Demeo v. State Farm Mutual Automobile Insurance

The single issue before us is whether the defendant failed to “effectuate prompt, fair and equitable settlement of [a] claim[] in which liability has become reasonably clear.” G. L. c. 176D, § 3(9)(/), as inserted by St. 1972, c. 543, § 1.

The essential facts of the controversy are not in dispute:1 the defendant’s insured (Wallace) was in her automobile travelling in the passing lane of a divided highway. The light was red at the approaching intersection, but as Wallace came closer to the intersection, the light turned green. Apparently confused about her location, Wallace stopped at the green…