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No. 98-413 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1999 MT 201 

295 Mont. 438

938 P.2d 999

THE TRAVELERS INDEMNITY COMPANY, 

Plaintiff and Respondent,

v.

NIEL ANDERSEN,

Defendant and Appellant.

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark,

The Honorable Thomas C. Honzel, Judge presiding.

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COUNSEL OF RECORD:

For Appellant:

Kenneth H. Gray; Jackson & Rice, Helena, Montana

For Respondent:

Joe Seifert; Keller, Reynolds, Drake, Johnson & Gillespie, 

Helena, Montana

Submitted on Briefs: April 22, 1999 

Decided: August 30, 1999

Filed:

__________________________________________

Clerk

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Justice Karla M. Gray delivered the Opinion of the Court

1. ¶Niel Andersen (Andersen) appeals from the judgment entered by the First Judicial 

District Court, Lewis and Clark County, on a jury verdict in favor of The Travelers 

Indemnity Company (Travelers). We affirm.

2. ¶Andersen raises the following issues:

3. ¶1. Did the District Court err in denying Andersen's motion for summary judgment 

asserting that Travelers' cause of action was barred by the statute of limitations?

4. ¶2. Did the District Court abuse its discretion in excluding expert witness testimony?

5. ¶3. Did the District Court abuse its discretion in excluding a report prepared by a 

deputy state fire marshal?

BACKGROUND 

1. ¶In 1974, Andersen purchased a large house in Helena, Montana, which 

subsequently was destroyed by fire on May 25, 1988. Local authorities investigating 

the fire determined the cause was arson, but could not determine with any certainty 

who was involved in the arson.

2. ¶At the time of the fire, the house was insured under a policy issued by Travelers. 

Andersen submitted a claim to Travelers, requesting payment under the insurance 

policy for the losses incurred by the destruction of the house. In conjunction with his 

claim, Andersen provided Travelers with his sworn statement that he was not 

involved in setting the fire which destroyed the house and he did not know who was 

responsible for the fire. In September of 1988, Travelers paid Andersen over 

$450,000 pursuant to the policy terms.

3. ¶Several years after the fire, the Lewis and Clark County Attorney (County 

Attorney) received information which he believed implicated Andersen and two 

others in a conspiracy to commit the 1988 arson. The County Attorney investigated 

further and, in July of 1992, filed an information in district court charging Andersen 

and Thomas Rippingale (Rippingale) with the felony offense of conspiracy to 

commit arson. A third alleged co-conspirator, Brian Hardy (Hardy), was charged 

with and pled guilty to the offense of arson in a separate proceeding.

4. ¶Upon learning of the newly discovered evidence and the filing of criminal charges 

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relating to the 1988 arson fire, Travelers filed this action against Andersen, 

Rippingale and Hardy. The complaint alleged that the defendants conspired to 

commit the arson which destroyed Andersen's house and sought reimbursement of 

the monies it paid Andersen under the insurance policy. Andersen subsequently 

moved for summary judgment, asserting that Travelers' cause of action was barred 

by the statute of limitations, and the District Court denied his motion.

5. ¶Hardy eventually was dismissed from the action and the proceedings against 

Rippingale were stayed as a result of his filing a petition for bankruptcy. The case 

proceeded to jury trial with Andersen as the sole defendant. The jury returned a 

verdict for Travelers, awarding it $465,175 in damages. Travelers then successfully 

moved the District Court to award prejudgment interest on the damages. The 

District Court entered judgment on the verdict, plus prejudgment interest and costs, 

in the amount of $905,789.94. Andersen appeals.

DISCUSSION 

1. ¶1. Did the District Court err in denying Andersen's motion for summary judgment 

asserting that Travelers' cause of action was barred by the statute of limitations?

2. ¶Andersen moved for summary judgment on the grounds that Travelers' complaint 

alleged a cause of action based on fraud and that, pursuant to § 27-2-203, MCA, the 

statute of limitations for an action based on fraud is two years. He argued that, 

because the actions which Travelers alleged constituted fraud occurred in 1988, the 

complaint--filed four years later in 1992--was untimely and the action was barred. 

The District Court denied the motion, but did not set forth the basis for its decision. 

Andersen asserts error.

3. ¶We review a district court's ruling on a summary judgment motion de novo and 

apply the same Rule 56, M.R.Civ.P., criteria applied by that court. Gomez v. State, 

1999 MT 67, ¶ 7, 975 P.2d 1258, ¶ 7, 56 St.Rep. 272, ¶ 7 (citation omitted). In that 

regard, 

[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the affidavits, if any, show that there 

is no genuine issue as to any material fact and that the moving party is entitled to a 

judgment as a matter of law.

