Rhodes v. AIG Domestic Claims, Inc.

Cypher, J.

On January 9, 2002, plaintiff Marcia Rhodes (Marcia),3 then forty-six years old, stopped her car, as directed by a police officer conducting traffic around a tree service crew, whereupon she was hit from behind by an eighteen-wheel trailer truck, leaving her instantly and permanently paralyzed. Marcia, along with her husband, Harold, and their daughter, Rebecca (collectively, the plaintiffs), are claimants under policies of insurance issued by the defendants for Building Materials Corp. of America (GAF),4 to whom the truck driver was assigned at the time of the accident. The plaintiffs brought this action against the defendant insurers, under G. L. c. 176D, § 3(9)(f), and c. 93A, §§ 2 and 9, for failure to effectuate prompt, fair, and equitable settlements of the plaintiffs’ tort claims. Principal among the issues on appeal are the plaintiffs’ burden to prove that their damages were caused by a recalcitrant insurer, and the amount to be multiplied for the insurer’s wilful and knowing violations of c. 93A.

We recount the facts relevant to this appeal from the trial judge’s comprehensive June 3, 2008, “Findings of Fact, Conclusions of Law, and Order,” summarized here and detailed further, as needed, in our discussion. Marcia was severely injured in 2002, when a truck struck her car from behind on Route 109 in Medway. At the time she was hit, she had been stopped by a patrolman at the site of tree service work being conducted by Jerry MacMillian’s Professional Tree Service (Professional Tree Service). The driver of the trailer truck, Carlo Zalewski, was employed by Driver Logistics Services (DLS), and was assigned to drive the truck for GAF. GAF leased the truck from Penske Truck Leasing Corp. (Penske). GAF carried a $2 million primary *301automobile insurance policy with Zurich American Insurance Company (Zurich), and a $50 million excess umbrella policy with National Union Fire Insurance Company of Pittsburgh, PA (National Union). AIG Domestic Claims, Inc. (AIGDC), formerly known as AIG Technical Services, Inc., was the claims administrator for National Union.5

GAF and Zurich used Crawford & Company (Crawford), as a third-party administrator for GAF’s claims. Crawford received notice of the claim regarding Marcia on January 9, 2002, the day of the accident. Crawford characterized the claim as “catastrophic” and deemed it reportable to both GAF and Zurich. A Crawford report dated January 30, 2002, sent to GAF, Zurich, and AIGDC, described the accident and indicated both that Marcia was paralyzed and remained hospitalized in life-threatening condition, and that the claim would carry a high value. A second correspondence from Crawford to GAF, Zurich, and AIGDC on April 8, 2002, reported that Zalewski, the driver of the truck, was clearly liable for the accident, and that there was the potential for contribution from Penske, Professional Tree Service, and the town of Medway. Crawford recommended that Zurich put the $2 million policy limits in reserve.

On April 16, 2002, Marcia returned home for the first time since the accident, where she was confined to a wheelchair, only to be hospitalized in May for emergency surgery. She again returned home in June, 2002. On July 12, 2002, the plaintiffs filed a civil complaint against Zalewski, DLS, Penske, and GAF (the tort action), Marcia seeking damages for her injuries, and Harold and Rebecca seeking damages for loss of consortium.6 On November 21, 2002, Zalewski admitted to sufficient facts to support a finding of guilt as to criminal charges stemming from the accident.

In September, 2002, and May, 2003, Crawford provided Zurich and AIGDC with an estimate for the plaintiffs’ case of between $5 million and $10 million. On August 13, 2003, the plaintiffs sent to GAF’s counsel a “day in the life” videotape, chronicling a typical day for Marcia, now a paraplegic, and a *302written demand for $16.5 million, which included summarized medical expenses of $413,977.68, present value of future medical costs of $2,027,078, loss of household services of $292,379, and out-of-pocket expenses of $83,984.74.

On September 11, 2003, Crawford sent Zurich a copy of the plaintiffs’ written demand and accompanying documentation, including medical records and expenses, and the videotape. Zurich then set about to verify the claims, developing its own life care plan and conferring with GAF’s defense counsel concerning the claims, defenses, and value of the plaintiffs’ damages. On a November 19, 2003, conference call, a Zurich claims director told GAF’s counsel, along with Crawford and AIGDC, that she would seek authority to tender Zurich’s policy limit of $2 million. GAF’s counsel recommended that a $5 million settlement offer be made to the plaintiffs, but AIGDC’s claims director refused, claiming he was new to the case and that he wanted to hire additional counsel to represent GAF and AIGDC.

