Case Title: Lorang v Fortis Insurance

Citation: 2008 MT 252

Docket Number: cd1d961d-c0d6-4ee1-921f-3cacd06df49d

State: montana

Court: Montana Supreme Court

Date: 2008-07-17T00:00:00Z

Document:
FILED
shy 17 208

04-489
IN THE SUPREME COURT OF THE STATE OF MONTANA.
2008 MT 252

 

JOHN and BONNIE LORANG,

Plaintiffs, Appellants and
Cross-Appellees,

FORTIS INSURANCE COMPANY,

Defendant, Appellee and
Cross-Appellant.

 

 

APPEAL FROM: District Court ofthe Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No, DV 2002-961,
Honorable G. Todd Baugh, Presiding Judge
COUNSEL OF RECORD:
For Appellant

LB. Cozzens, Donald L. Harris, Cozzens, Warren & Harris, PLP,
Billings, Montana

For Appellee:

James L. Jones, Michelle Sullivan, Holland & Hart, LLP,
Billings, Montana

 

‘Submitted on Briefs: May 11, 2005
Decided: July 17, 2008

Fite:
Justice James C. Nelson delivered the Opinion of the Court.
{1 John and Bonnie Lorang (“Lorangs”), husband and wife, filed suit against their
health insurance provider, Fortis Insurance Company (“Fortis”), in the District Court for
the Thirteenth Judicial District, Yellowstone County. The Lorangs alleged breach of the
insurance contract by non-performance, breach by anticipatory repudiation, and three
violations of the Unfair Trade Practices Act (“UTPA").

{2 Fortis moved for dismissal, arguing that the District Court lacks subject-matter

 

Jurisdiction, The court denied this motion. Additionally, the parties filed cross-motions
for summary judgment. In considering these motions, the court first granted partial
summary judgment on liability in favor of the Lorangs with respect to their claim that
Fortis breached the insurance contract by non-performance. Second, the court granted
summary judgment in favor of Fortis on the Lorangs’ claim of breach by anticipatory
repudiation. Finally, the court granted summary judgment in favor of Fortis on each of
the Lorangs’ three UTPA claims. ‘The Lorangs filed an appeal with this Court, and Fortis
filed a cross-appeal.

$B We address the following issues:

{4 (1) Did the District Court err in concluding that it has subject-matter jurisdiction
over this case?

{5 @) Did the District Court err in precluding evidence of the parties’ prior dealings
from consideration on summary judgment?

{6 (3)Did the District Court em in ruling on the eross-motions for summary judgment

regarding the Lorangs’ claim for anticipatory breach of contract?
{7 Did the District Court err in ruling on the cross-motions for summary judgment
regarding the Lorangs’ three UTPA claims?
{8 We affirm in part, reverse in part, and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND
{9 The Lorangs, who have been married since 1983, purchased an individual health
insurance policy from Fortis in June of 1991.' The policy has been in effect continuously
since that time. In October of 1992, doctors discovered bone cancer in Bonnie’s right
leg. Consequently, her leg was amputated above the knee in February of 1993,
‘Thereafter, Bonnie received a prosthetic leg device, for which Fortis provided coverage.
{10 A prosthetic leg device attaches to an amputee by way of a separate item, a
“socket,” which must be professionally molded to fit the contours of the amputee’s

b, as

 

residual limb. An ill-fitting socket can cause sores and infection in the residual |
well as a distorted gait pattern and even a loss of ambulation. ‘Thus, because an amputee
‘experiences gradual changes in the volume and shape of his or her residual limb due to
atrophy, weight fluctuation, and other factors, it becomes medically necessary to replace
the socket on a periodic basis.

{11 In Bonnie's case, the gradual changes in her residual limb require that she obtain a
replacement socket approximately once every two to three years. She has received these
replacement sockets from two care providers, Billings Orthopedic, Inc., and Hanger
Prosthetics & Orthotics, Inc. Through these care providers, Bonnie has submitted claims

"At that time, Forts went under the name of Time Insurance Company. However, forthe sake
of simplicity, we will refer to the company as Fortis throughout this decision.

3
 

to Forts for the cost of her replacement sockets and associated materials and professional
service.
{12 As noted, the Lorangs” insurance policy with Fortis has been in effect continually

since 1991. While the policy has changed during that time in some respects through an

 

 

‘upgrade” process which Fortis offered, it is undisputed that the policy has always
provided coverage for the cost of medically-necessary replacement sockets, as well as the
associated cost of the materials and professional service necessary to mold the socket to

fit Bonnie's residual limb and to ensure proper

 

jgnment.
{U3 Although Fortis willingly provided coverage for Bonnie's first socket in 1993,
when she received her prosthetic leg device, Fortis has repeatedly resisted providing
coverage for the cost of Bonnie's medically-necessary replacement sockets. Fortis”
conduct in this regard has prompted the Montana State Auditor's Office (“Insurance
Commissioner") to intervene on Bonnie's behalf on two occasions. Fortis’ conduct also
[ed to a prior lawsuit between the parties, as well asthe current action.

{14 The Insurance Commissioner initially became involved in this case after Bonnie
received her fist replacement socket in 1994, By July of that year, the natural process of
atrophy had caused changes in the Volume and shape of Bonnie's residual limb, such that
the socket of her prosthesis no longer fit properly. As a result, she developed sores in the
distal end of her leg, at points of contact with the socket, and she had difficulty walking
with her prosthesis. Accordingly, Dr. Whitney Robinson prescribed replacement

socket. The socket itself cost $2,650.00, while the materials and service necessary to
‘mold it to Bonnie's leg and assure proper alignment cost $5,420.00, for a total of
$88,070.00.

{15 Bonnie submitted a claim to Fortis requesting coverage forall these costs, together
with a letter from her care provider explaining the medical necessity of a replacement
socket, Fortis denied the claim and issued a letter stating that the cost of a replacement
socket is not covered by the Lorangs’ policy. Consequently, Bonnie sent a letter to the
Insurance Commissioner, requesting assistance in compelling Fortis to comply with its

ately sent @

 

contractual obligation. The Insurance Commissioner intervened and ult
letter asking Fortis to honor Bonnie's clsim. Forts complied with this request, issued a
letter admitting its obligation to provide coverage, and ultimately rendered payment for
Bonnie's incurred expenses.

16 By the summer of 1996, Bonnie again experienced changes in the volume and
shape of her residual limb, such that the socket of her prosthesis no longer fit properly.
‘Accordingly, Dr. Whitney Robinson prescribed a replacement socket. This time the
socket itself cost $2,782.50, while the materials and service necessary to mold it to
Bonnie's leg and assure proper alignment cost $9,010.30, fora total of $11,792.80.

{17 Bonnie submitted a claim to Fortis requesting coverage for all of these costs,

necessity from Dr. Robinson.” Fortis responded with a

 

together with a leter of m
letter in which it agreed to provide benefits for the cost of the replacement socket itself

However, Forts also asserted, for the firs time, that the Lorangs” policy does not provide
> With this claim, Bonnie also sought coverage for the cost of replacing one of the permanent

‘components of her prosthesis, the “knee unit,” which Fortis denied. However, coverage for that
iter isnot at issue inthis case.
coverage for the cost of the materials and service associated with a replacement socket.
‘As noted, these associated costs constituted the bulk of Bonnie's claim.

{8 Bonnie's care provider, Billings Orthopedic, Inc., then sent a letter reminding
Fortis that it had provided coverage for these associated costs which Bonnie incurred in
replacing her previous socket. Nonetheless, Fortis maintained that these costs are not
‘covered by the Lorangs’ policy. Moreover, Fortis failed to provide payment for the
replacement socket itself, despite having acknowledged its obligation to do so. Thus, the
Insurance Commissioner intervened again, and sent a letter to Fortis stating, in part,
“Lrespectfully request you process for immediate payment on these incurred expenses.”
Fortis eventually complied with this request, issued a letter admitting its obligation to
provide coverage for the replacement socket as well as the associated costs, and
ultimately rendered payment for Bonnie's incurred expenses.

$19 Previously, in the summer of 1996, Fortis had notified its agents that it would be
offering an upgraded version of the “Form S02" medical policy in Montana—the policy
‘under which Bonnie was insured. With this notice, Fortis recommended that Montana
insureds should elect the upgrade, which purportedly provided broader coverage at a
reduced price. Thus, one of Fortis’ local agents, Joan Nelson, talked with Bonnie about
the option of upgrading. Given Bonnie’s ongoing need for replacement sockets, Mrs.
Nelson contacted Fortis’ General Agent for Montana, Marie Deonier, to determine
‘whether the upgraded policy would provide the same prosthetics coverage which the
Lorangs’ policy already provided. Mrs. Deonier recommended that the Lorangs take the

‘opportunity to upgrade, and stated that the upgraded policy would provide coverage for
Bonnie's future replacement sockets. Accordingly, the Lorangs elected to upgrade their
policy. They notified Fortis of their decision, and the upgrade went into effect in
December of 1996, The upgraded policy was thereafter identified as a “Form 100”
‘medical policy, while the Lorangs maintained the same policy number they received in
1991. Nearly two months later, under the circumstances explained above, Fortis issued
payment for Bonnie’s second replacement socket.

{20 By October of 1998, Bonnie again experienced changes in the volume and shape
of her residual limb, such that the socket of her prosthesis no longer fit properly.
‘Accordingly, Dr. Whitney Robinson prescribed a replacement socket. This time the
socket itself cost $2,800.00, while the associated materials and service cost $9,010.30, for
a total of $11,810.30.

{21 Bonnie submitted a claim to Fortis requesting coverage for all of these costs,
together with a letter of medical necessity from Dr. Robinson, Fortis responded with a
letter in which it denied the claim, stating that the Lorangs’ policy does not provide
coverage for the cost of replacement sockets. This time, Fortis did not distinguish
between the cost of the socket itself and the cost of associated materials and service.

{22 Consequently, John Lorang sent a leter requesting that Forts reconsider its denial
Additionally, Fortis’ local agent, Joan Nelson, and Fortis’ General Agent for Montana,
Marie Deonier, also sent letters to Fortis asking for reconsideration, Mrs. Deonier
stressed in her letter that a replacement socket was medically necessary. She also

stressed that Fortis had previously provided payment for Bonnie's replacement sockets,
and stated: “I would also not like to see us have to go to court with this, and if denied
again, it would not surprise me if that i the route these people will be forced to take.”

423. Fortis conducted a review of the claim, but refused to reverse its denial. Fortis
then responded with a letter stating that the Lorangs had upgraded to the “Form 100”
policy, and further stating that this policy does not provide coverage for the cost of
replacement sockets. However, Fortis failed to identify any difference between the
prosthetics provisions in the original version of the Lorangs* policy and those in the
upgraded version of their policy.

{24 Marie Deonier then sent another letter urging Fortis to reconsider. Fortis again
reviewed the claim, but refused to reverse its denial. Fortis then issued another letter
stating that the Lorangs’ upgraded policy does not provide coverage for the cost of
replacement sockets. Again, Fortis failed to identify any difference between the
prosthetics provisions in the original version of the Lorangs’ policy and those in the
upgraded version of their policy.

{25 The Lorangs retained an attomey who sent a letter demanding that Fortis
acknowledge its obligation and render payment. This letter further stated that the
Lorangs would file suit if necessary. Once again, Forts refused to reverse the denial and
issued a letter stating that the Lorangs’ upgraded policy does not provide coverage for the
cost of replacement sockets.

{26 The Lorangs sent one more request for reconsideration, but Fortis again refused to
reverse its denial. Thus, in June of 1999, the Lorangs filed suit against Fortis in state

District Court. They asserted various claims including breach of contract, breach of
fiduciary duty, violation of the UTPA, and violation of the Americans With Disabilities
‘Act. They also asserted a claim for fraud, alleging that Forts, knowing of Bonnie's
ongoing need for prosthetics coverage, had induced them to “upgrade” their policy in
1996 without informing them thatthe company would thereafter interpret the upgraded
policy to preclude coverage forthe cost of replacement sockets

$27 Fortis removed the suit to federal District Court, In December of 1999, the parties
catered into a confidential settlement agreement, and the case was dismissed. Pursuant to
the settlement agreement, Fortis rendered payment to settle the Lorangs" various legal
claims and to cover the cost of Bonnie's replacement socket as well as the associated
materials and service. Thereafter, the insurance policy remained in effect, and the
LLorangs continued paying monthly premiums as they had since 1991.

$28 Subsequently, Bonnie also became insured under a Blue Cross medical policy.
She obiained this insurance when she became employed at Lockwood School, an
elementary and middle school in Billings. Bonnie had worked for the school as @
substitute teacher before she developed cancer. In 2000, she went back to work for the
school as a specch therapist sid, and consequently obtained insurance through the
school’s group plan with Blue Cross

$29 By May of 2002, Bonnie again experienced changes in the volume and shape of
her residual limb, such that the socket of her prosthesis no longer fit properly.
‘Accordingly, Dr. Whitney Robinson prescribed a replacement socket. This time the

socket itself cost $3,900.00, while the associated materials and service cost $11,549.00,

 

for a total of $15,449.00, Bonnie submitted a claim to both Blue Cross and Fortis, along
‘with a letter of medical necessity from Dr. Robinson which stated in part: “[Bonnie] has
developed a chronic sore .... Socket replacement is medically necessary to prevent
further stump injury and loss of ambulation.” Blue Cross paid its share of the claim,
'$9,126.23, leaving Forts responsible for the remainder of $6,322.77.

{30 Once again, Fortis denied Bonnie’s claim and sent a letter on October 2, 2002,
asserting that the Lorangs’ policy does not provide coverage for the cost of replacement
sockets. Consequently, the Lorangs contacted their attorney, who sent Fortis a demand
letter on October 15th. ‘This leter stated that Fortis had violated the UTPA and that the
Lorangs would file suit if payment was not rendered in ten days.

{B1__ Fortis acknowledged receipt of the letter, but failed to render payment. ‘Thus, the
Lorangs filed the instant lawsuit on November Ist. They asserted claims for breach of
the insurance contract by non-performance and breach by anticipatory repudiation. They

also asserted three claims for violation of the UTPA: (1) misrepresentation of the policy;

 

(2) failure to conduct a reasonable investigation before denial; and (3) failure to act in
‘g004 faith to promptly settle the claim, Fortis then admitted that the Lorangs’ policy
provides coverage for the cost of replacement sockets, and rendered payment on
December 3rd, which was nearly four months after the claim was submitted.

{82 A protracted discovery dispute then ensued. The Lorangs attempted to conduct
discovery relevant to their position that Fortis’ general practice is to deny claims for
replacement sockets, To that end, they issued interrogatories requesting, inter alia,
information regarding other instances in which Fortis had denied its insureds’ claims for

replacement sockets, and any lawsuits arising therefrom. Fortis refused to provide this

10
information, objecting inter alia that the information was irrelevant and that the requests
Were unduly burdensome, Consequently, the Lorangs filed a motion to compel. ‘The

District Court then ordered Fortis to respond to these requests and also issued a waming

 

Which is indicative of Fotis’ tactics during discovery. The court warmed: “Responses

‘and objections that are outside the scope of the applicable Rules of Civil Procedure will

 

not be deemed responsive
$33 During these proceedings, in June of 2003, one component of Bonnie's socket
failed, This component, for which Fortis had previously provided coverage, was
immediately replaced in order to restore the socket to functional condition. Bonnie
submitted a claim for the replacement cost to both Blue Cross and Fortis, along with a

letter of medical necessity from Dr. Whitney Robinson. Blue Cross paid its share of the

 

claim, $860.00, leaving Fortis responsible for the balance of $215.00. Fortis denied the
claim and issued yet another letter stating that the Lorangs’ policy does not provide
coverage. The Lorangs cited this denial to the District Court as further evidence in
support of their claims, and Fortis thereafter rendered payment.

$34 In October of 2003, Forts filed a motion for dismissal based on a lack of subject-
matter jurisdiction, which the District Court denied. The Lorangs then moved for partial
summary judgment on liability as to all claims, and Fortis filed a cross-motion for
summary judgment on all claims. The District Court granted partial summary judgment

on liabi favor of the Lorangs with respect to their claim for breach of contract by

 

non-performance, The court then granted summary judgment in favor of Fortis on the

n
Lorangs’ claim for breach of contract by anticipatory repudiation. Finally, the court
granted summary judgment in favor of Fortis on the Lorangs’ three UTPA claims.
$85 The Lorangs now appeal the District Court’s order denying their motions for
partial summary judgment and granting summary judgment in favor of Fortis. Fortis
cross-appeals the court's determination that it has subject-matter jurisdiction over this
case?

