IN THE SUPREME COURT OF THE STATE OF MONTANA
JODIE ULRIGG,
plaintiff and Appellant
-v-
JACK JONES and SAFECO INSURANCE CO.,
Defendants, Respondents
and Cross Appellants.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John S. Henson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Michael Sol, Sol & Wolfe, Missoula, Montana
For Respondent:
Mark S. Williams, Shelton C. Williams, Williams &
Ranney, Missoula, Montana
Submitted on Briefs: October 26, 1995
Decided: December 5, 1995
Filed:
Justice James C. Nelson delivered the Opinion of the Court.
The Plaintiff , Jodie Ulrigg (Jodie), appeals from the February
6, 1995 opinion and order of the Fourth Judicial District Court,
Missoula County, granting Defendant Jack Jones' (Jack) motion for
summary judgment. Jack cross-appeals from that part of the June 9,
1995 opinion and order of the District Court granting Jodie's
motion to add Safeco Insurance Co. (Safeco) as a party defendant to
her lawsuit. We affirm the District Court's grant of summary
judgment in favor of Jack; we reverse the District Court's order
joining Safeco as a party to the lawsuit.
BACKGROUND
On August 18, 1994, Jodie filed her complaint in District
Court naming Jack as the sole defendant in her personal injury
suit. Jodie alleged that Jack is "the owner of an automobile which
negligently struck an automobile driven by [Jodiel on or about
September 10, 1991" and that Jack's automobile "was driven by a
person whom [Jodie] believes to be [Jack's] daughter, as agent for
[Jackl and with the knowledge and permission of [Jackl ; [andl that
[Jackl was negligent for entrusting his vehicle to his daughter to
drive. "
Jack answered, admitting that the automobile which he owned
was involved in the subject collision on the date alleged and that
his daughter Jacque Jones (Jacque) was driving the car at the time
of the accident with his permission. Jack denied that Jacque was
his agent or that he was negligent for permitting her to use his
car.
2
Subsequently, Jack moved for summary judgment, supporting his
motion and brief with the fruits of discovery and with his and
Jacque's affidavits. Jodie filed opposing briefs. Following the
District Court's February 6 , 1995 decision granting Jack summary
judgment, Jodie moved to alter or amend the summary judgment and to
add Safeco as a party defendant. Jack objected, and on June 9,
1995, the District Court entered its opinion and order refusing to
alter or amend its decision on summary judgment, but granting
Jodie's motion to add Safeco. This appeal and cross-appeal
followed. Other pertinent facts are set forth, as necessary, in
our discussion.
We address the following issues on appeal:
I. Did the District Court err in granting summary judgment
to Jack?
I Did the District Court err in granting Jodie's motion to
join Safeco as a party defendant in her lawsuit?
DISCUSSION
Notwithstanding that Jodie's notice of appeal only states that
she is appealing from the District Court's February 6 , 1995 order
granting Jack summary judgment, it is apparent from the briefs that
both parties presume that Jodie's appeal also includes the District
Court Is June 9, 1995 denial of her motion to alter or amend the
summary judgment order and her renewal of that motion. We will,
likewise, proceed on that basis.
Our review of the trial court's grant of summary judgment is
de novo; we utilize the same criteria as the district court.
Summary judgment is proper only when no genuine issue of material
fact exists and when the moving party is entitled to judgment as a
matter of law. Rule 56 (c), M.R.Civ.P.; Brown v. Demaree (Mont.
l995), 901 P.2d 567, 569, 52 St.Rep. 819, 820 (citing Minnie v.
City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214). We
look to the pleadings, depositions, answers to interrogatories,
admissions on file and affidavits to determine the existence or
nonexistence of a genuine issue of material fact. Krebs v. Ryan
Oldsmobile (1992), 255 Mont. 291, 294, 843 P.2d 312, 314 (citing
Sherrodd, Inc. v. Morrison-Knudsen Co. (1991), 249 Mont. 282, 284,
815 P.2d 1135, 1136). We review the district court's conclusions
of law to determine if the court's interpretation of the law is
correct. Nimmick v. State Farm Mut. Auto. Ins. Co. (1995), 270
Mont. 315, 319, 891 P.2d 1154, 1156 (citing Steer, Inc. v.
Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601,
603) .
We assume that Jodie's motion to alter or amend was considered
by the trial court under Rule 60(b), M.R.Civ.P., since her motion
was filed more than 10 days following the court's February 6, 1995
order and was, therefore, untimely under Rule 59(g). See Ring v.
