No. 85-16
I N THE SUPREME COURT OF THE STATE OF MONTANA
THE STATE OF MONTANA, ex r e l . ,
DONNA S. FITZGERALD, i n d i v i d u a l l y
and a s A d m i n i s t r a t r i x of t h e
E s t a t e of R o n a l d E . F i t z g e r a l d ,
Relator,
D I S T R I C T COURT O F THE EIGHTH
J U D I C I A L D I S T R I C T , I N AND FOR
THE COUNTY O F CASCADE, HON. P E T E R
L. RAPKOCH & AETNA INSURANCE CO.,
Respondents.
O R I G I N A L PROCEEDINGS:
COUNSEL O F RECORD:
For Relator:
blarra, Wenz, Johnson & ~ o p k i n s ,P.C.; Joseph R.
M a r r a argued, G r e a t F a l l s , Montana
John F . I w e n , G r e a t F a l l s , Montana
D o l a N. Wilson, J r . , G r e a t Falls, Montana
F o r Respondents:
James, Gray & McCafferty; R o b e r t J . James argued,
G r e a t F a l l s , Montana
-- -
Submitted: May 1 5 , 1 9 8 5
Decided: J u l y 23, 1985
Filed: J U 2 3 i985
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
We accept jurisdiction as petitioned for by Donna S.
Fitzgerald the relator, by way of supervisory control to the
extent outlined in this opinion. A copy of this opinion,
when served upon the District Court of the Eighth Judicial
District, Cascade County, the Honorable Peter L. Rapkoch,
judge presiding, shall be, constitute and serve the office of
a writ of supervisory control over the District Court in
cause no. 79977C pending in said District Court, entitled
Donna S. Fitzgerald, individually and as the administratrix
of the Estate of Ronald E. Fitzgerald, Deceased, Plaintiff
vs. Aetna Insurance Company, defendant.
Further proceedings in said District Court cause shall
be in accordance with this opinion.
Relator, Donna S. Fitzgerald (Fitzgerald) fil-ed a
petition in this Court for a writ of supervisory control on
January 10, 1985. We deferred taking jurisdiction until
response was obtained from the respondents, and oral argument
had on May 15, 1985. We will set forth here a general
statement of the facts in the underlying action, and later
add such facts as may be necessary for a full discussion of
the issues presented and determined by us.
On November 23, 1973, Ronald E. Fitzgerald was killed
when the tractor-trailer rig he was driving collided with
another tractor-trailer driven by Rudolph Col-licott,who was
employed by Turner Valley Transport Company (TVT), a Canadian
corporation. The collision occurred outside of Lewistown,
Montana, in Fergus County. On December 6 , 1973, Rudolph
Collicott pleaded guilty to drunk driving and manslaughter.
He was sentenced to a term of five years in the Montana State
Penitentiary. The widow, Donna S. Fitzgerald, individually
and as administratrix of the Estate of Ronald E. Fitzgerald
filed suit in state court naming Collicott, TVT, and Emanual
St. Louis as defendants. St. Louis owned the tractor that
Collicott was using while hauling pipe for TVT at the time of
the collision. The defendants, Canadians all, removed the
case to Federal District Court in Great Falls, Montana, on
the basis of diversity of citizenship. After extensive
pretrial discovery, a bench trial was held in Federal
District Court. On April 17, 1975, the Federal District
Court rendered a judgment in favor of Fitzgerald and against
Collicott and TVT for $190,739.00. This amount was within
the coverage of the Aetna pol-icy. No judgment St.
Louis was entered; the Court denied TVT's cross-claim for
indemnification. Fitzgerald's judgment was not paid hy Aetna
nor by the two Canadian insurers who had issued policies to
TVT .
This state court a.ction was filed by Donna Fitzgeral-d on
July 30, 1975 to force Aetna and the two Canadian insurance
companies, Markel Insurance Company and Canadian Surety
Company, to pay the judgment of $190,739.00 obtained by
Fitzgerald against their insured, TVT. Fitzgerald contended
that Aetna was liable to pay the judgment under a policy of
insurance issued to TVT by Aetna. Her complaint also alleged
that Aetna acted in bad faith by refusing to pay the judgment
against its insured, hy causing Fitzgerald unnecessary time
and expense in prosecuting the underlying action against TVT,
by acting in bad faith in offering ridiculously low
settlements before and after the judgment aga.inst TVT, and by
maliciously, oppressively and fraudulently depriving
plaintiff of the proceeds of her judgment, cansing her
extreme emotional distress.