STANDARD OF REVIEW
{36 We conduct de novo review of summary-judgment orders, performing the same
analysis as does a district court pursuant to Rule 56 of the Montana Rules of Civil
Procedure. LaTray v. City of Havre, 2000 MT 119, 4 14, 299 Mont. 449, § 14, 999 P.2d
1010, 414.
{37 Summary judgment may be granted only when there is a complete absence of
genuine issues of material fact and the moving party is entitled to judgment as a matter of

law. M. R. Civ. P. $6(c); LaTray, 4 14. ‘The party seeking summary judgment bears the

 

inital burden of establishing a complete absence of genuine issues of material fact.

 

LaTray, 414. To satisfy this burden, the moving party must “exclude any real doubt as
to the existence of any genuine issue of material fact” by making a “clear showing as to
‘what the truth is.” Toombs v. Getter Trucking, Inc., 256 Mont. 282, 284, 846 P.2d 265,
266 (1993). In doing so, the moving party must contend with our rules which favor the
party opposing summary judgment,

> For the sake of simplicity, we will use the term “replacement socket” hereafter to refer both to
the socket itself and the associated materials and service.

 

R
{88 In determining whether genuine issues of material fact exist, we must view all
evidence in the light most favorable to the non-moving party. LaTray, 415. Therefore,
all reasonable inferences that may be drawn ftom the evidence must be drawn in favor of
the party opposing summary judgment. LaTray, 15. If there is any doubt as to whether
4 genuine issue of material fuct exists, that doubt must be resolved in favor of the party
opposing summary judgment, Newbury v. State Farm Fire d& Cas. Ins. Co., 2008 MT
156, 4 14, 343 Mont. 279, § 14, 184 P.3d 1021, § 14; Krusemark v, Hansen, 186 Mont.
174, 177, 606:P.2d 1082, 1084 (1980); Mathews v. Glacier Gent. Assurance Co., 184
Mont, 368, 379, 603 P.2d 232, 238 (1979)

{89 If the moving party meets its burden of demonstrating a complete absence of

‘genuine issues of material fact, the burden then shifts to the non-moving party to set forth

 

specific facts, not merely denials, speculation, or conclusory statements, in order to
establish that a genuine issue of material fact does indeed exist. M. R. Civ. P. S6(€);
LaTray, $14. Finally, if no genuine issues of material fact exist, it must then be
determined whether the facts actually entitle the moving party to judgment as a matter of
law. M.R. Civ. P. 56(6).

DISCUSSION

40 (1) Did the District Court err in concluding that it has subject-matter
Jurisdiction over this case?

41 On cross-appeal, Fortis raises this jurisdictional issue in connection with the

Lorangs' previous lawsuit against the company, which was settled in 1999. Ifthe District

3
Court does not have subject-matter jurisdiction, the remaining issues in this appeal are
moot. Thus, we address Fortis’ cross-appeal first

42 As noted above, the Lorangs filed their first lawsuit against Fortis in state District
Court, and Fortis removed the case to federal District Court. After the partes reached a
settlement, the federal District Court dismissed the case, but issued an order stating that it
‘would retain jurisdiction “for the limited purpose of enforcing the settlement agreement.”
Based on this order, Fortis filed a motion in this case requesting that the state District
Court dismiss for lack of subject-matter jurisdiction. In its motion, Fotis argued thatthe
state District Court lacks subject-matter jurisdiction because the Lorangs’ present claims
constitute an attempt to enforce the settlement agreement reached in the previous case,
cover which the federal District Court expressly retained jurisdiction. In response, the
Lorangs argued that they did not seek to enforce the settlement agreement, but rather, to
‘enforce the insurance contract and Montana’s statutory law governing the conduct of
insurers. Then, shortly after filing the motion for dismissal in state District Court, Fotis
moved the federal District Court to assume jurisdiction in this matter, again contending
that the Lorangs seck to enforce the settlement agreement over which the federal court
retained jurisdiction,

$43 The state District Court concluded that it does have subject-matter jurisdiction,
and therefore denied Fortis’ motion for dismissal. The federal District Court denied
Fortis’ motion to assume jurisdiction, concluding that the issues raised in the instant

‘ction are not encompassed by the settlement agreement. In doing so, the federal District

 

id

 

Court stated that when it retained jurisdiction to enforce the settlement agreement

4
not “assume jurisdiction over all future lawsuits that may arise under the insurance policy
between the parties.”

{44 Fortis appealed the federal District Court's ruling to the Ninth Circuit Court of
Appeals. Additionally, Fortis presently appeals the state District Court's ruling to this
Court, maintaining that subject-matter jurisdiction resides with the federal District Court
At the same time, however, Fortis also asserts in this appeal that the Ninth Circuit's
decision will be dispositive of this issue. Specifically, Fortis asserts that if the federal
District Cour’s refusal to assume jurisdiction is upheld on appeal by the Ninth Circuit,
then the state District Court is correct in concluding that it has subject-matter jurisdiction
over this case.

$45. We need not address Fortis’ assertion that the propriety of the state District
Court's decision depends on the decision rendered by the Ninth Circuit Court of Appeals.
While the appeal and cross-appeal to this Court were pending, the Ninth Circuit affirmed
the federal District Court's decision. Lorang v. Fortis Ins. Co., 135 Fed. Appx. 117 (9th
Cir. 2005) (unpublished). Thus, we need not address this jurisdictional issue further,
because Fortis now formally agrees that the state District Court has subject-matter
Jurisdiction over this ease,

$46 @) Did the District Court err in precluding evidence of the parties’ prior
dealings from consideration on summary judgment?

 

 

{47 In the early stages of this litigation, Fortis sought to preclude evidence of the

information in its records regarding the parties’ dealings prior to the first lawsuit. In
doing so, Fortis asserted that the Lorangs were attempting to use this evidence to
“recltigate” the prior suit and thereby obtain “double recovery.”

{48 The District Court initially rejected Fortis’ assertion, observing that “neither party
intends any recovery for damages already paid” in the previous lawsuit, The court also

rejected Fortis’ attempt to limit the evidence, and held: “it will be appropriate for

 

plaintiffs to put the history of thei relationship with defendant before the jury.” Further,
the court noted that it would take steps to ensure that the jury would not award damages
forthe claims previously settled.

{49 Despite the court's decision, Fortis persisted in its effort to exclude the evidence
contained in its records regarding the parties’ prior dealings. Eventually, the District,
Court changed course by adopting a rationale based on principles of res judicata and
collateral estoppel. Consequently, the court ruled that evidence of the parties’ dealings
pre to the first lawsuit is irrelevant. In making this ruling, the court concluded that it
‘has no “jurisdiction” over such evidence, stating: “This Court's jurisdiction begins with
the date of the settlement agreement (in the previous litigation}.”. Therefore, in deciding
the cross-motions for summary judgment, the District Court excluded from consideration
the evidence of the parties’ dealings prior to the 1999 settlement agreement.

{50 On appeal, the Lorangs argue that the District Court erred in this regard because
the subject evidence is directly relevant to each of their claims and the defenses Fortis
asserts. In response, Fortis argues that the evidence is not relevant for any legitimate
purpose in this case. Fortis also argues that, in excluding this evidence, the District Court

acted within its broad discretion regarding evidentiary matters.

16
I. Standard of Review
{151 First, we address Fortis’ argument regarding the standard of review. It is well
established, as noted above, that this Court conducts de novo review of summary-
Judgment orders, and that we do so by engaging in the same plenary analysis as district
courts must conduct pursuant to Rule $6 of the Montana Rules of Civil Procedure.
LaTray, $14. In contrast to this rule, however, Fortis proffers the “abuse of discretion”
standard with respect to the instant issue, suggesting that we grant substantial deference
to the District Court’s decision,

$52 Specifically, Fortis relies on Onstad v. Payless Shoesource, 2000 MT 230, 301
‘Mont. 259, 9 P.3d 38, which is one in a series of cases holding that we utilize the “abuse
of discretion” standard in reviewing evidentiary rulings. Onstad, {39 (overruled in part
‘on other grounds) (citing Massman v. City of Helena, 237 Mont. 234, 240, 773 P.2d
1206, 1210 (1989)). “However, Onsiad holds that we utilize this standard of review in a
specific context—i.e., where a district court has issued a discretionary ruling on the
admissibility of evidence at trial. Onstad, }39. Rulings in this context are a matter of
district courts’ “broad discretion” regarding trial matters, and we therefore typically
review such rulings pursuant to the “abuse of discretion” standard.‘ Benjamin v,

Torgerson, 1999 MT 216, § 15, 295 Mont. 528, $ 15, 985 P.2d 734, 415. The Onstad

* ‘There are, however, some instances in which we conduct de novo review of rulings regarding
‘admissibility at trial—i.e., where the district court's decision is based on a conclusion of law. J
re TW., 2006 MT 153, § 8, 332 Mont. 454, § 8, 139 P.3d 810, $8. This stands in contrast to the
‘common situation which merits the “abuse of discretion” standard of review—i.e., where there is
“more than one permissible way to resolve an evidentiary issue" and the district court “is inthe
‘best position to make that decision.” Benjamin, 15.

 

7
decision does not suggest that we utilize this same deferential standard in reviewing
summary-judgment rulings. In fact, such an approach would conflict with our precedent
holding that de novo review of a summary-judgment order “affords no deference to the
district court's decision” and demands that we conduct an inquiry “identical” to that of
the district court. See e.g. Remille v. Fredrickson, 2004 MT 324, 49, 324 Mont. 86,419,
101 P.3d 773,49; Groshelle v. Reid, 270 Mont. 443, 446, 893 P.2d 314, 316 (1995).

453A district cour’s ruling on a summary-judgment motion is not @ discretionary

function which merits deferential review. Svaldi v. Anaconda-Deer Lodge County, 2005

 

MT 17, 4 12, 325 Mont. 365, 4 12, 106 P.3d 548, 4 12: Cole v. Valley Ice Garden, LLC,
2005 MT 115, $4, 327 Mont. 99, $4, 113 P.3d 275, $4 (our review of a summary-
judgment order is “non-deferential”). Rather, summary judgment requires district courts
to make a series of legal conclusions regarding the applicable law, the reasonable
inferences to be drawn from the evidence in favor of the non-movant, and the application
of law to the undisputed facts and reasonable inferences of fact. See LaTray, 414-15,
18; Carelli v. Hall, 279 Mont. 202, 207, 926 P.2d 756, 760 (1996). Such conclusions are
cither correct or incorrect as a matter of law. Therefore, in the context of summary
judgment, a decision to categorically exclude certain evidence from consideration is not a
discretionary function akin to admitting or excluding evidence at trial. Rather, this
determination is a conclusion of law which we must review de novo, just as we review all

other aspects of the decision to grant summary judgment. LaTray, $14. Indeed, we have
never parsed out different aspects of a summary-judgment ruling for differing standards
of review, and we will not accept Fortis’ invitation to do so now.*

{54 Here, the District Court ultimately adopted a rationale based on principles of res
judicata and collateral estoppel. Consequently, the court concluded that it has no
“Jurisdiction” over the evidence at issue, and that the evidence is not relevant. As these
conclusions of law were part of the court's decision on summary judgment, we review
them de novo.

TL Jurisdiction

{55 We now tum to the District Court's conclusion that it lacks “jurisdiction” over the
‘evidence at issue

{56 “The subject-matter jurisdiction of the district cours is established by the Montana
Constitution.” Miller v. District Court, 2007 MT 149, $45, 337 Mont. 488, $45, 162
3d 121, 445. In particular, Article VII, Section 4(1) provides that district courts have
“original jurisdiction in... all civil matters and cases at law and in equity.”

$57 Subject-matter jurisdiction is a court's fundamental authority to hear and
adjudicate a particular class of cases or proceedings. See Miller, $43; Ballas v. Missoula
City Board of Adjustment, 2007 MT 299, § 15, 340 Mont. $6, 415, 172 P.3d 1232, $15;
Pefiav. State, 2004 MT 293, 4 21, 323 Mont. 347, § 21, 100 P.3d 154, § 21 (overruled in
part on other grounds by Davis v. State, 2008 MT 226,423, _ Mont. __,4.23,_ P.3d

_. 123); California v. Western Tire Auto Stores, Inc., 207 N.E.2d 474, 476 (Ill. 1965)

5 Moreover, a district court's conclusion as to its jurisdiction is always subject to de novo
review, regardless ofthe context in which the conclusion is made. Stanley. Lemire, 2006 MT
5304, 452, 334 Mont. 489, $52, 148 P.3d 643, 452.

19
(Jurisdiction of the subject matter does not mean simple jurisdiction of the particular
case then occupying the attention of the court, but jurisdiction of the class of cases to
which the particular case belongs.”). See also Eberhart v. United States, $46 USS. 12, 16,

is that which delineates

 

1268, Cx. 403, 405 (2005) (the law of subject-matter jurisdiction
the “classes of eases" within a court's adjudicatory authority); Restatement (Second) of
Judgments § 11 emt. a (1982) (rules of subject-matter jurisdiction are those which invest

court with “authority to adjudicate a type of controversy"). Both this Court and the

 

litigants before it have, at times, failed to properly recognize this basic principle

 

58 For example, in Miller the defendants’ argument treated a filing deadline as a
“jurisdictional” rule. Miller, $42. Despite our previous opinions that justified this
characterization, we held that the filing deadline is not “jurisdictional” provision
because it does not delineate a class of cases falling within the district courts’
adjudicatory authority. Miller, $1 44-46. Likewise, in Pefia the defendant asserted that

he was bringing a “jurisdictional” claim when he challenged the legality of the district

 

ccourt’s sentencing decision. Pefta, §f]16-18. We held that the challenge was not a

 

“jurisdictional” claim because it did not dispute the court's ability to hear and determine
the case. Pea, $25. In doing so, we partially overruled State v. Moorman, 279 Mont.
330, 928 P.2d 145 (1996), upon which Pefia had understandably relied, because in that

‘case we erroneously treated a sentencing matter as a “jurisdictional” issue. Pefia, 25.

 

(In analyzing another issue, we erred in our treatment of the concept of jurisdiction, and

thus Pefia has been overruled in part on other grounds, as noted above. Davis, §23.)

20
159 Similarly, in State v. Garrymore, 2006 MT 245, § 10, 334 Mont. 1, $10, 145 P.3d
946, 1 10, the State misused the term “jurisdiction” in conjunction with a rule of appellate
review. In response, we noted that the State was actually following this Cours lead to
the extent we had erroneously indicated that one of our precedents—a decision regarding
appellate review of criminal sentences—is a source of “jurisdiction.” Garrymore, 10

is Article VIL, Section 2

 

1. 1. Inreality, we noted, the source of this Courts jurisdieti
of the Montana Constitution. Garrymore, 10 n. 1.

{60 Unfortunately, these and other cases demonstrate “the morass into which one is
led ... by loose talk about jurisdiction.” City of Yonkers v. United States, 320 U.S. 685,
695, 64 S. Ct. 327, 333 (1944) (Frankfurter, J, dissenting). Indeed, we have observed
that this Court has sometimes been “profligate” in its use of the term “jurisdiction.”
DeShields v, State, 2006 MT 58, $f 9-10, 331 Mont. 329, $9 9-10, 132 P.3d 540, §§.9-10
(partially overruling State ¥. Yorek, 2002 MT 74, $15, 309 Mont, 238, $15, 45 P.3d
872,415, where we erroneously stated that the question of whether a court possesses the
authority to impose a sentence is a jurisdictional issue). Thus, it is not surprising that
litigants and district courts have also misused the concept of jurisdiction by following our
precedents. Here, however, the District Court cited no authority in excluding the subject
‘evidence based on the concept of jurisdiction.

{61 There is no dispute as to whether the District Court has subject-matter jurisdiction

‘over this case. As noted above, Fortis has unsuccessfully disputed this jurisdictional

© Justice Scalia has coined the phrase “drive-by jurisdictional rulings” to describe incautious
treatment of jurisdictional law. Stee! Company v. Citizens for a Better Environment, 523 US.
83,91, 118. Ct, 1003, 1011 (1998)

21
issue before the state District Court, the federal District Court, and the Ninth Circuit
Court of Appeals. However, in the instant appeal Fortis agrees that the state District
Court does have subject-matter jurisdiction over this case. See §§ 44-45, supra. Thus, as
neither party disputes the court's authority to hear and adjudicate this case, we start from
the agreed-upon premise that the state District Court has subject-matter jurisdiction over
this case.

