Court Opinion

ID: 887447
Source: CourtListenerOpinion
Date Created: 2013-06-05 04:31:07.631703+00
Date Added: 2024-06-11T15:11:20.074234
License: Public Domain

No. 05-655

            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   2006 MT 319
             ___________________________________
                                             )
HUGH MONROE and ELEANOR MONROE,              )
Husband and Wife,                            )
                                             )
               Plaintiffs and Appellants,    )                  OPINION
                                             )                    AND
        v.                                   )                   ORDER
                                             )
COGSWELL AGENCY, and SAFECO INSURANCE        )
COMPANY OF AMERICA,                          )
                                             )
               Defendants and Respondents.   )
         ___________________________________ )

¶1    Hugh and Eleanor Monroe (the Monroes) appeal from a summary judgment order

entered in favor of Cogswell Agency and Safeco Insurance Company of America

(Safeco) by the Eighth Judicial District Court, Cascade County. We dismiss the appeal.

¶2    Hugh and Eleanor Monroe were injured in a single car accident when their 2003

Dodge Durango veered off the highway, rolled, and struck a post on the evening of

November 19, 2003. The Monroes claimed benefits under the underinsured motorist

(UIM) provision in their Safeco insurance policy. Safeco denied the Monroes’ claim for

UIM benefits, citing language in the policy that excluded UIM coverage because the

Monroes were injured by their own vehicle. The Monroes accepted the paid benefits

from Safeco, but reserved their right to seek the disputed UIM coverage.

¶3    The Monroes brought an action in district court on April 13, 2004, alleging two

causes of action. The Monroes alleged first that their insurance agent, Cogswell Agency,

negligently had breached its duty to provide the Monroes with proper and complete

insurance coverage by failing to “procure adequate amounts of coverage” for the
Monroes. The Monroes also alleged that the court enter a declaratory judgment that their

Safeco polices provided UIM coverage for the injuries that they sustained in the accident.

¶4    Safeco and the Monroes filed cross-motions for summary judgment on the

Monroes’ request for declaratory judgment. The Monroes argued that even if the court

granted Safeco’s motion for summary judgment on the declaratory action, Safeco still

would be a party to the negligence claim because Safeco has a “principal-agent”

relationship with Cogswell. The District Court granted summary judgment in favor of

Safeco, holding as a matter of law that the Monroes could not collect UIM benefits for

their injuries sustained in the accident. The court also noted that the Monroes’ assertion

that Safeco was a party to their negligence claim was “not plead and will not be

considered absent a motion to amend.”

¶5    The Monroes moved the court to stay the proceedings, certify the summary

judgment ruling on the declaratory judgment issue as final pursuant to M. R. Civ. P.

54(b) (Rule 54(b)), and to permit the Monroes to amend their negligence claim in order to

add Safeco as a defendant.      Safeco opposed the Monroes’ motion to amend, and

conditionally opposed their motion to stay the proceedings pending appeal, but did not

oppose their motion to certify the summary judgment as final. The District Court denied

the Monroes’ motion to amend, certified its summary judgment order as final, and stayed

further proceedings in the District Court pending appeal to this Court. This appeal

followed.

¶6    The dispositive issue before us is whether the District Court’s Rule 54(b)

certification order is sufficient to support our review of the summary judgment order

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before the District Court resolves the remaining issues in this case. Neither party raised

this issue on appeal. We raise it sua sponte because this Court lacks jurisdiction to

entertain a judgment improperly certified as final under Rule 54(b). In re Marriage of

Armstrong, 2003 MT 277, ¶ 6, 317 Mont. 503, ¶ 6, 78 P.3d 1203, ¶ 6.

¶7     A court exercises its discretion when determining whether there is “no just reason

for delay” to certify as final, pursuant to Rule 54(b), one or more but fewer than all the

claims or parties in a pending legal action. Roy v. Neibauer, 188 Mont. 81, 85, 610 P.2d

1185, 1188 (1980). The court should weigh the policy against piecemeal appeals against

whatever exigencies in the case at hand when entering these orders. Roy, 188 Mont. at

85, 610 P.2d at 1188. The court should not order Rule 54(b) certifications “routinely or

as a courtesy or accommodation to counsel.” Roy, 188 Mont. at 85, 610 P.2d at 1188.

