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King v. State Farm Mutual Automobile Insurance Co.

Supreme Court of Montana

September 3, 2019

KYRA KING, Plaintiff and Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellee.

          Submitted on Briefs: July 24, 2019

          APPEAL FROM District Court of the Seventeenth Judicial District, In and For the County of Phillips, Cause No. DV 2016-11 Honorable Yvonne Laird, Presiding Judge

          For Appellant: Terryl T. Matt, Matt Law Office, PLLC, Cut Bank, Montana

          For Appellee: Paul R. Haffeman, Stephanie A. Hollar, Davis, Hatley, Haffeman & Tighe, P.C., Great Falls, Montana

          OPINION

          INGRID GUSTAFSON, JUSTICE

         ¶1 Kyra King appeals the Order on Attorney Fees and Litigation Expenses issued by the Seventeenth Judicial District Court, Phillips County, on July 27, 2018. We affirm in part, reverse in part, and remand for further proceedings.

         ¶2 We restate the issue on appeal as follows:

Whether the insurance exception to the American Rule allows the insured to recover otherwise nontaxable costs she would not have incurred but for the insurer's behavior.

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 On December 27, 2014, Carla King (Carla) was driving a vehicle which was hit by a drunk driver on U.S. Highway 2, near Malta. In the vehicle with Carla were Karen Yazzie, Kyra King (King), and Kyrsten Henry. Carla, Karen Yazzie, and King were all injured in the accident. The three filed a lawsuit against both the driver of the other vehicle, Eric Keltesch (Keltesch), and State Farm Mutual Automobile Insurance Company (State Farm) on June 22, 2016. State Farm insured the vehicle that was being driven by Carla at the time of the 2014 accident, and the relevant policy included underinsured motorist (UIM) coverage with a policy limit of $50, 000. Keltesch was underinsured for the damages and injuries which resulted from the accident. Karen Yazzie's UIM claim was ultimately dismissed because she was not covered by the policy and Carla's UIM claim was settled before trial.

         ¶4 King and State Farm did not agree on the value of her claim and so it proceeded to trial in April 2018. State Farm had offered to settle King's claim for $20, 000. The jury returned its verdict on April 18, 2018, which found that King had suffered damages in the amount of $410, 000. On May 7, 2018, King filed a Motion for Attorney Fees and Litigation Expenses, seeking both attorney fees and a total of $12, 767.33 in litigation expenses and costs. On May 11, 2018, King filed an Affidavit for Attorney Fees and Litigation Expenses in Support of Motion, which revised her request for litigation expenses and costs to $12, 758.35. State Farm filed its response brief on May 21, 2018, agreeing that King was entitled to her attorney fees, but arguing that King was not entitled to claim her costs because they were not timely filed and exceeded those allowable by statute. On May 22, 2018, the District Court entered its Judgment against State Farm in the amount of $50, 000-the policy limit-along with "interest and taxable costs." The District Court's Judgment further stated that the "issue of Plaintiff's attorneys' fees and non-taxable costs shall be determined later." On June 4, 2018, King filed both a Renewed Motion for Attorney Fees and Litigation Expenses and a Reply Brief in Support of Litigation Expenses.

         ¶5 The District Court held a hearing on King's Motion for Attorney Fees and Litigation Expenses on July 24, 2018. At the hearing, counsel for King again revised her requested litigation expenses and costs-this time seeking a total of $11, 800.08. On July 27, 2018, the District Court issued its Order on Attorney Fees and Litigation Expenses. The District Court awarded King $20, 000 in attorney fees, pursuant to King's 40% contingency fee arrangement with her attorney, and denied all of King's claimed litigation expenses and costs because they were not filed within five days of the jury's verdict as required by § 25-10-501, MCA.[1] King appeals, arguing that the timing requirement of § 25-10-501, MCA, only applies to those taxable costs found in § 25-10-201, MCA, and she should have been granted her request for nontaxable costs in the form of litigation expenses not covered by the statute.

         STANDARD OF REVIEW

         ¶6 We review a district court's order concerning costs for an abuse of discretion. Total Indus. Plant Servs. v. Turner Indus. Group, LLC, 2013 MT 5, ¶ 61, 368 Mont. 189, 294 P.3d 363 (citing Hitshew v. Butte/Silver Bow County, 1999 MT 26, ¶ 29, 293 Mont. 212, 974 P.2d 650). We review a district court's application of a statute in determining entitlement to costs for correctness. ...


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