No. 13047 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

19 7 5 

MOUNTAIN WEST FARM BUREAU, et a1.y 

Plaintiff and Appellant, 

ROBERT L. NEAL, individually and as 

Administrator of the Estate of 

DEBORAH NEAL, Deceased, and 

ROBERT C. DRIGGS, 

Defendants and Respondents. 

Appeal from: District Court of the First Judicial District, 

Honorable Gordon R. Bennett, Judge presiding. 

Counsel of Record: 

Scanlon and Connors, Anaconda, Montana 

Joseph C. Connors argued, Anaconda, Montana 

Radonich, Brolin and Reardon, Anaconda, Montana 

-p~/ 0/&~7e& For Reqmdmts : L.L -& 

Johnson and Foster, Lewistown, Montana 

Robert L. Johnson argued, Lewistown, Montana 

Submitted: December 17, 1975 

Filed : 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

Plaintiff Mountain West Farm Bureau Mutual Insurance 

Company (Farm Bureau) brought a declaratory judgment action 

against defendants Neal and Driggs seeking a declaration that 

Farm Bureau is liable to pay no more than $10,000 to its insured, 

It Neal, under its uninsured motorist" coverage. Neal counterclaimed that Farm Bureau is liable in the amount of $80,000. 

The district court, Lewis and Clark County, found Farm ~ureau's 

liability to be $40,000. Farm Bureau and Neal appeal from this 

order. 

The underlying issue is whether and under what circumstances a person carrying a single policy of automobile liability 

insurance, which insures two or more vehicles and includes a 

provision for uninsured motorist coverage, may "stack" or 

I I pyramid" the uninsured motorist coverage limits. The district 

court held that under the insurance policy in question the uninsured 

motorist coverage limits may be stacked on the basis of the number 

of vehicles insured, but that those limits may not be stacked on 

both the wrongful death and survival claims. We affirm. 

The facts of this case were stipulated in the district 

court and are undisputed here. Prior to July 4, 1971, Farm 

Bureau issued its policy of automobile liability insurance to Neal, 

the policy included a provision for uninsured motorist coverage in 

the amount of $10,000 for one person in any one accident. Four 

motor vehicles, all owned by Neal, were covered by the same policy. 

Neal, his wife, and his daughter Deborah were named insureds by 

definition under the policy, which was in full force and effect on 

July 4, 1971. 

On July b, 1971, Deborah Neal was riding on a motorcycle 

owned and operated by Robert Driggs, the other defendant herein. 

An accident occurred in which Deborah was injured; she died on 
July 10, 1971. Driggs was an uninsured motorist at the time of 

the accident. 

Neal brought an action against Driggs and Farm Bureau in 

the district court of Gallatin County seeking damages from Driggs 

for ~eborah's injury and death, and reimbursement from Farm 

Bureau under the uninsured motorist provisions of its policy with 

Neal. Thereafter, on February 6, 1974, Farm Bureau filed its 

complaint for declaratory judgment in Lewis and Clark County 

against Neal and Driggs. The Gallatin County action between Neal 

and Driggs is pending, Farm Bureau having been dropped as a party 

thereto. 

Farm Bureau alleged in its complaint that it had tendered 

$10,000 to Neal to satisfy its obligation under the uninsured 

motorist provisions of its policy; that said tender had been 

repeatedly refused; and that Neal believed he was entitled to 

multiply the $10,000 limit for uninsured motorist coverage by the 

number of automobiles Neal had insured under the same policy. 

Farm Bureau prayed for a declaratory judgment to the effect that 

it was under no duty or obligation to pay more than $10,000 to 

Neal for injuries to and death of Deborah Neal under the terms 

of the policy. 

Defendant Neal answered by admitting all of Farm Bureau's 

allegations save those which would limit Farm Bureau's liability 

to $10,000 or to $40,000. Neal counterclaimed for a declaratory 

judgment declaring that Farm Bureau's maximum obligation under 

the policy is $80,000 ---$40,000 for the damages to the heirs for 

the wrongful death of Deborah Neal, and $40,000 for the bodily 

injuries and personal suffering of Deborah Neal under her survival 

claim. Thus Neal sought to "stack" uninsured motorist coverage 

limits in two ways, viz. (1) by multiplying the $10,000 limit by 

the number of insured vehicles (four), and (2) by multiplying the 
$40,000 liability resulting thereby by the number of claims prosecuted 

by Neal as an insured individual and representative of the heirs 

of Deborah Neal, and as administrator of Deborah Ileal' s estate, 

(two). 

