### IN THE SUPREME COURT OF THE STATE OF MONTANA

No. 80-78

STATEFARMMUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Third-Party Plaintiff,

CINDY J. SOLEM, Plaintiff andAppellant,

HELEN G

# .BUCKINGHAM, Third-Party Defendant and Respondent.

ORDER

The above-captioned opinion shall be amended to read as follows: Page 5, lines 9,10, 11, 12 and 13 from the top shall read: 

# ".

.

# . 1810,mandated that result. But that caseheld only that impleading parties not sued by theplaintiff, forpurposes of contribution, is not proper. This is a subrogation casebased on contract,and Osier has no application." DATED this

# 3_tdday of February, 1981.

Justices 

### ! ii;

### No. 80-78 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981

STATEFARMMUTUAL AUTO!IIOBILE INSURANCE COMPANY, Defendant and Third-PartyPlaintiff,

CINDY J. 

### SOLEM, PlaintiffandAppellant,
vs. HELEN G. BUCKINGHAM, Third-Party Defendantand Respondent.
Appeal from: District Court of the Eighth JudicialDistrict, In and for the County ofMissoula,Montana Honorable Jack L. Green, Judgepresiding. Counsel of Record: For Appellant: Williams Law Firm,Missoula,Montana Berger,Anderson, Sinclairand Murphy,Billings, Montana For Respondent: Garlington,Lohn and Robinson, Missoula, Montana

Submitted onbriefs: July 11, 1980 ~ecided :

## JAN

## 2

## 81987

### Mr. JusticeDaniel J. Shea delivered theOpinion of theCourt.
State Farm Mutual Automobile Insurance Company sued by its insured under an uninsured motorist provision, appeals from an order of the Missoula County District Court dismissing 

### its third-party complaint which sought indemnity from the uninsured motorist for any liabilitythe insurance company might be adjudged to owe the plaintiff. We hold that the District Court erred in not allowing StateFarm to implead thethird-party defendant. Cindy J. Solem as plaintiff filed a complaint against State Farm alleging that Solem was a passenger in a car driven by William J. Schultz which collided with a car driven by Helen G. Buckingham, an uninsured motorist. The complaint alleged that the negligence of the uninsured motorist was a proximate cause of the collision and of personal injury to Solem. It further alleged that both Solem and Schultz 

### were insured atthe time of the collision under separate policies of insurance with State Farm, each of which provided uninsured motorist coverage in the amount of $25,000/$50,000. Solem has filed suit under the uninsured motorist provisions of both policies and prays for judgment against StateFarm inthe amount of $50,000 or such lesser amount asa jury might determine. StateFarm filed its answer to the complaint admitting that the collision occurred, but denying the negligence of the uninsured motorist. State Farm's answer raises as affirmative defenses: (1)that the suit against State Farm 

### is premature unless it is first determined that the plaintiff 

### is legally entitled to recover damages from the uninsured motorist, and (2) that the uninsured motorist 

### is
an indispensable party under Rule 19, M.R.Civ.P. State Farm then filed a third-party complaint namingHelen G. Buckingham as third-party defendant. The thirdparty complaint recites the fact that Solem has sued State Farm under the uninsured provisions of the policy and then alleges that Buckingham is the uninsured motorist involved in the collisionmentioned inSolem's complaint. StateFarm then seeks indemnity from Buckingham for "such sums asmay be adjudged against it in favor of Cindy J. Solem, and for their costs." Buckingham moved to dismiss the third-party complaint against her on the grounds it failed to state a claim against her on which relief could be granted. Buckingham and State Farm filed briefs. The District Court originally denied the motion to dismiss, but then reversed itself and dismissed the claim against Buckingham. State Farm moved for reconsideration of the order of dismissal and, after argument, the District Court declined to change 

### its decision. Plaintiff, Solem, has not submitted a brief with this Court in support of or in opposition to State Farm's appeal. The sole issuebefore us 

### iswhether an insurer, sued by 

### its insured for recovery of uninsured motorist benefitsmay implead theuninsured motorist under Rule 14(a),M.R.Civ.P. If plaintiff establishes that Buckingham was negligent and caused the accident resulting in plaintiff's injuries, State Farm then 

### is responsible under uninsured motorist coverage, topay the amount of thejudgment tothe extent of the applicable coverage. Upon payment, State Farm would then be subrogated to the rights of plaintiff Solem and may seek to establish that amount from Buckingham. See, Skauge


### v. Mountain States Tel. & Tel. (1977), 172 Mont. 521, 565 P.2d 628. We hold that State Farm doesn't have to wait until 

### it pays a judgment obtained before it has a right tobring Buckingham into the lawsuit. Rule 14(a),M.R.Civ.P., expressly grants a defendant the procedural right to bring into the lawsuit as a third-party defendant, anyone who "may be" liable tohim. This can be done under theprinciple of subrogation even if the liability of the third party is contingent and cannot be established until the original defendant has been held liable. 1ABarron and Holtzoff, 