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Rule 56(c), M.R.Civ.P. Generally, we begin our summary judgment review by 

determining whether the moving party established the absence of genuine issues of 

material fact. Gomez, ¶ 7. In the present case, however, the parties do not dispute the 

material facts relating to the summary judgment issue. Consequently, the question before 

us is whether Andersen was entitled to judgment as a matter of law. The District Court 

concluded that Andersen was not entitled to judgment as a matter of law and we review 

that conclusion to determine whether the interpretation of the law is correct. See Gomez, ¶ 

7 (citation omitted).

1. ¶Andersen reiterates on appeal his arguments that Travelers' complaint alleged a 

cause of action sounding in fraud, for which the statute of limitations is two years, 

and that, because the complaint was not filed until nearly four years after the alleged 

fraudulent acts, the action is barred. Travelers responds that the gravamen of its 

complaint is breach of the insurance contract, rather than fraud, and its complaint 

was filed well within the 8-year statute of limitations period set forth in § 27-2-202

(1), MCA, for an action based on a written contract.

2. ¶Under certain circumstances, potential tort liability may coexist with contract 

liability. Thiel v. Taurus Drilling Ltd. 1980-II (1985), 218 Mont. 201, 209, 710 P.2d 

33, 38; Unruh v. Buffalo Bldg. Co. (1981), 194 Mont. 553, 555, 633 P.2d 617, 618. 

Where an action may be based either in tort or contract, the injured party may elect 

the theory under which he or she wishes to proceed and the statute of limitations 

governing that theory will control. Weible v. Ronan State Bank (1989), 238 Mont. 

235, 237, 776 P.2d 837, 838. However, where doubt exists as to the theory of the 

action--and, therefore, which statute of limitations should apply--the general rule is 

that the doubt is resolved in favor of the longer statute of limitations. Weible, 238 

Mont. at 237, 776 P.2d at 838 (citing Thiel, 218 Mont. at 212, 710 P.2d at 40). "The 

choice of which statute of limitation should apply ultimately rests on a 

characterization of the essence of the claim." Thiel, 218 Mont. at 210, 710 P.2d at 

38. Consequently, we look to the substance of the complaint to determine the nature 

of the action and which statute of limitation applies. Weible, 238 Mont. at 237, 776 

P.2d at 838.

3. ¶Travelers' complaint alleges that it issued a policy to Andersen insuring his house 

which included fire hazard coverage. The policy provided that the fire hazard 

coverage was not available if the property was damaged through intentional arson 

by Andersen. The policy required that, in the event of a fire loss, Andersen was to 

provide Travelers with a true and correct proof of loss statement. The complaint 

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further alleges that, pursuant to this insurance contract provision, Andersen 

presented Travelers with two sworn proofs of loss stating that he was not involved 

with the incident which caused the destruction of his house and also gave Travelers 

sworn statements that he was not responsible for the fire and did not know the 

identity of the responsible people. The complaint alleges that, in reliance on 

Andersen's representations that he was not involved with the arson, Travelers paid 

him monies pursuant to the policy's terms.

4. ¶Travelers' complaint next alleges that Andersen, Rippingale and Hardy conspired 

to commit and committed the arson at issue in order to breach the insurance contract 

between Travelers and Andersen and that, "[b]y this breach of contract and fraud, 

Andersen has received the fire insurance proceeds to which he would otherwise not 

be entitled." Furthermore, the complaint alleges that Travelers is subrogated to the 

amounts paid Andersen as a result of the arson, through both the terms of the policy 

and Montana law, and that

Niel Andersen has wrongfully, deceitfully, and fraudulently committed arson to his 

property . . . in concert with Rippingale and Hardy, and has fraudulently submitted proofs 

of loss, statements under oath, and other information to Plaintiff, violating his insurance 

contract with Plaintiff, and wrongfully receiving Plaintiff's insurance proceeds through 

this fraud.

1. ¶Although Travelers' complaint clearly alleges that Andersen committed fraud, it 

also clearly alleges that Andersen's actions breached the insurance contract and that 

Travelers is entitled, under the terms of the contract, to be reimbursed for the 

monies it paid Andersen. While the complaint does not specifically denominate the 

claims as either tort or contract, we have held that

[t]he general rule applied to situations falling within the twilight zone of contract and tort 

law is that doubt must be resolved in favor of an action based upon contract.

