
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 94-1286                             BARBARA THOMAS, AS COMMITTEE                                FOR FRANCES L. WERNER,                                Plaintiff - Appellee,                                          v.                         METROPOLITAN LIFE INSURANCE COMPANY,                                Defendant - Appellant.                                 ____________________          No. 94-1287                             BARBARA THOMAS, AS COMMITTEE                                FOR FRANCES L. WERNER,                                Plaintiff - Appellant,                                          v.                         METROPOLITAN LIFE INSURANCE COMPANY,                                Defendant - Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. William G. Young, U.S. District Judge]                                             ___________________                  [Hon. David S. Nelson, Senior U.S. District Judge]                                         __________________________                                 ____________________                                        Before                               Torruella, Chief Judge,                                          ___________                           Campbell, Senior Circuit Judge,                                     ____________________                              and Stahl, Circuit Judge.                                         _____________                                _____________________               Joseph Trovato, with  whom David J.  Larkin, Jr. and  Sandra               ______________             _____________________      ______          Parker were on brief for defendant-appellant.          ______               Lawrence J. Casey, with whom Scott E. Bettencourt and Crowe,               _________________            ____________________     ______          Crowe & Vernaglia, P.C. were on brief for plaintiff-appellee.          _______________________                                 ____________________                                  November 28, 1994                                 ____________________                                         -2-                    TORRUELLA, Chief  Judge.  This case  involves a dispute                    TORRUELLA, Chief  Judge.                               ____________          arising  under an  insurance  policy, part  of  the Empire  Plan,          issued by defendant-appellant Metropolitan Life Insurance Company          ("Met Life")  to plaintiff-appellee Frances Werner.1   Because we          agree with  the  district court  that  the policy  terms  mandate          coverage  here, and  that  Met  Life  acted  in  good  faith  and          committed no unfair or deceptive practices, we affirm.                                    I.  BACKGROUND                                    I.  BACKGROUND                    McLean  Hospital ("McLean")  is a  psychiatric hospital          located in Belmont, Massachusetts.  Its forty-six building campus          consists numerous  patient care  buildings, as well  as buildings          for the hospital's operations, such as offices, laundry, storage,          and  garages.  McLean primarily  provides, on an inpatient basis,          diagnostic   and  therapeutic   facilities  for   the  diagnosis,          treatment  and   care  of   mentally  ill  persons   by  licensed          physicians.    McLean  also  provides  continuous,  24-hour-a-day          nursing services  to  its patients  under  the supervision  of  a          registered graduate nurse.                    Through  its  various facilities  and  programs, McLean          offers its patients a spectrum of care and treatment that aims to          foster less dependence on  institutional support.  These programs          range from the psychotic disorders program, in which patients are          constantly  supervised and  have  little  responsibility, to  the          community  residential  and  treatment  programs,  which  provide                                        ____________________          1  Ms. Werner  brings suit by and through  her Committee, Barbara          Thomas.                                         -3-          patients with  a structured  environment, a  somewhat independent          living arrangement,  and the same 24-hour-a-day  professional and          ancillary  hospital  services  that  are available  in  the  more          restrictive  treatment  units.   The  Hope Cottage  and  the Mill          Street  Lodge   are  two  such   residential  treatment  programs          available at McLean.                    All   of  the   programs  at   McLean,   including  the          residential treatment programs, are  staffed by McLean employees,          and  all  services provided  through  these  programs are  billed          through McLean's central accounting department.                    In September 1985, Frances Werner, a diagnosed paranoid          schizophrenic, was admitted to McLean and initially placed in the          psychotic  disorders  unit.   