Following the conference call, Zurich’s claims director began compiling the necessary information for a report that was required by Zurich to obtain authorization for the $2 million tender to AIGDC. On December 19, 2003, she submitted the report, estimating the value of the claim in excess of $10 million. The individual to whom she submitted the report was leaving Zurich’s employ at the end of the year, and the request for authority was forwarded to her replacement. Approval came on January 22, 2004, and on January 23, 2004, Zurich verbally tendered its policy limits to AIGDC, which indicated that it would not accept a verbal tender and needed it in writing.

In the meantime, the plaintiffs’ August 13, 2003, settlement demand went unanswered. AIGDC, for its part, refused to make a settlement offer prior to mediation and claimed more discovery was needed. On March 18, 2004, GAF’s counsel sent a letter to AIGDC, stating that its failure to tender settlement constituted a violation of c. 176D, § 3(9)(/), and c. 93A. AIGDC continued to drag its feet, however, wrangling with Zurich over defense obligations and refusing to accept Zurich’s tender of its primary policy limits (conduct described by the trial judge here as “spurious”). At the end of March, 2004, GAF’s counsel offered *303the plaintiffs Zurich’s policy limit of $2 million to settle the case, which the plaintiffs rejected.

In mid-April, 2004, the plaintiffs agreed to mediation, but AIGDC refused to proceed, claiming the need for more discovery, including depositions of Marcia and Rebecca, even though the discovery period had closed in September, 2003. Again, AIGDC stalled, waiting until July 20, 2004, to conduct an independent medical examination of Marcia and eventually forgoing the deposition of Rebecca altogether before mediation. As the trial date of September 7, 2004, loomed, AIGDC finally agreed to schedule mediation for August 11, 2004. AIGDC’s claims director recommended that authority be given to make a settlement offer at mediation of $6 million, but AIGDC’s claims supervisor overruled him and authorized a settlement of only $4.75 million, which included $2 million from Zurich plus $1 million from Professional Tree Service (the limits of its coverage, which AIGDC assumed it would be willing to pay; as it turned out, Professional Tree Service ultimately settled for $550,000).

At the mediation on August 11, 2004, the plaintiffs sought $15 million to settle the case. AIGDC offered $3.5 million. Harold testified at trial that he would not have accepted a settlement offer of less than $8 million at the mediation. No further settlement offers were forthcoming.

Trial on the tort action commenced before a jury on September 7, 2004. Before trial, the parties stipulated to liability, and the case proceeded on the issue of damages only. When AIGDC determined that the trial was proceeding more favorably to the plaintiffs than anticipated, AIGDC increased its offer to $6 million, which was not accepted. The jury returned its verdict on September 15, awarding the plaintiffs a total of $9,412 million on their claims; with interest and adjustments, the amount came to approximately $11.3 million. Judgment entered on the jury verdict on September 28, 2004.

AIGDC filed an appeal from the tort judgment, arguing that the verdict was excessive and that the court’s denial of the defendants’ motion to obtain Marcia’s psychological records during discovery was reversible error. On November 19, 2004, the plaintiffs sent a c. 93A demand letter to Zurich and AIGDC, demanding reasonable settlement within thirty days. On December 17, *3042004, AIGDC offered $7 million, which included Zurich’s $2 million, and required the plaintiffs to release all claims under c. 176D and c. 93A. Shortly thereafter, on December 22, Zurich paid the plaintiffs $2,322,995.75, without requiring releases. The plaintiffs filed this action on April 8, 2005.

On May 2, 2005, AIGDC offered the plaintiffs a structured settlement that, combined with the other defendants, totaled $8.62 million. On June 2, 2005, the plaintiffs settled with AIGDC for $8,965 million, paid in three monthly installments, with no release of the plaintiffs’ c. 176D and c. 93A claims. Adding this to the amounts paid by the other defendants, the plaintiffs were paid a total of approximately $11,835 million to settle the tort action.

This action for violations of c. 176D and c. 93A was tried to the judge over sixteen days. The judge found for the insurers on all but the plaintiffs’ claims stemming from AIGDC’s postverdict settlement conduct. He awarded the plaintiffs their loss of use damages for AIGDC’s delay in making a reasonable settlement offer after the jury verdict, which he doubled on account of AIGDC’s wilful and knowing violations of c. 176D and c. 93A.

On appeal, the plaintiffs argue that the judge erred as to the claims against AIGDC in (1) finding no liability for AIGDC’s pretrial violations of c. 176D; (2) basing the postverdict violation damages on loss of use, rather than on the underlying judgment; and (3) using the wrong dates for the calculation of postver-dict damages. Last, the plaintiffs argue that the judge erred by finding Zurich not liable for its pretrial conduct. AIGDC cross-appeals, arguing that the judge erred (1) in holding it liable for postverdict violations of c. 176D; and (2) in the calculation of damages.

