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Durbin v. Mountain West Farm Bureau Mutual Insurance Co.

United States District Court, D. Montana, Missoula Division

August 17, 2017



          Dana L. Christensen, Chief District Judge

         Before the Court is Defendant Mountain West Farm Bureau Mutual Insurance Company's ("Mountain West") motion for summary judgment, Plaintiff William Durbin and Carol Durbin's ("Plaintiffs") cross motion for summary judgment, and Plaintiffs' motion to certify motor vehicle liability insurance stacking questions to the Montana Supreme Court. For the reasons explained below, the Court grants Mountain West's motion for summary judgment and denies Plaintiffs' motions.

         Background and Procedural History

         On July 10, 2014, Plaintiffs sustained personal injuries in a motor vehicle accident. The vehicle was operated by Holly Berner, and owned by AEC, Inc. Mountain West provided coverage to its insureds, Berner and AEC, Inc., pursuant to Policy No. BPM04242 (the "Policy"). Plaintiffs filed a civil lawsuit in the Montana Twenty-First Judicial District, William and Carol Durbin v. Holly Berner and AEC, Inc., Cause No. DV 14-112. The parties settled, and as part of that agreement, Mountain West's insureds confessed judgment in the amount of $1, 500, 000.[1]Mountain West paid the policy limits of $500, 000 to Plaintiffs.

         Here, Plaintiffs seek a declaration that the Policy's bodily injury liability coverage "stacks, " requiring payment of an additional $1, 000, 000 by Mountain West. In its Counterclaim, Mountain West seeks a declaration that the Policy's liability coverage is limited to $500, 000. The parties both move for summary judgment on this legal issue. Plaintiffs also move the Court to certify the issue of stacking of bodily injury liability coverage to the Montana Supreme Court.

         Legal Standard

         A party is entitled to summary judgment if it can demonstrate that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment is warranted where the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Only disputes over facts that might affect the outcome of the lawsuit will preclude entry of summary judgment; factual disputes that are irrelevant or unnecessary to the outcome are not considered. Id. at 248. In ruling on a motion for summary judgment, a court must view the evidence "in the light most favorable to the opposing party." Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). "[T]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 1863 (quoting Anderson, 477 U.S. at 255).

         Pursuant to Rule 15 of the Montana Rules of Appellate Procedure, a federal district court in Montana Court may certify questions to the Montana Supreme Court for instruction. See Mont. R. App. P. 15(3). "The decision to certify a question to a state supreme court rests in the 'sound discretion' of the district court." EckardBrandes, Inc. v. Riley, 338 F.3d 1082, 1087 (9th Cir.2003) (quoting Louie v. United States, 776 F.2d 819, 824 (9th Cir.1985)). Even where state law is unclear, resorting to the certification process is not obligatory. Lehman Bros. v. Schein, 416 U.S. 386, 390 (1974). "If the state's highest appellate court has not decided the question presented, then [a United States District Court] must predict how the state's highest court would decide the question." Orkin v. Taylor, 487 F.3d 734, 741 (9th Cir. 2007). In the absence of Montana Supreme Court precedent, a federal district court sitting in Montana may look to decisions from other jurisdictions, other relevant state cases, and secondary sources such as the Restatement to determine how the Montana Supreme Court would resolve the issues. EckardBrandes, 338 F.3d at 1087.


         I. Stacking of Bodily Injury Coverages

         The usual principles of contract interpretation apply in this case. It is well-established in Montana that the "construction and interpretation of a contract is a question of law" for the court to decide. Corporate Air v. Edwards Jet Center, 190 P.3d 1111, 1120 (Mont. 2008). When "the language of an agreement is clear and unambiguous, and as a result, susceptible to only one interpretation, the court's duty is to apply the language as written." Rich v. Ellingson, 174 P.3d 491, 495 (Mont. 2007). The court is to "'give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.'" Corporate Air, 190 P.3d at 1120 (quoting Mont. Code Ann. § 28-3-301). To that end, the court must read the contract as a whole, giving "effect to every part if reasonably practicable, each clause helping to interpret the other." K&R Partnership v. City of Whitefish, 189 P.3d 593, 600 (Mont. 2008) (quoting Mont. Code Ann. § 28-3-202). If the terms of a contract are clear, "the court must determine the intent of the parties from the wording of the contract alone." Rich, 174 P.3d at 495.

         A. Limitation of a single claim

         First, Mountain West argues that its Policy clearly limits coverage to $500, 000 per accident, regardless of the number of autos covered or premiums charged. The Policy defines an "accident" as a "continuous or repeated exposure to the same conditions resulting in 'bodily injury' or 'property damage.'" (Doc. 3-1 at 17.) The Policy further states on the Declaration Page that the "Liability -Combined Single Limit" is "$500, 000." (Doc. 3-1 at 6.) Thus, Mountain West contends that because the parties agree that only one accident caused the Plaintiffs' injuries, the "combined single limit" of $500, 000 for the one accident is the limit Mountain West is obligated to pay under the Policy.

         The Court agrees that under general contract interpretation principles, the Policy is unambiguous that the limitation of bodily injury coverage for one accident is $500, 000. ...

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