The district court of Lewis and Clark County had before 

it the stipulated facts and a copy of the insurance policy issued 

by Farm Bureau to Neal. Following hearing and submission of 

briefs, the court held that Farm ~ureau's maximum total obligation 

to Neal under its policy for all injuries to and the death of 

Deborah Neal is the sum of $40,000. Farm Bureau appeals from that 

portion of the district court's order which permits stacking the 

$10,000 uninsured motorist coverage limit on the theory that four 

vehicles were insured by one policy; Neal appeals from the portion 

of the order which denies his attempt to stack the two claims as 

an insured individual and as administrator of Deborah ~eal's 

estate. 

The issues on appeal are: 

(1) Do the insurance policy provisions relating to 

uninsured motorist coverage contain contradictions which render 

the policy ambiguous, thus permitting a judicial construction of 

the policy which allows stacking based on the number of vehicles 

insured? 

(2) Can the insurance claimant Neal stack uninsured 

motorist coverage limits on the basis of his capacity to sue on 

two claims, i.e., as an insured individual and as administrator 

of Deborah ~eal's estate? 

In its order and opinion dated March 12, 1975, the district 

court disposed of the first issue in this language: 

"1t is the opinion of the Court that the provisions 

of the policy dealing with and labelled '~imits of 

~iability' (pg.32) and those provisions of paragraph 

'1' of the definitions section of the policy (pg.37) 

are contradictory, ambiguous and beyond reconciliation 

and must therefore be construed in favor of the policyholder. When so construed, the effect of paragraph '1' 
af the definitions is to provide - four separate 

policies of uninsured motorist insurance with 

maxlmum liability of $10,000 each for each person 

physically injured or killed in a particular 

occurrence, there having been four vehicles insured 

under the policy at the time of the injury. JC JC JX" 

(Emphasis supplied.) 

The limits of liability provision referred to states 

i.n part : 

"(a) 'The limit of liability, as stated in the 

declarations for uninsured motorist coverage, as ' applicable to each person' is the limit of the 

company's liability for all damages, including 

damages for care or loss of services, because of 

bodily injury sustained by one person as the result 

of any one accident and, subject to the above provision respecting each person, the limit of liability 

stated in the declarations as applicable to 'each 

accident' is the total limit of the Company's 

liability for all damages, including damages for 

care or loss of services, because of bodily injury 

sustained by two or more persons as a result of 

any one accident. II 

I' It L~aragraph 1 of the definitions section provides in 

oertinent part: 

I' (1) Two (2) or more automobiles--- Fhen two (2) 

or more automobiles are insured hereunder, the 

terms of Section 111 shall apply separately to 

each JX it J;." 

This provision is referred to as the separability clause. 

The rule of construction of insurance policies in Montana 

<"a 

is stated in section 40-3725, R.C.M. 1947: 

1' Construction of policies. Every insurance contract 

shall be construed according, to the entiretv of its 

terms and conditions as set-forth in the and 

as amplified, extended, or modified by any rider, 

endorsement, or application which is a part of the 

policy. 11 

It is also the rule in Montana that where an ambiguity 

in an insurance policy exists after viewing it in its entirety, 

the terms thereof will be construed liberally in favor of the 

insured and strictly against the insurer. In Atcheson v. Safeco 

Insurance Company, 165 Mont. 239, 527 P.2d 549, 31 St.Rep. 839,846, 

it is said: 

"When an ambiguity arises ik J; * the insured is entitled to the benefit of any doubt. I I 
See also: Lamb v. "age, 153 Mor~t. 171, 455 P.2d 337; St. Paul 

Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 433 P. 2d 795; 

Johnson v. Equitable Ins. Co., 142 Mont. 128, 381 P.2d 778; Eby 

v. Foremost Insurance Co., 141 Mont. 62, 374 P.2d 857. Cf. Stonewall 

Ins. Co. v. West, 163 Mont. 12, 514 P.2d 764; Jones v. Virginia 

Surety Co., 145 Mont. 440, 401 P.2d 570; Section 13-720, R.C.M. 