Thiel, 218 Mont. at 209-10, 710 P.2d at 38.

1. ¶We conclude that Travelers' complaint sufficiently alleges a cause of action based 

on breach of a written contract to allow application of the 8-year statute of 

limitations set forth in § 27-2-202(1), MCA. As a result, we further conclude that 

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the complaint, filed within four years of the alleged acts on which the claim is 

based, was timely filed.

2. ¶We hold that the District Court did not err in denying Andersen's motion for 

summary judgment asserting that Travelers' cause of action was barred by the 

statute of limitations.

3. ¶2. Did the District Court abuse its discretion in excluding expert witness testimony?

4. ¶As stated above, Travelers sued Andersen, Rippingale and Hardy alleging that they 

were co-conspirators in the arson. Travelers stipulated to dismiss Hardy from the 

action prior to the trial. However, because Hardy had admitted that Rippingale 

solicited him to set the fire which destroyed Andersen's house, he was a primary 

witness in Travelers' case against Andersen. A number of years before the fire, 

Hardy had suffered a closed head injury which resulted in various psychological 

problems including poor memory and a propensity to be manipulated easily. As a 

result, his credibility as a witness was a major issue between the parties.

5. ¶Andersen intended to challenge Hardy's credibility at trial through the expert 

testimony of Dr. William Stratford (Stratford), a psychiatrist who examined Hardy 

and submitted a report stating, in essence, that Hardy was incapable of telling the 

truth. Travelers moved in limine to exclude Stratford's testimony, arguing that 

expert testimony regarding a witness's credibility is inadmissible. The District Court 

granted Travelers' motion based on our decision in Matter of Teaching Certificate of 

Thompson (1995), 270 Mont. 419, 893 P.2d 301. Andersen asserts error.

6. ¶Evidentiary rulings, including whether expert testimony is admissible, are within 

the trial court's discretion. Certificate of Thompson, 270 Mont. at 427, 893 P.2d at 

305. Consequently, we review the District Court's decision granting Travelers' 

motion in limine to determine whether the court abused its discretion.

7. ¶Generally, expert testimony evaluating the credibility of a witness is inadmissible. 

Certificate of Thompson, 270 Mont. at 427, 893 P.2d at 306; State v. Harris (1991), 

247 Mont. 405, 410, 808 P.2d 453, 455. The question of a witness's credibility lies 

exclusively within the province of the jury. Expert testimony regarding witness 

credibility improperly invades the jury's function in that the jury may defer to the 

expert's expertise and infer that the expert believes the witness to be credible or 

incredible. Certificate of Thompson, 270 Mont. at 429, 893 P.2d at 307; Harris, 247 

Mont. at 409, 808 P.2d at 455.

8. ¶Andersen contends that Stratford's testimony was to be directed toward describing 

Hardy's mental condition as a result of the injury he suffered rather than to directly 

assail Hardy's credibility. He asserts Stratford was to render opinions regarding 

Hardy's ability to appreciate the nature and quality of his acts, his capacity for lying, 

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his inability to relate his impressions of prior incidents, his poor memory and his 

tendency to be easily influenced or manipulated by others. He argues that it is 

permissible for an expert to testify about these types of things, that the testimony 

"goes to the very heart of the defense" and that, in determining Stratford's testimony 

was inadmissible, the District Court excluded the only evidence he had to impeach 

Hardy's credibility.

9. ¶The premise underlying Andersen's argument is that Stratford's testimony was his 

only evidence impeaching Hardy's credibility. Our review of the record, however, 

reveals that Andersen elicited testimony from other witnesses regarding virtually all 

of the points on which he contends Stratford was to testify. For example, Hardy 

testified on cross-examination regarding his accident, the nature of his head injury 

and that he had difficulty with his memory. Andersen's counsel also was able to 

highlight numerous inconsistencies in Hardy's testimony during cross-examination. 

Furthermore, Rippingale testified that Hardy was "a space cadet," was incapable of 

telling the truth, would adopt memories suggested to him by others regardless of 

whether the memories were true, was easily manipulated by family members and 

close friends, and had "diminished capacity." Hardy's wife testified that he had 

selective memory, would tell lies when it suited his needs and was capable of saying 

he did things he actually had not done.

10. ¶The record is clear that, Andersen's contention to the contrary notwithstanding, 

Stratford's testimony was far from the only testimony he had to impeach Hardy's 

credibility. Thus, the premise underlying Andersen's argument fails.

