*1 FARMERS ALLIANCE MUTUAL INSURANCE Corporation, COMPANY, Kansas Insurance Appellant, Plaintiff v. Representative HOLEMAN,

KRISTI Personal Gary of the Estate of Leonard, Lee Deceased, Respondent. Defendant No. 97-313. January Heard 1998. January 6, Submitted 1998. Decided June 1998. 1998 MT 155. St.Rep. 601. Mont. 961 P.2d 114. *2 §

See C.J.S. Insurance For Appellant: Habedank, Robert J. Savage (argued); Cumming, Sidney. Best & Savage; Towe, Ball, D. (argued); Donald Sommerfeld Respondent:

For Sommerfeld; Mackey Billings. & Enright, Roy (argued) Brown; Susan P. R. Amici Curiae: Steven For (for Robinson; American & Missoula Alliance of In- Garlington, Lohn surers); Offices; Beck (argued); John J. Richardson Law Bozeman (for Lawyers). Trial Montana opinion REGNIER delivered the of the Court.

JUSTICE Montana, States District Court for the District of The United Division, questions, adjudi- certified to this two Billings has Court necessary of which the court deemed for resolution of the de- cation before it. The claratory judgment pending action United States Dis- questions forth the as follows: trict Court set Leonard, Gary Lee an insured under the Farmers 1.The estate Company policy Mutual Insurance issue this set- $25,000 with the driver of the underinsured tled for limits vehicle, Jr., Storey, which struck and killed Leonard. In Darrel motor money, the estate released the underinsured motor

exchange for the heirs, executors, administrators, driver, agents, and his as- vehicle liable, corporations might firms or or who signs, persons, and all other issue, be liable. Under the Farmers Alliance is be claimed to respect coverage, to underinsured motorist required pay, *3 entitled to recover as dam- legally compensatory the insured is sums of an underinsured motor vehicle. from the owner or driver Does ages Gary position the estate of Lee Leonard in the of be- place the release longer legally compensatory damages entitled to recover ing no of the underinsured motor vehicle and thus bar the owner or driver to the underinsured motorist recovering pursuant the estate policy? the Farmers Alliance provisions of coverages underinsured motorist and auto medical 2. Can the ¶3 coverages be stacked under the Farmers Alliance payments are insured under multiple pol- in this where vehicles one issue of each icy premium charged where a for motor vehicle policy? within the listed below,we answer the first question the reasons discussed For

¶4 the critical is whether Leonard’s es- negative. question We hold from the driver of the entitled to recover legally tate was accident, and thus conclude vehicle at the time of underinsured seeking Leonard’s estate from re- does not bar question the release in pursuant benefits to the underinsured motorist covery of of the Farmers Alliance motorist negative, one in question Because answer number we in ¶5 entirety.1 question turn address the second certified its For the rea below, sons we answer number two in the affirma discussed tive, the underinsured and and conclude auto may be under payments coverages stacked the Farmers Alli paid separate ance at issue in this case because insured each vehicle. premiums for insured

FACTUAL BACKGROUND the following by We take relevant facts from those recited ¶6 Court in its order: Federal District certification 31,1991, May On or Alliance issued an about Farmers automo- Brown, policy to and Diana the named insureds bile insurance Wade 9, 1991, and Scott On parents pickup Hankel. November a Ford by truck Alliance the policy insured Farmers under issued to Wade Watson, Brown, by and Lori Diana driven which Scott Hankel and Gary Lee were passengers, Leonard was involved in a one-vehicle ac- 90,15.6 Whitehall, cident on Interstate miles west of Montana. twenty thereafter, Approximately pickup minutes driven Jr., Storey, traveling Darrel was Storey east on Interstate 90 when lost control of the vehicle as he slow for attempted to the accident scene. Storey The and right vehicle skidded struck the rear corner of the trailer pickup. attached to the Watson The resulting pushed collision Storey the trailer into the ditch onto and its left side. The vehicle rap- idly Gary Lee rotated. Leonard’s coat became on the entangled hitch of Storey vehicle which caused to be dragged Leonard Storey until went vehicle after it backward into a ditch on the side of injuries the road. died result Leonard as a he sustained. Storey The vehicle insured Farm State out its liability portion limits of its in the amount of $25,000. exchange the money, Leonard’s estate released heirs, “Storey, executors, administrators, agents, assigns, his liable, persons, other corporations might firms or or who be claimed to liable be ....” release, signing Prior to Leonard’s estate made demand

upon *4 certification, erroneously accepting 1. In our order stated we would reach question only “yes.” if to

the second certified our answer the first provided in the payments coverage auto medical for Business Auto Diana Policy pay any of Wade and Brown. Farmers refused under provision by This action was filed Farmers Alliance against Eristi