Hoselton (1982), 197 Mont. 414, 424, 643 P.2d 1165, 1171 (citing 7
Moore's Federal Practice, 9 60.18 [el, at 216.1 (2d ed. 1979)). " [A]
motion that is made under Rule 59, which is not timely. . . may,
nevertheless, be considered as a motion under Rule 60 when it
states grounds for relief under this latter rule." u, P.2d
643
at 1171. Under such circumstances, the appropriate standard of
review is whether the District Court abused its discretion in
denying a motion to alter or amend the summary judgment order.
Goodover v. Lindey's, Inc. (19881, 232 Mont. 302, 312, 757 P.2d
1290, 1296.
Under the applicable standards of review, we determine that
the District Court's legal conclusions for granting Jack summary
judgment were correct and that it, therefore, did not abuse its
discretion in refusing to alter or amend its summary judgment
order.
Jodie first argues that she attempted to "streamline" the
litigation by simply suing Jack as the owner of the automobile and
by not suing the driver, Jacque, who Jodie believed was out of
state and unavailable--i.e.she limited her suit to "one plaintiff
and one defendant." Jodie claims that her approach was proper
because Jack, as the owner of the car, was the real party in
interest or a necessary party. Under Jodie's theory, an action may
be brought against the owner of a motor vehicle directly to invoke
insurance coverage because the controlling statutes, the Motor
Vehicle Safety-Responsibility Act, 5 61-6-101 through 5 61-6-304,
MCA, (the Act) while, not imputing negligence to the vehicle owner,
nevertheless, does, under Montana's mandatory motor vehicle
insurance laws, impute responsibility for financial liability.
Jodie bases her argument on her interpretation of those statutes,
on her view of what the legislature intended in adopting the Act,
and, by analogy, on the fact that the legislature has, in certain
other instances, mandated financial responsibility of one person
for the acts, omissions, negligence, necessities or support of
others (in this regard, Jodie cites 5 5 41-1-201, 40-6-237, 40-2-
106, 40-2-103, and 23-2-505, MCA). We reject this argument.
Generally, the owner of a motor vehicle is not vicariously
liable for the acts or omissions of the driver, absent statute or
proof of some other legal theory such as agency or negligent
entrustment. See Smith v. Babcock (1971), 157 Mont. 81, 84-87, 482
P.2d 1014, 1016-17 (citing Clawson v. Schroeder (l922), 63 Mont.
488, 499, 208 P. 924, 927). See also Forrester v. Kuck (1978), 177
Mont. 44, 49, 579 P.2d 756, 759 (quoting 8 Am.Jur.2d, Automobiles
and Highway Traffic, 5 571).
Contrary to Jodie's argument, except in two instances
mentioned below, the Act does not impose vicarious liability on a
third party. Rather, the Act requires the owner of a motor vehicle
to continuously provide liability insurance coverage for operation
of the vehicle by the owner and any permissive user. Section 61-6-
301(1) (a), MCA. In that respect, it is undisputed that Jack
fulfilled his obligation under the Act in this case--he provided
liability insurance through Safeco which covered the permissive use
of his car by his daughter, Jacque. Nothing in the Act made Jack
personally liable, however, for Jacquelsalleged negligent driving.
The Act as written imposes only financial responsibility, not
liability.
As noted above, the legislature has imposed vicarious
liability on third parties for the acts and omissions of motor
vehicle drivers in two instances. First, under 5 61-5-108,MCA, a
parent or other responsible adult must sign the driver's permit or
license application of a person under age 18 and, along with the
minor driver, assume the financial obligation of any negligence or
willful misconduct of the minor while driving. Under that statute,
the negligence or willful misconduct of the minor is statutorily
imputed to the adult signing the minor's application. Section 61-
5-108(2), MCA. Second, 5 61-6-201,MCA, imposes vicarious liability
upon owners of vehicles used in commercial passenger transportation
for acts and omissions of their employees while driving such
vehicles.
Neither of those statutes is applicable in the instant case.
Jacque was not a minor at the time of the accident nor was she
driving Jack's commercial passenger transportation vehicle as his
employee. Moreover, contrary to Jodie's arguments, it is apparent
that where the legislature intends to impose vicarious liability on
a third person for a driver's acts or omissions, it does so by
statute specifically written to accomplish that purpose. (To the
same effect, See S, 23-2-505, MCA, wherein the legislature has
statutorily imposed vicarious liability on the owner of a vessel
for injury or damage occasioned by its negligent operation.)
Jodie also argues that Jack is properly sued as a necessary
party to her litigation, regardless of fault, in order to recover
on his insurance, since the insurer's duty to defend is only to the
person who purchases the insurance and owns the policy and because
the insurance contract is not designed to protect permissive users.
