United States District Court, D. Montana, Great Falls Division
JOHNSTON UNITED STATES MAGISTRATE JUDGE
Park Plaza Condominium Association (Park Plaza), brought this
action against Defendants The Travelers Indemnity Company of
America, Phoenix Insurance Company, The Travelers Indemnity
Company, Travelers Property Casualty Company of America, and
the Travelers Companies, Inc. (collectively Travelers),
asserting claims for breach of insurance contract and
statutory bad faith.
before the Court are the following two motions: 1) Park
Plaza's Motion for an Order Enforcing Travelers'
Irrevocable Assertion of the Attorney Client Privilege; and
2) Park Plaza's Motion to Strike Travelers' Expert
Rebuttal Report by Mr. Dethlefs. Travelers opposes both
motions. The Court conducted a hearing on the motions on
October 17, 2018. The Court is prepared to rule.
Plaza is an association of people who own 35 individual units
of a condominium building in Great Falls, Montana, entitled
the “Park Plaza” building. Park Plaza has insured
the Park Plaza building since 2009 under an insurance policy
issued by Travelers - Policy No. 680-4460N581. The concrete
siding on the exterior of the Park Plaza building has
cracked. Park Plaza contends that high winds, wind-driven
rain, wind pressure, and story drift has caused the damage.
Park Plaza submitted a notice of damage claim to Travelers on
April 13, 2017, seeking coverage under Policy No.
680-4460N581. Travelers began investigating the damage claim
upon receipt of the notice.
Plaza filed the present lawsuit in the Montana Eighth
Judicial District Court, Cascade County on September 8, 2017,
while Travelers was investigating the claim. Travelers
removed the case based on this Court's diversity
Plaza's Amended Complaint has two counts. Park Plaza
asserts a claim against Travelers for breach of insurance
contract, and a claim for statutory bad faith under
Montana's Unfair Trade Practices Act, Mont. Code Ann.
§§ 33-18-201(4), (5), and (6). Park Plaza alleges
that Travelers committed bad faith: 1) by refusing to pay its
claim without conducting a reasonable investigation: 2) by
failing to affirm or deny coverage within a reasonable period
of time; and 3) by failing to attempt in good faith to
effectuate a prompt, fair, and equitable settlement when
liability was reasonably clear. Id.
argues that the cracks in the siding panels were caused by
“restrained movement of the panels” due to faulty
installation. (Doc. 64 at 4; Doc. 73 at 10-11). Travelers
argues that “the panels should not have been rigidly
attached to the Park Plaza building.” (Doc. 73 at 11).
Travelers argues that the rigid attachment prevented the
panels from accommodating volume changes as the panels shrank
and expanded due to changes in moisture and
has asserted a counterclaim against Park Plaza seeking a
declaration that Policy No. 680-4460N581 provides no coverage
for the damage to the Park Plaza building. (Doc. 25 at
15-21). Travelers contends that no coverage exists for the
following four reasons: 1) The claimed loss was already known
and in progress when Policy No. 680-4460N581 took effect; 2)
Park Plaza did not give Travelers prompt notice of the loss;
3) No proof exists that damage in excess of the policy
deductible resulted from an event that occurred during the
policy period; and 4) Coverage exclusions in Policy No.
680-4460N581 operate to bar coverage. (Doc. 63-1 at 2-3).
Travelers alleges that Park Plaza's bad faith claim fails
because it had a reasonable basis in both law and fact for
contesting coverage. (Doc. 25 at 14).
provided Park Plaza notice of its decision to deny coverage
on August 1, 2018. (Doc. 63-1). Traveler's Executive
General Adjuster, Kevin Brown sent Park Plaza's lawyer a
letter explaining why Travelers was denying coverage.
Park Plaza's Motion for an Order Enforcing
Travelers' Irrevocable Assertion of the Attorney Client
April 24, 2018, Park Plaza moved the Court for an Order
requiring Travelers to make an irrevocable declaration of
whether it intended to invoke the attorney-client privilege
with respect to the claims alleged by Park Plaza. (Doc. 46).
The Court granted the motion. (Doc. 58). The Court ...