Kilby Butte Colony, Inc. v. State Farm Mutual Automobile Insurance Co., 403 P.3d 664

Kilby Butte Colony (a Montana Hutterite religious corporation) owns and titles vehicles in the Colony's name; individual members cannot own Colony vehicles.
The Colony purchased a State Farm commercial auto policy providing $50,000/$100,000 underinsured motorist (UIM) coverage; the declarations list the named insured as "Kilby Butte Colony."
Mary Ann and Ivan Stahl, Colony members, were injured as passengers in a vehicle owned by a different Canadian Hutterite colony while in Saskatchewan; they sought UIM benefits under Kilby Butte’s State Farm policy.
State Farm denied the claim, concluding the Stahls were not "insured" under the Policy because they were not occupying a vehicle that qualified as "your car," a "newly acquired car," or a "temporary substitute car."
Kilby Butte sued; the district court granted State Farm summary judgment, holding the Policy unambiguously required occupancy of a covered vehicle for UIM benefits and that corporate policies may lawfully restrict covered persons.
The Montana Supreme Court affirmed, finding the policy terms unambiguous and not illusory: coverage applied only to occupants of covered vehicles, which the Stahls were not.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Stahls qualify as "insureds" under Kilby Butte’s State Farm UIM policy	Colony: UIM coverage is personal/portable; limiting coverage to occupants of covered vehicles renders UIM illusory for Colony members who cannot individually own vehicles	State Farm: Policy unambiguously limits UIM to persons occupying covered vehicles; corporate policies can lawfully restrict beneficiaries	Held: Stahls are not insureds—policy unambiguously requires occupancy of a covered vehicle; summary judgment for State Farm affirmed

Hanson v. Emp’rs Mut. Cas. Co., 336 F. Supp. 2d 1070 (D. Mont. 2004) (corporate auto policies may limit UIM beneficiaries to occupants of covered vehicles)
Am. States Ins. Co. v. Flathead Janitorial & Rug Servs., 355 P.3d 735 (Mont. 2015) (policy interpretation and reasonable expectations doctrine applied to corporate policies)
Stonehocker v. Gulf Ins. Co., 368 P.3d 1187 (Mont. 2016) (refusing to expand UIM coverage to non-occupant corporate members not in covered vehicles)
Chaffee v. U.S. Fidelity & Guaranty Co., 591 P.2d 1102 (Mont. 1979) (public-policy constraint on insurers placing provisions that defeat paid-for coverage)
Bennett v. State Farm Mut. Auto. Ins. Co., 862 P.2d 1146 (Mont. 1993) (same public-policy principle regarding illusory coverage)
Mitchell v. State Farm Ins. Co., 68 P.3d 703 (Mont. 2003) (UIM coverage is generally personal and portable, but exceptions exist for corporate policies)
Newbury v. State Farm Fire & Cas. Co. 184 P.3d 1021 (Mont. 2008) (read policy as whole; unambiguous terms control)