The plaintiffs, individually and on behalf of other persons similarly situated, brought this action pursuant to G.L.c. 93A, §§ 2 (a), 9, against the defendant (Commercial) in March, 1974. The complaint alleges that Commercial employed unfair and deceptive settlement practices in handling personal injury and property damage claims under the Massachusetts no-fault motor vehicle insurance laws, G.L.c. 90, §§ 34M-340, et seq., and requests that the court grant the plaintiffs (and others similarly situated) injunctive relief, reasonable attorneys' fees, and monetary relief in the amount of actual damages multiplied by three. Commercial filed a demurrer, treated as a motion to dismiss, in May, 1974, and a motion for summary judgment in December, 1975, both alleging that the complaint fails to set forth a cause of action under c. 93A. A judge of the Superior Court, relying on the pleadings and a stipulation of all material facts entered into by the parties solely for the purpose of deciding Commercial's motions, entered an interlocutory order denying the motions. At the request of the parties, the judge stayed the proceedings below and reported the matter of his interlocutory order to the Appeals Court.
For the purposes of deciding the issues raised by Commercial's motions, and not otherwise, Commercial stipulates that the plaintiff's factual allegations are true. In addition, the parties stipulate that (a) Commercial is a Massachusetts insurance company, 20% of whose gross revenue is derived from transactions in interstate commerce; (b) all claims in this case arose from transactions and actions which occurred primarily and substantially within Massachusetts; (c) the Attorney General has not proposed any action against Commercial under G.L.c. 93A concerning Commercial's claim practices and has not notified the Federal Trade Commission or Commercial of any such proposed action; and (d) the Federal Trade Commission has not sent the Attorney General any written objection to proposed Attorney General action with respect to Commercial practices, or served Commercial with a complaint concerning its business practices. The parties agree that these stipulated facts comprise all the facts material to the issues raised by Commercial in its motions.
Commercial argues that it is exempt from application of c. 93A under § 3 (1) (b) of that chapter and is therefore not subject to actions pursuant to c. 93A, § 9. In the alternative
1. General Laws c. 176D contains prohibitions and remedies which overlap provisions of G.L.c. 93A. Commercial maintains that c. 93A is inapplicable to activities which fall within this area of overlap because the Legislature intended that c. 176D preclude concurrent application of c. 93A and that c. 93A exclude the insurance business from the scope of its prohibitions and its remedies.
Chapter 176D, § 2, as appearing in St. 1972, c. 543, § 1, prohibits "unfair or deceptive act[s] or practice[s] in the business of insurance." Sections 5-7 authorize the Commissioner of Insurance to investigate insurance company affairs, to hold hearings to determine the legality of their practices, and to order insurance companies to cease and desist from engaging in acts or practices found to be unfair or deceptive.
Chapter 93A, § 2, inserted by St. 1967, c. 813, § 1, prohibits "unfair or deceptive acts or practices in the conduct of any trade or commerce" (emphasis added). The Attorney
Chapter 93A, § 3 (1) (a) (inserted by St. 1967, c. 813, § 1), also provides that nothing in c. 93A applies to "transactions ... otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of the commonwealth." Consequently, neither the Attorney General nor an individual consumer can maintain an action under c. 93A based on practices permitted under c. 176D. See SDK Medical Computer Servs. Corp. v. Professional Operating Management Group, Inc., 371 Mass. 117, 126-127 (1976) (procedure for ensuring lack of conflict). The provisions of cc. 176D and 93A, thus, overlap but do not conflict.
Chapter 176D on its face does not exclude application of c. 93A to unfair and deceptive insurance practices. Section 8 of that chapter clearly contemplates concurrent application of "other laws of this commonwealth." One such applicable law is G.L.c. 90, § 34M, a portion of the no-fault motor vehicle insurance statutory scheme, which provides that a person to whom benefits are due under a no-fault
Nothing in c. 176D by implication excludes c. 93A from the phrase "other laws." The legislative failure to enact a private remedy for c. 176D violations does not show an intent to bar all private remedies for unfair and deceptive insurance practices. Like the Attorney General, the Commissioner of Insurance has limited resources with which to vindicate individuals' wrongs, so he too must focus his attention on insurance practices he finds most deleterious to the public interest, leaving small but valid claims unattended. Commercial argues that, although a private right of action would protect such claims, the Legislature did not enact such a remedy in its 1972 amendment to c. 176D. However, one can infer that this omission stemmed from the Legislature's knowledge that such a consumer right of action already existed pursuant to c. 93A, § 9, rather than from a desire to bar such actions. See note 3 supra. Indeed, the Legislature's reenactment of the § 8 saving clause in
The mere existence of one regulatory statute does not affect the applicability of a broader, nonconflicting statute, particularly when both statutes provide for concurrent coverage of their common subject matter. See Marshal House, Inc. v. Rent Control Bd. of Brookline, 358 Mass. 686, 697-699 (1971). Cf. SDK Medical Computer Servs. Corp. v. Professional Operating Management Group, Inc., 371 Mass. 117, 126-127 (plaintiffs can bring c. 93A action for unfair competition even though the Commissioner of Insurance may have administrative authority under c. 176D to correct the allegedly unfair practices); Gordon v. Hardware Mut. Cas. Co., 361 Mass. 582, 585-587 (1972). Therefore, since c. 176D does not preclude application of c. 93A to insurance practices expressly or by implication, we conclude that c. 176D does not bar application of c. 93A to unfair or deceptive insurance acts or practices.
