349 F.Supp.2d 128 (2004) | Cited 2 times | D. Massachusetts | December 7, 2004


The Charter Oak Fire Insurance Company ("Charter Oak"),defendant in this matter, has filed a motion for summary judgmentin its contract dispute with Dimaio Family Pizza & Luncheonette,Inc. and Anthony Dimaio (together "Plaintiffs"). The parties haveconsented to this court's jurisdiction pursuant to28 U.S.C. § 636(c). For the reasons described below, Charter Oak's motionwill be granted in all respects but one, Plaintiffs' claim underMass. Gen. L. chs. 93A and 176D.


On December 18, 2000, the Villa Dimaio Restaurant in Whately,Massachusetts, burned down. Plaintiffs, it appears, were insuredby Charter Oak for property losses due to fire.1 Prior to the fire, Dimaio Family Pizza andLuncheonette, Inc. ("Dimaio Family Pizza"), the owner of therestaurant, filed for Chapter 11 bankruptcy. Over one year afterthe fire, Anthony Dimaio ("Dimaio"), the treasurer and secretaryof Dimaio Family Pizza, personally filed for Chapter 7bankruptcy. The Bankruptcy Court appointed separate trustees forDimaio and Dimaio Family Pizza.

In the instant six-count lawsuit, Plaintiffs, their bankruptcycases closed, allege breach of contract (Counts I and II) andbreach of the implied covenant of good faith and fair dealing(Count V). Plaintiffs also allege that Charter Oak should beestopped from denying that the loss is payable under the policy(Count III), waived its rights under the contract (Count IV), andis liable to Plaintiffs under Mass. Gen. L. ch. 93A, §§ 2 and 11and ch. 176D, § 3, for unfair and deceptive trade practices(Count VI). Presently before the court is Charter Oak's motionfor summary judgment. In essence, Charter Oak asserts thatPlaintiffs are barred from any of the relief they seek because oftheir failure to timely comply with the suit limitation provisionin the insurance policy.


When ruling on a motion for summary judgment, the court mustconstrue the facts in a light most favorable to the nonmovingparty. Benoit v. Tech. Mfg. Corp., 331 F.3d 166, 173 (1st Cir.2003). Summary judgment is appropriate when "there is no genuineissue as to any material fact" and "the moving party is entitledto judgment as a matter of law." Fed.R.Civ.P. 56(c). For thispurpose, an issue is "genuine" when the evidence is such that a reasonable fact-finder could resolve thepoint in favor of the nonmoving party, and a fact is "material"when it might affect the outcome of the suit under the applicablelaw. Morris v. Gov't Dev. Bank, 27 F.3d 746, 748 (1st Cir.1994). The nonmoving party bears the burden of placing at leastone material fact into dispute after the moving party shows theabsence of any disputed material fact. Mendes v. Medtronic,Inc., 18 F.3d 13, 15 (1st Cir. 1994) (discussing Celotex Corp.v. Catrett, 477 U.S. 317, 325 (1986)).


In its motion for summary judgment, Charter Oak asserts that,under the terms of its policy and as required by Mass. Gen. L.ch. 175, § 99, Plaintiffs had to commence any suit or actionwithin two years of the loss. Plaintiffs, Charter Oak maintains,did not commence suit until February 12, 2004, over three yearsafter the loss.

Plaintiffs concede that their suit was filed more than twoyears after the loss, but refute Charter Oak's motion on threegrounds. First, Plaintiffs assert that, having filed forbankruptcy and having no standing to bring suit within two yearsof the loss, they fall within an exception to the limitationsprovision. Second, Plaintiffs argue that Charter Oak's failure tocomply with yet another statute, Mass. Gen. L. ch. 231, § 140B,tolled the limitations period. Finally, Plaintiffs assert that,in any event, their unfair and deceptive practices claim underMass. Gen. L. ch. 93A, §§ 2 and 11 and ch. 176D, § 3, is timelypursuant to ch. 260, § 5A. The court will address each argumentin turn.


The insurance policy provision upon which all parties relyprovides as follows: No suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or equity this commonwealth unless commenced with two years from the time the loss occurred.

. . . . If a suit or action upon this policy is enjoined or abated, suit or action may be commenced at any time within one year after the dissolution of such injunction, or the abatement of such suit or action, to the same extent as would be possible if there was no limitation of time provided herein for the bringing of such suit or action.(Charter Oak's Brief at 3). This provision tracks Mass. Gen. L.ch. 175, § 99.2 In essence, Plaintiffs claim that theirindividual bankruptcy petitions had "enjoined" their claims andthereby extended the limitations period. The court is notconvinced.

