A federal judge has sided with tenants in an insurance coverage dispute over an apartment fire, finding that Vermont Mutual Insurance Co. failed to seriously engage in settlement negotiations even though its liability was reasonably clear.

In an underlying case filed in Middlesex County Superior Court, long-term tenants Chester Robinson and Lorraine Hames sued their landlord, Edward Toland, and building owner, Cogavin Associates, for allegedly failing to fix a faulty electrical condition that sparked a fire at their apartment in 2014. The elderly couple lost most of their belongings in the blaze and had to seek expensive emergency housing, according to the judge’s order filed Sept. 27 in U.S. District Court for the District of Massachusetts.