NO. 84-424
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
RAYMOND GUIBERSON,
Plaintiff and Respondent,
HARTFORD CASUALTY INSURANCE
COMPANY,
Defendant, Third-Party Plaintiff
and Appellant,
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, TIM TINTINGER
and THE STATE OF MONTANA,
Third-Party Defendants and
Appellants.
APPEAL FROM: DiStrict Court of the Third Judicial DiStrict,
In and for the County of Deer Lodge,
The Honorable Robert Boyd, Judge preSiding.
COUNSEL OF RECORD:
For Appellants:
Alexander & Baucus; Nancy Cory argued for Hartford
CaSualty Ins., Great Falls, Montana
Michael J. McKeon argued for State Farm, Anaconda,
Montana
John BobinSki argued for State, Dept. of Administration,
Helena, Montana
For ReSpondent:
Corette, Smith, Pohlman & A1len; R. D. Corette &
Robert Carlson argued for Guiberson, Butte, Montana
Submitted: JUn@ 131 1935
DeCid@d; AuguSt 8, l985
Filed= ":§‘é’*§§‘*;§ ?985
_ 1
Clerk
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
A jury in the Third Judicial District, Deer Lodge Coun-
ty, awarded plaintiff $600,000 in damages for injuries sus-
tained after he jumped onto the trailer bed of his employer's
beer truck in an attempt to prevent two escaped mental pa-
tients from absconding with it. In an amended judgment, the
court found the State of Montana liable for half the verdict
and the uninsured motorist (mental patient) liable for the
other half. The State paid and settled its claims. Insur-
ance companies appeal the amended judgment, and. plaintiff
cross-appeals to reinstate the original verdict.
We affirm the amended judgment to the extent that it
determined the liabilities of the joint tort-feasors, the
State of Montana and Tintinger, the uninsured motorist. we
reverse the portion of the order which apportioned the lia-
bilities in contract of the two insurance companies under
their respective uninsured motorist provisions.
We hold that State Farm was the primary insurer with
adequate coverage at the time of the accident to cover the
entire liability of the uninsured motorist. Thus, Hartford
as excess insurer owes nothing under these facts.
On January l4, 198l, Ray Guiberson was delivering beer
to the Warm Springs Store in Deer Lodge County, Montana, and
stopping to take orders for his employer, Roach. & Smith
Distributors, Inc. Ray was driving his employer's vehicle, a
pickup truck with a fifth wheel trailer attached. He had
left the keys in the ignition. While Ray was in the store,
Tim Tintinger, a mental patient at Warm Springs State Hospi-
tal, jumped into the cab of the truck and another escaped
patient jumped into the attached unit. They began driving
away.
Ray raced out of the store and jumped into the trailer
attached. to the moving' truck. He 'unsuccessfully tried. to
talk the two patients into stopping the truck. When they
reached Interstate 90, Tintinger began driving at a high rate
of speed, finally driving through a highway patrol roadblock
and overturning the truck. Ray was thrown out of the at-
tached trailer. He suffered contusions and abrasions over
his entire body. A severe skull fracture extending into the
base of the skull resulted in partial permanent hearing loss
and destruction of the labyrinth on the left side.
Ray first filed suit against his own personal insurer,
Hartford Casualty Insurance, which had a policy provision in
accordance with Montana law covering uninsured motorists.
Ray sought to have this provision applied to Tim Tintinger as
an uninsured driver. Hartford joined as third-party defen-
dants State Farm Mutual Automobile Insurance Company and the
State of Montana, State Farm insured the fourteen vehicles
owned and used by Ray's employer, Roach and Smith Distribu-
tors, State Farm's policy also contained an uninsured motor-
ist provision.
Hartford brought in State Farm as the ownership insurer,
Hartford impleaded the State under a theory of subrogation,
alleging that the State's negligence in supervising Tintinger
was the proximate cause of its contractual obligation to its
insured. State Farm cross-claimed against the State, incor-
porating by reference Hartford's arguments on issues relating
to subrogation.
