In an October 23, 2018 decision, the Appeals Court, affirmed, in the case of Derrick Martins Oliveira vs. The Commerce Insurance Company, a Superior Court ruling in favor of The Commerce Insurance Company (“Commerce”) construing for the first time in Massachusetts the meaning of the terms “related by blood” in relation to who is an insured under the underinsured motorist coverage section of the standard Massachusetts auto policy (“auto policy”).
Facts giving rise to Mr. Oliveira’s claim against Commerce
On July 18, 2014, Mr. Oliveira was injured in a serious single-automobile accident while a passenger in a vehicle owned and operated by a third party. The driver of the vehicle in which he was a passenger was “highly intoxicated” and crashed the vehicle at high speed into a diesel fuel pump at a fire station in Charlestown.
As a result of the accident, Mr. Oliveira sustained fractures to his spine and ribs, tore ligaments in his knee, and suffered substantial lacerations and scarring on his scalp. He was hospitalized for four days, required long-term disability, and incurred medical bills of more than $40,000.
The driver responsible for causing Mr. Oliviera’s injuries had $100,000 guest liability coverage under her auto policy. Mr. Oliveira made a claim and received the driver’s full liability limit of $100,000. However, based on his injuries, Mr. Oliviera believed the responsible driver was underinsured, and he looked to an auto policy that offered additional underinsured motorist coverage.
Commerce’s $250,000 underinsured motorist policy limit and Mr. Oliviera’s claim
At the time of his 2014 accident, Mr. Oliveira had lived with his fiancée since 2012 in a single-family unit in Dorchester along with his fiancée’s mother and stepfather. Mr. Oliviera and his fiancée had had a minor son together who also lived with them in this multi-generational family grouping. Within this household, Mr. Oliviera and his fiancée cooked and ate together, shared some household expenses, watched television and played video-games together and with their son. However, Mr. Oliveira was not married to his fiancée when he was injured in his Charlestown auto accident.
Mr. Oliviera did not own a motor vehicle. His fiancée’s grandparents owned two motor vehicles insured with Commerce under a policy that provided $250,000 per person in underinsured motorist coverage. The grandparents allowed both Mr. Oliveira and his fiancée to use their vehicles and listed them on their policy with Commerce as operators.
Under the grandparents’ policy, Commerce would pay Mr. Oliviera for his uncompensated injuries “caused by someone who [did] not have enough insurance” if Mr. Oliviera could qualify as an insured and prove his damages exceed the $100,000 he received from the responsible driver’s insurer.
Mr. Oliviera’s claimed denied because he was not “related by blood” to named insureds
After settling with the responsible driver’s insurer, Mr. Oliveira submitted a claim under Commerce’s policy with the grandparents. Under this standard auto policy form, persons qualifying for underinsured motorist benefits included:
Any household member…while occupying an auto not owned by You [the grandparents]…”
Claim denial, Superior Court, and appeal
There was no dispute that Mr. Oliviera had received his injuries while occupying a vehicle not owned by the grandparents. The dispute between Mr. Oliviera and Commerce primarily involved the policy’s definition of a “household member.” This definition stated:
Household Member – means anyone living in your household who is related to you by blood, marriage or adoption. This includes wards, step-children or foster children.”
Mr. Oliveira claimed coverage under the policy as a “household member” of the policy-holding grandparents. While Mr. Oliveira was not related by marriage or adoption to the grandparents, he argued that he was related by blood to these insureds through his biological son and therefore entitled to coverage as a “household member.”
Commerce denied the claim stating Mr. Oliveira did not “meet the definition of a ‘household member'” under the policy.
Mr. Oliviera filed suit in the Superior Court against Commerce. On cross-motions for summary judgment, the judge hearing the matter found that Mr. Oliveira was not related by blood to either grandparent. Thus, he was not a “household member” and was not entitled to underinsured motorists coverage under the policy.
Mr. Oliviera appealed the Superior Court decision to the Appeals Court.
The Appeals Court’s majority decision affirmed Superior Court ruling with a two-judge dissent
To the three-justice majority, the usual and ordinary sense of the phrase “related by blood” denotes a genetic relationship between the two persons asserted to be related citing a law dictionary defining “blood relative” as “[o]ne who shares an ancestor with another.”
In this case, the majority ruled there was no genetic relationship between Mr. Oliveira and the policy-holding grandparents.
The majority noted that Mr. Oliveira relied on the fact that both he and one of the policy-holding grandparents, his fiancée’s mother had a genetic relationship with Mr. Oliveira’s child. The three judges pointed out that the policy covers (for underinsured motorists purposes) a person “related to you [the policyholder] by blood, marriage or adoption,” not someone “who is related by blood to someone you are related to by blood.”
These judges refused to grant Mr. Oliveira’s request for reading the policy to include an expansive definition of “related by blood.” To them, the policy language by specifically adding “wards, step-children or foster children” to the persons included in “household member,” made evident that the meaning of “related . . . by blood, marriage or adoption” was not suited to further expansion beyond its usual and ordinary meaning. Otherwise, there would be no need to add those categories of persons to the definition of “household member.”
Mr. Oliveira’s construction of “related by blood” was “breathtaking in its breadth and yet remarkably disconnected to the asserted policy goal of covering a broad range of family relationships.” Majority opinion
The majority distinguished a Supreme Judicial Court case in which that court had applied such an expansive definition of “related by blood” in deciding who was entitled to seek a protective order from abuse and domestic violence as not applicable to the insurance context.
