Scheafer v. Safeco Insurance Co. Of
320 P.3d 967
Mont.2014Background
- Scheafer was injured in a November 7, 2007 automobile accident while driving a Mattress King vehicle insured by Mountain West Farm Bureau; she sought Med Pay benefits and Mountain West paid UIM benefits/Med Pay undisclosed amount; Safeco paid Med Pay and Mountain West paid UIM; Scheafer sued Safeco in 2009 alleging unlawful subrogation and over-reduction of coverage under “other insurance” clauses; district court held excess clauses valid and non-subrogation and dismissed; on remand the record was supplemented with the two policies and it was determined Mountain West was primary and Safeco excess; Montana Supreme Court affirmed the district court’s dismissal while noting Med Pay and UIM should be treated differently and that the record lacked complete information on damages and payments to determine made whole status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Safeco’s “other insurance” clauses valid and enforceable? | Scheafer argues clauses constitute subrogation and violate made-whole. | Safeco asserts clauses are valid excess provisions, not subrogation. | Yes, valid and not subrogation. |
| Do the clauses violate the made-whole doctrine? | Made-whole requirement should prevent subrogation until full recovery. | Clauses do not subrogate and Safeco is excess after primary payer. | No violation; not de facto subrogation under record. |
Key Cases Cited
- Blue Cross & Blue Shield of Mont., Inc. v. Mont. State Auditor, 2009 MT 318 (Mont. 2009) (exclusions cannot allow subrogation before benefits paid under Montana law)
- Reitler v. Allstate Ins. Co., 192 Mont. 351 (Mont. 1981) (medical payments subrogation limited; distinguished here)
- Christenson v. Farmers Ins. Exch., 211 Mont. 250 (Mont. 1984) (limits subrogation discussion to medical payments context)
- Skauge v. Mountain States Tel. & Tel. Co., 172 Mont. 521 (Mont. 1977) (made whole policy supporting subrogation limits)