Court Opinion

ID: 5136801
Source: CourtListenerOpinion
Date Created: 2021-12-20 23:18:27.110643+00
Date Added: 2024-06-11T08:23:58.423786
License: Public Domain

2021 UT App 64

              THE UTAH COURT OF APPEALS

                KURT LUND AND TERENA LUND,
                        Appellees,
                            v.
                TRUCK INSURANCE EXCHANGE,
                        Appellant.

                           Opinion
                      No. 20191043-CA
                      Filed June 24, 2021

            First District Court, Logan Department
                The Honorable Brian G. Cannell
                          No. 180100009

         Paul M. Belnap, Stuart H. Schultz, and Chet W.
               Neilson, Attorneys for Appellant
      Bretton K. Hadfield and Matthew D. Lorz, Attorneys
                         for Appellees

JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion,
  in which JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS
                         concurred.

CHRISTIANSEN FORSTER, Judge:

¶1     Truck Insurance Exchange (TIE) declined to pay Terena
and Kurt Lund’s underinsured motorist (UIM) coverage claim
after it determined that Terena may have been at least fifty
percent at fault for a two-vehicle accident in which she was
involved. 1 After the claim was denied, the Lunds filed a
complaint alleging, among other causes of action, that TIE’s
denial of the claim breached the policy’s implied covenant of

1. Because the Appellees share the same last name, we refer to
them by their first names for clarity and ease of reference.
                      Lund v. Truck Ins. Exch.

good faith and fair dealing. TIE filed a motion for partial
summary judgment, arguing that its decision to deny the Lunds’
UIM claim could not, as a matter of law, have been made in bad
faith because the validity of the claim was fairly debatable. The
district court denied the motion, and TIE sought interlocutory
appeal. We reverse the denial of TIE’s motion and remand for
this matter for further proceedings.

                         BACKGROUND

¶2      TIE issued an automobile insurance policy to Kurt that
provided UIM coverage for “all sums the ‘insured’ is legally
entitled to recover as compensatory damages from the owner or
driver of an ‘underinsured motor vehicle.’” 2 Kurt was the named
insured on the policy, but the policy clarified that family
members of the named insured were also “insureds” under the
policy.

                           The Accident

¶3    On February 13, 2013, shortly before 10:00 a.m., Terena,
driving a red Hyundai, collided with the driver (Driver) of a

2. “Underinsured motorist coverage provides first-party
insurance protection for damages that exceed the limits of the
tort-feasor’s bodily injury coverage. Underinsured motorist
coverage is a facet of uninsured motorist coverage; its purpose is
to provide insurance protection to the insured against damages
caused by a negligent motorist as if the motorist had another
liability policy in the amount of the underinsured policy.” United
States Fid. & Guar. Co. v. Sandt, 854 P.2d 519, 521 (Utah 1993); see
also Utah Code Ann. § 31A-22-305.3(1)(b)(i) (LexisNexis Supp.
2020).

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white Buick. 3 No passengers accompanied Terena, while Driver
was traveling with four passengers. The accident left Terena
with significant and permanent injuries, including brain trauma,
bone fractures, facial lacerations, and various contusions.

¶4     The police report of the accident stated that the driver of
the white Buick “changed lanes in an attempt to pass the red
Hyundai and began to accelerate. At approximately the same
time, the driver of the red Hyundai changed lanes in an attempt
to pass an unknown vehicle traveling in front of her.” The report
went on to state,

      The white Buick swerved to the left, went off the
      roadway and onto the shoulder before over
      correcting to the right and colliding with the red
      Hyundai. The white Buick’s right front tire
      impacted the red Hyundai’s left rear tire. This
      impact acted essentially as a pit maneuver and
      spun the red Hyundai around 180 degrees. The red
      Hyundai continued sliding until it struck a
      concrete bridge support on the right front of the
      car. The red Hyundai’s momentum caused it to
      overturn and land on its roof on the top of the
      bridge. . . . The driver of the white Buick was able
      to guide his car . . . off of the roadway, down an
      embankment, and [to a stop].

