No. 12358
I N T E SUPREME COURT O THE STATE O M N A A
H F F OTN
1972
T E STATE O MONTANA, upon r e l a t i o n
H F
of BANKERS LIFE & CASUALTY COMPANY,
a corporation,
Relator,
ROBERT E. MILLER, and t h e DISTRICT C U T
OR
O THE EIGHTH JUDICIAL DISTRICT O T E
F F H
STATE O MONTANA, I N AND F R T E COUNTY
F O H
O CASE,
F
Respondents.
ORIGINAL PROCEEDING:
Counsel of Record:
For R e l a t o r :
Church, H a r r i s , John 6 Williams, Great F a l l s ,
Montana.
E a r l J. Hanson and Douglas A l l e n argued, Great
F a l l s , Montana.
For Respondents:
Hoyt, Bottomly and G a b r i e l , Great F a l l s , Montana.
John C. Hoyt argued, Great F a l l s , Montana.
Submitted: September 28, 1972
~ecide:
d 17 1m
Filed:
rniil!p$
Mr. J u s t i c e Wesley C a s t l e s delivered t h e Opirtion of t h e Court.
This i s an o r i g i n a l proceeding wherein r e l a t o r seeks a w r i t
of supervisory c o n t r o l t o t h e end t h a t t h e respondent d i s t r i c t
c o u r t of t h e e i g h t h j u d i c i a l d i s t r i c t , t h e Honorable Paul G.
H a t f i e l d p r e s i d i n g , should vacate i t s order dated August 24,
1972, ordering r e l a t o r insurance company t o answer i n t e r r o g a -
t o r y No. 26 of p l a i n t i f f ' s f i r s t i n t e r r o g a t o r i e s .
W issued an order t o show cause d i r e c t e d t o t h e d i s t r i c t
e
c o u r t with copies t o counsel f o r p l a i n t i f f M i l l e r . Respondents
appeared by b r i e f and motion seeking d e n i a l of t h e a p p l i c a t i o n
f o r a w r i t and an order s u s t a i n i n g t h e d i s t r i c t c o u r t ' s order.
Oral argument was had. N problem concerning procedure i s
o
presented.
Respondent M i l l e r , h e r e i n a f t e r r e f e r r e d t o a s t h e Insured,
i s p l a i n t i f f i n the d i s t r i c t court action. He commenced t h e
a c t i o n a g a i n s t r e l a t o r Bankers L i f e & Casualty Company, h e r e i n -
a f t e r r e f e r r e d t o a s t h e Insurance Company, t o recover general
and p u n i t i v e damages e s s e n t i a l l y f o r breach of c o n t r a c t by t h e
insurance company.
Insured a l l e g e d i n h i s amended complaint t h a t he purchased
two insurance p o l i c i e s from Insurance Company. One of t h e
p o l i c i e s purchased was t i t l e d " ~ i c k n e s sand Accident Policy"
and t h e o t h e r p o l i c y was t i t l e d "Accident Policy". Early i n
1971, Insured made c e r t a i n claims under both p o l i c i e s and t h e r e -
a f t e r i n s t i t u t e d t h e a c t i o n a g a i n s t Insurance Company on J u l y
3 0 , 1971. ~ n s u r e d ' samended complaint was f i l e d on December 14,
1971.
Insured divided h i s a c t i o n i n t o two claims. One claim
concerns t h e Sickness and Accident Policy and t h e o t h e r t h e
Accident Policy. I n both claims Insured seeks damages f o r breach
of c o n t r a c t and exemplary o r p u n i t i v e damages f o r a l l e g e d v i o l a -
t i o n s of t h e insurance code of t h e s t a t e of Montana. Insured
has pleaded in both claims, among other allegations, that the
course of conduct of Insurance Company was deliberately embarked
upon and was designed to be, was, and is oppressive, malicious,
and fraudulent as to Insured in addition to being a violation
of the insurance code.
In its amended answer Insurance Company alleged that it has
made all payments due Insured under the Sickness and Accident
Policy and denied that these payments were late. Furthermore,
in Insurance Company's amended answer to claim two of lnsuredls
complaint, Insurance Company alleged that there was no coverage
afforded by the Accident Policy and therefore no payment was
due' Insured. Insurance Company also denied all allegations of
wrongdoing including those allegations of malicious or oppressive
conduct.
Insured then began extensive discovery through the use of
interrogatories. Many were objected to by Insurance Company.
