Rolan v. New W. Health Servs.
Decision Date | 04 January 2022 |
Docket Number | DA 20-0279 |
Citation | 2022 MT 1 |
Court | Montana Supreme Court |
Parties | DANA ROLAN, on her own behalf and on behalf of the class she represents, Plaintiffs, Counter-Defendants, and Appellees, v. NEW WEST HEALTH SERVICES, Defendant and Appellee, DARWIN SELECT INSURANCE COMPANY and ALLIED WORLD ASSURANCE COMPANY and DARWIN NATIONAL ASSURANCE COMPANY, Defendant, Counter-Claimant, and Appellant. |
Submitted on Briefs: February 24, 2021
District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDV-2010-91 Honorable Kathy Seeley, Presiding Judge
For Appellant Allied World Assurance Company: Martha Sheehy Sheehy Law Firm, Billings, Montana Randall G. Nelson, Nelson Law Firm, Billings, Montana
For Appellees Dana Rolan and the class she represents: Erik B Thueson, Attorney at Law, Helena, Montana For Appellee New West Health Services: Robert Lukes, Garlington, Lohn & Robinson, Missoula, Montana Gary M. Zadick, Ugrin Alexander Zadick P.C., Great Falls, Montana
¶1 Defendant Allied World Assurance Company (Allied), New West Health Service's (New West) insurer, appeals the Orders of the First Judicial District Court, Lewis and Clark County granting Plaintiffs and New West's cross-motion for partial summary judgment finding Allied is equitably estopped from enforcing the "each Claim" policy limit and denying Allied's motion for partial summary judgment on indemnification. We restate and address the following issues on appeal:
¶2 We reverse in part and affirm in part and remand for further proceedings.
¶3 On November 16, 2007, Dana Rolan sustained serious injuries from an automobile accident resulting in $120, 000 of immediate medical expenses. Rolan had health insurance through New West. The tortfeasor's liability insurance Unitrin Services Group (Unitrin), paid $100, 000 of Rolan's medical expenses directly to her medical providers under its liability policy. New West denied coverage to Rolan because Unitrin had paid medical costs in advance.
¶4 On January 26, 2010, Rolan filed a complaint against New West alleging individual and class claims for breach of contract, violation of made-whole rights, and unfair claims settlement practices under § 33-18-201, MCA. Rolan argued New West reduced her insurance coverage by $100, 000 in violation of its made-whole obligations. Rolan sought class certification based on New West's practice of failing to conduct a made-whole analysis and denying claims that were also covered by a liability insurer. New West tendered the defense to Allied.
¶5 Allied acknowledged a duty to defend New West under the Managed Care Organization Errors and Omissions Liability Policy ("MCEO Policy"). In a reservation of rights letter dated February 18, 2010, Allied's Senior Claims Analyst, Joseph Sappington, wrote:
(Emphasis added.) The reservation of rights letter further stated, "As we are assuming New West's defense in this matter I will be in contact with you shortly to discuss the retention of [attorneys] as counsel."
¶6 On May 7, 2012, the District Court certified the class and held New West liable for monetary losses. On August 6, 2013, this Court upheld the class certification in Rolan v. New W. Health Servs., 2013 MT 220, 371 Mont. 228, 307 P.3d 291 (Rolan I). This matter came before us again in 2017, Rolan v. New W. Health Servs., 2017 MT 270, 389 Mont. 228, 405 P.3d 65 (Rolan II), in which we reversed the District Court's ruling granting New West leave to amend.
¶7 On September 30, 2013, after New West retained its own coverage counsel, it confirmed in a letter to Allied's Senior Claims Analyst that Allied's reservation of rights letter accurately set forth coverages available for indemnification:
New West's coverage counsel and a New West representative followed up the letter in a phone conversation with Allied's Senior Claims Analyst that Allied would only contest coverage for "willful misconduct or willful violation of state law."
¶8 Three years later, and six years into litigation, Allied clarified in an October 5, 2016 email that the $1 million "each Claim" limit applied to the class action lawsuit, rather than the $3 million aggregate-claim limit. Allied also asserted, for the first time, that it had no indemnity obligation under the MCEO Policy. New West's coverage counsel responded to Allied's change in position:
(Emphasis added.)
¶9 In 2016, New West announced it was going out of business. Rolan moved for a preliminary injunction and show cause hearing to ensure the Plaintiffs' interests were protected. On October 20, 2016, New West in its response brief opposing Rolan's motion assured the District Court that adequate insurance coverage still existed to cover Rolan's claim, as Rolan was still the only identified plaintiff:
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