Justia Insurance Law Opinion Summaries

Articles Posted in Montana Supreme Court
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The Supreme Court affirmed the order of the district court granting summary judgment in favor of ALPS Property & Casualty Insurance Company and declaring that ALPS owed no duty to defend or indemnify Defendants in a malpractice suit, holding that the district court correctly granted summary judgment to ALPS.ALPS brought this action seeking a declaration that it owed no duty to defendant or indemnify Keller, Reynolds, Drake, Johnson & Gillespie, P.C. (the firm) or any of its members for claims Bryan Sandrock, GG&ME, LLC and DRAES, Inc. (collectively, Sandrock) asserted in a malpractice suit against the firm and three of its attorneys. In granting summary judgment for ALPS, the district court held that the firm's ALPS policy did not provide coverage for Sandrock's claim. The Supreme Court affirmed, holding that the district court correctly concluded that there was no coverage under the policy because a member of the firm knew the basis of the legal malpractice claim before the effective date of the policy. View "ALPS Property & Casualty Insurance Co. v. Keller" on Justia Law

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The Supreme Court reversed the holding of the district court that Farmers Insurance Exchange had no duty to defend the Insureds in this case but reversed the district court's holding that the duty to indemnify was not justiciable, holding that when there is no duty to defend there cannot be a duty to indemnify.Defendants in two underlying lawsuits (together, the Insureds) tendered the claims to Farmers, with whom they had a homeowners insurance policy. Farmers concluded that coverage was not available because the claims asserted intentional conduct by the Insureds and filed the instant declaratory judgment action to confirm that it did not have a duty to defend or indemnify. The district court granted summary judgment to Farmers, concluding that there was no coverage under the policy and that the issue of indemnification was not justiciable. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly concluded there was no coverage under the policy; (2) did not abuse its discretion in denying the Insureds more time for discovery; but (3) erred in concluding that the issue of whether Farmers had a duty to indemnify was not justiciable. View "Farmers Insurance Exchange v. Wessel" on Justia Law

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The Supreme Court affirmed the judgment of the district court granting motions to dismiss filed by Farmers Insurance Exchange and State Farm Fire and Casualty Company, holding that the district court did not err in granting the motions to dismiss.Plaintiffs filed a complaint against State Farm and Farmers alleging, among other claims, common law bad faith and violation of the Unfair Trade Practices Act. The insurers filed motions to dismiss. The district court granted the motions to dismiss. The Supreme Court affirmed, holding that the district court did not err in dismissing Plaintiffs' bad faith claims on the basis that the liability of State Farm and Farmers was not reasonably clear. View "Shepard v. Farmers Insurance Exchange" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the district court granting class certification in this action alleging breach of contract and violation of Montana's Unfair Trade Practices Act (UTPA), Mont. Code Ann. 33-18-101 et seq., holding that a sufficient factual basis was established to justify certification of the classes.Plaintiffs filed this action against Fergus Farm Mutual Insurance Company (FFM), alleging that FFM breached its insurance contract with Plaintiffs and all other insureds by failing to include general contractor overhead and profit in the cost to repair or replace Plaintiffs' property. The district court granted Plaintiffs' motion for class certification. The Supreme Court reversed in part, holding (1) the district court did not abuse its discretion by determining that common questions of law predominate the litigation and support certification of the class; but (2) certain conclusions reached by the district court were a "bridge too far" at this stage of litigation. View "Kramer v. Fergus Farm Mutual Insurance Co." on Justia Law

