Wilkie v. Hartford Underwriters Ins. Co.

• Decision Date: 07 September 2021
• Docket Number: DA 20-0514
• Parties: PAUL WILKIE, Plaintiff and Appellant, v. HARTFORD UNDERWRITERS INSURANCE COMPANY, a/k/a THE HARTFORD; RICHARD L. SPROUT; and SHAUNA SPROUT, Defendants and Appellees.
• Court: Montana Supreme Court

2021 MT 221

PAUL WILKIE, Plaintiff and Appellant, v. HARTFORD UNDERWRITERS INSURANCE COMPANY, a/k/a THE HARTFORD; RICHARD L. SPROUT; and SHAUNA SPROUT, Defendants and Appellees.

No. DA 20-0514

Supreme Court of Montana

September 7, 2021

Submitted on Briefs: June 30, 2021

Appeal From: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-20-367B Honorable Rienne H. McElyea, Presiding Judge

For Appellant: Robert K. Baldwin, Jeffrey J. Tierney, Goetz Baldwin & Geddes, P.C., Bozeman, Montana

For Appellees Richard and Shauna Sprout: Patrick M. Sullivan Poore, Roth & Robinson, P.C., Butte, Montana

For Appellee Hartford Underwriters Insurance Company: Ian McIntosh, Dale Schowengerdt, Kristen Meredith, Crowley Fleck PLLP, Bozeman, Montana

For Amicus Montana Trial Lawyers Association: Patrick T. Fox Hunt & Fox PLLP, Helena, Montana Veronica A. Procter, Procter Law PLLP, Billings, Montana

OPINION

BETH BAKER, JUSTICE

¶1 Paul Wilkie appeals an Eighteenth Judicial District Court order dismissing as moot his claim for declaratory judgment that The Hartford Underwriters Insurance Company, a/k/a The Hartford, has a duty as an insurer to provide its insured's policy to a third-party claimant when the insured's liability is reasonably clear. The District Court dismissed the case as moot after Richard and Shauna Sprout, the insureds, provided the policy to Wilkie. Wilkie contends that the District Court erred because The Hartford failed to meet its burden of demonstrating the inapplicability of the voluntary cessation exception to mootness. We reverse the order dismissing the claims against The Hartford and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Wilkie was injured when Richard Sprout hit him with his truck while Wilkie was walking across the street. At the time of the accident, Sprout was insured by The Hartford under an automobile insurance policy ("the Policy"). Wilkie submitted a claim to The Hartford and, after concluding that Sprout's liability was reasonably clear, The Hartford began making Ridley^[1] medical payments to Wilkie. In February 2020, Wilkie's counsel requested from The Hartford a copy of the Policy or to "at least tell me the limit of liability insurance that applies to this claim." An employee of The Hartford responded the next day, stating:

Mr. Wilkie is not our insured and currently has a pending Bodily Injury claim with us. I do not believe we have any obligation at this time to provide you with a copy of our insured's policy, declaration page, or release his policy information to you, however, if you believe otherwise, please provide our office with such information for review.

Wilkie's counsel did not respond to this request for additional information. Wilkie's counsel never demanded that the Sprouts provide a copy of the Policy.

¶3 Wilkie instead filed his complaint with the District Court on March 30, 2020, seeking a declaration that The Hartford, as an insurer, had a duty to provide the Policy to Wilkie prior to litigation because liability was reasonably clear; or alternatively that The Hartford had a duty to disclose to Wilkie the amount of insurance coverage available for his claim. His complaint "included the Sprouts as defendants in this matter because they may claim an interest in the relief that [Wilkie] requests." Wilkie alleged that, besides his medical expenses, he was entitled to general damages but "ha[d] not yet made a demand . . . for payment of such general damages for various reasons, including, but not limited to, that he is not aware of the provisions of . . . Sprout's policy or of the amount of coverage available to pay damages to [him]." The complaint additionally alleged that "it is a common and normal practice of The Hartford to refuse to disclose the policy, declaration page, or policy amounts to injured third-party claimants like [Wilkie, ]" which "ha[s] the effect of putting it in a more advantageous position[]" because it would "impose upon [Wilkie] the burden to negotiate from a position of ignorance, while The Hartford would negotiate with full knowledge of any issues about coverage and the amount of liability coverage available."

¶4 About three weeks after Wilkie filed his complaint, the Sprouts' counsel provided Wilkie with a copy of the Policy and its declarations page. The Hartford then filed a motion to dismiss under M. R. Civ. P. 12(b)(1) and 12(b)(6), which the Sprouts joined. Under its Rule 12(b)(1) claim for lack of subject matter jurisdiction, The Hartford argued that, because Wilkie was provided a copy of the Policy, the issues raised in his complaint were moot. It contended that Wilkie lacked any continued personal interest in the action and the District Court could not grant him any further relief. Wilkie objected, arguing that his request for declaratory relief should proceed under one of the exceptions to the mootness doctrine: voluntary cessation or wrongs capable of repetition yet evading review. The Hartford responded that the voluntary cessation exception did not apply when Wilkie alleged only a single instance of the challenged conduct, and that the evading review exception did not apply when Wilkie did not show that the challenged conduct was of limited duration or reasonably would be expected to occur again.