In  March 1986,  her  condition had          improved, and  she was  transferred to the  community residential          and  treatment  program  at  McLean.    While  in  the  community          residential and treatment program,  Werner was assigned a  bed in          the  Hope  Cottage building  until March  1989,  and in  the Mill          Street  Lodge  building from  March  1989  until February  1992.2          Werner was  assessed a room and  board charge during her  stay at          McLean,  including the period she  spent in the  Hope Cottage and          Mill Street Lodge buildings.                    Werner is  an enrollee  under a group  health insurance          policy known  as  the Empire  Plan (the  "Plan"), which  provides          health insurance benefits to  New York State Government employees                                        ____________________          2   Werner  was  transferred back  into  the psychotic  disorders          program for approximately one  month during September and October          1989.                                         -4-          and  their dependents.   Under  the Plan,  Werner is  eligible to          receive benefits  for covered medical services  that are provided          to her.    The Plan  provides  that Blue  Cross pay  for  covered          services for  the first 120 days  of care, and that  Met Life pay          for such services after the initial 120 days.                    Blue Cross  paid its liability  for the first  120 days          that Werner was in McLean.  After the initial 120  days, Met Life          paid for  the services received  by Werner  while she was  in the          psychotic disorders program (September 5,  1985 to March 6, 1986,          and September 14  to October 10, 1989).  Met Life denied Werner's          claims for services received while  she was in McLean's community          residential  and  treatment  program,  however,  contending  that          neither the Hope Cottage nor the Mill Street Lodge are within the          scope of the Plan.                    The Plan  specifically provides that Met  Life will pay          for certain  covered medical  expenses, including  "[s]ervices of          private  proprietary hospitals  for the  treatment of  mental and          ______________________________          nervous conditions  and alcoholism"  (emphasis added).   The Plan          further defines  "hospital" as  "only an institution  which meets          fully every one" of three tests.  The Plan sets forth these tests          as follows:                      1.  It is  primarily engaged in providing                      on  an  inpatient  basis  diagnostic  and                      therapeutic  facilities  for surgical  or                      medical diagnosis, treatment and  care of                      injured and sick persons by  or under the                      supervision of a staff of  physicians who                      are duly licensed to practice; and                      2.  It continuously  provides 24-hours-a-                      day  nursing  service  by  or  under  the                                         -5-                      supervision   of   registered    graduate                      nurses; and                       3.  It is  not a skilled nursing facility                      and it is not, other than incidentally, a                      place of  rest, a  place for the  aged, a                      place  for  drug  addicts,  a  place  for                      alcoholics or a nursing home.          The phrase "on an  inpatient basis" is defined under the  Plan to          mean that the institution assesses a room and board charge.                    Met Life received a letter dated October 18,  1990 from          one of Werner's physicians at  McLean, Dr. Peter Choras.  In  his          letter,   written  on  McLean  Hospital  letterhead,  Dr.  Choras          explained  the  urgency  of   Werner's  medical  situation,   and          entreated Met Life to provide coverage  for Werner's treatment at          the Mill  Street Lodge, which he  called a "half-way  house."  In          response, Met  Life reiterated  that no benefits  were available,          because  residential facilities  or programs,  including "halfway          houses,"  were not  covered  by  the  Plan.    Met  Life  further          explained  that  it  "must  adhere  to  the  plan  provisions  as          stipulated by the contract holder."                    After  receiving  requests  on  Werner's   behalf  from          another  physician and  an attorney  to reconsider its  denial of          coverage, Met Life apparently looked for the Mill Street Lodge in          the American Hospital Association accreditation manual.  Although          McLean  Hospital was listed, the Mill  Street Lodge was not.  Met          Life responded  to these  appeals  on March  5, 1991,  requesting          additional information  about the  Mill Street  Lodge to  aid its          reconsideration.   