462. We reject the notion that a court with subject-matter jurisdiction over a particular

 

‘case may nonetheless lack ju over certain evidence presented in support of the
claims at issue. The law of subject-matter jurisdiction does not govern the types of
‘evidence properly considered in a case; rather, it designates the various classes of cases
within a court's adjudicatory authority. See eg. Eberhart, 546 U.S. at 16, 126 S. Ct. at
405. ‘Thus, in determining whether to exclude evidence from consideration on summary
judgment, the District Court was faced not with a jurisdictional issue, but with an
evidentiary issue. A court's jurisdiction over the subject-matter of a case—ic., the
authority to hear and adjudicate the action—necessarily entails the authority to decide all
‘evidentiary issues presented therein, see Pefa, $121, and such jurisdiction is not
‘diminished in any way by the nature of the evidence a party proffers in support ofa claim
‘or defense. Thus, as the District Court undisputedly had subject-matter jurisdiction over
this case, it was obligated to determine the evidentiary issues based on the applicable law,

hich we discuss below.

2
 

TIL Retitigation of the Prior Lawsuit
163 We now tum to the District Cout’s conclusion that evidence of the parties’ prior
dealings must be excluded based on the resolution of the Lorangs’ first lawsuit against
Fortis,

{64 As noted, Fortis attempted to persuade the District Court that the Lorangs’ use of
this evidence would lead to a re-ltigation of the previous lawsuit in conjunction with the
new claims in this case. The court initially rejected Fortis’ arguments and determined
that the Lorangs would be permitted to utilize this evidence. However, the court
subsequently changed course, relying on principles of res judicata and collateral estoppel.
{65 The doctrine of res judicata, which embodies the concept of “claim preclusion,”

bars the re-litigation of la

 

4 party has already had an opportunity to litigate.
Baltrusch v. Baltrusch, 2006 MT 51, $15, 331 Mont. 281, § 15, 130 P3d 1267, 15.
The doctrine of collateral estoppel, which embodies the concept of “issue preclusion,” is

1 form of res judicata which bars a party from re-litigating an issue, as opposed to an

 

entire claim, where that issue has been litigated and determined in a prior suit.

 

Battrusch, 15; State v. Diton, 2006 MT 235, $40, 333 Mont. 483, $40, 144 P.3d
783,440.
$66 Relying on these principles, the District Court concluded that because the Lorangs

hhad settled their prior suit against Fortis, evidence of the parties’ dealings prior to that

7 Although we need not substantively address it here, we note the trend toward clarifying these
concepts by the use of more precise terminology. See Northern Siates Power Co. v. Bugher, S25
N.W.2d 723, 727 (Wis. 1995); Baker v. General Motors Corp., 522 US, 222, 233 n. 5, 118 S.
Ct 657, 664. 5 (1998),

2B
suit could not be considered in the instant action, As a part of this reasoning, the court
held, as noted above, that it lacked “jurisdiction” over the evidence involved in the prior
suit. The court also determined that the Lorangs’ use of this evidence would lead to a
“recltigation” of the prior lawsuit. We disagree with this rationale,

{67 First, principles of claim preclusion and issue preclusion do not limit a court's
authority to adjudicate all evidentiary issues in an action where the court has subject-

matter jurisdiction. See $62, supra. Second, as our precedents indicate, the fact that

 

certain evidence was relevant in a previous suit does not establish that utilizing the
‘evidence in a subsequent suit leads to re-itigation of claims or issues previously litigated.
{68 For example, in Fadness v. Cody, 287 Mont. 89, 93-94, 951 P.2d 584, 587 (1997),
the plaintiffs brought consecutive lawsuits arising out of one real-estate transaction. The
first suit was an’action to quiet title, to foreclose on @ mortgage, and for fraud by the
purchaser, while'the second suit was an action for negligence and breach of fiduciary
duty by the real-estate agent and the closing agent. Fadness, 287 Mont. at 93-94, 96-97,
951 P.2d at $87-89. We held that collateral estoppel was not implicated in the second
suit because the issues raised for decision therein were different from the issues in the
first suit. Fadness, 287 Mont. at 96-97, 951 P.2d at $89 (As we stated, “{tJhe fact that
‘each action arises from the same transaction does not mean that each involve the same
issues.”). Thus, the plaintiffs’ second suit was not a re-ltigation of issues inthe first suit,
despite the fact that the evidentiary basis for both suits involved the same transaction

Fadness, 287 Mont. at 95-97, 951 P.2d at 588-89.

er
$69 We rendered a similar decision in Finsiad v. W.R. Grace & Co., 2000 MT

 

228, 4925-31, 301 Mont. 240, $91 25-31, 8 P.3d 778, 4425-31. There, the plain
supported their claim for punitive damages by utilizing some of the same evidence that
‘was involved in previous litigation against the defendant, Finstad, $30. We held that
this approach did not implicate collateral estoppel because the issues regarding punitive
damages in the subsequent case were not identical to those previously litigated.
Finstad, $f) 30-31. ‘Thus, the plaintiffs’ use of evidence that was relevant in the prior
litigation did not lead to a resitigation of the issues previously determined.

Finstad, $9 30-31

 

{70 We have also rendered a similar decision in the context of a UTPA action. In Graf
¥, Continental Western Ins. Co., 2004 MT 105, 46, 321 Mont. 65, $6, 89 P.3d 22, 46,
the plaintiff brought consecutive lawsuits, a negligence action and a UTPA action, and

the evidentiary basis for both suits involved a single automobile accident. The district

 

court ruled that the plaintiff's second suit, the UTPA action, was barred by collateral
estoppel because she was attempting to reclitigate the liability issue resolved in the first

suit. Graf, $20. We reversed, holding that collateral estoppel was not implicated

 

because the issues raised in each ease were not the same. Graf, {9 12, 21. Specifically,
the issue in the first case was whether the facts of the accident established lability on the
part of the other driver. Graf, $4 12-21. The issue in the second case was, inter alia,
‘whether the insurer violated the UTPA in light of its knowledge regarding the facts of the
accident. Graf, $f 12-21. Thus, because the issues raised in the two cases were different,

‘we held that the second suit did not constitute a re-litigation of the first suit, despite the

2s
fact that the evidentiary basis of both suits involved the facts of the accident. Graf, § 21

 

(noting “one does not have to ‘re-ltigate’ the question of liability [for negligence) in
pursuing the UTPA claim”).

{71 In addition to these cases, we have issued numerous decisions, in various contexts,
which demonstrate this principle—i.e,, that where the claims and issues raised in
consecutive suits are different, the subsequent use of evidence that was relevant in the

first suit does not constitute re-litigation.*

 

* For example, in Marriage of Stout, 216 Mont. 342, 348-51, 701 P-2d 729, 733-34 (1985),
‘where the petitioner instituted proceedings to modify 2 dissolution decree, we held that neither
res judicata nor collateral estoppel precluded the use of evidence from an earlier proceeding
regarding termination of parental rights, because the issues in the two proceedings were
different. Similarly, in Mater of Raymond W. George Trust, 1999 MT 223, $95, 42-50, 296
Mont. 56, 9] 5, 42-50, 986 P.2d 427, 9 5, 42-50, where the evidentiary basis ofthe sut involved
a trust which had already been the subject of two prior suits, we held that neither res judicata nor
collateral estoppel barred the partes from contesting their respective interests in the trust. We
stated: “While the subject mater ofthe litigation—the Raymond W. George Trust—is the same
1s the earlier litigation, the issue raised in this instant case isnot the same issue that was raised in
the earlier cases.” Matter of George Trust, §49. Therefore, the use of evidence regarding the
trust in subsequent litigation did not constitute re-litigation of the issues in the prior cases.
Matter of George Trust, 45-46, 48-50. Likewise, in Holoman v. 4-G's Plumbing & Heating.
Inc., 264 Mont. 432, 439-40, 872 P.2d 318, 322-23 (1994), where one set of events constituted
the evidentiary basis for aIitigant’s counter-claims in a frst suit and his claims in a second suit,
‘we held that collateral estoppel was not implicated because the issues raised in each suit were
different. See also Lane v, District Court, 2003 MT 130, §§ 19-37, 316 Mont. 55, 4 19-37, 68
P.3d 819, $F 19-37 (consecutive lawsuits between the same parties both involved the facts
surrounding a purchase agreement, but res judicata was not implicated); Scot v. Henrich, 283,
‘Mont, 97, 101-04, 938 P.2d 1363, 1366-68 (1997) (a prior federal-law action and a subsequent
state-law action both arose from the same incident wherein the plaintiff's husband was killed by
4 police office, but res judicata was not implicated); Lund v. State Comp. Mut. Ins. Fund, 263,
Mont. 346, 351-52, 868 P.24 611, 614 (1994) (evidence of a single on-the-job injury was the
subject of consecutive actions for workers’ compensation benefits, but neither res judicata nor
collateral estoppel were implicated); Anderson v. State, 250 Mont. 18, 19-22, 817 P.2d 699,
700-02 (1991) (consecutive legal actions both involved the facts surrounding the seizure and
suspension ofa driver's license, but collateral estoppel was not implicated); Estate of Watkins v.
‘Hedman, Hileman & Lacosta, 2004 MT 143, 94 31-34, 321 Mont. 419, $4 31-34, 91 P.3d 1264,
‘§9.31-34 (the evidentiary basis of consecutive lawsuits involved an improperly drafted trust, but
neither res judicata nor collateral estoppel were implicated). See also Slater v. Central Plumbing

 

 

26
{72 As in the above-noted cases involving consecutive legal actions, the claims and
issues raised in this suit are distinct from those in the Lorangs' prior suit against Fortis.
Specifically, the Lorangs’ first suit asserted claims for breach of contract, breach of
fiduciary duty, fraud, violation of the Americans With Disabilities Act, and violations of
the UTPA, inter alia. In support of these claims, the Lorangs alleged that Fortis
improperly denied Bonnie's 1998 claim, despite having previously admitted that the
policy provides coverage for replacement sockets. The Lorangs also alleged that Fortis,
knowing of Bonnie’s ongoing need for prosthetics coverage, had induced them to
“upgrade” their policy in 1996 without informing them that Fortis would thereafter
interpret the upgraded policy to preclude coverage for replacement sockets.

{73 Conversely, the Lorangs” instant action alleges wrongdoing by Fortis after the first
suit was settled. Based on this subsequent conduct, the Lorangs now allege that Fortis
hhas again breached the insurance contract and committed UTPA violations, in accordance
with its general practices regarding prosthetics claims. Yet, while liability in this case
depends on Fortis’ conduct in 2002, the parties’ prior dealings are inextricably linked to
the present claims. For example, one of the primary factual issues in this case is whether
Fortis conducted a reasonable investigation before denying Bonnie's 2002 claim. As
explained in more detail below, this issue requires an evaluation of the information Fortis
possessed when it denied the claim, such as the company’s documented inconsistent

representations regarding the policy, the company’s prior admissions that the policy

 

& Heating Co., 1999 MT 257, $4 27, 31, 297 Mont. 7, $] 27, 31, 993 P-2d 654, $9 27, 31; Phelan
Lee Blaine Enterprises, 220 Mont. 296, 299-303, 716 P.24 601, 602-05 (1986); and Stapleron
+, Fist Security Bank, 207 Mont. 248, 258, 675 P.2d 83, 89 (1983).

2
 

provides coverage for replacement sockets, and its payment of Bonnie’s prior claims
which were virtually identical to her 2002 claim, However, in presenting this
information from Fortis’ files, the Lorangs are not seeking to hold Forts liable for its
prior conduct reflected in these documents; rather, liability inthis case depends on Forts’
conduct in 2002, Thus, although the subject evidence was relevant in the prior litigation,
the jury’s consideration of this evidence in evaluating the Lorangs’ present claims does
not constitute relitigation of Fortis’ liability asserted inthe first lawsuit

474 We recognize thatthe Lorangs' second suit asserts some of the same legal theories
of recovery as were asserted in the first suit. We also recognize that both suits arose from

the parties’ ongoing relationship and Fo

 

tions under the insurance policy.
However, the two lawsuits represent distinct causes of action because each arises from
different instances of alleged wrongdoing. ‘Therefore, because the claims and issues to be
resolved in this case aré distinct from those resolved in the first case, the Lorangs’ present
use of evidence which was relevant in the prior suit does not constitute a re-ltigation of
that action. See e.g. Fadness, 287 Mont. at 95-97, 951 P.24 at 588-89; Finstad, $9 30-31;
Graf, 12-21.

{75 Indeed, re-tigation of the first suit would require the jury to determine whether
Fortis’ pre-2002 conduct satisfies the elements of the various claims asserted in the
Lorangs’ first lawsuit. Another type of re-litigation would involve asking the jury to
determine whether Fortis’ pre-2002 conduct satisfies the elements of the legal theories
asserted in the instant action. However, the Lorangs do not seck any such

determinations. Rather, as explained in more detail below, the Lorangs seek to utilize the

28
evidence of prior dea

 

igs to reveal the specific information Fortis possessed when it
investigated Bonnie's 2002 claim. Additionally, the Lorangs seck to utilize this evidence
to rebut Fortis’ defenses and to demonstrate that Fortis’ 2002 denial represents a general
practice with respect to these types of claims. Further, the Lorangs seek to utilize this
evidence to provide context for the instant claims by revealing the history of their
relationship with Fortis. As for this particular use of the evidence, we have previously
addressed such an approach in response to arguments of res judicata and collateral
estoppel

{76 In Berlin v. Boedecker, 268 Mont. 444, 446, 448, 452, 887 P.2d 1180, 1181-82,
1185 (1994), where the parties had entered into several investment transactions, the
plaintiffs brought claims against their investment agent for breach of contract and breach

based on the defendant's conduct in two of these

 

of fiduciary duty, inter
‘transactions. At trial, the plaintiffs relied on evidence which was introduced in a prior
lawsuit between the partes—a suit which arose from another transaction they had entered
into with the defendant. Berlin, 268 Mont. at 451-52, 887 P.2d at 1184-85. On appeal in
the second suit, the defendant argued that the plaintiffs’ subsequent use of the same
‘evidence constituted a re-litigation of the prior lawsuit, and that res judicata was therefore
implicated in the second suit. Berlin, 268 Mont, at 451-52, 887 P.2d at 1184-85. The
defendant also argued that collateral estoppel was implicated by this alleged re-ltigation
of the prior suit. Berlin, 268 Mont. at 453, 887 P.2d at 1185-86, We rejected these
arguments, noting that the two lawsuits were based on different instances of alleged

‘wrongdoing, and that different issues were raised in each case. Berlin, 268 Mont. at

29
452-53, 887 P.2d at 1185-86, We also stated that the subject evidence—evidence of the
parties’ various interactions—was introduced in the first suit “because it provided @
background on the parties’ series of transactions and their relationship.” Berlin, 268
Mont, at 452, 887 P.2d at 1185. Thus, the plaintiffs" use of the same evidence in the
452-54,

second suit did not constitute a re-ltigation ofthe first suit. Berlin, 268 Mont

   

887 P.2d at 1185-86,
477 Similarly here, the Lorangs seek to utilize the evidence of prior dealings not to
re-litigate the prior lawsuit or Fortis’ prior actions, but to explain the history of their

relationship with Fortis and thereby provide context for the instant claims. Furthermore,

 

the consecutive lawsuits in Berlin, the alleged instances of wrongdoing and the issues

raised in this case are different than those raised in the Lorangs” prior suit against Fort

 

‘Therefore, as with the Bertin plaintiffs’ use of the same evidence in consecutive lawsuits,
the Lorangs’ use of evidence regarding the history of their relationship with Fortis does
not constitute a re-litigation of the claims or issues raised in the first lawsuit. This
conclusion is consistent with our decisions in Fadness, Graf, Finstad, and numerous

other cases where we held that utilizing the same evidence in consecutive lawsuits did not

 

amount to reclitigation. See § 71 n. 8, supra,
{78 Accordingly, we hold that the District Court erred in applying concepts of claim
preclusion and issue preclusion to exclude the evidence of prior dealings between Fortis

and the Lorangs.

30
IV, Admissibility

{79 Having determined that evidence of the parties’ prior dealings is not barred from
consideration based on concepts of jurisdiction, claim preclusion, or issue preclusion, we
now tur to the governing law.

