Federated Mut. Ins. Co. v. Anderson

• Decision Date: 23 November 1999
• Docket Number: No. 98-077.,98-077.
• Citation: 1999 MT 288,991 P.2d 915,297 Mont. 33
• Parties: FEDERATED MUTUAL INSURANCE COMPANY, Plaintiff, v. Brent ANDERSON, d/b/a Conifer Logging, Defendant, Third-Party Plaintiff, and Appellant, v. Jones Equipment, Inc., and John Deere Insurance Company, Third-Party Defendants, Respondents, and Cross-Appellants.
• Court: Montana Supreme Court

991 P.2d 915

1999 MT 288

297 Mont. 33

FEDERATED MUTUAL INSURANCE COMPANY, Plaintiff, v. Brent ANDERSON, d/b/a Conifer Logging, Defendant, Third-Party Plaintiff, and Appellant, v. Jones Equipment, Inc., and John Deere Insurance Company, Third-Party Defendants, Respondents, and Cross-Appellants.

No. 98-077.

Supreme Court of Montana.

Submitted on Briefs September 10, 1998.

Decided November 23, 1999.

Thomas J. Beers and Matthew O. Clifford, Beers Law Office; Missoula, Montana, Michael G. Alterowitz, Alterowitz Law Offices, P.C.; Missoula, Montana, For Appellant.

Shelton C. Williams, Williams & Ranney, P.C.; Missoula, Montana, For Respondents.

Justice TERRY N. TRIEWEILER delivered the Opinion of the Court.

¶ 1 Federated Mutual Insurance Company filed a complaint in the District Court for the Fourth Judicial District in Missoula County in which it sought to recover from Conifer Logging, Inc., amounts Federated had paid to its insured, Jones Equipment, Inc., for the loss of logging equipment Jones leased to Conifer. Conifer filed a third-party complaint against John Deere Insurance Company in which it sought indemnity for any amounts which it might owe Federated. As a result of John Deere's first appeal to this Court, Federated Mutual Insurance Co. v. Anderson (1996), 277 Mont. 134, 920 P.2d 97, we affirmed the District Courts award of partial summary judgment in favor of Conifer and imposed Rule 32 sanctions against John Deere for its frivolous appeal. After this case was remanded, Conifer amended its complaint to allege unfair trade practices. The District Court awarded partial summary judgment in favor of Conifer on the issue of liability for the amended claim; however, following a jury trial, entered judgment in favor of John Deere on all remaining issues. Conifer appeals the judgment of the District Court and John Deere cross-appeals from the entry of summary judgment. We affirm the award of summary judgment, and reverse the judgment in favor of John Deere.

¶ 2 The issues on appeal and cross-appeal are:

¶ 3 1. Did the District Court err when it refused to allow Conifer to include John Deere's conduct on appeal as part of its unfair trade practices action?

¶ 4 2. Is there sufficient evidence in the record to support the jury's verdict that malice had not been proven?

¶ 5 3. Did the District Court err by allowing John Deere to make inappropriate comments to the jury?

¶ 6 4. Did the District Court err when it refused to give Conifer's proposed law of the case instruction and allowed John Deere to present a defense contrary to the law of the case?

¶ 7 5. Did the District Court err when it awarded summary judgment in favor of Conifer on the issue of Deere's liability and instructed the jury that Deere had acted "unreasonably"?

¶ 8 6. Did the District Court err when it excluded the testimony of Deere's expert witnesses?

¶ 9 7. Did the District Court err when it allowed Conifer to amend its complaint to include an unfair trade practices claim after the expiration of the statute of limitations?

¶ 10 8. Did the District Court err when it admitted evidence of acts which occurred more than two years prior to the commencement of the Plaintiff's action?

FACTUAL BACKGROUND

¶ 11 These same parties were before this Court on appeal in Federated Mutual v. Anderson (1996), 277 Mont. 134, 920 P.2d 97 ("Federated Mutual I"). In that case, Conifer had sued John Deere for indemnity from claims made against it by Federated Mutual. In Federated Mutual I we set forth the facts which gave rise to the original complaint as follows:

On May 29, 1991, Conifer Logging agreed to lease a 1987 Timberjack feller buncher from Jones Equipment Company. The feller buncher, which is a vehicle that cuts and stacks standing timber, was worth $130,000. The term of the lease was one to six months with an option to purchase the equipment. Before the lease began, Conifer was entitled to a free, one_week trial period without obligation or risk. The one_week trial period was reflected in the original option to purchase, which stated that although delivery was scheduled for June 10, the first rental payment was not due until June 17 and the six_month term of the lease did not expire until six months and one week after delivery on December 17, 1991.

