Mountain West Farm Bureau Mutual Ins. Co. v. Brewer
| Decision Date | 24 April 2003 |
| Docket Number | No. 01-512.,01-512. |
| Citation | 2003 MT 98,315 Mont. 231,69 P.3d 652 |
| Parties | MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, Plaintiff and Respondent, v. Addi BREWER, Respondent, and Ashley Christensen, Defendants and Appellants. Chris Christensen and Angie Christensen, individually and as guardians and conservators for Ashley L. Christensen and her estate, Petitioners and Appellants, v. Mountain West Farm Bureau Mutual Insurance Company, Respondent and Respondent. |
| Court | Montana Supreme Court |
Robert T. Bell, Richard A. Reep, Reep, Spoon & Gordon, P.C., Missoula, Montana, For Appellants.
Lon J. Dale, Milodragovich, Dale, Steinbrenner & Binney, P.C., Missoula, Montana, For Respondent.
¶ 1 The Appellants, Chris and Angie Christensen ("Christensens"), appeal from an order issued by the Fourth Judicial District Court, Missoula County, denying their request for attorney fees. We reverse and remand.
¶ 2 The parties present the following issues on appeal:
¶ 3 1. Did the Christensens waive their right to recover attorney fees?
¶ 4 2. Is an injured third-party claimant who prevails in an insurance coverage action against a motor vehicle liability insurer entitled to recover his or her attorney fees?
¶ 5 Following a single vehicle accident in which the Christensens' daughter, Ashley Christensen, sustained significant injuries, the Christensens filed a declaratory judgment action against Mountain West Farm Bureau Mutual Insurance Company ("Mountain West") to establish insurance coverage under a Mountain West motor vehicle policy. The District Court entered summary judgment in favor of Mountain West and we reversed. For a recitation of the factual and procedural background of that phase of the case, see Christensen v. Mountain West, 2000 MT 378, 303 Mont. 493, 22 P.3d 624.
¶ 6 On remand, the Christensens moved for an award of attorney fees incurred in the declaratory judgment action. The Christensens submitted § 27-8-313, MCA, the "supplemental relief" provision of the Uniform Declaratory Judgments Act, and the insurance exception to the American Rule as authority for an award of attorney fees. On June 19, 2001, the District Court denied the Christensens' motion. On July 13, 2001, the Christensens filed a notice of appeal from the District Court's denial.
¶ 7 Whether an injured third-party claimant who prevails in an insurance coverage action against a motor vehicle liability insurer may recover his or her attorney fees is a question of law. We review issues of law to determine whether the district court's interpretation of the law is correct. Armstrong v. Gondeiro, 2000 MT 326, ¶ 12, 303 Mont. 37, ¶ 12, 15 P.3d 386, ¶ 12.
¶ 8 Did the Christensens waive their right to recover attorney fees?
¶ 9 Under Montana's Rules of Civil Procedure, a party must give notice to the other party of the facts which he or she expects to prove, and the facts must disclose the presence of all the elements necessary to make out a claim. See Rule 8(a), M.R.Civ.P.; Mysse v. Martens (1996), 279 Mont. 253, 266, 926 P.2d 765, 773. Similarly, if a party fails to raise an issue or argue it in his or her brief, we will deem the issue waived and will not address it. Schaubel v. Iversen (1993), 257 Mont. 164, 166, 848 P.2d 489, 490; Teesdale v. Anschutz Drilling Co. (1960), 138 Mont. 427, 431, 357 P.2d 4, 7. We have also held that if a party fails to raise an issue on a first appeal, he or she cannot then raise the issue in a second appeal. Downs v. Smyk (1982), 200 Mont. 334, 343, 651 P.2d 1238, 1242, overruled on other grounds by Gray v. City of Billings (1984), 213 Mont. 6, 689 P.2d 268.
¶ 10 Mountain West argues that because
the Christensens never requested attorney fees in either their briefs for summary judgment or in their first appeal before this Court, they have waived their right to now request them. The Christensens counter that they requested attorney fees in their initial Petition for Declaratory Relief. While they did not request attorney fees in their motion for summary judgment, Rule 56, M.R.Civ.P., allows a party to move for summary judgment on a portion of a party's action. The Christensens contend that they simply sought summary judgment initially to establish insurance coverage, not attorney fees. They point to their summary judgment motion's title, Motion for Summary Judgment re: Insurance Coverage, as support for this position.
