355 P.3d 735
Mont.2015Background
- Bridgett, a college student in Utah, suffered severe injuries while bicycling after colliding with a negligent truck in December 2011; she was not working for or in a Flathead Janitorial vehicle when injured.
- Flathead Janitorial, a closely held Montana corporation owned by Mark and Katherine Noland, was the Named Insured on a commercial auto policy issued by American States covering 27 listed company vehicles for Sept. 25, 2011–Sept. 25, 2013.
- After settling with the tortfeasor, Bridgett obtained UIM and medical payment benefits under two personal policies but the Nolands sought additional UIM and MP coverage under Flathead Janitorial’s commercial policy.
- American States denied coverage and sued for declaratory judgment; the Nolands counterclaimed that Bridgett (as a family member of shareholders) was an insured and that stacking applied.
- The district court granted summary judgment to American States, holding Bridgett was not covered because she was not occupying a covered auto owned by the corporation at the time of the accident.
- The Montana Supreme Court affirmed: the policy unambiguously named the corporation as “you,” limited coverage to occupants of listed covered autos (or those otherwise qualifying under corporate provisions), and did not extend coverage to Bridgett in these facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bridgett is an insured under Flathead Janitorial’s commercial policy for UIM and MP coverage | The policy is ambiguous (terms like “you,” “family member,” and “pedestrian”); correspondence listing Bridgett as a driver and her status as a family member of shareholders support coverage | Policy unambiguously names Flathead Janitorial as the Named Insured; coverage extends only to the corporation and persons occupying listed covered autos | Held for American States: no coverage because Bridgett was not occupying a covered auto and the policy unambiguously limits insureds accordingly |
| Whether extrinsic correspondence listing drivers became part of the policy or created ambiguity | Letter listing drivers (including Bridgett) shows she was intended to be covered | Letter is separate from and not incorporated into the policy; it does not create ambiguity in the policy language | Held for American States: the letter is not part of the policy and cannot create ambiguity |
| Whether the MP/UIM definitions create ambiguity when read with corporate “you” | MP provision uses terms (e.g., pedestrian/family member) that cannot reasonably describe a corporation, producing ambiguity | Read as a whole, the policy’s definition of “you” refers to the corporate Named Insured and the MP/UIM insured lists apply accordingly | Held for American States: no ambiguity when the policy is read as a whole; coverage limited to occupants of covered autos or qualifying corporate-related insureds |
| Whether court should reach stacking issue | Plaintiffs argue stacking is appropriate if coverage exists | Defendant argues no stacking because no coverage; issue is premature | Court did not reach stacking because it resolved lack of coverage in insurer’s favor |
Key Cases Cited
- Lee v. Great Divide Ins. Co., 342 Mont. 147, 182 P.3d 41 (Mont. 2008) (summary judgment review; corporate policy limits coverage to corporation and occupants of listed autos)
- Hanson v. Employers Mut. Cas. Co., 336 F. Supp. 2d 1070 (D. Mont. 2004) (found ambiguity in similar MP provision for shareholders of closely held corporation)
- Lierboe v. State Farm Mut. Auto. Ins. Co., 316 Mont. 382, 73 P.3d 800 (Mont. 2003) (upheld denial where injured passenger was not in a vehicle listed in corporate policy)
- Chilberg v. Rose, 273 Mont. 414, 903 P.2d 1377 (Mont. 1995) (coverage limited to insureds occupying vehicles listed in the policy)
- Stutzman v. Safeco Ins. Co. of Am., 284 Mont. 372, 945 P.2d 32 (Mont. 1997) (insurance contracts enforced as written when language is clear)