Jones was unable to deliver the feller buncher to Conifer's logging site on June 10, and delayed delivery until June 17. As a result, Jones prepared a revised lease agreement and option to purchase and drafted an equipment rental agreement. The revised documents reflected the fact that Conifer was entitled to a one_week free trial period and stated that the delivery date was June 17, the first payment was due on June 24, and the option had to be exercised or the feller buncher returned to Jones by December 24, 1991.

During the one_week free trial period Conifer had no contractual obligations regarding the feller buncher, and did not assume the risk of loss. Jones was liable for any damage to the equipment during that period. Once the lease commenced, however, Conifer became responsible for any damage to the feller buncher and was obligated to provide insurance coverage for it. The lease commenced on June 24, 1991, when Conifer kept the feller buncher and made its first lease payment.

In June and early July 1991, Conifer discovered serious problems with the feller buncher and decided to terminate the lease. On July 16, 1991, Conifer contacted an equipment hauler to have the feller buncher shipped back to Jones. On July 17, 1991, however, the feller buncher caught on fire and was destroyed on Conifer's logging site. Conifer notified John Deere Insurance Company of the loss on July 18, 1991.

At the time of the lease, Conifer's logging equipment was insured by John Deere Insurance Company pursuant to the terms of a "contractor's inland marine policy." That policy included a "newly acquired property" provision which provided automatic coverage for any similar property acquired by Conifer during the term of its policy provided that Conifer reported the acquisition of such property and paid an additional premium on the property within thirty days from the date on which the property was acquired.

After the destruction of the feller buncher, Federated Mutual Insurance Company paid Jones Equipment for the loss and then sued Conifer Logging for indemnification. In turn, Conifer filed a third_party complaint against John Deere Insurance Company in which it alleged that the feller buncher was insured pursuant to its policy with John Deere. Conifer maintained that pursuant to the newly acquired property provision in that policy John Deere was required to indemnify Conifer for the full amount of any judgment recovered by Federated.

John Deere moved for summary judgment on January 31, 1995. In support of its motion, it maintained that the feller buncher was never insured by John Deere because the loss occurred before Conifer had notified John Deere of its acquisition of the property and after the thirty_day notice requirement of the "newly acquired property" provision had expired. Conifer filed a cross_motion for summary judgment in which it asserted three grounds for coverage. First, Conifer maintained that using the usual methods of computation of time, the thirty_day grace period began on June 18, the day after Conifer's receipt of the equipment, and that therefore the fire on July 17 occurred within the thirty_day automatic coverage period. Second, Conifer maintained that because it had a one_week free trial period without obligation or risk, Conifer did not "acquire" the feller buncher pursuant to the newly acquired property clause until June 24, 1991, and its loss on July 17, 1991, was well within the thirty_day period for automatic coverage. Finally, Conifer maintained that John Deere's inconsistent interpretation of the language of its own newly acquired property clause established the provisions' ambiguity and required the court to interpret the clause in favor of coverage as a matter of law.

On May 30, 1995, the Fourth Judicial District Court issued an opinion and order. In its order, the court denied John Deere's motion for summary judgment and granted Conifer's cross_motion for summary judgment. The court concluded that the feller buncher "was covered by [John] Deere's policy under each of Conifer's theories."

Federated Mutual I, 277 Mont. at 136-38, 920 P.2d at 99-100.

¶ 12 On appeal, we concluded that:

[T]he uncontroverted facts establish that although the feller buncher was delivered on June 17, 1991, Conifer's lease of the machinery was delayed by the one_week free trial period and did not start until June 24, 1991. Because neither Conifer nor Jones intended any ownership interest or risk of loss for the feller buncher to pass to Conifer until the lease commenced, we hold that Conifer did not "acquire" the feller buncher pursuant to the newly acquired property provision of its lease with John Deere until June 24, 1991. Therefore, we conclude that the destruction of the feller buncher on July 17, 1991, and Conifer's notice to John Deere of the loss on July 18, 1991, were within the thirty_day period of automatic coverage provided by Conifer's policy with John Deere. For these reasons, we affirm the District Court's order which denied John Deere's motion for summary judgment and granted Conifer's cross_motion for summary judgment.

Federated Mutual I, 277 Mont. at 142, 920 P.2d at 102. We further concluded that John Deere's appeal was without merit, and assessed sanctions against John Deere pursuant to Rule 32, M.R.App.P. See Federated Mutual I, 277 Mont. at 145, 920 P.2d at 104.

¶ 13 On remand, Conifer moved to amend its complaint to include a Montana Unfair Trade Practices Act (hereafter "MUTPA") claim based on both John Deeres prelitigation actions and its conduct during litigation. The District Court allowed the amendment with respect to the prelitigation actions only. Following Conifer's ...