As an initial matter, however, the court rejects Charter Oak'scontention that, pursuant to the contractual and statutoryprovision at issue, Plaintiffs' present lawsuit must havecommenced prior to the bankruptcy filings in order for Plaintiffsto thereafter be eligible for an extension of the limitationsperiod. If no suit had commenced, Charter Oak argues, there wasnothing to enjoin or abate.

The court reads the provision differently than Charter Oaks.See Coll v. PB Diagnostic Sys., 50 F.3d 1115, 1122-23 (1st Cir. 1995) (underMassachusetts law, contract interpretation is a question of lawfor the court unless the contract is ambiguous). In applicablepart, the provision states that "If a suit or action upon thispolicy is enjoined or abated, suit or action may be commencedat any time within one year after the dissolution of suchinjunction, or the abatement of such suit or action." The courttakes the plain meaning of the term "commenced" to mean "begin"or "initiate." Thus, the language of the exception foresees thata suit or action may be initiated after an injunction dissolvesor when an action is no longer abated, i.e., no longersuspended. Reading the provision, and the authorizing statute, inthe manner Charter Oak suggests would leave Plaintiffs withoutany exception at all. See Great Southwest Fire Ins. Co. v.Hercules Building & Wrecking Co., 619 N.E.2d 353, 356(Mass.App. Ct. 1993) (holding that insurer relying on "separate anddistinct" exclusion has the burden of proving that it applies).

Plaintiffs, however, do not fare as well with respect to thecore of their remaining argument. Even assuming that theprovision allows additional time for the commencement of lawsuitsthat have been "enjoined" or "abated," Plaintiffs had neitherbeen "enjoined" nor "abated" from commencing suit against CharterOak in the manner contemplated.

In reaching this conclusion, the court must necessarilydistinguish Plaintiffs' "abatement" argument from the automatic"stay" which takes effect upon the filing of a bankruptcypetition. See Soares v. Brockton Credit Union (In re Soares),107 F.3d 969, 975 (1st Cir. 1997); Sunshine Dev. v. FDIC,33 F.3d 106, 113-14 (1st Cir. 1994). As the parties are well aware, section 362(a)(1) of the BankruptcyCode provides that a petition in bankruptcy stays thecommencement or continuation of all nonbankruptcy judicialproceedings "against the debtor." See id.; Jamo v. Katahdin Fed.Credit Union (In re Jamo), 283 F.3d 392, 398 (1st Cir. 2002).The stay, of course, did not itself prevent Plaintiffs, asdebtors, from commencing suit against others, and Plaintiffs donot rely on its protections. Instead, Plaintiffs assert that theyhad been "enjoined" from bringing suit against Charter Oakbecause their rights had been transferred to their respectivetrustees in bankruptcy who alone could initiate suits.

The court does not entirely agree with Plaintiff's analysis. Inessence, the court finds that, given the facts of this case, the"enjoined or abated" language in the statute does not apply inthe manner suggested by Plaintiffs. Moreover, it must beremembered that Dimaio himself could have commenced suit againstCharter Oak at any time after the fire and before he filed forbankruptcy.3

To be sure, when both Dimaio and the Dimaio Family Pizzaseparately filed for bankruptcy, "all legal or equitableinterests . . . in property as of the commencement of the case"became the property of the respective bankruptcy estates. See11 U.S.C. § 541(a)(1). Thus, any cause of action could be pursuedby a representative of the estate, i.e., the trustee or, in aChapter 11 case where a trustee has not been appointed, by the debtor-in-possession. See 11 U.S.C. § 323(b).See also DiStefano v. Stern (In re J.F.D. Enters., Inc.),223 B.R. 610, 621 (Bankr. D. Mass. 1998), aff'd, 236 B.R. 112(Bankr. D. Mass. 1999), aff'd, 215 F.3d 1312 (1st Cir. 2000).Here, the bankruptcy trustees were the representatives of theestates and, as such, had exclusive standing to assert any statelaw claims against Charter Oak. See 11 U.S.C. § 323(b). Seealso Erricola v. Gaudette (In re Gaudette), 241 B.R. 491, 498(Bankr. D.N.H. 1999) ("More specifically stated, if the cause ofaction belongs to the estate, the trustee has exclusive standingto assert it.") Regan v. Vinick & Young (In re Rare CoinGalleries of Am., Inc.), 862 F.2d 896, 901 (1st Cir. 1988) ("Thetrustee steps into the shoes of the debtor for the purpose ofasserting or maintaining the debtor's causes of action, whichbecame property of the estate.") (citation omitted). But thetransfer of the "property," i.e., the claim against Charter Oak,from Plaintiffs to the trustees did not leave Plaintiffs withoutrights. Thus, the two entities in each bankruptcy, i.e., thetrustee and the debtor, "exist[ed] side-by-side, having differentpowers and rights and, as importantly, being separate anddistinct entitites and therefore having different interests."Gray v. Exec. Risk Indem., Inc. (In re Molten Metal Tech.,Inc.), 271 B.R. 711, 729 (Bankr. D. Mass. 2002). Thus,Plaintiffs, as debtors, could have petitioned the BankruptcyCourt to force their respective trustees to either initiate suitagainst Charter Oak or abandon their interests in the claimagainst Charter Oak. See Fed.R.Bankr.P. 6007. Plaintiffs,who were represented by counsel in the bankruptcy proceedings,failed to do so.

