Opinion ID: 889317
Heading Depth: 1
Heading Rank: 5

Heading: Issue Three: Did the District Court abuse its discretion by allowing St. Paul to present prejudicial and inadmissible evidence at trial?

Text: ¶ 52 Peterson argues the District Court abused its discretion when it allowed St. Paul to present the following evidence at trial: (1) evidence of a lack of traffic citations; (2) evidence from responding Montana Highway Patrol officers regarding the point of impact of the accident; and (3) testimony about Peterson's prior driving activity. Peterson argues that the federal district court prohibited such evidence in the negligence suit, and that the District Court's admission of this evidence in the UTPA case was directly contrary to Britton v. Farmers Ins. Group, 221 Mont. 67, 721 P.2d 303 (1986). ¶ 53 In Britton, we held that while an insurer may utilize inadmissible facts or evidence to develop admissible evidence, it acts unreasonably if it declines payment of a claim merely upon inadmissible evidence or testimony. Britton, 221 Mont. at 86-87, 721 P.2d at 316. Here, the evidence in question was not the sole basis for the denial of the claim; rather, it was evidence contained in the insurer's file which, along with other evidence, informed St. Paul's decision. In Lorang, we said that the information in the insurer's records is critical in determining whether a UTPA violation has occurred. Lorang, ¶ 88. This is just such information. Britton did not abrogate a district court's discretion regarding the admissibility of evidence in a bad faith case; it merely held that if an insurer has nothing more than inadmissible hearsay-type evidence upon which to deny a claim, it is likely acting in bad faith. ¶ 54 In light of the foregoing and our reasoning under Issue One, we find Peterson's argument unpersuasive. Whether or not such evidence would be admissible in the underlying negligence suit is beside the point when it comes to the jury's determination of whether St. Paul violated the UTPA. In making the UTPA determination, the jury is entitled to hear and see this information because it informed St. Paul's assessment and because the jury must determine whether a reasonable person, with knowledge of the relevant facts and law, would conclude, for good reason, that Lindberg was liable for the accident. See also Lorang, ¶¶ 87-89. It was therefore not an abuse of discretion for the District Court to admit this evidence, irrespective of whether it would have been admissible in the underlying negligence suit.