1947. 

Viewing the limits of liability clause and separability 

clause in juxtaposition and as part of the entire policy leads 

I I to the conclusion that they are contradictory, ambiguous and 

11 beyond reconciliation. The separability clause is expressly 

made part of the uninsured motorist coverage. The limits of 

liability clause limits coverage for "each person" in any one 

accident to $10,000. On the other hand, under the separability clause 

each separate automobile is governed by the limits of liability 

clause of the policy. Thus, under the former clause Neal would 

recover no more than $10,000; under the latter he could recover up 

co $40,000. 

Applying the rules of construction of insurance policies 

hereinabove stated, we hold the district court was correct in 

construing the ambiguous provisions in favor of the insured, Neal, 

and stacking uninsured motorist coverage limits to a maximum of 

$40,000. 

Further clarification of this holding can be found in 

uninsured motorist cases from Montana and other jurisdictions. 

Farm Bureau and Neal strongly contested the application to the instant case of Sullivan v. Doe, 159 Mont. 50,59,60,62, 495 P.2d 

193, the only other reported Montana case dealing with uninsured 

motorist coverage. The pertinent issue in Sullivan as stated by 

the Court was: 

'I* * * whether it is permissible for an insurance 

company in Montana to place limitations in its t uninsured motorist1 coverage which reduce or 

eliminate its liability below the statutory limits." 
This Court unanimously held where there were two insurance 

policies on one individual, both of which contained uninsured 

motorist coverage, neither insurer could limit its liability 

below the $10,000 statutory limit by deducting workman's compensation or "other insurance" benefit payments by virtue of 

certain policty clauses. These clauses, as applied by the insurance companies, were in derogation of the letter and spirit of 

Montana's uninsured motorist statute, section 40-4403, R.C.M. 

1947, and were declared void. In Sullivan we were dealing with 

two insurance policies and with a "primary" and "excess1' insurer. 

Nevertheless, Sullivan aids our task here by declaring: 

"* Jc * The basic purpose of this [uninsured motorist] 

statute is obvious---to provide protection for the 

automobile insurance policyholder against the risk of 

inadequate compensation for injuries or death caused 

by the negligence of financially irresponsible motorists. 

t I The legislative purpose * * is simply to place 

the injured policy holder in the same position he would 

have been if the uninsured motorist had liability insurance * * *. ' 1 

11 In discussing the excess" insurer's contention that its "other 

insurance" clause relieved it of any liability, we stated: 

119c * * the statutory requirement of $10,000 

I uninsured motorist' coverage prescribes a minimum 

amount only and does not purport to fix a statutory 

maximum. l I 

The legislative policy considerations enunciated in 

Sullivan apply with equal force here. Therefore, where an insurer 

does not validly limit its liability to the statutory minimum, 

che uninsured motorist coverage limits can be stacked to effectuate 

the purpose of the uninsured motorist statute. That purpose is 

indemnification for the insured up to the limit of the insurer's 

Liability, as stacked, or the total damages suffered by the insured--- 

whichever is less. 

Both parties in this appeal cited cases from other jurisdictions in support of their contentions regarding the stacking of 

uninsured motorist coverage limits based on number of vehicles 
insured. Without extensively reviewing those conflicting cases 

in this opinion, we find ~eal's authorities more persuasive. 

In its order and opinion, the district court expressly 

relied on the Indiana case of Jeffries v. Stewart, (1nd.App. 1974), 

309 N.E.2d 448. In Jeffries the court found an ambiguity created 

by a limits of liability clause and separability clause almost 

identical to those in the instant case, and construed the policy 

in favor of stacking coverage limits. Subsequently in Miller v. 