An instructive case on point is Polis v. Getaways, 2001 WL185481 (N.D. Ill. Feb. 26, 2001). There, the plaintiff, who was in bankruptcy,attempted to file an independent action against a promoter oftravel packages prior to the expiration of the statute oflimitations on her claim. The plaintiff argued that the courtshould allow her to file suit because the statute of limitationswas about to expire on the claim. At the promoter's request,however, the complaint was dismissed for lack of subject matterjurisdiction. The court found that the trustee in bankruptcy, notthe plaintiff, had standing to bring suit. If the plaintiff"believed that the trustee was not properly administering theclaim as an asset of the estate," the court explained, she "couldhave petitioned the bankruptcy court to order the trustee to filesuit or abandon the claim." Id. at *2 (citing11 U.S.C. §§ 105(a), 554(b); Bankruptcy Rule 6007). "Upon the trustee'sabandonment of the claim", the court continued, the plaintiff"would have standing to file suit." Id. (citing Koch Refiningv. Farmers Union Cent. Exchange, Inc., 831 F.2d 1339, 1347 n. 9(7th Cir. 1987)). Since the plaintiff never availed herself ofthis remedy under the law, she was "bound by her own inaction"and could not be afforded any relief. Id.

Here, too, Plaintiffs had at all times available the means forasserting their claim against Charter Oak either through thetrustees in bankruptcy or the Bankruptcy Court itself if thetrustees failed to properly pursue the claim. Thus, Plaintiffswere not "enjoined" or "abated," as those terms are used in thepolicy, from pursuing their claimed interests in a timely matter.

In this regard, there is no doubt that Plaintiffs were aware ofthe time constraints applicable to their claim. For one thing,both trustees in bankruptcy sought and obtained approval from the Bankruptcy Court to retain legalcounsel to commence legal actions, if necessary, to protect theclaims of the estates. Moreover, with the understanding ofPlaintiffs' attorneys, the trustees had twice asked Charter Oakfor additional time within which to bring suit. Charter Oakgranted those requests by extending the filing deadline toFebruary 2, 2003, and then again to April 11, 2003. No furtherextensions were sought. Thus, at a minimum, Plaintiffs had anadditional four months beyond the two year deadline within whichthey could have petitioned the Bankruptcy Court to force thetrustees either to initiate suit against Charter Oak or abandonthe claim so that they could pursue the claim on theirown.4 Indeed, Dimaio Family Pizza had some time, albeitonly nine days, to file suit on its own behalf after theBankruptcy Court on April 2, 2003, ordered the trustee to abandonany interest in the insurance claim. A similar abandonment didnot occur in DiMaio's bankruptcy until June 20, 2003.


Plaintiffs' second, alternative argument — that Charter Oak'sfailure to comply with Mass. Gen. L. ch. 231, § 140B tolled thestatute of limitations — is also unconvincing. In applicablepart, section 140B provides that "the cause of action of anyclaimant who receives an advance payment under this section butwho is not given the written notice required hereunder shallaccrue on the date such written notice is actually given and not on the date the injury or damage wassustained."5 Here, Plaintiffs contend, they did notreceive notice of the statute of limitations at the time CharterOak made a partial payment to the Town of Whately for the removaland disposal of the restaurant's building remnants and debris.

As Charter Oak argues, however, the notice requirementmentioned in the statute is intended for third-party claimants,here the Town of Whately, not the insurance policy holders, here Plaintiffs. Indeed, as Charter Oakpoints out, it appears that every Massachusetts case that hascited § 140B since its enactment in 1967 has done so in thethird-party context.

Nonetheless, Plaintiffs counter that the statute does notpreclude them from being both persons "insured against loss" and"claimants" entitled to the protection of the statute."Relatedly," Plaintiffs continue, "the statute is not worded insuch a way that would preclude Charter Oak from being both aperson against whom a claim is made and an insurer required togive the statutory notice." (Plaintiffs' Brief at 7.)