Nothing could be further from the truth.
Section 61-6-103(2)(b), MCA, provides, in pertinent part, that
the owner's policy must:
insure the person named therein and any other
person, as insured, using any motor vehicle or motor
vehicles with the express or implied permission of the
named insured. . . .
Jack's policy issued by Safeco conforms to this statutory mandate.
Accordingly, Jacque, had she been sued, would have been covered by
Jack's insurance policy. While Jodie raises hypothetical questions
regarding how a tort victim might recover if the vehicle owner
posts an indemnity bond under § 61-6-301(2),MCA, that is not the
fact situation at issue, and we decline to address her concerns in
that regard.
Next, having found unavailing Jodie's arguments to impose
statutory liability on Jack under the Act, we turn to her
contention that Jack should be liable under theories of agency and
negligent entrustment. On the basis of the record before us, we
conclude that Jodie did not establish a genuine issue of material
fact implicating either theory.
In discovery, Jack propounded to Jodie an interrogatory
request requiring her to state the basis for her contention that
Jacque was acting as Jack's agent at the time of the accident.
Jodie responded that
[Jacque] was in control of Jack Jones1 vehicle;
appeared to be in charge of the vehicle with Jack Jones'
permission or at his behest, and appeared to be in charge
of the vehicle and responsible to him for its care and
operation, and operating it under his authority and
auspices.
There is nothing in Jodie's answer (or in any other part of the
record, for that matter) that sets forth any factual basis
supporting Jodie's conclusion that there was an agency relationship
between Jacque and Jack in connection with her operation of his
automobile. At the most Jodie's answer demonstrates that Jacque
was driving Jack's car with his permission--a fact conceded by
Jack.
Jodie speculates that Jacque was her father's agent because
the purpose of her trip was to visit the University financial aid
office. However, both Jack and Jacque submitted uncontroverted
affidavits on summary judgment that established that Jack did not
know of Jacque's trip, that he did not request her to use his car,
that she was not driving the car in the performance of any task for
him, and that he did not derive any benefit from her use of his
car.
We have consistently held that speculative and conclusory
statements are not a sufficient basis on which to raise a genuine
issue of material fact. Miller v. Herbert (Mont. 19951, 900 P.2d
273, 276, 52 St.Rep. 655, 658; Howard v. Conlin Furniture No. 2,
Inc. (Mont. 1995), 901 P.2d 116, 119, 52 St.Rep. 814, 815. Jodie's
burden on summary judgment was to come forward with substantial
evidence that would establish a genuine issue of material fact that
there was an agency relationship between Jacque and Jack. She
failed in her burden to demonstrate such a fact, and her bald,
unsupported conclusions and speculation to that effect are legally
insufficient to withstand summary judgment. See Thornton v.
Songstad (1994), 263 Mont. 390, 398-401, 868 P.2d 633, 638-40.
Similarly, Jodie failed in her burden to establish any factual
basis for her claim that Jack negligently entrusted his automobile
to Jacque. In discovery Jack required Jodie to set forth her
evidence on this theory of her case. Jodie admitted that she did
not have sufficient information to admit or deny Jack's contention
that he had no reason to believe Jacque would fail to drive his
vehicle in a reasonable and safe manner and that he had no reason
to believe that she would use his vehicle in a manner involving
unreasonable risk of physical harm to others. According to Jodie,
when asked via interrogatory, the basis for her negligent
entrustment claim was that,
[Jacque'sl operation of the vehicle was the
proximate cause of the accident and the resulting
injuries and consequential damages to the Plaintiff.
[Jack] was negligent in not ascertaining or ensuring that
the driver was sufficiently experienced or skilled in the
operation of a motor vehicle to avoid such an accident,
and to avoid injuring the Plaintiff.
Again, Jodie supplied no factual basis for her claim of
negligent entrustment. Jacque was 21 at the time of the accident;
she was a licensed driver; and her's and her father's
uncontradicted affidavits establish that Jack had no reason
whatsoever to doubt his daughter's competency as a driver.
Jodie maintains that our decision in Williams v. State Medical
Oxygen & Supply, Inc. (1994), 265 Mont. 111, 874 P.2d 1225,
supports her negligent entrustment theory. That is not the case,
however. In the first place and most importantly, the plaintiff in
Williams, established a factual record supporting his theory of
negligent entrustment. Williams, 874 P.2d at 1226. Secondly, our
decision in that case turned on a factual scenario that supported
negligent entrustment under 5 308 of the Restatement (Second) of
Torts (1965). That is not the situation in this case. Rather,
Jodie's complaint alleges negligent entrustment of the type
described in 5 390 of the Restatement--i.e. supplying a chattel to
a person incompetent to use it safely. Williams, 874 P.2d at 1227.
