The Massachusetts Supreme Court overturned a lower court decision on Wednesday and unanimously ruled that an insurer does not have to pay attorney’s fees in a personal injury case.
Paul and Jane Poirier, who ran a cleaning company, Leominster, Massachusetts-based Servpro in Fitchburg-Leominster, had received “entrepreneurial liability protection” from Montpelier-based Vermont Mutual Insurance Co., according to Wednesday’s ruling by the Massachusetts Supreme Court in Vermont Mutual Insurance Co. vs. Paul Poirier and others.
After determining the liability protection, the policy states that it will not pay any other sums unless expressly provided for in an extension of coverage, the ruling said.
In June 1999, Douglas and Phyliss hired Maston Servpro to clean up a sewage spill in their basement. Servpro workers remove contaminated material, clean the baseman and applied disinfectants.
They did not warn Maston that it could be dangerous to stay in the basement until the disinfectants had dried. Ms. Matson continued to clean the basement after the disinfectant was applied and developed shortly after ongoing breathing problems that her doctor determined were caused by exposure to the chemicals used in Servpro’s cleaning products, the ruling said.
The Matson couple sued the poiries for breach of contract and neglect, among other things. Following a bench trial, the trial judge issued a $ 267,248.67 award to Ms. Maston for reduced earning capacity, medical expenses and pain and suffering and an additional $ 5,000 to Mr. Maston for loss of consortium damage.
The judge also awarded the couple $ 215,328 in fees and $ 15,447.76 in costs. A state appellate court upheld the rewards and imposed additional attorney’s fees of $ 21,600 and appeal costs of $ 1,970.35.
The Massachusetts Supreme Court in Boston overturned the decisions of the lower courts and held that the policy did not cover attorneys’ fees. “The insurance contract here provides only the recovery of ‘damages’ and attorneys’ fees” cannot be reclaimed as damages under the insurance contract, “the state Supreme Court said, re-referring the case to further proceedings.
Laura A. Foggan, chair of Crowell & Moring LLP’s insurance / reinsurance group in Washington, who filed an amicus letter supporting the insurer on behalf of the American Property Casualty Insurance Association in the case, issued a statement that partially stated: “As the court acknowledged is “damages to compensate for the damage, and the imposition of attorneys’ fees is to deter misconduct and recognize the public benefit of bringing the misconduct to light.” Consequently, the court found no coverage for the attorney’s fees. “
Other lawyers in the case did not respond to a request for comment.