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The Supreme Court reversed the order of the district court granting summary judgment in favor of Farmers Insurance Exchange on Plaintiff's claim for underinsured motorist (UIM) benefits, holding that Plaintiff's UIM claim was not barred by either the doctrine of issue preclusion or claim preclusion.Plaintiff sued Darrell King alleging damages resulting from injuries he sustained when King rear-ended him. King was insured by Progressive Northwestern Insurance Company, and Plaintiff was insured by Farmers. When Farmers refused to pay Plaintiff anything under his UIM coverage Plaintiff filed a lawsuit against Farmers to recover his UIM benefits. Plaintiff's lawsuit against King subsequently went to trial, and the jury awarded Plaintiff $10,000 in damages. Before the district court entered judgment, the parties settled for $50,000 - the policy limits of King's liability coverage with Progressive. Thereafter, Farmers moved for summary judgment on Plaintiff's UIM coverage claim, arguing that because Plaintiff had settled with King, his UIM claim was barred by issue preclusion and claim preclusion. The district court granted summary judgment for Farmers. The Supreme Court reversed, holding that a contract claim for UIM benefits is wholly distinct and separate from the underlying third-party tort claim, and therefore, Plaintiff's complaint was barred by neither issue preclusion nor claim preclusion. View "Reisbeck v. Farmers Insurance Exchange" on Justia Law

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The Supreme Court accepted supervisory control over this matter and affirmed the district court's ruling denying Philadelphia Indemnity Insurance Company's motion to dismiss for lack of personal jurisdiction, holding that the district court did not err by holding that Montana had specific personal jurisdiction over Philadelphia under Montana's long arm statute and the due process clause of the Fourteenth Amendment.In the underlying action, Appellees were sued for failing to distribute to employees eighteen to twenty percent service charges (the Walter Class Action). Appellees submitted a claim to Philadelphia requesting defense and indemnity, but Philadelphia denied the claim. After Appellees settled the Walter Class Action and paid the judgment entered against them Appellees brought suit against Philadelphia arguing that Philadelphia had a duty to defend them in the Walter Class Action. Philadelphia filed a motion to dismiss for lack of personal jurisdiction, which the district court denied. The Supreme Court affirmed, holding (1) the case qualifies for and merits review pursuant to the Court's constitutional power of supervisory control; and (2) a Montana court may exercise specific personal jurisdiction over Philadelphia regarding Plaintiffs' claims. View "Gateway Hospitality Group Inc. v. Philadelphia Indemnity Insurance Co." on Justia Law

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The Supreme Court affirmed the order of the district court partially denying Appellant's motion for attorney fees, holding that the district court did not abuse its discretion in its determination of whether attorney fees awarded to class counsel were reasonable.Appellant filed individual and class action claims against Montana University System (MUS). The parties reached a partial settlement. The district court approved the settlement and appointed Appellant the class representative and her attorneys as class counsel. The court's order provided that class counsel were entitled to attorneys' fees and costs, but the parties were unable to agree to a total attorney fees and costs award. The district court declined to award class counsel their requested fees under a percentage-based calculation and, instead, calculated the fee award by multiplying the hours worked on the case by hourly rates of $275 and $375, respectively. The Supreme Court affirmed but remanded the case for a determination of the interest to which Appellant was entitled, holding (1) the district court did not abuse its discretion in determining whether the attorney fees awarded to class counsel were reasonable; and (2) Appellant was entitled to interest in accordance with Mont. Code Ann. 25-9-205. View "Gendron v. Montana University System" on Justia Law

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The Supreme Court allowed hundreds of former employees of W.R. Grace & Company's Zonolite Division in Libby (Grace) to continue their asbestos-related personal injury claims against Maryland Casualty Company (MCC), Grace's former workers' compensation insurance provider, holding that MCC owed Grace workers a direct common law duty under Restatement (Second) of Torts 324A(b)-(c) to use reasonable care under the circumstances to warn them of the known risk of exposure to airborne asbestos in certain Grace workplaces.The Supreme Court assumed supervisory control over proceedings pending before the Montana Asbestos Claims Court. Here the Court addressed on extraordinary review MCC's assertion that the district court erred in concluding that MCC owed a duty of care to warn third-party employees of Grace of a known risk of airborne asbestos exposure in or about Grace facilities in and about Libby, Montana between 1963 and 1970. The Supreme Court held that, based on MCC's affirmative assumption of employee-specific medical monitoring and Grace's reliance on MCC to perform that function, MCC owed Grace workers a legal duty to use reasonable care to warn them of the risk of airborne asbestos. View "Maryland Casualty Co. v. Asbestos Claims Court" on Justia Law

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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