The report concluded by stating that “neither driver was issued
a citation for unsafe passing” because “law enforcement has

3. The various reports in the record use multiple terms for the
individuals and vehicles involved in this accident. For ease of
reference throughout this opinion, we use “red Hyundai,”
“white Buick,” “Terena,” and “Driver” without using brackets to
indicate alterations to quotations.

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been unable to definitively prove which vehicle entered the
passing lane first.”

¶5      The police report also included written statements from
three independent eyewitnesses. Eyewitness 1 wrote that he was
driving east when he saw the red Hyundai pull out to pass and
clip the white Buick, which was already in the process of
passing. He reported that the collision sent the white Buick
skidding into a ditch, where it stopped, while the red Hyundai
hit a bridge abutment, flipped, and landed upside down.

¶6    Eyewitness 2 stated, “I saw a white Buick pull across the
yellow line to pass. As the white Buick was passing[,] the red
Hyundai in front of it pulled out to pass as well[,] and the red
Hyundai’s front end clipped the back end of the white Buick.”
She saw the white Buick go off the road and the red Hyundai
land “on its roof after hitting the cement barrier on the bridge.”

¶7     Eyewitness 3 wrote that there was an SUV, the red
Hyundai, and the white Buick, traveling in that order. She stated
that the white Buick pulled out to pass the red Hyundai and the
SUV. She explained, “[T]hen the red Hyundai pulled out a little
then went back[;] as the white Buick was still passing[,] the red
Hyundai pulled out to pass and hit the white Buick. The white
Buick stopped off the road [and] the red Hyundai flipped and hit
the cement barrier and landed on [its] hood.”

                        TIE’s Investigation

¶8     Within days, the Lunds informed TIE of the accident. In
its investigation, TIE’s claims representative (Representative)
spoke with Driver a few days after the accident. Driver said that
he “[w]as going in the same direction [as] Terena was and he
was trying to pass her.” He said he “used [his] blinkers,” “pulled
out into [the] on coming [lane],” and “his car got even with
Terena’s driver side back door.” Driver asserted that at this
moment, Terena “tried to pass the person in front of her.” Driver

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                      Lund v. Truck Ins. Exch.

said he “tried to go to the side of the road,” but “his vehicle hit
the snow on the side of the road and he lost control . . . . Terena
was still coming over to Driver’s lane [and] collided.” About ten
days after the accident, Representative spoke with the Lunds’
insurance agent, who told Representative that Terena “was
trying to pass . . . [the] car in front of her” and that she “looked
in [the] mirror [and] saw Driver but he was behind her.” The
agent said that as Terena “began to change lanes . . . Driver was
there, then his vehicle came towards her and [the] collision
occurred.” Representative explained to the agent “that it sounds
like Terena might be at fault for [the] accident” but noted that
she “did not want to make a decision like that without speaking
with [the insured].”

¶9     A few weeks later, Representative, who had not yet
received the police report, indicated in a claim summary that the
accident involved a passing dispute and that liability was yet
undetermined.      But    Representative      summarized   TIE’s
understanding of the accident as follows:

       Based on Driver’s statement and Terena’s [account]
       through agent, Driver moved into [the] oncoming
       lane to pass Terena and another slow moving
       vehicle. Terena then began to move into [the] same
       oncoming lane so Driver continued to veer left in
       an attempt to avoid [her]. Driver struck snow on
       the side of the road causing him to lose control and
       strike Terena’s vehicle which caused it to lose
       control and hit a barrier.

Shortly thereafter, Representative received the police report,
which included the eyewitness statements. And in late April,
Representative wrote in the claim summary report, under the
heading “Liability Overview,” that “[n]o statement” had been
“received from insured driver.” The report went on to
summarize Representative’s investigation:

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                      Lund v. Truck Ins. Exch.

