A federal judge has denied a Massachusetts construction company’s attempt to reinstate its unfair insurance practices claims against Arch Specialty Insurance Company, declining to decide whether a Massachusetts statute invalidated the New York choice-of-law provision in its insurance policy.
The August 21, 2026, ruling came nearly five months after Agency Checklists raised that precise statutory question.
In his March 23 analysis, Is Choice-of-Law Illegal in Surplus Lines Policies, Agency Checklists’ Co-Founder, Owen Gallagher, questioned whether Massachusetts General Laws Chapter 175, Section 22, prohibited the foreign choice-of-law provision in the Arch policy, notwithstanding its status as surplus lines coverage.
The question arose after U.S. District Judge Indira Talwani dismissed Callahan Construction Managers’ Massachusetts Chapter 93A and 176D claims on February 27, 2026. The court enforced a broad New York choice-of-law provision in the policy, effectively eliminating the insured’s Massachusetts statutory claims because New York law provided no comparable private remedy.
A Massachusetts Statute That May Affect Surplus Lines Policies
As Agency Checklists noted in March, Chapter 175, Section 22 provides, in relevant part:
No company and no officer or agent thereof shall make, issue or deliver any policy of insurance … containing any condition, stipulation or agreement … providing that any such policy or contract made in the commonwealth on lives, property or interests therein shall be governed by the laws of any state or country other than this commonwealth. Any such condition, stipulation or agreement shall be void.
In Agency Checklists’ view, the statute raises questions about the enforceability of foreign choice-of-law provisions in policies made or delivered in Massachusetts, including policies issued by surplus lines insurers.
Court Declines to Decide the Issue
Callahan subsequently raised Section 22 in a motion for reconsideration, arguing that the statute invalidated Arch’s choice-of-law provision. Alternatively, Callahan requested that the federal judge certify the question to the Massachusetts Supreme Judicial Court.
Judge Talwani denied both requests.
The court concluded that Callahan could have raised Section 22 when originally opposing Arch’s motion to dismiss but failed to do so. Because the statutory argument was raised for the first time on reconsideration, the judge declined to address its merits.
The August ruling leaves the dismissal of Callahan’s Chapter 93A and 176D claims intact.
The underlying legal question identified in the March Agency Checklists analysis remains unanswered: whether Chapter 175, Section 22 applies to surplus lines policies such as Callahan’s and, if so, whether it invalidates their foreign choice-of-law provisions.
Callahan, Inc. d/b/a Callahan Construction Managers v. Arch Specialty Insurance Company, No. 1:25-cv-10412-IT (D. Mass. Aug. 21, 2026).
