Shilhanek v. D-2 Trucking, Inc.
| Decision Date | 29 April 2003 |
| Docket Number | No. 01-874.,01-874. |
| Citation | 2003 MT 122,315 Mont. 519,70 P.3d 721 |
| Parties | Roxy SHILHANEK, an individual; Corey Shilhanek, a minor by and through his guardian ad litem, Timothy Shilhanek; Ryan Shilhanek, a minor by and through his guardian ad litem, Timothy Shilhanek; and Timothy Shilhanek, an individual, Plaintiffs and Appellants, v. D-2 TRUCKING, INC., a corporation; Krzysztof Ceklarz, an individual; Adam Cwikla, and Does 1 through 50 inclusive; and Canal Insurance Company, intervenor, Defendants and Respondents. |
| Court | Montana Supreme Court |
A Clifford Edwards (argued), Roger W. Frickle, Edwards, Frickle, Halverson & Anner Hughes, Billings, Montana, for Appellants.
Donald L. Harris, Larry B. Cozzens (argued), Cozzens, Warren & Harris, Billings, Montana, for Respondents.
Lawrence A. Anderson, Great Falls, Montana, (MTLA), for Amicus. Justice PATRICIA O. COTTER delivered the Opinion of the Court.
¶ 1 Appellants Roxy Shilhanek, Timothy Shilhanek, Corey Shilhanek and Ryan Shilhanek (the Shilhaneks) filed a complaint against Respondents Krzysztof Ceklarz, Adam Cwikla and D-2 Trucking, Inc. (D-2), in the Thirteenth Judicial District Court, Yellowstone County. Respondent Canal Insurance Company (Canal), intervened in the case. The Shilhaneks filed a cross-claim against Canal, alleging that Canal had violated the Montana Unfair Trade Practices Act (UTPA). Canal filed a motion for summary judgment, which was denied by the District Court. Canal then filed a second motion for summary judgment, which the District Court granted. The Shilhaneks appeal. We affirm in part and reverse in part.
¶ 2 We restate the issues on appeal as follows:
¶ 3 1. Did the District Court err when it determined that Canal did not have a duty in 1997 or 1998 to pay the Shilhaneks' undisputed medical expenses until it obtained a release for its insureds?
¶ 4 2. Did Canal act in bad faith when it conditioned its payment of policy limits on the Shilhaneks providing it with a release of all claims against its insureds?
¶ 5 3. Did the District Court err when it granted Canal's motion for summary judgment with respect to the Shilhaneks' claim that Canal violated § 33-18-201(4), MCA (1997)?
FACTUAL AND PROCEDURAL BACKGROUND
¶ 6 On May 4, 1997, Roxy Shilhanek and her son, Corey Shilhanek, were involved in a motor vehicle accident in Billings, Montana. The accident occurred when a truck driven by Ceklarz collided with Roxy's vehicle. The truck was owned by Cwikla and D-2. The Shilhaneks brought a lawsuit against Ceklarz, Cwikla, and D-2 on August 11, 1997. The case proceeded to trial, and a jury awarded the Shilhaneks compensatory and punitive damages on July 24, 1998.
¶ 7 Following the jury's verdict, several post-trial motions were filed. On February 1, 1999, Canal, the liability insurer for D-2, Cwikla and Ceklarz, filed a motion to intervene in the case for the limited purpose of challenging one of the District Court's orders regarding a post-trial motion. On February 17, 1999, the District Court granted Canal's motion to intervene; however, it declared that Canal would be treated as a full party to the action. The Shilhaneks subsequently filed a cross-claim against Canal on February 19, 1999, alleging that Canal had violated the UTPA. Canal then appealed the District Court's decision to declare it a full party to the action. We affirmed the District Court with regard to this issue on January 20, 2000. See Shilhanek v. D-2 Trucking, Inc., 2000 MT 16, ¶¶ 44-48, 298 Mont. 101, ¶¶ 44-48, 994 P.2d 1105, ¶¶ 44-48.
¶ 8 On March 1, 2000, Canal filed a motion for summary judgment, alleging that its actions were not in violation of any portion of the UTPA. The District Court denied Canal's motion on June 26, 2000. On July 16, 2001, Canal filed a second motion for summary judgment, which was similar in content to its original summary judgment motion. Canal's second motion requested that the District Court revisit its claims in light of discovery that had occurred in the case. The District Court granted Canal's second motion for summary judgment on August 28, 2001. This appeals follows.