       Driver states that [as] he was trying to pass Terena
       his car got even with the red Hyundai and Terena
       attempted to pass [the] vehicle in front of her, [and]
       Driver tried to get on [the] side of the road as much
       as he could[. T]hey collided, then they both spun
       around [and Terena’s car] began to roll.

       [Eyewitness 1] states that Terena [had] attempted
       to get over as Driver was passing, [and] Terena
       crossed the lines but went back into her lane, then
       Driver saw that Terena had gone back in [and] he
       accelerated and he attempted to pass her again,
       [but] she then began to come over into [his] lane,
       [and he] tried to get over to [the] side of the road as
       much as possible[. T]hey came into contact with
       each other, [and] Terena overcorrected and caused
       her vehicle to roll.

¶10 The claim report noted that the police report “makes a
narrative but does not [choose] sides” and concluded, “It
appears our insured was 100% negligent for this loss based on
over correcting vehicle [once] collision occurred between the two
lanes.” An additional comment states, “Appears insured is 100%
negligent for this loss please close your claim.” In a letter, dated
April 30, Representative informed the Lunds’ attorney, “I have
completed my investigation into this loss and it appears at this
time Terena would not have a claim to present against this
policy.”

¶11 GEICO, Driver’s liability insurer, submitted materials
concerning the accident to an accident reconstructionist. The
detailed report, which was completed in August 2014, came to
the conclusion that “the white Buick was established in the . . .
lane” when the red Hyundai “encroached into the path of the
white Buick, and physical contact between the two vehicles
resulted.” The GEICO reconstructionist concluded,

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      Terena had sufficient available visual information
      to have known not to move into the passing lane at
      that time, had she been paying appropriate
      attention to her operating environment. . . . The
      initial contact, and all subsequent collision events
      including the red Hyundai’s wall impact and
      overturning, occurred as a result of Terena’s choice
      to move from her lane into the adjacent lane
      directly into the established path of the white
      Buick.

Even though it concluded that Terena’s driving had likely
caused the collision, GEICO voluntarily paid the policy limits of
$100,000 to the Lunds in January 2015, a necessary prerequisite
for Terena’s request for UIM benefits from TIE.

¶12 In its summary report from September 2014—a point at
which it had become apparent that litigation was likely—TIE
described its understanding of liability for the accident in the
following terms: “Appears Terena has the majority of fault, as
witnesses state Driver pulled into the opposite lane before she
did. There may also be an argument for comparative fault on
Driver. [Representative] accepted liability and we paid [GEICO’s
subrogation] demand at 100%.” And in a summary report dated
a few days later, TIE noted that while liability was pending as
neither driver was cited, “witness statements seem[ed] to be
adverse to Terena” because they “indicate[d] that the white
Buick pulled out to pass and was passing [the] red Hyundai
when Terena then pulled out to pass the vehicle in front—this
would indicate that Terena may have attempted to pass when
unsafe to do so—liability may be a challenge on this case for
Terena.”

¶13 In May 2015—over two years after the accident—TIE’s
counsel (Counsel) sent the materials concerning the accident
(namely, the police report, witness statements, estimates,
and photographs) to a different accident reconstructionist

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                     Lund v. Truck Ins. Exch.

(Reconstructionist). Counsel wrote to Reconstructionist, “After
you have an opportunity to review the photos and the . . .
materials, please give me a call so we can discuss your initial
thoughts concerning the responsibility for this accident and what
activities you would need to conduct to finalize your opinions.”

¶14 Around the same time, Counsel wrote an update to TIE
on the status of his investigation of the crash. Counsel noted that
the Utah Highway Patrol trooper who investigated the crash
“indicated that it was very difficult for him to determine who
was responsible for the accident. He could not conclusively
determine if Driver’s vehicle was in the passing lane before
Terena’s vehicle entered the passing lane. He also indicated that
it was a confusing accident scene.” However, Counsel noted that
the trooper “admitted that all 3 independent witnesses in their
statement[s] indicated that [the] red Hyundai struck the white
Buick as Terena tried to pass the vehicle in front of her.” Counsel
also noted that he contacted GEICO requesting the claim file and
the accident reconstruction it had performed, but GEICO would
not share the information absent a subpoena.

