Gretzky v. AMGuard Insurance Company

United 	States 	District 	Court
District 	of Massachusetts
Victoria 	Gretzky,
Plaintiff,
V . 	Civil 	Action No.
25-10267-NMG
AmGUARD 	Insurance 	Company,
Defendant .
MEMORANDUM 	& ORDER
GORTON, 	J.
This 	case 	arises 	fro m allegations 	of 	u nfair 	and 	deceptive
business 	pract ic es 	brought 	by 	plaintiff , 	Victoria 	Gretzky
(" Gretzky " 	or 	" plaintiff " ) , 	against 	defendant , 	AmGUARD 	Insuran ce
Company 	( " AmGUARD " 	or 	" defendant " ) . 	Defendant 	moves 	to 	limit
damages . 	For 	the 	reasons 	that 	follow , 	that 	motion 	will 	be
allowed .
I . 	Background
a . Facts
In 	September , 	2021 , 	Gretzky 	was 	injured 	when 	she 	fell 	on 	a
staircase 	at 	an 	apartment 	building 	owned 	by 	Manual 	and 	Madalena
Arruda 	(" the 	Arrudas " ) . 	Gretzky 	sustained multiple 	fractures 	to
her 	legs 	that 	resulted 	in 	surgery 	and 	she 	was 	hospitalized 	for
several 	months . 	The 	Arrudas 	had 	purchased 	a 	liability 	insurance
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policy 	through 	AmGUARD 	which 	provided 	coverage 	for 	Gretzky ' s
fall .
In 	September , 	2022 , 	Gretzky 	filed 	an 	action 	against 	the
Arrudas 	in 	Massachusetts 	state 	court 	to 	recover 	her 	medical
expenses 	and 	pain 	and 	suffering 	damages . 	AmGUARD made
settlement 	offers 	many 	times 	before 	the 	case 	went 	to 	trial .
Gretzky 	declined 	all 	of 	t h ose 	settle ment 	offers 	and 	demanded
$1 , 000 , 000 	in 	damages , 	which 	was 	AmGUARD ' s 	policy 	limit , 	plus
interest . 	On 	the 	second 	day 	of 	trial , 	the 	parties 	settled 	and 	a
consent 	ju dgement 	was 	entered . 	It 	declared 	that 	Gretzky 	was
entitled 	to 	$2 , 250 , 000 	exclusive 	of 	interest 	and 	costs , 	and
reserved 	her 	right 	to 	bring 	first 	a n d 	t hi rd - party 	bad 	faith
claims 	against 	AmGUARD . 	AmGUARD 	acknowledged 	responsibility 	for
paying 	Gretzky 	$1 , 000 , 000 	but 	the 	parties 	dispute 	whether 	the
settlement 	required 	it 	to 	pay 	pre - judgement 	interest 	as 	well .
On 	July 	8 , 	2024 , 	Gretzky 	requested 	immediate 	payment 	of
$1 , 000 , 000 	plus 	pre - judgement 	interest . 	One 	week 	later , 	AmGUARD
submitted 	a 	check 	for 	$1 , 000 , 000 	with 	a 	written 	note 	that 	it 	was
in 	" full 	and 	final 	settlement ". 	Gretzky 	rejected 	that 	check
because 	the 	settlement 	agree ment 	per mitted 	h er 	to 	pursue 	bad
faith 	claims 	and 	the 	check 	did 	not 	include 	pre - judgement
interest . 	On 	July 	31 , 	2024 , 	AmGUARD 	sent 	an 	identical 	check 	to
plainti f f 	who 	again 	rejected 	it . 	On 	August 	8 , 	2024 , 	AmGUARD
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sent 	a 	new 	$1 , 000 , 000 	check 	without 	the 	written 	notation 	that
Gretzky 	accepted .
b. Procedural 	History
Later 	in 	August , 	2024 , 	plaintiff 	sent 	a 	demand 	letter 	to
AmGUARO 	for 	relief 	under 	M. G. L . 	c . 	93 , 	§9 	(" Chapter 	93A " ) 	and
also 	alleged 	a 	violation 	of 	M. G. L c . 	1760 , 	§3 (9) (a) - (d) , (f)
(" Chapter 	1760 " ) . 	In 	September , 	2024 , 	AmGUARO 	responded
offering 	plaintiff 	$232 , 769 , 	which 	represented 	pre - judgment
interest 	at 	12% 	accrued 	from 	September 	1 , 	2022 , 	through 	August
8 , 	2024. 	Plaintiff 	rejected 	that 	proffer .