To the majority, Mr. Oliveira’s construction of “related by blood” was “breathtaking in its breadth and yet remarkably disconnected to the asserted policy goal of covering a broad range of family relationships.” The majority noted that under Mr. Oliveira’s theory, any two persons with a common blood relative were themselves related by blood. The majority to emphasize this point out stated that under this definition: “Indeed, a couple with a biological child would be surprised to find themselves to be blood relatives.”
The majority concluded ruling in favor of Commerce that:
…the Superior Court judge correctly concluded, based on the undisputed facts, that Mr. Oliveira was not “related by blood” to the policyholders in the usual and ordinary sense of those words, the judge properly granted summary judgment to the insurer.
Dissent focuses on a statute and prior Supreme Judicial Court decision
The two-judges joining in the 16-page dissent to the majority’s 12-page decision in favor of Commerce focused on a number of issues. However, the three main points were:
The undefined term “resident relative” is broad enough to provide coverage for Mr. Oliviera through his common relationship through his son to the son’s maternal grandmother. Dissenting justices
- In a 2001 case, the Supreme Judicial Court concluded that two individuals, who were in the identical relationship to one another as Mr. Oliveira and his biological son’s maternal grandmother, are “related by blood,” to obtain protection from domestic abuse. To the dissenters, contrary to what the majority held in ruling for Commerce, the same essential rules apply to the interpretation of that very same phrase in the insurance policy in dispute.
- Underinsured motorists is a statutory coverage. The statute does not define “related by blood” or “household member.” Instead, the law states coverage applies to a “resident relative.” the statute, unlike the policy, does not use the phrase “household member.” Instead, the statute provides, in pertinent part, that someone in Mr. Oliveira’s position was eligible for underinsured motorists coverage “from the policy of a resident relative” (Emphasis in original). The undefined term “resident relative” is broad enough to provide coverage for Mr. Oliviera through his common relationship through his son to the son’s maternal grandmother.
- Modern society presents an almost infinite variety of possible domestic situations and living arrangements. The Supreme Judicial Court has ruled the term ‘household member’ can have no precise or inflexible meaning. Mr. Oliveira qualifying for underinsured motorists coverage because he is considered to be related by blood to his child’s maternal grandmother, with whom he resides, is no more broad to the dissenting judges than, “a person qualifying for underinsured motorists coverage under the policy issued to his or her third cousin, with whom he or she happens to reside.”
The dissenting justices concluded that in their opinion the fair meaning of the language used in the policy, as applied to Mr. Oliviera’s claim consistent with the statutory language and legislative policy of the underinsured motorists statute was:
Mr. Oliveira and his child are ‘related by blood.’” Likewise, the maternal grandmother, through her daughter, Mr. Oliveira’s fiancée, is “related by blood” to the child. Thus, the child is “related by blood” to both the maternal grandmother and Mr. Oliveira.” And, as was the case [before the Supreme Judicial Court], this makes Mr. Oliveira and the grandmother “related by blood” through that child.
They concluded stating for the record they would reverse the judgment, allow Mr. Oliveira’s motion for summary judgment, deny Commerce’s motion for summary judgment, and declare that Mr. Oliveira qualifies as a “household member” under the policy issued by Commerce to the grandmother and step-grandfather.
Ruling for Commerce with two-judge dissent may result in further appellate proceedings
The favorable Appeals Court ruling for Commerce resulted from a relatively rare five-judge panel deciding this case. The Appeals Court has twenty-four appellate judges and a chief justice. The cases heard by this court are almost exclusively decided by three-judge panels.
In any particular appeal, if a single judge dissents from the decision of the other two panel members, the decision of the two will prevail unless a majority of the other twenty-two justices of the court agree with the dissenting judge’s interpretation of the law. When opinions are scheduled for publication, all the justices review them before their release. In the case of a dissenting opinion, if a majority of all the Justices agrees with the majority of the panel, the decision is published as a two to one decision of the original panel. If a majority of all the Justices agrees with the dissent, the panel is enlarged to reflect the view of the majority of the court, generally by adding to the panel the two senior Justices who are part of the full court majority. The case heading, in such case, shows the panel had five members, but in effect, the decision is that of the entire court.
In this case, the favorable decision for Commerce resulted from the majority of justices siding with the original dissenting judge of the original panel. Two additional justices were added to the original panel to support the dissenting judge’s opinion, which then became the majority opinion of the five justices. The original decision of the two other justices then became the dissenting opinion.
The Massachusetts Appeals Court is an intermediate appellate court. The ultimate judicial authority resides with the Supreme Judicial Court. Parties dissatisfied with an Appeal Court’s decision may apply for further appellate review. However, the allowance of any further appeal is discretionary with the Supreme Judicial Court.
Under the Massachusetts Rules of Appellate Procedure, Mr. Oliveira will have until November 12, 2018, to apply for further appellate review. Counsel for Mr. Oliviera, Brad W. Greenberg, has advised Agency Checklists he will file an application for further appellate review with the Supreme Judicial Court.
Based upon the three-to-two Appeals Court decision, and the arguments of the dissenting justices based upon a prior Supreme Judicial Court decision, Mr. Oliveira has nothing to lose and much to gain by making an application for further appellate review to the Supreme Judicial Court.
Agency Checklists will keep you posted
If Mr. Oliveira ultimately decides not to file for further appellate review or, if he files and the Supreme Judicial Court does not allow further appellate review, this decision will state the accepted legal interpretation of what the “related by blood” language in the standard Mass auto policy.
Agency Checklists will monitor this case and keeps its readers posted as to any further developments.