In Constantino v. Paul Revere Life Insurance Co., the Massachusetts Appeals Court, in a non-binding decision under Rule 23.0, affirmed a judgment finding that an insurer violated G. L. c. 93A and G. L. c. 176D by unreasonably delaying disability benefits.

The plaintiff sought presumptive total disability benefits under a policy provision covering the total and irrecoverable loss of use of both feet. Although medical evidence submitted described his feet as paralyzed and functionally useless, the insurer repeatedly denied the claim because he could still walk with braces and a walking stick. After the plaintiff retained counsel and threatened litigation, the insurer reconsidered the same evidence, reversed its position, and retroactively paid benefits. The trial judge found that the insurer had adopted an indefensibly aggressive interpretation of the policy and effectively failed to meaningfully investigate the claim for approximately two years.

The Appeals Court rejected the insurer’s argument that its coverage determination reflected merely a good-faith disagreement over policy interpretation. The court emphasized the trial judge’s supported findings that the insurer repeatedly shifted its interpretation of the policy and effectively refused to meaningfully investigate the plaintiff’s claim for two years. Those findings supported liability under G. L. c. 176D, § 3 (9) (c), for failing to adopt and implement reasonable standards for the prompt investigation of claims, and § 3 (9) (f), for failing to effectuate prompt, fair, and equitable settlement once liability became reasonably clear. The court also rejected the insurer’s contention that its eventual payment of all benefits defeated liability. The insurer never responded to the plaintiff’s demand, and the court concluded that it had not made a qualifying prompt and fair settlement offer within 30 days that might limit its exposure under § 9(3).

This decision again reinforces the importance of thoroughly investigating and promptly responding to a c. 93A demand letter.