No. 95-207 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1995 

STATE FARM FIRE AND 

Plaintiff 

CASUALTY COMPANY, 

and Appellant, 

v. 

DARRELL POWELL, and JACK SMITH, as 

guardian ad litem for NATASHA SMITH, 

and as Personal Representative of the 

Estate of CHRISTINA SMITH, deceased, <<.,/ ..~sm;& ~~~~~~~~~~~~~~~~~ 

_ /,._ __ _, .,Lrrib"r .Y 

Defendants and Respondents. 

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: 

Lyman H. Bennett, III, Morrow, Sedivy & Bennett, 

Bozeman, Montana 

For Respondent: 

Anne Biby, Bottomly Law Offices, 

Kalispell, Montana (for Smith) 

Filed: 

Submitted on Briefs: August 31, 1995 

Decided: November 21, 1995 
Justice'Terry N. Trieweiler delivered the opinion of the Court. 

The plaintiff, State Farm Fire and Casualty Company, filed a 

complaint in the District Court for the Eighth Judicial District in 

Cascade County in which it sought a declaratory judgment to the 

effect that the insurance policy it issued to Darrell Powell did 

not provide liability coverage for his collision with Christina 

Smith on August 8, 1994. State Farm moved for summary judgment. 

Jack Smith, who represented Christina Smith's estate and her 

daughter, also moved for summary judgment. State Farm's motion was 

denied and Smith's motion was granted. State Farm appeals the 

District Court's disposition of the summary judgment motions. We 

affirm the judgment of the District Court. 

The issue on appeal is whether the District Court correctly 

concluded that the vehicle operated by Darrell Powell at the time 

of his collision with Christina Smith was an "insured vehicle" 

according to the terms of State Farm's policy issued to Powell. 

FACTUAL BACKGROUND 

In December 1993, Darrell Powell entered into an oral 

agreement to buy a 1971 Ford truck from his brother and 

sister-in-law, Walter and Amanda Powell. Walter and Darrell agreed 

that Darrell would make payments for the Ford when able and that he 

would become the owner of the truck after he had paid the full 

$1200 purchase price. Until the full purchase price was paid on 

July 10, 1994, Walter continued to insure the Ford with his own 
carrier: On one occasion, Darrell paid the premium amount to 

Walter, who then sent the premium to his carrier. 

During the seven month period that Darrell made payments to 

Walter, Walter and Amanda kept the truck at their home and used it 

as their own. From time to time, Darrell would notify Walter and 

Amanda that he wanted to use the truck, and he would do so if it 

was available at the time he needed it. Walter and Amanda, 

however, continued to use the truck in exactly the same manner they 

had used it prior to their oral purchase agreement with Darrell. 

In.January 1994, while Darrell was making payments to Walter, 

the truck's registration expired. Walter and Darrell agreed that 

Darrell should register the truck in his name so that he would not 

have to re-register the vehicle later that year. In order to 

register the truck, Darrell's name had to appear on the title. 

Walter transferred the title, and Darrell registered the Ford truck 

in his name on January 28, 1994. A new title was issued in 

Darrell's name on March 11, 1994. 

On July 10, 1994, Darrell made the final payment for the Ford 

truck. .On that date, Walter and Amanda cancelled their insurance 

policy which covered the truck and executed a bill of sale which 

stated: 

We, the undersigned, hereby sell to Darrell L. Powell, a 

1971 3/4 Ton 2 Wheel Drive Ford Pickup - green and white 

in color. Debt is paid in full on this date. 

DATED this 10th day of July, 1994. 

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Although Darrell continued to leave the truck at Walter's 

house after July 10, Darrell then used the truck at will, whereas 

Walter asked Darrell's permission to borrow it. According to their 

affidavits, Walter and Amanda intended that ownership of the truck 

pass to Darrell on the date he finished paying for it. After 

July 10; 1994, Walter and Amanda no longer considered themselves 

the owners of the Ford truck. 

On August 8, 1994, while attempting to walk across U.S. 

Highway 2 near Havre, Christina Smith was struck by the Ford truck 

which was being operated by Darrell. Christina died seven hours 

later as a result of injuries caused by the collision. 

Jack Smith, as personal representative of Christina's estate 

and guardian ad litem of her five-year-old daughter, filed an 

action against Darrell Powell in the District Court of the Twelfth 

Judicial District in Hill County. That action is still pending. 

Powell's insurance provider, State Farm, then filed this 

declaratory judgment action to avoid coverage for Powell's 

potential liability. State Farm insured Powell's 1986 Mazda pickup 

truck at the time of the collision, but maintained that the Ford 

truck he was operating was not an insured vehicle. 

On April 4, 1995, the District Court granted Smith's 

cross-motion for summary judgment, based on its determination that 

the Ford truck was insured as a "newly acquired vehicle" according 

to the terms of Powell's insurance policy. On April 20, the court 

entered a declaratory judgment in favor of Smith. 

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STANDARD OF REVIEW 

This Court reviews a summary judgment order entered pursuant 

to Rule 56, M.R.Civ.P., based on the same criteria applied by the 

district court. Brinkman and Lenon v. P c? D Land Enterprises ( 19 94 ) , 2 6 3 Mont . 

238, 241, 867 P.2d 1112, 1114. Rule 56(c), M.R.Civ.P., provides 

that summary judgment is proper only when "there is no genuine 

issue as to any material fact and . . the moving party is 

entitled to a judgment as a matter of law." 

Because our review of summary judgment is plenary, we decline 

to review two of State Farm's claims on appeal: first, that the 

trial court failed to consider State Farm's reply brief before 

issuing its order; and second, that the court did not state with 

sufficient particularity its reasons for granting Smith's summary 

judgment motion. Since we review the entire record, including 

State Farm's reply brief, denovo, we hold that the District Court's 

failure to consider that brief was, at best, a harmless error. 

Furthermore, there was nothing in State Farm's three-page reply 

brief which even addressed the issue on which the District Court's 

judgment was based. Therefore, State Farm's substantial rights 

could not have been affected by the District Court's failure to 

consider it. 

We also hold that the District Court's order granting summary 

judgment, though not exhaustive, was sufficient to apprise the 

parties'of the court's rationale for concluding that Powell's Ford 

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truck was an insured vehicle according to the terms of State Farm's 

policy. 

DISCUSSION 

Did the District Court correctly conclude that the vehicle 

operated by Darrell Powell at the time of his collision with 

Christina Smith was an "insured vehicle" according to the terms of 

State Farm's policy issued to Powell? 

State Farm contends that it did not insure Darrell's operation 

of his Ford truck on August 8, 1994, because on that date the truck 

was not an "insured vehicle" as required by Powell's insurance 

policy. According to State Farm, Powell's truck was not an 

"insured vehicle" because it was neither (a) "your car," (b) a 

"newly acquired car," (c) a "temporary substitute car," or (d) a 

"non-owned car," as required by the terms of the policy. 

State Farm reasons that "your car" can only be the car 

described on the declarations page, in this case the 1986 Mazda 

truck. However, since Powell had purchased the 1971 Ford truck and 

the title had been transferred, neither was it a "non-owned car," 

and it was not a "temporary substitute car," which is also defined 

as a non-owned vehicle. State Farm further maintains that the Ford 

was not a "newly acquired car" because Powell did not notify the 

company of his acquisition of the vehicle within thirty days after 

the date on which he acquired an ownership interest. State Farm 

relies on our decision in Colonial Insurance Co. v. Blankenship (1988) , 231 

Mont. 469, 753 P.Zd 880, to establish the proposition that Powell 

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became the owner of the Ford when he acquired title to the vehicle 

in January 1994, rather than when Walter and Amanda executed the 

bill of sale on July 10, 1994. 

Although we agree that Colonial Insurance would be the starting 

point for determining Powell's ownership of the vehicle, we hold 

that "delivery," and not "ownership," is the definitive date from 

which to determine coverage based on State Farm's policy. The 

plain language of State Farm's policy provides that: 

NewlyAcquiredCar - means a car newly owned by you if it . . . 

is an added CCIY and . . [is] owned by you on the date of 

its delivery to you; but only if you . . . tell us about 

it within 30 davs after its deliverv to YOU . . . 

(Underlining added.) The policy clearly states that the thirty-day 

grace period is to run from the date of delivery, not from the time 

an ownership interest is acquired. 

The sincerity of State Farm's argument in this case must be 

questioned in light of the inconsistent position it has taken in 

the past when it was to its advantage to do so. In the past, State 

Farm has taken the position that the date of delivery is the 

crucial date from which to determine coverage for a newly acquired 

vehicle. In LYllier v. Turnaclzfl (N.M. 1988), 758 P.2d 796, Turnacliff 

took possession of a car on October 21, before the title was 

transferred or payment was made. After Turnacliff was involved in 

an accident on November 28, State Farm argued that the dispositive 

date for coverage under its "newly acquired car" provision-- 

identical to the provision in Powell's policy--was the date of 

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delivery. The L’Allier court agreed that according to the policy 

language "the newly acquired car provision began to run when the 

newly acquired car was 'owned' and 'delivered' to Turnacliff." 

L’ANier , 758 P.2d at 797. The court stated: 

The dispositive issue on appeal is whether, as a matter 

of law, the thirty-day notice period under the newly 

acquired car provision in Turnacliff's automobile 

insurance policy began to run when Turnacliff took 

delivery of the car. We hold that delivery is a critical 

element of ownership of a car, and when the circumstances 

indicate that the parties intended for ownership of the 

car to pass, delivery of the car is sufficient to trigger 

the running of the newly acquired car provision in an 

automobile insurance policy. 

L ‘Allier , 758 P.2d at 797. 

Because "delivery" is not defined in State Farm's insurance 

policy, we choose to give the term its ordinary meaning. We hold 

that in the context of the newly acquired vehicle clause, the word 

"delivery" signifies a handing over of physical possession and 

control of an automobile. 

In this case, we conclude, based on uncontroverted facts, that 

delivery occurred on July 10, 1994, when Walter and Amanda intended 

to transfer ownership of the truck to Darrell, and when Darrell's 

physical possession and control of the truck was finally possible. 

Therefore, we conclude that the Ford truck operated by Darrell 

Powell on August 8, 1994, when he collided with Christina Smith, 

was a "newly acquired vehicle," and therefore, an "insured vehicle" 

according to the terms of State Farm's policy. 

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For these reasons, we affirm the District Court's order which 

denied State Farm's motion for summary judgment and granted summary 

judgment to the defendants. 

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