*1 CHARLES DEES, Respondent Cross-Appellant, Plaintiff,
v. AMERICAN NATIONAL FIRE INSURANCE corporation,
COMPANY, a New York Appellant Cross-Respondent. Defendant, No. 92-339. July 15,
Submitted on Briefs
1993.
September 14,
Decided
1993.
St.Rep.
For Mort Respondent: Firm, Goldstein Law Havre. JUSTICE HARRISON Opinion delivered the of the Court. (American National) American National Fire Insurance Company appeals judgment from a jury entered on a verdict in the Twelfth Court, Judicial District County, Hill awarding respondent Charles (Dees) compensatory punitive damages. We affirm in part in part. reverse American National raises the following appeal: issues on
1. Whether the District Court erred denying American Na- summary tional’s motions for judgment and directed verdict on the alleged issue of its violations of the Unfair Trade Practices Act. 2. Whether the District Cоurt erred in denying American Na- tional’s motion for mistrial based on Dees’ about his attorney’s costs and fees.
3. Whether the District Court erred in striking jury award of damages.
4. Whether the District Court erred in awarding pre-judgment interest on the damages award. cross-appeal
Dees’ following raises the issue: 5. Whether the District Court in reducing erred award punitive damages. This originated note, case as an promissory action on a filed (Solem) Havre, Solem Insurance Agency Montana, in March 1990. Dees was the represented $5,772 defendant. The note premium “companion plan” insurance, issued to Dees American 1,310.8 covering planted National and barley. acres wheat and liability acre, insurer’s per was limited to $50 but endorsement on policy included a multiplier triple recovery that would *5 436 26,1989, to cover policy the on June purchased event ofloss. Dees
the year. crop 1989 the fields near 10,1989, passed hail over Dees’wheat July
On a storm at farm Kremlin, working his father the Montana. Dees was with a eventually filed from the fields for which he shop, about four miles his his inspected After the storm he and father damage. claim hail in plants had been knocked over and noticed that numerous fields in He that it adjoining fields, each about 160 acres size. testified two my purposes knocked over.” For crop like a third of was “looked Township in are their litigation, designated the two fields location East, North, North, Range 32 Range Township 13 Section and 31 34). (Sections East, 34 13 Section 3 and damage at trial provided оf hail in these fields was Evidence testimony Berg, neighbor, that he through the of Arnold a who said storm, immediately hail Dees’ after the and had observed in fields Marty Ritterhouse, cutter Dees’ wheat the custom who harvested August 1989. during the first week of in the harvesting testified that he had been wheat Ritterhouse sixties; early he Hi-Line area since that had often observed area; in the 1989 spring August effects of hail on wheat that in Dees’ 3 “plumb effects of hail obvious” fields Sections were particular, plants, 34. In he mentioned broken heads of wheat lying ground, typical pattern on and the hail storm of downed relatively strip, curving narrow from to north- plants southeast agreed crop He that one-third of the was reasonable estimate west. Dees’ in the fields. loss two 7,1989, August entered Photographs taken Dees on which were trial, standing at the showed rows of with numer- in evidence wheat lying ground the rows. ous stems between According to special type called wheat was “Newana.” University tes- Baldridge, agronomist who Donald a Montana State short-stemmed, Dees, developed tified for Newana wheat was variety very strong spring wheat. It has stems that semi-dwarf over, Looking “lodging” falling and shatter-resistant heads. resist that he photographs, Baldridge in Dees’ testified at the fallen wheat breakage spring kind of in Newana wheat had never observed that alone, and that “lookslike hail me.” from wind storm, evening July day telephoned On the agent reported spring his wheat had been insurance that his com- of the insurance damaged by expected representatives hail. He afterward, one until but no came inspect his wheat soon pany 1,1989. cut, August By the field in time Section had been with patches uncut for field in inspection, left but the Section had not been cut because the custom cutter it too green. considered Velk, agent companion policy,
Victor who had sold Dees the Schaible, August arrived at Dees’ farm late on 1 with James adjuster. “adjust” Schaible had intended to day, already day Dees’ claim because he had a full worked Dees, however, another claim and tired. To accommodate he made According some informal observations in Section to his trial, probably twenty at he told Dees that he had lost *6 twenty-five percent crop, to ofhis but not because ofhail. He observed over, broken, that the stems bent wheat were not and were all bent therefore, testified, over at one point; damage appeared Schaible the wind, to be due to not hail.
