Fisher v. State Farm Mutual Automobile Insurance
2013 MT 208
| Mont. | 2013Background
- Dec. 30, 2007, Sharon injured when Les (driver) negligently struck a parked car near Townsend.
- Les carried a primary Auto Policy ($250k/$500k) and a separate Umbrella Policy ($2,000,000).
- Umbrella Exclusion: no coverage for bodily injury to any insured; Sharon qualifies as an insured by marriage to Les and as a resident relative.
- District Court granted summary judgment for McCartneys, finding the exclusion unenforceable as unconscionable, but allowed ambiguity/public-policy/undue-conscionability arguments to proceed.
- State Farm appeals, arguing the exclusion is not unconscionable or ambiguous and is valid under Montana law.
- Issues and rulings are reviewed de novo; the Court reverses the District Court on all grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Umbrella exclusion unambiguously excludes Sharon | Fisher/Les argue exclusion is ambiguous or misinterpreted | State Farm argues exclusion clearly excludes Sharon as an insured | Exclusion facially excludes Sharon; not ambiguous under Montana law. |
| Family Member Exclusion violates public policy | McCartneys contend exclusion contravenes mandatory minimums and public policy | State Farm asserts exclusion consistent with statute and policyCrafts. | No public policy violation; exclusion valid under Montana law. |
| Family Member Exclusion is unconscionable | McCartneys show one-sided terms harming consumers | State Farm argues term not unconscionable given market and purpose of umbrella policies | Exclusion not unconscionable; District Court erred; judgment for State Farm. |
Key Cases Cited
- Royle v. Royle, 202 Mont. 173 (Mont. 1983) (reasonable expectations; household exclusions and Royle)
- Iowa Mut. Ins. Co. v. Davis, 231 Mont. 166 (Mont. 1988) (named driver exclusion; public policy and minimum coverage)
- Stutzman v. Safeco Ins. Co. of Am., 284 Mont. 372 (Mont. 1997) (upheld/voided exclusions in UIM depending on statutory minimums)
- Newbury v. State Farm Fire & Cas. Ins. Co., 2008 MT 156 (Mont. 2008) (public policy against exceeding mandatory coverage; optional vs mandatory)