
USCA1 Opinion

	




          November 1, 1993                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                                 ____________________        No. 93-1490                        CARMEN FORCUCCI and THERESA FORCUCCI,                               Plaintiffs, Appellants,                                          v.                     UNITED STATES FIDELITY AND GUARANTY COMPANY,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. A. David Mazzone, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Stahl, Circuit Judge,                                        _____________                     Aldrich and Campbell, Senior Circuit Judges.                                           _____________________                                 ____________________            Mark D. Shuman for appellants.            ______________            Alice  Olsen Mann  with  whom  Ralph  C.  Sullivan  and  Morrison,            _________________              ___________________       _________        Mahoney & Miller were on brief for appellee.        ________________                                 ____________________                                 ____________________                      ALDRICH,  Senior  Circuit   Judge.    The  district                                _______________________            court's  allowance of  defendant's  Fed.  R.  Civ.  P.  56(c)            summary   judgment    motions,   adopting    a   magistrate's            recommendation,  raises questions of opinion, the law as well            as  the basic  facts  being undisputed.    Did defendant,  an            insurer on a standard automobile policy providing coverage in            case of injury  by a party who was  uninsured or underinsured            ("UIM coverage"),  act  fairly,  reasonably,  promptly,  with            respect to a  claim?   Mass. G.L.  c. 93A,   9  and c.  176D,              3(9).   (Counts I  and II).   Was its conduct  "extreme and            outrageous . . .   utterly  intolerable"?    Agis  v.  Howard                                                         ____      ______            Johnson,  371  Mass. 140,  145,  355 N.E.2d  315,  319 (1976)            _______            (quoting Restatement).  (Counts III  and IV).  Counts III and            IV's allegations  are themselves  extreme, and  are so  fully            answered by the magistrate judge as confirmed by the district            court  and by what  we say, incidentally,  hereafter, that we            will give  them no  further specific  attention.   The  other            claims are more difficult, as are often questions of judgment            when summary  disposition is  sought.  Cf.  Wallace v.  Shade                                                   __   _______     _____            Tobacco Growers Agric. Ass'n., Inc.,  642 F.2d 17, 19-20 (1st            ___________________________________            Cir.  1981).   At the  same time,  although our review  is de                                                                       __            novo, Rivera-Marcano v.  Normeat Royal Dane Quality  A/S, 998            ____  ______________     _______________________________            F.2d  34, 37  (1st Cir. 1993),  we may  be slow to  reverse a            magistrate's careful conclusions, thoughtfully  reviewed.  In                                         -2-            this case  we almost entirely  agree with what has  been said            below and we affirm.                      First, some  dates.   On November  11, 1988  Cesare            Forcucci,  son of plaintiffs Carmen and Theresa Forcucci, was            injured in  a single vehicle  accident, dying  the next  day.            There  was at  first  a  question whether  he,  or one  Darin            Goodwin, was driving.  On April 26, 1989, plaintiffs' counsel            notified  defendant of the  accident, and requested  the full            medical  coverage of  $10,000,  due  regardless  of  who  was            driving.   Nothing  was said  about UIM.   On June  1 counsel            wrote  with respect to  UIM that Goodwin's  $100,000 coverage            with Travelers was insufficient.  Defendant paid the medical.            In late September Travelers, evidently conceding that Goodwin            had  been the  driver,  offered the  full $100,000  under its            policy, and thereafter  paid it.   On November 9  plaintiffs'            counsel  wrote defendant that  Goodwin had been  convicted on            October 5 of motor  vehicle homicide, thus resolving the  UIM            issue,  and  repeated  his demand  for  defendant's  full UIM            $100,000.  Included was a handwritten Victim Impact Statement            that Theresa  Forcucci had  submitted to  the criminal  court            prior to  Goodwin's sentencing,  describing the  effects upon            her of her son's loss.                      On  November  28,  having  received  no   response,            plaintiffs'  counsel, by fax, asked  defendant why it did not            respond.   On December  4, having received  no reply, counsel                                         -3-            telephoned  defendant and  was  told  that  it  was  awaiting            completion  of  its  investigation  into the  possibility  of            plaintiffs  making a  claim against  the  nightclub that  had            supplied  Goodwin with alcoholic  beverages.  Asked  why this            was  relevant, defendant's claim representative could give no            answer.  