¶11 personal representative Gary of the estate of Lee Leon- non-coverage claims seeking by declaration for made ard es- medical and payments tate under auto underinsured motorist policy of the insurance issued Farmers Alliance. Gary is purposes Leonard an insured for underinsured motorist cov- Lee coverage payments policy auto medical erage and issue. Farmers Alliance is policy required pay, Under the issue coverage, to underinsured motorist “all sums the ‘in- respect with legally compensatory damages to recover as sured’ is entitled ”Moreover, ‘[underinsured]2 of an motor vehicle.’ the owner or driver required to pay, respect Farmers Alliance is expenses incurred for payments necessary medical “reasonable auto for an who ‘bodily and funeral services to or ‘insured’ sustains ” caused an ‘accident.’ injury’ The at issue also states: “autos”, “insureds”, premiums ofthe number ofcovered Regardless “accident”, or vehicles involved in the claims made most paid, damages resulting any one Alliance] will for [Farmers LIMIT OF INSURANCE for “accident” [and COVERAGE AUTO MOTORISTS [UNDERINSURED]3 COVERAGE]4shown the MEDICAL PAYMENTS Declarations. required Alliance is to “stack” the Holeman claims Farmers coverages payment the auto medical $300,000 of provide at issue to $12,000 payment coverage. of medical Court, District summary judgment in the federal On Gary Lee argued, part, that because estate Leonard term District substituted the “underinsured” United Court 2. The States motor vehicle in the of the definitions of uninsured because one “uninsured” motor vehicle. is an underinsured again substituted term “underinsured” United District Court 3. The States No. 2. in Footnote for the reasons described “uninsured” phrase pay- “auto medical District inserted the The United States Court coverage” endorsement the uninsured motorists because ments “limit of insur- payments endorsement contain identical auto medical paragraphs. ance”

317 with and released the driver of the settled underinsured vehicle Leonard, which struck the estate is barred from seeking underinsured motorist Farmers Alliance longer legally compensatory entitled to recover dam- because it is no ages argued from the underinsured motorist. Farmers Alliance also specifically prohibits stacking. that the policy

QUESTION 1 place Gary Does the release the estate of Lee Leonard in position being longer legally of no entitled to compensatory recover underinsured damages from the owner or driver of the motor vehicle and thus bar the estate from recovering pursuant to the policy? underinsured motorist Farmers Alliance that, argues Farmers Alliance because Holeman entered into a with general Storey, third-party release tort-feasor this she pursuant cannot recover underinsured motorist benefits to the of Farmers In policy. support argument, terms Alliance itsof liability preliminarily Farmers Alliance asserts that its to an insured for underinsurance motorist is liability benefits derivative of the tort-feasor. third-party Because the derivative nature of this coverage, argues, Farmers Alliance Holeman’s decision settle with Storey liability and him precludes release from her from recovering underinsured motorist benefits. that, Farmers Alliance liability *6 Supreme the Oregon P.2d which Court determined of limitations to an insured’s Oregon’s applied

that contract statute hold against an insurer for uninsured motorist benefits. In so action liability “the of insurer is on its ing, the court concluded that the based insured, any gov claim of the insured also is with the contract at v. by Turlay, contract.” 488 P.2d 412. See also Kalhar erned the (Or. 1994), App. Co. Ct. 877 P.2d Transamerica Ins. uninsured solely by “[a] for benefits exists rea (recognizing that claim motorist lia coverage provided by the the insurance an insurer’s policy; son of contract.”). thus of is created Holeman bility the tort another present case liability of Farmers Alliance’s in the argues source any by Storey special tort rela lies not with the committed with Storey, of Farmers Alliance and but with the terms tionship between her claim arises from the insur insurance contract itself. Because contends, that Holeman the fact provisions, contract’s ance Storey liability from does agreed to release him settled with she her underinsured motorist benefits prohibit seeking now from policy issue. to the terms of at pursuant cov that motorist Although recognize too underinsured extent, nature, is, an insurer’s to of a derivative we conclude erage any arises liability given motorist benefits in case for underinsured contract, and contractual relation the terms ofthe insurance its from (Or. See, e.g., Vega Oregon Farmers Ins. Co. with insured. v. ship its 95, 97 inherently derivative nature 1996), (recognizing liabil coverage, concluding “the but claims on its provide such is based for failure to ity of an insurer insured, negligent not on the uninsured driver’s with the contract act”). Thus, ofthe contract we turn to terms in the signed precludes the release Holeman issue to determine whether recovering her underinsured motorist benefits from from Therefore, we must whether that portion Alliance. determine all obligates “pay which Farmers Alliance to sums the ‘insured’ compensatory entitled recover legally damages to as from the ” vehicle,’ driver of an motor requires owner or ‘underinsured be able she compensatory Holeman to demonstrate was entitled to accident, Storey the time of the or at damages the time she filed her claim for underinsured motorist benefits. this urges Holeman Court to look to the contract itself con- recover,” phrase, “legally

strue the entitled to in a manner consistent remaining terms the insurance as well as with the construed, asserts, public of this State. So por- obligates tion of the Farmers Alliance to “pay sums legally the ‘insured’ is entitled recover compensatory ” of‘an vehicle,’ the owner or driver underinsured motor requires only that she be able to she establish was entitled to compensatory damages at the time of accident order to recover underinsured motorist benefits. argues required

