Tucker v. Farmers Ins. Exchange

• Decision Date: 21 July 2009
• Docket Number: No. DA 08-0083.,DA 08-0083.
• Citation: 351 Mont. 448,215 P.3d 1,2009 MT 247
• Parties: Patsy Ann TUCKER, Personal Representative of the Estate of Cathryn Claire Rose Tucker, Plaintiff and Appellee, v. FARMERS INSURANCE EXCHANGE, a Reciprocal Inter-Insurance Exchange, Defendant and Appellant.
• Court: Montana Supreme Court

215 P.3d 1

2009 MT 247

351 Mont. 448

Patsy Ann TUCKER, Personal Representative of the Estate of Cathryn Claire Rose Tucker, Plaintiff and Appellee, v. FARMERS INSURANCE EXCHANGE, a Reciprocal Inter-Insurance Exchange, Defendant and Appellant.

No. DA 08-0083.

Supreme Court of Montana.

Submitted on Briefs December 24, 2008.

Decided July 21, 2009.

For Appellant: Mark S. Williams, Williams Law Firm, P.C., Missoula, Montana.

For Appellee: Alexander (Zander) Blewett, III, Hoyt & Blewett, PLLC, Great Falls, Montana.

Justice BRIAN MORRIS delivered the Opinion of the Court.

¶ 1 Farmer's Insurance Exchange (FIE) appeals from a jury award of $516,000 in wrongful death damages to Patsy Ann Tucker (Tucker) in the Fourth Judicial District Court, Missoula County. The court also awarded attorney fees, costs, and accrued interest. We affirm.

¶ 2 FIE presents the following issues for review:

¶ 3 Whether the District Court properly denied FIE's motion for a directed verdict on Tucker's underinsured motorist (UIM) claim for wrongful death damages.

¶ 4 Whether the District Court properly applied Idaho law in determining the wrongful death damages.

¶ 5 Whether the District Court correctly denied collateral source offsets from Tucker's wrongful death damages award.

PROCEDURAL AND FACTUAL BACKGROUND

The Accident

¶ 6 Tucker is a co-personal representative of the estate of her daughter, Cathryn Claire Rose Tucker (Cady Tucker). Cady Tucker, age 11, died on August 15, 2002, following an automobile accident that took place north of Seeley Lake on Montana Highway 83. Cady Tucker lived in Idaho Falls, Idaho, with her mother and her mother's husband, Robert Starr (Starr), at the time of the accident. Cady Tucker's biological father is John Hoctor (Hoctor). Hoctor is a co-personal representative of Cady Tucker's estate.

¶ 7 Cady Tucker rode in the front seat of a vehicle owned and operated by Robert Cushman (Cushman), a Montana resident. Jamie Robbins (Robbins), Cady Tucker's cousin, rode in the backseat of Cushman's vehicle. Janie McNair (McNair), also a Montana resident, negligently drove her vehicle over the centerline and collided head-on with Cushman's vehicle. Cushman and Robbins suffered serious injuries. Cady Tucker died from her injuries after living an appreciable amount of time.

Insurance Coverage

¶ 8 Safeco insured Cushman under two separate policies with UIM limits of $100,000 per person and $300,000 per accident. Safeco agreed to stack the policies and paid $200,000 to Tucker and Hoctor in equal shares of $100,000. All parties agreed that these monies constituted survivorship damages under Montana law. Tucker and Hoctor divided the survivorship damages in accordance with the succession laws of Montana.

¶ 9 State Farm insured McNair for liability coverage of $25,000 per person and $50,000 per accident. McNair collided with two separate vehicles in this accident. McNair's negligence caused the death of Cady Tucker and caused severe injuries to Cushman, Robbins, and three passengers in the vehicle trailing Cushman's vehicle. State Farm admitted to McNair's negligence. As a result, State Farm provided additional coverage of $25,000 per person and $50,000 per accident. State Farm divided its $100,000 limit among the injured parties, including Cady Tucker's heirs, with a $50,000 per person limitation. State Farm paid survivorship damages in the amount of $35,625 to Tucker and Hoctor in equal shares of $17,812.50.

¶ 10 Tucker and Hoctor agreed that the Safeco and State Farm monies constituted survivorship damages and thus split these amounts equally as co-personal representatives of Cady Tucker's estate. They further agreed that any money damages received in the future would not be divided equally as Tucker had provided a vast majority of Cady Tucker's financial support and care.

¶ 11 Starr had purchased two UIM policies that insured Tucker and Cady Tucker. The first policy, Farmers Insurance Company of Idaho (FICI), insured them for $250,000 per person. The FICI policy contained a provision that Idaho law governed the contract. Consistent with Idaho law, the FICI policy contained a mandatory arbitration provision. The second policy, FIE, insured both Tucker and Cady Tucker for $1,000,000 per occurrence. Starr had purchased the FIE policy to provide excess coverage above the FICI policy. The FIE policy contained no choice of law provision and no arbitration provision.

