Justia Insurance Law Opinion Summaries

Articles Posted in Montana Supreme Court
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The Supreme Court reversed the order of the district court denying as untimely Defendant's motion for substitution of judge, holding that the substitution motion was timely because federal law halts any proceedings in the state court once a notice of removal is filed unless and until the case is remanded. Plaintiffs sued Defendant in the Seventh Judicial District Court based on Defendant's denial of an insurance claim. After a summons was issued and served upon Defendant, Defendant filed a notice of removal to the United States District Court for the District of Montana on the basis of diversity of citizenship. The federal district court granted Plaintiffs' motion for remand to state court after determining that the parties lacked complete diversity. Ninety-five days after it was served Defendant filed a motion for substitution of judge. The trial court ruled the motion was untimely. The Supreme Court reversed, holding that because Defendant filed its motion for substitution the same day the state court clerk received notice that the federal court had ordered remand and returned the original state court documents, the motion was timely. View "Sage Financial Properties, LLC v. Fireman's Fund Insurance Co." on Justia Law

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The Supreme Court answered in the negative a question certified to it by a federal district court regarding tension in case law between an insurer's duty to a third-party claimant and its duty to its insured. As a result of an accident caused by High County Paving, Inc., one person died and another was critically injured. United Fire & Casualty Co., High County's insurer, advance-paid the medical expenses of the injured parties prior to a final settlement. High County argued that any further payments to the injured parties without obtaining a release for High County would violate United Fire's duties to High Country, as general damages are not a type of damages that are required to be advance-paid to an injured third party. United Fire argued it was required to tender a payment of policy limits to the injured parties without a release for High Country because total damages exceeded policy limits. The Supreme Court held that an insurer does not breach its duty to its insured when it pays policy limits to an injured third party, without a release for its insured, after a motor vehicle accident when both liability for the accident is reasonably clear and it is reasonably clear that total damages caused by the insured exceed policy limits. View "High Country Paving v. United Fire & Casualty Co." on Justia Law

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In this insurance dispute the Supreme Court reversed in part the district court's determination that Carla King was not entitled to her taxable costs and her claimed nontaxable costs after a jury found in favor of King, holding that the district court erred in concluding that King was not entitled to her claimed nontaxable costs. King was injured when her vehicle was hit by a drunk driver. King sought underinsured motorist coverage from State Farm, but King and State Farm did not agree on the value of King's claim. State Farm had offered to settle the claim for $20,000. The jury found that King had suffered damages in the amount of $410,000. The district court entered judgment against State Farm in the amount of the policy limit of $50,000. The district court awarded King $20,000 in attorney fees and denied King's claimed litigation expenses and costs. The Supreme Court held (1) the district court correctly held that King was not entitled to her taxable costs as provided by Mont. Code Ann. 25-10-201 because they were not timely filed; and (2) the district court erred in concluding that King was not entitled to her claimed nontaxable costs because those litigation costs were part of the insurance exception to the American Rule. View "King v. State Farm Mutual Automobile Insurance Co." on Justia Law

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The Supreme Court reversed the judgment of the district court dismissing the amended complaint filed by Employers Mutual Casualty Company against Continental Resources, Inc., holding that the district court erred as a matter of law when it determined that Employers Mutual must defend Continental as an additional insured under a commercial general liability (CGL) insurance policy it issued to Black Rock Testing, Inc. Employers Mutual filed a declaratory judgment action to determine its obligations to defend and indemnify Continental under the CGL policy it issued to Black Rock. The district court granted Continental's motion for summary judgment and dismissed the complaint, concluding that Continental was entitled to a defense as an additional insured under the insurance policy. The Supreme Court reversed, holding (1) under any reasonable interpretation of the insurance contract and its endorsements, the policy did not cover Continental as an additional insured; and (2) therefore, Employers Mutual owed no duty to defend or indemnify Continental under the policy. View "Employers Mutual Casualty Co. v. Estate of Buckles" on Justia Law

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The Supreme Court reversed the judgment of the district court determining that a stipulated settlement entered into by the parties was reasonable, holding that a stipulated settlement entered without the consent of an insurer to resolve litigation between the insured and a third-party claimant will not be presumed reasonable against the insurer when the insurer has been defending the insured throughout the litigation. The liability insurer in this case provided the insured a defense throughout the relevant proceedings but did not confirm coverage under the policy. The insurer declined to settle with Plaintiffs for policy limits and misrepresented the policy limits. Eventually, Plaintiffs entered into a stipulated settlement with the insured. The insurer intervened to challenge the reasonableness of the settlement. The district court found that the settlement agreement was reasonable, determining that the insurer had effectively abandoned its insured. The Supreme Court reversed, holding (1) a court may approve a stipulated judgment as between a third-party claimant and the insured in the underlying liability case, but the agreement will not be presumed reasonable as to the insurer if the insurer did not participate in the settlement and was providing a defense; and (2) the district court's reasonableness determination was based in part on its conclusion that a presumption of reasonableness applied, requiring reversal. View "Draggin'y Cattle Co. v. Junkermier, Clark, Campanella, Stevens, P.C." on Justia Law