¶23 Holeman first the terms of the itself her exhaust, presumably by settlement, judgment or Storey’s liability policy before she could recover underinsured motorist benefits. Holeman contends her entitlement seek underinsurance benefits only Storey’s matured after she liability recovered policy, and that, reaching Storey, asserts settlement with just she did as the policy required. Holeman focuses on that section of policy’s provides underinsurance endorsement which as follows: *7 If provides this insurance a limit of the required excess amount applicable the law where a covered “auto” is principally ga- only raged, pay liability we will after or policies bonds have been by judgments payments. exhausted or argues the foregoing provision precluded ¶24 Holeman contractual seeking her from from indemnification Farmers Alliance until she had full payment Storey’s liability policy. received under Holeman to a of other points support also number to further her ar- that, gument settling Storey, with she fact complying was in attempt liability Farmers Alliance’s to condition its for underinsured Storey’s the upon liability policy. motorist benefits exhaustion of For example, Holeman notes the defines an underinsured motor time liability policy applies one “towhich a or vehicle as bond at the 320 the under that paid

an ‘accident’ but amount bond or to the ‘in- enough legally is not to the full amount the insured is sured’ enti- added.) damages.” (Emphasis points tled recover as Holeman also to uninsured to motorist portion that endorsement which states any be damages paid by “[t]he amount shall reduced all sums or is anyone legally responsible, including who all sums Part’s LIABILITY Coverage argues COVERAGE.” Holeman it is that foregoing provisions only clear from that attempted require, but to she exhaust all other anticipated, ap- asserting a plicable liability policies before claim for underinsured benefits. recover,” “legally to construing phrase, entitled we whole, insurance if possible, will read the as will reconcile give parts meaning Fitzgerald its to each and effect. v. various Aetna (1978), 186, 192, 370, 176 577 P.2d 373 (citing Aleksich Ins. Co. Mont. (1945), 223, 164 Health Ass’n Mont. v. & Accident 118 Mutual Benefit 372). Furthermore, determining purpose P.2d “in the contract’s intent, whole, as a giving special examine the contract no [will] (1995), Nimmick Farm any specific deference to clause.” v. State 270 315, 321, 891 1154, 1158. any ambiguities P.2d Wewill Mont. construe insurer. Leibrand v. contained in insurance Na (1995), 1, Casualty 272 Property tional Farmers Union Co. Mont. Ranch, 6, 1220, (citing Bauer Inc. v. Mountain 898 P.2d West 156, (1985), 153, 1307, 1309); 695 P.2d Farm Bureau 215 Mont. (1993), 354, 356, P.2d Home Ins. 257 Mont. Wellcome v. Co. as a “[a]mbiguity only when contract taken whole 192. An exists reasonably subject to two different in wording phraseology its Bunday (1991), terpretations.” Canal Co. v. 249 Mont. Ins. 974, 977. ambiguity “the We have held that is ex viewpoint average intelligence of a consumer with

amined from Leibrand, in the insurance but not trained law or business.” 10, 898 P.2d at Mont. above, suggests “legally the phrase, As noted Farmers recover,” be able to presently to mandates

entitled Storey in order her entitlement to re- demonstrate suggested by Interpreted benefits. cover Alliance, policy requiring that Holeman portion compensatory damages legal her entitlement demonstrate requirement clearly policy’s conflict with additional Storey would liability applicable policies prior recover- exhaust all that Holeman *8 motorist benefits. For ing example, underinsured would to, hand, require preserve on the one that Holeman her appear cause Alliance, hand, Farmers while on the other against of action mandate Storey’s light that she settle with insurer. In of Farmers Alliance’s “only agreement pay to underinsured motorist benefits after all lia- by judgments have been exhausted bility policies pay- bonds or ments,” conclude it was reasonable for Holeman to believe that we sought could not have indemnification from Farmers Alliance un- she Storey, thereby liability exhausting til she had first settled with Moreover, notes, portion policy. pol- of his insurance an icy question defines underinsured motor vehicle as one “to time liability bond or at the an applies ‘accident’ but the amount under that bond or paid policy to the ‘insured’ is not enough legally the full amount the insured is entitled to re- added.) damages.” (Emphasis cover as terms, By the policy suggests its thus that Farmers Alliance will only