Aetna twice attempted to remove the state court suit to
federal court but was unsuccessful. Aetna's first removal
petition was remanded to state court because all of the
defendants in the action did not join the petition for
removal. Thereafter, on July 12, 1976, both Canadian
insurance companies were dismissed from the state court
action for lack of personal jurisdiction. Service against
both companies was quashed.
After the dismissal of the Canadian insurance companies,
Aetna filed another petition to remove the case to fed.era1
court. The Federal District Court again remanded the case to
the state court holding the case was always removable but
Aetna had failed to state in the first removal petition that
the Canadian companies were not parties. During the oral
hearing on the motion to remand the second removal, United
States District Judge Russell Smith remarked:
"I think it's a shameful business when a plaintiff
gets in a position where she has to straighten out
defendants who wrote policies and who ought to be
able to get together and interpret them themselves.
Of course it's just this sort of thing that makes
insurance companies the unpopular creatures that
they are in the court."
Fitzgerald. seeks to have admitted in the present state
court action the quoted statement by Judge Smith when this
case is eventually tried.
Meanwhile, in the state court action, Aetna filed
various motions to dismiss the case. Judge Paul Hatfield,
then a state court judge, briefly presided over the matter
until he was disqualified by Aetna. On January 21, 1976,
before the Canadian companies were dismissed from the
lawsuit, Judge Hatfield issued an order that in substance was
directed at the Canadian companies' motion to dismiss for
lack of jurisdiction. In that order, he stated:
"[lit appears to be another occasion for the
justified criticism of the courts and lawyers who
appear to lose sight of their true function, the
administration of justice, while they joust with
technicalities without substance resulting in
delays, which is ultimately detrimental and
expensive for all parties."
Fitzgerald seeks to introduce this statement at the
upcoming trial.
Judge R. J. Nelson a.ccepted jurisdiction after Judge
Hatfield was disqualified by Aetna. On July 12, 1976, Judge
Nelson issued an order dismissing the Canadian insurance
companies from the case and denying Aetna's motion to strike
counts I1 and I11 of plaintiff's complaint. (Count I1
essentially requests punitive damages and attorney fees on
the grounds of fraudulent breach of contract, and count 111
seeks damages for mental and emotional distress for failure
to pay the judgment.) Aetna was ordered to file an answer
within 20 days. Fitzgerald commenced discovery and sought to
inspect and copy certain correspondence between Aetna, its
attorneys, agents, and employees relating to this lawsuit and
also any written communication in Aetna's possession between
the Canadian insurers, driver Collicott, and their attorneys
and agents. Aetna refused to comply with the request. A
hearing was held on December 13, 1976 on plaintiff's motion
to produce.
Judge Truman Bradford issued an order directing Aetna to
produce all documents except communications between Aetna and
its counsel of record that pertained to this suit. In Judge
Bradford's order and opinion, he wrote:
"This Court is also cognizant by taking judicial
notice of its records and files herein, that suit
was commenced by this Plaintiff on December 3,
1.973, that it was removed to the Federal Court
which rendered this judgment May 29, 1975; that
this lawsuit was filed July 30, 1975; and it was
twice removed and remanded from the Federal Court;
that the Defendants have disqualified one of the
District Judges originally presiding in this
matter, and that the matter has continued to the
point where the maxim, 'Justice delayed is justice
denied' is particularly applicable herein."
Fitzgerald seeks to have this quotation admitted into
evidence at the upcoming trial.
On February 8, 1977, Aetna moved in state court for
summary judgment pursuant to Rule 56, M.R.Civ.P., contending
that under the facts stipulated in this case it was not
liable to pay the May 29, 1975 judgment entered against
Collicott and TVT in federal court, and that plaintiff's
claim alleging bad faith and intentional infliction of
emotional distress should be dismissed as a matter of law.