¶15 In February 2016—three years after the accident—
Counsel advised TIE that he had interviewed two of the
eyewitnesses. Eyewitness 1 stated that Driver was already in the
passing lane when Terena started to pull out in an attempt to
pass. Eyewitness 2 stated that the front bumper of Terena’s
vehicle made contact with Driver’s car. This eyewitness also
“indicated that Terena should have seen the white Buick without
difficulty.” Counsel reported that he had attempted to discuss
the accident with the passengers in Driver’s car but had not
received “any cooperation from them to this point.”

¶16 In April 2016, Counsel reported to TIE that
Reconstructionist had “reviewed the documents,” plotted “the
crash movement,” and “performed calculations to establish the
sequence and cause of the accident.” Counsel told TIE that
Reconstructionist’s “conclusions [were] very favorable and it

20191043-CA                     8                2021 UT App 64
                     Lund v. Truck Ins. Exch.

[was] clear to [Reconstructionist] that Terena was the cause of
the accident”:

      Based on the markings [Reconstructionist] was able
      to observe provided by the Utah Highway Patrol, it
      is clear to him that Driver’s vehicle was in the
      passing lane when Terena attempted to move into
      the passing lane to make a pass of the car in front
      of her. The physical evidence demonstrates that
      Driver was required to make an evasive maneuver
      in response to Terena entering his lane of travel.
      This evasive maneuver was to the left and forced
      Driver’s vehicle[] off the roadway on to the berm.
      As a result of this exiting of the roadway Driver
      lost control of his vehicle and struck Terena’s
      vehicle in the left rear . . . . The physical evidence
      demonstrates this impact occurred in the passing
      lane. . . . The physical evidence also corroborates
      the version of the accident related by Driver.

                     The Lunds’ UIM Claim

¶17 About a year later, in May 2017, the Lunds’ attorney sent
a letter to TIE with a formal demand for UIM benefits to pay
medical expenses for injuries Terena sustained in the accident:
“In our evaluation of her case, we believe there is no question
that Terena’s situation represents a policy limits claim and
therefore demand the sum of $1,000,000.” In June, Counsel
responded in writing that TIE was “declining to make [a UIM]
offer” at that time:

      The applicable underinsured vehicle is the one
      operated by Driver. Based on our investigation, we
      believe Terena was the sole proximate cause of the
      accident and consequently her injuries. At a
      minimum she is at least 50% responsible for the
      accident and consequently her injuries. With that

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       factual scenario, Terena is not legally entitled to
       recover compensatory damages from Driver, and
       therefore does not possess a valid UIM claim
       against [TIE].

¶18 The Lunds filed a complaint against TIE in January 2018,
alleging breach of contract, breach of the covenant of good faith
and fair dealing, and loss of consortium. Regarding the breach of
the covenant of good faith and fair dealing, which claim is the
focus of this appeal, the Lunds asserted that TIE (1) placed “its
own economic interests over those of Terena”; (2) made “an
unrealistically low settlement offer that was substantially below
the reasonable value of the claim, given Terena’s injuries and
loss”; (3) failed “to properly and diligently investigate and fairly
evaluate Terena’s claim”; (4) refused “to promptly and
reasonabl[y] tender its uninsured [p]olicy limits, or the
reasonable value of Terena’s claim”; (5) refused “to provide any
clear justifiable basis for its unreasonably low offer or refusal to
tender [p]olicy limits”; and (6) “forc[ed] Terena to file suit to
force [TIE] to honor its obligations, and to incur substantial costs
and fees as a result.”