Several objections were sustained and several were overruled,
In the course of lnsuredls discovery interrogatory No. 26 of
plaintiff's first interrogatories to defendant was propounded
to Insurance Company. Interrogatory No. 26, the only one involved
in this proceeding, reads:
"State the names and addresses of all persons within
the State of Montana who have made a claim against
Bankers Life & Casualty Company for monies they claim
owed to them under health and accident or disability
policies issued by Bankers Life and Casualty Company
and which claim Bankers Life and Casualty Company has
either refused or has not paid in full in the amount
claimed due by the Policy holder during the past three
(39 years,11
Insurance Company made this objection to interrogatory
No, 26:
his interrogatory is objectionable on the grounds that
the information called for is irrelevant and, further,
is confidential business information which the defendant
should not be required to disclose unless and until plaintiff
shows that it is relevant to the subject matter
involved in the pending action. Further, this
interrogatory is objectionable on the grounds that
it amounts to a cross-examination of defendant upon
immaterial matter which does not appear to be reason-
ably calculated to lead to the discovery of admis-
sible evidence.
11
And, further, this interrogatory is objectionable
on the ground and for the reason that it is un-
reasonably burdensome, oppressive, or vexatious. I1
As stated heretofore, ~nsured's complaint indicates that
he seeks damages for alleged breach of contract under two .
separate policies and then pleaded and alleged violations of
the insurance code, thereby attempting to bring his case within
the law of State ex rel. Larson v. District Court, 149 Mont. 131,
423 P.2d 598. We are not here directly concerned with Larson
at this stage. However, the allegation as to violation of the
insurance code is what might be termed a general allegation con-
cerned with the merits of his claims under the two contracts.
That is to say, the allegations of insurance code violations are
dependent upon whether there has been a breach of the contract
sued upon, which has been denied in all particulars, We shall
not here attempt to distinguish Larson other than to observe
that Larson discussed the "unique facts alleged in petitioner's
complaint".
Interrogatory No. 26 does not amern itself with the ~nsured's
insurance contracts or claims in suit, Rather, it seeks names
and addresses of all persons and policyholders of Montana who
have made claims for benefits which were either refused for any
reason or not paid in the full amount claimed, which would cover
presumably all denials of coverage for whatever reason, all cases
of partial coverage, all erroneously submitted claims, and all
litigated, adjusted or compromised claims; all without regard to
the hundreds of different factual contents, or even the private
business matters of the thousands of policyholders. Such far
reaching results are uncalled for by the issues raised in
this litigation. The rules of discovery were never intended
to interfere with contractual relationships in such a far
reaching manner. We observe in this connection that the dis-
trict court allowed wide latitude to the Insured in propounding
interrogatories which are not presented as issues here, although
some were objected to.
The Montana Rules of Civil Procedure require interrogatories
to be relevant to the subject matter of the action. Rule 33
provides in part:
II
Interrogatories may relate to any matters which
can be inquired into under Rule 2 ( )
6 b , and the
answers may be used to the same extent as provided It
in Rule 26(d) for the use of deposition of a party.
Rule 2 ( )
6b, M.R.Civ.P., provides:
"b
() SCOPE OF EXAMINATION. Unless otherwise
ordered by the court as provided by Rule 30(b)
or (d), the deponent may be examined regarding
any matter, not privileged, which is relevant
to the subject matter involved in the pending
action, whether it relates to the claim or de-
fense;£ the examining party or to the claim or
defense of any other party, including the existence,
description, nature, custody, condition and loca-
tion of any books, documents, or other tangible
things and the identity and location of persons
having knowledge of relevant facts, It is not
ground for objection that the testimony will be
inadmissible at the trial if the testimony sought
appears reasonably calculated to lead to the dis-
covery of admissible evidence." (Emphasis added.)
We shall assume for our purpose here that the discovery
attempted was relevant and material but whether it was reason-
able to the issues pleaded at this stage is the crux of the
matter. Apparently the Insured would search for some "pattern"
of business practices that might somehow relate to his general
charge of an oppressive, malicious and fraudulent action towards
him. However, in all of the cases we have searched the subject
of reasonableness is considered by weighing the annoyance and
expense involved against the value of the information sought.
See: 4A ~oore's Federal Practice 5 33:20; United States v.
Imperial Chemical Industries, 8 F.R.D. 551; United States v.
Loewfs, Incorporated, 23 F.R,D. 178.
Here, it is clear from the affidavits and answers that the
answer to interrogatory No. 26 involves multiple and minute
factual details which can only be compiled after many thousands
of hours of work at a considerable cost. Also, counsel for
Insured stated that he intends to write a letter to each and
every policyholder disclosed in the answer to interrogatory No.
26. The rules of discovery were never intended to be used to
interrupt or interfere with contractual relationships to this
extent. We are simply unable to see, even assuming the factual
matters sought to be relevant, where, considering the annoyance
and expense involved, the value of the information sought has a
reasonable relationship under these circumstances.
Accordingly, we find the district court abused its discretion
in ordering that interrogatory No. 26 be answered and that part
of its order of August 24, 1972, is set aside.
~ssociakd
Justice
Associate Justices.
Mr, Justice.JohnConway Harrison deeming himself disqualified
took no part in this Opinion.