file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

No. 00-133 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

2001 MT 28 

NATIONAL CASUALTY COMPANY, 

a Wisconsin corporation, 

Plaintiff and Interpleader,

STEVEN SUMMERS, 

Defendant and Appellant, 

v.

AMERICAN BANKERS INSURANCE COMPANY

OF FLORIDA, an Insurance Company, 

Defendant, Respondent and Cross-Appellant. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

Honorable Ed McLean, Judge Presiding

COUNSEL OF RECORD:

For Appellant:

Charles J. Tornabene, Tornabene & McKenna, Missoula, Montana

For Respondent:

Lon T. Holden and Brian L. Taylor, Jardine, Stephenson, Blewett

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (1 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

and Weaver, Great Falls, Montana (American Bankers) 

Thomas R. Bostock, Warden, Christiansen, Johnson & Berg, 

Kalispell, Montana (National Casualty) 

Submitted on Briefs: July 20, 2000 

Decided: February 15, 2001

Filed:

__________________________________________

Clerk

Justice W. William Leaphart delivered the Opinion of the Court. 

¶1 Steven Summers (Summers) appeals from the order of the Fourth Judicial District 

Court granting American Bankers Insurance Company of Florida (American Bankers) 

proceeds that National Casualty Company (National) deposited with the court when it 

filed an interpleader action. American Bankers cross-appeals the order denying its motion 

for attorney fees. We affirm.

¶2 The following issues are presented on appeal:

¶3 1. Did the District Court err in concluding that American Bankers' "other insurance" 

clause was enforceable? 

¶4. Did the District Court err in concluding § 33-24-102, MCA, has no application in the 

present case?

¶5. Did Summers preserve for appeal a pro rata reimbursement issue?

¶6. Did the District Court abuse its discretion in denying American Bankers' motion for 

attorney fees?

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (2 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

Factual and Procedural Background

¶7 Summers owned a home in Missoula for which he purchased insurance in 1995 from 

American Bankers. In March of 1997, Summers' agent, acting on Summers' direction, 

obtained an insurance policy from National. Summers intended to replace rather than 

supplement, the American Bankers policy with the National policy; however, neither 

Summers nor his agent canceled the American Bankers policy or informed American 

Bankers of the policy with National. Summers continued to make premium payments for 

the American Bankers policy. 

¶8 Both of the policies contained "other insurance" clauses. The American Bankers policy 

provided:

Other Insurance. If the insurance provided by this policy is also provided by other 

insurance, the coverage under this policy will terminate as of the effective date of 

the other insurance.

National's policy provided:

Other Insurance. If property covered by this policy is also covered by other fire 

insurance, we will pay only the proportion of a loss caused by any peril insured 

against under this policy that the limit of liability applying under this policy bears to 

the total amount of fire insurance covering the property.

¶9 In November, 1997, a fire destroyed Summers' house. Summers submitted a claim to 

American Bankers and received $80,000, which was the policy limit. American Bankers 

subsequently learned of Summers' policy with National. National filed an interpleader 

action in the District Court and deposited its policy limit of $77,000 with the clerk of 

court. Both American Bankers and Summers claimed entitlement to the deposited monies 

and filed cross-motions for summary judgment.

¶10 The District Court granted American Bankers' summary judgment motion and 

concluded that the "other insurance" clause in American Bankers' policy should be 

enforced and that Summers' policy with American Bankers therefore terminated when 

Summers obtained an insurance policy with National. The court also determined that § 33-

24-102, MCA, which provides that the amount of insurance written in a policy "shall be 

taken conclusively to be the true value of the property insured," could not be applied to 

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (3 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

two separate insurance policies as Summers advocated because the "specific language of 

the statute limits its application to recovery for property improvement losses under a 

single insurance policy." 

¶11 The court ordered that American Bankers was entitled to the $77,000 that National 

had interpled as well as the $3,000 difference in the two policy limits. The court ordered 

Summers to reimburse American Bankers for that difference less the $470.00 Summers 

paid American Bankers in premiums after obtaining the insurance policy with National. 

The court also denied American Bankers' motion for attorney fees, concluding in part that 

the common law equitable exception to the rule that parties are responsible for their own 

attorney fees did not apply as Summers' arguments were neither "frivolous nor malicious 

in nature."

Discussion

¶12 1. Did the District Court err in concluding that American Bankers' "other insurance" 

clause was enforceable? 

¶13 Our standard of review in appeals from summary judgment orders is de novo. Mead v. 

M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. We review a district court's 

summary judgment to determine whether it was correctly decided pursuant to Rule 56, M.

R.Civ.P., which provides that summary judgment is only appropriate where there is no 

genuine issue of material fact, and the moving party is entitled to judgment as a matter of 

law. In the case at hand, both parties moved for summary judgment, agreeing that there 

were no genuine issues of material fact. We are guided in our interpretation of insurance 

policies by the well-established principle that when the language of a policy is clear and 

explicit, the policy should be enforced as written. Nat'l Farmers Union Property & Cas. v. 

George, 1998 MT 205, ¶ 12, 290 Mont. 386, ¶ 12, 963 P.2d 1259, ¶ 12.

¶14 Relying on the public policy enunciated in automobile insurance cases, Summers 

claims that American Bankers' "other insurance" clause is void as a matter of public 

policy. See Bennett v. State Farm Mut. Auto. Ins. (1993), 261 Mont. 386, 390, 862 P.2d 

1146, 1149. Summers argues that American Bankers should not now be allowed to avoid 

liability under a policy for which it accepted premium payments. 

¶15 American Bankers responds that the public policy that victims shall receive adequate 

compensation does not prevent enforcement of "other insurance" clauses. American 

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (4 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

Bankers argues that Summers has already been fully compensated and that public policy 

precludes Summers from profiting by receiving a double recovery for his property loss. 

Citing the rule that when clear, an insurance policy should be enforced, American Bankers 

asks the Court to affirm the District Court's decision. Summers does not argue that the 

policy is ambiguous but again emphasizes that public policy demands that insurance 

companies not escape liability under insurance policies for which they have accepted 

premium payments.

¶16 Our decisions allowing the stacking of multiple insurance policies in automobile 

insurance cases were predicated on the public policy that victims should be compensated 

for their losses. We have held that multiple uninsured and underinsured motorists policies 

should be stacked when an insured who is named in multiple policies has proven damages 

that exceed the limits of an individual policy. Bennett, 261 Mont. at 390, 862 P.2d at 1149. 

Our decisions do not support providing a windfall to an insured who has suffered a 

property loss and has been fully compensated for that loss under his insurance policy. 

¶17 Summers has not claimed that if he were limited to recovery from one policy, he 

would not be adequately compensated. He merely states that nothing in the record 

indicates the value of the property, and therefore there is nothing in evidence to prove he 

would actually profit from receiving payments from both insurance companies. The public 

policy enunciated in Bennett does not apply in the present case as Summers has not even 

suggested that his loss exceeds the limits of his policy with National. The fact that 

Summers intended to have a single policy insuring his house for $77,000 indicates that he 

has already been fully compensated for his property loss. 

¶18 The language of American Bankers' insurance policy is clear and explicit, and this 

Court finds no public policy reason to avoid its provisions. Although some authorities 

suggest that escape clauses may be considered unconscionable when "though there was 

technically other collectible insurance, enforcement of the clause would result in the 

insured losing all coverage," the present case is not such a situation. Couch on Insurance 

3d, § 219:37 (1999). American Bankers has done precisely what we recommended in 

Musselman, when we advised, "we believe that insurance companies are in a better 

position to draft policies to prevent" situations which provide an insured with a profit. 

Musselman v. Mountain West Farm Bureau Mut. Ins. (1992), 251 Mont. 262, 268, 824 

P.2d 271, 275. We affirm the District Court ruling that the contract be enforced as written, 

and that, as written, its "other insurance" clause terminated the policy at the time Summers 

procured an insurance policy with National protecting the same property. 

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (5 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

¶19 2. Did the District Court err in concluding § 33-24-102, MCA, has no application in 

the present case?

¶20 Section 33-24-102, MCA, provides:

Insuring improvements - insurance equal to true value. Whenever any policy of 

insurance shall be written to insure any improvements upon real property in this 

state against loss or damage and the property insured is considered to be a total loss, 

without criminal fault on the part of the insured or his assigns, the amount of 

insurance written in such policy shall be taken conclusively to be the true value of 

the property insured and the true amount of loss and measure of damages.

¶21 Summers argues that this "value stated" statute applies in the present case and that it 

requires that he receive the sum of the two policies he inadvertently maintained. Summers 

contends that since the "actual or appraised value of the property has never been 

ascertained and could possibly be in excess of the coverage of the two policies," the total 

coverage of both policies should be taken conclusively to be the true value of the property.

¶22 In Issue 1, we affirmed the District Court holding that Summers' policy with 

American Bankers terminated when he obtained his policy with National and we therefore 

need not address this issue. According to our holding in Issue 1, Summers only had one 

policy in effect at the time of the fire. Summers has already received the full amount of 

that coverage and consequently the application of § 33-24-102, MCA, would have no 

effect on the present case. 

¶23 3. Did Summers preserve for appeal a pro rata distribution issue?

¶24 Summers admits he did not raise the issue of pro rata distribution in the District Court, 

but argues that the issue nonetheless was squarely before the court. Summers argues that 

the issue was raised when National asked the court to "determine the right, if any, of each 

Defendant to share in the interpleaded sum and the amount of such share," and therefore 

requests this Court to prorate the loss between the two insurance companies. Summers 

further contends that American Bankers would be unjustly enriched if it were to receive 

the entire amount interpled by National, and that National should receive none of the 

funds as returning the money to National "would be to reward that company's lack of 

diligence." Consequently, Summers concludes that "fairness, if nothing else, would dictate 

that the balance be released to the Appellant."

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (6 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

¶25 Summers did not raise the issue of pro rata distribution at the District Court and we 

will not review a lower court's actions (or inaction) on an issue it was not given the 

opportunity to consider. Day v. Payne (1996), 280 Mont. 273, 277, 929 P.2d 864, 866. 

Furthermore, Summers has already received full payment on his single valid insurance 

policy, and pro rata distribution between National and American Bankers could have no 

effect on his award. Summers therefore has no interest in and no standing to argue for pro 

rata distribution between the two insurance companies. 

¶26 4. Did the District Court abuse its discretion in denying American Bankers' motion for 

attorney fees?

¶27 A district court's grant or denial of attorney fees is a discretionary ruling which we 

review for abuse of discretion. Braach v. Graybeal, 1999 MT 234, ¶ 6, 296 Mont. 138, ¶ 6, 

988 P.2d 761, ¶ 6. However, a district court's underlying determination that legal authority 

exists for an award of attorney fees is a conclusion of law which we review to determine 

whether the court interpreted the law correctly. Braach, ¶ 6. The general rule in Montana 

is that absent a statutory or contractual provision, attorney fees are not recoverable. 

Kennedy v. Dawson, 1999 MT 265, ¶ 52, 296 Mont. 430, ¶ 52, 989 P.2d 390, ¶ 52. 

¶28 This Court has recognized an equitable exception to the general rule regarding 

attorney fees. In Braach, we clarified that: 

[A] court, under its equity powers, may award attorney fees to make an injured party 

whole. Foy v. Anderson (1978), 176 Mont. 507, 511-12, 580 P.2d 114, 116-17. Such 

awards are to be determined on a case-by-case basis. Foy, 176 Mont. at 511, 580 

P.2d at 117. In subsequent cases addressing the Foy "equitable" exception, however, 

we have expressly limited its applicability to situations where a party has been 

forced to defend against a wholly frivolous or malicious action. See, e.g., Youderian 

Const., Inc. v. Hall (1997), 285 Mont. 1, 15, 945 P.2d 909, 917; Newman v. Wittmer

(1996), 277 Mont. 1, 12, 917 P.2d 926, 933; Tanner v. Dream Island, Inc. (1996), 

275 Mont. 414, 429-30, 913 P.2d 641, 651; Holmstrom Land Co. v. Hunter (1979), 

182 Mont. 43, 48-49, 595 P.2d 360, 363.

Braach, ¶ 9.

¶29 American Bankers asks this Court to adopt an expanded interpleader exception which 

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (7 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

allows for an award of attorney fees if a party makes a "false claim." American Bankers 

contends that "[t]his case presents the perfect example of why this Court should recognize 

or apply such an exception. American Bankers is innocent of any wrongdoing . . . [and 

Summers] made what should be viewed as a false claim . . . ."

¶30 In its attempt to encourage us to adopt a new rule, American Bankers summarily states 

that it is innocent and that Summers' claim was false. American Bankers clarifies neither 

what constitutes a "false claim," nor why Summers' claim should be considered "false" 

and provides little analysis to convince this Court that Montana should adopt a new 

interpleader rule. We decline to adopt an interpleader exception which would allow the 

award of attorney fees when a "false" claim is made. 

¶31 Finally, awarding attorney fees is a discretionary act. American Bankers has presented 

no argument and this Court sees no evidence that the District Court abused its discretion in 

expressly declining to apply either the equitable exception or a proposed interpleader 

exception in its denial of American Bankers' motion for attorney fees. Even if we were to 

adopt an exception, the awarding of attorney fees would continue to be discretionary. 

Reversal of a discretionary action by a district court requires proof of abuse of discretion. 

Braach, ¶ 6. American Bankers has presented no such proof of abuse in this case. 

¶32 The District Court correctly interpreted the law in Montana when it determined that 

because Summers' claim was neither frivolous nor malicious, it would not award attorney 

fees to American Bankers. We therefore affirm the District Court's denial of American 

Bankers' motion for attorney fees. 

/S/ W. WILLIAM LEAPHART

We concur: 

/S/ KARLA M. GRAY

/S/ JAMES C. NELSON

/S/ JIM REGNIER

/S/ TERRY N. TRIEWEILER

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (8 of 9)3/23/2007 4:10:11 PM
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-133%20Opinion.htm (9 of 9)3/23/2007 4:10:11 PM