According to Met  Life, it never  received any          information that  changed its determination that  the Mill Street                                         -6-          Lodge was not a covered facility.                    Werner brought  suit against  Met Life in  August 1991,          alleging breach  of contract, breach  of the implied  covenant of          good faith and  fair dealing, unfair  and deceptive practices  in          violation of  Mass. Gen. L. ch.  93A and 176D, and  infliction of          emotional distress.3                    Werner   moved  for  declaratory  relief,  for  summary          judgment  on her breach of  contract claim, and  requested a jury          trial  on her  other claims.   Met  Life cross-moved  for summary          judgment  on all  Werner's  claims, contending  that Mill  Street          Lodge and the Hope Cottage were not hospitals under the Plan, and          that it had not engaged in any unfair or deceptive practices.                    After  a hearing  on  the motions,  the district  court          granted judgment in Werner's favor on her request for declaratory          relief and  her claim of  breach of contract,  and in Met  Life's          favor  on the  remaining  claims.    Both  Met  Life  and  Werner          appealed.                                    II.  ANALYSIS                                    II.  ANALYSIS                    A.  Standard of Review                    A.  Standard of Review                        __________________                    Because  the district court granted summary judgment in          Werner's favor regarding the breach of contract claim,  we review          that decision de novo.  Serrano-P rez v. FMC Corp., 985 F.2d 625,                        __ ____   _____________    _________          626 (1st Cir. 1993); Pagano v. Frank, 983 F.2d 343, 347 (1st Cir.                               ______    _____          1993).  We must determine whether the record, viewed in the light                                        ____________________          3   Werner  has  voluntarily withdrawn  her  claim for  emotional          distress on  appeal, but  preserves her right  to seek  emotional          distress damages under Mass. Gen. L. ch. 93A.                                         -7-          most favorable to Met Life and drawing all reasonable  inferences          in  Met Life's  favor, presents  any genuine  issues of  material          fact, and whether Werner is  entitled to judgment as a matter  of          law.  Summary judgment may not be granted if the evidence is such          that  a  reasonable jury  could return  a  verdict for  Met Life.          Serrano-P rez, 985  F.2d at 626.  Mere allegations, or conjecture          _____________          unsupported in the  record, are insufficient  to raise a  genuine          issue of material fact.   Wynne v. Tufts Univ. Sch. of  Med., 976                                    _____    _________________________          F.2d  791, 794  (1st Cir. 1992),  cert. denied,  113 S.  Ct. 1845                                            _____ ______          (1993).                    Regarding  Werner's  other claims,  conversely, because          the district court granted summary judgment in favor of Met Life,          we review this  decision de  novo, and are  required to view  the                                   __  ____          record in  the  light most  favorable to  Werner, the  non-moving          party.  Serrano-P rez, 985 F.2d at 626.                  _____________                    B.  Werner's Claims for Breach of Contract                    B.  Werner's Claims for Breach of Contract                        ______________________________________                    Werner  claims  that the  Mill  Street  Lodge and  Hope          Cottage  fully meet each of  the Plan's tests,  and therefore all          services rendered are fully  covered expenses.  Met Life,  on the          other hand, claims that the facilities fail to meet the first two          of  the three  tests  set  forth  in  the  Plan's  definition  of          "hospital," arguing that they  are not "inpatient" facilities and          do not provide 24-hour nursing service.4                                        ____________________          4   Werner  claims,  and Met  Life does  not  disagree, that  the          facilities fully meet the third test of the  Plan, i.e., they are          not skilled nursing facilities, a place of rest, a place  for the          aged, a place for drug addicts or alcoholics, or a nursing home.           As the record fully supports this  claim, we need not address  it                                         -8-                    We  first  address a  preliminary  matter.   While  the          rights and  obligations of parties under  insurance contracts are          determined  by the  language  contained in  the policy,  New York          law5 requires that  the court determine,  in the first  instance,          whether  language in a  contract is ambiguous  and susceptible to          two or  more reasonable interpretations.  Newin Corp. v. Hartford                                                    ___________    ________          Accident  and  Indem.  