Dees testified that he had seen counting Schaible stems in wheat an uncut 3 and portion Section that Schaible had him told that his twenty-three loss was approximately percent. they While were still field, Velk, testified, the Dees he agent, asked the what he would companion recover under his hail Velk policy. told him that under his particular policy “pay sixty the out” would roughly eighty be to Dees, percent. According to “that’s when Mr. changed Schaible [his] adjustment.” mind finishing about an later, days Two Velk adjuster, returned with a second Sam McCor- mick. MсCormick had adjusting 1975; been hail insurance since he the estimated at trial that he had over made one thousand hail adjustments during August his career. On inspected McCormick patches uncut of wheat in Section 3 as well as the uncut wheat in Section He he crop damage, testified that observed some but “I just find thing could not the type that indicated that we had had a hail loss.” He said that to explained he had Dees that if it were hail damage, variety stems of places, the the wheat would be in a broken uniformly ground; time, not bent the over near he also said that at the disagree testified, Dees did this explanation. however, with Dees by wind, that McCormick told him damaged the wheat had been and that he ... I “couldn’tbelieve it. was in shock ....” fields,
After inspected sign McCоrmick he asked Dees to acknowledging “withdrawal claim” form that he had not sustained a loss that to payment would entitle him under his American National hail policy. insurance refused this sign Dees form. 28, 1989, Goldstein, attorney,
On November Dees’ Mort wrote to National, stating percent that Dees had lost 25 of his crop, its hail, payable by American National under the loss due unpaid policy premium. exceeded the amount companion hail or, in the payment of the cash balance letter demanded Goldstein’s using alternative, appraisal procedures of Dees’loss outlined joint of the policy, telephone and included the name and number damage crop August. to Dees’ custom cutter who had observed the respond to this letter. In March American National did not insurance action agency against initiated its collection Dees. promissory in his answer that the note was “contin- asserted after American had gent,” not intended be enforced until National $9,462. Dees then damage, his claim for which estimated at paid said, he that Solem and Ameri- representation, He relied on Solem’s can National: damage, times for hail that Charles Dees pay
would at all alleged value required pay “prom- would the face not be note”, issory if due to for hail there was amount Charles Dees damage equaled greater than the face value ofthe ... that ... was contingent note. against American for included a counterclaim answer costs, interest, attorney’s fees, his crop, plus
exemplary damages. on March hearing argument granted
After oral court grounds summary judgment, Dees was Solem’smotion Promissory prove evidence “to that the precluded admitting from oral *7 had other than set forth in the Note terms conditions those subsequently paid the full amount due on written document.” Dees 7,1991, hearing on March the court promissory note. At a second summary partial motion for on judgment denied American National’s Dees’counterclaim. 1,1991, on ended
Ajury began April trial on Dees’counterclaim Dees. The verdict form is April special with a verdict for below, question. jury’s response with the each reproduced acres, any QUESTION NO. 1: Did of the Plaintiff’s insured under case, in policy hail in evidence this suffer companion insurance by in five crop yield directly caused excess of a reduction (5%)? percent
ANSWER: Yes so,
QUESTION many 2: how of the acres ...? NO. If 315.4 ANSWER:
QUESTION percent crop What is the reduction NO. 3: overall by yield directly your hail to the acres identified in answer caused Question No. 2? ANSWER: 31.8%
QUESTION defendant, given Did under the NO. 4: instructions you, violate Montana Unfair Claims Settlement Practices Act? Yes ANSWER:
QUESTION Did NO. 5: defendant have a either reasonable basis given you under the law as in the instructions or fact for payment denying on the hail claim? No
ANSWER: QUESTION you Do convincing NO. 6: find clear and evidence malice, guilty that defendant was actual as defined Court’s instructions?
