Bailey v. State Farm Mutual Automobile Insurance
300 P.3d 1149
Mont.2013Background
- Baileys sued State Farm and Olson for negligent failure to secure UIM coverage after a drunk-driver collision; district court granted summary judgment for defendants; Montana transfer of policy from Oregon to Montana involved Softich and Stan Bailey; Oregon policy included UIM; MT policy did not; Baileys claimed oral requests for matching Oregon coverage were not honored; May 2005 phone discussion indicated Baileys didn’t want UIM; Baileys discovered lack of UIM after Oct 2006 accident with medical expenses exceeding liability limits; trial court relied on written application showing no UIM requested and found no fiduciary duty; on appeal, court reverses summary judgment and remands for trial on negligence
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to procure UIM coverage when requested | Baileys directed matching Oregon coverage, creating duty to obtain UIM | Defendants fulfilled the specific coverage requested in the application | Summary judgment reversed; issue for trial |
| Whether a fiduciary duty or heightened negligence duty exists | Agent owed broader duties beyond procuring coverage | No fiduciary duty recognized under Montana law | Not decided on remand; the case remanded for merits on negligence theory |
Key Cases Cited
- Monroe v. Cogswell Agency, 2010 MT 134, 356 Mont. 417, 234 P.3d 79 (MT 2010) (insurance agent duty to procure requested coverage)
- Fillinger v. Northwestern Agency, 283 Mont. 71, 938 P.2d 1347 (MT 1997) (duty to obtain coverage as requested; contract-law framework)
- Lee v. Andrews, 204 Mont. 527, 667 P.2d 919 (MT 1983) (agent liability for failure to secure requested coverage)
- Gay v. Lavina State Bank, 61 Mont. 449, 202 P. 753 (MT 1921) (early standard on reading insurance contracts and agent duties)
- Featherston by & ex rel. Featherston v. Allstate Ins. Co., 875 P.2d 937 (Idaho 1994) (Idaho 1994) (scope of agent's duty depends on what the agent was asked to provide; genuine issue of material fact on coverage requested)
- Robertus v. Farmers Union Mut. Ins. Co., 2008 MT 207, 344 Mont. 157, 189 P.3d 582 (MT 2008) (no absolute duty to read policy; reliance on agent when highly skilled in area)
- Thomas v. Northwestern Nat’l Ins. Co., 1998 MT 343, 292 Mont. 357, 973 P.2d 804 (MT 1998) (insured's duty to read policy depends on reasonable expectations and agent relationship)
- McCulley v. Am. Land Title Co., 2013 MT 89, 369 Mont. 433, 300 P.3d 679 (MT 2013) (chronology and context when evaluating summary-judgment record)