Opinion ID: 888387
Heading Depth: 3
Heading Rank: 2

Heading: Fortis' Motion for Summary Judgment

Text: ¶ 177 Like the Lorangs, Fortis argues that this issue should be determined as a matter of law on summary judgment. Specifically, Fortis argues, without reference to the additional facts of this case, that when an insurer that has denied a claim immediately accedes to a demand for payment of a claim without further discussionit complies with § 201(6) as a matter of law. ¶ 178 First, we note that Fortis did not immediately accede to the Lorangs' demand for payment. Rather, Fortis failed to pay Bonnie's claim for over two months after the initial denial (which was nearly four months after the claim was submitted), even though the company was clearly liable for the payment. Second, we cannot limit our analysis to the fact that Fortis eventually paid Bonnie's claim after the Lorangs pressed their rights. By its express terms, the UTPA requires more than eventual compliance with the insurance contract; it imposes a duty to act in good faith when liability becomes reasonably clear. Section 33-18-201(6), MCA. As we have held, with respect to claims made by an insured (as opposed to a third-party claimant), the insurer's duty to effectuate settlement under § 33-18-201(6), MCA, is a fiduciary duty. Klaudt v. Flink, 202 Mont. 247, 250, 658 P.2d 1065, 1066 (1983) (overruled in part on other grounds, superseded in part by § 33-18-242, MCA); Fode v. Farmers Ins. Exchange, 221 Mont. 282, 285, 719 P.2d 414, 415-16 (1986) (superseded in part by § 33-18-242, MCA). ¶ 179 To adopt Fortis' argument, thus making an eventual payment the conclusive factor in determining compliance with § 33-18-201(6), MCA, would render irrelevant any inquiry into whether the insurer acted in good faith during the initial stages of a claim. Thus, an insurer could summarily deny or ignore a claim which it is clearly obligated to pay, thereby utterly disregarding the statutory duty of good faith, and yet escape liability under § 33-18-201(6), MCA, by issuing payment after the claimant takes steps to enforce his or her rights. This would defeat the purpose of the statute, which is to prompt good faith conduct not merely after a wrongful denial when the claimant insists on his or her contractual rights, but when liability becomes reasonably clear. Moreover, this would create a financial incentive for unscrupulous insurers to disregard the duty of good faith during the initial stages of a claim. That is, if we held that eventual payment is sufficient to comply with § 33-18-201(6), MCA, there would be no consequence for bad faith during the initial stages of a claim. In this scenario, an insurer could summarily deny claims which it is clearly obligated to pay, consequently profiting where the claimant does not contest the denial, and yet avoid liability under § 33-18-201(6), MCA, by eventually issuing payment if the claimant does contest the denial. ¶ 180 We reject Fortis' argument, as it is incompatible with both the letter and the spirit of § 33-18-201(6), MCA. Where an insurer wrongfully denies a claim, subsequent payment of the claim does not establish that the insurer complied with its duty of good faith. ¶ 181 We must consider all the admissible evidence, not merely the fact that Fortis eventually paid this claim after the Lorangs took steps to enforce their contractual rights. Additionally, because Fortis is the moving party here, we must view the evidence in a light most favorable to the Lorangs. LaTray, ¶ 15. That is, we must draw any reasonable inferences from the evidence in favor of the Lorangs, recognizing that a reasonable juror might do the same at trial. LaTray, ¶ 15. ¶ 182 Viewing the evidence in this light, it is clear that Fortis cannot prevail on summary judgment. Indeed, this is clear even without viewing the evidence in a light most favorable to the Lorangs. Based on the parties' prior dealings and the testimony of Fortis' own employees, the denial at issue here is consistent with what appears to be a calculated, systematic effort by Fortis to avoid its contractual obligations. As noted, despite an instruction to the contrary, Fortis' adjuster reverted to what she portrayed as the company's general practice regarding prosthetics claims. Thus, the evidence which tends to suggest that Fortis may have acted in good faith here-including the fact that Fortis issued an instruction to its adjusters regarding proper handling of Bonnie's claims, and the fact that Fortis issued payment of the claim just over two months after the wrongful denialdoes not establish the absence of genuine issues of material fact. ¶ 183 The District Court granted Fortis' motion for summary judgment without discussing the application of summary-judgment rules or providing any analysis. Instead, the court simply reasoned: The evidence shows that payment was prompt. We do not condone this cursory approach, nor do we agree with the court's reasoning. For the reasons noted above, we conclude that this cause of action must be resolved by a jury. Thus, we hold that the District Court erred in granting Fortis' motion for summary judgment. [28]