Hartford Accident & Indemnity Co., 506 F.2d 11,15, the Court of 

Appeals applied Indiana law to an uninsured motorist coverage 

stacking situation, affirmed the District Court and held that 

stacking was not permissible. However, it reconciled this holding 

with Jeffries by stating: 

If* * * Resolving the ambiguity in favor of the 

insured, it [the Jeffries court1 held that the 

insured was entitled to aggregate the liability 

limits. In the case at bar, however, there was 

no separability clause affecting the uninsured 

motorist coverage and no ambiguity in the policy 

coverage, and the case logically may be distinguished. f: ik -'-I1 48 

It is with the reasoning of this statement from Miller 

that we distinguish Westchester Fire Insurance Company v. Tucker, 

(Tex.1974), 512 S.W.2d 679, relied on by Farm Bureau. Cf. Talbot 

v, State Farm Mutual Automobile Ins. Co. (Miss.1974), 291 So.2d 

699, (no reference to separability clause). Other cases cited by 

Farm Bureau either deal with general liability coverage rather than 

uninsured motorist coverage, Pacific Indemnity Company v. Thompson, 

56 Wash.2d 715, 355 P.2d 12; or fail to make any distinction between 

the two types of coverage, Castle v. United Pacific Insurance Group, 

252 Or. 44, 448 P.2d 357; Kennedy v. American Hardware Mutual Ins. 

Co., 255 Or. 425, 467 P.2d 963; Allstate Insurance Company v. Schmitka, 

21 Cal.App.3d 59, 90 Cal.Rptr. 399; Arminski v. United States 

Fidelity and Guaranty Co., 23 Mich.App. 352, 178 N.W.2d 497; Otto 

v. Allstate Insurance Company, 2 I11.App.3d 58, 275 N.E.2d 766; 

Allstate Insurance Company v. IlcHugh, 124 N,J.Super. 105, 304 A,2d 

777; Hurles v. Republic Franklin Ins. Co., 39 Ohio App,2d 118, 
316 N.E.2d 494. In order to promote the adjudicated purpose of 

our uninsured motorist statute, we decline to follow these cases. 

Farm Bureau urges one more point with respect to the 

I I first issue, namely, that the duplicate coverage" clause of the 

policy entitled the insured to only one set of uninsured motorist 

coverage limits. However, we agree with the district court, which 

stated in its order and opinion: 

I I The 'duplicate coverage' provision 9: * * 

deals with duplicate coverage within a single 

policy, not similar coverage in multiple policies. 

If it was intended to limit the statutorily required and accepted uninsured motorist coverage 

within any of the separate policies, it is invalid. It 

Cf. Sullivan v, Doe, 159 Mont. 50, 495 P.2d 193. 

On cross-appeal Neal maintains the $40.000 liability of . ', 

Farm Bureau should be doubled because there are two claims in the 

main tort action--survival and wrongful death. In effect, Neal 

claims coverage as (1) the legal representative as administrator 

of Deborah Neal's estate for her personal injuries and death, and 

(2) an insured.individua1 under the policy and representative of 

Deborah ~eal's heirs, also insureds under the policy, Alternatively, 

Neal seems to claim that in event the $20,000 limit of liability 

for "each accident" set forth in the limits of liability clause 

and the policy declarations can be stacked on the four separate 

policies to $80,000. 

The main argument runs afoul of that portion of the policy 

definition of "Named insuredi' which provides : 

I I The insurance afforded under Coverage P [uninsured 

motorist] applies separately to each insured, but 

the inclusion herein of more than one insured shall 

not operate to increase the limits of the Company's 

liability. " 

Accordingly ~eal's claim of $80,000 uninsured motorist coverage 

must fail. 

Neal's alternative contention that the "each accident" 

limit of $20,000 can be stacked is without merit. The limits of 
liability clause, heretofore set forth, subordinates the "each 

It accident1' provision to the each person" provision. The district 

court was correct in denying this claim. 

The order of the district court is affirmed. 

Justice . 

We Concur: 

n 

Chief' Justice James T. Harrison and Justice Wesley Castles 

dissenting: 

We dissent. 

We do not agree that there is any ambiguity in the 

liability and separability clauses and thus would not construe 

anything. 

However, we do agree with the majority's discussion 

of the cross-appeal. 

i' "".- Justice.