### 5 426 at 664-73 (1960); 3 Moore's Federal Practice, 

### 5 14.08, at 243-46; Moore's Federal Practice, S 14.10, at 281-88. Also see, Crosby v. Billings Deaconess Hospital (1967), 149 Mont. 314, 426 P.2d 217 (holdingthat defendant should have been allowed to implead a third party under a theory of indemnity). Under a theory of subrogation to the insured's rights of recovery against the third party, federal courts have regularly permitted the insurer to implead that party


### as 

### a third-party defendant. See, King v. StateFarm Mutual Insurance Co. (W.D. Ark. 1967), 274 F.Supp. 824; St. Paul Fire & Marine Insurance Co. v. United States Lines Co. (2d Cir. 1958), 258 F.2d 374, cert. den. 359 U.S. 910, 79 S.Ct. 587, 3 L.Ed.2d 574: Concordia College Corp. v. Great American Ins. Co. (D. Minn. 1953), 14F.R.D. 403; Glen Falls Indemnity Co. 

### v. Atlantic Bldg. Corp. (4thCir. 1952), 199 F.2d 60. InKing v. StateFarm Mutual Insurance Co., supra, the court specifically held that an insurer sued by 

### its insured under an uninsured motorist provision, may bring the uninsured tortfeasor into the lawsuit. The court rejected the argument (which is the same argument Buckingham makes here) that the insurance company has no right of action until it has actuallypaid thejudgment to

### its insured, and therefore that impleader of the uninsured motorist should not be permitted untilpayment 

### ismade. 274 F.Supp. at 826.We also reject thisargument. We arepersuaded that the better practice 

### is topermit impleader in such practices, and therefore that the trial court erred in granting Buckingham's motion todismiss. We find no authority supporting Buckingham's position, and 

### we further note that the trial court granted the motion under the mistaken belief that Consolidated Freightways Corp. v. Osier (1979), Mont. 

## , 605 P.2d 1076, 36 St.Rep. 1810, mandated that result. But that case held only that there 

### is no right of contribution or indemnity between joint tortfeasors - inparidelecto. 605 P.2d at1081. Here, State Farm is not a tortfeasor and obviously isn't inparidelicto 

### - with Buckingham: Solem's action against StateFarm isn't a tort action; rather, it is a contract action. We hold that StateFarm may implead Buckingham under a theory of contingent liability based on subrogation. Liberally allowing impleader of contingently liable parties 

### is consistent with the underlying purposes of Rule 14. The rule 

### is designed to reduce multiplicity of litigation by settling all disputes arising from one occurrence in one suit, to spare an unsuccessful defendant the burden of bearing a judgment against him while he brings suit against
someone liable to him for plaintiff's claim, to prevent inconsistentjudgments on the same facts, and to settlethe ultimate liability for a claim with a minimum of effort and expense. See, C. Wright and A. Miller, 6 Federal Practice and Procedure, .§ 1442 (1971); See also, Glen Falls Indemnity Co. v. Atlantic Building Corp., supra, 199 F.2d at 63; St. Paul Fire & Marine Insurance v. United States Lines Co., supra. There is no good reason to afford Buckingham the procedural protection of being able to postpone being sued until the actionbetween Solem and StateFarm is concluded.In fact, a contrary holding would not eliminate Buckingham from being at least indirectly involved in the suit between Solem and State Farm. Plaintiff Solem must establish that Buckingham negligently caused any inj ur

### ies she received and therefore, it is unlikely that Buckingham could avoid an appearance incourt totestify. The order of the District Court dismissing the thirdparty complaint 

### is vacated. The case is remanded with instructions that the District Court require Buckingham to
answer StateFarm's third-party complaint.
F-1



### We Concur:

ChieLJustice



## ......................... Justices

This casewas submitted prior toJanuary 5, 1981.

### Mr. Justice JohnC. Sheehy, speciallyconcurring:

I

### agreewith the result reached in the foregoing opinion, which is the onlyproper result in the posture of the case as it is received from the District Court by this Court What puzzlesme is the fact that the insured sued his insurer in the first instanceby a direct action to establish liability against the uninsured motorist. I

### believe all insurance companieswriting uninsuredmotorist coverage in this state use a common form for such coverage, last amended, 

### Ibelieve, in 1966. Under that common form, the insured injured motoristmay, after notice to his insurance company, sue the responsible uninsured motorist to determine the extent of the uninsuredmotorist's legal liability,if they are not otherwiseable to agree. Until the legal liability of the uninsuredmotorist isdetermined, which in turndetermines the liability of the insurer,a direct action against the insurer, inmy opinion, ispremature. Suit first against the uninsuredmotorist would be in conformancewith the long-establishedrule in Montana that a direct action against an insurerdoes not lie until the liabilityof the insured has been established,Conley

### v. U.S.F. & 

### G. 

### Co. (1934),98

### Mont. 31, 37 P.2d 565,Cummingsv. Reins (1910),40Mont. 599, 107 P. 904,and our further long-standing rule that the injectionof insurance into the action determining liability is improper. Vonault v. O'Rourke

(1934),97Mont. 92, 33 P.2d 535. If plaintiff here had properly sued Buckingham to determine liability in the firstplace, theproblem of this causewould not have arisen.

Justice