STANDARD OF REVIEW
¶ 9 Our review of a district court's grant or denial of a motion for summary judgment is de novo. Hickey v. Baker School Dist. No. 12, 2002 MT 322, ¶ 12, 313 Mont. 162,
¶ 12, 60 P.3d 966, ¶ 12. Therefore, we apply the same Rule 56, M.R.Civ.P, criteria as applied by the district court. Hickey, ¶ 12. Pursuant to Rule 56, M.R.Civ.P.:
The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court as to whether the court erred.
DISCUSSION
¶ 10 The District Court's resolution of the Shilhaneks' cross-claim left some issues unresolved. Accordingly, we have restated the issues to address the unresolved questions.
¶ 11 Did the District Court err when it determined that Canal did not have a duty in 1997 or 1998 to pay the Shilhaneks' undisputed medical expenses until it obtained a release for its insureds?
¶ 12 Canal offered to settle the Shilhaneks' claims against D-2, Cwikla and Ceklarz (hereinafter Canal's insureds) on February 27, 1998. Canal's offer provided that it would pay the Shilhaneks the policy limit of $1,000,000, in exchange for a full release of all claims against its insureds. The Shilhaneks refused to provide such a release. The case then proceeded to trial, and the Shilhaneks were awarded damages in excess of $3,000,000.
¶ 13 The Shilhaneks subsequently filed a cross-claim against Canal, asserting, inter alia, that Canal's refusal to pay their undisputed medical expenses without a release violated subsections (6) and (13) of § 33-18-201, MCA (1997). Section 33-18-201, MCA (1997), provides, in pertinent part:
¶ 14 Our holding in Ridley v. Guaranty Nat. Ins. Co. (1997), 286 Mont. 325, 951 P.2d 987, is dispositive of this issue. In Ridley, Keith Ridley was a passenger in a vehicle that was involved in a collision. The driver of the other vehicle was insured by Guaranty National Insurance Company. Ridley, 286 Mont. at 327-28, 951 P.2d at 988. Guaranty admitted that its insured had the majority of fault for the accident; however, it refused to pay for Ridley's ongoing medical expenses. Ridley brought a declaratory action, requesting that the District Court determine that pursuant to § 33-18-201, MCA, Guaranty had an obligation to pay medical expenses when liability was reasonably clear, regardless of whether a final settlement had been agreed upon. The District Court declined to grant Ridley the requested relief, and Ridley appealed. Ridley, 286 Mont. at 328, 951 P.2d at 989.
¶ 15 This Court analyzed Ridley's claim in the context of § 33-18-201, MCA, and noted that the purpose of § 33-18-201, MCA, is to assure prompt payment of damages for which an insurer is clearly obligated. Ridley, 286 Mont. at 335, 951 P.2d at 993. Accordingly, we held that subsections (6) and (13) of § 33-18-201, MCA, require an insurer to pay an injured third party's medical expenses before final settlement when liability is reasonably clear. Ridley, 286 Mont. at 334, 951 P.2d at 992. Therefore, we reversed the order of the District Court and entered declaratory judgment in favor of Ridley. Ridley, 286 Mont. at 338, 951 P.2d at 994-95.
¶ 16 Pursuant to Ridley, insurers are obligated to pay an injured third party's medical expenses prior to final settlement when liability for such expenses is reasonably clear. Ridley was decided on December 24, 1997. Consequently, Canal's obligation under Ridley arose on December 24, 1997. Canal does not contest the fact that its insureds are liable for the Shilhaneks' injuries. Therefore, we hold that Canal had a duty to pay the Shilhaneks' undisputed medical expenses, up to the limits of its coverage, without the benefit of a settlement agreement, after December 24, 1997. ¶ 17 As an alternative argument, Canal maintains that if our holding in Ridley imposed on it the obligation to pay the Shilhaneks' undisputed medical expenses before final settlement, such obligation was limited to the mandatory minimum coverage required by the Motor Vehicle Safety-Responsibility Act (MVRA). Section 61-6-103(2)(b)(i)(iii), MCA (1997), a provision of the MVRA, provides that all owners and operators of motor vehicles must carry mandatory liability insurance, in the minimum amount of: (1) $25,000 because of bodily injury to or death of one person in any one accident; (2) $50,000 because of bodily injury to or death of two or more persons in any one accident; and (3) $10,000 because of injury to or destruction of property of others in any one accident.
¶ 18 This Court addressed the nexus between § 33-18-201, MCA, and § 61-6-103(2), MCA, in Watters v. Guaranty Nat. Ins. Co., 2000 MT 150, 300 Mont. 91, 3 P.3d 626. The plaintiffs in Watters were injured when their vehicle was involved in a collision with another vehicle. The driver of the other vehicle was insured by Guaranty National Insurance Company for the minimum amount of coverage required by § 61-6-103(2), MCA....
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