11. ¶We hold that the District Court did not abuse its discretion in excluding the expert 

witness testimony.

12. ¶3. Did the District Court abuse its discretion in excluding a report prepared by a 

deputy state fire marshal?

13. ¶At trial, Andersen offered into evidence a report written by a deputy state fire 

marshal who had assisted local law enforcement in investigating the fire but who 

had died prior to trial and was unavailable to testify. Travelers objected to admission 

of the document on the basis that it had not been endorsed as an exhibit in the 

pretrial order. The District Court reserved its ruling.

14. ¶During a subsequent discussion in chambers, Andersen again offered the document 

into evidence, arguing that it was admissible under Rule 803(6), M.R.Evid., as a 

record kept in the ordinary course of business. Travelers objected on the basis the 

document was an investigative report by law enforcement inadmissible under Rule 

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803(8)(i), M.R.Evid. The District Court concluded that the document was an 

investigative report and excluded it from evidence. Andersen asserts error and, as 

stated above, we review a district court's evidentiary rulings to determine whether 

the court abused its discretion. See Certificate of Thompson, 270 Mont. at 427, 893 

P.2d at 305.

15. ¶Andersen contends that the District Court should have admitted the fire marshal's 

report under the business records exception to the hearsay rule set forth in Rule 803

(6), M.R.Evid. In response, Travelers reiterates its first objection to the report, 

which was not addressed by the District Court, that the document was properly 

excluded because Andersen failed to identify it as an exhibit in the pretrial order.

16. ¶The purpose of pretrial orders is to simplify issues, prevent surprise and allow 

counsel to prepare their cases for trial based on the pretrial order. State ex rel. Ins. 

Fund v. Berg (1996), 279 Mont. 161, 180, 927 P.2d 975, 986. Additionally, a 

pretrial order governs the subsequent course of the action unless modified by a later 

order. Rule 16(e), M.R.Civ.P.; Berg, 279 Mont. at 179-80, 927 P.2d at 986. 

Consequently, we often have held that parties may not assert issues or other matters 

which were not included in the pretrial order. See, e.g., Berg, 279 Mont. at 180, 927 

P.2d at 986; Naftco Leasing Ltd. v. Finalco, Inc. (1992), 254 Mont. 89, 94-95, 835 

P.2d 728, 731-32; Bache v. Gilden (1992), 252 Mont. 178, 182, 827 P.2d 817, 819. 

More specifically, we previously have held that a district court erred in admitting 

evidence not listed as an exhibit in the pretrial order. Workman v. McIntyre Const. 

Co. (1980), 190 Mont. 5, 11-12, 617 P.2d 1281, 1284-85.

17. ¶Andersen concedes that he did not list the fire marshal's report as an exhibit in the 

pretrial order. He asserts, however, that the document was offered as rebuttal and 

that a party is not required to list rebuttal evidence in the pretrial order. We disagree 

with Andersen's characterization of this exhibit as rebuttal evidence.

18. ¶Andersen is correct that a party is not required to give advance notice of witnesses 

or evidence offered as rebuttal. See, e.g., Valley Properties v. Steadman's Hardware, 

Inc., (1992), 251 Mont. 242, 250, 824 P.2d 250, 255. However, rebuttal evidence is 

evidence offered to counteract new matter presented by the adverse party. Massman 

v. City of Helena (1989), 237 Mont. 234, 243, 773 P.2d 1206, 1211. Here, Andersen 

did not offer the fire marshal's report to counter any new evidence presented by 

Travelers. Rather, he offered the report during cross-examination of a witness 

presented during Travelers' case-in-chief. Evidence in a plaintiff's case-in-chief is 

not "new matter" to be counteracted with rebuttal evidence. See, e.g., Miller v. 

Frasure (1994), 264 Mont. 354, 370-71, 871 P.2d 1302, 1312. We conclude that the 

fire marshal's report was not rebuttal evidence and, as a result, we further conclude 

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that the report was properly excluded because Andersen failed to list it as an exhibit 

in the pretrial order.

19. ¶We hold that the District Court did not abuse its discretion in excluding the fire 

marshal's report.

20. ¶Affirmed.

/S/ KARLA M. GRAY

We concur:

/S/ JAMES C. NELSON

/S/ JIM REGNIER 

/S/ WILLIAM E. HUNT, SR.

/S/ TERRY N. TRIEWEILER 

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