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ALPS Property & Casualty Insurance Co. v. McLean & McLean, PLLP

Supreme Court of Montana

September 18, 2018

ALPS PROPERTY & CASUALTY INSURANCE COMPANY, d/b/a Attorneys Liability Protection Society, A Risk Retention Group, Plaintiff and Appellee,
v.
McLEAN & McLEAN, PLLP; DAVID McLEAN; MICHAEL McLEAN and MIANTAE McCONNELL, Defendants and Appellants. McLEAN & McLEAN, PLLP and MICHAEL McLEAN, Counter Plaintiffs and Appellants,
v.
ALPS PROPERTY & CASUALTY INSURANCE COMPANY, Counter Defendant and Appellee. JOSEPH E. MICHELETTI, PERSONAL REPRESENTATIVE OF THE ESTATE OF JOSEPH F. MICHELETTI, Deceased, and MARILYN C. MICHELETTI, Intervenors and Appellants.

          ORDER

         On August 7, 2018, we issued an opinion in the above-entitled action, reversing the District Court's Order granting summary judgment to ALPS Property & Casualty Insurance Company (ALPS). On August 22, 2018, ALPS filed a Petition for Rehearing. M. R. App. P. 20(1)(a) provides that a petition for rehearing will be considered only when the Court "overlooked some fact material to the decision," when "it overlooked some question presented by counsel that would have proven decisive to the case," or when "its decision conflicts with a statute or controlling decision not addressed" by the Court. ALPS fails to demonstrate any of these grounds for rehearing.

         First, ALPS asks this Court for a rehearing on the following determination: that Michael McLean (Michael) had a reasonable expectation he was entitled to purchase Extended Reporting Endorsement (ERE) coverage. ALPS argues that the ability to purchase ERE coverage is only available to a "Named Insured" (in this case, the law firm entity, McLean & McLean) under policy provisions §§ 4.4.1, 4.4.5, and because Michael is an "Individual Insured," and not a "Named Insured," he is not entitled to such coverage. Therefore, ALPS contends he had no reasonable expectation of coverage under a provision applicable only to McLean & McLean. ALPS also asserts that the Opinion did not consider ALPS's separate, distinct basis for denying coverage: the policy was canceled for non-payment of premiums, which resulted in an exclusion of ERE coverage under § 4.4.5(a). Finally, ALPS asserts that Michael is not an innocent insured because it contends that Michael violated provision §4.14.1 of the policy when he "misrepresented that ALPS could rely on the veracity of the applications" and that ALPS should be afforded the opportunity to present arguments regarding Michael's culpability. ALPS contends that because this Court overlooked material facts and controlling law we should amend or withdraw Opinion ¶¶ 32-38 and remand to the District Court to determine Michael's reasonable expectations.

         As to ALPS's contention that Michael was not entitled to, nor could he reasonably expect to, purchase ERE coverage under contractual provisions §§ 4.4.1, 4.4.5, this argument is waived because it was never before this Court on direct appeal. It is axiomatic that for this Court to have "overlooked some fact material to the decision," that fact must have been brought to the Court's attention.[1]

         ALPS's contention that Michael had no reasonable expectation of ERE coverage because the policy was cancelled due to "non-payment of premiums" is without merit. This Court conducted a de novo review of the policy provisions, including § 4.4.5. Moreover, after ALPS sent a letter initially cancelling the policy for "non-payment of premiums," ALPS subsequently purported to rescind the policy and, in a paradoxical move, refunded McLean & McLean a surplus premium, which Michael rejected.

         As on direct appeal, ALPS's argument regarding Michael's culpability hinges on Michael's failure to detect or to make reasonable efforts to discover David McLean's (David) violations. ALPS argues that Michael is not an "innocent insured" under the definition of the policy because he violated provision § 4.14.1 when he unknowingly attested to the veracity of David's misrepresentations. ALPS does not contend Michael participated in David's misdeeds nor did anything illegal. ALPS's arguments do not point to any facts or circumstances which this Court did not already consider, and we are not convinced rehearing is warranted. See State ex rel. Bullock v. Philip Morris, Inc., 2009 Mont. LEXIS 443, at *2, 217 P.3d 475, 486 ("[a] petition for rehearing is not a forum in which to rehash arguments made in the briefs and considered by the Court....") (citing M. R. App. P. 20(1)(a)).

         Second, ALPS asks this Court to clarify its "implied finding that the remedy of common law rescission is not available on remand" and to allow ALPS to pursue common law rescission on remand. "Clarification" is not a basis to consider a petition for rehearing. See M. R. App. P. 20(1)(a). As noted in the Opinion, nothing in the Opinion either sanctioned or foreclosed the availability of common law rescission. Opinion, ¶30n. 5. We explicitly did not rule on this point because it was not before the Court. See Opinion, ¶ 30 n. 5. Rather than clarification, what ALPS is really seeking is an advisory opinion as to the availability of common law rescission. See Mont. Dep't of Nat. Res. & Conserv. v. Intake Water Co., 171 Mont. 416, 440, 558 P.2d 1110, 1123 (1976) ("[t]he courts have no jurisdiction to determine matters purely speculative, enter anticipatory judgments .. . deal with theoretical problems, give advisory opinions .. . provide for contingencies which may hereafter arise, or give opinions....") (internal citations omitted); see also Sternhagen v. Dow Co., 282 Mont. 168, 170-71, 935 P.2d 1139, 1140-41(1997). We decline to do so.

         Having fully considered ALPS's positions, we conclude that rehearing is not warranted under the standards of M. R. App. 20(1)(a). ALPS has not shown this Court overlooked some fact material to its decision or some question presented by counsel that would have proven decisive to the case, or that our decision conflicts with a statute or controlling decision not addressed by this Court. Accordingly, IT IS HEREBY ORDERED that the petition for rehearing is DENIED.

         The Clerk of Court is directed to mail copies of this Order to all counsel of record.

          Justices Rice, Baker and District Court Judge Michael Moses (sitting for Justice Michael E Wheat) would grant the Petition for Rehearing.

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Notes:

[1] Further, besides a recitation of the policy language, the only mention of § 4.4.5 in ALPS's appellate brief states that "ALPS would not issue an [ERE] to any member of a firm whose policy was rescinded ... ." (Emphasis added). ALPS's contention that an individual member of a firm could never purchase ERE coverage because he or she is not a ...


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