Co.,  467  N.E.2d 887,  889  (N.Y.  1984);          __________________________          Hartford  Accident and Indem.  Co. v. Wesolowski,  305 N.E.2d 907          __________________________________    __________          (N.Y.  1973).   We  agree  with the  parties  that  there are  no          ambiguities in the relevant language of  the Plan.  The issue  at          the  heart of  this  case is  whether  the residential  treatment          facilities  at McLean  meet the  Plan's three-part  definition of          "hospital."  Although the dispute arises under the Plan, there is          no  dispute  over  the  meaning of  the  terms  contained within.          Specifically,  the  parties  do not  disagree  as  to  the Plan's          definition of the  term "hospital," nor  do they offer  differing          constructions  of  that  three-part  definition.    Rather,  they          disagree over whether the facts presented by Werner's case -- the          treatment she received in the residential facilities -- fit  that          unambiguous  definition.  In other  words, this is  not a dispute          over the construction of ambiguous terms; rather, it is a dispute          over  the   application  of  clear  terms   to  somewhat  unusual          circumstances.   Therefore, because "the words  in the paragraphs                                        ____________________          here, and assume it true for purposes of this opinion.           5    The parties  do not dispute that  we are bound  to apply New          York law to the construction and interpretation of the Plan.                                           -9-          of  the  policy under  examination  have a  definite  and precise          meaning, unattended by danger of  misconception in the purport of          the policy  itself, and concerning  which there is  no reasonable          basis for a  difference of  opinion," Breed v.  Insurance Co.  of                                                _____     _________________          North America,  413 N.E.2d 1280, 1282  (N.Y. 1978), we find  as a          _____________          matter of  law that there  is no ambiguity  in the  relevant Plan          terms here.                    In the absence of  ambiguity, well-settled New York law          requires  courts to  enforce  provisions of  an insurance  policy          according  to  their plain  and  ordinary meaning.    Lavanant v.                                                                ________          General Accident Ins. Co.  of America, 595 N.E.2d 819,  822 (N.Y.          _____________________________________          1992) (citations omitted); American  Home Prods. Corp. v. Liberty                                     ___________________________    _______          Mut.  Ins.  Co., 565  F.  Supp.  1485,  1491-92  (S.D.N.Y.  1983)          _______________          (discussing New York  contracts law).   Courts may  not vary  the          terms of a policy  to accomplish "notions of abstract  justice or          moral  obligation."  Breed, 385  N.E.2d at 1283.   Applying these                               _____          principles,  our task  is to  determine  whether the  Mill Street          Lodge and Hope Cottage  fully meet each of the  unambiguous tests          set  forth  in the  Plan's definition  of  "hospital."   Met Life          argues first that the Mill Street Lodge and Hope Cottage fail the          first test.  It contends that these facilities do not operate "on          an  inpatient  basis" and  do  not provide  "surgical  or medical          diagnosis, treatment and care . . .  by or under the  supervision          of  a staff  or physicians  who are  duly licensed  to practice."          Instead, Met Life  contends that  the two  facilities are  merely          "community or group residences."                                         -10-                    Under  the  plain terms  of  the  Plan, however,  these          facilities  do operate on an "inpatient" basis.  The Plan defines          "inpatient"  to mean  simply  that a  room  and board  charge  is          assessed  to the patient.  The record establishes that Werner was          assessed such charges for each night of her stay at both the Mill          Street Lodge and Hope Cottage.  Thus, this requirement is clearly          met, and Met Life's contentions to the contrary have no merit.                    Met  Life   further   insists  that   the   residential          facilities  are not  primarily  engaged in  "surgical or  medical          diagnosis, treatment,  or care" as the Plan  requires. Met Life's          counsel  conceded in  oral argument  before this  court that  the          facilities  are staffed and operated by  McLean personnel, are on          the  same campus  as McLean,  and all  operational  and treatment          decisions  are  made  by McLean  doctors  and  staff.   Met  Life          nevertheless contends that the facilities are completely separate          and independent  entities from  McLean, and have  different, non-          covered  functions.  