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High Country Paving, Inc. v. United Fire & Casualty Co.

Supreme Court of Montana

December 31, 2019

HIGH COUNTRY PAVING, INC., Plaintiff,
v.
UNITED FIRE & CASUALTY CO., Defendant.

          Submitted on Briefs: October 9, 2019

          Certified Question, United States District Court, In and For the District of Montana, Missoula Division, Cause No. CV 18-163-M-DWM Honorable Donald W. Molloy, Presiding Judge.

          For Plaintiff: Robert K. Baldwin, Trent M. Gardner, Jeffrey J. Tierney, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana

          For Defendant: Jon T. Dyre, Crowley Fleck PLLP, Billings, Montana

          For Amicus Montana Defense Trial Lawyers: Mikel L. Moore, Moore, Cockrell, Goicoechea & Johnson, P.C., Kalispell, Montana

          For Amicus Montana Trial Lawyers: Colin Gerstner, Gerstner Law PLLC, Billings, Montana

          OPINION

          Ingrid Gustafson, Justice.

         ¶1 Pursuant to M. R. App. P. 15, the United States District Court for the District of Montana, Missoula Division, the Honorable Donald W. Molloy presiding, certified the following question of law to this Court:

Where liability is reasonabl[y] clear, is it a breach of an insurer's duty to its insured to pay policy limits to a third party in a motor vehicle accident without a release of its insured where claimed special damages are below policy limits but total damages (including general damages) exceed policy limits?

         ¶2 We accepted the certified question as written, and now conclude the answer to the question is no, with certain qualifications.

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 In accordance with M. R. App. P. 15(6)(a)(ii), the U.S. District Court set forth the relevant factual background to the certified question in its Certification Order, which we restate here.

         ¶4 High Country Paving, Inc. (High Country), is an asphalt paving company located in Bozeman. High Country purchased a liability insurance policy from United Fire & Casualty Co. (United Fire) which included three types of coverage: (1) commercial general liability (CGL) coverage in the aggregate amount of $2 million, with a $1 million per-occurrence limit; (2) commercial auto liability coverage in the amount of $1 million; and (3) commercial umbrella coverage in the amount of $2 million. In August 2016, during the policy period, one of High Country's employees was involved in an accident while operating an insured vehicle. In the accident, a loaded equipment trailer came unhitched while the vehicle was under way and collided with another vehicle. The driver of the other vehicle was killed, and a passenger was seriously injured. High Country then notified United Fire of the accident.

         ¶5 United Fire hired attorney Nick Pagnotta of the Williams Law Firm to represent High Country. High Country separately retained attorneys Jeffrey Tierney and Trent Gardner of Goetz, Baldwin & Geddes, P.C. On October 31, 2017, attorney Chris Edwards of Edwards, Frickle & Culver, issued a demand letter on behalf of the parties injured in the accident, demanding payment of "High Country Paving's Policy Limits of $3, 000, 000.00 . . ." without a release for High Country. The demand letter included a description of the following claimed economic damages:

Projected lost future income: $609, 486.36 Medical expenses, as of the demand date: $283, 991.09 Assisted living expenses, as of the demand date: $61, 060.89 Projected future assisted living expenses: $595, 342.91

         The total of the claimed economic damages was $1, 549, 881.25. Edwards's demand letter further explained that his clients would also be seeking compensation for general ...


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