ANSWER: Yes
QUESTION you Do convincing NO. 7: find clear and punitive damages against should be assessed the defendant? ANSWER: Yes
Based these court responses, calculated Dees’ actual dam- $12,679. ages jury as The retired a time seсond to determine the punitive damages, amount of having given, first been a new exhibit, copy of American National’s 1990 Annual Statement. This statement had been filed with Commissioner, the Montana Insurance pursuant law. It showed that in 1990 had American National assets surplus of million and a $79 of million. $14 for approximately deliberated hour delivering one before following verdict:
QUESTION you NO. 1: What amount of punitive damages do against assess the defendant American National Fire Insurance Company? $575,000
ANSWER: On April American National for judgment moved not- verdict, withstanding adjusters out pointing that three insurance witness, expert agronomist American National’s consultant Fairfield, Montana, from all testified that had not sustained a compensable Therefore, hail loss. American National it argued, had claim denying basis for reasonable and could not be held liable practices. unfair claims
The District Court denied this motion in an order on April entered 22,1992. day the same its findings On filed fact and conclusions *8 damages, required punitive relating of law concluding punitive that the MCA, but approving verdict accompanying required order damages was excessive. award $12,679 damages, Dees the sum of in actual pay American National to said $300,000 damages, “together with interest on plus punitive 5,1991 April per April annum from percent at the rate of 10 sums $32,643.90. judgment, including 21,1992,...” $499.20 The total or costs, $345,822.10, April from at the to bear interest per annum. percent rate of ten stay for a bond and moved supersedeas
American National filed stayed aрproved court the bond pending appeal; execution jury’s reduction of the cross-appealed court’s execution. damages award. I denying err in American National’s motions Did the District Court alleged issue ofits summary judgment and directed verdict on the for Act Unfair Trade Practices violations? Judgment
Summary counterclaim, had Dees asserted that In his Act, et seq., Unfair Trade Practices 33-18-101 violated the Montana MCA, companion hail misrepresenting coverage his under the claim; investigation of his policy; by failing conduct reasonable liability claim after its had by making attempt no to settle the reasonably of the Act follow. clear. The relevant subsections become may, frequency general as to indicate persоn with such No practice, any following: do of the business (1) provisions policy or insurance misrepresent pertinent facts issue; relating coverages at
(4) conducting a investi- reasonable pay refuse to claims without information; upon all available gation based (6) fair, prompt, attempt good faith to effectuate neglect liability has claims in which become equitable settlements reasonably clear; 33-18-201, MCA.
Section damages pursu exemplary requested
Dees also 33-18-242, cause of MCA, provides independent which ant to § caused a violation of certain subsections of action *9 33-18-201, MCA, those in Dees’ including cited counterclaim. Sec- § 33-18-242, MCA, provides also exemplary tion assessed 27-1-221, 33-18-242, in accordance with MCA. In an action under § MCA, a plaintiff required prove is not that thе violations were of frequency general such as to indicate a practice. business Section 33-18-242(2), insurer, however, MCA. An may not be held under liable 33-18-242, MCA, if it had “a reasonable basis law or in fact” for contesting plaintiff’s claim. Section MCA. February 1991,
In partial American National moved for sum mary judgment on the issue practices only. Summary of unfair trade judgment appropriate, argued, on that issue was American National deposition because Dees’ indicated “at worst” a opinion difference of adjusters between the hail concerning and himself the amount of hail crop, to his presented because Dees had no evidence of fraudulent, unfair, or bad faith acts or part omissions Court, however, American National. The District fоund that Dees had raised factual In particular, issues. a jury question found as to whether American delay National’s three-week in adjusting Dees’ claim was to advantage, as claimed, American National or whether it negligent handling indicated of Dees’ claim. argues
American appeal National that the District Court should granted partial have summary judgment because it had reasonable for denying basis Dees’ claim. It relies on Britton v. Farmers Ins. (1986), 67, 221 Group 71-72, 303, 306, Mont. 721 P.2d for the propo- sition that “an insurance contract must include a broad freedom in the insurer policy to evaluate claims under reject and to nonmeri- Britton, torious Our primary however, claims.” holding was that an reasonably insurer does not act if it declines to pay insured’s merely upon claim Here, testimony. inadmissible evidence or conflict- ing presented evidence was toas whether American National reason- ably denied Dees’ claim.