The court agrees with Charter Oak. In the one case Plaintiffscite in support of their argument, Allstate Ins. Co. v.Reynolds, 685 N.E.2d 1210 (Mass.App.Ct. 1997), the "claimant"was in fact a third party claimant, i.e., a passenger in theinsured's vehicle who filed suit against the insured for injuriessustained in an automobile accident. That is the very kind ofthird party claimant which, Charter Oak maintains, is protectedby the statute. In line with Reynolds, the court finds asfollows: the "claimant" in this case is the Town of Whately; the"person[s] against whom a claim or suit for damages on account ofbodily injury, property damage, or death is made" are Plaintiffs;and the "insurer" is Charter Oak. Plaintiff, as a result, cannotbe granted the additional time allowed by the statute andafforded claimants only. The court, therefore, declines to extendthe statute's protection in the manner Plaintiffs suggest.

To be sure, insurance claims are often very complex and involvea multitude of parties. It is fair, therefore, that each partyshould be given notice of the statute of limitations within whichto enforce its rights. But requiring such notice to the insured every time an insurance company renders a payment to a thirdparty, as Plaintiffs would have it, would not only be burdensomebut, given that the insured is provided notice of the statute oflimitations in the insurance contract itself, nonsensical.Accordingly, the court will enter summary judgment in CharterOak's favor with respect to Counts I through V.6


Plaintiffs fare better with regard to their last argument,namely, that their claim under Mass. Gen. L. ch. 93A, §§ 2 and 11and ch. 176D, § 3 in Count VI should survive Charter Oak's motionfor summary judgment. Pursuant to this court's scheduling orderof April 7, 2005, discovery proceeded only with regard to thestatute of limitations issue. Accordingly, Plaintiffs' claim inCount VI, for which there is a four year statute of limitations,is not presently before the court.


For the reasons stated, Charter Oak's motion for summaryjudgment is ALLOWED with regard to Counts I through V, but DENIEDwith regard to Count VI. The clerk's office shall schedule aconference so that the remaining discovery events may be set withrespect to Count VI.


1. Although the named insured is "Villa Dimaio Restaurant,"the parties have proceeded, for purposes here, as if Plaintiffsthemselves were insured by Charter Oak.

2. The pertinent part of chapter 175, § 99 reads as follows: No suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or equity in this commonwealth unless commenced within two years from the time the loss occurred. . . . If suit or action upon this policy is enjoined or abated, suit or action may be commenced at any time within one year after the dissolution of such injunction, or the abatement of such suit or action, to the same extent as would be possible if there was no limitation of time provided herein for the bringing of such suit or action.

3. Although the fire occurred after Dimaio Family Pizza filedfor bankruptcy, making the insurance claim a post-petition rightnot necessarily transferable to the trustee, the parties have notquestioned the transfer of that property right to the trustee. Asdescribed, Dimaio's personal petition for bankruptcy was filedafter the fire and, thus, the claim against Charter Oakautomatically became part of his bankruptcy estate. See11 U.S.C. § 541(a).

4. It is not clear from the record why the trustees did notcommence suit. Charter Oak, however, suggests that the trustees'decision is consistent with its position that its payments toPlaintiffs' creditors of over $335,000 for losses from the firefully discharged its liability under the policy.

5. In full, section 140B reads as follows: Any person against whom a claim or suit for damages on account of bodily injury, property damage, or death is made, or if such person is insured against loss by reason of his liability to pay such damages the insurer of such person may advance money to, or pay bills incurred by or on behalf of, such claimant, or plaintiff, as the case may be, without affecting the question of liability for such damages, and evidence of such payments shall not be admissible at the trial of such suit on the issue of liability or to mitigate damages; but if, in such case, there shall be a judgment in favor of the plaintiff for money damages, the presiding judge of the court in which the judgment is entered shall, upon motion of the defendant, credit upon such judgment the amount of such payments. Any such insurer who makes an advance payment under this section shall at the time of making such payment, by notice in writing, inform the claimant of the statute of limitations applicable to his claim and the time within which an action is required to be commenced to enforce such claim in a court of competent jurisdiction. The cause of action of any claimant who receives an advance payment under this section but who is not given the written notice required hereunder shall accrue on the date such written notice is actually given and not on the date the injury or damage was sustained.

6. Plaintiffs concede that if the suit limitations provisionwas construed in favor of Charter Oak, as it has been, then theirbreach of contract, waiver and estoppel claims would necessarilyfail. The same is true as to the implied covenant of good faithand fair dealing claim. See Chokel v. Genzyme Corp., 17 Mass.L. Rep. 83, 2003 WL 23016549, at *4 (Mass.Super.Ct. Nov. 12,2003) ("Without a breach of the contract, there can be no claimfor a breach of an implied covenant of good faith and fairdealing".) (citing AccuSoft Corp. v. Palo, 237 F.3d 31 (1stCir. 2001)).

Back to top