1. AIGDC’s pretrial conduct, a. Liability. The judge found that AIGDC failed to effectuate a prompt settlement of the plaintiffs’ claims once liability became reasonably clear, as required by law, and that its failure was wilful and knowing. As the judge explained: “AIGDC did not delay its settlement offer to conduct the investigation needed to make liability reasonably clear; it delayed it because it thought it would be in a better strategic posture if the offer were postponed until the mediation and it did not wish the mediation to occur until trial was nearly *305imminent.” The judge found that liability and damages for Marcia’s injuries were reasonably clear on December 5, 2003, and, with respect to AIGDC’s excess policy, when Zurich tendered its policy limits on January 23, 2004. The judge concluded that, even allowing a generous amount of time for all the issues AIGDC claimed it needed to resolve, AIGDC violated its statutory duty by failing to make a settlement offer by May 1, 2004. As to the fairness of the settlement offer, the judge found that when AIGDC finally made an offer of $3.5 million to the plaintiffs on August 11, 2004, the amount was at the “low end” of the reasonable range for the plaintiffs’ claims.7

General Laws c. 93A, § 2(a), inserted by St. 1967, c. 813, § 1, states that “[ujnfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” General Laws c. 176D, § 3, inserted by St. 1972, c. 543, § 1, for its part, prohibits “unfair or deceptive acts or practices in the business of insurance,” including, in subsection (9)(/), the failure “to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” General Laws c. 93A incorporates c. 176D, thereby encouraging settlement of insurance claims, whether those of an insured or a third-party claimant, and discouraging insurers from forcing claimants into unnecessary litigation to obtain relief. Clegg v. Butler, 424 Mass. 413, 419 (1997). Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556, 564, 567-568 (2001). See generally Morrison v. Toys “R” Us, Inc., 441 Mass. 451, 454-455 (2004) (“One obvious legislative concern was that entities that profit from selling insurance policies not abuse exclusive rights and duties to control litigation vested through those same policies”). “Together, the statutes require an insurer . . . ‘promptly to put a fair and reasonable offer on the table when liability and damages become clear, *306either within the thirty-day period set forth in G. L. c. 93A, § 9(3), or as soon thereafter as liability and damages make themselves apparent.’ ” Bobick v. United States Fid. & Guar. Co., 439 Mass. 652, 659 (2003), quoting from Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 566.

The judge found that the plaintiffs incurred costs and suffered emotional distress from the uncertainties and frustrations of litigation as the matter dragged on past the point at which liability for Marcia’s tort injuries became clear and a settlement offer from AIGDC was statutorily due. But the judge pointed to Harold’s testimony that, by the time of the mediation, the plaintiffs would not have settled for less than $8 million as proof that the plaintiffs would have rejected AIGDC’s offer of $3.5 million even if it had been put forth promptly. Based on that finding, the judge determined that a timely and reasonable settlement offer would not have materially diminished the plaintiffs’ harm because they would have rejected the offer, proceeded with litigation, and incurred the costs and frustrations of litigation in any event.8 The judge thus concluded that the plaintiffs suffered no actual damages caused by AIGDC’s deliberate and strategic delay in making an offer to settle the tort action.

The plaintiffs challenge the judge’s ruling that it was their burden to prove they would have accepted a settlement offer of $3.5 million, had AIGDC put forth that amount by May 1, 2004, in order to establish that they were damaged by the insurer’s recalcitrance. They point to the admonition of the Supreme Judicial Court that “[a]n insurer’s statutory duty to make a prompt and fair settlement offer does not depend on the willingness of a claimant to accept such an offer.” Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567. “Even excessive demands on the part of a claimant... do not relieve an insurer of its statutory duty to extend a prompt and equitable offer of settlement once liability and damages are reasonably clear.” Bobick v. United States Fid. & Guar. Co., 439 Mass. at 662.

*307Our courts have recognized the frustrations and costs of unnecessary litigation as part of the injury to be averted by c. 176D and c. 93A, for those with meritorious claims covered by insurance policies. See Clegg v. Butler, 424 Mass. at 419. To further that objective, the statutes are “designed to make it ‘unprofitable’ for a defendant to ignore meritorious claims.” International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 857 (1983) (c. 93A). Therefore, even where the plaintiff initially rejected a tardy but reasonable offer of settlement, the Supreme Judicial Court has reiterated that “quantifying the damages for the injury incurred by the plaintiff as a result of [an insurer’s] failure under G. L. c. 176D, § 3(9)(/), does not turn on whether the plaintiff can show that she would have taken advantage of an earlier settlement opportunity.” Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567. See Bobick v. United States Fid. & Guar. Co., 439 Mass. at 663, and cases cited (reiterating the teaching of Hopkins, supra).

