United States District Court, D. Montana, Billings Division
KELLY D. PORCH and MICHELLE R. PORCH, Plaintiffs,
PREFERRED CONTRACTORS INSURANCE COMPANY, RRG; GOLDEN STATE CLAIMS ADJUSTERS INC.; SAFEBUILT INSURANCE SERVICES, INC. d/b/a SIS WHOLESALE INSURANCE SERVICES, Defendants.
TIMOTHY J. CAVAN United States Magistrate Judge.
Kelly D. Porch and Michelle R. Porch filed this action
against Defendants Preferred Contractors Insurance Company
(“PCIC”), RGG, Golden State Claims Adjusters Inc.
(“Golden State”), and Safebuilt Insurance
Services, Inc. doing business as SIS Wholesale Insurance
Services (“SIS”), arising out of PCIC and Golden
State's failure to defend an underlying lawsuit the
Porch's brought against Ochoa's Construction, Inc.
(“Ochoa's”). (Doc. 29.) Plaintiffs assert
claims for declaratory relief, breach of contract, breach of
the implied covenant of good faith and fair dealing,
violation of Montana's Unfair Trade Practices Act
(“UTPA”), common law bad faith, breach of
fiduciary duty, negligence, and punitive damages.
before the Court are Defendants' Motion for Summary
Judgment (Doc. 62); SIS's Motion to Dismiss (Doc. 35);
and PCIC and Golden State's Motion to Dismiss (Doc. 38).
The motions are fully briefed and ripe for the Court's
considered the parties' submissions, the Court finds
Defendants' Motion for Summary Judgment should be
GRANTED, and SIS, PCIC and Golden
State's Motions to Dismiss should be DENIED as
FACTUAL BACKGROUND 
2014, Roofing & Restoration Services of America, LLC
(“RRSA”) and Rambur Construction, Inc.
(“Rambur”) entered into a Joint Marketing
Agreement, pursuant to which RSSA and Rambur acted together
to solicit sales of roofing jobs in the Billings, Montana
area following a significant hail storm.
2014, RRSA contracted with Plaintiff Kelly Porch to sell
roofing contracts on several residential buildings in
Billings. RRSA chose to treat Mr. Porch as a direct seller as
defined by 26 U.S.C. § 3508, and did not elect
Workers' Compensation coverage for him.
and Rambur hired Ochoa's Construction, Inc.
(“Ochoa's”) to tear off and reapply materials
to a residential roof in Billings. On July 10, 2014, Mr.
Porch arrived at the Ochoa's job site with a project
manager from RSSA. While at the job site, Mr. Porch and the
project manager went up onto the roof to physically show
Ochoa's foreman how they wanted the materials applied.
Mr. Porch used a ladder provided by Ochoa's to get onto
the roof. While Mr. Porch was on the roof, one of the
employees from Ochoa's moved the ladder and placed it
against the rain gutter of the house. When Mr. Porch was
climbing down the ladder, the rain gutter broke, causing the
ladder and Mr. Porch to fall approximately 10-15 feet. Mr.
Porch was knocked unconscious and severely injured. Mr. Porch
alleges he injured his right foot, both kidneys, his lungs,
nose, back, right elbow, and right leg.
time of Mr. Porch's accident, PCIC insured Ochoa's
under a Commercial General Liability Policy, policy number
PC95125, effective June 6, 2014 to June 6, 2015 (the
filed a Complaint and Demand for Jury Trial
(“Complaint”) on November 24, 2014, in the
Montana Thirteenth Judicial District Court, Yellowstone
County against Ochoa's and RRSA (the “underlying
Complaint”). The underlying Complaint alleged Mr. Porch
sustained damages “from a fall resulting from a
negligently placed ladder on the job site.” Neither
PCIC, Golden State, nor SIS were named as defendants.
April 23, 2015, PCIC was notified of the underlying
Complaint. Golden State responded on behalf of PCIC, and
informed Ochoa's by letter dated May 21, 2015, that no
coverage existed for the allegations in Plaintiffs'
Complaint, and that PCIC would be denying coverage for
defense and indemnity.
February 24, 2016, Ochoa's entered into a stipulated
consent judgment and covenant not to execute, and assigned to
Plaintiffs all of its rights against Defendants. Plaintiffs
thereafter dismissed all defendants except Ochoa's.
March 28, 2017, Judge Ingrid Gustafson of the Montana
Thirteenth Judicial District Court held a reasonableness
hearing with respect to Plaintiffs and Ochoa's stipulated
consent judgment. Plaintiffs were present at the hearing and
presented evidence in support of the reasonableness of the
judgment; Ochoa's did not appear. On March 30, 2017,
Judge Gustafson entered judgment in the amount of $4, 700,
000.00 in favor of Plaintiffs and against Ochoa's.
Plaintiffs were granted leave to file a Second Amended
Complaint, which added PCIC and Golden State as defendants,
and asserted various claims against them based on their
coverage decisions with respect to Ochoa's. Defendants
then removed the case to this Court, and sought dismissal on
grounds that Judge Gustafson erred in permitting Plaintiffs
to amend their complaint after judgment had been entered in
the state court. (Porch v. Ochoa's Const. Inc., et
al., No. CV-17-93-BLG-SPW-TJC, Docket No. 80 (D.