Summary judgment appropriate when there is no genuine issue of material moving party fact and the to judgment is entitled 56(c), a matter of law. Rule M.R.Civ.R The initial burden of demon strating a genuine absence of issue of material fact lies with the moving party; moving party burden, once the has party met that opposing summary judgment must genuine establish that issues of (1988), 521, 516, material fact exist. Peschel v. Jones 232 Mont. 760 Conclusory speculative P.2d 54. statements are insufficient 442 (1988), v. Jenkins issue ofmaterial fact. Simmons genuine
raise a P.2d Mont. agreed that he had
Here, stating an affidavit Dees submitted companion unusually high premium for American National’s pay an Velk, agent, led to its policy hail because he had been believe claim, delay inequitable denial ofhis subjected to he would not be stating that he had notified American National that further Ritterhouse, cutter, Marty was available as a witness who custom the wheat was cut. the effects of the hail storm before had observed affidavit, stating that he had supporting Ritterhouse submitted in Dees’fields and that damage greater percent than observed had contacted him con- representative American National ever no admittedly limited its cerning his observations. adjuster. its investigation to routine visit genuine establishing his burden of issue We hold that Dees met his claim as to whether American National had denied *10 ofmaterial fact and that American Nаtional was investigation, reasonable without summary judgment to on the issue of unfair trade not entitled (1990), Co. v. St. Paul Fire & Marine Ins. practices. See Walker 256, 1157, summary judgment in 786 P.2d which we reversed Mont. company plaintiff because the had set forth suffi- for the insurance an issue as to a reasonable investi- cient facts to establish whether made, MCA. required had gation been Directed Verdict trial, day adjuster McCormick fourth of the after the
On the in damage he no ofhail Dees’wheat testified that had found evidence fields, verdict on all claims. American National moved for a directed argument The oral in chambers and denied motion court heard comment. without only in properly granted for verdict
“Amotion directed any jury, to submission to the complete аbsence of evidence warrant light most of fact must be considered in and all inferences Britton, at If the party.” 721 P.2d 317. opposing favorable party, evidence, opposing to the light in a most favorable viewed could differ as to conclusions drawn people indicates that reasonable evidence, v. proper. is not Weber Blue Cross from the a directed verdict 462-463, (1982), 643 P.2d Montana 196 Mont. documents, Here, expert in the form of presented Dees testimony, support his contention that lay photographs conducting without a rea- had denied his claim American National to warrant sub- investigation. evidence was sufficient This sonable mitting practices jury. the issue ofunfair trade to the The District Court American motion properly denied National’s for directed verdict.
II Did District in denying Court err American National’s based motion for mistrial on Dees’ about his costs attorneys fees?