We believe the Supreme Judicial Court’s discussion of the issue in Bobick, supra at 662-663, should guide our analysis in this case, despite AIGDC’s assertion that it constituted mere dicta.9 To begin, we agree with the plaintiffs that evidence that they would not have settled their claims for less than $8 million at mediation, less than a month before trial, was speculative as proof of whether they would have settled their claims had AIGDC put forth a reasonable offer months earlier, and should not serve as the basis for denying recovery for the insurer’s misconduct. Indeed, the judge’s finding that the unlawful delay in making a settlement offer was strategic on AIGDC’s part implicitly acknowledged that, at least from AIGDC’s jaded perspective, the degree of the claimants’ frustrations was subject to change as the case dragged on. AIGDC apparently was willing to risk a deliberate violation of the statutes in the hope that the plaintiffs’ mounting frustrations and financial strain would inure to the insurer’s benefit. The statutory multiplier serves as a deterrent to just that. See, e.g., Yeagle v. Aetna Cas. & Sur. Co., 42 Mass. App. Ct. 650, 655 (1997) (“Hence the 1989 amendment *308[to c. 93A], which threatened a bad faith defendant with multiplication of the amount of the judgment secured by the plaintiff on his basic claim — a total that might be many times over the interest factor”).

Recognizing the damaging effects of such tactics by insurers, the Supreme Judicial Court said in Hopkins v. Liberty Mut. Ins. Co., supra:

“We reject the defendant’s contention that the plaintiff has not shown she was adversely affected or injured by its conduct. The defendant’s deliberate failure to take steps, as required by law, to effectuate a prompt and fair settlement . . . when the liability of its insureds was clear, forced the plaintiff to institute litigation, and in so doing, to incur the inevitable ‘costs and frustrations that are encountered when litigation must be instituted and no settlement is reached.’ ”

434 Mass. at 567, quoting from Clegg v. Butler, 424 Mass. at 419.10

Given the uncertainty of the effect that unfair settlement practices and prolonged pretrial maneuvering may have on the claimant’s circumstances and outlook when a late settlement offer finally is made, we think the plaintiffs’ recovery here should not turn on conjecture as to what they might have done had AIGDC not abused its position. AIGDC may have gambled that delaying until trial was imminent would weaken the claimants’ resolve; the opposite may well occur.11 Even AIGDC’s posture changed considerably once the trial was underway, increasing *309its offer from $3.5 million to $6 million in a matter of days. But whatever the effect of AIGDC’s calculated delay on the plaintiffs’ willingness to accept the tardy offer eventually put forth, we hesitate to hinge their recovery on a hypothetical response to a timely and reasonable offer, based on their actual response to a deliberately late one.

Our analysis is informed by the purpose of the statutory scheme, which is not to require the insurer to extend an initial offer that must be accepted by the claimant but, rather, to initiate the process of settlement negotiations promptly and thereby facilitate out-of-court resolution. “The statute [G. L. c. 176D, § 3(9)] does not call for [a] defendant’s final offer, but only one within the scope of reasonableness.” Bobick v. United States Fid. & Guar. Co., 439 Mass. at 662. See International Fid. Ins. Co. v. Wilson, 387 Mass. at 857 (c. 93A). By initiating the settlement process in a timely fashion, the ordinary give and take of negotiations provides the opportunity to move forward toward resolution before costs escalate, frustrations mount, positions harden, and a trial looms. “Ordinary give and take would suggest that both would and should move.” Forcucci v. United States Fid. & Guar. Co., 11 F.3d 1, 2 (1st Cir. 1993) (describing the settlement process under c. 176D, § 3[9]). The applicable statutes were enacted to prevent the harmful effect on the claimant and the settlement process when the claimant’s demand for settlement of a meritorious claim goes unanswered. See, e.g., Clegg v. Butler, 424 Mass. at 419 (“Whether a settlement is eventually reached or not, unjust delay subjects the claimant to many of the costs and frustrations that are encountered when litigation must be instituted and no settlement is reached”).

