In the case of Progressive Mountain, Inc. v. MADD, LLC, No. 15-10250 (10th Cir. 2020), the court held that it was not within the scope of the settlement agreement for Progressive to maintain a website which discusses its own policy, particularly when the policy had been in effect before the lawsuit was brought. The policy would have violated the anti-retaliation provision of the agreement.
In a related case, United States v. American Association of Retired Persons, No. 14-cv-2176 (D. Mass. 2020), the court held that a non-profit group was not entitled to recover monetary damages under an arbitration clause in the group's insurance policy. The group, which sued the insurer because it had not received a sufficient amount of premium payments, had signed up with the company as a policyholder, not as an individual. The group did not become a policyholder until the policyholder made his claim against the company. This resulted in an arbitrator's award of a default judgment in favor of the company.
Progressive Mountain, Inc. v. MADD, LLC, No. 14-10250 (10th Cir. 2020) was decided on the basis that it is unreasonable for policyholders to expect a company which has not been licensed as a motor vehicle insurer to compensate them if they are injured while driving uninsured vehicles. Further, it is unreasonable for a policyholder to make payments on a policy that he has not purchased, as well as unreasonable to expect a company to pay for his medical bills as long as the individual maintains a policy with the same insurer even after he stops making payments.
In the case of Progressive Mountain, Inc. v. MADD, LLC, the Court of Appeals for the District of Massachusetts affirmed the trial court's ruling in favor of the defendant. According to the Appeals Court, the policyholder's ability to sue the company for breach of contract under the Massachusetts Fraud Act was limited to situations in which the policyholder was able to prove that the insurer's breach of contract was the proximate cause of his injury. It did not, however, consider whether the policyholder was entitled to recovery of damages for breach of contract even if he was injured at fault.
In contrast, in the case of MADD, LLC v. Progressive Mountain, Inc., the Second Circuit Court of Appeals for the District of Massachusetts found that the policyholder could bring a claim for breach of contract. based on the policyholder's policyholder-induced decision to drive uninsured vehicles. In doing so, the appeals court acknowledged that Progressive had provided a wide range of discount insurance benefits to policyholders, including the policyholder's right to purchase additional insurance for his automobile while maintaining an existing policy. In addition, the policyholder had already opted to purchase a more expensive policy, which the company considered to be appropriate given the policyholder's history and circumstances.
The Appeals Court rejected the theory that the policyholder had waived his rights under the policyholder's insurance policy by opting to purchase a more expensive policy. It noted that the policyholder's policyholder-induced . . . . . . decision to drive uninsured cars was a decision that was not contemplated in the initial policy purchase agreement and thus did not require a waiver. Further, the appeals court noted that the policyholder's decision to drive uninsured vehicles had a direct and negative impact on his personal injury case. If the policyholder had not taken this action, he may not have been able to obtain financial compensation in the form of a policyholder's policy payment discounts.