By what standard is bad faith failure to settle measured in Massachusetts? Silva v Norfolk & Dedham Mass App Ct 2017 – set out the standards.


There must be expert evidence that NO reasonable insurer, having the information available to the carrier on trial – would have failed to settle.

**2020 update – see Chuilli v Liberty Mutual Mass App – duty triggered when a reasonable insurer with the same facts would have offered to settle.**


Insured car rear ended a tow truck; Silva was in the truck.  He worked that day and for the next year before claiming to have been badly injured.

The case went to trial and Silva won a judgment far in excess of the policy limits. After the judgment, while the case was on appeal, the insurer offered to pay the policy limits without including post judgment interest, conditioned upon a release of its insured.

After trial, Silva gave the driver a release in return for assignment of her rights to bad faith insurance claims against her insurer – for failing to promptly settle within the policy limits.

The judge determined the insurer made a reasonable decision to try the case rather than to settle.  During the bad faith trial, the Judge refused to allow an attorney to testify that the carrier’s conduct was bad faith.


There were plenty of facts produced in the claims file to establish reasons to doubt the claimant’s veracity.  During the bad faith trial, there was no testimony about steps the carrier should have but did not take.  Fault was clear but damage was subject to good faith disagreement.  An insurer’s good faith but mistaken evaluation of damages is not a violation of 176D.

The expert was prohibited from testifying on the ultimate issue because his list of activities that were ‘unfair claims practices’ did not establish that no reasonable insurer would have failed to settle within the policy limits.

An insurer can be liable for … for negligent handling of its settlement.  The test … “is not whether a reasonable insurer might have settled the case within the policy limits, but rather whether no reasonable insurer would have failed to settle the case within the policy limits.” Hartford Cas. Ins. Co. v. New Hampshire Ins. Co., 417 Mass. 115, 118 at 121 (1994).

Insurers must unconditionally offer to pay the policy limits or be exposed to post judgment interest afterwards.  The Appeals Court found no bad faith in failing to unconditionally offer the policy limits – the risk was exposure to post judgment interest which the carrier later paid.

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