United States District Court, D. Montana
PETER BYORTH and ANNA McKEAN, on behalf of themselves and all those similarly situated, Plaintiff,
USAA CASUALTY INSURANCE COMPANY, Defendant.
GREGORY R. TODD, DISTRICT COURT JUDGE.
matter comes before the Court by a Motion to Compel filed by
Plaintiffs, Peter Byorth and Ann McKean (Byorth and McKean),
on January 6, 2016. Defendant USAA Casualty Insurance Company
("USAA") filed a response on January 27, 2017.
Plaintiffs filed their reply on February 9, 2017. Oral
argument was held on March 10, 2017. Having read the motions
and their supporting briefs, this Court deems this matter
OF RELEVANT FACTS
Plaintiffs in this matter were both injured in motor vehicle
accidents. Byorth and McKean were both covered under
USAA's med-pay policies. In both cases, USAA delayed or
denied coverage and declared that several portions of the
medical costs were not medically necessary after a review of
USAA's affiliate Auto Injury Solutions (AIS). In the
Complaint filed on April 25, 2015, Byorth and McKean alleged
that USAA breached their fiduciary duty and contractual
obligation to the Plaintiffs. Additionally, Byorth and McKean
alleged that USAA had violated Montana Unfair Trade Practices
Act (UTPA) and sought to certify a class of persons similarly
situated pursuant to Rule 23 of the Montana Rules of Civil
Procedure. This Court certified the class pursuant to Rule
23(a) on December 29, 2015.
filed a notice of appeal on January 7, 2016 objecting to the
class certification. The Montana Supreme Court reversed the
class certification and remanded for further proceedings
consistent with the Supreme Court's opinion on December
Montana, "parties may obtain discovery regarding any
non-privileged matter that is relevant to any party's
claim or defense - including the existence, description,
nature, custody, condition, and location of any documents or
other tangible things and the identity and location of
persons who know of any discoverable matter. The information
sought need not be admissible at the trial if the discovery
appears reasonably calculated to lead to the discovery of
admissible evidence." Mont. R. Civ. P. 26(b)(1).
Furthermore, "[t]he purpose of discovery is to promote
the ascertainment of truth and the ultimate disposition of
the lawsuit in accordance therewith. Discovery fulfills this
purpose by assuring the mutual knowledge of all relevant
facts gathered by both parties which are essential to proper
litigation." Richardson v. State, 2006 MT 43
¶f 22, 331 Mont. 231, 130 P.3d 634 (citing Massaro
v. Dunham (1979), 184 Mont. 400, 405, 603 P.2d 249,
USAA must comply with Plaintiffs discovery requests because
they are relevant to her claim, are geographically and
temporally appropriate, and, confidential information is
protected pursuant to court order.
Montana, the "rules of civil procedure are premised upon
a policy of liberal and broad discovery." Patterson
v, State, 2002 MT 97, ¶ 15, 309 Mont. 381, 46 P.3d
642. The Montana legislature enacted the UTPA to discourage
unfair and deceptive trade practices. Section 33-18-101, MCA.
Thus, the UTPA prohibits any person from engaging in a
general business practice that would result in
unfair claim settlements. See generally, §
33-18-201 (1), et al. (emphasis added). Although, a plaintiff
is not required "to prove that the violations were of
such frequency as to indicate a general business practice,
" the plaintiff may nonetheless seek discovery and
information regarding the defendant's business practice
because it is relevant for assessing the appropriateness of
punitive damages. Section 33-18-242 (2), MCA; Lorang v.
Fortis Ins. Co., 2008 MT 252, ¶ 93, 345 Mont. 12,
192 P.3d 186; § 33-18-242 (4), MCA.
USAA claims that the Plaintiffs' allegations in the
Complaint are restricted to issues regarding "file
reviews" and "coding errors." Thus, since the
Montana Rules of Civil Procedure limit discovery to "any
non-privileged matter that is relevant to any party's
claim or defense" then discovery ought to be limited
"file reviews" and "coding errors." Mont.
R. Civ. P. 26(b). The Court is unpersuaded by this argument.
A review of the Complaint demonstrates that the Plaintiffs
allege that USAA violated the UTPA, fiduciary and contractual
obligations. The allegations are general and references to
"file review" and "coding errors" are
short and plain statements] of the claim showing that the
pleader is entitled to relief." Mont. R. Civ. P.
8(a)(1). Limiting future discovery based on the limited
access to evidence a plaintiff has at the beginning of a case
would undercut the principle of notice pleading.
USAA claims, partly based on boilerplate language, that some
of the requests for production regarding budgets, billings
and statistical documents are overly broad and unduly
burdensome, or, that the information sought is confidential.
Discovery need not be admissible to be discoverable, and,
given the liberal discovery rules in Montana, the Court finds
that USAA's concerns regarding the burden and breadth of
the discovery are appropriately addressed though a geographic
limitation to Montana, and a three-year limit for any
information sought. Mont. R. Civ. P. 26(b)(1);
Patterson, ¶ 15. Further, there is already a
protective order in place to protect confidential information
that may appear as a result of discovery.
also objects to producing the Market Conduct Examination
(MCE) for the states in which it offers insurance. MCE's
are documents detailing an insurers business practices in
that state. USAA claims that the "Montana Department of
Insurance has not conducted any MCE in the past six years,
" and, thus it has nothing to produce in relation to
Montana and any other MCE are both geographically or
temporally irrelevant despite the language of the UTPA.
Section 33-18-242 (2), MCA. However, the assessment of
"general business practices" is central to the
UTPA. Section 33-18-101; See generally, §
33-18-201 (1), MCA. Section 33-18-242 (2), MCA, clarifies
that the plaintiff does not have an affirmative duty to prove
that unfair trade practices constitute the general business
practice of the defendant in order to prevail. However, that
provision does not reduce the effect of a central phrase of
the UTPA. Section 1-3-233, MCA. In fact, § 33-18-242(2)
is a restriction on defendants from using a plaintiffs
inability to prove that his injury was a result of a general
business practice as an affirmative defense. Ultimately, the
Supreme Court addressed this issue in Lorang,
stating if a jury should decide "that punitive damages
should be awarded here, assessing a proper amount requires