consider a vehicle underinsured if an amount already has been applicable liability policy. under an bond or Because review of sought the contract as a whole indicates Farmers Alliance to condi- liability upon tion its for underinsured motorist benefits the exhaus- Storey’s liability tion of it escape conclude cannot now liability attempts based on Holeman’s with the comply policy by settling Storey. As demonstrated the foregoing, the contrac- interpretation suggested by tual Farmers place Alliance would conflict, policy’s provisions thereby giving various rise ambi- guity. interpret Bound as we are to the insurance policy as a whole insurer, any ambiguities against and to construe we conclude the policy requires that Holeman demonstrate she was entitled to com- pensatory damages Storey, from not at the time of her claim for benefits, but at the time of the accident. That Storey liability Holeman has released from preclude does not her Alliance, establishing, separate in a action Farmers Storey. part fault and on the foregoing, question Based on the we answer the first certified to and hold the release in negative, place us in the does not entitled position being longer legally insured no to recover compensatory damages owner or driver underinsured recovering pursu- motor vehicle and thus does not bar the estate from the underinsured motorist of the Farmers Alliance ant to

QUESTION 2 auto Can payments coverages be stacked under the Alliance policy *9 multiple in this where vehicles are insured under one pol- issue is icy premium charged coverage of each motor vehicle where the policy? listed within Having question negative, answered the first certified in the we

¶3 certified accordingly question entirety. will address the second in its question we turn first to the ofwhether the doing, so underinsured may coverages Alliance policy motorist be stacked at in this case. issue Stacking coverages A. of in Asking question that we answer the second certified the

¶31 negative, first we to honor the argues ought Farmers Alliance terms prohibit of from expressly stacking the Holeman Pointing the coverages present motorist case. to our underinsured Mutual Co. v. decision in Farmers Alliance Insurance Holeman (hereinafter 1315, 1320 274, 281, 924 (1996), Mont. P.2d Holeman I), argues look to ofthe policy Farmers Alliance we must the terms it self can stack the underinsured to determine whether Holeman mo therein. coverages torist contained I, 33-23-303, MCA, interpreted In Holeman we and concluded § prohibit stacking payment “does the of the statute coverage and the undennsured motorist available under a liability premium vehicle insurance where a is

policy of motor policy.” vehicle within that each motor listed charged I, 278 at 282, 924 P.2d at recognized that Mont. 1320.We the Holeman left of whether question “[t]he had instead ex Legislature Montana coverage, can be coverages, cess additional such as underinsurance I, interpretation.” amatter of Holeman 278 Mont. stacked... as on our that the Relying at P.2d at 1320. determination is “a matter of coverages underinsurance permissibility stacking that whether argues interpretation,” Farmers coverages motorist issue in may stack the underinsured the terms of the depends solely upon case an insured prohibit clearly purports at issue The benefits, providing pertinent part underinsured stacking that: INSURANCE

D. LIMIT OF “autos,” “insureds,” pre- of the number of covered Regardless “accident,” made or vehicles involved in the paid, miums claims resulting any for all one “accident” most we will OF INSURANCE for MOTOR- [UNDERINSURED]5 is the LIMIT shown in the Declarations. ISTS COVERAGE I, Although permissibility we determined in Holeman that the “a matter of stacking policy interpreta- is validity tion,” did not have occasion to address anti-stacking provisions contained issue. To answer us, I, begin before we must where we left off in Holeman anti-stacking provisions in- policy’s determine whether are valid, public policy or void as of this State. In so do- deed remaining argu- will address each of Farmers Alliance’s two ing, we in turn. ments on our decision in Grier v.Nationwide Mutual Relying Insurance (1991), 457, 812 argues,

Co. 248 Mont. as it I, policy’s did before this Court in Holeman that the underinsured mo actually part policy’s torist uninsured motorist cover 33-23-203, age, clearly prohibited by of which is MCA. § *10 specifically, More Farmers Alliance asserts that because provision policy underinsured motorist in the instant is contained governing within the section uninsured motorist coverage, actually a coverage part of the uninsured motorist cov 33-23-203, cannot in erage, light as such be stacked MCA. § I, rejected In Holeman we the precise argument presently ad by Although vanced Farmers Alliance. our sole task in Holeman I was 33-23-203, MCA, interpret anti-stacking language rather § itself, policy than the terms of the we nevertheless proceeded to dis at issue in in tinguish policy Grier from one case. Grier, noted that example, For “unlike the at issue in the in forth coverage stant sets the underinsurance on the declara I, page.” Holeman 278 Mont. at 924 P.2d tions at 1319. In accor I, in dance with our decision Holeman we determine that the substantively

issue in Grier differs from the one at issue in the pres analysis. and thus conclude that Grier does not control our ent Finally, Farmers Alliance cannot argues Holeman stack coverages qualified because Leonard as an in- No. 3.

