Insurer sues to avoid paying $9.9M ‘torture email’ award

A liability insurer is seeking a declaration that it has no duty to pay a $9.9 million judgment facing a Dartmouth homeowner and his companion who were sued by their neighbors.

Certain Underwriters at Lloyd’s of London filed a declaratory judgment action in U.S. District Court in Boston against Dr. Timothy G. Haydock and his companion Barbara Moss, and Margaret and John Reichenbach. According to the complaint, from November 2007 through November 2012, Underwriters provided personal liability coverage under a series of five policies issued to Haydock, who lives in Dartmouth.

In 2015, the Reichenbachs sued Haydock and Moss, alleging the defendants had subjected them to years of harassment and obstruction while they attempted to build their dream home on a nearby waterfront lot. The Reichenbachs’ suit alleged that the defendants deprived them of their constitutional right to enjoy their property in violation of the Massachusetts Civil Rights Act, tortious interference with a contract, and trespass.

Evidence presented at a March 2023 trial in Bristol Superior Court featured an email Moss allegedly sent to another neighbor in which Moss wrote in apparent reference to the Reichenbachs: “We’re going to torture them! Just you wait and see.”

The jury found Haydock and Moss liable on each of the Reichenbachs’ claims, awarding $3.7 million in damages.

In May 2024, Judge Thomas J. Perrino granted the plaintiffs counsel fees and expenses under the MCRA in the amount of $2,383,816, to be borne jointly and severally by Haydock and Moss. With pre-judgment interest, Perrino entered judgments against each defendant for a combined total of $9,902,881.

In January, Perrino denied the defendants’ motion for a new trial and judgment notwithstanding the verdict. Haydock and Moss have appealed.

In its suit, Underwriters contends that while it provided its insured with a defense, it had no duty to indemnify either Haydock or Moss for the judgments against them.

As to Moss, the insurance carrier argues that while Haydock’s companion may have lived with him on occasion, she was neither a named insured nor a covered member of Haydock’s “household” within the meaning of its policies.

More to the point, Underwriters claims an exclusion in its policies for bodily injury or property damage “expected or intended by an insured” barred coverage of the Reichenbach judgments.

Further, Underwriters points to language in policies issued for 2010 and 2011 excluding from the definition of a covered claim personal injury “[c]aused by or at the direction of an ‘insured’ with the knowledge that the act would violate the rights of another and would inflict ‘personal injury,’” as well as any personal injury “[a]rising out of oral or written publication of material, if done by or at the direction of an ‘insured’ with knowledge of its falsity.”

Boston lawyer Robert P. Powers believes Underwriters has a strong case in arguing that it has no duty to cover the underlying judgments against Haydock and Moss.

“I’ve been around long enough to know that nothing is a ‘slam dunk,’” says Powers, whose Melick & Porter practice includes insurance coverage defense. “But I would agree that Underwriters is holding a very, very strong hand. They handled the matter correctly in that they undertook the defense under a reservation of rights.”

Powers says the insurance carrier’s case is bolstered by the Bristol Superior Court jury’s answers to special interrogatories in Reichenbach v. Haydock. Powers notes that the jury specifically found that none of the damages awarded for the MCRA violations or trespass were attributable to the defendants’ conduct during the periods covered by policies issued by Underwriters in November 2010 and November 2011.

Underwriters also has a strong case in arguing that Moss was not a covered member of Haydock’s household.

“Equitable considerations aren’t going to change the fact that the Underwriters policy says ‘insured’ means a ‘resident of your household who is a relative,’ and she’s not,” he says. “Underwriters has a very strong argument that they owe her no obligations whatsoever.”

The jury verdict also appears to make clear that Haydock and Moss acted with the requisite state of mind for purposes of triggering Underwriters’ exclusions for intentional injury.

For example, the jury answered “yes” to questions as to whether both Haydock and Moss used “threats, intimidation, or coercion” to interfere with the Reichenbachs’ constitutional rights to use and enjoy their property. Likewise, the jury found that both Haydock and Moss had intentionally interfered with the Reichenbachs’ contract with their builder, making the construction project more expensive.

The Reichenbachs’ attorney, Robert B. Feingold of Feingold Bonnet-Hebert in New Bedford, declined a request for comment.

Christopher P. Flanagan of Wilson Elser in Boston represents Underwriters in its declaratory judgment action. Flanagan did not respond to a request for comment. Melissa C. Allison of Anderson Kreiger in Boston represents Haydock and Moss and also did not respond.