DuBray v. Farmers Ins. Exchange, 01-068.
| Decision Date | 06 December 2001 |
| Docket Number | No. 01-068.,01-068. |
| Parties | Robert D. DuBRAY, Plaintiff and Appellant, v. FARMERS INSURANCE EXCHANGE and John Does 1-10, Defendants and Respondents. |
| Court | Montana Supreme Court |
For Appellant: Martin R. Studer, Attorney at Law, Bozeman, MT.
For Respondents: Ian McIntosh, Crowley, Haughey, Hanson, Toole & Dietrich, P.L.L.P., Billings, MT.
¶ 1 The plaintiff, Robert DuBray, filed a complaint for declaratory judgment against the defendant, Farmers Insurance Exchange, in the District Court for the Eighteenth Judicial District in Gallatin County. DuBray asked the District Court to determine that Farmers was required to pay DuBray's medical expenses prior to settlement of or judgment on the underlying claim. DuBray additionally sought pre-judgment interest, costs of suit, and compensatory and punitive damages. The District Court granted defendants' motion to dismiss on the basis that DuBray's complaint was effectively a bad faith action barred by § 33-18-242(6)(b), MCA prior to resolution of the underlying claim against the insured. DuBray appeals the District Court's order. We affirm in part and reverse in part.
¶ 2 We consolidate and restate the issue presented as follows:
¶ 3 Did the District Court err when it dismissed DuBray's claim for declaratory judgment for failure to state a claim upon which relief can be granted?
¶ 4 The parties agree that on July 10, 1998, a motor vehicle collision occurred between a vehicle driven by Farmers Insurance Exchange's insured, Steven Crawford, and a vehicle driven by the plaintiff, Robert DuBray. Following the accident, DuBray submitted a claim to Farmers for property damage and personal injuries caused by the accident. Farmers concluded that Crawford was primarily liable for the accident and advanced medical payments and compensation for property damages to DuBray.
¶ 5 When Farmers declined to advance further payments for medical expenses, DuBray brought this declaratory judgment action in the District Court for the Eighteenth Judicial District in Gallatin County to compel Farmers to continue paying his medical expenses. As of the date this matter was submitted, DuBray's underlying suit against Crawford to determine and recover damages caused by Crawford's negligence had not been resolved. DuBray's complaint sought to recover "actual damages in an amount equal to DuBray's unpaid medical expenses, compensation for his pain and discomfort, mental distress, inconvenience and embarrassment, punitive damages, costs of suit and interest ..."
¶ 6 Farmers filed a Rule 12(b)(6) M.R.Civ.P. motion to dismiss on the grounds that DuBray failed to state a claim for which relief can be granted. The District Court initially denied Farmers' motion. After Farmers objected to DuBray's first set of discovery requests, DuBray moved for an order compelling Farmers to disclose materials he contended were relevant to the declaratory judgment action. Farmers then filed a motion to reconsider the order denying its motion to dismiss.
¶ 7 On November 30, 2000, the District Court issued an order which granted Farmers' motion to dismiss. The District Court concluded that DuBray's claim, though filed as a declaratory judgment action, had been transformed through discovery requests to "an insurance bad faith claim in disguise." Consequently, the District Court granted Farmers' motion to dismiss and denied DuBray's motion to compel. DuBray now appeals from the order of the District Court.
¶ 8 A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [the plaintiff's] claim which would entitle [the plaintiff] to relief. A motion to dismiss pursuant to Rule 12(b)(6), M.R.Civ.P., has the effect of admitting all well-pleaded allegations in the complaint. In considering the motion, the complaint is construed in the light most favorable to the plaintiff, and all allegations of fact contained therein are taken as true. Boreen v. Christensen (1994), 267 Mont. 405, 408, 884 P.2d 761, 762. The determination that a complaint fails to state a claim upon which relief can be granted is a conclusion of law, which we review to determine whether the court's interpretation of the law is correct. Boreen, 267 Mont. at 408, 884 P.2d at 762.
¶ 9 Did the District Court err when it dismissed DuBray's declaratory judgment action for failure to state a claim upon which relief can be granted?
¶ 10 The District Court, having concluded that DuBray's complaint was the substantive equivalent of a bad faith action, dismissed the complaint pursuant to Rule 12(b)(6) M.R.Civ.P. The District Court relied on Fode v. Farmers Insurance Exchange (1986), 221 Mont. 282, 719 P.2d 414, for its conclusion that bad faith claims may not be brought until the liability issues of the underlying case have been determined either by settlement or by judgment. Based on this conclusion, the District Court dismissed DuBray's complaint in its entirety.
¶ 11 DuBray contends that the District Court erred by relying on Fode and ignoring Safeco Ins. Co. v. District Court, 2000 MT 153, 300 Mont. 123, 2 P.3d 834, where we approved declaratory judgment actions as a means for compelling advance payment of medical expenses. DuBray further contends that his declaratory judgment action was filed pursuant to the Uniform Declaratory Judgment Act, §§ 27-8-101 through 313, MCA, and not § 33-18-242(6)(b), MCA, and therefore is not a bad faith claim and is not barred.
¶ 12 Farmers contends that Safeco only authorized declaratory judgment actions for those damages which, according to our decision in Ridley v. Guaranty Nat'l Ins. Co. (1997), 286 Mont. 325, 951 P.2d 987, are owed prior to final settlement;...
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