In 	November , 	2024 , 	plaintiff 	filed 	a 	complaint 	against
AmGUARO 	in 	Massachusetts 	state 	court , 	allegi n g 	t h at 	AmGUARO
intentionally , 	knowingly , 	willfully 	and 	repeatedly
[violated 	Chapter 	93A 	and 	Chapter 	1760 , 	via] 	unfair 	and
deceptive 	practices 	in 	the 	business 	of 	insurance .
In 	February , 	2025 , 	the 	action 	was 	removed 	to 	this 	Court .
In 	defendant ' s 	answer 	it 	denies 	liability . 	In 	May , 	2025 ,
defendant 	filed 	a 	motion 	to 	limit 	damages 	under 	Chapter 	93A ,
asserting 	that 	the 	offer 	of 	settlement 	made 	in 	response 	to 	the
demand 	letter 	was 	reasonable 	and 	entitles 	it 	to 	the 	safe 	harbor
provision 	of 	Chapter 	93A .
Plaintiff 	opposes 	the 	motion , 	asserting 	that 	AmGUARO ' s
settlement 	offer 	was 	unreasonable 	relative 	to 	the 	actual 	injury
suffered . 	Plaintiff 	claims 	prejudgment 	interest 	is 	the 	wrong
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measure 	of 	economic 	damages 	and 	t hat 	damages 	fo r 	men tal 	anguish
and 	unnecessary 	prolongment 	of 	the 	litigation 	should 	have 	b een
included 	in 	the 	offer .
II . 	Legal 	Standard
Chapter 	176D , 	Section 	3 , 	of 	the 	Massachusetts 	General 	Laws
provides 	that 	insurance 	companies 	have 	an 	obligation 	to
" effectuate 	prompt , 	fair 	and 	equitable 	settlements 	of 	claims 	in
which 	liability 	has 	become 	reasonab ly 	clear . " 	M. G. L . 	c . 	176D ,
§3 ( 9) ( f) . 	Chapter 	93A 	of 	the 	Massachusetts 	General 	La ws
provides 	the 	statutory 	basis 	for 	damages 	when 	an 	in su rer 	has
violated 	Chapter 	1 76 D. 	In 	cases 	in 	which 	insurers 	have 	failed
to 	effectuate 	prompt 	and 	fair 	settlements ,
recovery 	shall 	be 	in 	the 	amount 	of 	actual 	damages ; 	or 	up 	to
three , 	but 	not 	less 	than 	two , 	times 	such 	amount
as 	punitive 	damages 	if 	the 	violative 	conduct 	is 	willful 	or
knowing . 	The 	punitive 	damages 	provisi on 	was 	amended 	in 	1989 	to
define 	the 	" actual 	damages " 	to 	be 	multiplied 	as 	"t he 	amount 	of
the 	ju dgment 	on 	al l 	claims 	arising 	out 	of 	the 	same 	and
underlying 	transaction 	or 	occurrence ." 	R. W. 	Granger 	& Sons ,
Inc . 	v . 	J 	& S 	Insulation , 	Inc ., 	754 	N. E . 	2d 	668 , 	680 	(2001)
As 	relevant 	to 	the 	present 	motion , 	Chapter 	93A 	also
includes 	a 	" safe 	harbor " 	provision . 	Section 	9(3) 	provides 	that
if 	a 	recipient 	of 	a 	demand 	letter 	timely 	tenders 	a 	written
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settlement 	offer 	and 	that 	offer 	i s 	rejected , 	the 	recipient 	may
limit 	dama ges 	when
the 	court 	finds 	that 	the 	relief 	tendered 	was 	reasonable 	in
relation 	to 	the 	injury 	actually 	suffered 	by 	the 	petitioner .
M. G. L . 	c . 	93A 	§ 	9 ( 3) .
The 	reasonableness 	of 	an 	offer 	is 	a 	question 	for 	the
factfinder , 	taking 	into 	account 	al l 	of 	the 	attendant 	facts 	and
circumstances . 	Applied 	Image 	Reprographics , 	Inc . 	v . 	Citizens
Bank 	of 	Mass ., 	2012 	WL 	2913528 , 	at 	*12 	(Mass . 	Super . 	Ct . 	June 	5 ,
2012) . 	When 	plaintiff 	has 	no 	reasonable 	expectation 	of 	proving
an 	elem ent 	of 	her 	case , 	however , 	the 	question 	of 	reasonab leness
may 	be 	res o lved 	as 	a 	matter 	of 	law . 	Wahlstrom 	v . 	Zu rich 	Am .