{80 The evidence properly considered on summary judgment depends on the

substantive legal pri

 

les applicable to the claims at issue. McGinnis v. Hand, 1999
MT 9, 16, 293 Mont. 72, 46, 972 P.2d 1126, 46, Within the context of this substantive
law, only admissible evidence may be considered. Carelli, 279 Mont. at 207, 926 P.2d at

760; Brown v. Merrill Lynch,

 

ierce, Fenner & Smith, Inc., 197 Mont. 1, 7, 640 P.24
453, 456 (1982), Although a particular piece of evidence is inadmissible for one purpose,
it may yet be properly considered on summary judgment if it is admissible for another
purpose. McDermott v. Carie, LLC, 2005 MT 293, $¥ 20-21, 329 Mont. 295, $9 20-21,
124 P.3d 168, $9 20-21. ‘Thus, evidence must be assessed in light of the purpose for
which itis offered. McDermott, $4 20-21.

JBI _ Here, the Lorangs assert claims for breach of contract by non-performance, breach
by anticipatory repudiation, and claims for three violations of the UTPA:
(1) mistepresentation of the insurance policy; (2) failure to conduct a reasonable
investigation before denying the claim; and (3) failure to act in good faith to effectuate a

prompt, fair, and equitable settlement when liability was reasonably clear” In

All statutory references in this Opinion are to the 2001 version of the Montana Code, which
‘was in effect during the time period relevant to this case, See Boettcher v. Montana Guaranty
Fund, 2007 MT 69, § 14, 336 Mont. 393, § 14, 154 P.34 629, 9 14.

 

31
conjunction with these causes of action, the Lorangs also assert that Fortis is liable for

 

compensatory and punitive damages.
482 The claim for breach of contract by non-performance is not at issue here, as Fortis
hhas not appealed the District Court's decision to grant partial summary judgment on

liability in favor of the Lorangs. With respect to the Lorangs’ claim of anticipatory

 

breach of contract, and their claim that Fortis misrepresented the insurance policy in
violation of the UTPA, we do not discuss the admissibility of evidence regarding the
parties’ prior dealings. ‘That is because, as explained below, we conclude that summary
judgment is properly rendered on these claims regardless of whether evidence of prior
dealings is considered. Therefore, we turn to the remaining claims.

A. Failure to Conduct a Reasonable Investigation Before Denial

 

83 The Lorangs claim that Fortis, in accordance with its general practices regarding
prosthetics claims, violated that portion of the UTPA which states that insurers may not
“refuse to pay claims without conducting a reasonable investigation based upon all
available information.” Section 33-18-201(4), MCA. As the plain statutory language

dictates, the issue of whether an insuret’s investigation was reasonable requires an

 

analysis of all information available to the insurer when it denied the claim, Therefore,
‘our precedents hold that the jury must consider, at a minimum, the insurer's own records.
Peterson v. The Doctors’ Co., 2007 MT 264, $33, 339 Mont. 354, $33, 170 P.3d
459, 4 33 (where an insurer has allegedly failed to conduct a reasonable investigation, the
UTPA action functions to “test the propriety of the actions taken or not taken by the

insurer in light of the information possessed by the insurer at the time it adjusted the

2
underlying claim”) (emphasis added); Graf, § 17 (to properly evaluate a UTPA claim, the
jury must be “aware of everything in the claims file,” such as “investigative reports,
valuations and correspondence”).

‘184 Here, apart from any other information Fortis may have been obligated to obtain,

the information most readily a

 

lable to Fortis was its own records, Those records
contain the evidence of the parties’ prior dealings which establish thet Fortis was
obligated to honor Bonnie's 2002 claim, as the company has conceded in this litigation.
‘Therefore, evidence of the parties’ prior dealings contained in Fortis’ own files, being

ppart of the information readily available to Fortis, is necessarily admissible for the

 

Jury's consideration of whether Fortis violated § 33-18-201(4), MCA. Peterson, $3:

Graf, 17.

{85 We note the implications of holding otherwise. If we held that Fe

 

records are

not admi

 

le, the jury would be presented with an inaccurate picture of the
circumstances in which Fortis made its decision regarding Bonnie’s 2002 claim, We
could not expect a UTPA trial to serve its intended purpose under such circumstances.
This approach would distort the jury's assessment of the insurer's knowledge and
conduct, and thereby unfairly prejudice either the plaintiff or the defendant, depending on
the nature of the excluded evidence. That is, exclusion would unfairly prejudice
claimants where, as in this case, the records demonstrate the insurer's obligation to pay
the claim at issue. Similarly, exclusion would unfairly prejudice insurers where the
records contain evidence demonstrating that the claims-investigation process was in fact

reasonable, In this latter scenario, the plaintiff would obviously obtain an unfair

3
advantage at the defendant's expense, In the same way, here, Fortis would obtain an
unfair advantage at the Lorangs’ expense if its own records were excluded from
consideration.

{86 As we have previously observed, the UTPA is designed to protect claimants

against insurers who would deny a claim without first conducting a reasonable

 

investigation. Peterson, 443; O'Fallon v. Farmers Ins. Exchange, 260 Mont. 233, 242,
859 P.2d 1008, 1014 (1993). We conclude the UTPA cannot provide such protection if
the insurer’s records are excluded from consideration. Nor can an insurer properly
explain a reasonable investigation without reference to its own records. Indeed, without
considering the insurer's own records, it is impossible to assess the reasonableness of the
investigation at issue, and therefore impossible to litigate the UTPA claim.

{87 Most important, however, is the plain language of the UTPA. The Legislature has
utilized unmistakable terms which establish that all information available to the insurer
must be considered. Section 33-18-201(4), MCA. Our decision in Peterson followed
this clear statutory language. In that case, both parties sought to exclude different
portions of information the insurer possessed during its consideration of the claim.
Peterson, $32, 36. The insurer successfully persuaded the district court to exclude
letters and correspondence it had obtained, and we held that this was reversible error
because it “prevented the [claimants] from establishing the full extent of the information
possessed by {the insurer] at the time it adjusted their claim.” Peterson, ${ 32-35
(emphasis added). Likewise, the claimants argued that other information gathered by the

insurer was inadmissible, and we rejected this argument because the evidence constituted

4
“a truthful representation of the information used in the (elaims-adjustment] process at
issue.” Peterson, § 39.
{88 The “public policy embodied in the UTPA [is that] insurer conduct is to be

retrospectively measured against the standards adopted by the Legislature,” and those

 

“UTPA standards focus on what the insurer knows at @ particular point in tim
Graf, $§ 17-18 (emphasis added). Consequently, the very essence of a UTPA claim “is
that an insurer, given [the] information available to it, has acted unreasonably in

adjusting a claim.” Peterson, $43 (emphasis added). Thus; simply put, the information

 

in an insurer's records is critical in determining whether a UTPA violation has occurred.

 

In some cases, this information will benefit the plaintiff, while in other cases it will
benefit the defendant. Either way, whether used as a sword or a shield, this evidence is
necessarily admissible in assessing the reasonableness of the investigation at issue."”
Peterson, $9 32-39; Graf, $9 17-18. Accordingly, we hold that the evidence of the
parties’ prior dealings contained in Forts’ records is necessarily admissible forthe jury's
consideration of whether Fortis failed to conduct a reasonable investigation in violation
of § 33-18-201(4), MCA.

B, Failure to Act in Good Faith in Settlement

{89 The Lorangs also claim that Fortis, in accordance with its general practices

regarding prosthetics claims, violated the UTPA’s provision that insurers may not

"© Of course, we recognize that some portions of an insurer's records may be inadmissible
‘pursuant to overriding rules regarding the work-product doctrine or the attorney-client privilege
See eg. Palmer v. Farmers Ins. Exchange, 261 Mont, 91, 105-20, 861 P.2d 895, 904-13 (1993);
Kuiper v, District Court, 193 Mont. 452, 456-63, 632 P.2d 694, 696-700 (1981). However, no
ssuch issues have been raised in this case.

35
 

neglect to attempt in good faith to effectuate prompt, fir, and equitable settlements of

 

claims in which liability has become reasonably clear.” Section 33-18-201(6), MCA.

 

Pursuant to the plain statutory language, this claim requires an initial determination of

 

‘whether Fortis’ libility was reasonably clear with respect to Bonnie’s 2002 claim. If that

 

question is answered in the affirmative, it must then be determined whether Fortis acted
promptly and in good faith given its clear responsibility to cover her claim. These
determinations, like the assessment of Fortis’ investigative efforts, must be made in light
of the information Fortis possessed when it considered Bonnie's 2002 claim.
Peterson, 4133 (where an insurer has allegedly failed to act in good faith in setting a
claim, the UTPA action functions to “test the propriety of the actions taken or not taken
by the insurer in light of the information possessed by the insurer at the time it adjusted
the underlying claim”) (emphasis added); Graf, $17 (to properly evaluate a UTPA claim,
the jury must be “aware of everythiig in the claims file,” such as “investigative reports,
evaluations and correspondence”). Here, Fortis’ records contain evidence of the parties’
prior dealings—ie, the protracted wrangling which prompted Fortis to repeatedly admit
‘coverage and pay Bonnie's previous claims which were virtually identical to her 2002
claim, ‘Thus, the evidence of these prior dealings, which Fortis possessed at the time it
‘was obligated to act in good faith regarding Bonnie's 2002 claim, is necessarily
admissible for the jury’s consideration of whether Fortis violated § 33-18-201(6), MCA.
C. Punitive Damages

{90 The Lorangs have also asserted a claim for punitive damages. Montana’s statutory

aw provides that punitive damages may be assessed against an insurer which has

36
committed the UTPA violations alleged here. Section 33-18-242(4), MCA; Dees ¥.
American Natl. Fire Ins. Co., 260 Mont, 431, 444, 861 P.2d 141, 149 (1993).

$91 To prevail on this claim, the Lorangs must prove that Fortis’ conduct amounts to
“actual fraud or actual malice” as statutorily defined for the independent purpose of

assessing punitive damages. Section 27-1-221, MCA."' Here, the Lorangs have alleged

 

that Fortis acted with actual malice, which is statutorily defined as follows
A defendant is guilty of actual malice if the defendant has
knowledge of facts or intentionally disregards facts that create a high
probability of injury to the plaintiff and:
(a) deliberately proceeds to act in conscious or intentional disregard
of the high probability of injury to the plaintiff; or
(b) deliberately proceeds to act with indifference to the high
probability of injury to the plaintiff.
Section 27-1-221(2), MCA. An “injury to the plaintiff” includes a deprivation of the
benefits of one’s property. Section 27-1-106(2), MCA.
$92 The statutory language demonstrates that, as with proof of the alleged UTPA
violation itself, proof of actual malice depends on what the insurer knew or disregarded
when it considered the subject claim. As we have explained above, the inquiry into what
Fortis knew requires an assessment of Fortis’ records which contain the history of the
parties’ prior dealings regarding the issue of prosthetics coverage. In other words, Fortis’
records bear directly on the relevant issue of whether Fortis had knowledge of facts or
intentionally disregarded facts (which the Lorangs assert is Fortis’ general business

practice) creating a high probability of depriving the Lorangs of benefits due under the

"Under this statute, “actual fraud” and “actual malice” are specifically defined for the purpose
of establishing liability for punitive damages, independent of how these concepts are defined in
other areas of the law.

7
insurance policy. Indeed, without considering the information in Fortis’ records, it would
bbe impossible to assess what Fortis knew or disregarded.

$93 Moreover, if the jury determines that punitive damages should be awarded here,
assessing a proper amount requires analysis of the reprehensiility of Fortis’
‘conduct, which is determined in part by considering whether this was an isolated
incident. Seltzer v. Morton, 2007 MT 62, $f 162-67, 174, 336 Mont. 225, $$ 162-67,
174, 154 P.34 561, $9 162-67, 174 (citations omitted). Here, the evidence of the parties’
prior dealings speaks directly to this issue. Accordingly, the evidence of the parties’ prior
dealings contained in Fortis records is necessarily admissible as to the Lorangs’ punitive
damages claim."®

D. Fortis’ Defense Strategy

 

{94 Evidence of the parties" prior dealings is also admissible with respect to certain

 

aspects of Fortis’ defense strategy. First, we note Fortis maintains that its denial of

Bonnie's 2002 claim was a mistake. ‘The record contains evidence that it was « mistake,
in the sense that this denial was inconsistent with Forts’ prior admissions of coverage.
However, the record also contains evidence that it was not a mistake in the sense that this
denial was consistent with Fortis’ general practices and previous attempts to withhold

© Of course, no punitive damages may be assessed to punish Fortis for its wrongful denials prior
to 2002, because Fortis liability for that conduct was litigated in the prior lawsuit. However,
Fortis’ prior conduct is nonetheless an important consideration on a limited basis—ie., a
recidivist may be punished more severely than a first-time offender where, as here, “the conduct
in question replicates the prior transgressions.” State Farm Mut. Auto. Ins. Co. v. Campbell, 538
US. 408, 423, 123 S. Ct. 1513, 1523 (2003). In such circumstances, the previously litigated
conduct cannot serve as a basis for determining whether punitive damages should be assessed,
but it may be considered to the extent it demonstrates a pattern of wrongdoing and therefore
suggests that “strong medicine is required to cure the defendants disrespect forthe law,” BMW
of North America, inc. v. Gore, 517 US. $59, 577, 1168. Ct 1589, 1599 (1996).

 

38
‘coverage for virtually identical claims. In any event, the issue of whether this denial was
in fact a mistake or part of the alleged general practice regarding prosthetics claims, bears
directly on the issue of Fortis’ alleged malice. As we have explained above, evidence of
the parties’ prior dealings is admissible for the Lorangs’ purpose of proving malice. For
the same reasons, this evidence is also admissible for the Lorangs’ purpose of rebutting
Fortis’ “mistake” defense. See Peterson, $932-35 (holding that the district court
‘committed reversible error by excluding information which the insurer possessed because
that prevented the claimants from, inter alia, rebutting the defenses raised by the insurer
in the UTPA tral).

495 Second, throughout these proceedings Fortis has characterized the Lorangs and
their counsel as unjustifiably litigious for “rushing” to file this lawsuit without first
attempting alternative measures to obtain the insurance benefits. Of course, the Lorangs
will be entitled to rebut this argument if itis made at trial. In this regard, evidence of the
parties’ prior dealings is highly relevant. ‘That is, it reveals that Bonnie had previously
attempted alternative measures to obtain coverage—ice., repeated requests for
reconsideration prior to the first lawsuit—only to be met with more denials. This
evidence also reveals that Fortis provided coverage for Bonnie’s 1994 claim and her 1996
claim only after intervention by the Insurance Commissioner, and that Fortis provided
coverage for Bonnie's 1998 claim only after she filed suit, Accordingly, we hold that to

the extent Fortis attempts to portray the Lorangs and theit counsel as unjustifiably

 

litigious in this matter, evidence of the parties’ prior dealings will be admissible for the

39
purpose of illuminating the circumstances which prompted the Lorangs to file this
lawsuit
E. Cautionary Instruction

{96 Finally, we again acknowledge Fortis’ concern with “reclitigation” of the prior

 

lawsuit, The issue to be litigated in this case is whether Forts is liable for its conduct in

 

denying Bonnie's 2002 claim, The Lorangs may not re-ltigate Fortis’ liability for its
pre-2002 conduct, as that issue was settled in the prior lawsuit. Yet, we have held that
evidence of the partis’ prior dealings, which includes Fortis’ pre-2002 conduct, is
admissible. Thus, we stress that this evidence of prior dealings is admissible for the
specific purposes we have described, as is necessary for the litigation of this action; the
primary purpose, of necessity, being to inform the jury of what information Fortis knew
and had access to when it denied Bonnié’s 2002 claim. This evidence may also be
admissible for other limited purposes, depending on subsequent developments in this
case. However, in no event may this evidence be used in a manner suggesting that Fortis
may now be held liable for its pre-2002 conduct. Again, liability for that conduct has
been settled, and evidence of that conduct is now admissible only for certain purposes
‘other than pre-2002 liability.

197 The underlying principle here is that admissibility depends on the purpose for
which the evidence is to be used—ie., evidence may be inadmissible for some purposes
and yet admissible for others. McDermott, $920-21. OF course, where a party is

properly permitted to utilize evidence that

 

inadmissible for certain purposes, there may

be a risk that the jury considers such evidence in an improper manner. This concern

40
arises in numerous scenarios, and we therefore have law directly on point. Rule 10 of
the Montana Rules of Evidence provides that where evidence is inadmissible for one
purpose and yet admissible for another, “the court, upon request, shall restrict the
evidence to its proper scope and instruct the jury accordingly.” Thus, because evidence
of the parties’ prior dealings is admissible only for certain limited purposes, Fortis is
entitled to a cautionary instruction in this regard."*

V. Conclusion

 

{98 In summary, evidence of the parties” prior dealings may not be used to re-ltigate
Fortis liability for its pre-2002 conduct. However, we conclude that such evidence is
admissible forthe various purposes described above, given the legal principles governing
the UTPA claims asserted here. It may also be admissible for other limited purposes,
depending on how the trial unfolds. Thus, we hold that the District Court erred in

exéluding this evidence from consideration on summary judgment.

