Boldt v. State Farm Mut. Auto. Ins. Co.

• Citation: 151 Mont. 337,443 P.2d 33
• Decision Date: 11 July 1968
• Docket Number: No. 11399,11399
• Parties: Basil A. BOLDT, Plaintiff and Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, Defendant and Appellant.
• Court: United States State Supreme Court of Montana

Page 33

443 P.2d 33

151 Mont. 337

Basil A. BOLDT, Plaintiff and Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, Defendant and Appellant.

No. 11399.

Supreme Court of Montana.

Submitted April 2, 1968.

Decided July 11, 1968.

Cooke, Moulton, Bellingham, Longo, & Mather, Ward Swanser, argued, Billings, for defendant and appellant.

Shone & Sullivan, A. G. Shone, argued, Butte, for plaintiff and respondent.

HASWELL, Justice.

This is an appeal by defendant from an order granting summary judgment to plaintiff. Plaintiff's action sought recovery from defendant insurance company of the amount of a judgment previously secured by plaintiff against the insured arising out of an automobile accident.

Plaintiff is Basil A. Boldt, who was injured in an automobile accident on November 15, 1958, while riding as a passenger in a truck which was struck by an automobile driven by L. D. Gibson, a driver covered by the provisions of the automobile liability insurance policy in question. Plaintiff sued Gibson for damages as a result of personal injuries he suffered in the accident and on August 6, 1962, recovered a judgment therein of $3,310.53. After the appeal period expired and the judgment became final, plaintiff filed the instant case against Gibson's insurer, State Farm Mutual Automobile Insurance Company, to recover the amount of his judgment against Gibson.

The defense of the insurer in the instant case is that the automobile accident of November 15, 1958, was not reported to it until approximately a year later; that this failure constituted a breach of the policy provisions, and by reason thereof it was not liable under the terms of the policy in question. It should be noted that upon notification of the accident, the insurer proceeded with the investigation and subsequent defense of plaintiff's action against Gibson under a 'reservation of rights' agreement.

At the hearing on plaintiff's motion for summary judgment in the instant case the parties agreed '(1) That Plaintiff's Motion for Summary Judgment may be deemed to be submitted solely on the question of whether or not it is governed by Section 53-438 Revised Codes of Montana, 1947.'

On July 19, 1967, the district court of Treasure County granted plaintiff's motion for summary judgment and entered judgment against defendant in the amount of plaintiff's judgment against Gibson and interest. Defendant appealed from that order and judgment.

The sole issue presented for review is the correctness of the order granting plaintiff's motion for summary judgment and the judgment entered thereon. Determination of this issue turns on whether the Motor Vehicle Safety Responsibility Act renders inoperative the policy defense of failure to notify the insurer seasonably of the occurrence of the accident.

Plaintiff contends (1) that the language of the policy subjects it to the provisions of the Motor Vehicle Safety Responsibility Act and (2) that public policy requires that the Motor Vehicle Safety Responsibility Act be interpreted to bring this insurance policy within its provisions. Plaintiff further argues that because the provisions of the Act amend the policy be eliminating any defense based upon failure of the insured to seasonably notify the insurer of the occurrence of the accident, plaintiff is entitled to judgment as a matter of law.

On the other hand, defendant contends that only insurance policies issued under the provisions of the Motor Vehicle Safety Responsibility Act as proof of future financial responsibility are subject to its terms, that the policy in question was not so issued, and that the policy defense of lack of notice is unaffected by the Act. As a result there are factual questions involving this defense yet to be resolved precluding entry of summary judgment for plaintiff.

At the outset it is clear that unless the provisions of the Act barring the defense of lack of notice are applicable to the policy in question, either pursuant to the language of the policy or the provisions of the Act, plaintiff's summary judgment cannot stand.

In our view there is nothing in the language of the insurance policy that incorporates the provisions of the Motor Vehicle Safety Responsibility Act therein unless such Act is otherwise applicable by its own terms. On the contrary the policy specifically provides as follows: 'FINANCIAL RESPONSIBILITY LAWS. When certified as proof of future financial responsibility under any motor vehicle financial responsibility law and while such proof is required during the policy period, this policy shall comply with such law if applicable, to the extent of coverage and limits required thereby, but not in excess of the limits of liability stated in this policy. The insured agrees to reimburse the company for any payment made by the company which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph.' (Emphasis added). This provision clearly indicates that the provisions of the Motor Vehicle Safety Responsibility Act are not included as a part of the policy: (1) unless the policy is certified as proof of future financial responsibility, (2) during the time that proof of future financial responsibility is required under the Act, and (3) the Act requires the policy to conform to its provisions. Accordingly we must look to the provisions of the Act alone to determine whether its provisions are applicable to the policy in question.

In interpreting the Montana Act, counsel for both parties have directed our attention to numerous cases from other jurisdictions claimed to have similar Acts. We have examined these cases and it is readily apparent that there is a substantial conflict of authority as to whether the requirements of automobile liability insurance policies contained in these acts apply to all automobile liability policies. See 8 A.L.R.3rd 388 for a collection of cases from all jurisdictions.

Montana's Motor Vehicle Safety Responsibility Act was enacted by the Legislature in 1951 (Chap. 204, L.1951) and is contained in sections 53-418 through 53-458, R.C.M.1947, as amended. It has been subsequently amended in minor particulars since that time, but it remains substantially as originally enacted. The overall purpose of the Act as stated in its title is to eliminate reckless and irresponsible drivers from Montana highways and to accomplish this purpose comprehensive requirements were enacted relating to reporting of accidents, posting security for payment of damages, furnishing proof of...