¶19 During the mediation process, TIE deposed Terena and
Eyewitness 1. And Counsel provided a copy of
Reconstructionist’s report, which had concluded that Terena
“was the primary and sole cause” of the accident. After
mediation proved unsuccessful, the Lunds filed an amended
complaint, again identifying the same three causes of action
contained in the initial complaint.

¶20 After deposing Eyewitness 2, TIE filed a motion for
partial summary judgment. TIE argued that while the duty of
good faith and fair dealing contemplates that an insurer will
diligently investigate the facts to determine whether an insured’s
claim is valid, “[i]f a claim brought by an insured against an
insurer is fairly debatable, failure to comply with the insured’s
demands cannot form the basis of bad faith.” (Quoting Saleh v.

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                      Lund v. Truck Ins. Exch.

Farmers Ins. Exch., 2006 UT 20, ¶ 24, 133 P.3d 428.) Moreover, TIE
argued that “an insurer cannot be held to have breached the
covenant of good faith on the ground that it wrongfully denied
coverage if the insured’s claim, although later found to be
proper, was fairly debatable at the time it was denied.” (Quoting
Jones v. Farmers Ins. Exch., 2012 UT 52, ¶ 7, 286 P.3d 301.) And
TIE pointed out that “a claim is fairly debatable where there is
evidence that creates a factual issue as to the claim’s validity.”
(Quotation simplified.) Accordingly, TIE urged the court to grant
partial summary judgment because the Lunds’ “cause of action
for breach of the implied covenant of good faith and fair dealing
fail[ed] as a matter of law.”

¶21 In a very brief order, the district court denied the motion,
stating that under the test articulated in Beck v. Farmers Insurance
Exchange, 701 P.2d 795 (Utah 1985), “minds could reasonably
differ as to whether or not [TIE] fairly evaluated [the Lunds’]
insurance claim and that issues raised by [the Lunds’ breach of
the covenant of good faith and fair dealing] cause of action were
appropriate for a jury.” See id. at 801. (“[T]he implied obligation
of good faith performance contemplates, at the very least, that
the insurer will diligently investigate the facts to enable it to
determine whether a claim is valid, will fairly evaluate the claim,
and will thereafter act promptly and reasonably in rejecting or
settling the claim.”).

¶22 TIE filed a petition seeking permission to file an
interlocutory appeal of the district court’s order denying its
motion for partial summary judgment, which we granted. 4

4. The Lunds assert that the court’s denial of TIE’s motion for
summary judgment is not appropriate for an appeal. While it is
true that interlocutory orders are not appealable as of right, the
Utah Rules of Appellate Procedure allow for discretionary
appeals from interlocutory orders. See Utah R. App. P. 5(a)
                                                   (continued…)

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                     Lund v. Truck Ins. Exch.

             ISSUE AND STANDARD OF REVIEW

¶23 TIE asserts that the district court erred in applying the law
on the “fairly debatable” defense when it denied TIE’s motion
for partial summary judgment. “We review a district court’s
grant or denial of summary judgment for correctness and view
the facts and all reasonable inferences drawn therefrom in the
light most favorable to the nonmoving party.” Vander Veur v.
Groove Ent. Techs., 2019 UT 64, ¶ 7, 452 P.3d 1173 (quotation
simplified).

                           ANALYSIS

¶24 As a threshold matter, we make two observations. First,
this case involves a UIM claim. See generally supra note 2. The
Lunds’ insurance policy provided that TIE would “pay all sums
the ‘insured’ is legally entitled to recover as compensatory
damages from the owner or driver of an ‘underinsured motor
vehicle.’ The damages must result from ‘bodily injury’ sustained
by the ‘insured’ caused by the ‘accident.’” Here, Terena was
TIE’s “insured” and the vehicle driven by Driver was the
allegedly “underinsured motor vehicle.” The Lunds argue that

(…continued)
(“Any party may seek an appeal from an interlocutory order by
filing a petition for permission to appeal from the interlocutory
order with the appellate court with jurisdiction over the case.”);
id. R. 5(g) (“An appeal from an interlocutory order may be
granted only if it appears that the order involves substantial
rights and may materially affect the final decision or that a
determination of the correctness of the order before final
judgment will better serve the administration and interests of
justice.”). Here, we previously exercised our discretion and
granted TIE permission to appeal. We decline any invitation to
revisit that ruling.