The District Court denied a motion filed by the State of
Montana on December 17, l982, asking for dismissal of the
third-party complaint against it. In February 1984 both
State Farm and Hartford filed motions for summary judgment
which the court denied. Finally, parties proceeded to trial
on April 23, l984. After several days of testimony, the jury
returned a verdict on a special verdict form in favor of Ray
for $600,000, finding Tintinger and the State equally respon-
sible for Ray's injuries. Although the jury found the plain-
tiff Ray to be l0% negligent, it did. not find that his
negligence was a proximate cause of his injuries.
In the judgment entered May 2, 1984, the court decreed
that "Plaintiff have and recover from the defendants, HART-
FORD CASUALTY INSURANCE COMPANY, STATE FARM MUTUAL AU'I'OMOBILE
INSURANCE COMPANY:; TIM TINTINGER and 'I‘HE STATE OF MONTANA,
the sum of SIX HUNDRED THOUSAND AND NO/100 ($600,000.00)
DOLLARS . . .." The State of Montana and Hartford moved to
amend the judgment to conform to the verdict.
On May 30, l984, the court rendered an amended judgment
apportioning the $600,000 equally between the defendants
found to be negligent and proximate causes of the injuries:
Tim Tintinger, $300,000 and the State of Montana, $300,000.
Relying on contractual language in the insurance policies,
the court further apportioned the recovery of payments for
the liabilities of Tintinger, the uninsured motorist, between
Hartford and State Farm. The court based a pro rata appor-
tionment on the limit of their respective coverages deter-
mined by "stacking," i.e., adding the total coverage for all
vehicles for which each insured has paLj a premium. For
plaintiff's two vehicles at $50,000 each, Hartford's policy
limits were $lO0,000; for plaintiff's employer's fourteen
vehicles, State Farm's policy limits were $350,000. The
ratios of l00,000/450,000 and 350,000/450,000 reduced to
fractions resulted in the following apportionment:
(l). Hartford 22.223% $ 66,669.00
(2). State Farm 77.777% $233,331.00
$300,000.00
There was no offset for plaintiff's negligence (l0% on the
special verdict form) because it was not a proximate cause of
his injuries.
Hartford and State Farm appealed, and Ray Guiberson
cross-appealed. The State settled its obligations with Ray
on November 2l, l984. Under the terms of the settlement, the
State paid Ray the sum of $l45,000 cash and agreed to pay him
$l,0O0 per month for life, with a thirty-year term certain
for him and his designated beneficiaries. These payments
commenced on January 1, l985. Ray released the State from
all claims he might have except those arising under the
Workers' Compensation Act. His attorneys executed a satis-
faction of May 30, l984, amended judgment against the State.
we consider the following issues on appeal:
Hartford and State Farm's issues in common:
1. Is the State responsible for the entire jury verdict
on the basis of subrogation?
2. Should the $300,000 limitation on governmental
liability for damages in tort of § 2-9-l07; MCA, retroactive-
ly apply and if so, is the limitation constitutional?
Hartford's i§§u§:
3. Did the court err by apportioning pro rata the
insurance companies' coverages when the Hartford policy
states that it is only an excess insurer?
State Farm's issues:
4. Did the District Court err in "stacking" the $25,000
policy limits on each vehicle to arrive at a total limitation
of $350,000?
5. Does State Farm uninsured motorist coverage apply
when the vehicle was not driven with consent and the vehicle
was insured under the liability coverage of that policy?
Guiberson's issues:
6. Should this Court dismiss the appeal of Hartford as
frivolous and assess damages for an appeal taken for purposes
of delay?
7. Should the original verdict be reinstated so that
defendants State Farm, Hartford and Tintinger would be liable
jointly and severally for $300,000 each?