We conclude that the causal link between AIGDC’s unfair settlement practices and injury to the plaintiffs was sufficiently established by showing that the insurer failed to initiate the settlement process once the merits of the plaintiffs’ claims were clear, thus depriving the plaintiffs of the opportunity to engage in a timely settlement process, and thereby forcing them to pursue recovery through the courts. See Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 566-567. Compare R.W. Granger & Sons, *310Inc. v. J & S Insulation, Inc., 435 Mass. 66, 81 (2001) (unreasonable settlement practices after jury verdict on underlying claim).12 “In this context, ‘injury’ simply refers to ‘the invasion of any legally protected interest of another.’ ” Clegg v. Butler, 424 Mass. at 418, quoting from Leardi v. Brown, 394 Mass. 151, 159 (1985), and Restatement (Second) of Torts § 7 (1965). See generally Hershenow v. Enterprise Rent-A-Car Co. of Boston, 445 Mass. 790, 799-800 (2006) (discussing Leardi, supra). The record here established that the plaintiffs were injured when the settlement process was inexplicably delayed, thereby compounding their frustrations and fears as a result of prolonged and deliberate neglect of their meritorious claims. See Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567. Compare R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. at 81 (causal link established between insurer’s wrongful postverdict settlement practices and loss to plaintiff when plaintiff’s clear right to recovery under its surety bond was delayed).

We consider the statutory purpose better served if evidence that the plaintiffs rejected AIGDC’s $3.5 million offer less than a month before trial, or even hoped for significantly more at that late date, is not relied upon to suppose that the settlement process was doomed from the start. The Legislature has placed the duty on the insurer to effectuate settlements by proceeding promptly with a reasonable settlement offer, thereby reducing the uncertainties and frustrations that inevitably follow from needless delay and the complications of litigation. “An insurer should not be permitted to benefit from its own bad faith, where, *311as occurred here, it violated G. L. c. 176D, § 3 (9)(/), by intentionally failing to make a prompt, fair offer of settlement.” Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 568. On this record, we conclude that the plaintiffs established that they were harmed when AIGDC deliberately chose to ignore its statutory duty to make a prompt settlement offer when liability was clear, thereby denying the plaintiffs the opportunity to engage in the settlement process and exacerbating their losses.

b. Measure of damages. While our reading of Hopkins v. Liberty Mut. Ins. Co. and Bobick v. United States Fid. & Guar. Co., supra, persuades us that the plaintiffs’ rejection of AIGDC’s offer of $3.5 million at mediation did not undermine the causal link between the insurer’s delay and the plaintiffs’ damages, it did, however, affect the measure of those damages.

In Hopkins v. Liberty Mut. Ins. Co., supra, where the plaintiff accepted a late settlement offer, the Supreme Judicial Court explained the measure of damages as follows: “The so-called causation factor entitles a plaintiff, like the plaintiff here, to recover interest on the loss of use of money that should have been, but was not, offered in accordance with G. L. c. 176D, § 3(9)(/), if that sum is in fact included in the sum finally paid to the plaintiff by the insurer.” 434 Mass. at 567. The court then added by footnote: “We need not decide in this case whether the same measure of damages would apply in a case where an insurer, having initially violated G. L. c. 176D, § 3 (9)(/), and G. L. c. 93A, §§ 2 and 9, thereafter makes a fair and reasonable (but nevertheless tardy) offer of settlement, which is refused by a claimant.” Id. at 567 n.16. We read the qualification to mean that while the court did not reach the question whether the “measure of damages,” that is, how the damages are quantified, would differ when a reasonable offer is made late and rejected, damages are nevertheless incurred in such a situation as a consequence of the insurer’s delay. See, e.g., R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. at 81-82 (discussing “measure of damages,” as distinct from issue of causation, as going to question whether single or multiple damages should be awarded and amount to be multiplied). Contrary to AIGDC’s assertion, we do not read the Hopkins footnote to mean that the recalcitrant insurer that eventually makes an offer prior to trial might be relieved of *312all damages; that would tend to condone, rather than discourage, strategic delay. See Hopkins v. Liberty Mut. Ins. Co., supra at 566 (c. 176D, § 3[9][F], and c. 93A, § 9, “together require an insurer . . . promptly to put a fair and reasonable offer on the table when liability and damages become clear, either within the thirty-day period set forth in G. L. c. 93A, § 9 [3], or as soon thereafter as liability and damages make themselves apparent”). Compare R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., supra at 77 (c. 176D was intended to punish insurer that deliberately delayed offer to settle after jury verdict in underlying action, only to put forth late offer that was substantially less than case was worth).

