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Thursday, October 27, 2022

Post Beer Pong Tournament Fight Leads to Double Damages Against Insurer

While we typically think of car accidents and slip and falls as the stereotypical personal injury cases, there are actually quite a few other types of situations that lead to personal injury cases.  One such type of personal injury case involves physical assault caused by an intoxicated person.  Many times, liability will extend beyond the actual individual responsible for another’s injuries to the person or establishment who served the liquor.  Massachusetts and many other states have enacted a “Dram Shop law” in an effort to deal with these types of cases.

Pursuant to Massachusetts General Laws chapter 138 § 69, someone suffering from physical injury, property damage, or other damage may sue the licensed liquor provider who served an intoxicated person.  M.G.L. c. 138 § 69 dictates that waitstaff, bartenders, and owners all have a responsibility to ensure that no patron becomes too intoxicated or is served after a certain limit.

The recent case Terry v. Hospitality Mutual Insurance Company involved a Plaintiff, William Terry, who participated in a beer pong tournament hosted at Canton Junction Sports Bar on the evening of February 17, 2011.  On the same evening, two other individuals, Michael Conners and Kilder Cardona were visibly intoxicated at the bar but were still served alcohol by the establishment.  After the tournament, Mr. Connors and Mr. Cardona attacked Mr. Terry in the parking lot of the bar causing him serious injury.  Mr. Terry retained counsel and sent a demand letter to Hospitality Mutual Insurance Company, the insurer for the bar.  The insurance company did not make a reasonable settlement offer, despite claims from the Plaintiff that he suffered a traumatic brain injury from the beating.  The Plaintiff filed a lawsuit against the Defendants in Norfolk County Superior Court where a verdict was found in favor of the Plaintiff in the amount of $331,945.26.

As the insurance company had only offered $25,000.00 as a settlement offer, the Plaintiff filed a separate lawsuit against the insurance company for violation of M.G.L. c. 93A and 176D against Hospitality Mutual Insurance Company, claiming unfair and deceptive settlement practices.  The judge found that the Plaintiff was not credible and had exaggerated his injuries but that, regardless, Hospitality had engaged in unfair and deceptive claim settlement practices by (1) conducting an investigation that focused on disproving Canton Junction's liability instead of objectively assessing all the evidence and (2) failing to offer a fair and equitable settlement once Canton Junction's liability became reasonably clear. The judge concluded that Hospitality's unfair and deceptive claim settlement practices were knowing or willful, and the Judge awarded Terry double damages in the amount of $500,000, plus attorney's fees and costs.  Hospitality appeals, arguing that some of the judge's findings of fact are clearly erroneous, that she applied an incorrect legal standard, and that application of the correct legal standard compels the conclusion that Hospitality did not engage in unfair claim settlement practices.  The appeals Court disagreed with Hospitality and affirmed the Judge’s finding.

There were two variations of how the fight began.  By all witness accounts, other than the bar’s manager and bartender, it was agreed that Mr. Connors and Mr. Cardona (who had already participated in one beer pong tournament that evening in Boston), were visibly intoxicated at the Canton bar and yet were served six individual beers and a pitcher of beer.  However, Mr. Terry stated that he was attacked while Mr. Connors and Mr. Cardona, who were upset about losing the tournament, testified that Mr. Terry through the first punch.  The insurance adjuster knew that the bar had seventeen surveillance video cameras inside and outside that bar, but the adjuster never asked the bar to preserve the footage.  At some point, the surveillance video footage was overwritten.  In her notes, the adjuster only made mention of Mr. Connors and Mr. Cardona’s version of the events and did not include Mr. Terry’s very different version.  The insurance adjuster also stated in her notes that “there was no evidence that alcohol was a factor” and that “neither Terry nor Connors or Cardona were intoxicated.”  She reached this conclusion before actually speaking with any of the tournament participants whose accounts were already in the police report and contradicted these conclusions.  One of the biggest issues that the Court found was that the insurance company and its adjusters “cherry-picked” the facts that helped them and ignored the facts that contradicted the position they wanted to take.  For example, the insurance company felt that the abrasions on Mr. Terry’s knuckles supported that he threw the first punch but ignored the other evidence such as Connors’ booking photographs and the grand jury testimony that supported the opposite conclusion. 

General Laws c. 93A and c. 176D operate in tandem "to encourage the settlement of insurance claims and discourage insurers from forcing claimants into unnecessary litigation to obtain relief." Caira v. Zurich Am. Ins. Co., 91 Mass. App. Ct. 374, 381 (2017), quoting Clegg v. Butler, 424 Mass. 413, 419 (1997). The provisions of c. 176D make it unlawful for insurance companies to "fail[] to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies" and to "refus[e] to pay claims without conducting a reasonable investigation based upon all available information." G. L. c. 176D, § 3 (9) (c), (d).  These provisions require insurance companies to investigate insurance claims promptly and reasonably.   Hospitality asserts that, notwithstanding the fact that a jury awarded Terry ten times the amount of Hospitality's $25,000 settlement offer, that settlement offer was reasonable.  As found by the judge, Hospitality violated its obligation to conduct a prompt and reasonable investigation by "cherry- pick[ing] facts that supported the position staked out from the beginning –- that the insured's liability was doubtful –- and discarded, or at least diminished the significance of, the considerable amount of contrary information." As the judge put it, Hospitality "engaged in a results-oriented treatment of the evidence related to the claim, rather than a considered appraisal of it, based upon 'all available information,' G. L. c. 176D, [§ 3 (9) (d)]."  One major piece of evidence that the insurance company ignored was the video footage from the Boston bar in which Mr. Connors and Mr. Cardona appear already-visibly intoxicated.

This has become a common trend with insurance companies – cherry picking facts in personal injury cases.  That is why it is important to contact a lawyer as soon as possible after an accident.

If you have any questions regarding personal injury, please feel free to contact the Law Offices of Samuel S. Reidy for a free consultation.

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