§§§ue Number ls Subrogation. Hartford and State Farm
contend that the State in negligent and careless acts failed
to supervise its patient, Tintinger, Contending that without
Tintinger's escape, Guiberson would not have sustained inju-
ries, the insurance companies claim that the State is the
party truly liable. Hartford and State Farm believe that,
standing in the shoes of the plaintiff, they should be subro-
gated to his right against the real party responsible for the
injuries, i.e., the State.
The insurers incorrectly cite State Farm v. Solem (Mont.
l98l), 622 P.2d 682, 38 St.Rep. l24, to support the insurers'
right of subrogation following a jury determination of lia-
bility of the uninsured motorist. In fact, we held in §Ql§m
that State Farm had the procedural right under Rule 14(a),
M.R.Civ.P., to implead the uninsured motorist or bring anyone
who "may be" liable into the lawsuit in the first place under
the principle of subrogation, without having to wait until
the insurer pays a judgment. §Qlem, 622 P.2d at 683. Thus,
Rule 14 permits impleading on the principle of contingent
liability. Of course, an insurance company has the right of
subrogation to the rights of the plaintiff once liability is
established. But the insurers misconstrue the procedure in
stepping into Guiberson's shoes after the verdict and apply-
ing the procedure of impleading. Rule 14 permits impleading
of third parties before trial; it does not substitute for a
jury determination of liability.
The State and Tintinger were already properly impleaded
under Rule l4(a), M.R.Civ.P. The jury verdict found both
parties equally negligent and equal proximate causes of
Guiberson's injuries. In the amended judgment, the court
conformed the result to the jury finding, determining that
the patient was responsible for one-half the judgment, the
State responsible for the other half. The State has satis-
fied the claim against it for its own negligence. The insur-
ers are subrogated to the rights of Guiberson against the
uninsured motorist, Tintinger, for his personal liability, as
determined by the jury. His negligence is not imputable to
the State. The purpose of uninsured motorist provisions is
to cover the individual liability of the uninsured motorist
to the limits of the policy according to policy provisions.
In this case, the insurers may proceed on the principle of
subrogation against Tintinger alone for that portion of the
judgment for which the State is not liable.
We affirm the District Court and hold that the State is
responsible only for its own negligence in supervision. We
hold that the insurance companies are subrogated to the right
of plaintiff against the uninsured motorist alone because his
liability is covered, not that of the State. The insurers
cannot alter a jury verdict of liability under a nunc pro
tunc theory of contingent liability where liability is not
contingent but determined.
Issue Number gc Limited government liability for
damages in tort under § 2-9-l07, MCA.
For the reasons discussed on the State's liability for
its own negligence alone and not for the entire jury verdict,
we do not have to reach the constitutionality of limitation
of damages or the retroactive application of the statute
which was enacted after the incident at issue. The jury did
not find the State liable for an amount exceeding the
$300,000 limitation found in § 2-9-lO7, MCA, and the State
has satisfied plaintiff's claims in tort against the State.
Issue Number §: Primary / excess insurer,
Guiberson's personal insurer, Hartford, provides in its
policy:
"If there is other applicable similar insurance we
will pay only our share. Our share is the propor-
tion that our limit of liability bears to the total
of all applicable limits. However, any insurance
we provide with respect nn n vehicle ynn nn nnn nnn
shall nn excess over nny other collectible insur-
ance." (Emphasis added.)
State Farm's policy on the beer truck states:
"If the insured is injured while occupying your
car, and your car is described on the declaration
page of another policy providing uninsured motorist
vehicle coverage, we are liable only for our share.
Our share is that percent of the damages that the
limit of liability of this coverage bears to the
total of all such uninsured motor vehicle coverage
applicable to the accident."
Hartford contends that the specific language of the
uninsured motorist provisions in both policies when construed
together denotes State Farm as the primary insurer and Hart-
ford as the excess insurer under this factual situation.
Hartford relies on Montana case law to illustrate that the
clauses are not repugnant and that Hartford's liability does
not arise until the limits of the collectible coverage under
State Farm have been exceeded. Mountain States Mutual Casu-
alty Co. v. American Casualty Co. (l959), 135 Mont. 475, 342
P.2d 748.