In support of this argument, Met Life points          to  the fact  that they are  licensed separately by  the state of          Massachusetts  as  either  a  "community  residence"  or   "group          residence."                    We do  not see the  relevance of the  state's licensing          scheme   to  the   Plan's  definition   of  covered   facilities.          Presumably,  a  state  has  its  own  purposes and  criteria  for          licensing and regulating mental health  facilities, far different          than  the intentions of parties  to an insurance  contract.  This          case  involves the application  of contractual terms.   The label                                         -11-          that  state officials  may  place  on  a particular  facility  or          treatment  program  is  not  part of  the  Plan's  definition  of          "hospital,"  and  we see  no reason  to  add any  other elements,          including  licensing  nomenclature,  to  the  Plan's  unambiguous          three-part definition of covered facilities.6                    Furthermore, we  do not  agree that  the  facts in  the          record show that  the facilities are  separate and distinct  from          McLean  Hospital.  McLean  provides comprehensive, individualized          treatment  plans  for  mentally  ill  people,  with  the  aim  of          developing  independent  living skills.    In order  to  meet its          patients' diverse  medical  needs, McLean  necessarily  offers  a          continuum  of programs  with varying  degrees of  supervision and          responsibility.   When  a  McLean patient  commences a  treatment          scheme at the hospital, the  programs and services provided  will          naturally depend on the  patient's condition, and as part  of her          ongoing treatment, a McLean  patient may be transferred  from one          program to  another.  Not all  of these programs are  in the same          building, although  they are on the  same campus.   They are all,          however,  operated  and staffed  by  the  same McLean  personnel.                                        ____________________          6   Even  if  we were  to  consider the  residential  facilities'          licenses,  they nevertheless  do not  necessarily prove  that the          facilities are "separate and  distinct" from McLean.  In  a sworn          affidavit   explaining  the   licenses,   the  Director   of  the          Massachusetts  Department of  Mental  Health,  Michael H.  Weeks,          stated that  McLean Hospital Corporation is  "licensed to conduct          residential programs at McLean Hospital . . . in its Hope Cottage          and Mill Street  Lodge buildings."  This  characterization by the          head  licensing official  of the  state actually  contradicts Met          Life's arguments,  and supports the finding  that the residential          facilities are not distinct entities, but are integral components          of McLean, two of the several treatment programs McLean offers.                                         -12-          While  the Mill Street Lodge  and Hope Cottage  exist in separate          buildings  from the  main hospital  building, their  function and          services  are not separate from  the hospital.   On the contrary,          they  constitute just  two  of these  various treatment  programs          developed and administered by McLean physicians and staff.  Thus,          they are two of the integral components that comprise the overall          institution of McLean Hospital.                    This is not to say that  any or all facilities owned or          even  operated by a hospital are necessarily covered by the Plan.          Modern hospitals  are frequently owned by  corporations that also          own other  healthcare  entities, such  as  laboratories,  nursing          homes, or  outpatient facilities.   These entities  clearly would          not meet the Plan's  coverage terms.  The programs at issue here,          however,  are  part  and   parcel  of  McLean's  various  medical          diagnosis  and treatment  programs, and  thus are covered  by the          Plan.                    Met  Life also  contends  that because  nurses are  not          physically  present 24  hours a day  at the Mill  Street Lodge or          Hope  Cottage,  these facilities  fail  the second  prong  of the          Plan's  definition of  "hospital."   We agree  with the  district          court,  however, that the Plan's terms do not require that nurses          be physically present  24 hours  a day, but  merely that  nursing          services be available  24 hours  a day.   The record  establishes          that  all of  the hospital's  nursing and ancillary  services are          provided in the residential programs.   Although those nurses are          not physically present in those buildings and must be summoned if                                         -13-          needed, the patients in the residential programs nonetheless have          the benefit of the nursing services that are available 24 hours a          day in the  main building.  