5. See Footnote only by virtue of his in the insured occupancy sured vehicle. Because bought not a named insured paid Leonard was who for the issue, asserts, he reasonably expect could not expanded coverage by in the afforded share underinsured motorist benefits. Farmers Alliance relies on a number jurisdictions support various argument of cases from of its there exists a material distinction between a named insured who has purchased policy, for an insurance and an individual who only by qualifies occupancy as an insured virtue ofhis or her in an in- at the time of an accident. sured vehicle example, points For to the case of Ohio Casu- 1979), alty Stanfield, (Ky. Insurance Co. v. 581 S.W.2d in which Kentucky Court Supreme distinguished between a first class of thereby “protected who are named insureds and regard- individuals activity location or caused damages injury less of their in- motorist,” by an uninsured and a second flicted class insureds injury “protection whose is confined to inflicted they ‘occupying highway motorist while are an insured uninsured ve- ” Casualty, Recognizing 581 S.W.2d at 557. hicle.’ Ohio that a first class, reasonably may expect payment named insured that “his of an premium falling additional will result increased for those ” insured,’ within the definition of the ‘named the court held that the insured in that case could stack the uninsured named insurance coverages Casualty, contained his own Ohio (Ala. Liberty 1976), (quoting at 559 Lambert v. Mut. Ins. Co. S.W.2d 263). that the concluding 331 So. 2d insured could not stack employer’s policy, contained within his the uninsured how- ever, the defendant the court determined second class insured reasonably expect and could not to share in the policy, as to afforded a first class insured since he did not broader Casualty, involved. Ohio 581 S.W.2dat the additional already that this Court has responds established that distinction between a first class named in there exists no material and a premiums on a second class insured who pays sured who *11 only by occupancy virtue of his or her an insured qualifies as such points Sayers to our decision in v. specifically, More vehicle. 336, 340, 628 659, 662, (1981), 192 Mont. P.2d Insurance Co. Safeco that, qualified as insured as de plaintiff held where which we distinguish persons “no reason to between by the we had fined actually In- paid premiums.” who have policyholders insured stead, justification “[t]he we concluded that lies not in protection, protection who has for the extra but rather that the has purchased,” persons “[t]he been held that benefits flow to Sayers, 340, insured.” 628 P.2d at 662. Mont. (1995), Pointing Chilberg to our decision in v.Rose 273 Mont.

414, 903 1377, argues recognized we have since qualify a distinction between named insureds and those who only by insureds virtue of their in an insured vehicle. occupancy Chilberg, plaintiff injured riding by Jay while in a car owned Mid-Century Dean and insured through Company. Insurance Chilberg, 273 Mont. at 903 P.2d at 1378. At the time of the acci dent, Dean had three cars separate policies through insured under Mid-Century. Chilberg, 415, 903 plain Mont. at P.2d at 1378. The tiff sought to stack the pro uninsured motorist medical benefits vided for in all three policies. Chilberg, 273 Mont. at 903 P.2d at 1378. We held the plaintiff was not entitled to stack those on the grounds that he did qualify “not as an insured under the two disputed policies because he occupying was not the cars insured un der disputed the two policies.” Chilberg, 417, 903 273 Mont. at P.2d at 1379. We noted that “Chilberg was a who passenger neither had ‘rea expectations’ sonable qualify nor did he as an insured spouse or family member under more than policy.” one Chilberg, 273 Mont. at 903 P.2d at 1380. Although we recognized that the plaintiff Chilberg was an oc-

cupant who had no expectations” “reasonable under all three policies, we prohibited stacking primary grounds on the the plaintiff did not qualify as an insured under the two other Mid-Century policies. In the present only there one order, issue. In its certification the United States District Court clari- “Gary fied that Lee Leonard is an insured for purposes underinsured motorist coverage payments and auto medical cover- age under the policy at issue.” Sayers, As we noted in benefits for which the insurer has received per- valuable consideration “flowto all sons insured, insured.”6 As an Leonard was thus entitled to share in the benefits for which Farmers Alliance had received valuable Although Sayers longer good light anti-stacking provi- is no law in 33-23-203, MCA, sions contained reasoning in § our on this issue remains sound. *12 326 Sayers, 340,