{99 (3) Did the District Court err in ruling on the cross-motions for summary
Judgment regarding the Lorangs’ claim for anticipatory breach of contract?

 

{100 Under our statutory law, an insured may maintain an action for breach of contract
‘against an insurer, in addition to a UTPA action. Section 33-18-242(3), (6)(@), MCA
(barring all actions by insureds except claims for breach of contract, fraud, and UTPA
violations).

$101 Here, the Lorangs filed two claims for breach of contract. With thet first claim,

the Lorangs alleged that Fortis breached the contract by non-performance—i.e., by

' Tethe jury determines that punitive damages are warranted, such a cautionary instruction will
be particularly important. See § 93 n. 12, supra.

41
violating its then-present duty to cover Bonnie's 2002 claim for the cost of a replacement
socket, Fortis eventually conceded that it had wrongfully denied Bonnie's claim, and the
District Court granted partial summary judgment on liability in favor of the Lorangs as to
this claim, Fortis has not appealed the court’s ruling, and therefore this first breach-of-
contract claim is not at issue on appeal.

{102 Additionally, the Lorangs alleged that Fortis breached the contract by repu

 

ing
its future obligations—i.., by repudiating its duty to cover Bonnie's future claims for
replacement sockets. Our precedents recognize this as a claim of breach by anticipatory
repudiation, or “anticipatory breach of contract.” STC, Inc. v. City of Billings, 168 Mont.
364, 370-72, $43 P.2d 374, 377-78 (1975); Chamberlin v. Puckett Construction, 277

Mont. 198, 202, 921 P.2d 1237, 1239 (1996). The Lorangs moved for partial summary

 

Judgment on liability as to this claim, and Fortis then filed a cross-motion for summary
Judgment. The District Court considered these motions together and issued an order in
which it denied the Lorangs’ motion and granted Fortis’ motion. On appeal, the Lorangs
argue that the court erred in ruling on these cross-motions.

{103 As we have held, summary judgment is appropriate where there are no genuine
disputes as tothe facts which are material toa claim. LaTray, 4 14, Here, nether Fortis
nor the Lorangs raise any disputes as to the material facts regarding this claim of
anticipatory breach. Rather, both parties argue that they are entitled to summary
judgment based on the application of law to the undisputed facts. Similarly, we perceive
no disputes regarding material facts which would preclude summary judgment, and we

therefore turn to the applicable law.

a
{104 An anticipatory breach of contract is @ breach which occurs before the
contractually-established time for performance has arrived. Chamberlin, 277 Mont. at
202, 921 P.2d at 1239. This type of breach is committed when a party repudiates a
contractual duty. Chamberlin, 27 Mont, at 202, 921 P.2d at 1239. We have held
that “repudiation” in this context is “a positive statement to the promise or other
person having a right under the contract, indicating that the promisor will not or cannot

substantially perform his contractual duties.” STC, 168 Mont. at 374, $43 P.2d at

 

379 (citation and internal quotation marks omitted). Because repudiation creates an

immediate right of action for breach of contract even though the time for performance has
not yet arrived, we have set a high bar for the type of “positive statement” that
qualifies as a repudiation.'* STC, 168 Mont. at 372-74, 543 P.2d at 378-79. A mere
expression of intent will not suffice. S7C, 168 Mont. at 374, $43 P.2d at 379. Rather,
repudiation must appear “only in the clearest terms"—that is, it must be absolute and

unequivocal.'* STC, 168 Mont. at 373-74, 543 P.2d at 379.

4 There isa distinction between a denial of lability based on factual issues, and a repudiation of
‘ contractual duty, It is important “to remember what repudiation is not. A denial that the futs
entitle insured to recovery under the policy is not a repudiation.” Continental Casualty Co. .
Boerger, 389 S.W.24 566, 568 (Tex.Civ.App. 1965) (citation omitted).

"5 Repudiation may also be accomplished by a party’s voluntary act that makes it impossible for
him or her to perform as promised. Arthur L. Corbin, Corbin on Contracts vol. 4, § 959, at 856
(West 1951)

® See also Corbin on Contracts vol. 4, § 959, at 853 (“a definite and unconditional repudiation

is a breach of the contract, creating an immediate right of action”); E. Allan Famsworth,

Farnsworth on Contracts vol. Il, § 8.21, at 535-36 (2d ed., Aspen 1998) (10 constitute a
repudiation, the statement must be “sufficiently positive to be reasonably understood as meaning
thatthe breach will actually occur”; a party's “expressions of doubt as to its willingness or ability
to perform do not constitute @ repudiation”). See also United California Bank v. Prudential In.
Co,, 681 P.2d 390, 431 (Ariz.App. 1983) (A mere expression of “disagreement over the terms of
‘8 contract is not itself an anticipatory repudiation, nor is a mere offer to perform on terms other

 

a
{10S With these principles in mind, we turn to the parties arguments.
$106 First, Fortis takes issue with the fact that the Lorangs seek to hold the company in
anticipatory breach of the insurance contract, with respect to the provisions regarding
prosthetics coverage, while continuing to treat the rest of the contract as remaining in
effect. Fortis argues that the Lorangs are barred from bringing this claim because they
allege that the company repudiated only part of its duties under the contract, and Montana
law does not recognize an action for “partial anticipatory breach.” In support of this

argument, Fortis cites STC, Ine. v. City of Billings, wherein we stated that a repudiation

 

‘must be entire, absolute and unequivocal to support an action for anticipatory breach.”
STC, 168 Mont, at 373, $43 P.2d at 379. Based on this language, Fortis argues that a
claim for anticipatory breach may be maintained only where a party repudiates the
“entire” contract, The District Court rejected this argument, and we do also.

{107 Under Fortis’ proposed approach, a party to a contract could repudiate its duty
‘under one of several material provisions in the agreement, and yet remain immune from a
claim of anticipatory breach because it has not repudiated the entirety of its contractual
duties, We conclude that this approach would conflict with the doctrine of anticipatory
breach as it has been developed in Montana.

$108 In addition to the language of STC, Ine. v. City of Billings which Fortis cites, that
decision also states that a repudiation oceurs where the promisor makes “a positive

statement ... that the promisor will not or cannot substantially perform his contractual

 

than those contained in the agreement .... Otherwise, contracting parties would be constantly
appearing in court with anticipatory repudiation claims.”)

“4
duties.” S7C, 168 Mont, at 374, 543 P.2d at 379 (emphasis added, citation and internal
‘quotation marks omitted). This holding reflects our decision in McCaull-Dinsmore Co. v.
Jackson, where we recognized that a repudiation may occur when a party renounces “the
contract in whole or in part.” McCaull-Dinsmore Co. v. Jackson, 57 Mont. $55, 560, 189
P. 71, 772 (1920). In that case, the buyer did not repudiate all of its obligations under
the contract, but this Court held the buyer's statement that it would not adhere to a
specific payment provision in the agreement “amounted to a repudiation of a material
provision of the contract.” McCaull-Dinsmore, 57 Mont. at $62, 189 P. at 772 (emphasis
added).

{109 Although our decision in STC, Inc. v. City of Billings states that a repudiation
“must be entire, absolute and unequivocal to support an action for anticipatory breach,”
‘we used the term “entire” there to describe the categorical nature of a statement which
‘constitutes a repudiation. STC, 168 Mont. at 373, 543 P.2d at 379. Neither that case nor
any of our other decisions indicate, as Fortis contends, that a party must repudiate the
“entire” contract in order to commit an anticipatory breach. Thus, we reject Fortis’
argument.

{110 Forts also argues that itis entitled to summary judgment because its denial letter
to the Lorangs in 2002 did not constitute a repudiation of its duty to provide coverage for
Bonnie's future replacement sockets. Given the strict criteria for establishing a claim of
anticipatory breach, we agree with this argument,

{111 In response to Bonnie's 2002 claim, Fortis sent the Lorangs a denial leter which

states that the policy does not provide coverage for such claims. Standing alone, this

4s
statement does amount to a categorical denial of liability. However, the letter also stated
that Fortis would conduct a review of the claim determination upon request. The letter
further provided instructions as to how the Lorangs could initiate the review process, and
stated that Fortis would notify the Lorangs of the result of the review and explain its
reasoning,

{WIZ As we have held, anticipatory breach is a repudiation of a contractual duty before
the time set for performance, and such breach occurs only where a party makes an
absolute and unequivocal statement repudiating its contractual duty. STC, 168 Mont, at
370, 373, $43 P.2d at 377, 379. We conclude that Fortis’ letter, taken as a whole, does
not meet the criteria for repudiation because it is not absolute and unequivocal. By
expressly offering to reconsider its determination, Fortis left open the possibility that it
‘would honor its contractual obligation to cover Borinie’s future claims for replacement
sockets, ‘Thus, even when viewing the facts in a light most favorable to the Lorangs,
LaTray, $15, we conclude that Fortis’ letter was equivocal, and it therefore falls short of
‘the unconditional type of statement required to establish a repudiation."”

{113 The Lorangs argue we should consider the evidence that Fortis has denied each of
Bonnie's claims for replacement sockets, in 1994, 1996, 1998, 2002, and 2003, and has
‘complied with the contract only after intervention by the Insurance Commissioner or after
"By contrast, the insurer in Continental Casualty Co. didnot offer to reconsider its decision to
cease paying benefits, The insurer there committed anticipatory breach because its actions
suliciently demonstrated “a fired intention to abandon, renounce, and refuse to perform the
contract.” Continental Casualty Co., 389 S.W.2d at S68-69 (emphasis added). See also Group
Life & Health ins. Co. v. Turner, 620 SW 2d 670, 673-74 (Tex.Civ.App. 1981) (The insurer
repudiated its contractual duty, although intially expressing willingness to reconsider its denial

of lability, the insurer thereafter refused to reconsider “and finally told {the claimaat] to quit
calling because his file was close.”

 

46
being sued. This evidence, the Lorangs argue, demonstrates that Fortis will never
Voluntarily honor its contractual duty. However, while the Lorangs may be correct in this
argument, the evidence of Fortis’ continual disregard of its contractual obligations does
not change the equivocal nature of the letter it issued in 2002, Whatever can be said of
Fortis’ prior conduct, the letter it issued in response to Bonnie's claim—even when
viewed in a light most favorable to the Lorangs—simply was not an absolute and

‘unequivocal repudiation

 

{114 In summary, the material facts are not in dispute, and therefore summary judgment
is the appropriate means of adjudicating the Lorangs’ claim of anticipatory breach."
LaTray, § 14. We conclude that Fortis is entitled to summary judgment because its letter
denying Bonnie's 2002 claim does not constitute an absolute and unequivocal repudiation
of the company's future contractual obligations regarding replacement sockets. Thus, we
hold that the District Court properly denied the Lorangs’ motion for partial summary
judgment on liability and properly granted Fortis’ motion for summary judgment.

{115 (@) Did the District Court err in ruling on the cross-motions for summary
judgment regarding the Lorangs’ three UTPA claims?

 

{116 As noted, the Lorangs brought three UTPA claims and filed a motion for partial

  

summary judgment on liability as to each one, Fortis then filed a cross-motion for

summary judgment on each of these claims. ‘The District Court denied the Lorangs’

"Although the parties dispute whether the denial was a mistake or an intentional act, that issue
is not relevant in determining whether Fortis repudiated its contractual duty. Chamberlin, 277
‘Mont. at 204-05, 921 P2d at 1241 (the intent underlying a party's statement is irrelevant in
determining whether the statement constitutes @ repudiation) (citation omitted), See also
Farnsworth on Contracts vol. I, § 8.21, at 539.

a
motion and granted Fortis’ motion. Before analyzing these claims, we note that our
statutory law provides the insurer with an affirmative defense whereby it may avoid
liability in a UPA action if it “had a reasonable basis in law or in fact for contesting the
claim or the amount of the claim, whichever is in issue.” Section 33-18-242(5), MCA;
Redies v. Attorneys Liability Prot. Soe., 2007 MT 9, § 28, 335 Mont. 233, $28, 150 P.3d
930, $28. Here, Fortis does not argue that it had a reasonable basis in law or fact for
contesting Bonnie's claim. Additionally, Fortis admits that it breached the insurance
‘contract by denying the claim,

1. Misrepresentation

{117 The UTPA prohibits insurers from misrepresenting the coverage provisions of an
insurance policy. Section 33-18-201(1), MCA. Where an insurer violates this
prohibition, the claimant may bring an independent cause of action to recover actual
damages. Section 33-18-242(1), MCA. Additionally, in accordance with the
Legislature's express purpose of prohibiting unfair and deceptive claims-adjustment
practices, the UTPA provides that punitive damages may be assessed against an insurer
for such a misrepresentation. Sections 33-18-101; 33-18-242(4), MCA.

{118 Here, the Lorangs allege that Fortis misrepresented the insurance policy when, in

 

response to Bonnie's 2002 claim, it issued a letter to the Lorangs stating that the policy

does not provide coverage for the cost of replacement sockets. The Lorangs moved for

 

partial summary judgment on liability as to this claim, and Fortis then filed a cross-

‘motion for summary judgment, The District Court considered these motions together and

48
issued an order in which it denied the Lorangs’ motion and granted Fortis’ motion. On
appeal, the Lorangs argue that the court erred in ruling on these eross-motions.

{119 As we have held, summary judgment is appropriate where there are no genuine
disputes as to the facts which are material to a claim, LaTray, § 14. Here, neither Fortis

nor the Lorangs

 

ise any disputes as to the material facts regarding this claim. Rather,
both parties argue that they are entitled to summary judgment based on the application of |
law to the undisputed facts. Similarly, we perceive no disputes regarding material facts
which would preclude summary judgment, and we therefore proceed to the merits of this
claim,

1120. We begin by noting the central factual matters which are undisputed, Fitst, itis

undisputed that the Lorangs’ policy provides coverage for the cost of medically-

 

necessary replacement sockets. Second, it is undisputed that Fortis stated in its leter to

the Lorangs that the policy does not provide such coverage. Third, it is undisputed that

 

Fortis did in fact misrepresent the policy with this letter. ‘The Lorangs argue, quite

 

simply, that these undisputed facts entitle them to partial summary judgment on liability.
Fortis disagrees, arguing that further analysis is required.

{121 While not disputing that it misrepresented the policy, Fortis nonetheless argues
that it is entitled to summary judgment because its writen statement to the Lorangs does
not constitute the specific type of misrepresentation prohibited by the UTPA. In support
of this argument, Fortis first contends that “some level of intent to misrepresent is

required for a violation of the statute.” Thus, Fortis argues that because it did not actually

intend to misrepresent the policy, its statement to the Lorangs does not violate the UTPA.

49
‘Second, Fortis contends that an insurer can “refute” an alleged intent to misrepresent by
paying the subject claim after the misrepresentation occurs. Thus, because it ultimately
paid Bonnie's 2002 claim, Fortis argues that the Lorangs cannot prevail on this claim
even if they could prove an intentional misrepresentation. Third, Fortis contends that an
insurer's misrepresentation of policy provisions does not violate the UTPA if the
claimant knows the statement is false. Thus, Fortis argues that because the Lorangs knew
they were entitled to coverage pursuant to the policy, the statement was not a
misrepresentation under the UTPA.

{122 Upon these contentions, Fortis argues that it is entitled to summary judgment
because its statement to the Lorangs does not amount to the specific type of
iisrepresentation prohibited by the UTPA. As Fortis puts it, the statement at issue is not
an “actionable misrepresentaion.”

123 The District Court adopted Fortis’ argument that a misrepresentation must be
intentional in order to violate the UTPA. The court also agreed that Fortis’ conduct after
it sent the letter, and after the Lorangs filed this suit, is relevant in determining whether
Fortis had misrepresented the policy in violation of the UTPA. Thus, the court held,

without any supporting analysis or citation to authority, that because Fortis ultimately

 

paid Bonnie's claim “the evidence refutes any intent of Fortis to misrepresent the policy

 

provisions.” Finally, the court held that “any wrong by Fortis was promptly cured.”

$124 Fortis’ arguments boil down to a three-part set of rules which Fortis argues should

 

‘govern claims of misrepresentation under the UTPA: (1) the plaintiff must prove that the

insurer intended to misrepresent the policy; (2) the plaintiff cannot demonstrate such

50
intent if the insurer subsequently pays the claim; and, (3) in any event, an insurer's
‘isrepresentation is not actionable under the UTPA if the plaintiff knows ofthe falsity of |
the statement. We conclude that these proposed rules conflict with the UTPA’s plain
language.

