In Appleton v. National Union Fire Insurance Co., No. 24-1952 (1st Cir. July 29, 2025), Paula Appleton was severely injured in a car accident in January 2015 when a pickup truck struck her vehicle from behind. Appleton filed an insurance claim against the driver, whose policy was administered by AIG Claims, Inc. Over four years, Appleton and AIG exchanged settlement offers and attended three mediations but failed to reach a settlement. In March 2019, a Massachusetts state court jury awarded Appleton $7.5 million in damages. Appleton then sued AIG and National Union Fire Insurance Company in federal court, alleging they failed to conduct a reasonable investigation and did not extend a prompt and fair settlement offer as required by Massachusetts law.
The United States District Court for the District of Massachusetts granted summary judgment in favor of the defendants. The court concluded that the defendants conducted a reasonable investigation and that their duty to extend a prompt and fair settlement offer was not triggered because the value of Appleton’s damages never became clear.
The United States Court of Appeals for the First Circuit reviewed the case. The court determined that a reasonable jury could find that Appleton’s damages became clear in early 2018 and that the defendants failed to extend a prompt and fair settlement offer afterward. Consequently, the court vacated the district court’s summary judgment ruling in part and remanded for trial on Appleton’s settlement claim. However, the court affirmed the district court’s grant of summary judgment on Appleton’s claim that the defendants failed to conduct a reasonable investigation.