Brilz v. Metro. Gen. Ins. Co., DA 11–0275.

Docket NºNo. DA 11–0275.
Citation366 Mont. 78, 285 P.3d 494, 2012 MT 184
Case DateAugust 21, 2012
CourtUnited States State Supreme Court of Montana

366 Mont. 78
285 P.3d 494
2012 MT 184

Candice BRILZ, Plaintiff and Appellant,
v.
METROPOLITAN GENERAL INSURANCE COMPANY, Defendant and Appellee.

No. DA 11–0275.

Supreme Court of Montana.

Submitted on Briefs Feb. 22, 2012.
Decided Aug. 21, 2012.


[285 P.3d 495]


For Appellant: Rex Palmer, Attorneys Inc., P.C., Missoula, Montana.

For Appellee: Fred Simpson, Wilton H. Strickland, Bohyer, Simpson & Tranel, P.C., Missoula, Montana.


Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Candice Brilz filed an action in Montana state court purportedly asserting statutory and common law bad-faith claims against Metropolitan General Insurance Company (Metropolitan). Metropolitan removed the action to federal court and filed a motion for summary judgment, which the federal court granted. Thereafter, Brilz commenced the instant declaratory judgment action in the Fourth Judicial District Court, Missoula County, seeking a determination that she may pursue her common law bad-faith claim against Metropolitan. Because the statute of limitations on that claim had since expired, Brilz requested a ruling that she may pursue the claim pursuant to § 27–2–407, MCA, or this Court's doctrine of equitable tolling. The District Court dismissed the action, and Brilz now appeals.

[285 P.3d 496]

¶ 2 The sole issue on appeal is whether Brilz is entitled to pursue her common law bad-faith claim. Brilz again argues that she may do so under § 27–2–407, MCA, or the equitable tolling doctrine. We conclude, however, that principles of claim preclusion bar her from filing a second action against Metropolitan arising out of the same underlying facts. We accordingly affirm the District Court's judgment.

BACKGROUND

¶ 3 Brilz was injured and suffered property damage in an automobile collision which occurred in Missoula on August 14, 1998. She alleges that the driver of the other vehicle, David Kidder, was entirely at fault. At the time of the accident, Kidder was insured by Metropolitan. His policy included coverage in the amount of $25,000 for personal injury to one person.

¶ 4 Brilz submitted a claim to Metropolitan seeking to recover under Kidder's policy. On January 8, 2001, Metropolitan offered to settle with Brilz by tendering the $25,000 policy limits. Brilz alleges that this only occurred after “numerous communications and requests” on her part. Brilz accepted Metropolitan's offer on February 2, 2001, thus settling her insurance claim.

¶ 5 One year and five days later, on February 7, 2002, Brilz filed a lawsuit in the Fourth Judicial District Court against Metropolitan regarding the manner in which Metropolitan had adjusted her claim for insurance benefits. In paragraphs 7 through 9 of her complaint, Brilz alleged that Metropolitan had violated the Unfair Trade Practices Act by failing to reasonably investigate her claim and by failing to effectuate prompt, fair, and equitable settlement of her claim. See§ 33–18–201(4), (6), MCA. Additionally, in paragraphs 11 and 12 of her complaint, Brilz alleged that Metropolitan knew it was obligated to pay her claim but nevertheless withheld benefits, and in so doing acted “oppressively, maliciously and outrageously towards Plaintiff, with conscious disregard to Plaintiff's known rights and with the intention of wrongfully interfering with Plaintiff's prospective economic advantage and property interest in such benefits and of intentionally causing unjust and cruel hardship and severe emotional distress to Plaintiff.” Brilz further alleged that Metropolitan “acted to and did vex, injure and annoy Plaintiff,” and that in failing and refusing to timely and reasonably pay benefits based upon all available information, Metropolitan “acted wrongfully and unreasonably.”

¶ 6 Metropolitan removed the action to the United States District Court for the District of Montana based on diversity jurisdiction. See28 U.S.C. §§ 1332(a)(1), 1441(a), (b). The parties then filed cross-motions for summary judgment on the question whether Brilz's claims are time barred. The federal district court concluded, first, that Brilz's statutory claim under the Unfair Trade Practices Act is barred by § 33–18–242(7)(b), MCA, which prescribes a one-year statute of limitations on an action by a third-party claimant against an insurer. Brilz argued that her complaint also set forth a separate common law bad-faith claim to which a three-year statute of limitations applied. The federal district court ruled, however, that Brilz had not alleged such a claim. The court reasoned that her complaint “contains no allegations that [Metropolitan] acted in ‘bad faith,’ breached its duty of good faith and fair dealing, or otherwise breached some duty ‘independent of statute or of insurance contract’ ” (quoting St. Paul Fire & Marine Ins. Co. v. Cumiskey, 204 Mont. 350, 357, 665 P.2d 223, 226 (1983)).1 Citing paragraphs 7 through 9 of the complaint, the federal district court observed that Brilz had alleged violations of § 33–18–201(4) and (6), MCA, and from this the court then reasoned that she “bases the allegations in her complaint entirely on statutory duties, and does not allege the material elements of a common law bad faith claim.” The court did not identify what it thought “the material elements of a common law bad faith claim” were, however.