Fitzgerald filed a cross-motion for partial summary judgment
seeking to find Aetna liable for the aforementioned judgment
and compelling Aetna to pay. On April- 19, 1977, after a
hearing, Judge William Coder, who was then presiding over the
case, denied Aetna's motion and granted plaintiff's motion
for partial summary jud.gment. Aetna obtained a stay of
execution and appealed to the Montana Supreme Court. In
Fitzgerald v. Aetna Insurance Co. (1978), 176 Mont. 186, 577
P.2d 370, this Court affirmed. the order of the District
Court. This Court, however, declined to address Aetna's
motion to strike counts I1 and III on the grounds that the
denial of the motion by the District Court was not an
a-ppealable order under Rule 1, M.R.App.Civ.P. See 176 Mont.
On April 28, 1978, Aetna paid Fitzgerald the total
amount of the judgment obtained in 1975 against Rudolph
Collicott and TVT.
On June 15, 1.978, Judge Coder assessed 51,115.50 for
attorney fees against Aetna because plaintiff was required to
respond to Aetna's repeated motions to strike that raised no
new grounds other than those contained in the earlier
motions. The award was made pursuant to Rule 11, M.R.Civ.P.
and the equitable power of the court. Aetna has not paid
this assessment to date.
Plaintiff served a set of interrogatories on Aetna on
June 20, 1978, and Aetna answered these on July 19, 1978. On
May 6, 1980, plaintiff filed a notice of readiness for trial.
No more documents were filed in this case until July 19,
1983, when plaintiff filed a motion for a preliminary
pretrial conference. A conference date was set and vacated.
Judge Coder retired from the bench and Judge Thomas
McKittrick accepted jurisdiction over the case. Fitzgerald
moved to disqualify Judge McKittrick and on January 5, 1984;
Judge John McCarvel accepted jurisdiction. Aetna moved to
disqualify Judge McCarvel. Judge R. D. McPhillips accepted
jurisdiction. Fitzgerald moved to disqualify Judge
McPhillips. On March 23, 1984, Judge Peter Rapkoch accepted
jurisdiction and is still presiding.
I
SUPERVISORY CONTROL
Several issues are raised for consideration here. The
first issue to be addressed is whether a writ of supervisory
control should issue in this case.
Aetna points to the decision against it in Fitzgerald v.
Aetna Insurance Co., supra, where we denied its petition for
writ of supervisory control on the ground that the denial of
the motions to strike was not an appealable order. Aetna
contends that the rulings of the District Court here invol-ved
are not appealable orders. Fitzgerald on the other hand
contends that she has been engaged in this litigation for
more than ten years, and has no plain, speedy or adequate
remedy in the ordinary course of 1-aw for redress under the
rulings hereafter to be discussed. Fitzgerald contends that
a writ of supervisory control will serve to save judicial
time, provide judicial economy, and prevent eggregious error
by the District Court from prolonging her already protracted
litigation.
Early in this century, this Court decided that one of
the functions of the supervisory power of the Court is to
control the course of litigation in those courts subject to
its control, where those courts are proceeding within their
jurisdiction but under mistake of law are doing a gross
injustice, and there is no appeal or the remedy by appeal is
inadequate. State ex rel. Shores v. District Court (1903),
27 Mont. 349, 71 P. 159; State ex rel. Whiteside v. District
Court (1900), 24 Mont. 539, 63 P. 395. We have refused to
issue a writ of supervisory control when it appeared that any
injustice to the party could be corrected by an appeal from
the final judgment. State ex rel. Barron v. District Court
(1946), 1.19 Mont. 344, 174 P.2d 809.
There are no written regulations or laws respecting our
power of supervisory control, and this Court has followed the
practice of proceeding on a case-by-case basis although we
have been careful not to substitute the power of supervisory
control for an appeal provided by statute. State ex rel.
Reid v. District Court (1953), 126 Mont. 489, 255 P.2d 693.
We have said, however, that if it is apparent from the record
that a relator will be deprived of a fundamental right, both
justice and judicial economy require the Supreme Court to
resolve the issue in favor of the relator and assume
jurisdiction, State ex rel. Coburn v. Bennett (Ilont. 1982),
655 P.2d 502, 39 St.Rep. 2300. If the cause in district
court is mired in procedural entanglements and appeal is not
an adequate remedy, we will issue a writ of supervisory
control. State ex rel. Levitt v. District Court (1977), 172
Mont. 12, 560 P.2d 517.