During trial, stated, direct examination at the Dees in response question asking him to state amount of was he requesting, got way money that “I have more in thing stuck this than responded, I ever recover ....” “By thing, will Goldstein stuck in this you thing?” what do mean stuck in this Counsel for Na- relevance, objected grounds tional judge and the said to Gold- stein, question. “Ask a I am sustaining refusing objections.” used to Goldstein asked: you
Have incurred bringing fees for witnesses this case and attorney in order try fees and collect proceeds? [the] hail answered, Quite ‘Yes.I continued, have. substantial.” Goldstein “Approximately how much?” Counsel for objected American Nаtional again. court sustained the objection and recessed for a discussion mistrial, chambers. American then National moved grounds that had been influenced before counsel had object. counsel, chance to After extended discussion with the court denied this motion. argues
American National that evidence ofthe costs Dees incurred pursuing his claim was to the irrelevant issues of whether Dees should recover for hail and whether American had acted bad faith. American unusually large National infers from the punitive damage award that this evidence prejudicial. was
Our determining standard review in whether mistrial *11 appropriately denied is whether the district abused court its discre (1987), 62, 68, 625, tion. Kuhnke v.Fisher 227 Mont. P.2d As 740 628. Kuhnke, observed in judge we the district court hears the entire trial position аnd is in the prejudicial best to determine the effect of attorney jury. misconduct on the
Here, Langen Judge denied American National’s motion for already mistrial on grounds objection the that he had sustained its Later, Goldstein’s his questions. findings to of fact and conclusions law, jurys he the punitive damages attributed award to American “dogmatic damage” stand that was the National’s there no hail and to during its the trial. As the haughtiness” and of witnesses “arrogance and their testi- jury exposed to American National’s witnesses was five-day trial, the it is reasonable mony repeatedly throughout did, infer, single refer- Langen presumably as Dees’ brief Judge comparatively insignificant. costs We conclude that the ence to its denying did not discretion in National’s court abuse mistrial. for a motion
Ill jury striking Did District err in not the award of Court punitive damages? brought
In an under Montana Unfair Trade Practices action assessed, 27-1-221, Act, damages may pursuant be § (13) (1), (4), (6), MCA, (5), (9), for a of subsections or violation 33-18-201, 33-18-242(4), Here, jury MCA. found MCA. Section (6). (4), (1), violated and that American National had subsections jury long This will not overturn a as as the Court verdict evidence, by substantial, is credible viewed supported verdict (1990), prevailing party. Thayer most v. Hicks light favorable 138, 156, reweigh P.2d 795. cannot 243 Mont. We findings jury or disturb unless evidence so inherently not to entitled to belief. Sizemore v. improbable be (1990), 246 P.2d Power Co. Mont. Montana Here, eyewitness testimony, presented expert photo- Dees supporting his contention that he had sus- graphs, documents 10,1989, July the hail tained a substantial loss as result of storm though compensation he for that loss. Even and that was entitled another experienced adjusters expert witness offered credible expert indicating that Dees’ loss was not a evidence and compensable, result of the hail storm and therefore was not support verdict in his favor. evidence was sufficient to statutory remaining question is whether met the stand- 27-1-221, MCA, reason- punitive damages award. Under ard for been damages may be awarded when a defendant has able MCA, guilty provides: found of actual malice. Section knowledge if he of facts guilty A defendant is of actual malice has high probability of intentionally that create a disregards or facts injury plaintiff to the and:
(a) dis- deliberately or intentional proceeds act сonscious injury plaintiff; to the regard high probability of the *12 (b) deliberately proceeds act with to the high indifference probability injury plaintiff. of to the damages proved “All for punitive by elements the claim must be evidence, convincing [which] clear and ... is more than a beyond than preponderance evidence but less reasonable doubt.” Section MCA. by
A award must be reviewed 27-l-221(7)(c), judge. Accordingly, district court Section MCA. Judge Langen reviewed the award that jury correctly and concluded punitive damages against National, assessed based on clear convincing evidence that American National had been guilty of actual malice toward Dees and had violated the Montana Unfair Trade Practices Act.