On December 5  plaintiffs mailed a demand letter for            unfair  settlement practices pursuant to G.L. c. 93A,   9(3).            This  extensive  letter  referred, inter  alia,  to  a recent                                               _____  ____            Massachusetts  case, Bertassi v. Allstate Ins. Co., 402 Mass.                                 ________    _________________            366, 522  N.E.2d  949 (1988),  that  held that  an  insurer's            investigation of possible  dram shop liability was  no excuse            for delay.  The certified  receipt shows that this letter was            received on December 11.  Defendant replied by fax on January            11, 1990, offering $25,000 in full settlement.  On January 18            counsel  replied by certified  mail that $25,000  was grossly            inadequate  and  stating  that  plaintiffs  were  instituting            arbitration proceedings  forthwith  pursuant  to  the  policy            provisions.                      Plaintiffs' first  claim is that  defendant's offer            was  not  "prompt,"  one  of   the  four  objections  to  the            magistrate's  report, because  it was made  31 days  from the            date of its receipt of  plaintiffs' December 5 letter, rather            than within 30.   Thirty days is a  statutory period relating            to a defendant's  opportunity to receive Ch.  93A protection,            Mass. G.L. c. 93A,   9(3),  not to the statutory  requirement                                         -4-            of a reasonably prompt response.  Mass. G.L. c. 176D,   3(9).            Especially with the holiday season interference we accept the            magistrate's conclusion that 31 days was reasonably prompt as            matter of law.1                      The  more serious question is whether $25,000 was a            reasonable offer.   The  magistrate found it  was on  the low            side, but  reasonable as matter of law.  In agreeing with him            we stress two factors; one, perhaps more than he did, and one            that he  did not  stress at all.   Negotiating  a settlement,            particularly when  the damages  are unliquidated,  is, to  an            extent,  a legitimate bargaining  process.  The  statute does            not call for defendant's final offer, but only one within the            scope of reasonableness.  Experienced negotiators do not make            their final offer  first off, and experienced  negotiators do            not expect it, or take seriously a representation that it is.            Indeed, plaintiffs say as much  in now intimating that  their            own $100,000  policy limits offer  was not final in  spite of            the fact that, in several talks, they refused to reduce it.                      The  reasonableness of a defendant's response is to            be considered  in the light of the  situation as a whole, one            aspect  of  which   was  the  size  of   plaintiffs'  demand.                                            ____________________            1.  We   further  ask,   if  plaintiffs   consider   30  days            appropriate, may not a fax on the 31st day be equivalent to a            letter mailed on the 30th?                                         -5-            Plaintiffs'  demand was very  high.2  Ordinary  give and take            would suggest that both would and should move.  Defendant was            not ever given that opportunity, even when it traded  against            itself,  as  shown  in  the   magistrate's  report.    As  to            defendant's alleged bad faith, this  is not a case like Whyte                                                                    _____            v. Connecticut Mutual Life Ins. Co.,  818 F.2d 1005 (1st Cir.               ________________________________            1987).                        We  have   only  one   problem,  the   last  minute            expression  of  defendant's  legal   department's  fear  that            $100,000  would be  a likely  outcome.   How  over-large that            opinion  might be is  indicated by the  arbitrator's finding.            See  n.2,  ante.    This  brings  us  to  Theresa  Forcucci's                       ____            extensive victim  impact statement,  submitted in support  of            her claim herein.   With the greatest respect  for a bereaved            mother who has suffered a great tragedy, a jury's response is            not necessarily predictable.   Defendant's legal department's            belief that a jury might give it great weight did not destroy            the  reasonableness of the claim department's opinion that it            might not.   Two  different views could  both be  reasonable.            Apprehensions  did  not  make the  lower  offer unreasonable,            particularly where, in dollars, that offer was the nearer  to            the arbitrator's finding.                                            ____________________            2.  In saying this we may look at the arbitrator's finding of            $55,000.  Plaintiffs'  complaint of  the magistrate's  giving            weight  hereto  overlooks that the statute  expressly permits            it.  Mass.  G.L. c. 176D,   3(9)(8)G.   Their contention that            he accepted it out of hand is incorrect.                                         -6-                      We  accept   the  magistrate's   recommendation  in            substance, and affirm the district court.                                         -7-