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The Supreme Court accepted a question certified to it by the United States District Court for the District of Montana to address an Estate's third-party claim to stacked liability limits in an aircraft insurance policy that covered multiple aircraft, concluding that the answer to the question, which the Court reformulated, was no. The Supreme Court reformulated the question as follows: "Is the Estate of Darrell L. Ward entitled to stack the limits of liability coverage for three separate aircraft under the terms of an insurance policy issued to the pilot of an aircraft in which Ward was a passenger at the time it crashed?" The Supreme Court answered no to the reformulated certified question because (1) the plain, unambiguous language of the contract limits the coverage to the aircraft that is involved in the accident; (2) there is no public policy or statute that mandates payment of the cumulative coverage for separate aircraft in an aviation liability insurance policy that does not provide for such payment; and (3) the insurance policy at issue was not subject to stacking of its passenger liability coverages. View "U.S. Specialty v. Estate of Ward" on Justia Law

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In this insurance dispute, the Supreme Court reversed in part the entry of summary judgment in Plaintiff’s declaratory action regarding underinsured motorist coverage (UIM) in favor of Farmers Insurance Exchange, holding that the district court erred by holding that Farmers could offset its underinsured motorist coverage (UIM) obligation to Plaintiff dollar-for-dollar with GEICO’s entire UIM payment. Plaintiff was one of five passengers injured in an accident. The tortfeasor was underinsured by $48,686 as to Plaintiff’s damages. The vehicle in which Plaintiff was a passenger was insured by GEICO, and Plaintiff carried personal vehicle coverage with Farmers, including medical payment (MedPay) coverage and UIM coverage. GEICO paid Plaintiff its individual UIM coverage limit and Farmers paid Plaintiff under her MedPay coverage. In total, Plaintiff received payments of $2,500 less than her total stipulated damages. Disputes Plaintiff had with Farmers led Plaintiff to file this declaratory action. The district court held in Farmers’ favor on the two contested issues. The Supreme Court held (1) the policy language did not permit Farmers to offset its UIM obligation dollar-for-dollar with the entire GEICO UIM payment; (2) Farmers was entitled to offset its UIM obligation with its MedPay payments to Plaintiff; and (3) Plaintiff was entitled to recover attorney fees. View "Cramer v. Farmers Insurance Exchange" on Justia Law

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The Supreme Court affirmed in part and reversed and remanded in part the district court’s grant of summary judgment in favor of ALPS Property & Casualty Insurance Company (ALPS) in this declaratory action, holding that the district court erred when it determined that ALPS properly rescinded an insurance policy, which the court rendered void from the inception of the coverage period for Michael McLean and McLean & McLean, PLLP (M&M), but the court did not err in concluding that no coverage existed as to third-party claimants Miantae McConnell and Joseph and Marilyn Micheletti. Specifically, the Court held (1) the district court erred in concluding that Mont. Code Ann. 33-15-403 provided for a right to rescind the policy; and (2) the district court did not err when it concluded that the third-party claims were barred because they were lodged after ALPS had cancelled the policy or were excluded from coverage under other policy provisions. View "ALPS Property & Casualty Insurance Co. v. McLean & McLean" on Justia Law

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The Supreme Court reversed the district court’s deemed denial of Scottsdale Insurance Company’s motion to set aside the default judgment entered against it, holding that Scottsdale satisfied its burden of establishing that doubt existed concerning whether service was properly effectuated. National Parks Reservations (NPR) filed a complaint and demand for jury trial, naming Scottsdale. Because Scottsdale was a foreign insurer, NPR was statutorily required to serve Scottsdale through the Office of the Montana State Auditor, Commissioner of Securities and Insurance (the Commissioner). The Commissioner, in turn, was statutorily required to forward the complaint and summons to Scottsdale. After Scottsdale failed to appear the district court entered a partial default judgment against Scottsdale. Scottsdale moved to set aside the default judgment, arguing that both NPR and the Commissioner had failed strictly to comply with foreign insurer service requirements under Mont. Code Ann. 33-1-603(1), and, thus, the default judgment was void. Scottsdale’s motion was deemed denied. The Supreme Court reversed, holding that Scottsdale established that doubt existed regarding whether service was properly completed by the Commissioner. View "Reservation Operations Center LLC v. Scottsdale Insurance Co." on Justia Law

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In this insurance coverage dispute, the district court erred in concluding that Plaintiff’s claim under the Unfair Trade Practices Act (UTPA) and the Declaratory Judgment Act should be dismissed. Plaintiff was involved in an accident while she was a passenger in a car driven by Kevin Gallivan. Peter Kirwan owned the vehicle, and Safeco Insurance Company insured Kirwan. Mid-Century Insurance Company insured Gallivan. Plaintiff sued Safeco and Mid-Century (collectively, Defendants), and the parties entered into a settlement agreement. Plaintiff subsequently brought this lawsuit against Defendants bringing claims seeking declaratory judgment and violations under the UTPA and alleging that Defendants used the collateral source statute to justify reduction in her damages notwithstanding that the collateral source statute was inapplicable. The district court granted Defendants’ motion to dismiss. The Supreme Court reversed, holding (1) even if Defendants had a reasonable basis to apply the collateral source statute, the court failed to consider the plain language of the statute and whether it was applicable in Plaintiff’s case; and (2) Plaintiff sufficiently pled an independent cause of action under the UTPA to overcome Defendants’ joint motion to dismiss. View "Marshall v. Safeco Insurance Co. of Illinois" on Justia Law