No. 86-034 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

THELMA WALKER, 

VS. 

B. MILES LARSON, and ST. PAUL FIRE AND 

MARINE INSURANCE COMPANY, 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Thomas M. McKittrick, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Howard F. Strause, Great Falls, Montana, 

For Respondent: 

Jardine, Stephenson, Blewett and Weaver; 

William D. Jacobsen, Great Falls, Montana, 

Submitted on Briefs: April 4, 1986 

Decided: October 2, 1996 

( ;: - f * yqfjfj Filed: 

Clerk 
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of 

the Court. 

This is an appeal from the Eighth Judicial District in 

and for Cascade County, Montana, granting summary judgment to 

defendants. We reverse and remand. 

In September, 1981, St. Paul Fire and Marine Insurance 

Company (St. Paul) issued an errors and omissions policy to 

B. Miles Larson (Larson), a practicing attorney in Stanford, 

Montana. The policy was a renewal of a policy Larson had 

with St. Paul since 1971, and was to be in effect for one 

year. The policy was not renewed when it came due, although 

an application to renew had been sent to Larson in July. 

St. Paul offered Larson a reporting endorsement, which 

had it been purchased, would have extended his coverage to 

include claims made or reported after the expiration date of 

the policy. Larson did not respond to the offer and no 

endorsement was issued. 

Larson was retained by Thelma Walker (Walker) during 

the summer of 1979 to probate the estate of her late husband. 

In January, 1982, the Internal Revenue Service (IRS) notified 

Walker that Larson had computed incorrectly the amount of 

estate tax due and owing by the estate and had incorrectly 

filed the Federal Estate Tax Return. At a meeting between an 

IRS agent, Walker, Walker's new attorney and her two 

daughters, it was determined that as a result of Larson's 

mistakes Walker owed a considerable amount in unpaid taxes 

and interest. 

Sometime before September 1, 1982, Larson was contacted 

by an IRS agent informing him the IRS did not agree with his 

computation on the estate tax returns. Larson also received 

a copy of a letter Walker wrote to the Commission on Practice 
June 1, 1982, detailing Larson's actions. Walker spoke to 

St. Paul's general agent in Stanford about Larson's actions. 

Walker's attorney sent a letter to Larson January 31, 

1983, outlining Walker's major complaint against Larson. A 

copy of that letter was sent to the agency office in Stanford 

and was promptly forwarded to the St. Paul offices in Great 

Falls, along with a claim form. Shortly thereafter, St. Paul 

mailed a letter to Larson denying coverage on the ground the 

claim had not been made within the policy period. 

Walker subsequently filed a complaint against Larson 

alleging he had committed malpractice in administering the 

estate of her late husband and she had been damaged. She 

further alleged lack of good faith in settlement negotiations 

and other unfair trade practices as prohibited by 

$ 33-18-201, MCA. Both defendants filed motions to dismiss, 

which were denied. Larson did not file an answer and a 

default judgment was taken. St. Paul then filed a 

declaratory judgment action, asking the court to dismiss 

Walker's claim against it and to declare that her actions 

against Larson were not covered by any insurance policy 

issued by St. Paul. Several months later St. Paul moved for 

summary judgment on all issues relating to its liability. 

Walker filed a memorandum of authorities in opposition to the 

motion for summary judgment and affirmatively asked the court 

to grant summary judgment in her favor on the issue of 

insurance coverage. The court granted judgment in favor of 

St. Paul and dismissed Walker's claim aga-inst St. Paul with 

prejudice. Walker appeals that order. 

Appellant presents two issues to the Court; 

(1) Whether it was error to grant summary judgment to 

defendants rather than to plaintiff and (2) whether there was 
a factual question as to whether or not bad faith was 

involved in St. Paul's denial of coverage. The first issue 

is dispositive. 

Summary judgment is granted only when there is no 

genuine issue of material fact. Rule 52 (a) , M.R.Civ.P. F7e 

will not reverse an order of the District Court unless it is 

clearly erroneous resulting in an abuse of discretion. In 

this case the ruling was clearly erroneous. 

Larson's policy was a "claims made policy." Coverage 

was effective if a claim was made within the policy term. 

Both parties acknowledge the act of malpractice occurred 

within the policy term. St. Paul attempts to show no claim 

was made until after the term had expired. Walker argues, in 

turn, several incidents within the policy term effectively 

were claims. She had conversations with the agent and the 

secretary at the agency office in Stanford, and she wrote a 

letter to the Commission on Practice. She did not file a 

complaint in district court within the policy term. 

Appellant relies upon J.P. Link and Company v. 

Continental Casualty Company (9th Cir. 1972), 470 F.2d 1133. 

In that case the Circuit Court held that in the "claims made 

policy" under review, the word "claim" was ambiguous. The 

word "claim" could include more than filing a lawsuit and 

there was evidence that claims of liability were being 

pressed against the insured although no official claim had 

been filed. Coverage in Link was found to exist as a matter 

of law because ambiguity in the term claim was construed 

against the insurer, who wrote the policy. 

The case before us is strikingly similar to the Link 

case. The word "claim" is not defined in this policy and 

under the authority of Link it is sufficiently ambiguous to 
spring the rule which requires the ambiguity be construed 

against the insurer. There is ample evidence here to show 

that the plaintiff made claim against Larson, the insured, 

during the policy period. In fact, Plaintiff Walker filed a 

complaint with the Commission on Practice and advised both 

the insured and the insurer's agent, that she had done so. 

This action was taken during the policy period. 

We reverse summary judgment and hold coverage as a 

matter of law. The case is remanded for entry of judgment in 

favor of Thelma Walker.