Lane v. Farmers Union Ins.
| Decision Date | 21 October 1999 |
| Docket Number | No. 98-305.,98-305. |
| Citation | 1999 MT 252,989 P.2d 309 |
| Parties | Nancy LANE, Plaintiff and Appellant, v. FARMERS UNION INSURANCE, Defendant, Third Party Plaintiff and Respondent. |
| Court | Montana Supreme Court |
Kenneth D. Peterson, Peterson and Schofield, Billings, Montana, For Appellant.
James R. Halverson, Herndon, Sweeney & Halverson, Billings, Montana, For Respondent.
¶ 1 Plaintiff and Appellant Nancy Lane (Lane) appeals from summary judgment granted by the Thirteenth Judicial District Court, Yellowstone County. In her complaint, Lane alleged that the Defendant and Respondent, Farmers Union Insurance (Farmers), improperly denied coverage following a fire that severely damaged Lane's home, under a policy that named both her, and her husband Brad, as insureds. The District Court found that the intentional acts of Brad Lane, as decreed by a prior default judgment, precluded Lane's recovery under the express terms of her policy with Farmers. Lane's motions to set aside the judgment, pursuant to Rules 59(g) and 60(b), M.R.Civ.P., were deemed denied by the District Court. We reverse and remand.
¶ 2 Of the two issues raised by Lane, we find the following dispositive:
Did the District Court err in granting summary judgment to Farmers based on the conclusion that a default judgment, which decreed Brad Lane had committed certain acts, could as a matter of law bar Nancy Lane's loss claim under her policy with Farmers?
¶ 3 On February 17, 1995, a house owned by Lane on Box Elder Creek Road in Billings, Montana, was severely damaged by a fire. After the fire, Lane and her husband, Brad, signed and submitted a claim for losses under their insurance policy with Farmers. Both were named insureds. The policy had become effective January 4, 1995, and had been canceled January 20, 1995, for the stated reason that "this risk no longer meets our underwriting requirements." The cancellation would have taken effect February 22, 1995.
¶ 4 Farmers denied the claim, based on "gathered evidence," which allegedly demonstrated Brad intentionally set fire to the Lanes' house "with apparent knowledge by Nancy," and that Brad had also failed to disclose requested information regarding past insurance claims on the Lanes' policy application. Farmers claimed that either act barred recovery by an insured pursuant to express policy exclusions and conditions.
¶ 5 In support of these contentions, Farmers has asserted that Brad Lane "was investigated and prosecuted" for intentionally setting the fire, which it claims was "declared an arson." Farmers has further contended that the Lanes' policy application, bearing Brad's signature, demonstrated he concealed or provided false information. The focal point of this contention was Brad's response to the request "please list all losses during the past 5 years," to which he responded "none." This request, under "Prior Insurance Information," followed a request for the name of the Lanes' prior home owners insurance carrier. Brad provided the name of Trinity Universal of Kansas. Lane, in her deposition, admitted that she had filed a claim on her vehicle insurance approximately three years prior to the fire at the Box Elder Creek Road home. Farmers does not argue, nor does the record indicate, that the Lanes made any claims under their policy with Trinity.
¶ 6 Lane has never disputed that Brad was charged and prosecuted for arson. Rather, she has asserted throughout this litigation that Brad was never convicted. This assertion is not contradicted by any evidence found within the record. To the contrary, although Farmers has offered numerous conclusory allegations in its brief regarding the conduct of Lane and her husband dating back to the 1970s, it has not provided any further documentation to substantiate its claims beyond Lane's sworn deposition and the Lanes' policy application and agreement.
¶ 7 Also noteworthy is the uncontested assertion by Lane that she and Brad, although not legally separated, have not occupied the same home for much of their twenty-two-year marriage. In light of this, Lane states she was living and working in Glendive, located in Dawson County, at the time of the fire. Brad, on the other hand, was living in the Billings house at the time.
¶ 8 On February 14, 1997, Lane, proceeding pro se, brought suit against Farmers, seeking a declaratory judgment that Farmers had violated the terms of the insurance policy, and, in bad faith, had denied her claim. She asserted that she had complied with all terms and conditions of the policy and that Farmers "knew" she was not responsible for the fire. Furthermore, she contended that $180,000 of the $220,000 claim for damaged or destroyed property belonged to her.
¶ 9 In response, Farmers filed an answer, a counterclaim, and a third-party complaint against Brad Lane. The third-party complaint alleged that Brad intentionally set the fire and committed "fraud, concealment, misrepresentation, [and] false swearing," when he failed to disclose requested information on the policy application. For this reason, Farmers averred in its counterclaim that Nancy, pursuant to express policy conditions and exclusions, was barred from recovery under the policy as well.
¶ 10 On July 28, 1997, Farmers initiated an entry of default against Brad Lane for his failure to answer or otherwise appear in response to the third-party complaint, which had been served July 7, 1997, after numerous failed attempts. (Meanwhile, Lane had timely answered Farmers' counterclaim against her, which had been served at her residence in Glendive on April 15, 1997.) A default judgment order was issued by the District Court on August 1, 1997. The order, prepared by counsel for Farmers and signed by the District Court, decreed that there was no coverage for the claims of Brad Lane "because of his fraud, concealment, misrepresentation, false swearing, and intentional setting of fire," and therefore Farmers had "no duty to pay any of the claims of Bradley Lane arising from the house fire."
