Court Opinion

ID: 2813197
Source: CourtListenerOpinion
Date Created: 2015-06-30 20:01:21.104281+00
Date Added: 2024-06-11T11:30:26.887335
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              JUN 30 2015

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

DALE FOSSEN; et al.,                             No. 14-35077

              Plaintiffs - Appellants,           D.C. No. 6:09-cv-00061-CCL

 v.
                                                 MEMORANDUM*
CARING FOR MONTANANS, INC.,
FKA Blue Cross and Blue Shield of
Montana, Inc.,

              Defendant - Appellee.

                  Appeal from the United States District Court
                           for the District of Montana
                Charles C. Lovell, Senior District Judge, Presiding

                        Argued and Submitted June 4, 2015
                               Seattle, Washington

Before: O’SCANNLAIN, EBEL**, and McKEOWN, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable David M. Ebel, Circuit Judge for the U.S. Court of
Appeals for the Tenth Circuit, sitting by designation.
      The Fossens appeal from the district court’s grant of summary judgment in

favor of Caring for Montanans, Inc. (“CFM”) rejecting the Fossens’ purported

private right of action.

                                          I

      In 1987, the Montana legislature amended the Montana Unfair Trade

Practices Act (“UTPA”) expressly to designate six statutory provisions—all

contained in § 33–18–201—the violation of which would permit an insured or a

third party to pursue a direct claim against an insurer. Mont. Code Ann.

§ 33–18–242(1). Other than § 33–18–242(1), the UTPA does not expressly

recognize any other private right of action based on an alleged violation of any

other UTPA provision. Rather, the UTPA delegates broad enforcement powers to

the Insurance Commissioner to enforce compliance with the UTPA, including,

inter alia, the power to resort to judicial proceedings. See §§ 33–18–1001 to

–1006.

      While the Montana Supreme Court has determined that the 1987 amendment

did not abrogate preexisting common law causes of action, see, e.g., Thomas v.

Northwestern Nat’l Ins. Co., 973 P.2d 804, 809 (Mont. 1998), the Fossens’ claim

here turns entirely on CFM’s alleged statutory violation—specifically, CFM’s

alleged violation of § 33–18–206(2) of the UTPA, which prohibits “unfair

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discrimination between individuals of the same class and of essentially the same

hazard in the amount of premium . . . charged.” Since the 1987 amendment,

however, the Montana Supreme Court has never recognized a private right of

action for the violation of a UTPA provision other than those provisions identified

in § 33–18–242(1). In fact, in Williams v. Union Fidelity Life Insurance Co., 123
P.3d 213 (Mont. 2005), the Montana Supreme Court permitted the insured to

pursue a breach of contract claim against her insurer only because the insured was

not asserting that her claim arose due to the insurer’s alleged UTPA violations;

rather, the insured referenced the UTPA simply to provide support for her

independent breach of contract claim. Id. at 220; see also Brewington v.

Employers Fire Ins. Co., 992 P.2d 237, 240–41 (Mont. 1999) (permitting an

insured to pursue a bad faith claim against an insurer because the claim was based

on the common law tort of bad faith, rather than an alleged violation of the UTPA).

      Moreover, the Fossens point to nothing in either of the insurance policies

that incorporates the UTPA. Thus, unlike in State ex rel. Farm Credit Bank of

Spokane v. District Court, 881 P.2d 594 (Mont. 1994)—where the parties were

permitted to pursue a breach of contract claim based on a statutory violation

because the parties expressly incorporated the statute into the contract—here, the

parties did not intend to create contractually a cause of action based on a statutory

                                          3
violation. Id. at 602–03. The district court therefore correctly granted summary

judgment in favor of CFM on the Fossens’ claim that by allegedly violating

§ 33–18–206(2), CFM breached its insurance contracts with the Fossens.

                                           II

      Because the district court presided over the case for four years, see, e.g.,

Mackey v. Pioneer National Bank, 867 F.2d 520, 523 (9th Cir. 1989) (concluding

that “retention of jurisdiction well served the purposes of judicial economy and

efficiency” when the case had been in federal court for just over four months), and

the case involved issues of federal preemption, see United Mine Workers of

America v. Gibbs, 383 U.S. 715, 727 (1966), the district court did not abuse its

discretion in retaining jurisdiction over the Fossens’ pendent state law claims. See

Long v. City & Cty. of Honolulu, 511 F.3d 901, 907 (9th Cir. 2007).

                                          III

      Because the Montana Supreme Court’s previous interpretations of the UTPA

sufficiently establish that an insured party cannot assert a private right of action or

breach of contract claim based solely on an alleged violation of a UTPA provision

other than the six provisions specified in § 33–18–242(1), the district court did not

abuse its discretion in declining to certify such issue to the Montana Supreme

Court. See Riordan v. State Farm Mut. Auto. Ins. Co., 589 F.3d 999, 1009 (9th

                                           4
Cir. 2009). For the same reason, we decline to certify as well. See Mont. R. App.

P. 15(3)(b).

                                        IV

      The district court’s order granting CFM’s motion for summary judgment is

AFFIRMED.

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