¶ 11 The Christensens argue that they did not ask for attorney fees until after we remanded the matter to the District Court because they had not yet prevailed in this matter. We have previously held that a court may award attorney fees only to a prevailing party. Kunst v. Pass, 1998 MT 71, ¶ 38, 288 Mont. 264, ¶ 38, 957 P.2d 1, ¶ 38. In Kunst, we concluded that a plaintiff could seek attorney fees under the Residential Landlord and Tenant Act despite failing to mention a claim for attorney fees in the complaint, pretrial order, or trial brief. We reasoned that the defendants had notice of the claim since the plaintiff asked for "other and further relief as the Court may deem just and proper," they had an opportunity to defend themselves at oral argument, and a court may award attorney fees only to a prevailing party.
¶ 12 Here, Mountain West had notice of the Christensens' desire to seek attorney fees as they specifically prayed for such relief in their initial Petition for Declaratory Relief. Like the defendant in Kunst, Mountain West had an opportunity to defend against the request for attorney fees, which it successfully did in the District Court. Finally, the Christensens had not prevailed until we remanded the matter to the District Court. Thus, waiting to file a motion for attorney fees until prevailing on appeal was proper. For these reasons, we conclude that the Christensens did not waive their entitlement to attorney fees.
¶ 13 Is an injured third-party claimant who prevails in an insurance coverage action against a motor vehicle liability insurer entitled to recover his or her attorney fees?
¶ 14 Montana follows the general American Rule that a party in a civil action is not entitled to attorney fees absent a specific contractual or statutory provision. Mountain West Farm Bureau v. Hall, 2001 MT 314, ¶ 13, 308 Mont. 29, ¶ 13, 38 P.3d 825, ¶ 13. However, we have recognized equitable exceptions to the American Rule. See, e.g., Mountain West, ¶ 14 (); National Cas. Co. v. American Bankers, 2001 MT 28, ¶ 28, 304 Mont. 163, ¶ 28, 19 P.3d 223, ¶ 28 (); School Trust v. State ex rel. Bd. of Com'rs, 1999 MT 263, ¶ 67, 296 Mont. 402, ¶ 67, 989 P.2d 800, ¶ 67 (). Further, we have approved attorney fee awards in the absence of statutory or contractual authority where an insurer breaches its obligation to defend an insured. See Home Ins. Co. v. Pinski Brothers, Inc. (1972), 160 Mont. 219, 500 P.2d 945.
¶ 15 The Christensens essentially submitted two theories to the District Court in support of an attorney fee award, one discretionary and the other obligatory. First, the Christensens maintained that § 27-8-313, MCA, authorizes a court, in its discretion, to award attorney fees in declaratory judgment actions. Second, the Christensens argued that the insurance exception to the American Rule, as recognized in Pinski Brothers, obligates an insurer to compensate a prevailing insured for attorney fees incurred in a declaratory judgment action, pursuant to a breach of contract theory. The Christensens acknowledge that in Montana, to date, the insurance exception has applied to duty to defend cases only. However, the Christensens urge expansion of the insurance exception to afford attorney fees incurred in establishing a duty to indemnify.
¶ 16 Mountain West responds that no statutory or contractual authority exists to support the Christensens' attorney fee proposition. Further, citing Yovish v. United Services Auto. Ass'n (1990), 243 Mont. 284, 794 P.2d 682, Mountain West insists that we have refused to expand the insurance exception to incorporate duty to indemnify cases absent legislative authority. Since no statutory or contractual authority supports an award of attorney fees, and since none of the exceptions to the American Rule prove applicable to the case at bar, Mountain West implores us to affirm the District Court.
¶ 17 The parties agree that no contractual authority exists to support an award of attorney fees. As for statutory authority, we recently held that " § 27-8-313, MCA, authorizes a court to award attorney fees when the court, in its discretion, deems such an award `necessary or proper.'" Trustees of Indiana University v. Buxbaum, 2003 MT 97, ¶ 42, ___ Mont. ___, ¶ 42, 69 P.3d 663, ¶ 42. Clearly, the holding in Trustees of Indiana University applies to this case and, in fact, the Christensens submitted § 27-8-313, MCA, to the District Court as authority for an attorney fee award. However, the Christensens seek more than mere discretionary authority for an award. On appeal, they submit that Mountain West is obligated to reimburse them based on the insurance exception rationale articulated in Pinski Brothers.
¶ 18 Pinski Brothers remains the seminal decision addressing the recovery of attorney fees in an action between an insurer and insured. Pinski Brothers involved a suit between an insurer and its insured over the insurer's subrogation rights and the insured's right to damages for breach of the insurance contract. This Court held that the wrongful acts of the insurer in suing its insured under nonexistent subrogation...
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