The statutory scheme still encourages the insurer to put the offer on the table, even if late in doing so, to avoid multiplication of the underlying judgment. “That a wilful violator can limit his liability by making a reasonable settlement offer demonstrates the critical importance of the settlement process.” International Fid. Ins. Co. v. Wilson, 387 Mass. at 857. In keeping with the statute’s purpose of fostering out-of-court resolution of insurance claims, we conclude that the amount of the damages for AIGDC’s tardy but reasonable offer, rejected by the plaintiffs, should not be measured by the judgment obtained in the underlying tort action, as urged by the plaintiffs but, rather, should be measured by loss of use principles. As such, damages should be calculated between the time AIGDC breached its duty to make the initial offer, and the date the reasonable offer finally was made and rejected; this is the same result to the insurer had its late but reasonable offer been accepted. See Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567 (claimant entitled to recover “interest on the loss of use of money that should have been, but was not, offered,” to remedy insurer’s wrongdoing).13 Compare Yeagle v. Aetna Cas. & Sur. Co., 42 Mass. App. Ct. at 654-655 *313(where case went to trial after failed negotiations in which insurer offered less than competent conciliator’s evaluation of case value, and plaintiff would have accepted the amount determined by the conciliator, proper measure of c. 93A single damages award was interest on tort recovery for period settlement was wrongfully withheld).

We must therefore remand the matter to the Superior Court for a determination of loss of use damages on the amount of AIGDC’s $3.5 million settlement offer, between the date the judge found AIGDC clearly violated the statute, May 1, 2004, and the date it finally made a reasonable offer, August 11, 2004. Because AIGDC’s delay was found to be wilful and knowing, the amount of the plaintiffs’ damages is subject to multiplication. See Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 561, 569. Whether the damages are to be doubled or trebled shall be decided on remand as well.

2. AIGDC’s postverdict conduct. The judge also found that AIGDC violated the applicable statutes by deliberately failing to make a prompt and reasonable settlement offer to the plaintiffs following the jury verdict in the underlying action. The judge characterized AIGDC’s initial postverdict offer of $7 million, on December 17, 2004, as “not only unreasonable, but insulting,” and found it a knowing and wilful violation of c. 176D. The judge awarded loss of use damages to the plaintiffs, which he doubled rather than trebled, “only because AIGDC later came to its senses and made a reasonable post-judgment offer before the appellate litigation began in earnest.”

a. Liability. AIGDC filed a cross appeal from the judge’s determination that AIGDC violated its statutory duty by unreasonably delaying settlement with the plaintiffs after the verdict in the underlying case. In particular, AIGDC argues that the judge erred in finding that its appeal from the judgment in the tort action lacked merit, without first hearing expert testimony addressing the issue. But where AIGDC conceded liability at the outset of the underlying trial on the tort action, we reject AIGDC’s argument that the issues raised in its appeal from that judgment were so complex or involved such specialized knowledge that the judge required expert opinion as to their merits. The grounds for the appeal, which the judge assessed as “unusually feeble,” *314involved the amount of the judgment, which AIGDC’s own experts placed as within the reasonable range for the plaintiffs’ claims, and a single evidentiary ruling made during discovery that denied AIGDC access to Marcia’s psychological records. The cases relied upon by AIGDC do not establish that the judge required expert testimony regarding insurance industry practice in order to determine that those grounds for appeal lacked merit and that AIGDC’s postjudgment settlement conduct violated the statutes.

b. Damages. The judge awarded the plaintiffs loss of use damages on the $8,965 million settlement ultimately agreed to, at the rate of one percent per month, for five months (see note 14, infra).

The plaintiffs argue that the underlying tort judgment should serve as the amount to be multiplied for AIGDC’s wilful and knowing delay in making a reasonable settlement offer postver-dict and for its pursuit of what the judge found to be a meritless appeal. It is true that the 1989 amendment to c. 93A provided that the underlying tort judgment, rather than loss of use damages, was to be multiplied when the “insurer had acted in bad faith . . . and the plaintiff had been obliged to try to the end an action on the underlying claim.” Yeagle v. Aetna Cas. & Sur. Co., 42 Mass. App. Ct. at 655. Here, however, where a settlement was reached postverdict, and litigation at the appellate level had not commenced to a significant degree at that time, we conclude that the statutory purpose was served by measuring punitive damages according to loss of use rather than the underlying tort judgment. Compare R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. at 77, 82 (punitive damages double the amount of the underlying judgment properly awarded for wilful and knowing violation of c. 93A where judge found surety’s inexplicable delay in settling after verdict against its principal in underlying action forced additional litigation on bond for nearly a year and necessitated a hearing at which surety put forth no viable defense).