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TIE was contractually required to pay up to the policy’s limits on
their UIM claim because they allege Driver was at fault for the
accident and damages for Terena’s injuries exceeded the limits
covered by Driver’s insurance. But to sustain a valid UIM claim
under the conditions of their insurance policy with TIE, the
Lunds had to be “legally entitled” to recover damages from the
underinsured vehicle. And pursuant to Utah law, they are
“legally entitled” to recover only if Driver’s fault for the accident
exceeded Terena’s. See Utah Code Ann. § 78B-5-818(2)
(LexisNexis 2018) (“A person seeking recovery may recover from
any defendant or group of defendants whose fault . . . exceeds
the fault of the person seeking recovery prior to any reallocation
of fault . . . .”).

¶25 Second, the UIM claim here involved a first-party-
insurance relationship between Terena and TIE. The term “first-
party” refers “to an insurance agreement where the insurer
agrees to pay claims submitted to it by the insured for losses
suffered by the insured.” Beck v. Farmers Ins. Exch., 701 P.2d 795,
798 n.2 (Utah 1985). 5 Under the “first-party relationship between
an insurer and its insured, the duties and obligations of the
parties are contractual.” Id. at 800. And “as parties to a contract,
the insured and the insurer have parallel obligations to perform
the contract in good faith.” Id. at 801. Moreover, in the UIM-
coverage context, the adversarial relationship changes from a
third-party dispute between the insured and an alleged
tortfeasor to a first-party dispute between the insured and the
insurer. See Estate of Berkemeir ex rel. Nielsen v. Hartford Ins. Co. of
the Midwest, 2003 UT App 78, ¶ 8, 67 P.3d 1012, aff'd, 2004 UT
104, 106 P.3d 700. Accordingly, once the Lunds made a claim for

5. “In contrast, a ‘third-party’ situation is one where the insurer
contracts to defend the insured against claims made by third
parties against the insured and to pay any resulting liability, up
to the specified dollar limit.” Beck v. Farmers Ins. Exch., 701 P.2d
795, 798 n.2 (Utah 1985).

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UIM coverage, Terena and TIE became, “practically speaking,
adversaries.” See Beck, 701 P.2d at 799 (quotation simplified).

¶26 The “implied obligation of good faith performance
contemplates, at the very least, that the insurer will diligently
investigate the facts to enable it to determine whether a claim is
valid, will fairly evaluate the claim, and will thereafter act
promptly and reasonably in rejecting or settling the claim.” Id. at
801. However, “[i]f a claim brought by an insured against an
insurer is fairly debatable, failure to comply with the insured’s
demands cannot form the basis of bad faith.” Saleh v. Farmers Ins.
Exch., 2006 UT 20, ¶ 24, 133 P.3d 428; see also M.A. v. Regence
BlueCross BlueShield of Utah, 2020 UT App 177, ¶ 16, 479 P.3d
1152 (“In the context of first-party insurance claims, an insurer
acts reasonably in denying a claim if the insured’s claim is fairly
debatable.” (quotation simplified)). “Therefore, an insurer
cannot be held to have breached the covenant of good faith on
the ground that it wrongfully denied coverage if the insured’s
claim, although later found to be proper, was fairly debatable at
the time it was denied.” Jones v. Farmers Ins. Exch., 2012 UT 52,
¶ 7, 286 P.3d 301 (quotation simplified). As relevant here, the
district court’s decision to grant or deny TIE’s partial motion for
summary judgment should have turned on whether the Lunds’
claim for UIM coverage was “fairly debatable.” Saleh, 2006 UT
20, ¶ 24. In more concrete terms, the focus of the fairly debatable
question was whether Terena’s fault for the accident may have
exceeded that of Driver. See Eldredge v. State Farm Mutual Auto.
Ins. Co., No. 2:12CV900 DAK, 2014 WL 1875663, at *6 (D. Utah
May 9, 2014) (“Stated another way, the denial of an insurance
claim is reasonable, as a matter of law, if the insured’s claim is
fairly debatable.” (quotation simplified)).

