United States District Court, D. Montana, Missoula Division
BREANNE WALDEN, DANIELLE DESCHENES AZURE, JESSICA BLACKWEASEL, SABRINA REMUS COYNE, BRITTANY DEAN, JENNIFER DEMENT, DANIELLE DUNCAN, JACKIE GREAVU, BETH HAYES, JANA HEILIG, KEALLIE LIETZ, JACKIE MULLENNAX, SARA ONSAGER, ANNA RADFORD, BARBARA SLOAN, MOLLY STILSON, and KYRA TILSON, Individually and as Assignees of DB&D, LLC d/b/a DAHL'S COLLEGE OF BEAUTY, Plaintiffs,
MARYLAND CASUALTY COMPANY, and DOES 1-5, inclusive, Defendants.
L. Christensen, Chief Judge
the Court is Defendant Maryland Casualty Company's
("Maryland") motion for summary judgment. Maryland
seeks declaratory relief that the remaining claim set forth
in the Plaintiffs' Complaint is precluded under the
policy. For the reasons explained below, the Court denies the
motion for summary judgment.
AND PROCEDURAL HISTORY
alleged various tort claims against Dahl's School of
Beauty ("Dahl's") in the underlying action.
Dahl's confessed judgment and assigned its rights to the
Plaintiffs. This case is a declaratory judgment action
regarding whether the CGL policy issued by Maryland provides
coverage to Plaintiffs.
October 7, 2015, the Court granted Maryland's motion for
summary judgment finding that the policy excluded coverage
for bodily injuries that were the unintended or unexpected
consequences of intentional acts. The Montana Supreme Court
decided Employers Mutual Casualty Co. v. Fisher Builders,
Inc., 371 P.3d 375 (Mont. 2016) (hereafter
"Fisher") on April 19, 2016, during the
pendency of Plaintiff s appeal to the Ninth Circuit Court of
Appeals. On June 15, 2017, the Ninth Circuit reversed and
remanded for further proceedings on the issue of whether
Plaintiffs claims constitute an "occurrence" in
accordance with the Fisher standard.
after receiving status reports from both parties, the Court
determined that the only remaining issue in this case
concerned the bodily injury claims asserted in Count I of
Plaintiffs' Complaint. Maryland now moves for summary
judgment on that claim, contending there is no
"occurrence" under the policy in accord with the
two-part test articulated in Fisher.
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).
"[A]t the summary judgment stage the judge's
function is not himself to weigh the evidence and determine
the truth of the matter but to determine whether there is a
genuine issue for trial." Anderson, 477 U.S.at
interpretation of an insurance contract is a question of law
for the Court. Babcock v. Farmers Ins. Exck, 999
P.2d 347, 348 (Mont. 2000). The Court will construe terms
according to their usual, commonsense meaning. Natl.
Farmers Union Prop. & Cas. Co. v. George, 963 P.2d
1259, 1261 (Mont. 1998). The interpretation should honor the
objectively reasonable expectations of the insured.
Hanson v. Emp'rs Mut. Cas. Co., 336 F.Supp.2d
1070, 1075 (D. Mont. 2004). Any ambiguities regarding
coverage are construed against the insurer. Id. at
1073. "An ambiguity exists when a contract taken as a
whole is reasonably subject to two different
interpretations." Id. (citation omitted);
see also Modroo v. Nationwide Mut. Fire Ins. Co.,
191 P.3d 389, 395 (Mont. 2008). However, a policy provision
is not ambiguous just because the parties disagree as to its
interpretation, and "courts will not distort contractual
language to create an ambiguity where none exists."
Giacomelli v. ScottsdaleIns. Co., 221 P.3d 666, 672
(Mont. 2009). "[A]n insurer must defend all counts so
long as one count potentially triggers coverage, even if the
remaining counts would not be covered." J&C
Moodie Prop. LLC v. Deck, 384 P.3d 466, 472 (Mont. 2016)
(citing State Farm Fire & Cas. Co. v. Schwan,
308 P.3d 48, 51 (Mont. 2013)).
Policy provides coverage for "bodily injury" caused
by an "occurrence." (Doc. 50-2 at 33, 35.)
"Bodily injury" refers to "bodily injury,
sickness or disease sustained by a person ... includ[ing]
mental anguish, mental injury, shock, fright or death
resulting from bodily injury, sickness or disease."
(Id. at 33.) An "occurrence" under the
policy "means an accident, including continuous or
repeated exposure to substantially the same general harmful
conditions." (Id. at 35.)
Fisher, the Montana Supreme Court held that an
"accident" may include intentional acts so long as
the consequences of those acts are not objectively intended
or expected from the standpoint of the insured. 371 P.3d at
378. The Montana Supreme Court additionally instructed that
an intentional act may constitute an "occurrence"
under a policy because the subsequent consequences may not
have been intended or expected by the actor. Id.
Therefore, the Montana Supreme Court established that the
following two-part test should be utilized when determining
whether the conduct in question constitutes an
"accident": "(1) whether the act itself was
intentional; and (2) if so, whether the consequences or
resulting harm stemming from the act was intended or expected
from the actor's standpoint." Id. (citing
Northwestern Nat. Cas. Co. v. Phalen, 597 P.2d 720
appeal in this case, the Ninth Circuit relied upon
Fisher and found that the "intentional
acts" exclusion under an insurance policy did not
preclude coverage because coverage under Fisher may
still exist if the intentional acts caused unintended or
unexpected consequences to the victim. Id. The Ninth
Circuit held that under Montana law, an
"occurrence" necessary to trigger coverage does not
exist if: "1) the act itself was intentional,
and 2) . . . the consequence or resulting harm
stemming from the act was intended or expected from the
actor's standpoint." Walden v. Maryland Casualty
Company, 692 Fed.Appx. 476, 477 (9th Cir. 2017) (citing
Fisher, 371 P.3d at 378) (emphasis added); see
also Mid-Century Ins. Co. v. Windfall Inc., 2016 WL
2992114, at *3 (D. Mont. May 23, 2016) (citing
Fisher, 371 P.3d at 378).
contends that Fisher merely categorizes insurance
cases involving emotional distress claims into categories of
"cases that find that the consequences of the
intentional conduct were unexpected or unintended, thereby
triggering coverage, and those that find that the
consequences of the intentional conduct were expected or
intended, in which case coverage is not triggered."