Thus, the Mill  Street Lodge and Hope          Cottage fully meet  this element  of the Plan,  and the  district          court's ruling on  Werner's breach  of contract claims  must   be          affirmed.                    C.  Werner's other claims                    C.  Werner's other claims                        _____________________                    Werner  contends  that  the  district  court  erred  in          granting  summary judgment in Met  Life's favor as  to her claims          for  breach of  the  implied  covenant  of  good  faith  and  for          violations  of the Massachusetts  unfair and  deceptive practices          statutes, Mass. Gen. L. ch. 93A and 176D.  Werner argues that the          record contains sufficient evidence giving rise to genuine issues          of material fact suitable for a jury trial on these claims.                      1.  Breach of the covenant of good faith                      1.  Breach of the covenant of good faith                    Under New  York law,  a plaintiff may  recover punitive          damages for  "bad  faith"  breach  of  contract  where  there  is          evidence of morally reprehensible conduct directed at the general          public,  Halpin  v. Prudential  Ins.  Co., 401  N.E.2d  171 (N.Y.                   ______     _____________________          1979), or an extraordinary showing of a disingenuous or dishonest          failure to carry  out a contract.  Gordon v. Nationwide Mut. Ins.                                             ______    ____________________          Co., 285 N.E.2d 849, 854 (N.Y. 1972),  cert. denied, 410 U.S. 942          ___                                    _____ ______          (1973).                    Regarding  her  allegations of  Met  Life's  bad faith,          Werner  simply has  not  shown that  Met  Life's conduct  in  the          instant  case rises to the level of morally reprehensible conduct                                         -14-          or  extraordinary  dishonesty.    To avoid  summary  judgment,  a          nonmoving party must be able to point to some specific, competent          evidence in support of its claim.  Wynne, 976 F.2d at  794.  Mere                                             _____          allegations  or conjecture  are insufficient  to raise  a genuine          issue  of material fact.   Id.  Although  Werner heatedly accuses                                     __          Met  Life of  callous indifference  to Werner's  predicament, the          record contains no evidence of any bad faith by Met  Life.  True,          Met  Life   denied  Werner's   claims.    Contrary   to  Werner's          contention,  however, Met Life did state the basis for its denial          -- it concluded  that the charges were  not covered by  the Plan.          Although this conclusion was  erroneous, it was not unreasonable,          particularly in light of  Dr. Choras' own characterization of the          Mill Street Lodge as a "half-way house."  Certainly, an insurance          company  may deny claims  if it honestly  and reasonably believes          that it is  not obligated to pay them.7   Werner also claims that          Met Life  conducted no investigation of  the relationship between          McLean  and the  Mill  Street Lodge.   If  true, this  failure to          investigate may  constitute ordinary negligence, but  it does not          rise  to  the  level   of  extraordinary  dishonesty  or  morally          reprehensible conduct directed  at the general public.   A claims          adjuster in a  large insurance company is usually not a doctor or          an attorney,  and  cannot  be expected  to  compile  and  analyze          extensive  information for  every claim.   We  refuse to  issue a                                        ____________________          7   We  also  note  that  Werner's  dire  medical  and  financial          situation does not transform Met Life's denial of coverage into a          bad faith act.  Met Life honestly and reasonably believed that it          was not legally bound to pay Werner's claims.                                           -15-          directive   to   insurance  companies   requiring   such  lengthy          procedures.                    Moreover, the record  does contain evidence that  after          receiving letters  on Werner's  behalf, Met Life  did investigate          Werner's  claims, and  requested  additional information  to that          effect, which  it never received.   We therefore  find that  as a          matter  of  law,  Werner  has  not shown  any  specific  evidence          supporting  its claims of  bad faith sufficient  to avoid summary          judgment, and the  district court's judgment in  Met Life's favor          on this claim must be affirmed.                                         -16-                      2.  Violation of the  Massachusetts unfair  practices                      2.  Violation of the  Massachusetts unfair  practices                          statute                          statute                    Werner  also claims  that Met  Life has  violated Mass.          