Opinion ID: 888148
Heading Depth: 2
Heading Rank: 3

Heading: Redies v. ALPS

Text: ¶21 On December 9, 2003, Redies filed the instant action alleging, pursuant to § 33-18-242(1), MCA, that ALPS had violated § 33-18-201, MCA, during the foregoing negotiations in Redies v. Addy. Specifically, with respect to the period (in 2001) before she filed her complaint, she alleged that Addy's liability to Redies was reasonably clear; that she had made a good faith, prompt attempt to settle the claim; and that ALPS, without statement of any meritorious basis in fact or in law, denied the claim and refused to offer any amount to settle the claim, instead embark[ing] upon a course and pattern of delay in the investigation, evaluation, and settlement of the claim, all of which was in bad faith. ¶22 Redies further alleged that after she filed her complaint in January 2002, ALPS continued their pattern and course of delay and purposeful frustration of Plaintiff's rights, though the liability of [Addy] was reasonably clear, and such liability was known to [ALPS] or would have been known upon reasonable investigation of all information available. In addition to her unfair trade practices claim, Redies alleged, in two separate counts, tortious breaches of statutory duties (specifically, § 33-18-201, MCA) and the implied duty of good faith and fair dealing. ¶23 ALPS answered Redies' complaint and, on October 25, 2004, filed a motion for summary judgment on the ground that [a]t all times during the pendency of the underlying case against [Addy] . . . , ALPS had a `reasonable basis in law' for contesting Redies's claimnamely, that as the attorney for a conservator, [Addy] did not owe a professional duty of care to Redies, the protected person in a conservatorship proceeding. Taking advantage of language in Watkins Trust v. Lacosta, 2004 MT 144, 321 Mont. 432, 92 P.3d 620, which we had decided in the interim (on June 8, 2004), ALPS asserted that the defense it had maintained on Addy's behalf in the underlying action was rock solid (and ALPS was entitled to rely upon it) because Montana law did not recognize a professional duty running from the lawyer for a conservator to a non-client beneficiary such as Redies. (As discussed below, we noted in Watkins Trust that [t]he duty owed [by an attorney] to a nonclient beneficiary is a matter of first impression in Montana. Watkins Trust, ¶ 21 (citing Rhode, ¶¶ 12-13).) ¶24 The District Court, Judge Todd presiding, agreed with ALPS, reasoning that not until 2004, when the Montana Supreme Court issued its opinion, in a case of first impression, were Montana attorneys held to owe duties to non-client beneficiaries. The court acknowledged our statement in Rhode that a multi-factor balancing test, such as that set out in Trask, may be effective when used to address the duties of attorneys in transactional matters or estate planning and probate practice.  Rhode, ¶ 17 (emphasis added). However, the court decided that the Trask test was not applicable to the case at hand because an adversarial situation existed between Redies and Uerling, which precluded the imposition of a fiduciary duty running from Addy to Redies during the months immediately following Redies' accident (citing Rhode, ¶ 17). [4] ¶25 Having determined that at the time of the alleged malpractice, Addy did not owe a duty to third-party beneficiaries such as Redies, the court concluded that ALPS had a reasonable basis in law for the denial of and defense against Redies' claim and that no genuine issues of material fact remained. Accordingly, the court granted ALPS's motion. Notably, Judge Todd did not rule on a M. R. Civ. P. 56(f) motion filed by Redies on November 30, 2004, except to say that [t]his order renders all other motions in the cause of action moot.