State Farm argues that our court should adopt a rule
that the company which provides the personal policy to the
named insurer is the primary insurer, per a classification
scheme found at l2A, Couch on Insuranme 23 § 45:635, and
other insurance be regarded as excess.
we find Hartford's argument more persuasive. It allows
us to look at the policies as actually drafted by the insur-
ers to determine the coverage agreed upon between insurer and
insured. Hartford's policy clearly states that any insurance
it provides to its named insured on any vehicle he does not
own "shall be excess over any other collectible insurance."
State Farm's policy has no provision covering excess insur-
ance, and cannot claim by its policy to be an excess insurer.
As drafted, State Farm's policy claims liability only
for its share "if the insured is injured while occupying your
car, and your car is described on the declaration page of
another policy providing uninsured motorist vehicle coverage
. . .H' This language activates a pro rata apportionment
when the insured. vehicle involved in the accident is de-
scribed in another policy which provides uninsured motorist
liability coverage, i.e., when there is more than one policy
particularly describing and covering the vehicle.
Because Hartford's policy does not describe or cover the
beer truck, it does not activate the shared liability provid-
ed for in State Farm's policy. Furthermore, Hartford's
policy provides that it will pay its share "if there is any
other applicable similar insurance," i.e., when the named
insured (here Guiberson) has other similar liability coverage
on automobiles he owns. But vehicles not owned by the named
insured come under the excess coverage provision.
we reverse the District Court on the apportionment of
the $300,000 liability of Tintinger, the uninsured motorist,
between Hartford and State Farm. we hold that Hartford was
an excess insurer on vehicles not owned by the policyholder
and that neither policy's language provided apportionment of
liability under this factual situation, where the beer truck
was not described. in another policy and. not owned by the
plaintiff,
Issue Number 4: "Stacking" nn coverage limits when
separate premiums are paid for ny the insured. Because we
hold that Hartford is an excess insurer on vehicles not owned
by its insured, we must determine what, if any, excess Hart-
ford owes. The trial court stacked the $25,000 uninsured
motorist liability limit (the same coverage the insured is
entitled t0) of each vehicle to arrive at State Farm's upper
limit of $350,000 liability on behalf of the employer for the
entire fleet of fourteen beer trucks. The court also stacked
the coverage Guiberson purchased from Hartford on his two
vehicles at $50,000 each to arrive at an upper limit of
$100,000 under Hartford's policy.
we will not overturn the District Court's stacking in
this case. At the time of the accident, the practice was
recognized of adding coverage based upon the payment of
separate premiums on separate vehicles. See, Chaffee v. U.S.
Fid. & Guar. Co. (l979), 181 Mont. 1, 591 P.2d 1102; Kemp v.
AllState (l979), 183 Mont. 526, 601 P.2d 20. We held that
this liability coverage the insured had purchased extended to
the uninsured motorist.
"In applying Montana law, we determine that. the
uninsured motorist coverages are to be 'stacked';
that is, in policies of insurance which cover two
or more vehicles, if a separate premium has been
charged and collected on each vehicle for uninsured
vehicle coverage, the insured is entitled to recov-
er under uninsured motorist coverage sums found
legally recoverable up to the aggregate sum of the
coverages on all the motor vehicles so insured."
Kemp v. Al1state, 601 P.2d at 24.
The accident occurred in January, l981. The Montana
Legislature passed a law abolishing stacking, § 33-23-203,
MCA, which became effective on October 1, 1981. The lower
court properly applied the law in effect at the time of the
accident. A1though the law forbids stacking now, we will not
apply the law retroactively to deprive the plaintiff of
coverage he was entitled to at the time of his accident. He
was entitled to $350,000 coverage from the fourteen separate
premiums his employer purchased from State Farm, plus
$100,000 coverage from Hartford as the excess insurer.