In addition, we hold that c. 93A, § 2 (a), covers insurance practices in its prohibition of unfair or deceptive acts or practices in any trade or commerce. Section 1 (b), as appearing in St. 1972, c. 123, includes in its definition of "any trade or commerce," see point 2 at pp. 79-80 infra, "the sale ... of any services and any property, tangible or intangible ... and any other ... thing of value wherever situate, and ... any trade or commerce directly or indirectly affecting the people of this commonwealth." Contrast G.L.c. 255D (Retail Installment Sales and Services Act), § 1, as appearing in St. 1967, c. 775, § 1 ("Services, any work, labor, or other services, purchased primarily for personal, family or household purposes ... but excluding insurance of all types"). We have previously held that c. 93A, § 2 (a), creates broad new rights, forbidding conduct not previously unlawful under the common law of contract and tort or under any prior statute. Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693 (1975). Commonwealth v. DeCotis, 366 Mass. 234, 244 n. 8 (1974). Section 1 (b) includes insurance transactions in the broad sweep of c. 93A, § 2 (a),
2. Commercial argues that, even if c. 93A, § 2 (a), applies to unfair and deceptive insurance practices, c. 93A, § 9, does not provide a private remedy for such practices because insurance policies do not constitute services or property within the meaning of § 9 (1), see p. 75-76 supra.
We construe § 9 in a manner consistent with its legislative purpose. United States Trust Co. v. Commonwealth, 348 Mass. 378, 383 (1965). Its purpose is to provide individual consumers with a remedy for injuries from § 2 violations, see pp. 75-76 supra, and thus to further the basic policy of c. 93A, "to regulate business activities with the view to providing ... a more equitable balance in the relationship of consumers to persons conducting business activities." Commonwealth v. DeCotis, 366 Mass. 234, 238 (1974). In achieving that purpose the Legislature wished to protect business from frivolous and unforeseeable consumer litigation. Therefore it limited the scope of § 9 by excluding practices involved in sales of "thing[s] of value," practices which merely "affect" citizens of this Commonwealth, practices which do not result in loss of money or property, and practices unrelated to sales (or lease) transactions. It did not exempt from the remedial provisions of § 9 any class of business which customarily engages in consumer transactions. Such an exemption would be inconsistent with the general purpose of c. 93A and the purpose of § 9 in particular. Hence, under the statutory scheme set forth in c. 93A, only the Attorney General, who represents the public's interest in fair and honest business practices, can take action based on practices in atypical consumer transactions, or practices whose harm to consumers is indirect. However, consumers directly affected by unfair business practices in common sales transactions can recover for their concrete injuries, however small, under § 9.
We conclude that sales of motor vehicle insurance policies constitute sales of property and sales of services
Although Commercial is not exempt from application of § 9 as matter of law, we note in passing that Commercial is subject to the remedial provisions of § 9 only as to those plaintiffs who show that they are purchasers of the insurance policies under which their claims are pressed and that their losses are attributable to their purchases of Commercial's insurance packages. Section 9 provides a remedy for persons who purchase property or services and thereby suffer a loss. See pp. 75-76 supra. Persons who are additional insureds under an insurance policy are not "purchasers" of that policy within the meaning of § 9 because they did not participate in the consumer transaction (sale of insurance package) on which § 9 is predicated. Furthermore, the losses such persons sustain by reason of an insurer's failure to settle their claims, are not losses attributable to sales of insurance.
The plaintiffs in this case have alleged losses of money because of unfair and deceptive practices by Commercial in its sales to them of motor vehicle insurance policies. This allegation states a proper cause of action under G.L.c. 93A, § 9 (1), and, if proved, can support a finding for the plaintiffs.
Finally, we find that Commercial is not exempt from application of c. 93A, § 9, under c. 93A, § 3 (1) (b), inserted by St. 1967, c. 813, § 1, which provides that "(1) [n]othing in this chapter shall apply to ... (b) trade or commerce of any person of whose gross revenue at least twenty per cent is derived from transactions in interstate commerce, excepting however transactions and actions which (i) occur primarily and substantially within the commonwealth, and (ii) as to which the Federal Trade Commission or its designated representative has failed to assert in writing within fourteen days of notice to it and to said person by the attorney general its objection to action proposed by him and set forth in said notice." The parties agree that more than 20% of Commercial's gross revenues derive from interstate commerce, that the transactions involved in this case occurred primarily and substantially in the Commonwealth, that the Attorney General sent no notice proposing action against Commercial to Commercial or to the Federal Trade Commission, and that the commission has not objected to any action. Thus, the parties effectively agree that the elements of § 3 (1) (b) (i) are present in this case and that the elements of § 3 (1) (b) (ii) are not.
We need not decide here whether the exception to the
Chapter 176D does not preclude application of c. 93A to unfair and deceptive insurance practices. Commercial is not exempt from c. 93A. Therefore, the judge properly denied Commercial's motion to dismiss and motion for summary judgment. It follows that his questions are answered in the negative and the case is remanded for trial.
"A. Is defendant exempt from c. 93A under Massachusetts statutory law, including c. 176D?
"B. Is defendant exempt from c. 93A under the United States Code, including the Federal Trade Commission Act (15 U.S.C. §§ 41-46, 47-58) and regulations thereunder?"