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An Insurer's Willful or Knowing Violation of Mass. Gen. Law, Ch. 93A, ' 9

By ALM Staff | Law Journal Newsletters |
July 31, 2012

Earlier this year, the Supreme Judicial Court of Massachusetts issued its much anticipated decision, Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486 (2012), clarifying the scope of damages when an insurer is found to have willfully or knowingly committed an unfair settlement practice in violation of the Massachusetts Consumer Protection Act (M.G.L. c. 93A, ' 9).

In awarding sanctions totaling $22 million, the court determined that the measure of damages for an insurer's willful or knowing violation of ' 9 of Massachusetts' prohibition of unfair settlement practices must be calculated as a multiple of the underlying tort judgment rather than the actual harm caused by the insurer's conduct. On the other hand, where the underlying tort claim settled prior to entry of a judgment, damages will be determined as a multiple of the actual harm caused by the insurer's violation.

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