125. First, with respect to Forts’ argument regarding the issue of intent, we note that
the UTPA provision at issue, § 33-18-201(1), MCA, simply states that an insurer may not
“misrepresent pertinent facts or insurance policy provisions relating to coverages at
issue.” This language does not distinguish between intentional and unintentional
misrepresentations; rather, it prohibits misrepresentations categorically. Thus, we have
never held that a claimant must prove any level of intent in order to demonstrate thatthe
insurer misrepresented the policy. Yet, Fortis would have us “interpret” this language to
‘mean that “some level of intent to misrepresent is required for a violation of the statute.”
Fortis fails to explain exactly what “level of intent" we should read into the statute. More
importantly, however, Fortis cites no authority and provides no justification for its
argument.

$126 In fact, the “interpretation” Fortis argues for is nothing short of an outright
revision of the statute, That is, Fortis would have us insert an “intent” element into the
statute, thereby immunizing insurers from liability for any mistepresentation which is not
proven to have been intentional, and consequently diminishing the protection which the
UTPA provides for claimants, We cannot alter the statute in this manner, as “one of the
most basic precepts governing this Court's function” is the long-standing mandate that

‘we must not insert into a statute what the Legislature has omitted. Saucier v.

31
MeDonald’s Restaurants of Montana, 2008 MT 63, 4170, 342 Mont. 29, 470, 179 P.3d
481, $70 (citing §1-2-101, MCA). Simply put, we have no business meddling withthe
statute as Fortis advocates."*

127 Whether the UTPA’s prohibition against misrepresentation should have an

 

“intent” clement is not an issue for us to resolve. The Legislature has resolved that ise
with the plain statutory language that categorically prohibits misrepresentations.
Pursuant to this plain language, a claim of misrepresentation under the UTPA is
determined by an objective analysis of the substance of the representation at issue,
‘without regard to whether it resulted from an intentional effort to mislead, carelessness,
incompetence, or anything else. Thus, we reject Forts’ argument that “some level of
‘intent to misrepresent is required for a violation of the statute.”””

128 As noted, Fortis also argues that an insurer can “refute” an alleged intent to

misrepresent by paying the subject claim after the misreprescittation occurs. We reject

' Similarly, in State v. Hudson, 2005 MT 142, 327 Mont. 286, 114 P.34 210, we refused 10
insert an “intent” element into statute where the Legislature had omitted such an element. With
respect to the statutory law which defines the offense of driving while under the influence of
‘alcohol or drugs, § 61-8-401, MCA, we stated: “the offense of driving while under the influence
remains a strict liability offense that doesnot require an intent element and we will not add one
here.” Hudson, 15.

2° With respect tothe issue of intent, the Lorangs argue that the misrepresentation here was not a
mistake because Fotis denies claims for replacement sockets as a matter ofcourse. We need not
address this argument here, as a response to Fortis argument, because the issue of intent is not
relevant in determining whether 2 misrepresentation occurred. We note, however, that the
LLorangs’ argument goes to their broader assertion that Forts’ conduct in this ease represents its
general business practice. That issue is appropriately considered at tril with respect to the
LLorangs' claim under § 33-18-201(6), MCA, and their claim that Fortis acted with actual malice
(although the Lorangs are not required to prove a general business practice in order to prevail on
their UTPA claims, §33-18-242(2), MCA). For the limited purposes of our summary-judgment
analysis here, however, the issues of mistake and general business practice are not relevant
determining whether Fortis misrepresented the policy in 2002,

 

82
this argument because an insurer's intent is simply irrelevant under § 33-18-201(1),
MCA. Moreover, an insurer’s conduct after an alleged misrepresentation does not have
any logical connection to the determination of whether a misrepresentation actually
‘occurred. OF course, subsequent conduct may be relevant to the issue of damages, as
Fortis argues, particularly where the insurer takes prompt remedial action, However,
subsequent conduct cannot change the nature of the previously rendered statement.

Indeed, if an insurer could “cure” a misrepresentation as the District Court concluded,

 

insurers could misrepresent at will, turning away untold numbers of claimants, and yet
escape liability even when a misrepresentation is discovered, by simply paying the claim
it was obligated to pay in the first place. This would render the UTPA’s prohibition
ineffective. Thus, we reject the notion that an insurer’s subsequent conduct has any
bearing on the issue of whether it misrepresented the insurance policy.

1129. Fortis also argues that an insurer's misrepresentation of policy provisions is not an

” if the claimant knows the statement is false. In support of

 

“actionable misrepresentatic
this argument, Fortis asserts that we should treat UTPA claims for misrepresentation, in
part, like tort claims for negligent misrepresentation, one element of which is that “the
plaintiff must have been unaware of the falsity of the representation.” Osterman v. Sears,
Roebuck & Co., 2003 MT 327, § 32, 318 Mont. 342, 4 32, 80 P.3d 435, 4.32. Fortis also
supports this argument by asserting that Montana has in some circumstances “adopted the
doctrine of ‘inquiry notice’ to preclude various claims of misrepresentation where the

plaintiff had knowledge that put them on notice.” Therefore, because the Lorangs knew

3
of the falsity of Fortis’ statement regarding prosthetics coverage, Fortis argues that its
misrepresentation ofthe policy does not violate the UTPA.

1130 Fortis cites no authority supporting its argument that we should import concepts
from these common-law doctrines into the UTPA. It is critical to recognize that a claim
for misrepresentation under the UTPA is an independent, statutorily-created cause of

action under § 33-18-242(1), MCA, which is distinct from common-law claims of

 

misrepresentation. Moreover, the UTPA is perfectly clear; it categorically prohibits
insurers from misrepresenting coverage provisions in an insurance policy. Section

33-18-201(1), MCA. It contains no exception for misrepresentations made to claimants

 

who accurately comprehend the meaning of the policy; rather, it is @ protection for all
claimants, regardless of their level of knowledge regarding the policy. Nor does the
UTPA suggest that a “misrepresentation” is to be defined with reference to the claimant's
state of mind.

{131 Pursuant to the UTPA’s plain language, a claim of misrepresentation is determined

by an objective analysis of the substance of the representation at issue. Thus, because the

 

claimant’s knowledge is irelevant in analyzing the substance of the insurer's statement,
it is irelevant in determining whether the insurer rendered a mistepresentation, Yet,
Fortis would have us interpret the UTPA's prohibition against misrepresentations in @
way that makes the claimant's knowledge relevant, thereby immunizing insurers from

 

ity for a misrepresentation where the claimant is fortunate enough to recognize the

deception, Under Fortis’ proposed approach, § 33-18-201(1), MCA, would only prohibit

54
‘misrepresentations to certain claimants, Adopting this approach would effectively revise
the statutory language at issue, and we are not at liberty to do so, Section 1-2-101, MCA.
$132. The statutory prohibition against misrepresentations reflects the fact that, given the
complexity of insurance policies, an insurer can easily mislead even well-informed
claimants as to the meaning of policy provisions. Thus, under § 33-18-201(1), MCA, the
insurer's duty is simply to be truthful in its representations regarding the coverage
provisions of an insurance policy. The claimant's knowledge regarding the policy is
utterly irrelevant in determining whether the insurer has violated its duty, Thus, we reject
Fortis’ argument that an insuret’s misrepresentation of policy provisions is not an
“actionable misrepresentation” if the claimant knows the statement is fase.

4133 In summary, the material facts are not in dispute, and therefore summary judgment
is the appropriate means of adjudicating this claim. LaTray, 414. It is undisputed that
Fortis misrepresented the prosthetics provisions of the insurance policy, just as it had
done before on several occasions, and we reject Fortis’ argument that this was not an
“actionable misrepresentation.” Thus, we conclude that the Lorangs are entitled to partial

Accordingly, we hold that the District Court erred in

 

summary judgment on li
denying the Lorangs’ motion for partial summary judgment and in granting Fortis’
motion for summary judgment on this claim,

Il, Failure to Conduct a Reasonable Investigation Before Denial

$134 The UTPA prohibits insurers from denying claims without first “conducting @
reasonable investigation based upon all available information.” Section 33-18-201(4),

MCA. Where an insurer violates this provision, the claimant may bring an independent

35
cause of action to recover actual damages. Section 33-18-242(1), MCA. Additionally, in
accordance with the Legislature's express purpose of prohibiting unfair and deceptive

claims-adjustment practices, the UTPA provides that punitive damages may be assessed

 

against an insurer for failing to conduct a reasonable investigation before denying @
claim, Sections 33-18-101; 33-18-242(4), MCA.

4135 Here, the Lorangs allege that Fortis violated the UTPA by failing to conduct &
reasonable investigation based on all available information before denying Bonnie's 2002
claim, The Lorangs moved for partial summary judgment on liability as to this claim,
and Fortis then filed a cross-motion for summary judgment. The District Court
considered these motions together and issued an order in which it denied the Lorangs’
motion and granted Fortis’ motion. On appeal, the Lorangs argue that the court erred in
ruling on these cross-motions.

1136 As we have held, summary judgment is appropriate where there are no genuine
disputes as to the facts which are material to claim. LaTray, 414. Here, the sole issue
is whether Fortis’ investigation of Bonnie’s 2002 claim was reasonable, Section
33-18-201(4), MCA. Reasonableness is generally a question of fact for the jury to
resolve, See Redies, § 30 (discussing the factual determination of whether an insurer had
1 reasonable basis for denying a claim). However, questions of fact may be determined
as a matter of law on summary judgment if “reasonable minds could reach but one
conclusion” on the issue. Seeley v. Davis, 284 Mont, $17, 523, 946 P.24 119, 122 (1997).
See also Redies, $35 (“while the assessment of reasonableness generally is within the

province of the jury... reasonableness is a question of law for the court to determine

56
when it depends entirely on interpreting relevant legal precedents and evaluating the
insurer's proffered defense under those precedents”); Craig v. Schell, 1999 MT 40, § 12,
293 Mont. 323, $12, 975 P.2d 820, 4 12 (in a negligence action, breach of duty and

‘causal

 

are factual issues which are ordinarily not susceptible to summary judgment;
however, such factual issues are appropriately determined as a matter of law on summary
Jjudgment where reasonable minds could reach but one conclusion).

$137 Here, both Fortis and the Lorangs agree that there are no genuine issues of
material fact for a jury to resolve, Both parties contend that the reasonableness of the
investigation is appropriately determined as a matter of law. We agree.

{138 We begin by noting the undisputed facts which are material to this claim. Fortis
maintains an extensive file which chronicles its prior dealings with the Lorangs. This file
contains a record of each of Bonnie's prior claims for replacement sockets, Fortis’ denials

of those claims, the Insurance Commissioner's intervention on Bonnie's behalf, and

 

Fortis’ ultimate admissions of liability and eventual payment of these claims, among
other things. It also contains records regarding the Lorangs’ first lawsuit against Fortis

and the subsequent settlement,

 

$139. These records were readily available to Jeanne Pehoski (“Pehoski”), the Fortis
‘adjuster who handled Bonnie's 2002 claim. Pehoski did not review all these records, but

she did locate a note which was placed in the Lorangs’ file after the previous lawsuit was

37
settled, This note states that Bonnie’s claims for replacement sockets are not to be denied

   

on the basis that such coverage is not available under the policy.
{140 Pehoski testified that upon discovering this note she determined Bonnie's claim
should be paid, and therefore prepared to take appropriate steps to that end. However,
Pehoski also testified that she was then called away from her desk, and consequently
forgot her determination that the claim should be paid. When she returned to her desk,
Pehoski testified, her thought process was as follows: “I came back, and I was on a
completely different wavelength. And I looked atthe claim. And I said to myself, well,
why was I going to pay that? These are denied. We don’t pay these. And I just denied
it” At another point in her deposition, Pehoski testified that she did not immediately
deny the claim, but proceeded to review a claims manual before issuing the denial. In
any event, itis undisputed that, after she forgot the pertinent information, Pehoski ended
the investigation without conducting any further review of the Lorangs’ records.”

{141 Fortis then admittedly breached the insurance contract when it issued the letter of,
denial stating that the Lorangs’ policy does not provide coverage for the cost of

replacement sockets. As noted, the District Court granted partial summary judgment on

2 This language reflects the fact that the Lorangs" policy provides coverage for replacement
sockets only when they are medically necessary. Here, as noted, there has never been any
dispute as to medical necessity regarding Bonnie's claim. As Dr, Robinson concluded,
“fBonnie} has developed a chronic sore .... Socket replacement is medically necessary to
prevent further stump injury and loss of ambulation.”

Pehoski’s testimony indicating that Fortis regularly denies replacement-socket claims, despite
its admissions regarding coverage, touches on the issue of Fortis’ general practice which the
Lorangs have raised on appeal, However, for the limited purposes of our summary-judgment
analysis here, we need not address that issue.

38
liability in favor of the Lorangs with respect to their claim that Fortis breached the
‘contract by non-performance, and that issue has not been appealed by Forts.

{142 Fortis argues that it conducted a reasonable investigation because Pchoski did in
fact locate the pertinent information, and the denial was merely a mistake which occurred
when she forgot that information. Additionally, Fortis argues that it cannot be held liable
under the UTPA because it ultimately paid Bonnie's claim,

143. The Lorangs argue that Forts failed to conduct a reasonable investigation because
Pehoski did not conduct any additional review of the Lorangs’ records after forgetting the
information she initially discovered, Additionally, the Lorangs argue that Forts cannot
utilize a “mistake” defense to avoid liability in this action. Finally, they argue that Fortis’
eventual payment of the claim does not “cure” its failure to conduct a reasonable _
investigation,

{144 The District Court failed to adequately address the Lorangs’ claim. First, the court
did not analyze whether there were factual issues which would preclude summary
Judgment. Second, the court did not determine whether Fortis’ investigation was
reasonable or unreasonable as a matter of law. Instead, the court addressed a tangential
aspect ofthe parties’ arguments, and held that Fortis’ wrongful denial does not prove that
its investigation was unreasonable. The court then proceeded to state that “any wrong by
Fortis was prompily cured.” Upon this reasoning, and without citation to any legal
authority, the court granted summary judgment in favor of Forts,

{145 First, we note Fortis stresses that its denial was a mistake which, as the District

Court held, was “cured” by the subsequent payment of Bonnie's claim. However, neither

9
 

the “mistaken” denial nor Fortis’ conduct after the denial are at

 

sole issue in a claim under § 33-18-201(4), MCA, is whether the investigation itself was
objectively reasonable.

{146 We have previously dealt with arguments which failed to recognize this principle.
For example, in Lough v. Insurance Co. of North America, 242 Mont. 171, 174-75, 789
P.2d 576, 578 (1990), where the-plaintiff alleged inter alia that the insurer violated the
UTPA by failing to conduct a reasonable investigation, the district court granted
summary judgment in favor of the insurer “on the basis that (the plaintiff} failed to

establish reasonably clear

 

ty” with respect to the underlying claim. We reversed,
stating: “By adopting {the insurer's) argument and affirming the District Cour, this
Court would be ignoring the plain meaning of the statute and imposing a condition
precedent not contemplated by the legislature.” Lough, 242 Mont. at 173-74, 789 P.2d at
578, We then recited the statutory language which creates an independent cause of action

solely for an unreasonable investigation, and stated that such actions simply do not

 

require proof of reasonably clear liability as to the underlying claim. Lough, 242 Mont.
at 174, 789 P.2d at 578. Thus, our decision acknowledged the plain statutory language
hich establishes that the nature of the investigation itself is the sole issue in a claim of
‘unreasonable investigation under the UTPA. Lough, 242 Mont. at 174, 789 P.2d at $78

{147 We also acknowledged this principle in Walker v. St. Paul Fire & Marine Ins. Co.,
241 Mont. 256, 258, 786 P.2d 1157, 1159 (1990), another case where the plaintif®
alleged, inter alia, that the insurer had violated the UTPA by failing to conduct a

60
reasonable investigation before denying her claim.” There, the district court granted
summary judgment in favor of the insurer based on its conclusion that a reasonable basis
cexisted for the denial. Walker, 241 Mont. at 257-58, 786 P.2d at 1159. We reversed,
stating that the district court’s conclusion that the insurer had “reasonable grounds [for
the denial] as a matter of law does not address the issues of material fact” regarding the
uunreasonable-investigation claim. Walker, 241 Mont. at 259, 786 P.2d at 1159 (emphasis
added). Again, this decision acknowledged the plain statutory language which
establishes that the nature of the investigation itself is the sole issue in a claim of
‘unreasonable investigation under the UTPA. Walker, 241 Mont. at 258-59, 786 P.2d at
1159. See also Peterson, $39 (where the plaintiffs alleged, inter alia, that the insurer
violated the UTPA by failing to conduct a reasonable investigation, we observed that the
issue “was not about the amount of the settlement which [the insurer] paid to the
[plaintiffs), but, rather, about the process used by [the insurer] before entering the
settlement”) (emphases added).

