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 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

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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