[285 P.3d 497]

Nor did the court specifically cite or discuss paragraphs 11 and 12 of Brilz's complaint.

¶ 7 The United States Court of Appeals for the Ninth Circuit affirmed in a memorandum opinion issued October 19, 2007. Brilz v. Metlife Auto & Home, 251 Fed.Appx. 458 (9th Cir.2007). The court first concluded that Brilz's statutory claim under the Unfair Trade Practices Act is time barred. Brilz, 251 Fed.Appx. at 459–60. Turning then to the question whether Brilz had alleged a common law claim, the court assessed her complaint under Rule 8(a)(2) of the Federal Rules of Civil Procedure. Doing so, the court held that Brilz's pleadings failed to set forth a common law bad-faith claim because although her complaint “explicitly alleged” that Metropolitan had violated the Unfair Trade Practices Act, it “made no mention of any common law claim.” Brilz, 251 Fed.Appx. at 460. The Ninth Circuit concluded that Brilz's complaint “provided the court and defendant ample notice of the statutory claim, but no meaningful notice of any purported common law claim. Nor does she point to anything in the record that would support any such claim.” Brilz, 251 Fed.Appx. at 460.

¶ 8 Following the federal courts' termination of her 2002 action, Brilz commenced the present action in the Fourth Judicial District Court. She filed her complaint in June 2008 and an amended complaint in May 2009. Brilz did not seek to renew her statutory claim against Metropolitan; rather, she requested a declaration that she may pursue her common law claim—even though, by this point, the statute of limitations on that claim had already run—based on two theories.

¶ 9 Brilz's first theory was premised on § 27–2–407, MCA,2 which states:

If an action is commenced within the time limited for the action and ... the action is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff ... may commence a new action for the same cause after the expiration of the time limited and within 1 year after [the] ... termination.
Brilz alleged that this statute applied to her common law claim because: she filed her initial complaint against Metropolitan in state court within the statute of limitations for common law bad-faith actions; her initial complaint properly pleaded an action for common law bad faith under Montana's pleading rules; Metropolitan removed the action to federal court where the action was terminated, not on the merits, but because Brilz's complaint did not meet federal pleading rules; and there was still time to file a new action for the same cause within one year after the termination of her first action.

¶ 10 Brilz's second theory for pursuing her common law claim was premised on the doctrine of equitable tolling. “Equitable tolling allows in limited circumstances for an action to be pursued despite the failure to comply with relevant statutory filing deadlines.” Lozeau v. GEICO Indem. Co., 2009 MT 136, ¶ 14, 350 Mont. 320, 207 P.3d 316 (listing “the requirements a party must demonstrate for application of the doctrine”). Brilz alleged that this doctrine applied because: she acted reasonably and in good faith in filing her first action in state court; Metropolitan was provided with timely notice of her common law claim because it was filed within the applicable statute of limitations and it was properly pleaded under Montana's pleading rules; Brilz acted reasonably and in good faith in seeking to pursue her “renewed” common law action following the termination of her first action in the federal courts; and Metropolitan has not been prejudiced with respect to its ability to gather evidence in defense of her claim.

¶ 11 The District Court rejected Brilz's arguments under both theories. With respect to § 27–2–407, MCA, the court concluded that, pursuant to the determination by the federal courts, Brilz failed to allege a common law bad-faith claim in her prior suit. The District Court agreed with Metropolitan that Brilz was essentially lodging “a collateral attack” on the federal courts' judgment,

[285 P.3d 498]

contrary to § 26–3–201, MCA.3 The court also reasoned that Brilz was barred by principles of issue preclusion from relitigating the question whether her original complaint contained a common law claim in addition to her statutory claim. As for equitable tolling, one of the requisites for applying this doctrine is “timely notice to the defendant within the applicable statute of limitations in filing the first claim.” Lozeau, ¶ 14 (internal quotation marks omitted). The District Court concluded that Brilz had not...

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