{148 Similarly here, whether Fortis’ denial was a “mistake” is irrelevant because the

is not at issue, Rather, as the plain statutory language dictates, the sole issue in

 

deni

 

® Incidentally, we note the Walker decision inexplicably states that this Court applies a
‘combined “clearly erroneous” standard and “abuse of discretion” standard in reviewing &
ssummary.judgment order. Walker, 241 Mont. at 258, 786 P.2d at 1159 (citing Walker v. Larson,
223 Mont. 333, 335, 727 P.2d 1321, 1322-23 (1986), in turn citing no authority). This is
incorrect. We apply neither of these standards; rather, we apply de novo review. LaTray, § 14;
see also Walker, 241 Mont. at 259-61, 786 P.2d at 1160-61 (Sheehy, J, specially concurring).

 

 

6
this independent cause of action is whether the investigation itself was objectively

 

reasonable.
{149 In the same way, the fact that Forts ultimately paid the claim, after the Lorangs

pressed their rights by

 

18 suit, is also irrelevant in determining whether the
investigation itself was objectively reasonable. Moreover, if we held that an insurer may
“cure” an unreasonable investigation by subsequently paying the claim after a denial,
insurers could simply. ignore the UTPA and forego reasonable investigation, or any
investigation, until the claimant takes steps to enforce his or her contractual rights, and
yet remain immune from liability under § 33-18-201(4), MCA. ‘This would effectively
render the UTPA’s mandate meaningless.

1150. Most importantly, however, we must acknowledge the plain statutory language
which prohibits us from affirming the District Court’s determination that Fortis “cured”
‘any shortcomings in its investigation by paying the claim after its wrongful denial. The
UTPA mandates a reasonable investigation before a denial. Section 33-18-201(4), MCA.
‘Thus, no amount of meritorious conduct after the denial (such as thorough investigation
‘or payment of the claim) can satisfy this obligation. OF course, subsequent conduct may
be relevant to the issue of damages, particularly where the insurer takes prompt remedi
action. However, conduct after the denial cannot operate to satisfy the statutory

obligation to conduct a reasonable investigation before denial.

% The Lorangs argue thatthe denial was not a mistake because Pehoski ultimately did what she
‘was trained to do—ie., deny claims for replacement sockets. While this argument is relevant to
their claim under § 33-18-201(6), MCA, and the issue of malice, i is not relevant in our analys
here, for the reasons noted above.

 

a
U1S1_ Thus, because the sole issue in an independent cause of action for an unreasonable
investigation is whether the investigation itself was objectively reasonable, we hold that
both the allegedly mistaken denial and Fortis’ ultimate payment are irrelevant in
determining liability as to this claim.

{152 We now tum to the parties’ arguments regarding the reasonableness of Forts’
investigation. As noted, itis undisputed that Pehoski began an investigation of the claim,
located information conclusively demonstrating Fortis’ obligation to pay, and promptly

“forgot” that information, It is also undisputed that Pehoski then chose to end the

 

investigation without further review of the Lorangs’ records.
{153 Fortis argues that, as a matter of law, it satisfied the statutory obligation to conduet
‘a reasonable investigation because Pehoski did, at one point, locate the pertinent
information, We disagree. Moreover, we find this argument frivolous.

{154 Simply accessing the pertinent information is not enough to satisfy the statutory
‘mandate; rather, that information must be examined in a reasonable manner. We
conclude that the UTPA’s “reasonable investigation” mandate requires, at a minimum,
that the investigating adjuster examine the pertinent information thoroughly enough to
retain it and act upon it, whatever the ultimate determination of the claim may be. After
all, the duty of reasonable investigation operates to ensure that the adjuster obtains
enough information to make an informed decision, However, an informed decision
cannot be made if the pertinent information is forgotten before it can be acted upon.

Here, when Pehoski “forgot” the pertinent information initially gleaned from the

6
Lorangs' file, the failure to continue the investigation was patently unreasonable because,
in effect, it was no different than a failure to conduct any investigation,

4155. Ofcourse, Pehoski’s location of the pertinent information was a reasonable step in
the investigative process. However, reasonable steps taken in the investigative process
do not render the investigation ultimately reasonable, Although Pehoski’s initial efforts
‘were not unreasonable, and the fact that she “forgot” the pertinent information does not
by itself render the investigation unreasonable, Pehoski’s subsequent decision to end the

jon without further review of the Lorangs’ records—at the time when she was

 

‘unaware of the pertinent information—renders the investigation unreasonable as a matter
of law.

‘4156 In summary, the only genuine issue of material fact as to liability in this claim is
whether Fortis’ investigation was reasonable, We reiterate that the reasonableness of an
insurer's investigation is a factual issue which ordinarily must be resolved by the jury.
However, where reasonable minds could reach but one conclusion, the issue is
appropriately determined as a matter of law on summary judgment. Here, even when the
evidence is viewed in a light most favorable to Fortis, we conclude that reasonable minds
could reach but one conclusion. Because Pehoski abandoned the investigative process
without the benefit of the critical information in Fortis’ own records, we conclude no
reasonable juror could find that Fortis’ investigation was reasonable. Simply put, an
insurer's investigation is unreasonable per se if the information gleaned therefrom is

“forgotten” and the investigation is ended at that point.
4157 Thus, we conclude that Fortis failed to conduct a reasonable investigation as @
‘matter of law, in violation of § 33-18-201(4), MCA, and the Lorangs are therefore
entitled to partial summary judgment on liability. Additionally, as noted above, Fortis’

“mistake” defense is not relevant to the issue of li

 

ity, and its eventual payment of
Bonnie's claim does not “cure” the failure to conduct a reasonable investigation before
the denial. Accordingly, we hold that the District Court erred in denying the Lorangs’
motion for partial summary judgment on liability and in granting Fortis’ motion for
summary judgment on this claim.

IIL. Failure to Act in Good Faith in Settlement

 

{158 The UTPA provides that insurers may not “neglect to attempt in good faith to

__ effectuate prompt, fair, and equitable settlements of claims in which liability has become

 

Section 33-18-201(6), MCA. Where an insurer violates this

 

reasonably. clea
provision, the claimant may bring an independent cause of action to recover actual
damages. Section 33-18-242(1), MCA. Additionally, in accordance with the
Legislature's express purpose of prohibiting unfair and deceptive claims-adjustment
practices, the UTPA provides that punitive damages may be assessed against an insurer in
this independent cause of action. Sections 33-18-101; 33-18-2424), MCA.

{159 Here, the Lorangs allege that Fortis violated § 33-18-201(6), MCA, in dealing
‘with Bonnie’s 2002 claim. The Lorangs moved for partial summary judgment on lability
as tothis claim, and Fortis then filed a cross-motion for summary judgment. The District

Court considered these motions together and issued an order in which it denied the

65
Lorangs’ motion and granted Fortis’ motion. On appeal, the Lorangs argue that the court
erred in ruling on these cross-motions.

{160 Before applying our summary-judgment standards to address this claim on the

 

merits, we address a preliminary argument raised by Forts.

{161 Fortis argues that the Lorangs may not maintain this cause of action because the
statute on which it is based does not apply to the circumstances at issue here. As noted,
the statute provides that insurers may not “neglect to attempt in good faith to effectuate
romp, fai, and equitable seitlements of claims in which lability has become reasonably
clear.” Section 33-18-201(6), MCA (emphasis added). Fortis argues that the term
“settlements” here refers only to compromise agreements. As Fortis states, “[Jhis claim
never progressed to a point where the parties had any reason to discuss or negotiate
compromise settlement.” Thus, Fortis contends that because it paid Bonnie’s claim in
full and did not attempt to negotiate a compromise settlement, § 33-18-201(6), MCA, is
inapplicable here and the Lorangs therefore cannot maintain a cause of action under this
statute. We disagree,

{162 The UTPA does not define the term settlements” used in § 33-18-201(6), MCA.
However, we have addressed this term in Ridley v. Guaranty Natl. Ins, Co., 286 Mont.
325, 951 P.2d 987 (1997). There, we considered whether the term “settlements” refers
only to a “final settlement” of all claims between the parties, or whether it also refers to
the payment of individual claims made before the parties enter into a final agreement

settling all claims. Ridley, 286 Mont. at 333-35, 951 P.2d at 991-93.

66
1163 The claimant in Ridley argued that the statutory obligation to effectuate
“settlements” requires payment of individual claims for medical expenses when liability
is reasonably clear, regardless of whether a final settlement is or can be reached as to all
claims, Ridley, 286 Mont. at 333, 951 P.2d at 991. ‘The insurer argued that the UTPA
does not require such “piecemeal compensation,” and that insurers are entitled to
withhold all payment, even if liability is reasonably clear as to initial claims, until a “final
settlement” is reached. Ridley, 286 Mont. at 333, 951 P.2d at 992.

{164 In rendering our decision, we noted that none of the definitions proffered on
appeal indicated that “settlement” is necessarily a resolution of all claims or disputes
between parties. Ridley, 286 Mont. at 334, 951 P.2d at 992. We also observed that “the
‘word ‘settle’ has different legal connotations in different situations: ‘[TJhe term may be
‘employed as meaning to agree, to approve, to arrange, to ascertain, to liquidate, to come
to or reach an agreement,’ and other things.” Ridley, 286 Mont. at 334, 951 P.2d at 992
{alteration in original) (citing Black's Law Dictionary 1372 (6th ed. West 1990)).
‘Additionally, we stated that the UTPA’s “reference to “settlements,” rather than a ‘final
settlement,’ would suggest that the Montana Legislature anticipated that an insurer may
hhave more than one obligation arise from the same incident.” Ridley, 286 Mont. at 334,
951 P.2d at 992,

{165 Ubimately, we concluded that the term “settlements” encompasses both the
preliminary payment of individual claims and the final settlement of all claims. Ridley,
286 Mont. at 334, 951 P.2d at 992, Thus, we rejected the insurer's argument and held

that § 33-18-201(6), MCA, requires insurers to pay claims for medical expenses, prior to

or
4 final settlement, when liability is reasonably clear.”* Ridley, 286 Mont. at 334, 951
P.24 at 992.

4166 Just as we declined in Ridley to narrowly interpret “settlements” as meaning only
the final settlement of all claims, we also dectine to interpret that term here to mean
nothing more than compromise agreements. “Settlement” is a term used in many
contexts, and it consequently has numerous meanings. See Black's Law Dictionary
1404-05 (Bryan A. Gamer ed,, 8th ed., West 2004) (Among other things, the term means
‘a payment made in a transaction, an agreement to end a dispute or lawsuit, the closing of
4 real estate transaction, and the execution of an estate by an executor.) (citations
omitted). In our jurisprudence, we have never suggested that a compromise agreement is
the only type of settlement contemplated by the UTPA’s mandate to “effectuate prompt,
fa

 

rand equitable settlements.” Indeed, it is axiomatic that effectuating an equitable

 

settlement in some cases may require a full payment of the amount demanded rather than
‘payment of some lesser amount pursuant to a compromise

{167 Moreover, Fortis’ approach would conflict with Ridley. As noted, our decision in
Ridley establishes that the term “settlements” in § 33-18-201(6), MCA, encompasses both
the initial payment of individual claims for which liability is reasonably clear, and the

final settlement of all claims. Ridley, 286 Mont. at 334, 951 P.2d at 992. To now hold

% As noted, the claims

issue in Ridley were claims for medical expenses. However, our
decision expressed a principle which extends beyond the facts of the case. As we stated in
DuBray v. Farmers Ins. Exchange, 2001 MT 251, 4 15, 307 Mont. 134, 4 15, 36 P.3d 897, $15,
“(nothing in Ridley suggests that its scope should be categorically limited to medical expenses.”
Rather, “the principle for which it stands,” as we stated, is that “where liability is reasonably
clear, injured victims are entitled to payment of those damages which are not reasonably in
dispute without first executing a setlement agreement and final release.” Dubray, $f 13-14.

   

68
that “settlements” refers only to compromise agreements, as Fortis asserts, would simply
be incompatible with Ridley’s treatment ofthat term.

{168 Ultimately, Fortis’ approach would establish that § 33-18-201(6), MCA, does not
impose a duty to effectuate settlement by full payment when liability is reasonably clear,
but only a duty to effectuate settlement by way of a compromise agreement, We
conclude there simply is no basis for construing the statute in this manner. Indeed, Fortis
cites no authority as to the meaning of the term “settlements,” but simply asserts its own

interpretation in conclusory fashion. Accordingly, we reject Fortis

 

‘A. The Lorangs’ Motion for Partial Summary Judgment
{169 We again refer to the pertinent statutory language in order to establish the proper
context for our discussion. Section 33-18-201(6), MCA, provides that an insurer may not
“neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of
claims in which liability has become reasonably clear.” Here, significant facts relevant
under this statute are undisputed. First, it is undisputed that Fortis’ liability was
reasonably clear when Bonnie submitted her 2002 claim. Second, there is no dispute as
to whether Fortis’ eventual payment of this claim was fair or equitable in terms of the
amount paid, Thus, the issue to be resolved here is whether Fortis violated its statutory
duty to actin good faith to effectuate prompt settlement. ‘This is fuctual issue. See eg
Precision Theatrical Effects, Inc. v. United Banks, N.A., 2006 MT 236, §|23, 333 Mont.

505, $23, 143 P.3d 442, 123; Simmons ». Jenkins, 230 Mont. 429, 435, 750 P.2d 1067,

 

1071 (1988). However, the Lorangs argue that this issue should be determined

‘matter of law on summary judgment.

Co)
170 Specifically, the Lorangs argue that Fortis violated § 33-18-201(6), MCA, as a
matter of law because the denial of Bonnie's claim resulted from Fortis’ institutionalized
scheme of attempting to avoid its contractual obligations with respect to prosthetics
coverage. As the Lorangs assert, even if an insured pursues Fortis’ internal claims-appeal
process, “Fortis’ practice is to automatically deny coverage for all replacement socket
claims, but to then ‘correct’ or ‘reverse’ its denial once an insured files suit or an
insurance commissioner's office intervenes on behalf of the insured.”

{171 In support of their argument that this is Fort

 

reneral practice, the Lorangs cite

testimony from Fortis’ claims adjusters who state that the company regularly denies

 

claims for replacement sockets and even trains its adjusters to do so. ‘The Lorangs also
cite the evidence that Fortis initially denied each of Bonnie's claims, in 1994, 1996, 1998,
2002, and 2003, but later admitted its contractual obligation and provided coverage after
the Insurance Commissioner intervened on two instances, and after the Lorangs filed suit
in another instance. Additionally, the Lorangs point to evidence that Forts has engaged
in this same conduct when dealing with other claimants. They state: “This not only
happened repeatedly to Bonnie Lorang, it also has happened to every other insured for
which Fortis has produced discovery!”

{172 While this evidence provides strong support for the Lorangs” argument, we must
consider the other admissible evidence as well. Additionally, because the Lorangs are the
moving party here, we must view the evidence in a light most favorable to Fortis.
LaTray, $15. That is, we must draw any reasonable inferences from the evidence in

favor of Fortis, recognizing that @ reasonable juror might do the same. LaTray, $15.

0
{173 While the record contains little evidence favorable to Fortis, it does demonstrate
that, as a result of the Lorangs’ first lawsuit, Fortis placed a note in the Lorangs’ file,
ostensibly to ensure that Bonnie’s claims would be handled appropriately. This note
states that Bonnie’s claims for replacement sockets are not to be denied on the basis that

such coverage is not available under the policy."* ‘This instruction was made readily

 

available in Fortis’ computer system, and Fortis’ adjuster Jeanne Pehoski did in fact
locate this instruction when considering Bonnie's 2002 claim. With respect to Fortis”
statutory obligation to act promptly, we note that Fortis ultimately issued payment nearly
four months after Bonnie’s claim was submitted, and just over two months after it was
wrongly denied. Fortis argues that while the claim would have been paid in October if
handled property, it was ultimately paid in December and the delay was not significant.