Ordinarily when there has been a settlement before trial, damages for the time lost by the insurer’s tardiness are calculated according to the interest lost on the money wrongfully withheld. See Clegg v. Butler, 424 Mass. at 425 (“As part of a statutory scheme meant to encourage out-of-court resolutions, [c. 93A] *315does not punish settling insurers by placing the entire settlement award at risk of multiplication”); Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567 (in case where settlement occurred before trial, award was for interest for loss of use on amount that should have been offered earlier). We concur with the judge that the same should be true in the procedural posture of this case, where, despite AIGDC’s ongoing, inexcusable, and deliberate misconduct, it made a reasonable settlement offer before trial, which was rejected, and the parties eventually settled postverdict. The judge, therefore, properly multiplied the loss of use damages for AIGDC’s wilful and knowing violation in delaying the offer of a reasonable settlement after the verdict in the underlying tort action.14 Compare id. at 560-561, 569.

3. Zurich’s pretrial conduct. The judge found that, as to Zurich, the existence of damages exceeding Zurich’s $2 million policy limits became reasonably clear in October, 2003, and that remaining questions concerning the availability of other coverage were resolved by mid-November, 2003. The judge further found *316that the steps taken by Zurich after November, 2003, to obtain authorization within the company to tender its policy limits were reasonable. Accordingly, the judge ruled that Zurich’s tender of its full policy on January 23, 2004, was timely, as required under c. 176D, § 3(9)0.

The plaintiffs challenge the judge’s finding that the existence of damages exceeding Zurich’s $2 million limit did not become reasonably clear until October, 2003, and that Zurich’s liability and damages did not become reasonably clear until November 19, 2003. The judge’s determination of the reasonableness of Zurich’s conduct was a question of fact, see Clegg v. Butler, 424 Mass. at 422, and therefore will not be disturbed unless clearly erroneous. The evidence supported the judge’s finding that information concerning Marcia’s medical expenses was not reasonably clear to Zurich until the fall of 2003. The judge relied on the fact that the plaintiffs did not provide Zurich with Marcia’s medical records and an accurate record of her medical expenses until the August 13, 2003, demand letter. The evidence supported the judge’s finding that Zurich acted reasonably and in conformity with industry standards in then verifying the damages, conferring with the other defendants regarding the availability of coverage and responsibility for the defense, and hiring its own life care expert to estimate the cost of Marcia’s future care.

The plaintiffs also complain that Zurich’s delay between November, 2003, and the January, 2004, tender violated the statutory requirement of a prompt settlement offer once liability and damages are clear to the insurer. In contrast to AIGDC’s delay, however, the judge found Zurich’s treatment of the claim reasonable, given the amount of the offer, the hierarchy for approval, and the lack of availability of key personnel at Zurich during that period. The plaintiffs do not challenge as clearly erroneous the judge’s subsidiary findings regarding Zurich’s actions between November, 2003, and January, 2004, and we conclude that his findings provided adequate support for ruling in Zurich’s favor. See, e.g., Buster v. George W. Moore, Inc., 438 Mass. 635, 642-643 (2003) (burden of proof rests on appellant to show error, where judge’s findings are supported by any reasonable view of evidence).

*317Conclusion. Paragraph two of the judgment shall be modified to provide that AIGDC’s and National Union’s violation of G. L. c. 176D, § 3(9)(/), prior to issuance of the final judgment in the underlying case, was wilful and knowing, and caused the plaintiffs to suffer actual damages from May 1, 2004, to August 11, 2004, as measured by the loss of use of $3.5 million during that period. The matter is remanded to the Superior Court for determination of the multiplication of the damages award in paragraph two of the modified judgment; that is, the damages shall either be doubled or tripled. Paragraph six of the judgment shall thereupon be modified accordingly. In all other respects, the judgment is affirmed.

So ordered.

We use first names for the sake of clarity.

Building Materials Corp. of America was doing business as GAF Materials Corp., and has been referred to throughout this litigation as “GAF.”

For simplicity’s sake, we refer to both as AIGDC.

The plaintiffs amended the complaint on August 30, 2002, to add a claim against Penske for negligent maintenance.

The plaintiffs have not challenged this finding on appeal, and we therefore do not address whether the judge’s determination that the August 11 offer was reasonable was “clearly erroneous,” as discussed by the dissent. See Mass.R. Civ.R 52(a), as amended, 423 Mass. 1402 (1996). Moreover, even if we were to conclude that we would have found otherwise, there is record evidence to support the judge’s findings. See Hopkins v. Liberty Mut. Ins. Co., 434 Mass. 556, 568 & n.18 (2001) (question whether offer is prompt and fair is question of fact to be resolved by trial judge).

