A Massachusetts federal court on Friday tossed claims against Liberty Mutual Insurance Co. in a proposed class action over premature termination of rental car coverage, saying the insurer was not party to the policies issued by another Liberty Mutual unit.
In an order granting summary judgment to Liberty Mutual Insurance Co., U.S. District Judge Brian E. Murphy held that the policies issued to the plaintiffs, a couple from Missouri and a man from Illinois, clearly state that they were provided by Liberty Mutual Personal Insurance Co.
The judge also found that LMIC is not liable as an alter ego of LMPIC under New Hampshire or Massachusetts law. According to the ruling, while the two Liberty Mutual Group Inc. subsidiaries share an office in Boston, LMPIC is based in New Hampshire, and LMIC is based in Massachusetts.
Diane and Anthony Watts of Kansas City, Missouri, and Adam Pizzitola of Oak Lawn, Illinois, sued the Liberty Mutual insurers in November 2023. In a subsequent amended complaint, they alleged that Liberty Mutual violated its own policy language by arbitrarily ending transportation expense coverage after seven days for policyholders whose vehicles were deemed total losses.
Once a vehicle is declared a total loss, Liberty Mutual is obligated to provide transportation expense coverage for up to 30 days, or until it determines that a shorter period of time is reasonably required for a policyholder to replace the covered vehicle, the plaintiffs said.
The complaint asserted claims for breach of contract, as well as claims of vexatious conduct under Missouri law and violation of the Illinois insurance code. The suit had also named Liberty Mutual Group Inc., LMHC Massachusetts Holdings Inc. and Liberty Mutual Holding Co. Inc., but those parties were dismissed without prejudice in May 2024, court records show.
Even if the policy language was ambiguous, Judge Murphy said Friday, the court would still not find that questions of fact remain as to whether LMIC provided the policies.
For example, the presence of corporate signatures and LMIC's website and phone numbers on the policies does not "plausibly suggest that LMIC, rather than or in addition to LMPIC, is the insurer for the policies," the judge said. "These additional elements, while attributable to either company in a vacuum, cannot be read to suggest that LMIC is involved in the policies where LMIC is otherwise not mentioned and LMPIC is clearly stated as the underwriter."
The fact that LMIC and LMPIC share an office also "does not transform LMIC into plaintiffs' insurance carrier or make the two companies co-insurers," Judge Murphy said.
As for the plaintiffs' contention that LMIC may be held liable under an alter ego theory, the judge found that factors applied by New Hampshire courts to determine whether piercing the corporate veil is appropriate do not support veil piercing in this case.
Notably, Judge Murphy said, "the record does not contain evidence to demonstrate a question of fact as to whether LMIC used LMPIC's corporate form to promote injustice or fraud."
LMIC also would not be liable under Massachusetts law given that courts in the Bay State adhere to similar factors as New Hampshire but are generally stricter, the judge added.
Representatives of the parties did not immediately respond to requests for comment Friday.
The plaintiffs are represented by Shanon Carson, Y. Michael Twersky, Julie Selesnick and John G. Albanese of Berger Montague PC and by Richard M. Ochroch, Brett N. Benton and Andrew R. Ochroch of Ochroch Benton PC.
The Liberty Mutual insurers are represented by Bridgitte E. Mott, Jacob A. Tosti, James A. Morsch, Stephanie L. Denker and Ryan M. Jerome of Saul Ewing LLP.
The case is Watts et al. v. Liberty Mutual Personal Insurance Co. et al., case number 1:23-cv-12845, in the U.S. District Court for the District of Massachusetts.
Sep 5
Deal Summary