As pointed out above, however, Jodie wholly failed to demonstrate
any facts supporting her theory of liability in that regard.
The record here demonstrates that, in opposition to Jack's
motion for summary judgment, Jodie offered only conclusory and
speculative statements as to her theories of agency and negligent
entrustment. The District Court was under no duty to anticipate
Jodie's proof to establish a material and substantial issue of
fact. Thornton, 868 P.2d at 640 (quoting Taylor v. Anaconda
Federal Credit Union (1976), 170 Mont. 51, 57, 550 P.2d 151, 154).
Jodie failed in her burden to raise any genuine issue of material
fact that Jacque was Jack's agent at the time of the accident or
that Jack negligently entrusted his automobile to his daughter.
Moreover, as a matter of law, Jack was not liable for Jacque's
alleged negligence merely because he was the owner of the
automobile she was driving. As the trial court concluded:
Plaintiff could easily have named [Jack's] daughter in
this action, and father's insurer would have been
required to defend, no evidence of explicit exclusion
from the policy having been shown. Simply because
[Jack's] car was involved in the accident does not make
him the proper party to be named as Defendant. What is
clear is that Plaintiff named the wrong party to this
suit, and the three-year statute of limitations has since
run. While naming [Jack] may have been no more than an
unfortunate error, there exists no basis for him to be
party to this lawsuit.
We hold that summary judgment was properly granted in favor of
Jack on Jodie's complaint, and that the District Court did not
abuse its discretion in denying Jodie's motion to alter or amend
its ruling in that respect.
11.
The District Court ' s granting Jodie's motion to join Safeco as
a party defendant in her lawsuit is a different matter, however.
This issue is raised as a cross-appeal from Jodie's appeal of the
District Court's order denying her motion to alter or amend and is,
we conclude, properly before this Court--Jodierssuggestion that
the District Court ' s order adding Safeco is not a final, appealable
order, to the contrary. Inasmuch as we have concluded that summary
judgment was properly granted in favor of Jack and, because, as
noted by the District Court, the statute of limitations has run on
any claim Jodie might have had against Jacque, Safeco is the only
remaining party in the lawsuit. Since, in this case there is no
legal basis on which Jodie can sue Safeco, it is proper that we
dispose of this issue in order to conserve judicial resources and
avoid further needless litigation. On Jack's cross-appeal, we
reverse the District Court's order adding Safeco as a party to
Jodie's lawsuit.
While she has failed to establish liability against either of
Safeco's insureds, Jack or Jacque, Jodie maintains that she should,
nevertheless, be able to sue Safeco directly. Jodie argues that
under § 61-6-103 (6) (a), MCA, the liability of the insurance carrier
becomes absolute wherever injury or damage covered by the motor
vehicle liability policy occurs. She also contends that Safeco is
the real party in interest under Rule 17(a), M.R.Civ.P. The
District Court agreed with this latter contention, concluding that
while Rule 17(a) speaks to the prosecution of matters by real
parties in interest, including contractually related parties, the
Rule should apply, as well, in matters of defense. Moreover, the
District Court agreed with Jodie that Safeco's liability stemmed
from a contractual relationship with Jack, and that, accordingly,
the longer contract statute of limitations applied to Safeco rather
than the shorter tort statute. We disagree with Jodie's arguments
and with the District Court's conclusions of law.
As noted by Justice Sheehy in his concurring opinion in State
Farm Mut. Auto Ins. Co. v. Solem (1981), 191 Mont. 156, 622 P.2d
the long-established rule in Montana [is] that a direct
action against an insurer does not lie until the
liability of the insured has been established, Conley v.
U.S.F.&G. Co. (1934), 98 Mont. 31, 37 P.2d 565 and
Cummings v. Reins (1910), 40 Mont. 599, 107 P 904, and
our further long-standing rule [is] that the injection of
insurance into the action determining liability is
improper. Vonault v. O'Rourke (1934), 97 Mont. 92, 33
P.2d 535.
State Farm, 622 P.2d at 684-85. The reasons for this rule are set
forth in 8 Appleman, Insurance Law and Practice, § 4861, p. 568
The extent of the insurer's liability has no relation to
the personal injury action as such, other than as regards
its duty to defend, and its presence in the case would
only serve to confuse and complicate it, and prejudice
the insured, the injured party, or both. . . .
Because direct actions against a liability insurer
contravene the common law, such a right must be expressly
sanctioned by the legislature and not merely
inferentially deduced.