¶27 An insured’s claim is “fairly debatable” as a matter of law
when the evidence creates “a legitimate factual issue as to the
validity” of an insured’s claim for benefits. See Prince v. Bear
River Mutual Ins. Co., 2002 UT 68, ¶ 35, 56 P.3d 524; see also M.A.,
2020 UT App 177, ¶ 17. “Of course, an insurer will not prevail on

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summary judgment simply by asserting that a claim is fairly
debatable.” M.A., 2020 UT App 177, ¶ 17. Rather, an insurer has
a “duty under Beck to evaluate the claim fairly.” Jones, 2012 UT
52, ¶ 12 (quotation simplified). And if the insurer has fairly
evaluated the claim and there remains “a legitimate factual issue
as to the validity of the insured’s claim, such that reasonable
minds could not differ as to whether the insurer’s conduct
measured up to the required standard of care, . . . [then] the
court [should] grant judgment as a matter of law.” See id.
(quotation simplified).

¶28 From a procedural point of view, there is no question that
TIE “diligently investigate[d] the facts” surrounding the Lunds’
claim. See Beck, 701 P.2d at 801. TIE gathered a copious amount
of evidence over an extended period of time in the course of its
investigation. It considered Driver’s account of events, the views
of the Lunds’ own insurance agent, the police report, the
statements of all the neutral third-party witnesses, and the report
of Reconstructionist. See Colony Ins. Co. v. Human Ensemble, LLC,
2013 UT App 68, ¶ 11, 299 P.3d 1149 (“In carrying out [the duty
to diligently investigate the facts], the focus is on whether the
insurer’s investigation was fair and reasonable given the extent
and availability of evidence, whether available evidence is
collected and witnesses are contacted, common practice in the
industry, and clarity of the evidence with regard to issues of
liability.” (quotation simplified)); accord Black v. Allstate Ins. Co.,
2004 UT 66, ¶ 21, 100 P.3d 1163.

¶29 Here, the central substantive question is whether, at the
time TIE denied the claim, it had facts in front of it that indicated
that the validity of the Lunds’ claim was fairly debatable.
Specifically, in the context of UIM coverage, the underlying
question was whether Driver’s fault for the accident exceeded
Terena’s. If TIE’s investigation uncovered facts sufficient to show
a genuine factual dispute about whether Terena was at least as
much at fault as Driver, then the validity of the Lunds’ UIM
claim under the conditions of the insurance policy was fairly

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debatable, and TIE’s “failure to comply with [the Lunds’]
demands [could not] form the basis of bad faith.” See Saleh, 2006
UT 20, ¶ 24. As we explain, TIE’s conclusion—that the validity of
the Lunds’ claim was indeed fairly debatable—was supported
by abundant evidence. 6

¶30 The investigation TIE conducted immediately after the
accident provided ample information to support a reasonable
initial conclusion that Terena may have been more at fault for
the accident than Driver. First, after being informed of the
accident, TIE formed its early understanding of the accident by
interviewing Driver, who told Representative that he and Terena
were traveling the same direction and, as he was passing her
vehicle and another vehicle, Terena attempted to pass just as his
car was even with hers, causing him to lose control.

