Modroo v. Nationwide Mut. Fire Ins. Co.

Citation191 P.3d 389,2008 MT 275,345 Mont. 262
Decision Date05 August 2008
Docket NumberNo. DA 07-0096.,DA 07-0096.
PartiesMary J. MODROO, individually and as Personal Representative of the Estate of Mamie J. Hardy, deceased, Estate of Mamie J. Hardy, and Cassius H. Hardy, Plaintiffs and Appellants, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Nationwide Agribusiness Insurance Company, Farmland Mutual Insurance Company, and Max Lemaire, Defendants and Appellees.
CourtUnited States State Supreme Court of Montana

For Appellants: James L. Jones, Kyle A. Gray; Holland & Hart LLP; Billings, Montana, (for Mary J. Modroo & Estate of Mamie J. Hardy), David R. Paoli, Heather M. Latino, John A. Kützman; Paoli, Latino & Kutzman, P.C.; Missoula, Montana, (for Cassius H. Hardy).

For Appellees: Gary L. Graham, David C. Berkoff; Garlington, Lohn & Robinson, PLLP; Missoula, Montana, (for Nationwide Mutual Fire Insurance Company).

Justice W. WILLIAM LEAPHART delivered the Opinion of the Court.

¶ 1 Mary J. Modroo, the Estate of Mamie J. Hardy (collectively, Modroo), and Cassius H. Hardy appeal from the District Court's rulings on several motions for summary judgment and motions to dismiss. We reverse and remand.

¶ 2 We restate the issues as follows:

¶ 3 Did the District Court err when it concluded that Mamie was not an "insured" under the Farmowners policy?

¶ 4 Did the District Court err when it determined that Hardy lacked standing to pursue his negligence claims against Nationwide?

¶ 5 Did the District Court err when it determined that Modroo was not entitled to medical payments coverage under the Farmowners policy?

¶ 6 Did the District Court err when it applied Ohio law to deny the stacking of coverages and to allow offsets under the personal auto policy?

¶ 7 Did the District Court err when it applied the forum non conveniens doctrine to dismiss Modroo's negligence claim in favor of Ohio proceedings?

BACKGROUND

¶ 8 On February 15, 2003, Mamie Hardy (Mamie) suffered fatal injuries in a single-vehicle accident in Mineral County, Montana. Max Lemaire was driving the vehicle, and Mamie was a passenger in the vehicle. Mamie died the next day at St. Patrick's Hospital in Missoula. At the time of the accident, Mamie, an Ohio resident, attended the University of Montana.

¶ 9 The District Court appointed Mamie's mother, Mary Modroo, an Ohio resident, as the Personal Representative of Mamie's estate in Missoula. Following the appointment, Modroo received Lemaire's policy limits of $50,000 from Allstate Insurance Company, without releasing Lemaire from liability. Modroo then filed a lawsuit in the District Court against Lemaire and against Modroo's underinsured-motorist (UIM) coverage carriers: Nationwide Mutual Fire Insurance Company, Nationwide Agribusiness Insurance Company, and Farmland Mutual Insurance Company (collectively, Nationwide). Nationwide then filed two declaratory actions against Modroo in the Geauga County Court of Common Pleas in Ohio. The Ohio court stayed those actions pending the disposition of the current Montana litigation.

¶ 10 Modroo's second amended complaint included a survival action, a wrongful death claim, a negligent infliction of emotional distress claim, a breach of contract claim, a claim for violations of the Unfair Claims Settlement Practices Act, and a negligence claim against Nationwide concerning the production and assembly of its policies and endorsements. Mamie's father, Cassius H. Hardy (Hardy), filed a motion to intervene in the litigation. The District Court granted Hardy's motion, but denied Hardy the right to participate in the wrongful death and survivorship claims.

¶ 11 Modroo's complaint asserted UIM coverage from Nationwide under two different policies: a commercial package policy (Farmowners policy) and a personal auto policy. Among other items, the Farmowners policy covered farm equipment, personal property, dwellings, and vehicles. The policy's Business Auto Coverage Form Declarations listed the Named Insured as:

                  CASSIUS H & MARY J HARDY &amp
                  HARRY MODROO
                  DBA MODROO FARM
                  15571 HEMLOCK RD
                  CHAGRIN FALLS OH 44022
                

On the same page as the Named Insured block, the policy contained the language, "FORM OF BUSINESS: PARTNERSHIP." The Farmowners auto policy contained a schedule of "covered autos" and provided those vehicles with liability coverage, medical payments coverage, UIM coverage, uninsured motorist (UM) coverage, and comprehensive and collision physical damage coverage.