Among twenty-three findings of fact listed judge, following support his best conclusion that American National inten- tionally disregarded facts that created a high probability injury deliberately Dees and acted with to the high probability indifference injury to Dees: adjuster 1. Had the fields, taken the time adjoining to examine damage occurred, where no had he would have determined that the damage wind, Dees’fields could not have been caused because typically generalized wind has a more effect than had does. the adjuster 2. Had taken knowledgeable the time to consult sources, he have would learned that Newana wheat had been short-stemmed, developed as a anti-lodging strain and that hail damage to wheat damage Newana differs from hail to оrdinary long-stemmed wheat. damage
The court’s statement that hail to Newana wheat differs damage from hail to other wheat should be characterized as inference fact, rather than but it is testimony consistent with the of Donald Baldridge, University agronomist Montana State who testified for Dees. Baldridge necessarily
Goldstein asked whether hail would cause breakage wheat, at points random on the stems of Newana as the testified, adjusters changed question had and then his without wait- ing anything August for an answer. asked He whether photographs Baldridge spring indicated that the wheat in Newana the photographs was not knocked over hail. The photographs show uniformly, fallen wheat bent off near over broken Baldridge replied, on the stems. pоints and not at random ground, to me.” “Well, damage like hail this looks they adjusters’ had not It from the was evident wheat, they nor had ofNewana specific considered the characteristics omissions, adjoining fields. In these in the looked wind Baldridge’s testimony the characteristics of about *13 considering and testimony comparing wind with and other Newana wheat convincing evidence jury could have found clear and damage, the guilty actual malice as defined American National was of that 27-1-221(2), MCA. law, of the nine Judge Langen addressed each In his conclusions of 27-1-221(7), MCA, requires him to in review- consider factors that § takes ing jury punitive damages. of American National award factor, the first which is judge’s regarding to the conclusion exception wrongdoing.” of reрrehensibility “the nature and the defendant’s by “arrogance he shocked the and Judge Langen stated that trial, adjusters by by during haughtiness” displayed responses to the fol- executive James Damron’s American National during punitive damages lowing questions, asked Goldstein hearing: anything wrong in matter
Q: you your company did Do think regarding in this case handling of the claim that is involved Charles Dees?
A: No. again, again? you way do it same all over If
Q: Would say in happened again, let’s 1991?
A: No. differently?
Q: you doWhat do [referring of to Goldstein’s Respond A: to the letter arbitration arbitration], requesting 1989 letter November have answered the argues that Damron could not American National affirmatively admitting guilt, Judge without but question first something must responses Damron’s Langen took convey to them ofthese “get people” the attention be done to investigative procedures are оrder.” changes in their “some having heard the evidence judge, A district court witnesses, determine whether position is in the best observed the damages have been met. Mad punitive requirements proof 65, 936, (1990), 61, Judge 939. 241 Mont. 784 P.2d dux v. Bunch is consistent with of Damron’s Langen’s interpretation damages, is to primary purpose punish wrongdoer which conduct, and deter further unlawful and we will not overrule it absent (1986), Ellinghouse abuse discretion. Ins. Co. v. Safeco 254, 217, Mont. 725 P.2d We conclude that the District did not err in striking Court jury damages. award
IV awarding Did the District Court err in prejudgment interest punitive damages on the award? judgment,
In signed April its final the District Court ordered American National to pay percent interest at the rate tenof per compensatory annum and punitive damages assessed — — against it, April frоm the date of the verdict to the date of the final judgment.
Prejudgment damages 27-1-211, interest on is controlled MCA, provides which that:
Every person who is entitled to recover capable certain or ofbeing made certain right calculation and the to recover which vested him upon particular day is entitled also to recover *14 day interest thereon from that .... punitive damages
Because by court, must they be reviewed the trial neither capable being vest nor are of made certain until the trial court completes its review and a judgment. issues final Prejudgment interest, therefore, is not on punitive available a damages award. See Maddux, 940, 784 P.2d at in upheld which we the district court’s jury reduction the damages of award of and concluded that because the damages clearly аmount of not was ascertainable until by court, determined the district prejudgment interest was not appropriate.