¶ 12 Tucker initially demanded the $250,000 policy limit in UIM coverage from FICI. John Evers (Evers), a general adjuster for FICI and FIE, initially informed Tucker that policy exclusions in both the FICI and FIE policies barred coverage. Evers later confirmed the insurer's intent, however, to address the UIM claims under both policies. Evers opined that coverage would be subject to an offset of the amount recovered from the tortfeasor and benefits received from Cushman's UIM coverage. Tucker detailed the damages that had been incurred from Cady Tucker's death and demanded that FICI and FIE pay the entire limit of $1,500,000 to the co-personal representatives of Cady Tucker's estate.

Idaho Court Proceedings

¶ 13 FICI responded by filing a complaint in Bannock County, Idaho, on March 13, 2003, that sought to compel arbitration of the UIM claim. FIE joined the complaint five days later. Three days later, on March 21, 2003, Tucker and Hoctor filed a complaint in Montana that sought damages against McNair for negligence and asserted UIM claims against FICI and FIE. FICI and FIE filed motions to dismiss the Montana action. The District Court dismissed the Montana action on June 23, 2003, based on comity and the fact that the Idaho court was considering the question of whether the insurance policies compelled arbitration. The Idaho district court interpreted the insurance contracts and granted FICI's motion to compel arbitration as its insurance policy contained an express arbitration clause. The Idaho district court denied FIE's motion to compel arbitration as its insurance policy did not contain an arbitration clause.

¶ 14 Tucker settled her claim with FICI after providing FICI with evidence that Cady Tucker had lived an appreciable time after the accident. Tucker and Hoctor agreed to discharge their UIM claim against FICI under Idaho law for the $250,000 policy limit. Hoctor received $70,000 and Tucker received $180,000. The parties did not apportion this settlement between survivorship damages and wrongful death damages. The Idaho district court dismissed this portion of the case with prejudice on December 29, 2003.

¶ 15 Tucker and Hoctor filed a second complaint in Montana on September 2, 2003, that sought damages against FIE. FIE moved to dismiss the second Montana action on June 30, 2004. The Montana court declined to rule on the dismissal motion and stayed the action pending resolution of the Idaho proceedings.

¶ 16 FIE sought leave to file an amended complaint for declaratory relief in the Idaho action on November 10, 2003. FIE sought a declaratory judgment to determine whether Tucker and Hoctor could recover under the FIE's UIM coverage and the amount of such recovery. The Idaho district court allowed FIE leave to amend its complaint in order to pursue a declaratory judgment "to determine whether FIE must pay [damages] and to whom it must pay the damages." The court refused, however, to allow FIE to determine in such action "the amount of damages [Tucker and Hoctor] may seek from FIE in a wrongful death action and/or breach of contract action."

¶ 17 FIE appealed to the Idaho Supreme Court. The Idaho Supreme Court agreed that no authority supported FIE's efforts to maintain a declaratory judgment action to determine damages when a wrongful death and survivorship action was pending in Montana to address the identical issue. Farmers Ins. Exchange v. Tucker, 142 Idaho 191, 125 P.3d 1067, 1071 (2005).

¶ 18 The Idaho Supreme Court admitted that FIE's argument contained "some initial curb appeal" as the case involved the interpretation of an insurance policy issued in Idaho to Idaho insureds. Tucker, 125 P.3d at 1071. The court further recognized that most of the likely trial witnesses on the damages issue lived in Idaho. The court ultimately determined, however, that the remaining issues in the case boiled down to the question of how much FIE must pay under its policy. Tucker, 125 P.3d at 1071. The court concluded that "the only issue of substance to be determined is the factual question as to the amount of damages, a question which is pending in the first-filed regular action in the state of Montana." Tucker, 125 P.3d at 1071.

Montana Court Proceedings

¶ 19 The Montana District Court held a jury trial on April 6, 9, and 10, 2007, on Tucker's claim for wrongful death damages. Tucker alleged that FIE was contractually obligated under its UIM policy for her wrongful death damages. The jury awarded Tucker damages in the amount of $516,000.

¶ 20 The District Court held a hearing on September 5, 2007, to address the role or extent of collateral sources. FIE did not present any evidence or call any witnesses. FIE instead argued that Tucker had received insurance settlements that covered the same damages that the jury had awarded. FIE claimed that it was entitled to offsets to the jury award for all amounts paid by other sources of insurance. The District Court determined that FIE had failed to meet its burden of proving specific amounts that could be defined as survivorship damages and specific amounts that could be defined as wrongful death damages that would entitle it any offsets.

¶ 21 FIE sought to have the court revisit its earlier ruling that Idaho law applied to the interpretation of the contract. The District Court affirmed that Idaho law applied to control the legal construction and effect of FIE's policy. The District Court pointed to our reliance on § 188 of the Restatement (Second) Conflict of Laws to determine the state that...