¶5 The District Court agreed that the claims had been rendered moot when the Sprouts provided Wilkie with the Policy and concluded that any additional ruling in the case would amount to an improper advisory opinion. The court granted The Hartford's and the Sprouts' motion and dismissed the case in September 2020.^[2]

STANDARD OF REVIEW

¶6 We review rulings under M. R. Civ. P. 12(b)(1) de novo for correctness. Stowe v. Big Sky Vacation Rentals, Inc., 2019 MT 288, ¶ 12, 398 Mont. 91, 454 P.3d 655 (citation omitted). "Mootness, as an issue of justiciability, presents a question of law, which we review for correctness." Heringer v. Barnegat Dev. Grp., LLC, 2021 MT 100, ¶ 13, 404 Mont. 89, 485 P.3d 731 (citations, internal quotation marks omitted); Reichert v. State, 2012 MT 111, ¶ 20, 365 Mont. 92, 278 P.3d 455 (citation omitted).

DISCUSSION

¶7 "The judicial power of the courts of Montana is limited to justiciable controversies." Greater Missoula Area Fed'n of Early Childhood Educators v. Child Start Inc., 2009 MT 362, ¶ 22, 353 Mont. 201, 219 P.3d 881 (citations omitted). "A justiciable controversy is one upon which a court's judgment will effectively operate, as distinguished from a dispute invoking a purely political, administrative, philosophical, or academic conclusion." Progressive Direct Ins. Co. v Stuivenga, 2012 MT 75, ¶ 16, 364 Mont. 390, 276 P.3d 867 (citation omitted). A "case or controversy" must exist throughout the matter for a court to retain jurisdiction. Child Start Inc., ¶ 23 (citations omitted) ("because the constitutional requirement of a 'case or controversy' contemplates real controversies and not abstract differences of opinion or moot questions, . . . courts lack jurisdiction to decide moot issues insofar as an actual 'case or controversy' no longer exists").

¶8 "Mootness is a threshold issue that must be resolved before we can address the underlying dispute." Walker v. State, 2003 MT 134, ¶ 40, 316 Mont. 103, 68 P.3d 872. An otherwise justiciable case may become moot if the disputed issue "has ceased to exist or is no longer live." Child Start Inc., ¶ 23 (noting that such a circumstance would prevent a court from "grant[ing] effective relief or . . . restor[ing] the parties to their original position"); Havre Daily News, LLC v. City of Havre, 2006 MT 215, ¶ 31, 333 Mont. 331, 142 P.3d 864. Any further ruling in such a case would constitute an impermissible advisory opinion, "i.e., one advising what the law would be upon a hypothetical state of facts or upon an abstract proposition, not one resolving an actual 'case or controversy.'" Plan Helena, Inc. v. Helena Reg'l Airport Auth. Bd., 2010 MT 26, ¶ 12, 355 Mont. 142, 226 P.3d 567 (citation omitted). "The fundamental question to be answered in any review of possible mootness is whether it is possible to grant some form of effective relief to the appellant." Montanans Against Assisted Suicide (MASS) v. Bd. of Med. Exam'rs, 2015 MT 112, ¶ 11, 379 Mont. 11, 347 P.3d 1244 (quoting Briese v. Mont. Pub. Emps. Ret. Bd., 2012 MT 192, ¶ 14, 366 Mont. 148, 285 P.3d 550) (internal quotation marks omitted).

¶9 Even when a case is no longer "live," however, a court may hear and decide the case in specific circumstances. One such circumstance is the "voluntary cessation" exception, which allows a case to proceed that "would otherwise have been rendered moot by a defendant's voluntary cessation of the challenged action." Montanans Against Assisted Suicide, ¶ 15 (citing Havre Daily News, ¶¶ 38-40). This exception addresses the concern "that a defendant will attempt to moot only a plaintiff's meritorious claims, thereby avoiding an undesirable judgment on the merits. . . . This concern is particularly acute in situations when one would expect the same defendant to encounter substantially identical future controversies." Havre Daily News, ¶ 34 n.7 (internal citations omitted); Montanans Against Assisted Suicide, ¶ 15.

¶10 A defendant's voluntary cessation of conduct cannot moot a case unless it is "absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur." Havre Daily News, ¶ 38 (quoting Friends of the Earth, Inc. v. Laidlaw Env'l Servs (TOC), Inc., 528 U.S. 167, 189, 120 S.Ct. 693, 708 (2000)). "'Due to concern that a defendant may utilize voluntary cessation to manipulate the litigation process,' the 'heavy burden' of demonstrating 'the challenged conduct cannot...