¶ 11 On October 29, 1997, Farmers moved for summary judgment. In support of its motion, Farmers contended that the deemed admissions decreed in the default judgment order resolved all material facts regarding the rejected claim under the terms of the policy. ¶ 12 Lane did not file a brief or appear at the January 30, 1998 summary judgment hearing. At the time, she was in the process of securing representation. It is unclear from the record to what extent the move from pro se to hiring legal counsel had on her failure to file a brief or appear. Nevertheless, summary judgment for Farmers was granted, and an order, again prepared by counsel for Farmers, was signed the day of the hearing. The District Court's memorandum declared that it was Therefore, the order found that there was "no coverage under the Farmers policy for Nancy Lane's claims or losses arising from the February 17, 1995 fire ..."
¶ 13 Subsequently, counsel for Lane moved the District Court, pursuant to Rules 59(g) and 60(b), to amend the judgment, arguing that Lane had difficulty obtaining representation, and could not effectively respond to Farmers' summary judgment. This motion was deemed denied as of April 8, 1998. Lane appealed both the granting of summary judgment in favor of Farmers and the denial of her post-judgment motions.
¶ 14 This Court reviews an order granting summary judgment under Rule 56, M.R.Civ.P. by utilizing the same criteria as the district court. See Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. Summary judgment is a remedy which should be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Rule 56(c), M.R.Civ.P. The procedure should never be substituted for trial if a material factual controversy exists. See Payne Realty v. First Sec. Bank (1992), 256 Mont. 19, 24, 844 P.2d 90, 93.
¶ 15 When we review a district court's conclusions of law, our standard of review is plenary and we must determine whether the court's conclusions are correct as a matter of law. See Hicklin v. CSC Logic, Inc. (1997), 283 Mont. 298, 301, 940 P.2d 447, 449.
¶ 16 Under our de novo review, if we find any material facts remain in dispute regarding the relevant acts committed by Brad Lane, then summary judgment was improper. Further, if the District Court found that Farmers was entitled to judgment as a matter of law, and the legal basis for this conclusion was incorrect, summary judgment was likewise improper.
Did the District Court err in granting summary judgment to Farmers based on the conclusion that a default judgment, which decreed Brad Lane had committed certain acts, could as a matter of law bar Nancy Lane's loss claim under her policy with Farmers?
¶ 17 Farmers asserts that Brad Lane intentionally set fire to the Lane home covered by the Lanes' policy with Farmers. This assertion is sustained, Farmers argues, by the District Court's default judgment order, which decreed Brad Lane committed the act, as well as the alleged acts of fraud, concealment, misrepresentation, and false swearing. Consequently, Farmers maintains, the default judgment was a proper basis for summary judgment in that it conclusively resolved any dispute over whether Brad Lane committed the alleged acts.
¶ 18 The District Court agreed in granting Farmers' motion for summary judgment against Nancy Lane. The District Court determined that the default judgment order of August 1, 1997, undisputedly "established that Brad Lane intentionally set the February 17, 1995 fire at the Lanes' home at 1015 Box Elder Creek Road." The District Court reasoned that under this Court's decision in Woodhouse v. Farmers Union Mutual Ins. Co. (1990), 241...
To continue reading
Request your trial
-
Brilz v. Metro. Gen. Ins. Co.
...common law claim because the court ultimately ruled that she had failed to allege such a claim in her complaint. Brilz cites Lane v. Farmers Union Ins., 1999 MT 252, ¶ 41, 296 Mont. 267, 989 P.2d 309, for the proposition that there can be no “judgment on the merits” of a claim if the claim ......
-
Powell v. Lane, 08-282.
...on a case-by-case basis. The issue of collateral estoppel and default judgments was also discussed in Lane v. Farmers Union Insurance, 296 Mont. 267, 989 P.2d 309 (1999) (also cited by the dissent). There, the court considered the question of whether a default judgment served as a final jud......
-
Powder River County v. State
...they are correct. Hampton v. Lewis and Clark County, 2001 MT 81, ¶ 19, 305 Mont. 103, ¶ 19, 23 P.3d 908, ¶ 19 (citing Lane v. Farmers Union Ins., 1999 MT 252, ¶ 15, 296 Mont. 267, ¶ 15, 989 P.2d 309, ¶ 15). The constitutionality of a legislative enactment is prima facie presumed, and every ......
-
Kiely Const., LLC v. City of Red Lodge
...as a matter of law. Hampton v. Lewis and Clark County, 2001 MT 81, ¶ 19, 305 Mont. 103, ¶ 19, 23 P.3d 908, ¶ 19 (citing Lane v. Farmers Union Ins., 1999 MT 252, ¶ 15, 296 Mont. 267, ¶ 15, 989 P.2d 309, ¶ 15). The standard of review of a district court's ruling on § 76-3-625(2), MCA, is the ......