We find from the record here that there are procedural
entanglements here caused by rulings made in the District
Court that may prolong the litigation and have great
potential to make an appeal an inadequate remedy. There is a
possibility sufficient for us to exercise supervisory control
that fundamental rights of Fitzgerald are in jeopardy.
Accordingly, we assume jurisdiction by way of supervisory
control.
THE ISSUE OF SEPARATE TRIALS ON PUNITIVE DAMAGES
One of the principal grounds on which we base our order
for supervisory control is the ruling of the District Court
relating to the trial of the issue of punitive damages.
Aetna moved for an order - limine
in (par. 7 of the
motion) :
"A. Prohibiting the plaintiff, any witness or
counsel from any way discussing or presenting to
the jury any information concerning the assets,
income, profits or other indicia of the economic
and financial condition of the d-efendant,or refer
to any amount claimed for punitive damages during
voir dire, opening statements, or the examination
of witnesses, until the plaintiff has presented
sufficient evidence upon which, in the court's
opinion, the question of punitive damages may
properly go to the jury."
The District Court ruled on that portion of the motion
- limine
in as follows:
"(A) Above is denied, except that, considering
substance over form, the court deems this motion in
limine to be a motion for a separate trial under
Rule 42(b), of the Montana Rules of Civil
Procedure, as to the amount of exemplary damages to
be awarded the plaintiff, if, and only if, the
plaintiff has obtained a v y i t o
edc-f the T r y in
this case that the defendant has acted in bad
faith, which motion is granted."
Left unclear from the District Court's order is whether
the punitive damages issue will be tried by one jury, sitting
seriatim, or to two different juries. Perfectly clear,
however, is that there will be two verdicts on the punitive
damages issue, assuming that the first verdict results in a
finding of bad faith, because the court acted sua sponte in
separating the liability from the punitive damages issues for
submission to the jury.
One of two conditions must exist for the exercise by a
district court of its power to separate issues for trial. It
must either be in furtherance of convenience, or to avoid
prejudice. Rule 42(b), M.R.Civ.P., provides:
"Rule 42(b). Separate trials. The court in
furtherance of convenience or to avoid prejusice
may order a separate trial of any claim,
cross-claim, counterclaim, or third-party claim, or
- any separate issue or of any number of claims,
of
cross-claims, counterclaims, third-party claims or
issues." (Emphasis added. )
We call to the attention of practitioners that Rule
42 (b), M.R.Civ.P., relating to separate trials, is different
in word-ing from Rule 42(b), of the Federal Rules of Civil
Procedure on the same subject. The federal rule provides
additional grounds for granting separate trial, as when
separate trials will be conducive to expedition and economy
but "always preserving inviolate the right of trial by jury."
Even though the federal provision of inviolate right of trial
by jury is missing from its Montana counterpart, Rule 42(b),
. .
.
there should be no difference in result under the Montana
rule when an order for separate trial is considered. Art.
11, § 26, 1972 Montana Constitution provides that "the right
of trial by jury is secured to all and shall remain
inviolate."
We begin consideration of the issue by conceding that
Rule 42(b), M.R.Civ.P., provides a broad discretion to the
district court in the handling of trial procedures. In State
ex rel. McGinnis v. District Court (Mont. 1983), 673 P . 2 d
1207, 40 St.Rep. 1858, where the District Court had
bifurcated a contest between claimants of an estate, we
denied supervisory control. In that case, the petitioners
claimed to be entitled to the estate of a decedent by reason
of an agreement that if they provided for her during her
lifetime, she would leave the bulk of her estate to them.
The decedent died intestate, and the intestate heirs
contended that they were entitled to distribution of the
decedent's estate. The District Court bifurcated the issue,
providing that the non-heirs would first present their claims
and if they presented a prima facie case, then the intestate
heirs would be cited to appear and defend against the
non-heirs at their separate expense. We decided to deny the
writ because of the broad discretion given to the District
Court in handling trial procedures.
In Monaco v. Cecconi (1979), 180 Mont. 111, 589 P.2d
156, we held that the District Court did not abuse its
discretion in providing a separate trial on a specific issue.
That case involved a suit to set aside a d-ecedent's deed of
real property to Cecconi, which suit was consolidated with a
contest over Cecconi's petition to have decedent's will
admitted to probate. The trial court limited the trial
issues to the validity of the earlier will, because even if
the deed were tainted by undue influence, the net result of a
valid will would have been the return of the real property to
the estate and the same property would still have gone to the
defendant by right of devise. In other words, determination
of one issue would dispose of another issue.