¶31 Second, Representative spoke with the Lunds’ insurance
agent, who explained that the collision occurred when Terena

6. The Lunds argue that TIE failed to properly marshal the
evidence used to support the district court’s ruling. Because
findings of fact are unnecessary in a summary judgment
decision—indeed, there are no findings of fact in the court’s
order here—it follows that an interlocutory appeal from the
grant or denial of a motion for summary judgment does not
require marshaling of evidence. See Smith v. Four Corners Mental
Health Center, Inc., 2003 UT 23, ¶ 16 n.6, 70 P.3d 904 (“When
appealing a district court’s grant of summary judgment, . . . the
appellant has no obligation to marshal the evidence. The
marshaling obligation only arises after a party challenges the
sufficiency of the evidence to support a . . . district court’s ruling
containing specific findings of fact. At the summary judgment
stage, the district court is not concerned about the sufficiency of
any evidence because it does not resolve any factual disputes.
Therefore, [a] . . . marshaling argument [is] inappropriate [in this
context].” (quotation simplified)).

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                       Lund v. Truck Ins. Exch.

was changing lanes to pass and Terena encountered Driver’s
vehicle. Based on this information, TIE concluded that the
accident involved a passing dispute but that it appeared Terena
had moved into the “same oncoming lane” that Driver was
using to pass a slower moving vehicle.

¶32 Third, TIE’s conclusion that Terena may have been at
fault was supported by the police report, which contained the
statements from the three independent eyewitnesses to the
accident. And while Representative noted that “[l]aw
enforcement [was] unable to establish who was in the passing
lane first,” the eyewitnesses unanimously agreed that Driver
was in the process of passing when Terena pulled out into the
same lane and the collision occurred. Based on this information,
TIE’s initial determination that Terena may have been at least
fifty percent responsible for the loss was reasonable.

¶33 Fourth, Reconstructionist’s report also supported TIE’s
conclusion that Terena may bear at least half of the fault for the
accident. We note that an expert’s opinion, such as that offered
by Reconstructionist, might make an “insured’s claim at least
fairly debatable.” See Prince, 2002 UT 68, ¶ 35 (stating that even if
a denial is based on an “expert’s opinion [that] is provided in
exchange for remuneration, [it] is not a bad faith denial [of a
claim] because the expert’s report creates a legitimate factual
question regarding the validity of an insured’s claim for
benefits”); see also Callioux v. Progressive Ins. Co., 745 P.2d 838, 842
(Utah Ct. App. 1987) (noting that an expert’s opinion, when
combined with other evidence, supported the conclusion that a
claim was fairly debatable). Reconstructionist came to the
unequivocal conclusion that Driver’s vehicle was in the passing
lane first when Terena attempted to pass and that it was “clear to
him” that Terena caused the accident.

¶34 In light of the evidence available to TIE during its
investigation, there existed a legitimate dispute about whether
Terena’s fault at least equaled Driver’s. Under these

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                     Lund v. Truck Ins. Exch.

circumstances, the validity of the Lunds’ claim was fairly
debatable. This is the very point the district court missed in
denying TIE’s partial summary judgment motion. The court
should have come to the opposite conclusion in this context:
TIE’s investigation into and evaluation of Terena’s liability for
the accident revealed a legitimate dispute that made the Lunds’
UIM claim fairly debatable. And ”an insurer cannot be held to
have breached the covenant of good faith on the ground that it
wrongfully denied coverage if the insured’s claim, although later
found to be proper, was fairly debatable at the time it was
denied.” Jones, 2012 UT 52, ¶ 7 (quotation simplified). Thus, we
conclude that the district court erred in denying TIE’s motion for
partial summary judgment with regard to the Lunds’ cause of
action for breach of the implied covenant of good faith and fair
dealing.

                         CONCLUSION

¶35 Because the validity of the Lunds’ claim was fairly
debatable, we conclude that the district court erred in denying
TIE’s motion for partial summary judgment. Under the
circumstances presented here, that motion should have been
granted. We reverse the court’s order and remand this matter for
further proceedings consistent with this opinion.

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