Montana does permit a direct action against an insurance
carrier under 5 33-18-242, MCA, which, among other things, allows
a third-party claimant, such as Jodie, to bring an independent
cause of action against an insurer for actual damages caused by the
insurer's violation of certain subsections of 5 33-18-201,MCA, the
Unfair Trade Practices Act. Jodie's claim against Safeco was not,
however, based upon 5 33-18-242, MCA, for conduct of Safeco
prohibited by § 33-18-201,MCA. Rather, Jodie moved to join Safeco
simply because she was left with no one else to sue; she had no
cause of action against Jack, and her claim against Jacque was
time-barred. Moreover, even if Jodie had brought suit against
Safeco under 5 33-18-242, MCA, subsection (6)(b) of that statute
prohibits the third-party claimant from filing an action against
the carrier until after the underlying claim has been settled or a
judgment is entered in favor of the claimant on the underlying
claim. See Harman v. MIA Service Contracts (1993), 260 Mont. 67,
73, 858 P.2d 19, 23.
Furthermore, Jodie's contention that § 61-6-103(6)(a), MCA,
supports her claim against Safeco is also misplaced. This
subsection of the financial responsibility law does not authorize
a direct action against an automobile insurance carrier, nor does
this statute repeal the general rule prohibiting direct actions
against an insurer until the insured's liability is established.
Rather, 5 61-6-103(6)(a), MCA, freezes the liability of the
insurance carrier at the point where injury or damage covered by
the policy occurs. There is nothing in the cited code section,
however, that obviates the tort claimant's obligation to first
establish that the insured was liable for the injuries or damages
for which coverage under the policy is claimed. Simply put, unless
and until the tort claimant establishes the liability of the
tortfeasor, then there are no injuries or damages "covered by the
policy. "
Additionally, we conclude that the District Court erroneously
permitted joinder of Safeco under Rule 17 (a), M.R.Civ.P. That rule
requires that every action be prosecuted in the name of the real
party in interest. We have interpreted this rule to require a
fully subrogated insurance carrier to bring suit in its own name
against the wrongdoer responsible for the loss, because once the
loss is fully paid by the insurer the insurer becomes subrogated to
the insured's claim against the wrongdoer and the insured no longer
has a right of action against the wrongdoer. State ex rel. Nawd's
T.V. and App. Inc. v. District Court (1975), 168 Mont. 456, 459-60,
543 P.2d 1336, 1338 (citing United States v. Aetna Casualty &
Surety Co. (l949), 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed. 171).
Obviously, that is not the situation in the instant case. There is
nothing in the plain language of the rule nor in any authority
cited by Jodie that supports her interpretation and the trial
court's conclusion that, by reason of the rule, an insurance
company can be sued directly by a third-party claimant in the place
of the insured tortfeasor. Rule 17 (a), M.R.Civ.P., is not a direct
action statute, and we decline to stretch the plain language of the
rule to hold that it is.
Finally, we need only briefly address Jodie's contention and
the District Court's conclusion that the statute of limitations for
bringing Safeco into the litigation has not expired, because the
eight-year contract, rather than the three-year tort statute of
limitation applies. As pointed out above in our discussion of this
issue, Jodie established no basis under statute or in common law
for her direct action against Safeco. Accordingly, it follows that
any discussion of what statute of limitations applies is
irrelevant. Discussion of which statute of limitations applies to
a cause of action presupposes that the plaintiff has a cause of
action against the defendant in the first place. Jodie has no
direct cause of action against Safeco because she has not
established any liability on the part of Safeco's insureds and
because there is no applicable Montana statute or theory under
which Jodie can sue Jack and Jacque's insurer, absent her first
establishing the insureds' liability. Jodie has no contract with
Safeco; she has pled no claim against Safeco for violation of the
Unfair Trade Practices Act; and any liability on the part of Safeco
for coverage of Jodie's claims derives solely from the underlying
liability of Safeco's insureds--which Jodie has failed to
establish.
We have reviewed Jodie's arguments and authorities, but none
support her attempt to join Safeco in this case. Accordingly, we
hold that the District Court erred in allowing the joinder of
Safeco as a party defendant under the circumstances, here, and we
reverse the order of the District Court granting J o d i e r s motion to
add Safeco as a party to her lawsuit.
Affirmed as to Jodie's appeal; reversed as to Jack's cross-
appeal
ustice
/u /?
;
/ Chief Justice
December 5, 1995
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:
Michael Sol, Esq.
Sol & Wolfe
101 E. Broadway, Ste. 300
Missoula. MT 59802
Mark S. Williams, Esq.
Williams & Ranney
P.O. Box 9440
Missoula, MT 59807
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA