Opinion ID: 887136
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Heading: issues

Text: ¶ 17 Whether the District Court erred in denying Barbara's motions for summary judgment and for judgment as a matter of law upon her claim that Union Fidelity breached its insuring agreement by rejecting her claim for benefits and rescinding her Certificate of Insurance. ¶ 18 Our standard of review in appeals from summary judgment rulings is de novo. Wendell v. State Farm Mut. Auto. Ins. Co., 1999 MT 17, ¶ 9, 293 Mont. 140, ¶ 9, 974 P.2d 623, ¶ 9 (citing Ruckdaschel v. State Farm Mut. Auto. Ins. (1997), 285 Mont. 395, 398, 948 P.2d 700, 702). We apply the same criteria applied by the district court pursuant to Rule 56(c), M.R.Civ.P. The moving party must establish both the absence of genuine issues of material fact and entitlement to judgment as a matter of law. Once the moving party has met its burden, the opposing party must present material and substantial evidence, rather than mere conclusory or speculative statements, to raise a genuine issue of material fact. Hanson v. Water Ski Mania Estates, 2005 MT 47, ¶ 11, 326 Mont. 154, ¶ 11, 108 P.3d 481, ¶ 11 (citing Fair Play Missoula v. City of Missoula, 2002 MT 179, ¶ 12, 311 Mont. 22, ¶ 12, 52 P.3d 926, ¶ 12; Enger v. City of Missoula, 2001 MT 142, ¶ 10, 306 Mont. 28, ¶ 10, 29 P.3d 514, ¶ 10). ¶ 19 This Court's standard of review of appeals from district court orders granting or denying motions for judgment as a matter of law is identical to that of the district court. Marie Deonier & Assoc. v. Paul Revere Life Ins. Co., 2004 MT 297, ¶ 18, 323 Mont. 387, ¶ 18, 101 P.3d 742, ¶ 18 (citing Durden v. Hydro Flame Corp., 1998 MT 47, ¶ 22, 288 Mont. 1, ¶ 22, 955 P.2d 160, ¶ 22; Ryan v. City of Bozeman (1996), 279 Mont. 507, 510, 928 P.2d 228, 229-30). Judgment as a matter of law is properly granted only when there is a complete absence of any evidence which would justify submitting an issue to a jury and all such evidence and any legitimate inferences that might be drawn from that evidence must be considered in the light most favorable to the party opposing the motion. Marie Deonier, ¶ 18 (citing Bevacqua v. Union Pac. R.R. Co., 1998 MT 120, ¶ 46, 289 Mont. 36, ¶ 46, 960 P.2d 273, ¶ 46; Durden, ¶ 21). ¶ 20 Barbara argues on appeal that the District Court erred in failing to hold Union Fidelity liable as a matter of law on her breach of contract claim because Union Fidelity engaged in postclaim underwriting which is statutorily prohibited as an unfair trade practice in Montana. Barbara maintains that during the application process, an insurer must require fact-specific information regarding the applicant's medical history that the insurer considers to be material and absent such rudimentary underwriting, a material misrepresentation cannot occur as a matter of law. Barbara points out that Union Fidelity's application form did not require any fact-specific information regarding past medical history. ¶ 21 Union Fidelity argues that postclaim underwriting is not an independent claim in Montana and that even if Barbara could assert an independent postclaim underwriting claim, § 33-18-215, MCA, does not support her argument that she was entitled to judgment as a matter of law based solely on Union Fidelity's application form. Union Fidelity maintains that because Clarence made a material representation on the application form, Union Fidelity was entitled to rescind the policy. ¶ 22 In 1997, the Montana Legislature amended Montana's Unfair Trade Practices Act (UTPA) and expressly prohibited postclaim underwriting. Postclaim underwriting prohibited  condition. An insurer, health service corporation, or health maintenance organization may not place an elimination rider on or rescind coverage provided by a disability policy, certificate, or subscriber contract after a policy, certificate, or contract has been issued unless the insured has made a material misrepresentation or fraudulent misstatement on the application or has failed to pay the premium when due. Section 33-18-215, MCA (emphasis added). ¶ 23 Moreover, § 33-15-403, MCA, allows an insurer to deny coverage when an applicant fails to provide truthful and accurate information: Representations in applications  recovery precluded if fraudulent or material. (1) All statements and descriptions in any application for an insurance policy or annuity contract or in negotiations for an insurance policy or annuity contract by or on behalf of the insured or annuitant are considered representations and not warranties. (2) Misrepresentations, omissions, concealment of facts, and incorrect statements do not prevent a recovery under the policy or contract unless: (a) fraudulent; (b) material either to the acceptance of the risk or to the hazard assumed by the insurer; or (c) the insurer in good faith would either not have issued the policy or contract or would not have issued a policy or contract in as large an amount or at the same premium or rate or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise. [Emphasis added.] ¶ 24 In this case, Barbara contends that Union Fidelity's application was ambiguous because it did not define good health, nor did it require information on past medical treatment. Union Fidelity argues that credit life insurance applications typically don't require as much information as other types of insurance. Moreover, Union Fidelity contends that its rates and contract terms are regulated and any ruling that Barbara was entitled to judgment as a matter of law based solely on Union Fidelity's application form would violate the filed rate doctrine. ¶ 25 The filed rate doctrine arose from a concern that a deviation from a rate filed with a federal regulatory agency can result in the imposition of civil or criminal sanctions by a court of law without sufficient knowledge or expertise of the rate-setting process of a regulatory agency. The purpose of the filed rate doctrine is to ensure that rates are both reasonable and evenly applied. It initially applied to common carriers, but was expanded to include telephone services, utilities and insurance. ¶ 26 The filed rate doctrine originated in Keogh v. Chicago & N.W. RY. Co. (1922), 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183, wherein the United States Supreme Court held that a private shipper could not recover treble damages against railway companies that had set rates that were filed with and approved by the Interstate Commerce Commission (ICC). The Supreme Court set forth two rationales for its holding. First, the regulatory scheme already allowed for the recovery of damages for illegal rates in proceedings before the ICC and, second, carrier rate regulation was primarily intended to prevent the charging of discriminatory rates. Where damages are sought under a state law, [the filed rate doctrine] may apply if the challenged rates or prices were set by a federal regulatory authority. See, e.g., Knevelbaard Dairies v. Kraft Foods Inc. (9th Cir.2000), 232 F.3d 979, 992 (emphasis added) (citations omitted). Furthermore, the filed rate doctrine bars both state and federal claims that attempt to challenge a rate that a federal agency has reviewed and filed. County of Stanislaus v. Pacific Gas & Elec. Co. (9th Cir.1997), 114 F.3d 858, 866 (emphasis added), cert. denied, 522 U.S. 1076, 118 S.Ct. 854, 139 L.Ed.2d 754 (1998). ¶ 27 In an amicus brief filed in the case sub judice, the Office of the Montana State Auditor acting as Commissioner of Insurance for the State of Montana (the Commissioner), argued that the filed rate doctrine is not applicable in this case because the rate charged for the insurance is not contested. The Commissioner maintained that the filed rate doctrine has not been extended to include insurance forms approved by a state agency and that the Commissioner's regulatory authority does not, and should not, immunize or otherwise preclude a claim against an insurance company for a violation of state law. ¶ 28 In this case, there is no evidence that Union Fidelity's rates for credit life insurance were set, reviewed or filed by a federal regulatory authority. Hence, Union Fidelity is not immunized under the filed rate doctrine for a claim for violation of state law. Based on the foregoing, we hold that the filed rate doctrine is not applicable in this case and we reject Union Fidelity's argument in that regard. ¶ 29 Union Fidelity also argues that the Montana Legislature limited the claims that an insured may bring against an insurer when it enacted § 33-18-242, MCA, and under that statute, postclaim underwriting is not an independent claim. Section 33-18-242(3), MCA, provides: An insured who has suffered damages as a result of the handling of an insurance claim may bring an action against the insurer for breach of the insurance contract, for fraud, or pursuant to this section, but not under any other theory or cause of action. An insured may not bring an action for bad faith in connection with the handling of an insurance claim. [Emphasis added.] ¶ 30 Contrary to Union Fidelity's contentions, Barbara points out that she is not asserting that postclaim underwriting is an independent claim, only that it has bearing upon the facts of this case because the Legislature has seen fit to define and prohibit postclaim underwriting in § 33-18-215, MCA. Barbara contends that while this prohibition is relevant to her claims of bad faith, fraud and malice, it bears most directly on her breach of contract claim and Union Fidelity's defense of rescission. Barbara maintains that absent such rudimentary underwriting as requiring fact-specific information regarding an applicant's medical history, a material misrepresentation cannot occur, hence Union Fidelity's rescission of Clarence's application was improper as a matter of law. ¶ 31 Relying on Schneider v. Minn. Mut. Life Ins. Co. (1991), 247 Mont. 334, 806 P.2d 1032, the District Court denied Barbara's motion for summary judgment on the basis that the bottom line question is a question of fact for a jury to determine. In that case, Jock Schneider (Jock) had purchased group life insurance through Minnesota Mutual Life Insurance Company (Mutual). In completing the application, Jock represented that he had not been hospitalized or consulted a physician during the last three years and that he had not been treated for the various health problems listed in the application. Sixteen days later, Jock died of an accidental gunshot wound to the head. During its investigation, Mutual learned that Jock had been under a physician's care for alcoholism and depression. Mutual rescinded the policy. Schneider, 247 Mont. at 336-37, 806 P.2d at 1034. ¶ 32 Jock's wife, Darlene, sued Mutual alleging breach of contract and seeking punitive damages. Mutual argued that rescission was appropriate because the misrepresentation was material and that Mutual in good faith would not have issued the policy if Mutual had known about the doctor visits. Mutual appealed the district court's judgment in favor of Darlene. On appeal, this Court expressly stated that questions of materiality and of good faith are both questions of fact. Schneider, 247 Mont. at 339-40, 806 P.2d at 1036. ¶ 33 Therefore, we hold that the District Court did not err in denying Barbara's motion for summary judgment as there still remained genuine issues of material fact as to whether there was a misrepresentation on Clarence's part and, if so, whether that misrepresentation was material. We also hold that the District Court did not err in denying Barbara's motion for judgment as a matter of law because there was sufficient evidence to justify submitting those issues to the jury. ¶ 34 Accordingly, we hold that the District Court did not err in denying Barbara's motion for summary judgment and motion for judgment as a matter of law.