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No. 01-068
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 251

ROBERT D. DuBRAY, Plaintiff and Appellant,

v. FARMERS INSURANCE EXCHANGE and JOHN DOES 1 -10, Defendants and Respondents.
APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Thomas A. Olson, Judge presiding.
COUNSEL OF RECORD: For Appellant: Martin R. Studer, Attorney at Law, Bozeman, Montana For Respondents: Ian McIntosh, Crowley, Haughey, Hanson, Toole & Dietrich, P.L.L.P., Billings, Montana Submitted on Briefs: August 2, 2001 Decided: December 6, 2001

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__________________________________________ Clerk

Justice Terry N. Trieweiler delivered the Opinion of the Court. ¶1 The plaintiff, Robert DuBray, filed a complaint for declaratory judgment against the defendant, Farmers Insurance Exchange, in the District Court for the Eighteenth Judicial District in Gallatin County. DuBray asked the District Court to determine that Farmers was required to pay DuBray's medical expenses prior to settlement of or judgment on the underlying claim. DuBray additionally sought pre-judgment interest, costs of suit, and compensatory and punitive damages. The District Court granted defendants' motion to dismiss on the basis that DuBray's complaint was effectively a bad faith action barred by § 33-18-242(6)(b), MCA prior to resolution of the underlying claim against the insured. DuBray appeals the District Court's order. We affirm in part and reverse in part. ¶2 We consolidate and restate the issue presented as follows: ¶3 Did the District Court err when it dismissed DuBray's claim for declaratory judgment for failure to state a claim upon which relief can be granted? FACTUAL BACKGROUND ¶4 The parties agree that on July 10, 1998, a motor vehicle collision occurred between a vehicle driven by Farmers Insurance Exchange's insured, Steven Crawford, and a vehicle driven by the plaintiff, Robert DuBray. Following the accident, DuBray submitted a claim to Farmers for property damage and personal injuries caused by the accident. Farmers concluded that Crawford was primarily liable for the accident and advanced medical payments and compensation for property damages to DuBray. ¶5 When Farmers declined to advance further payments for medical expenses, DuBray brought this declaratory judgment action in the District Court for the Eighteenth Judicial District in Gallatin County to compel Farmers to continue paying his medical expenses. As of the date this matter was submitted, DuBray's underlying suit against Crawford to

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¶10 The District Court, having concluded that DuBray's complaint was the substantive equivalent of a bad faith action, dismissed the complaint pursuant to Rule 12(b)(6) M.R. Civ.P. The District Court relied on Fode v. Farmers Insurance Exchange (1986), 221 Mont. 282, 719 P.2d 414, for its conclusion that bad faith claims may not be brought until the liability issues of the underlying case have been determined either by settlement or by judgment. Based on this conclusion, the District Court dismissed DuBray's complaint in its entirety. ¶11 DuBray contends that the District Court erred by relying on Fode and ignoring Safeco Ins. Co v. District Court , 2000 MT 153, 300 Mont. 123, 2 P.3d 834, where we approved declaratory judgment actions as a means for compelling advance payment of medical expenses. DuBray further contends that his declaratory judgment action was filed pursuant to the Uniform Declaratory Judgment Act, §§ 27-8-101 through -313, MCA, and not § 33- 18-242(6)(b), MCA, and therefore is not a bad faith claim and is not barred. ¶12 Farmers contends that Safeco only authorized declaratory judgment actions for those damages which, according to our decision in Ridley v. Guaranty Nat'l Ins. Co. (1997), 286 Mont. 325, 951 P.2d 987, are owed prior to final settlement; that the only damages to which Ridley applies are undisputed medical expenses; and that, therefore, the District Court should be affirmed. ¶13 We agree with the District Court and Farmers that, with the exception of damages for which liability is reasonably clear, our decision in Safeco did not authorize a declaratory judgment action to determine an insurer's liability prior to resolution of the underlying claim on which the insurer's liability is premised. Therefore, we conclude that the District Court correctly dismissed DuBray's claims for pain and discomfort, mental distress, inconvenience, and punitive damages. However, Safeco specifically held that declaratory judgment proceedings to determine liability for payment of those damages, such as medical expenses, about which liability is reasonably clear are not barred by § 33-18-242 (6)(b), MCA. Therefore, we conclude that the District Court erred when it dismissed that part of DuBray's claim that sought payment of medical expenses. Furthermore, we conclude that to construe Ridley as applying only to medical expenses just because medical expenses were all that were at issue in that case is to construe our holding too narrowly and ignore the principle for which it stands, and to the extent that language in Safeco is inconsistent with this conclusion we take this opportunity to clarify it. ¶14 The essence of our holding in Ridley is that where liability is reasonably clear, injured

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