On the other hand, in Standard Insurance Company v.
Sturvandt (1977), 173 Mont. 23, 566 P.2d 52, this Court said:
"We note that determination of the amount of money
due was deferred until after trial on appeal,
%pparently pursuant to Rule 42 (b), M.R.Civ.P.
Multiple trials and appeals arising from a single
dispute may create a severe burden in terms of
increased costs to litigants, delay in resolution
of the controversy, and court congestion. Where
there is no danger of prejudice and the issues are
not complex, the necessity of separate trials
should be carefully waived by the District Court to
ensure that the rule is not abused." 173 Mont. at
28; 566 P.2d at 55.
The case most closely in point appears to be United
Airlines, Inc. v. Weiner (9th Cir. 19611, 286 ~ . 2 d302. In
that case, there was a mid-air collision in 1958 in Nevada
between an airplane owned and operated by the USA and a
passenger airplane operated by United Airlines. Twenty-three
actions for wrongful death against United Airlines and the
United States were filed in the Federal District Court in
California. When the 23 cases were at issue, a motion was
made that all cases be consolidated on the issue of liability
only. The Federal District Court ordered that all of the
cases be consolidated on the issue of liability and that
thereafter the question of damages as to the plaintiffs in
each of the cases would be tried separately, by separate
juries, where demanded. The ruling of the Federal District
Court for separation of issues was appealed to the Court of
Appeals of the Ninth Circuit under 28 U.S.C. .
1292 (b) With
respect to the exemplary damages that were prayed for in some
(not all of the cases) the Court of Appeals said:
"It is apparent that where parties are asking for
exemplary damages which depend on the degree of
culpability of the defendant, they are required to
establish by their evidence their contentions as to
the degree of negligence. Likewise, the defendant
is entitled to show all of the facts surrounding
the collision in order to establish, if he can,
first that there was no negligence, and second,
that even if there was negligence, there was no
willful~ness or wantonness or extreme recklessness.
" J do not say that in no circumstances can a
Fe
separate jury determine the issue of damages after
another jury has determined the issue of liability
for we do not reach that question in this case. As
was said in a recent case in the Seventh Circuit
'whether a party is deprived of a jury trial as
contemplated by the Seventh Amendment when some of
the issues are submitted to one jury, and the other
issues to a second jury, is a more difficult
question to resolve.' (Citing authority.) We do
hold that under the circumstances presented by this
appeal the issues of liability and damages,
exemplary or normal, are not so distinct and
separable that a separate trial of the damage issue
may be had without injustice. The question of
damages is so interwoven with liability that the
former cannot be submitted to the jury
independently of the latter without confusion and
uncertainty which would amount to a denial of a
fair trial. (Citing authority.) " 286 F.2d at 306.
It is clear to us that the issue of exemplary damages in
any case is so interwoven with the proof first of negligence
and secondly of willfulness, wantonness, malice or
oppression, that their separation under Rule 42 (b),
M.R.Civ.P., for decision by a single jury seriatim or by
different juries is an abuse of discretion by the District
Court, which would result in extended and needless
litigation. We reverse the District Court on this point.
Though not applicable to this case, it is well to point
out the adoption by the legislature of H.B. 363, and its
signature by the governor, making it effective as of April
19, 1985. Section 2 of that Act amends 5 27-1-221, MCA, to
provide in a subdivision thereof:
"The plaintiff may not present, with respect to the
issue of exemplary and punitive damages, any
evidence to the jury regarding the defendant's
financial affairs or net worth unless the judge
first rules, outside the presence of the jury, that
the plaintiff has presented a prima facie case for
exemplary or punitive damages. l1
The District Court order in this case goes beyond what
the 1egisl.a.ture has provided to take effect in the future on
punitive damages claims. Under the new statute, in the
course of the trial, the district judge will determine out of
the jury's hearing whether a prima facie case exists for
punitive damages. The District Court in the case at bar has
directed that there must first be a jury verdict that there
is liability and another verdict for punitive damages.
For the guidance of the court in this case, we hold that
evidence of the net worth or financial affairs of Aetna would
become admissible when the plaintiff has established a prima
facie case for punitive damages.