consideration. 192 Mont. at 628 P.2d at 662. Whether qualified purchased Leonard insured because he for the issue, by virtue of his in occupancy the insured vehicle is is, immaterial. The fact Leonard was an “insured” under the terms of and as such was entitled to the same coverage any afforded

insured. identify scope To ofthat coverage, and to determine whether

Leonard, insured, as an was entitled to stack the underinsured mo torist contained within the policy, guidance we turn for our decision in Bennett v. State Farm Mutual Automobile Insurance (1993), 386, Bennett, Co. 261 Mont. 862 P.2d 1146. In we held that ‘other insurance’ clause that prohibits stacking “[a]n ofunderinsured coverage provided by motorist separate policies from the in same Bennett, surer is void as Montana public policy.” 261 Mont. at 390, 862 doing, P.2d at 1149. In so we recognized public policythat insurance may place “an insurer not in an policy provision a that de feats for which the insurer has received valuable consider ation,” purpose “[t]he and wrote that of underinsured motorist cover age provide is to source ofindemnification for accident victims when provide adequate Bennett, the tort-feasor does not indemnification.” 389, 862 Mont. at P.2d at 1148. public Wethen concluded that “the policy considerations that invalidate contractual ‘anti-stacking’ pro visions in an uninsured motorist endorsement support also invalidat ing those in an underinsured motorist endorsement.” Bennett, 389, 261 Mont. at 862 P.2d at 1148. Although arguably hand, distinguishable from the case at governs analysis

Bennett nevertheless our in the present case. For ex although there were ample, separate policies two insurance at issue Bennett, only in but one at in issue we conclude that Furthermore, notes, distinction is immaterial. as amicus we based Bennett, only considerations, our in not public policy decision on but on the doctrine of reasonable expectations. specifically, also More noted that because underinsured coverage generally “does vehicle,” depend person occupying on insured an insured reasonably expect insured in that case “could to recover up limit policies to the of both which she was an insured and for Bennett, premiums paid.” had been separate 261 Mont. at Moreover, 862 P.2d at 1148. we stated that “Montana citizens should they purchase have a reasonable that when expectation separate pol coverage, they adequate icies for underinsured motorist will receive motorist, up an underinsured for losses caused compensation Bennett, they purchased.” have policies limits of aggregate P.2d at 1149. Mont. at however, insured, status as an recognized, We have coverage, may depend indeed any connected 273 Mont. at Chilberg, in an insured vehicle. See occupancy upon holding Chilberg, it is Particularly light at 1380. of our 903 P.2d expec reasonable certainly may that Leonard have had no arguable purchase he did not expanded coverage because tation ofhis issue, occupancy instead as an insured virtue qualified but *13 inapplicability of the rea Despite apparent an insured vehicle. the case, however, we con doctrine in the expectations sonable overriding public upon considerations which we policy clude that the permitted mandate that Holeman be to stack the relied in Bennett coverages present in this case. addressing juncture Worth at this is the assertion amicus for ¶45 Alliance regarding the of American Insurers the effect of the 1997 33-23-303, of In anti-stacking provisions amendments to the MCA. § 1997, 44, Legislature thereby the Montana enacted Senate Bill 33-23-303, MCA, purpose the of the amending prohibiting § coverages all stacking policies. pres- automobile insurance The 33-23-303, MCA, ent version of thus purports preclude to the stack- § ing coverages. argues of underinsured motorist Amicus that when the MCA, 33-23-303, Legislature preclude Montana amended to § stacking, public policy it established and defined the of this State. premium “[i]n Amicus asserts that order to avoid increases which may stacking policies result from” claims of in multi-vehicle payment coverages, underinsured and medical “this Court should that the in Senate Bill 44 recognize public policy embodied does not 33-23-303, carry to light an effective date.” of the amendments § amicus MCA, asks that we the determination made in revisit we that the public supports stacking Bennett of this State coverages separate premiums underinsured motorist when have paid. been (1985), Casualty v. In Guiberson Insurance Co. ¶46 Hartford 288, 68, a decision the district upheld

Mont. coverages despite subsequent to uninsured motorist court stack recog We passage prohibiting practice. specifically of a statute that, now, “[ajlthough apply the law forbids we will not nized he was enti- retroactively deprive plaintiff the law Guiberson, tied to at the time of his accident.” 217 Mont. at Similarly, case, P.2d at 74. in the instant we will not apply provi 33-23-303, MCA, public embodies, sions of or the policy it § retroac tively deprive Leonard of he was entitled to at the time of the accident. on the foregoing, Based we conclude that Holeman is entitled to

stack the underinsured motorist coverages contained in the Farmers Alliance at issue in in light this of the fact multiple vehicles were insured under one and separate premiums were charged of each motor vehicle listed within the policy. Stacking payments B. auto medical coverages Having determined may that Holeman stack the underinsured motorist contained in the Farmers Alliance we must next determine whether she is similarly entitled to auto policy’s payments stack coverages. In support argument against of its stacking,

points portion ofthe auto medical payment coverage endorse- provides ment which as follows:

D. LIMIT OF INSURANCE. Regardless “autos,” “insureds,” number of covered pre- paid, miums claims made or vehicles involved in “accident,” most we will for all resulting any one “accident” the LIMIT OF for [AUTO INSURANCE MEDICAL PAYMENTS COVERAGE]7 shown in the Declarations. support argument As it did in of its the stacking of coverages, argues *14 an expressly precludes

itself insured from pay auto medical coverages. ment Farmers Alliance also relies ju on cases from other risdictions in which various courts have upheld policy similar provi in the statutory sions absence of a mandate that provide insurers cov See, erage expenses. e.g., for medical Lemoi v.Nationwide Mut. Ins. Co. (R.I. (Neb. 1982), 758; Pettid 1976), 453 A.2d v.Edwards 240 N.W.2d 344. light of our recent in decision the case of

¶51 Ruckdaschel v.State (1997), 395, Farm Mutual Automobile Insurance Co. 285 Mont. 948 700, otherwise, P.2d we conclude and hold that Holeman is entitled to 7. See Footnote No. 4.

329 payment coverages the auto medical contained within the stack Ruckdaschel, at this a policy plain issue in case. In injured she struck walking tiff was when a vehicle. Ruckdaschel, 396, 948 285 Mont. at P.2d at 701. At the ofthe ac time cident, payments three plaintiff separate policies had medical is Farm, separate which she and her had paid sued State for husband Ruckdaschel, 396, at 285 Mont. at 701. premiums. Bennett, Relying public policy on our decision in and the articu within, rely lated we held that State Farm could on language not amendatory deny coverage policy of its endorsement to under each Ruckdaschel, separate premium policy. when it received a for each again at P.2d at 702. We upheld applied 285 Mont. may place that insurer public policy policy “an insurance which provision coverage defeats for the insurer has received Ruckdaschel, valuable consideration.” 285 Mont. at P.2d at concluded “the District did We Court not err when it held that the public statutorily policy apply required concerns insurance apply types contexts to optional also of insurance case, as, Ruckdaschel, such in this medical payment coverage.” Mont. at 948 P.2d at 703. case, that, In the present similarly we conclude light public policy,

Montana’s and because Farmers Alliance received separate premiums each for vehicle insured under the is- sue, rely it cannot now on the policy’s exclusionary language deny coverage. foregoing analysis, Based on the answer second certified affirmative, in the

question conclude the underinsured mo- coverages torist and auto payments coverages may be stacked at issue in this where multiple vehicles are insured under one and where a premium ofeach charged motor vehicle listed within the TURNAGE, HUNT, NELSON,

CHIEF JUSTICE JUSTICES and LEAPHART TRIEWEILER concur. GRAY,dissenting.

JUSTICE I concur in on opinion the Court’s the first certified Montana, United States District District Court Billings respectfully opinion Division. I from that the sec- dissent on question, ond certified which is certain can be whether stacked under the issue in this case. *15 dispute no that the Farmers policy There is Alliance insurance “THE OF prohibited stacking: STACKING

specifically MOTORIST COVERAGEIS PROHIBITED....” If UNDERINSURED allowed, stacking public policygrounds it must be allowed on which is the I agree insurance with the Court policy. override the on the hinges resolution ofthe second certified whether that Bennett, governed imposed public in which was on issue or in this held grounds, by Chilberg, public which Court that policy prohibiting did not override terms the insurance reasons, following relies on it is stacking. The Court Bennett. For Chilberg controls. my view that Bennett, was a named insured under one of the plaintiff stacked, policies sought spouse to be and the

two insurance policy. the other In that as the Court named insured under out, may recognized public we “an insurer points policy provision in insurance a that defeats for place Bennett, has received valuable consideration.” which the insurer We stated that “Montana citizens Mont. 862 P.2d expectation they purchase sepa that when have a reasonable should coverage, they will receive ad policies rate for underinsured motorist motorist, anby for losses caused equate compensation policies purchased.” have aggregate they limits of up Bennett, P.2d at 1149. 261 Mont. at injured when another vehicle hit Chilberg The in was plaintiff he a driver of the at-fault vehicle passenger. car in which was The in- was Chilberg passenger The car which was uninsured. Insurance, two Mid-Century which also insured other cars sured separate premiums for each ofthe owner.The owner same argued policies. Chilberg in the three that the provided This policies disagreed. should be stacked. Court three fur- and rationale we restated in Bennett is not public policy The policies the instant by permitting Chilberg stack thered expec- who neither had “reasonable Chilberg passenger case. was a qualify as an in- nor did he tations” policy. family more than one member under spouse sured 418, 903 P.2d at 1380. Chilberg, 273 Mont. at passen- case. Leonard was a can said in the The same be expecta- had “reasonable be have plausibly argued who ger cannot in- the vehicle owner’s coverages would be stacked under tions” expectation” public the “reasonable I conclude that surance policy justification stacking, applied Bennett but re- *16 not jected Chilberg, apply in does here. Nor did qualify Leonard as an family than spouse insured member more one policy. Those overriding antistacking bases the the for terms of insurance have no under these facts. support Sayers, involving stackability In a 1981 case the of uninsured to a to