Ins . 	Co ., 	2022 	WL 	20416910 , 	at 	*4 	(D . 	Mass . 	Nov . 	22 , 	2022) .
III. 	Analysis
The 	parties 	dispute 	the 	meaning 	of 	" injury 	actual ly
suffered ,n 	in 	the 	safe 	harbor 	provision . 	Defendant 	contends
that 	the 	injury 	in 	such 	cases 	is 	the 	loss 	of 	use 	of 	the 	money
wrongfully 	withheld 	by 	the 	insurer 	and , 	therefore , 	the
reasonableness 	of 	the 	offer 	should 	be 	based 	on 	the 	interest 	lo s t
on 	the 	money 	th at 	should 	ha ve 	been 	proffered 	once 	liability 	was
r easonab ly 	established . 	With 	that 	understanding , 	defendant
offere d 	$ 232 , 769 , 	which 	represents 	interest 	at 	the 	rate 	of 	12 %
on 	the 	$1 	million 	policy 	limit , 	assuming 	that 	the 	$1 	million 	was
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payable 	on 	September 	1 , 	2022 	(the 	date 	the 	underlying 	tort 	claim
was 	filed) .
Plaintiff 	resp onds 	that 	loss 	of 	use 	is 	not 	applicable 	when
there 	is 	a 	judgment 	in 	the 	underlying 	tort 	ca se 	and 	the 	insurer
committed 	a 	willful 	violation 	of 	Chapter 	176D . 	She 	asserts
that , 	in 	such 	cases , 	the 	judgment 	should 	be 	multiplied 	pursuant
to 	the 	punitive 	damages 	amendment 	to 	the 	statutory 	scheme . 	She
also 	argues 	that 	the 	injury 	actually 	suffered 	includes 	damages
for 	emotional 	distress 	and 	the 	stress 	of 	going 	to 	trial 	but 	she
does 	not 	submit 	what 	a 	reasonable 	offer 	would 	have 	been 	other
than 	to 	suggest 	it 	should 	have 	been 	closer 	to 	the 	judgment 	of
$2 , 250 , 000 .
a. Loss 	of 	Interest
Plaintiff 	is 	mistaken 	about 	the 	applicability 	of 	loss - of -
use 	damages . 	Massachusetts 	case 	law 	indicates 	that 	loss 	of 	use
is 	the 	proper 	measure 	of 	damages , 	see , 	~ 	, 	Wahlstrom , 	2022 	WL
20416910 , 	at 	*4 	(collecting 	cases) , 	and 	plaintiff 	cites 	no
authority 	to 	the 	contrary . 	The 	single 	case 	she 	relies 	on ,
Rhodes 	v . 	AIG 	Domestic 	Claims , 	Inc ., 	is 	factually
distinguishable . 	First , 	the 	$7 	million 	offer 	in 	that 	case 	was
to 	settle 	both 	the 	judgment 	of 	the 	underlying 	tort 	suit
(approx ima tely 	$11 	million , 	which 	had 	not 	yet 	to 	be 	paid) 	and
the 	Chapter 	93A 	claim . 	Second , 	although 	perhaps 	the 	$7 	million
offer 	could 	have 	satisfied 	the 	safe 	harbor 	provision , 	none 	o f
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• 	I
the 	courts 	in 	the 	litigation 	analyzed 	the 	offer 	in 	that 	regard.
Third , 	at 	the 	time 	the 	$7 	million 	was 	offered , 	a 	judge 	had
already 	found 	the 	de fendant 	l iable 	for 	willful 	and 	knowing
violations 	of 	Chapter 	93A , 	enabling 	an 	award 	of 	punitive
damages .
Rhodes 	is 	inapposite 	to 	this 	case 	because 	(1) 	AmGUARD ' s
offer 	was 	to 	settle 	the 	Chapter 	93A 	claim 	o n ly 	because 	the
underlying 	tort 	action 	had 	already 	been 	settled ; 	(2) 	Rhodes 	did
not 	involve 	the 	safe 	harbor 	provision 	of 	the 	statute 	on 	which
this 	case 	indispu tably 	turns ; 	and 	(3) 	there 	has 	been 	no 	judicial
finding 	of 	a 	willful 	and 	knowing 	violation 	of 	Chapter 	93A . 	The
loss 	of 	use 	of 	wrongfully 	withheld 	settlement 	funds 	is 	the
proper 	standard 	that 	this 	Court 	will 	use 	to 	determine 	whether
AmGUARD ' s 	offer 	was 	reasonable.
Having 	determined 	that 	loss 	of 	use 	is 	the 	proper 	measure 	of
damages 	under 	Section 	1760 , 	the 	ultimate 	question 	is 	what 	was
that 	loss 	here?
i. 	Prejudgment Violations
Beginning 	with 	the 	prejudgment 	violation , 	plaintiff 	does
not 	and 	cannot 	argue 	that 	AmGUARD 	was 	obligated 	to 	settle 	for
more 	than 	the 	$1 	million 	policy 	limit . 	That 	is 	the 	maximum
amount 	plaintiff 	could 	have 	expected 	to 	receive . 	Thus , 	with
respect 	to 	prejudgment 	violations , 	plaintiff 	was 	deprived 	of 	use
of 	$1 	million , 	and 	her 	damages 	are 	the 	interest 	accrued 	on 	that
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' 	I
amount. 	Defendant ' s 	settlement 	offer 	was 	precisely 	that 	amount
and 	was 	therefore 	reasonable 	relative 	to 	the 	prejudgment
injuries .
ii. 	Post-Judgment Violations
As 	for 	post - judgment 	violations , 	plaintiff 	argues 	that
after 	the 	parties 	entered 	their 	consent 	judgment , 	defendant
became 	obligated , 	pursuant 	to 	the 	terms 	of 	the 	settlement , 	to
pay 	prejudgment 	interest 	on 	the 	$1 	million , 	i . e . 	$232 , 769 .
Thus , 	defendant 	is 	alleged 	to 	have 	wrongfully 	withheld 	the
payment 	of 	interest 	and 	therefore 	owes 	interest 	on 	the 	interest
which 	defendant 	did 	not 	include 	in 	its 	offer .
Whether 	defendant 	was 	required 	to 	pay 	prejudgment 	interest
as 	part 	of 	the 	consent 	judgment 	is 	a 	question 	of 	fact 	that 	the
Court 	will 	not 	determine 	at 	this 	stage . 	Assuming , 	arguendo ,
that 	the 	consent 	judgment 	did 	in 	fact 	mandate 	payment 	of 	the
prejudgment 	interest , 	the 	settlement 	offer 	was 	reasonable
relative 	to 	the 	injury 	suffered . 	The 	two - month 	withholding 	o f
the 	prejudgment 	interest 	resulted 	in 	less 	than 	$5 , 000 	in 	loss-
of - use 	damages , 	a 	de 	minimis 	amount 	compared 	to 	the 	amount
offered 	to 	plaintiffs , 	and 	therefore 	the 	September 	12 	settlement
offer 	was 	reasonable 	as 	a 	matter 	of 	law .
b. Other 	Injury
Finally , 	plaintiff 	contends 	that 	the 	Chapter 	93A 	settlement
offer 	was 	unreasonable 	because 	it 	did 	not 	include 	any 	damages
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for 	emotional 	distress . 	Plaintiff 	is 	correct 	that 	a 	Chapter 	93A
settlement 	may 	include 	more 	than 	just 	loss 	of 	use 	of 	wrongfully
withheld 	funds . 	Other 	damages 	include 	emotional 	distress 	for
t he 	fear 	of 	financial 	ruin 	and 	the 	hassle 	of 	litigation . 	Urban
v . 	Zurich Am . 	Ins . 	Co. , 	737 	F . 	Su pp. 	3d 	39 , 	46 	(D . 	Mass . 	2024) .
Yet , 	in 	this 	case , 	plaintiff 	did 	not 	include 	a 	request 	for 	such
damages 	in 	her 	demand 	letter . 	Not 	having 	been 	apprised 	of
plaintiff ' s 	alleged 	injuries 	outside 	of 	loss 	of 	use , 	defendan t
cannot 	be 	expected 	to 	have 	included 	compensation 	for 	such
damages 	in 	its 	offer . 	See 	Wahlstrom , 	2022 	WL 	20416910 , 	at 	*8 .
ORDER
For 	the 	foregoing 	reasons , 	the 	Motion 	to 	Limit 	Damages
(Docket 	No . 	19) 	is 	ALLOWED.
So 	ordered.
Nathaniel 	M. 	Gorton
Senior 	United 	States 	District 	Judge
Dated : 	November /O , 	2025
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