"Prima facie case" means the production by the plaintiff
of such evidence which, although not compelling a verdict on
the issue for the party whose contention it supports, is
sufficient to satisfy the burden of proof to support a
verdict in favor of the party by whom it is introduced when
the trier of fact finds the prima facie case is not rebutted
by other evidence. State ex rel. Department of Public Health
v. Hogg (Mo. App. 1971), 466 S.W.2d 167, 170; State ex rel.
Department of Public Health v. Ruble (Mo. 19701, 461 S.W.2d
909, 912, 913. A refusal by the district court of evidence
of net worth or financial affairs would mean that the
district court had determined that reasonable minds could not
differ that a prima facie case was not made out by the
plaintiff, much the same test as for a directed verdict.
Weber v. Blue Cross (Mont. 19821, 6 4 3 P.2d 198, 2 0 3 , 39
MAY THE PLAINTIFF'S COUNSEL OR HER WITNESSES
DURING TRIAL REFER TO ANY LEGAL DUTY OF AETNA?
Aetna moved for an ord-er in limine as follows:
"B. Prohibiting plaintiff, any witness or counsel
from referring to or indicating to the jury that at
any time that defendant [Aetna] owed a duty other
tha.n one not to intentionally inflict emotional
distress."
Ruling on this portion of the motion in limine, the
District Court went a step further, and ruled:
"B. Above is granted, with the additional ruling
that neither party is to refer to a duty of the
defendant Aetna, of whatever scope or nature, until
the closing arguments, after jury instructions have
been settled and read to the jury, and then only in
conformity therewith. This matter of the
defendant's duty is a legal question."
On this issue, Aetna argues that Fitzgerald, since she
is not an insured of Aetna, and has not recovered a judgment
in excess of the policy limits, nor obtained an assignment by
Aetna's insured, and because the complaint has not alleged a
violation of the Trade Practices Act, is not owed a duty
under the policy. Aetna argues that it would be prejudicial
to Aetna to allow plaintiff or her attorneys or witnesses to
imply that Aetna owed a duty toward her or violated laws in
the State of Montana prior to the Court's ruling on those
duties or violations.
Fitzgerald responds that if this order of the District
Court is allowed to stand, she has no lawsuit to try. She
contends that the case involves first the duty that Aetna
owed Donna Fitzgerald during the course of the wrongful d.eath
action and whether Aetna violated that duty, and then the
duty owed Donna Fitzgerald after the judgment was obtained
and whether Aetna violated that duty.
Counsel for Fitzgerald agree that it would be improper
for counsel to argue either the facts or the law to a jury
during voir dire examination and that neither the trial court
nor counsel should presume that this would be done.
Fitzgerald contends, however, that she has a right to state
to the jury on her opening statement what she intends to
prove in the action and that Aetna violated. duties imposed
upon it by the laws of the State of Montana and the laws of
the United States.
Section 25-7-301, MCA, sets forth the order of trial.
It provides with respect to the opening statements:
" (1) The party who has the burden of proof ma.y
briefly state his case - the evidence by which he
and
expects to sustain it.
"(2) The adverse party may then, or at the opening
of his case, briefly state his defense - the
and
evidence he expects to offer in support of
it . . ."
Under 5 25-7-102, MCA, all questions of law, including
the admissibility of testimony, the facts preliminary to such
admission, the constructi.on of statutes and other writings,
and other rules of evidence are to be decided by the court.
All discussions of law are to be addressed to the court.
Our research reveals no case directly in point from this
Court. We have held with respect to opening statements which
included inadmissible evidence in criminal. cases that
overbroad statements of expected evid-enceby prosecutors will
cause reversal. State v. West (Mont. 1980), 617 P.2d 1298,
37 St.Rep. 1772 (reversed); State v. Zachmeier (1968), 151
Mont. 256, 441 P.2d 737 (reversed); State v. Ruana (1972),
1.59 Mont. 507, 499 P.2d 797 (affirming conviction) ; State v.
Kolstad (1975), 166 Mont. 185, 531 P.2d 1346 (affirming
conviction) .
In reality, Aetna's motion under this subject has the
effect of repeating Aetna's earlier a-ttempts to strike from
Fitzgerald's complaint counts I1 and 111, except as to the
claimed intentional infliction of emotional distress. Aetna
contends that Fitzgerald is not a third party beneficiary
under the policy with TVT, and its only duty to Fitzgerald
was not intentionally to inflict emotional distress upon her.
