WILLIAM KOCEN v. LIBERTY MUTUAL INSURANCE COMPANY.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This is an appeal from a separate and final judgment entered on the plaintiff's claim for declaratory relief. The issue concerns whether the arbitration of the plaintiff's claim for underinsurance benefits may, at his election, be nonbinding, permitting him to obtain a subsequent judgment on the claim for which he could seek multiple damages pursuant to G. L. c. 93A and G. L. c. 176D. This issue appears to be controlled by prior case law. The plaintiff also argues that the statutory scheme deprives him of his constitutional right to a jury trial. This issue was not raised below and is deemed waived.
The plaintiff was injured in two separate car accidents in 1999 and 2000. In both accidents, the other drivers were found responsible, and the plaintiff recovered their $20,000 policy limits. He then claimed underinsurance benefits from his insurer, the defendant Liberty Mutual Insurance Company; the claim was denied. After a c. 93A letter was sent, the insurer offered a small amount of underinsurance benefits for damages suffered in the 2000 accident, but denied that any damages (beyond those paid by the tortfeasor) were incurred for the 1999 accident. Because the parties could not agree on the amount of damages suffered, G. L. c. 175, § 111D, required that the dispute as to the amount of damages be submitted to arbitration. Upon the insurer's demand for arbitration, the plaintiff indicated he would proceed to arbitration only if it were nonbinding or if his c. 93A claim were also submitted to arbitration. The insurer refused the conditions. The plaintiff then commenced this action seeking recovery under the policy for his personal injuries, alleging that the insurer violated c. 93A and c. 176D, and seeking a declaration that any arbitration of his underinsurance claim be nonbinding. The plaintiff's motion for partial summary judgment on his claim for declaratory relief was denied by the judge with the following endorsement: 'After hearing, denied. There is no basis for a declaration that the required arbitration be non-binding. When the case is ready for judgment a declaration to that effect will be entered.' The plaintiff's assented-to motion for entry of separate and final judgment was allowed, and a declaration entered 'that arbitration of [the plaintiff's] underinsurance claims under his motor vehicle insurance policies is binding.'
On appeal, the plaintiff alleges that there is a 'possible conflict' between c. 175, § 111D, which requires that disputes as to damages be submitted to arbitration, and c. 93A, § 9, which permits multiplication of damages in a 'judgment,' but not an arbitration award. He asserts that this is an issue of first impression. He also argues, for the first time on appeal, that because c. 175, § 111D, requires him to submit his contract dispute with his insurer to arbitration, the statute is an unconstitutional restriction on his right to a jury trial.
The plaintiff contends that when the Legislature amended c. 93A, § 9, in 1989 (St. 1989, c. 580, § 1) to permit multiple damages based on the amount of a judgment (as opposed to the loss of use, i.e., interest, of the amount owed), it created a conflict with c. 175, § 111D, because the amount awarded in an arbitration is not a 'judgment,' upon which multiple damages can be assessed. See Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 37 (1991). The holding in Bonofiglio was affirmed in Murphy v. National Union Fire Ins. Co., 438 Mass. 529, 532 (2003), and remains controlling. We do not see a conflict here.
The plaintiff also suggests that we revisit White v. Safety Ins. Co., 65 Mass. App. Ct. 607 (2006), to permit his c. 93A claim to be submitted to the arbitrator with the damage claim (thus permitting the arbitrator to grant multiple damages on the underlying claim). Again, this issue is controlled by recent case law that we decline to revisit.
Although we do not see a conflict between the statutes, the plaintiff asks us to resolve his perceived conflict by making the required arbitration nonbinding. This would, in essence, permit him to relitigate the damages issue in the context of his Superior Court action for claimed violations of c. 93A and c. 176D, resulting in a 'judgment' that he could then seek to have multiplied. There is nothing in the statutes, case law, or insurance contract that would support such a deviation from the standard rule that arbitration is binding. The plaintiff's policy argument that insurers may be less inclined to resolve these disputes fairly without the specter of multiple damages hanging over them, while possibly true, is left for the Legislature.
Finally, the plaintiff alleges that to the extent c. 175, § 111D, requires that the arbitration be binding, it is unconstitutional because it deprives him of his right to a jury trial on his contract claim against the insurer. See art. 15 of the Massachusetts Declaration of Rights. This argument was not made in Superior Court and is deemed waived. See, e.g., Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006). In addition, the Attorney General's office has not been notified of the constitutional challenge to the statute, as required by G. L. c. 231A, § 8.
Judgment affirmed.
By the Court (Rapoza, C.J., Mills & Graham, JJ.),