In particular, the judge acknowledged that the plaintiffs suffered “the emotional distress arising from the frustrations of litigation, the substantial costs of litigation, even in a contingent fee case, and the fear of financial ruin,” but found that these problems “arose from the fact that the minimum settlement they were prepared to accept was well above the settlement that the defendants were prepared to offer or were required by Chapter 176D to offer.”

In Bobick, the Supreme Judicial Court affirmed summary judgment for an insurer on a c. 93A claim where the insurer’s timely offer of $50,000, rejected by the plaintiff, was some $10,000 less than “the principal amount assessed by the jury” against the insurer in the subsequent trial on the tort action. 439 Mass. at 662.

In Hopkins, the underlying negligence action settled before trial. The Supreme Judicial Court affirmed a c. 93A damages award against the insurer, with both the base damages and the multiplication of damages based on the interest on the settlement ultimately agreed to in the underlying negligence action. The court concluded that, even though the settlement amount was the same as an amount earlier offered and initially rejected, the plaintiff had been harmed because of the tardiness of the offer, and thus started the clock running on the c. 93A damages award from thirty days after the plaintiff’s c. 93A demand letter was received. 434 Mass. at 560-561, 566-568.

Indeed, in finding that AIGDC’s stated reasons to depose Marcia and Rebecca before making a settlement offer at mediation were a pretense, the judge, too, referred to the possibility that attitudes toward settlement were subject to change: “[T]he reason to depose them was simply to gauge how credible they would be at trial, and this reason was offset by the fear that *309deposing them would harden the plaintiffs’ already tough position as to settlement.”

In recognizing the harm caused by the insurer’s unfair settlement practices in this situation, we do not rely upon a per se injury as referenced in Hershenow v. Enterprise Rent-A-Car Co. of Boston, 445 Mass. 790, 798-799 (2006), a c. 93A case that neither involved nor addressed the obligations of insurers under c. 176D. Rather, we point to the Supreme Judicial Court’s observation that in the insurance context, and to a tort victim with a meritorious claim for coverage, the frustrations of being ignored by the insurer and being forced into unnecessary court action to secure the claimant’s statutory right to a reasonable settlement constitute an injury. Hopkins v. Liberty Mut. Ins. Co., 434 Mass. at 567. See Metropolitan Property & Cas. Ins. Co. v. Choukas, 47 Mass. App. Ct. 196, 200 (1999) (“Choukas was adversely affected and injured by Metropolitan’s failure to make an offer, as he had to go through the arbitration proceedings and all the subsequent court actions”), overruled on other grounds by Murphy v. National Union Fire Ins. Co., 438 Mass. 529, 533 n.7 (2003).

We therefore avoid an outcome anticipated by the trial judge, who expressed the concern that, “if this Court, under Hopkins, were required to find that the plaintiffs suffered even nominal damages from being denied a prompt settlement offer that they certainly would have rejected, and if this Court were to find the violation willful or knowing (which it does), the plaintiffs would be entitled to receive not merely those nominal damages . . . but also double or triple the amount of the judgment they received in the underlying personal injury case — that is, $22.6 million or $33.9 million.”

The judge awarded loss of use damages for the postverdict violation at the statutory rate of one percent per month, for a period of five months, based on his finding that if AIGDC had made a reasonable offer on December 17, 2004, instead of the unreasonably low offer it actually made, then settlement would have occurred in January, 2005, instead of June, 2005, and the first of the three installment payments would have been paid in February, 2005, rather than, as actually occurred, in July, 2005.

Both parties appeal from this determination. The plaintiffs argue that the judge should have calculated loss of use damages for the postverdict violation from either the date of the underlying tort judgment (September 28, 2004), or December 17, 2004 (the date of AIGDC’s response to the plaintiffs’ c. 93A letter). In its cross appeal, AIGDC argues that the plaintiffs agreed to forgo statutory postjudgment interest as part of their settlement of the underlying tort action and that, in any event, the only evidence at trial regarding the measure of loss of use damages was the testimony of Harold that he would have invested the settlement funds, if paid earlier, in low-risk bonds, paying interest at the time of trial at three and one-half percent.

AIGDC has not persuaded us that the plaintiffs’ reservation of right to pursue their claims against AIGDC for violations of c. 93A and c. 176D excluded the right to recover damages for those violations. Nor does AIGDC provide authority requiring that we overturn the judge’s decision, as fact finder, to utilize the statutory rate for postjudgment interest as the measure of the plaintiffs’ damages for late settlement. Neither have the plaintiffs demonstrated that the judge erred in awarding damages based on the date he found a settlement would have been reached if a reasonable offer had been made on December 17, 2004.