Rule 54(b) orders “should be used only ‘in the infrequent harsh case’ as an instrument for

the improved administration of justice and the more satisfactory disposition of litigation

in the light of the public policy indicated by statute and rule.” Roy, 188 Mont. at 85, 610

P.2d at 1188.

¶8     We focus our inquiry on whether the Monroes’ appeal of the District Court’s

ruling on the declaratory judgment issue represents the “infrequent harsh case”

warranting Rule 54(b) certification. Although the District Court properly organized its

discussion around the five factors set forth in Roy, its reasoning fails to demonstrate that

this case represents the type of “infrequent harsh case” that a Rule 54(b) certification

serves to remedy. The court offers only two rationales that affirmatively support the

required finding that the Monroes’ appeal of the declaratory judgment issue represents an

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“infrequent harsh case.” The court noted that our review of the summary judgment ruling

on the declaratory judgment issue may (1) lesson the economic impact on all parties by

possibly preventing a second trial, and (2) benefit insurers and insureds by settling the

validity of the disputed owned auto exclusion.

¶9     The district court in Armstrong attempted to justify a Rule 54(b) certification with

the same reasoning.     The district court asserted that this Court (1) could save the

resources of the district court and the parties by possibly shortening or even eliminating a

trial on the certified issues, and (2) could benefit the litigants and the practice of family

law by resolving an issue of first impression. Armstrong, ¶¶ 13-14. We rejected both of

these rationales. Armstrong, ¶¶ 13-14.

¶10    We held that mere speculation that a trial may be avoided or shortened provided

an insufficient basis to support a Rule 54(b) certification.       Armstrong, ¶ 13.      We

questioned whether the argument that the parties and the court’s resources necessarily

would be saved by exchanging the possibility of two appeals to this Court for the

possibility of shortening or avoiding a second trial in the district court. Armstrong, ¶ 13.

We also rejected in Armstrong the argument that this Court would benefit the litigants

and the practice of family law by ruling on a certified issue of first impression.

Armstrong, ¶ 14. We noted that all “rulings from this Court necessarily are beneficial to

someone and, of course, we resolve many issues of first impression—almost always via

an ordinary appeal.” Armstrong, ¶ 14. For these same reasons, the District Court’s

analysis fails to qualify the Monroes’ appeal of the summary judgment ruling on the

declaratory judgment issue as an “infrequent harsh case.”

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¶11   The District Court abused its discretion in certifying the summary judgment as

final. Accordingly, we reverse the District Court’s certification and dismiss this appeal

as outside our jurisdiction. Armstrong, ¶ 16.

¶12   IT IS HEREBY ORDERED that this appeal is DISMISSED WITHOUT

PREJUDICE.

¶13   The Clerk of Court shall mail a copy of this Order to all counsel of record.

      DATED this 7th day of December 2006.
                                                       /S/ BRIAN MORRIS
                                                       /S/ JAMES C. NELSON
                                                       /S/ PATRICIA COTTER
                                                       /S/ JOHN WARNER

Justice Jim Rice specially concurring.

¶14   I concur with the Court’s order. The District Court’s certification analysis is

complete and commendable. Unfortunately, however, undertaking review of the merits

of the appeal at this juncture, and issuing a decision thereon, would not necessarily

resolve all the claims against even one defendant, Safeco. Whether we would affirm or

reverse the District Court’s entry of summary judgment on the policy interpretation issue,

and thereby resolve the UIM coverage claim, the District Court’s denial of Monroes’

motion to amend their complaint to add Safeco as a negligence defendant may bring

Safeco before us again in a second appeal.         Thus, “the relationship between the

adjudicated and unadjudicated claims” leaves us with little ability to foster judicial

economy in this case. Roy, 188 Mont. at 87, 610 P.2d at 1189. Although I disagree that

avoiding or shortening a trial will always “provide[] an insufficient basis to support a

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Rule 54(b) certification,” see ¶ 10, I agree with the Court that the posture of this case

does not justify review at this time.

                                               /S/ JIM RICE

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