¶ 12 The Farmowners policy's UIM endorsement provided that Nationwide would pay compensatory damages that "the `insured' is legally entitled to recover ... from the owner or operator" of an underinsured motor vehicle. The policy provided a limit of $1,000,000 of UIM coverage per accident. An anti-stacking provision limited the UIM coverage to $1,000,000 "[r]egardless of the number of covered `autos', `insureds', [or] premiums paid...." The Farmowners UIM endorsement also provided that the UIM limits would be offset by any amounts paid "by or on behalf of anyone who is legally responsible." The Farmowners auto policy contained no choice of law provision.

¶ 13 The UIM endorsement stated, "THIS ENDORSEMENT CHANGES THE POLICY." The UIM endorsement contained a Named Insured block that identified "CASSIUS H & MARY J HARDY &" as the Named Insured. The UIM endorsement also provided a definition for "insureds" that varied depending on the designation of the Named Insured.

¶ 14 Modroo also claimed UIM coverage under a personal auto policy issued by Nationwide. The personal auto policy listed Mary Modroo as the Named Insured and provided that Nationwide would pay compensatory damages that "you or a relative are legally entitled to recover from the owner or driver" of an underinsured motor vehicle "under the tort law of the state where the motor vehicle accident occurred...." The personal auto policy limited the amounts recoverable under UIM coverage to $300,000 per person, and the policy stated that the "per person policy limit shall be enforceable regardless of the number of ... vehicles or premiums shown in the Declarations or policy...." At the time of the accident, Modroo insured two vehicles under the personal auto policy. The personal auto policy also provided that any amounts available under UIM coverage would be offset by any amounts "available for payment by or on behalf of any liable parties...." The personal auto policy stated that Ohio's contract law governed the insurance contract's interpretation.

¶ 15 In a series of rulings on partial summary judgment motions, the District Court concluded that Modroo was entitled to UIM coverage under the personal auto policy; however, after conducting a conflicts-of-law analysis, the District Court applied Ohio law and determined that the personal auto policy allowed offsets and precluded the stacking of UIM coverage.

¶ 16 The District Court granted partial summary judgment to Nationwide and ruled that no UIM coverage was available to Modroo under the Farmowners policy. The court determined that the Farmowners policy designated the Named Insured as a partnership, and thus, no coverage extended to Mamie under the Farmowners policy. The District Court reasoned that no coverage existed because Mamie was injured in Lemaire's vehicle, which was not a covered auto under the Farmowners policy. The District Court conducted no conflicts-of-law analysis of the Farmowners policy, except to note that the policy contained no choice-of-law provisions. The District Court determined that the Farmowners policy contained no ambiguity regarding whom the policy insured or what constituted a covered auto. In light of its determination that coverage was clearly excluded under the Farmowners policy, the District Court dismissed Modroo's and Hardy's claims for bad faith and breach of contract.

¶ 17 The District Court also granted Nationwide's summary judgment motion on Hardy's negligence claims. The court concluded that Hardy lacked standing to pursue a negligence claim because Hardy possessed no ownership interest in Modroo Farm and possessed no insurable interest in Mamie's life. The District Court also denied Modroo's summary judgment motion for medical payments coverage under the Farmowners policy based on its conclusion that the partnership constituted the only Named Insured.

¶ 18 After the District Court's several rulings, Modroo's only remaining claims against Nationwide consisted of the bad-faith claim relating to the personal auto policy and the negligence claim relating to the production and assembly of Nationwide's policies and endorsements. The District Court bifurcated Modroo's claims against Lemaire and, under the doctrine of forum non conveniens, dismissed Modroo's negligence claim against Nationwide in favor of the stayed proceedings in Ohio. To obtain a final judgment, Modroo moved to dismiss the unfair claims settlement practices claim relating to Nationwide's initial denial of coverage under the personal auto policy. Modroo and Hardy now appeal from the District Court's rulings.

STANDARD OF REVIEW

¶ 19 We review de novo a district court's grant or denial of summary judgment, applying the same criteria as the district courts. Wendell v. State Farm Mut. Auto. Ins. Co., 1999 MT 17, ¶ 9, 293 Mont. 140, ¶ 9, 974 P.2d 623, ¶ 9. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file," together with any affidavits demonstrate that no genuine issue exists as to any material fact and that the party moving for summary judgment is entitled to judgment as a matter of law. M.R. Civ. P. 56(c). We view the evidence in the light most favorable to the party opposing summary judgment, and we draw all reasonable inferences in favor of the party opposing summary judgment. Oliver v. Stimson Lumber Co., 1999 MT 328, ¶ 22, 297 Mont. 336, ¶ 22, 993 P.2d 11, ¶ 22.

DISCUSSION

¶ 20 I Did the District Court err when it concluded...

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