coverage stranger policy, as the insurance this Court stated: only an pays premiums Safeco contends insured who the for the stack, additional should be allowed to citing several other jurisdictions persuaded by that so We have held. are not the au- thority cited. The rule of and the Kemp authorities cited therein Sayers an control. was insured as defined the policy. Under distinguish these facts there is no reason to persons between in- policyholders actually paid sured and who have premiums. The in justification stacking paid for lies not who has for pro- the extra tection, protection but rather that the been purchased. has The insured. flow to all persons benefits 340,

Sayers, Mont. at 628 P.2d at 662. As this Court noted in I, 278 Mont. 924 P.2d at Sayers no longer is good Sayers Unlike the uninsured, law. dealt with underinsured, rather coverage, 33-23-203, than motor vehicle and § MCA, specifically amended in 1997 to prohibit stacking was of unin Thus, Sayers sured motor vehicle insurance. has been “overruled” states, however, statutorily. The Court that the rationale underlying Sayers logically disagree. remains sound. I Sayers, premise justified of that stacking The was because it protection,” faulty. as is was for “extra The protection” “extra purchased multiple purpose for vehicles was not for the stacking, multiplicity possible but for passengers the drivers and who might (Ariz. vehicles occupy Hampton the insured. v. Allstate Co. Ins. 1980), court example, reasoned that it was theo- retically given that at one moment possible each of several insured operating vehicles could be be in individual accidents unin- motorists; operator sured each would then have coverage under each premium which was the risk insured and for which Sayers I that concerning had been conclude rationale paid. extra protection provide justification does not a purchased overriding stacking. and imposing the terms of insurance contract stacked, payments whether medical can be As to opinion majority deciding they relies on the Ruckdaschel in can. rationale; upon relied the Bennett disagree. I Ruckdaschel Again, Bennett, pur- an had plaintiff Ruckdaschel was insured who claim made. policies reasoning under which Under chased above, public I discussed conclude that does analogous impose the terms of insurance justify overriding plaintiff a is payment policy limits for who stranger the insurance then, question, the second certified I conclude that In answer to Lee to the limit of the unin- Gary Leonard entitled

the estate cover- payments and medical sured/underinsured vehicle that was involved the accident on age particular on one 9,1991, “occupancy” based Leonard’s of that vehicle upon November There- tortfeasor struck and killed him. third-party the time the fore, “No.” I would answer certified notes with respect benefits, policy provides its that Farmers Alli- ance “will all sums the is legally ‘insured’ entitled to recover as compensatory damages from the owner driver of an ‘underinsured ” motor vehicle.’ After Storey Holeman settled with and released him liability, maintains, from Farmers longer she was no “legally entitled Storey, to recover” from and thus precluded from recovering pursuant underinsured motorist benefits to the ex- press terms 19 Alliance relies a number of ¶ on cases in courts in jurisdictions other have interpreted similar language rec- that, ognized because underinsured is derivative of the liability, tort-feasor, tort-feasor’s an insured who releases a in effect (N.C. Spivey Lowery 1994), App. releases the insurer. v. Ct. 446 S.E.2d an (recognizing “liability 837 underinsurance motorist carrier’s liability,” is derivative of tort-feasor’s and concluding plaintiff third-party who released was precluded asserting tort-feasor from a (N.C. carrier); claim Buchanan v. Ct. App. Buchanan 1986), (holding defendant insurance company’s S.E.2d liability for underinsured motorist nature benefits derivative in who settled concluding insured with released precluded recovering third-party tort-feasor was (Del. 1993), benefits); Ins. Co. Nacchia Nationwide Mut. v. (Ga. 1994), 48, 52-53; Darby App. A.2d v. Mathis Ct. 441 S.E.2d 905, 908. coverage differently. Holeman views this She asserts that purely is not of a third-party underinsurance derivative liability, tort-feasor’s but instead arises an insurer’s contractual relationship support argument, insured. her (Or. 1971), Exchange v. Turlay to the case of Farmers Insurance points