Opinion ID: 4249099
Heading Depth: 3
Heading Rank: 2

Heading: Mr. Oltmanns’s Claim of Bad Faith for Relying on

Text: Opinion of Outside Counsel ¶70 Mr. Oltmanns also claimed that Fire Insurance impermissibly relied on the allegedly flawed advice of outside counsel. Thus, he argues, Fire Insurance did not fairly evaluate his claim and unreasonably rejected it. We agree with the court of appeals that “[a]n insurance company may reasonably and fairly rely, at least initially, upon a coverage opinion from qualified outside counsel, received in the course of careful investigation and evaluation of a claim.” Fire Ins. Exch. v. Oltmanns, 2016 UT App 54, ¶ 15, 370 P.3d 566. Mr. Oltmanns thus does not prevail on this claim. C. Mr. Oltmanns’s Claim for Breach of Duty to Defend ¶71 Mr. Oltmanns argued in its operative complaint in the district court and its briefing to the court of appeals and this court that “Fire Insurance breached its duty by failing to assume defense of the Blackner action” breaching “both contractual and implied duties.” However, Mr. Oltmanns failed to preserve this argument in their memorandum in opposition to Fire Insurance’s motion for summary judgment. ¶72 The Utah Rules of Civil Procedure at the time required that “[t]he motion, memoranda and affidavits [filed in summary judgment actions] shall be in accordance with Rule 7.” UTAH R. CIV. P. 56(c) (2014). 11 Summary judgment was required “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material Both rule 56 and rule 7 were substantially modified in 2015 to 11 more closely follow the style of the Federal Rules of Civil Procedure. We use the 2014 rules in place at the time the memoranda were filed. 36 Cite as: 2017 UT 81 DURHAM, J., concurring in part and in the result fact and that the moving party is entitled to a judgment as a matter of law.” Rule 7(c)(3)(A) requires that “[a] memorandum supporting a motion for summary judgment shall contain a statement of material facts as to which the moving party contends no genuine issue exists.” Rule 7(c)(3)(B) requires that “[a] memorandum opposing a motion for summary judgment shall contain a verbatim restatement of each of the moving party’s facts that is controverted, and may contain a separate statement of additional facts in dispute.” ¶73 Fire Insurance submitted a memorandum in support of their motion for summary judgment, which included statements that “Oltmanns tendered defense,” that “Fire Insurance asked [Oltmanns’s attorney] to continue defending Robert Oltmanns,” and “that in the event coverage was extended, . . . Fire Insurance would reimburse him for the costs and fees incurred.” In Mr. Oltmanns’s memorandum in opposition to Fire Insurance’s motion for summary judgment, Mr. Oltmanns does not use these facts to raise a breach of the duty to defend claim as an additional fact in dispute. Although Mr. Oltmanns raised this claim in his operative counterclaim, this does not nullify the mandate of rule 7(c)(3)(B) to restate controverted claims and raise “additional facts in dispute.” ¶74 Because the claim was not raised as a disputed material fact in Mr. Oltmanns’s opposition memorandum, it was not preserved. The claim for failure to defend was not properly presented to the district court in its opposition to summary judgment motion, so the court was not properly put on notice that it should rule on the failure to defend claim separately from the claim regarding the declaratory judgment action. See Donjuan v. McDermott, 2011 UT 72, ¶ 20, 266 P.3d 839 (“To properly preserve an issue for appellate review, the issue must be raised in the district court. Additionally, the issue must be specifically raised, in a timely manner, and must be supported by evidence and relevant legal authority. The purpose of the preservation requirement is to put the district court on notice of an issue and provide it with an opportunity to rule on it.” (citations omitted)). ¶75 I would affirm the court of appeals’ decision to uphold the district court’s grant of summary judgment, but do so on alternate grounds. Mr. Oltmanns waived his argument that Fire Insurance breached the implied covenant of good faith by bringing the declaratory judgment action when he conceded that it was merited in his brief to the court of appeals and his brief to this court. Therefore, summary judgment on behalf of Fire Insurance was appropriate. 37 FIRE INSURANCE EXCHANGE v. OLTMANNS DURHAM, J., concurring in part and in the result 38