United States District Court, D. Montana, Billings Division
ORDER ADDRESSING CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT
CAROLYN S. OSTBY, Magistrate Judge.
Plaintiff Shadya Jarecke's ("Jarecke") Complaint alleges two claims against Defendant American National Property and Casualty Co. ("ANPAC"). Count 1 alleges a violation of Montana's Unfair Trade Practices Act ("UTPA"), §§ 33-18-201 et seq., for failure to properly pay underinsured motorist ("UIM") coverage benefits. Count 2 alleges that ANPAC acted with malice. See Complaint (ECF 4)  at 3.
Pending are the parties' cross motions for partial summary judgment. For the reasons discussed below, the Court will grant ANPAC's motion and deny Jarecke's motion.
This action arose after Jarecke was injured in a motor vehicle collision with underinsured motorist Billie Jo Scheetz ("Scheetz") on June 29, 2012, in Billings, Montana. Jarecke's Complaint alleges that "ANPAC received information from which it knew that its asserted limits of $250, 000 were fully exposed and consumed by the value of [Jarecke's] loss." ECF 4 at 2.
ANPAC provided insurance coverage to Jarecke and her parents,  including UIM coverage, under a single policy covering three vehicles. Jarecke claims that available UIM policy limits of $250, 000 per person "stack" for each of the three vehicles for a total of $750, 000. ECF 4 at ¶¶ 4 and 13. ANPAC denies that UIM policy limits stack for the three vehicles. Answer (ECF 5) at ¶ 12. Rather, ANPAC maintains that Jarecke's applicable UIM policy limit is $250, 000. Id. at ¶ 4.
The relevant facts surrounding the UIM limits dispute are as follows. Before 2004, ANPAC used a per-vehicle pricing method for its Montana UIM coverage. In 2004, ANPAC filed with the state of Montana to change to a per-policy premium charge for UIM coverage. When ANPAC decided to change from a per-vehicle to a per-policy UIM premium charge, it recognized that it insured 753 vehicles in Montana in 412 policies. ANPAC then performed simple division and concluded that for each of the 412 Montana policies, it insured an average of 1.8 vehicles with UIM coverage. ECF 34-1 (Penick Depo.) at 7. ANPAC then used this 1.8 multiplier as a part of its calculation of a per-policy UIM premium in 2004. Id. at 8.
On August 29, 2007, the Montana Commissioner of Securities and Insurance ("Insurance Commissioner") sent an advisory memorandum notifying motor vehicle liability insurers that they could avoid stacking "if the premiums charged for the coverage by the insurer actuarially reflect the limiting of coverage separately to the vehicles covered by the Policy and the premium rates have been filed with the [C]ommissioner." ECF 30-1 at 1. The Insurance Commissioner provided insurers with instructions for filing rates for UIM and other coverages. ANPAC responded by submitting its actuarially approved UIM rates to the Insurance Commissioner. The Insurance Commissioner later notified ANPAC that ANPAC was substantially in compliance with MCA § 33-23-203 respecting its filings for non-stacked UIM rates. ECF 30-3 at 1.
Jarecke's parents first applied for automobile insurance with ANPAC on December 18, 2007. At the time, her parents were the only policy holders and insured two vehicles with ANPAC - a 1997 Ford Expedition and a 1994 Ford F-250 truck. The insurance application allowed them to elect to purchase UIM coverage in various per person and per accident limits. The application provided:
I request Uninsured and Underinsured Motorist Coverage with the limits of protection indicated above, with the full understanding that, regardless of the number of vehicles described in this policy, only one premium is charged for Uninsured or Underinsured Motorist Coverage and, therefore, only one limit of protection applies to any claim arising out of any one accident to which this coverage is applicable. I acknowledge that the coverages and options shown in this section have been explained to me and it is hereby agreed that my selections apply under this liability insurance policy and future renewals, replacements, or reinstatements of such policy. If I decide to select another option at some future time, I must advise my ANPAC agent or the company in writing before the section becomes effective.
ECF 31-1 (emphasis added). The Jareckes signed the specific coverage selection on the application.
The Jareckes' policy contains a limitation on UIM coverage and prohibits stacking, providing:
LIMITS OF LIABILITY USED IN COVERAGE UIM ONLY
The limits of liability shown in the Declarations apply, subject to the following:
(1) the limit for "each person" is the maximum we will pay as damages for bodily injury, including damages for care and loss of services or consortium, to one person in one accident;
(2) subject to the limit for "each person" the limit for "each accident" is the maximum we will pay as damages for bodily injury, including damages for care and loss of services or consortium, to two or more persons in one accident;
We will pay no more than these maximums regardless of the number of vehicles described in the Declarations, insured persons, claims, claimants or policies, or vehicles involved in the accident.
ECF 31 at 4.
The vehicle Jarecke was driving at the time of the June 29, 2012 collision with Scheetz, a 1998 Nissan Pathfinder, was added to the Jareckes' policy on April 26, 2011. The UIM premium for the Jarecke policy before the addition of this third vehicle was $77, and the premium remained at $77 after the vehicle was added. The UIM premium for the policy period that began following the addition of this third vehicle to the Jarecke policy remained at $77.
Jarecke settled her claims against Scheetz for the $50, 000 limits of Scheetz's policy. ANPAC has paid Jarecke $6, 000 under the Medical Payments Coverage provision of the Jareckes' policy. And ANPAC advanced $50, 000 in UIM benefits to Jarecke before she filed this action in state court on September 12, 2013. ANPAC removed the case to this Court on November 12, 2013. As noted, Jarecke alleges that ANPAC violated Montana's UTPA and acted with malice. Her Complaint seeks compensatory damages, punitive damages, and a declaration that the applicable UIM limits are $750, 000. The UIM declaration request is the only subject of the parties' pending cross motions for partial summary judgment.
II. SUMMARY OF PARTIES' ARGUMENTS
ANPAC argues that the UIM limits under its policy with Jarecke are $250, 000 rather than stacked limits of $750, 000, as Jarecke claims in her Complaint. ANPAC's Br. in Support of its Mtn. for Partial Summary Judgment (ECF 28) at 2. ANPAC argues that the UIM limits do not stack because: (1) the Jarecke family paid a single premium for UIM coverage, id. at 4-7 ; (2) ANPAC's policy and filings with Montana's Insurance Commissioner comply with MCA § 33-23-203, Montana's socalled "anti-stacking" statute, id. at 3-4, 10-11 ; and (3) the Jarecke's "insurance ...