Winter v. State Farm Mutual Automobile Insurance, 2014 MT 168

On Oct. 20, 2011 Jeffrey Winter injured his knee; total medical charges were $7,929.83. He had State Farm automobile medical payments (med pay) coverage (limit $15,000) and separate Blue Cross/Blue Shield (BCBS) health insurance.
BCBS paid nearly all provider charges; State Farm paid $25.02 (the remaining unpaid amount) and denied the rest because no unpaid bills remained.
Winter sued State Farm for breach of contract (and UTPA), arguing med pay covers medical expenses he "incurred" even if a separate health insurer already paid them. Parties stipulated to material facts (injury, insured status, amounts) and moved for summary judgment.
The District Court granted summary judgment to State Farm, holding Winter had not "incurred" medical expenses because he was not liable for unpaid bills and had been made whole.
The Montana Supreme Court reversed, holding that, as a matter of common meaning, a person "incurs" medical expenses when services are rendered (liability/obligation to pay attaches), so Winter’s med pay coverage was triggered even though BCBS paid the providers.
The Court also held Winter is entitled, as a matter of law, to attorney fees (insurance-exception to the American Rule), pre- and post-judgment interest, and costs; remanded to determine amounts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Winter "incurred" medical expenses under the med pay policy when a separate health insurer paid the bills	"Incurred" means expenses are incurred when services are rendered; Winter incurred the charges regardless of BCBS payment	"Incurred" should mean amounts the insured is actually liable to pay at claim time; no liability existed because BCBS paid, so State Farm owes only $25.02	Court held "incurred" means liability arises when services are rendered; Winter therefore incurred the expenses and State Farm’s policy was triggered despite BCBS payments
Whether Winter is entitled to attorney fees, interest, and costs if he prevails	Winter seeks attorney fees under the insurance-exception, prejudgment interest, and costs	State Farm suggested remand on these matters since District Court did not rule, but offered no statutory basis to deny them	Court held Winter is entitled as a matter of law to attorney fees (insurance-exception), pre- and post-judgment interest, and costs; remanded to quantify amounts

Newbury v. State Farm Fire & Cas. Ins. Co., 184 P.3d 1021 (Mont. 2008) (upheld clear policy exclusion preventing double recovery where policy expressly limited coverage)
Conway v. Benefis Health System, 297 P.3d 1200 (Mont. 2013) (insurer paid provider where third-party payer had discounted reimbursement rate; discussed that insured should not pocket excess where policy excludes it)
Blue Cross & Blue Shield of Montana v. Montana State Auditor, 218 P.3d 475 (Mont. 2009) (coordination-of-benefits language can exclude coverage for costs if insured received or was entitled to third-party payments)
Diaz v. State, 313 P.3d 124 (Mont. 2013) (used to explain prior coordination-of-benefits principles cited in Blue Cross case)