Gen. L. ch. 93A and 176D, which prohibit unfair or deceptive acts          or  practices in the business  of insurance.   It is questionable          whether, under choice-of-law analysis,  these statutes can fairly          be applied to Met Life in this context, in light of the fact that          the claims arise  under a  contract governed by  the laws of  New          York.   We need not address this issue, however, because assuming          arguendo that  chapters  93A and  176D can  properly be  applied,          ________          Werner has  failed to point to sufficient evidence supporting her          claims to avoid summary judgment.  Wynne, 976 F.2d at 794.                                             _____                    Chapters  93A  and  176D together  prohibit  unfair  or          deceptive practices in  the business of insurance,  and allow one          injured by such unlawful acts to bring an action for  damages and          equitable relief.  Section  3 of chapter 176D sets  forth several          unfair claim settlement  practices, including "[r]efusing  to pay          claims without conducting a  reasonable investigation based  upon          all available information."  Mass. Gen. L. ch. 176D   3(9)(d).8                    The Massachusettts Supreme Judicial Court has held that          a  plaintiff  may  recover under  chapters  93A  and  176D for  a          deceptive act  that  is the  result  of the  insurance  company's                                        ____________________          8  Section 3 of chapter 176D lists eleven unfair claim settlement          practices.  In her  brief, Werner states that Met  Life committed          "several" of these,  but she  does not specify  which ones,  much          less how they  were committed.   The only  violation that  Werner          specifically  alleges  is  a  failure  to  conduct  a  reasonable          investigation.   Because  we find no  hint in  the record  of any          other  possible violations,  we  only analyze  Werner's  specific          allegation.                                         -17-          negligence.  Swanson  v. Bankers  Life Co., 450  N.E.2d 577,  580                       _______     _________________          (Mass.  1983).  The plaintiff need not  show any actual intent to          deceive, and an act may  be deceptive even absent any showing  of          negligence.   Id. at 580.   The court  warned, however, that "not                        __          every  negligent act is  unfair or  deceptive" and  thus unlawful          under  chapter 93A.    Id.   To  determine whether  an  insurer's                                 __          negligence  constitutes "unfairness"  for 93A  purposes,  a court          must look to several factors, including what the insurer "knew or          should have known" about the circumstances of a particular claim.          Id. (citations omitted).          __                    Werner argues that, on the  facts presented, a trier of          fact could  reasonably  find  that  Met Life's  failure  to  call          McLean, look  into the  hospital's accreditation, or  examine the          letterhead on  which correspondence  was sent, was  "sufficiently          egregious" to incur liability under 93A.  These facts constitute,          according to Werner,  a blanket  denial of  coverage without  any          reasonable investigation.                    As  we noted  above, the  record does  contain evidence          that after receiving several letters on Werner's behalf, Met Life          investigated   Werner's   claims,   and    requested   additional          information.  We therefore cannot agree with Werner that Met Life          failed altogether to investigate her claim.  Perhaps the Met Life          employees could have been more thorough; perhaps they should have          taken  more  initiative after  receiving  Dr.  Choras' letter  on          McLean letterhead  and inquired  after the specifics  of McLean's          residential  programs.    As  we have  noted,  however,  hospital                                         -18-          corporations often own and operate healthcare entities that would          not come within the Plan's coverage.  This reality, combined with          the fact that the Mill Street  Lodge was not listed in a hospital          accreditation manual,  and that  Dr. Choras himself  labelled the          facility as a  "half-way house,"  compels us to  find that  their          failure to inquire further,  and their decision to deny  Werner's          claims, was  not unreasonable, and certainly  does not constitute          "unfairness" in violation of 93A and 176D.                                   III.  CONCLUSION                                   III.  CONCLUSION                    For  the  foregoing   reasons,  the  district   court's          judgment as to each of Werner's claims is hereby affirmed.                                                           ________                                         -19-