Because the liability of the uninsured motorist, Tintinger,
was determined to be $300,000, State Farn1 as the primary
insurer adequately covers the judgment and. Hartford owes
nothing as the excess insurer.
Issue Number §: Consent nn the insured vis n vis unin-
sured motorist coverage.
State Farm contends that its uninsured motorist provi-
sion on the truck does not cover the accident because the
vehicle was used without the owner's consent and it was
concurrently insured under liability coverage of the policy.
State Farm claims an exclusion in its policy language.
[Applicable uninsured motorist provision]:
"An uninsured motor vehicle does not include n land
motor vehicles
"1. insured under the liability coverage nn this
policy; . . ." (Emphasis added.)
[Insured for liability coverage]:
"Insured means:
'K . . [You, your spouse, relatives of the first
person named in the declaration] . .
"4. any other person while using such § car nn its
use is within the scope of consent nn you nn your
spou§e1" (Emphasis added.)
This Court does not support provisions placed on unin-
sured motorist coverage which restrict or thwart available
liability coverage that the insured would be entitled to in
an accident.
"The purpose of the statute is to protect complete-
1y, those willing to accept its protection, from
all harm, whatever their status--passenger, driver,
pedestrian--at the time of injury, produced by
uninsured motorists. The only restrictions are
that the plaintiff must be an insured, the defen-
dant motorist uninsured, and that plaintiff be
legally entitled to recover." Jacobson v. Imple-
ment Dealers Mut. Ins. Co. (Mont. 1982), 640 P.2d
908, 911, 39 St.Rep. 325, 328, citing Elledge v.
warren (La.App. 1972), 263 So.2d 9l2.
Plaintiff Guiberson is an insured; he was in the bed of
the beer truck pursuing his employer's interest in attempting
to prevent its disappearing with mental patients. His use
was within the scope of consent of Roach & Smith, Inc. The
defendant Tintinger was an uninsured motorist. Consent to
drive the beer truck is not only inapplicable to the defen-
dant as an uninsured, but also irrelevant. Plaintiff is
legally entitled to recover damages pursuant to a judgment
rendered according to a jury verdict. The language of the
uninsured motorist provision is nullified where it gives less
coverage for acts of the uninsured. than. it wou1d. to the
insured, thus defeating the purpose of providing such
coverage.
we hold that State Farm's uninsured motorist coverage
was applicable to these facts and that the plaintiff is
entitled to the full coverage available to the insured under
the policy.
Issues Numbered § and l. Plaintiff's motion nn dismiss
Hartford's appeal and. plaintiff's claim that the original
verdict nn reinstated.
we will not dismiss Hartford's appeal as frivolous or
initiated for purposes of delay. Hartford has prevailed on
the substantive issue of whether it is an excess insurer, and
raised the other substantive issue of subrogation which we
found inapplicable to the State but applicable to the other
tort-feasor, Tintinger, Plaintiff has entered the case to
contest the amended judgment, contradicting his claim that
Hartford's appeal is frivolous.
Plaintiff's argument that the original verdict of
$600,000 should be reinstated jointly and severally against
the tort-feasors, thereby making each one liable for the full
$600,000, has become moot with plaintiff's settlement of all
claims against the State. Furthermore, the insurers are not
joint tort-feasors with the State, as indicated by the origi-
nal judgment, and cannot be held jointly and severally liable
because the insurer's relationship to the uninsured motorist
is based on contract, not tort.
Hartford and State Farm contractually provided uninsured
motorist coverage. Both are liable according to the terms of
their contracts. Because State Farm's contract provides
primary coverage and the policy limits by stacking permitted
at the time of the accident are sufficient, State Farm is
responsible for the $300,000 liability of the uninsured
motorist, Tintinger, Consequently, Hartford's provision to
cover any excess uninsured motorist coverage on vehicles not
owned by the insured plaintiff is not activated and Hartford
is not responsible for any of the $300,000 verdict.
Affirmed in part and reversed in part.
>/’éhief Justice
we concurs
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