Fitzgerald's claim against Aetna is two-faceted,
depending upon whether her case is viewed before or after the
judgment wa.s obtained by her against TVT.
After Fitzgerald recovered judgment against TVT, under
Aetna's policy issued to TVT, Fitzgerald acquired a
contractual right to a cause of action against Aetna for the
amount of the judgment within policy limits. Aetna's policy
provided, under "conditionst'in paragraph 4, entitled "action
against the insurer," the following provision:
"4 .No action shall lie against the Insurer
unless, as a condition precedent thereto, the
Insured shall have fully complied with all of the
terms of this policy nor until the amount of the
insured's obligation to pay shall have been finally
determined either by judgment against the insured
after actual trial or by written agreement by the
insured, the claimant and the insurer.
"Any person or organization or the legal
representative thereof who has secured such
judgment or written agreement shall thereafter be
entitled to recover under the policy to the extent
of the insurance afforded by this policy. Nothing
contained in this policy shall give any person or
organization any right to join the insurer as a
codefendant in any action against the insured to
determine the insured's liability.
"Bankruptcy or insolvency of the insured or the
insured's estate shall not relieve the insurer of
any of his obligations hereunder."
Once judgment had been entered against Collicott and
TVT, Fitzgerald was more than simply a judgment creditor of
the insured; she had a contractual right under Aetna's policy
to sue the company directly. She did not need an assignment
of rights from the insured, although she may have obtained
one. The contractual right of a third party claimant to sue
the insurer directly after judgment must include the right to
receive payment of the determined third party claim after
judgment. After judgment against the insured, the claimant
against the insured is in the same position as an insured
with respect to the insurance company. The contractual
duties that exist then are protected by the same concepts of
good faith and fair dealing that pertain to contracts between
insurers and insureds.
With respect to testimony in this cause, it may be
necessary, if either party employs expert witnesses, for such
experts to refer to fiduciary or other duties of the insurer
in stating their opinions as to whether there was here an
improper failure to settle the claim. See Gibson v. Western
Fire Insurance (Mont. 1 9 8 4 , 682 P.2d 725, 41 St.Rep. 1048.
We find that the order of the District Court on this
issue is overbroad. We hold that under 5 25-7-301, MCA,
either counsel may briefly state his or her case and the
evidence he or she expects to introduce to support the same,
and to refer in opening statements to evidence to be adduced,
if those statements are made in good faith and with
reasonable ground to believe the evidence is admissible. See
75 Am.Jur.2d 291 Trial, S 208. Statements of counsel with
respect to the net worth of Aetna or its financial affairs
are subject to the discussion following hereafter relating to
the prayer of the complaint.
There remains in the District Court sufficient power to
correct or prevent abuses. Its power to grant mistrial, to
admit or deny improperly offered evidence or improper
testimony and to admonish the jury to ignore or disregard
improper statements or testimony will preserve the rights of
the parties to a fair trial.
IV
DID THE DISTRICT COURT ABUSE ITS DISCRETION
IN DENYING THE MOTIONS TO AMEND THE PRAYER
On November 29, 1984, at the pretrial conference,
Fitzgerald moved to amend her punitive damage prayer from $1
million to a "sum proportionate to the net worth of the
insurance company found obligated to pay the plaintiff."
This amendment was denied by the District Court.
Fitzgerald further moved to amend her compensatory
damage prayer from $100,000 to "whatever sum the jury finds
due." This motion was denied by the court.
Fitzgerald also moved to amend count I11 of her prayer
for compensatory damages to read: "For whatever sums the
jury finds due and proper for grave, mental and emotional
distress, and for whatever other relief may be just." This
motion was denied by the court.
ketna contends that such motions are addressed to the
discretion of the district court; that under Kraus v. Newman
(1960), 137 Mont. 388, 352 P.2d 261, there must be shown an
abuse of discretion which prejudices the other party; and
Aetna relies upon Cul-len v. Western, etc. Title Company
(1914), 47 Mont. 513, 134 P. 302, to the effect that after
issues are joined, the matter of amendment lies within the
discretion of the district court, particularly where it is
possible that if the amendment is allowed, further pleadings
and additional delay may be required. Aetna claims that
allowance of the amendments would require the defendant to
call a witness from Aetna to explain its financial statements
and balance sheets. Aetna further argues that the motion was
made on a Thursday afternoon preceding a Monday morning trial
date.