We the reverse District award prejudgment Court’s interest $300,000 punitive damages, in ten percent per at April annum from 5,1991 21,1992. to April
V reducing Did the District Court in err the award damages? punitive cross-appeal,
On urges this Court to the jury’s reinstate damages $575,000, punitive award of which District Court re- $300,000. duced to
448 extraordinary remedy, damages as “an punitive
Wehave described caution, gendered by passion applied with lest [which] ... should be wrongdoing, the award because of defendant’s prejudice Ellinghouse, unreasonable.” P.2d at 226- 725 unrealistic or becomes Here, passion prejudice “[t]he Judge Langen observed that by company is a wrong committed particularly strong can when be trying a to pоwer against small farmer with considerable financial damages award from jury’s punitive meet.” He reduced the make ends $300,000 Defen wrong committed $575,000 “[t]he to because justify [Dees] should receive certainly does not dant in this case windfall,” though he said that the award should a dollar half million “large enough get company’s attention.” be damages Ellinghouse, in a standard for
We established (citation omitted), damages holding “[p]unitive 725 P.2d at necessary adequately punish cannot be ‘in excess the amount ” example as an to it and others.’ We also the defendant and serve duty appears a to act when the award imposed on the district court “ recovery grossly disproportionate is raise excessive or ‘the so ” prejudice.’ Elling- of pаssion that it the result presumption omitted). (citation Here, Court house, the District 725 P.2d at duty: finding passion prejudice, performed its jury’s award. reduced the criteria set forth the United
Dees asks us
consider seven
(1991),
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Supreme
Haslip
in
Mut.
Ins. Co. v.
States
Pacific
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1032, 1045, 113
L.Ed.2d
for determin
111S.Ct.
U.S.
reasonably related to the
ing
award is
whether
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and retribution. These criteria
policy goals of deterrence
Court,
ruling
Supreme
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whose
were established
Supreme
Haslip
Court
because
upheld
the United States
“sufficiently
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definite and
impose
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awarding punitive
finders in
discretion ofAlabama fact
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at _,
Although Haslip correspond criteria jury reviewing award a Montana court must consider nine factors 27-1-221(7),MCA,they are identical. under punitive damages *15 they require criteria because urges adopt Haslip us to Dees not included in a factor litigation, consider the costs of fact finder to 27-1-221(7), District Court sustained Recalling that MCA. § and attor- objection evidence on costs American National’s fees, that: ney’s argues appeal Dees jury Trial the fact Judge if the and the would have considered of dollars, se, involved, litigation per of not for the number of cost intent, showing bullying by malice and but for insured, jury of its then the amount of the award for National very reasonably higher could punitive damages well have been .... argument. not persuaded statutory We are this Montana’s process requirements Haslip: they criteria meet the due forth in set impose meaningful a definite and constraint on the fact finder’s Moreover, awarding punitive damages. 27-l-221(7)(b), in discretion § MCA, court, or permits jury, “any to consider other circum- may reduce, that operate stances to increase wholly without defeating, damages.”
We hold that the District imposed by Court met the standard 27-1-22l(7)(c), MCA, by clearly stating § decreasing its reasons for jury award of and demonstrating its considera- 27-l-221(7)(b), tion of each the factors listed in § MCA. We reverse the District Court’s award prejudgment interest on punitive damages and for remand an order consistent with this opinion. District Court’s order is in all respects. affirmed other JUSTICE TRIEWEILER concurs.
JUSTICE specially concurring. GRAY I opinion, concur the Court’s but compelled feel to address (AN) arguments certain advanced American hopes offеring guidance clarity or additional in these difficult cases involv- ing question a coverage questions both of violations of 33-18- § (the Act). 242, MCA, of Montana’s Unfair Trade Practices Act begin by I stating my presented view sufficient documents, the form other witnesses not interviewed photographs AN and a violation of establish MCA, which forms the basis this independent brought action 33-18-242, pursuant to MCA. Such violation must be established by proof that an pay insurer refused to a claim conducting “without investigation upon a reasonable based all available information.” question Montana, generally “Reasonableness” is a of fact in and a conclude, evidence, could basis of Dees’ that AN’sinvesti gation upon was not reasonable all based available information. аrgues investigation requirement
AN that no of the violation present any was established because Dees expert testimony did general adjustment procedures practices were not followed industry relating and/or that standards investigation to claims *16 450 urges adopt implicitly, At least it us to a not met.
adjustment were testimony regards in these plaintiff expert a offer requirement that and AN’s previously, We have not done so establish a violation. to say, is to us do so here. This not persuade do not to arguments however, appropriate an insurer cannot introduce that negate proof in to of a violation of Act attempting other investigation based of a claim without a “reasonable based on denial where, here, Particulаrly an insurer information.” on all available might punitive damages, it well wish possibility faced with the is so. to do note, any testimony or regard, in that such evidence would
I this statutory language necessarily to be to the at issue. For have relevant required only adjuster if that an example, industry standard kind a of some in order to determine consult reference manual field, industry particular to a such an occurred whether investiga- the “reasonable likely would be irrelevant under standard required 33-§ on all available information” standard tion based 18-201(4),MCA. arguments surrounding
In to addition its “reasonable issue, seeking investigation” arguments and cases a presents AN in in fact” objective standard for “reasonable basis law or more clarify initial I liability point, under the Act. To note defense if it had for AN states several times that a reasonable basis that claim, Act. I contesting cannot be found to have violated the it 33-18-242, MCA, I read disagree interpretation. with this As Act that an insurer find violations of the and still determine could (for punitive damages) Act actual or on the not liable under the insurer had established the “reasonable basis” defense. basis important distinction, may seem to the hypertechnical, which This following discussion. objective urges adopt more standard of“reasonableness”
AN
us to
currently
urges
a return
the Britton
Specifically,
than
exists.
“unwarranted, unreasonable,
justification.”
without
standard
(1986), Group
Mont.
Aplaintiff brings 33-18-242,MCA, who under may action § seek damages; and punitive damages actual both kinds of available in such damages may an action are different from which be a awarded in policy coverage. breach of contract claim for damages may Actual be they awarded to the extent “were proximately caused the violation (13) (1), (4), (5), (6), (9), or of subsection of 33-18-201.” Section § 33-18-242(4), MCA. 33-18-242,
A can plaintiff punitive damages recover under § (1) MCA, only proofs: plaintiff a upon several must establish a the the preponderance of evidence that insurer violated one or more (2) 33-18-201, MCA; of specified plaintiff subsections must § convincing clear and evidence that insurer establish acted with 27-1-221, actual malice or actual fraud as defined in If a MCA. burdens, may or he plaintiff punitive meets these she be awarded damages. actual, proximately
An insurer can avoid an award of 33-18-242, MCA, by caused, establishing that its damages under § 33-18-201, any specified subsections of § did not violate conduct imposition punitive requires two MCA. Because may above, imposition proofs set forth an insurer avoid specified not damages by establishing either that it did violate not with actual frаud or malice. or that it did act subsections established, Finally, if and actual fraud or malice are even violations may for contesting that it had a reasonable an insurer still assert basis If policy. claim the insurance an insurer can establish made under 33-18-242, basis, it be may such a held liable under § reasonable MCA, words, prove In can to the provided at all. other an insurer denying fact ofthe finder of that had a reasonable basis for satisfaction claim, 33-18-242(5), MCA, complete defense to both provides damages under the Act. actual and fact, question it is for the trier reasonableness is Because judge credibility of the weigh fact to the evidence and witnesses determining the insurer had a “reasonable basis” for whether Thus, denying generally must be based claim. such determinations of each case. on the facts and circumstances join and JUSTICE NELSON CHIEF JUSTICE TURNAGE foregoing special concurrence of JUSTICE GRAY.