1174, in light of all the aforementioned evidence, we cannot agree that the Lorangs are
entitled to partial summary judgment on liability. We acknowledge the compelling
nature of the evidence which indicates bad faith by Fortis, as well as the relative strength
of the Lorangs’ argument compared to that of Fortis. However, we have held that if there
is any doubt as to the propriety of granting a summary judgment motion, that doubt must
be resolved in favor of the party opposing the motion, Newbury, 14; Krusemark, 186
Mont. at 177, 606 P.2d at 1084; Mathews, 184 Mont, at 379, 603 P.2d at 238. This rule

reflects the overriding principle that we must “exercise extreme care” to avoid resolving

% As noted, this language reflects the fact that the policy provides coverage for replacement
sockets only when they are medically necessary. Again, there has never been any dispute as to
medical necessity regarding Bonnie's claim,

n
factual issues which are properly determined by a jury. Bowen v. McDonald, 276 Mont.
193, 199, 915 P.24 201, 205 (1996) (citation omitted).
{175 Accordingly, in determining the propriety of summary judgment for the Lorangs,

affirmative effort to ensure

 

wwe resolve all doubt in favor of Fortis. Considering For
that Bonnie's claims would not be wrongly denied after the first lawsuit, as well as
Fortis’ remedial effort which culminated just over two months after the wrongful denial,
and viewing this evidence in a light most favorable to Fortis, LaTray, $15, we cannot
‘conclude as a matter of law that Fortis violated § 33-18-201(6), MCA. Thus, a jury must
resolve the factual issue of whether Fortis acted in good faith to effectuate prompt
settlement of Bonnie's claim.””

4176 As noted above, the District Court denied the Lorangs’ motion for partial

 

‘summary judgment on liability. In doing so, the court did not discuss the application of
‘summary-judgment rules or provide any analysis, but simply reasoned: “The evidence
shows that payment was prompt.” We do not condone this cursory approach, nor do we
agree with the court's reasoning. However, our practice is to affirm a correct ruling even
if it was based on erroneous reasoning. Collier v. Kincheloe, 2008 MT 100, § 8, 342
Mont, 314, $8, 180 P.3d 1157, 48, Thus, for the reasons noted above, we hold that the

court correctly denied the Lorangs’ motion for partial summary judgment on liability.

We note that although the Lorangs may utilize evidence of Fortis’ general practices in
supporting their claim under § 33-18-201(6), MCA, and in attempting to prove Forts’ alleged
malice, they are not required to prove that Fortis” conduct here constitutes its general practice in
order to prevail on this UTPA claim. Section 33-18-242(2), MCA.

 

n
B. Fortis’ Motion for Summary Judgment
$177 Like the Lorangs, Fortis argues that this issue should be determined as a matter of
Jaw on summary judgment. Specifically, Fortis argues, without reference to the
additional facts of this case, that “when an insurer that has denied a claim immediately

accedes to a demand for payment of a claim—without further discussion—it complies

 

with § 201(6) as a matter of law.”

178. First, we note that Fortis did not “immediately” accede to the Lorangs’ demand for

   

payment, Rather, Fortis failed to pay Bonnie’s claim for over two months after the ini
denial (which was nearly four months after the claim was submitted), even though the
company was clearly liable for the payment. Second, we cannot limit our analysis to the
fact that Fortis eventually paid Bonnie’s claim after the Lorangs pressed their rights. By
its express terms, the UTPA requires more than eventual compliance with the insurance
contract; it imposes a duty to act in good faith when liability becomes reasonably clear.
Section 33-18-201(6), MCA. As we have held, with respect to claims made by an
insured (as opposed to a third-party claimant), the insurer's duty to effectuate settlement
under § 33-18-201(6), MCA, is a fiduciary duty, Klaudt v. Flink, 202 Mont, 247, 250,
658 P.2d 1065, 1066 (1983) (overruled in part on other grounds, superseded in part by
§33-18-242, MCA); Fode v. Farmers Ins. Exchange, 221 Mont. 282, 285, 719 P.2d 414,
415-16 (1986) (superseded in part by § 33-18-242, MCA).

{179 To adopt Fortis’ argument, thus making an eventual payment the conclusive factor
in determining compliance with § 33-18-201(6), MCA, would render irrelevant any

inguiry into whether the insurer acted in good faith during the initial stages of a claim.

B
‘Thus, an insurer could summarily deny or ignore a claim which it is clearly obligated to

 

pay, thereby utterly disregarding the statutory duty of good faith, and yet escape liability
under § 33-18-201(6), MCA, by issuing payment after the claimant takes steps to enforce
his or her rights. This would defeat the purpose of the statute, which is to prompt good
faith conduct not merely after a wrongful denial when the claimant insists on his or her

contractual rights, but when liability becomes reasonably clear. Moreover, this would

create a financial incentive for unscrupulous insurers to disregard the duty of good faith

  

‘during the initial stages of a claim. That is, if we held that eventual payment is sufficient
‘to comply with § 33-18-201(6), MCA, there would be no consequence for bad faith
‘during the initial stages of a claim. In this scenario, an insurer could summarily deny
claims which it is clearly obligated to pay, consequently profiting where the claimant
does not contest the denial, and yet avoid liability under § 33-18-201(6), MCA, by

eventually issuing payment if the claimant does contest the denial.

 

{180 We reject Fortis’ argument, as it is incompatible with both the letter and the spirit

of § 33-18-201(6), MCA. Where an insurer wrongfully denies a claim, subsequent

 

ish that the insurer complied with its duty of good

{181 We must consider all the admissible evidence, not merely the fact that Fortis
‘eventually paid this claim after the Lorangs took steps to enforce their contractual rights.
Additionally, because Forts is the moving party here, we must view the evidence in a

light most favorable to the Lorangs. LaTray, § 15. That is, we must draw any reasonable

 

”
inferences from the evidence in favor of the Lorangs, recognizing that a reasonable juror
might do the same at trial. LaTray, § 15.

{182 Viewing the evidence in this light, it is clear that Fortis cannot prevail on summary
judgment. Indeed, this is clear even without viewing the evidence in a light most
favorable to the Lorangs. Based on the parties’ prior dealings and the testimony of
Fortis’ own employees, the denial at issue here is consistent with what appears to be @
calculated, systematic effort by Fortis to avoid its contractual obligations. As noted,
despite an instruction to the contrary, Fortis’ adjuster reverted to what she portrayed as
the company's general practice regarding prosthetics claims. ‘Thus, the evidence which
tends to suggest that Fortis may have acted in good faith here—including the fact that

Fortis issued an instruction to its adjusters regarding proper handling of Bonnie's claims,

 

and the fact that Fortis issued payment of the claim just over two months after the
wrongful denial—does not establish the absence of genuine issues of material fact.

{183 The District Court granted Fortis’ motion for summary judgment without
discussing the application of summary-judgment rules or providing any analysis. Instead,
the court simply reasoned: “The evidence shows that payment was prompt.” We do not
condone this cursory approach, nor do we agree with the court’s reasoning, For the

reasons noted above, we conclude that this cause of action must be resolved by a jury.

Thus, we hold that the District Court erred in granting Fortis’ motion for summary

 

judgment

38 Fortis also suggests thatthe District Court correctly ruled on the cross-motions for summary
judgment “because Fortis paid the claim during the contractual {sixty-day] reconsideration

15
IV. Damages
{184 Finally, Fortis presents an alternative basis on which it argues that we should
affirm the District Court. Fortis argues that it is entitled to summary judgment on all
three of the UTPA claims here because the impact of its conduct on the Lorangs “did not

rise to the level of compensable damages for emotional distes

 

Specifically, Fortis
argues that the Lorangs have failed to demonstrate that they suffered “severe” emotional
distress. In making this argument, Forts relies on Renville v. Fredrickson, 2004 MT 324,
324 Mont. 86, 101 P.3d 773, where we applied the standard enunciated in Sacco v. High
‘Country Independent Press, Inc., 271 Mont, 209, 896 P.2d 411 (1995).

185 In Sacco, we adopted a standard of proof for independent tort claims of negligent
or intentional infliction of emotional distress. Sacco, 271 Mont. at 220-39, 896 P.2d at
417-29, Although this Court had previously “characterized emotional distress as an
clement of damages rather than a distinct cause of action,” we recognized in Sacco that
the interest in freedom from infliction of emotional distress merits independent legal
protection by way of a stand-alone cause of action. Sacco, 271 Mont. at 230-32, 896

2d at 424-25. However, we also recognized that a high standard would be necessary in

 

period.” Because Fortis does not develop this argument, we address it only briefly. Of course,
Fortis may reserve for itself sixty days or any other period of time in which to “reconsider” &
claim. However, Fortis’ reconsideration procedure does not displace the statutory duty to act
promptly and in good fi

context of the UTPA, “itis axiomatic that laws established forthe benefit ofthe public cannot be
contravened by private contrac.” Watters v. Guaranty Nat. Ins. Co., 2000 MT 150, § 58, 300
Mont. 91, 4 58, 3 P.3d 626, $58 (citation and internal quotation masks omitted) (overruled in
part on other grounds). Where an insurer wrongfully denies a claim with the intent of pay
only if the claimant presses his or her rights, it acts in bad faith even if payment is ultimately
‘made within sixty days. That is precisely what the Lorangs allege here. As noted above,
‘whether Fortis complied with its duty of good feith sa factual issue

  

 

  

 

6
order to preclude a flood of such stand-alone actions and to guard against fraudulent
claims. Sacco, 271 Mont. at 232-33, 237, 896 P.2d at 425, 428. Therefore, we held that
claim for negligent or intentional infliction of emotional distress may be maintained as
aan independent cause of action only where the plaintiff suffers “serious or severe
‘emotional distress,” which we defined as that which is “so severe that no reasonable
person could be expected to endure it.” Sacco, 271 Mont. at 232-34, 237-39, 896 Pd at
425-26, 428-29 (internal alteration omitted).

{186 In Renville, we applied this standard because the plaintiff brought an independent
‘cause of action for negligent infliction of emotional distress. Renville, $§7, 10-11. The
plaintiff alleged that she suffered “extreme emotional distress” when she was notified of
her adult son’s death in an automobile accident. Renvile, $6, 10. Applying the Sacco
standard, we held that the plaintiff had not presented evidence demonstrating the requisite

level of emotional distress necessary to maintain her independent tort claim,

 

Renville, 14.
{187 In the instant appeal, Fortis argues that, because the Lorangs are claiming,
damages for emotional distress, the Sacco standard applies here just as it did in Rerwville.
This argument is incorrect because the Lorangs are not asserting an independent cause of
action for negligent infliction of emotional distress as did the plaintiff in Renville. We
have previously rejected just such an argument in Vortex Fishing Systems, Inc. v. Foss,
2001 MT 312, 308 Mont, 8, 38 P.3d 836,

{188 In Vortex, an employee brought a discrimination claim against his employer,

pursuant to the Montana Human Rights Act, and alleged emotional distress as one

n
clement of damages. Vortex, 410. The employer argued that the employee was required
to meet Sacco's “serious or severe” standard in order to recover damages for emotional
distress. Vortex, 431. We rejected this argument and affirmed the award of $2,500.00
for emotional-distress damages resulting from the employer’s unlawful discrimination.
Vortex, 434, In doing so, we acknowledged that Sacco establishes a standard which is
limited to independent tort claims of negligent or intentional infliction of emotional
distress. Vortex, $32. Because the employee had not asserted any such independent
claim, but had instead alleged emotional distress as an element of damages resulting
from unlawful discrimination, we held that the Sacco standard did not apply.
Vortex, 932,34.

{189 ‘Similarly here, the Lorangs have alleged emotional distress as an element of
<ainages resulting from Fortis’ UTPA violations. They have not brought an independent,
stand-alone tort claim for negligent or intentional infliction of emotional distress, and
thus the Sacco standard is not applicable inthis case. Vortex, 4 32.

4190 Fortis’ argument fails to recognize the distinction between emotional distress as an
‘element of damages resulting from a UTPA violation, and emotional distress. which
serves as the basis for an independent cause of action in tort. Sacco did not create a
standard for establishing emotional distress as an element of damages resulting from &
UTPA violation or torts generally. Rather, by its express terms Sacco ereates a standard
of proof solely for independent, stand-alone claims of negligent or intentional infliction
of emotional distress. Sacco, 271 Mont. at 234, 237, 896 P.2d at 426, 428; Vortex, § 32;

‘Seltzer v. Morton, 2007 MT 62, $119 n. 11, 336 Mont. 225, $119 n.11, 154 P.3d

8
61,4119 n. 11 (“Sacco does not define the standard for proving emotional distress
damages incurred pursuant to torts in general; rather, it defines an element of proof
necessary to maintain an independent action for intentional or negligent infliction of
‘emotional distress.”).

{191 In Fortis’ view, the Sacco standard may be injected into legal doctrines which
govern claims other than negligent or intentional infliction of emotional distress.
Nothing in Sacco supports this approach, and we have rejected just such an argument
in Vortex because the Sacco. standard, by its express terms, is limited to independent,
stand-alone tort claims for negligent or intentional infliction of emotional distress—
claims which we have deliberately sought to restrict by imposing a heightened standard
of proof. Sacco, 271 Mont, at 232-34, 237, 896 P.2d at 425-26, 428; Vortex, $32;
Seltzer, {119 n. 11.

{192 Finally, Fortis’ argument conflicts with the applicable statutory standard. The
UTPA provides that, in addition to punitive damages, a claimant may recover the “actual
damages” which were proximately caused by a UTPA violation. Section 33-18-242(1),
(@, MCA. To inject the Sacco standard into the UTPA framework would preclude
recovery for actual emotional-distress damages in any case where the claimant cannot
prove that his or her emotional distress was “so severe that no reasonable person could be

expected to endure it.” Sacco, 271 Mont. at 234, 239, 896 P.2d at 426, 429 (internal

 

is recognized by the Montana Pattern Instructions for jury trials, which
provide one set of instructions for Saeco claims, based on the “serious of severe” standard, and 2
‘separate instruction for cases where emotional distress is alleged as an element of damages in
claims other than negligent or intentional infliction of emotional distress. M.P.L2d 25.02,
15.01-03,

 

 
alteration omitted). That would mean that even substantial emotional-distress damages
falling below the “serious or severe” standard would not be compensable, despite clear

proof of a UTPA violation. Thus, to impose the Sacco standard in UTPA claims would

 

constitute a revision of the “actual damages” standard established by the Legislature. We
are not at liberty to revise statutes. Section 1-2-101, MCA; Saucier, $70.

193. ‘The Lorangs assert that Fortis’ conduct caused them to suffer fears of financial
hardship, humiliation, and feelings of betrayal. They also assert that, after having paid
their monthly premiums for over a decade, and having engaged in protracted efforts to
‘compel Fortis to provide the coverage it had promised, they were “shocked and sickened
at the prospect of having to battle with Fortis again to recover replacement socket
benefits”

4194" Fortis does not dispute that its conduct caused the Lorangs to suffer emotional
distress. Rather, Fortis argues that the Lorangs have failed to meet the “serious or
severe” standard of Sacco—i.e., “so severe that no reasonable person could be expected
to endure it.” Sacco, 271 Mont. at 234, 239, 896 P.2d at 426, 429 (intemal alteration
omitted). As we have explained, the Sacco standard does not apply here because the
Lorangs are not asserting an independent tort claim of negligent ot intentional infiction
of emotional distress. Sacco, 271 Mont. at 234, 237, 896 P.2d at 426, 428; Vortex, 432;
Seltzer, 4119 n.11. Accordingly, we reject Fortis’ argument. The measure of the

Lorangs' actual damages is a factual matter for the jury to determine.

530” We note that while the Lorangs correctly argue that Sacco's “serious or severe” standard does
not apply here, they also assert that their emotional distress was in fact severe. This will be a
‘mater for the jury to consider in determining the appropriate amount of damages.

 
CONCLUSION
{19S With respect to the issue raised on cross-appeal, Fortis now concedes, in light of
the intervening decision by the Ninth Circuit Court of Appeals, that the state District
Court has subject-matter jurisdiction over this case. Accordingly, we have not addressed
this issue
{196 With respect to the evidentiary issue raised by the Lorangs, we hold that the

evidence of the parties” dealings prior to the first lawsuit is admissible. With respect to

 

the claim of ant is is entitled to summary

 

tory breach of contract, we hold that F
judgment. With respect to the UTPA claim that Fortis misrepresented the policy, we hold
that the Lorangs are entitled to partial summary judgment on liability. With respect to the
UTPA claim that Forts failed to conduct a reasonable investigation before denying

Bonnie's claim, we hold that the Lorangs are entitled to partial summary judgment on

 

led to act in good faith to

liability. Finally, with respect to the UTPA claim that Fortis,

 

effectuate prompt settlement, we hold that neither party is entitled to summary judgment.
$197 Accordingly, we affirm in part, reverse in part, and remand for further

proceedings.

 

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