Fitzgerald responds that Rule 14, M.R.Civ.P. provides
for liberality in allowing amendments; that in Lien v. Murphy
Corp. (Mont. 1982), 656 P.2d 804, 39 St.Rep. 2252, the Court
held that a complaint filed in 1971 could be amended by the
plaintiff in 1980 to increase damages; that theories of a
case can be added to by amendments, Kearns v. McIntyre
Construction Company (1977), 173 Mont. 239, 567 P.2d 433; and
that amendments should be freely allowed when the defendants
are not misled to their prejudice, Haugen v. Warner (Mont.
1.983), 665 P.2d 1132, 40 St.Rep. 1036.
Rule 9 (g), M.R.Civ.P. requires that items of special
damages be specifically stated. Punitive damages do not fall
into the category of special damages. There is no other
provision in the Rules of Civil Procedure that punitive
damages must be demanded in a specific sum.
Sections 25-4-311, -312, -313, MCA, provide that in
actions for personal injury and wrongful death the amount of
damages may not be stated in a claim for relief unless the
defendant requests it. The claimant must give written notice
of the amount of special and general damages sought before a
default may be taken, or at least 45 days prior to the date
set for trial, under the statutes.
It is usually held that the prayer for damages is not
part of the claim or counterclaim. Under code pleading, the
prayer was independent of the statement of facts in the
complaint, a.nd if the complaint entitled plaintiff to any
relief, demurrer could not stand against it no matter what
the form of the prayer or whether there was any prayer at
a . Donovan v. McDevitt (1907), 36 Mont. 61, 92 P. 49.
Under Rule 54 (c), M. R.Civ.P., every final judqment shall
grant the relief to which the party in whose favor it is
rendered is entitled "even if the party has not demanded such
relief in his pleadings. "
We hold that under Rule 14, M.R.Civ.P., regarding
amendments to pleadings, that Fitzgerald should be allowed in
this case to amend the prayer in her complaint. We further
hol-d that because of the provisions of SS 25-4-311, -312, and
-313, MCA, defendant is entitled to have such amendments to
the prayer include the dollar amount of special and general
damages sought, including punitive damages in such prayers,
or in lieu, a statement of damages under S 25-4-312. We
further hold that in any amendment, the dollar amount sought
may not be open-ended, by reference to a proportion of the
financial condition or net worth of the defendant. In any
event, the amendment in addition to the dollar amounts stated
to the prayer may include such language as "such other and
further relief to which the plaintiff ma.y be entitled."
ARE THE STATEMENTS OF JUDGES IN MAKING RULINGS
LN RELATED CASES ADMISSIBLE IN THE TRIAL OF THIS CASE?
Aetna moved for an order in limine:
"Prohibiting the plaintiff, any witness or counsel,
from referring to any court order or statements
made by judges in the underlying 'death' [action]
in voir dire, opening statements or examination of
witnesses until such time as the court has ruled
that such orders or statements are admissible."
The District Court granted the motion.
Aetna particularly objects to admission of the
statements made by United. States District Judge Russell
Smith, State District Judge Paul Hatfield and State District
Jud.ge Truman Bradford, which are set forth earlier in this
opinion. Those statements were made in connection with other
cases that related to the cause at issue here.
It is Aetna's contention that since the judges may not,
without violation of judicial ethics, appear as witnesses in
the case, the statements attributed to them are inadmissible
and reference to such statements would be improper.
We note that the order - limine which was granted by
in
the District Court excludes references to the judicial
statements in the voir dire of the prospective jurors,
opening statements, or examination of witnesses, until the
court has ruled -- statements are admissible.
that the Probably
nothing prevents the plaintiff Fitzgerald from applying to
the Court for a pretrial determination of the admissibility
of such statements. It would be improper for this Court to
exercise supervisory control in advance of any rulings made
by the District Court on this subject, and in any event, such
rulings may properly be reviewed on appeal.
CONCLUSION
Supervisory control is granted in part and denied in
part. Let remittitur issue forthwith. Costs to relator.
We Concur: