96-255
No. 96-255
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
STEVE FILLINGER and RHONDA FILLINGER,
STEVE FILLINGER OUTFITTER & GUIDE
SERVICE, INC., a/k/a STEVEN FILLINGER
OUTFITTERS, INC., a/k/a STEVE FILLINGER
OUTFITTERS, a/k/a FILLINGER OUTFITTERS,
Plaintiffs, Respondents and Cross Appellants,
v.
NORTHWESTERN AGENCY, INC., OF GREAT FALLS,
Defendant and Appellant.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Thomas M. McKittrick, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Charles R. Johnson and Kirk D. Evenson; Marra, Wenz,
Johnson & Hopkins; Great Falls, Montana
For Respondents:
Robert B. Pfennigs and Jack L. Lewis; Jardine, Stephenson,
Blewett & Weaver; Great Falls, Montana
Submitted on Briefs: April 17, 1997
Decided: June 3, 1997
Filed:
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__________________________________________
Clerk
Justice Jim Regnier delivered the Opinion of the Court.
Northwestern Agency, Inc., hereinafter "Northwestern," appeals from the
judgment and jury verdict of the Eighth Judicial District Court, Cascade County. The
Respondents, collectively referred to herein as the "Fillingers," filed a cross-
appeal but
have elected only to respond to the issues raised by Northwestern and do not pursue
their
cross-appeal. The Fillingers filed a complaint against Northwestern seeking to
recover
alleged economic losses incurred as a consequence of Northwestern's procurement of an
insurance policy which did not afford the coverage allegedly requested by the
Fillingers,
and which coverage they believed Northwestern had procured for them. Western
Heritage, the insurer, was originally joined as a defendant in this action, but
settled with
the Fillingers prior to trial. The Fillingers dropped their separate individual
claims. The
case was submitted to the jury on a Special Verdict with eighteen questions
pertaining to
five separate legal theories including: negligent failure to procure the insurance
coverage
requested; negligent failure to inform the Fillingers that the requested coverage
was not
procured; negligent misrepresentation; breach of oral contract; and breach of 33-
18-
201, MCA, et. seq. The jury returned a verdict which found Northwestern liable on
all
five theories and assessed $125,000 in damages. We affirm.
The issues on appeal are:
1. Did the District Court err in instructing the jury that an insurance
policyholder has no duty to read the policy unless under the circumstances it is
unreasonable not to read it?
2. Did the District Court err by allowing evidence of the oral negotiations
between the Fillingers and Northwestern regarding their agreement to procure a
specified
insurance coverage?
3. Did the District Court err in failing to instruct the jury on the
applicable law
in regard to the necessity of expert testimony to establish the standard of care of
an
insurance agent in a negligence action by a client for failure to procure the
coverage
requested by the client?
4. Did the District Court err in submitting the Fillingers' claim to the jury
under an Unfair Trade Practices Act theory, specifically 33-18-201(1), MCA, as it
applied to Northwestern?
FACTUAL BACKGROUND
The Fillingers own and operate a guide and outfitting business near Stockett,
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Montana. From 1983 to 1994, with the exception of one year, the Fillingers
contracted
with Burlington Northern Railroad ("BN") to provide outfitting services, including
guided
hunting and floating trips, for customers and employees of BN. During the
negotiations
for the contract, the BN representative made it clear that a prerequisite for the
Fillingers
being awarded the contract was that they obtain insurance which would cover the
outfitting business for any accident, including an accident involving a horse. Steve
Fillinger, therefore, contacted Joyce Jenkins, the president of Northwestern,
concerning
his insurance requirements. An insurance policy was procured by Jenkins and renewed
annually by the Fillingers.
In November 1989, during a hunting trip sponsored by BN and guided by the
Fillingers, a BN employee, Mike O'Shaughnessy, was injured in a horse-related
accident.
The medical expenses were submitted by the Fillingers to Northwestern; however, the
payment of the medical expenses was not immediately rendered. On July 25, 1990,
prior
to a planned BN float trip, BN held a meeting with Steve Fillinger and Jenkins to
discuss
the O'Shaughnessy claim. BN was placated by the outcome of the meeting and did not
cancel its float trip with the Fillingers.
In 1991, the O'Shaughnessy claim still had not been paid, inducing BN to cancel
its 1991 contract with the Fillingers. In 1992, BN and the Fillingers renewed their
contract negotiations. A new contract was agreed upon which reduced the amount BN
would pay to the Fillingers for outfitting services. The new contract also
eliminated the
use of horses and required only "liability insurance as required by the State of
Montana
for outfitters."
At trial, the parties presented conflicting factual accounts surrounding the
procurement of the policy, the representations made by Jenkins, and the coverage the
policy entailed. Steve Fillinger testified he told Jenkins he "needed insurance
that would
cover everything, especially if anybody got hurt on a horse." Jenkins procured an
insurance policy for the Fillingers. Steve testified that she assured him that the
policy
would cover anything that happens, especially on a horse. Steve explained that he
did
not read the policies word for word, but confirmed with Jenkins that the policies
contained the coverage he had requested. Steve testified Jenkins represented that a
specific clause in the policy covered his concerns regarding the horses and referred
to this
clause as the "horse rider." Steve stated that he looked through the policy each
year to
see if the "horse rider" clause was attached because that was where BN's concerns
seemed to be focused.
In 1991, the Fillingers continued to use Jenkins to procure their insurance,
even
though BN was not one of their clients that year. Without BN as a client, Steve no
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longer needed the special insurance coverage and all he requested from Jenkins was a
"regular outfitter's policy." Jenkins maintained throughout the trial that this
regular
outfitter's policy was all that Steve ever requested. Steve testified, however,
that Jenkins
explained to him in 1991 for the first time that she could not provide the type of
policy
he had previously requested which would cover any accident, and that his current
insurance policy was only a liability policy which provides coverage only for
negligent
acts. During the trial, Steve asserted that if Jenkins had informed him of this
fact earlier
there would have been a number of options available to the Fillingers to satisfy BN's
insurance concerns, including elimination of the risk itself by discontinuing the
use of
horses.
At trial, the Fillingers sought recovery of damages for the concessions made for
the 1992 contract which were allegedly necessary in order to get BN back as a client
and
for the loss of income during 1991 in which year BN did not renew its contract with
the
Fillingers. The jury found Northwestern liable on all five theories and assessed
$125,000
in damages. Northwestern appeals.
ISSUE 1
Did the District Court err in instructing the jury that an insurance
policyholder has
no duty to read the policy unless under the circumstances it is unreasonable not to
read
it?
It is well within the district court's discretion to decide how to instruct a
jury,
taking into account theories of contending parties, and this Court will not overturn
the
district court except for abuse of discretion. Hall v. Big Sky Lumber & Supply, Inc.
(1993), 261 Mont. 328, 863 P.2d 389; Cline v. Durden (1990), 246 Mont. 154, 803 P.2d
1077. In Hall, we explained that on review by this Court
all jury instructions must be read as a whole and the party assigning error
to the court's instructions must show prejudice in order to prevail. Walden
v. State (1991), 250 Mont. 132, 818 P.2d 1190. Such prejudice will not
be found if the jury instructions in their entirety state the applicable law of
the case. Walden, 250 Mont. at 137, 818 P.2d at 1193.
Hall, 863 P.2d at 392.
Northwestern argues that the District Court erred in giving its Instruction No.
24
which provides:
In connection with your deliberations as to whether any reliance on
Joyce Jenkins was justified, I instruct you that, an insurance policyholder
has no duty to read the policy unless under the circumstances it is
unreasonable not to read it.
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Nor does it mean that an officer or employee of Fillinger Outfitters
had a duty to read the policy every time a new policy was issued.
You should, therefore, consider whether the officers and employees
of Fillinger Outfitters acted reasonably in relying upon any representations
made by Joyce Jenkins or any other officer or employee of Northwestern
Agency rather than reading the policy. This will depend upon the
Plaintiff's relationship with Joyce Jenkins and the officers and employees
of Northwestern Agency and the nature of the situation. You should
consider whether the representations of Joyce Jenkins, as an insurance agent
and given her expertise, as well as the representations of the other
Northwestern Agency officers and employees, naturally tended to induce
Fillinger Outfitters to reasonably believe that reading the policy would be
superfluous.
(Emphasis added.) This instruction was derived essentially verbatim from Fiorentino
v.
Travelers Ins. Co. (E.D. Pa. 1978), 448 F. Supp. 1364. The court in Fiorentino held
that this instruction accurately reflected Pennsylvania law on the subject of
negligent
misrepresentation and therefore determined that the lower court was correct in giving
such instruction.
The issue which Northwestern raises in regard to Instruction No. 24 is whether
an
insured has an absolute duty to read their insurance policy. This Court has not
previously addressed the issue of whether an insured has an absolute duty to read
their
insurance policy.
Northwestern asserts that the line of authority, including Fiorentino, which
holds
that an insured does not have an absolute duty to read their policy, but rather
only a duty
to act reasonably under the circumstances, is not good law nor is it the majority
view on
this subject. Northwestern urges this Court to adopt a rule holding that because an
insured has entered into a contract he or she has an obligation to read and
understand all
of the policy's terms notwithstanding any reasonable reliance on assurances by the
agent
who procured the insurance policy.
This Court has previously stated that an insurance policy is a contract subject
to
the applicable contract law of Montana. Universal Underwriters Ins. Co. v. State
Farm
Mut. Auto. Ins. Co. (1975), 166 Mont. 128, 135, 531 P.2d 668, 673. We have
acknowledged that one who executes a written contract is presumed to know its
contents
and assent to them. Johnson v. Estate of Shelton (1988), 232 Mont. 85, 89-90, 754
P.2d
828, 830. Instruction No. 24, however, does not provide absolute relief for an
insurance
policyholder from the obligation to read their insurance policy, it merely provides
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that
the extent of the obligation depends upon what is reasonable under the facts and
circumstances of each case.
To properly consider the issue of what is an insured's duty to read their
insurance
contract, the relationship of the parties must be considered. In an insurance
coverage
dispute there are typically two types of relationships. First, there is the
relationship
between the parties to the contract, i.e., the insured and the insurer; and second,
there
is the relationship between the insured and the agent. The relationship we are
concerned
with here is that between the insured, the Fillingers, and their agent,
Jenkins/Northwestern. In order to prevail on their claim, the Fillingers were
required
to prove that their agent negligently performed her duty to procure a specified
policy.
Under similar circumstances involving the relationship between the insured and
their agent, several jurisdictions have held that while the insured's failure to
read the
policy may amount to contributory negligence, it does not operate as a bar to relief
as a
matter of law. Fiorentino (Dist. Pa. 1978), 448 F. Supp. 1364; Floral Consultants,
Ltd.
v. Hanover Ins. Co. (Ill. 1984), 470 N.E.2d 527; Kirk v. R. Stanford Web Agency, Inc.
(N.C. App. 1985), 330 S.E.2d 262; Martini v. Beaverton Ins. Agency, Inc. (Or. 1992),
838 P.2d 1061, 1067. We are persuaded by the reasoning of this line of authority
that
an insured does not have an absolute duty to read their policy, but their failure to
do so
may amount to contributory negligence.
The Oregon Supreme Court succinctly explained its adoption of this view in
Martini by explaining that:
Insureds and insurance policies are not all alike. Insureds range from
unsophisticated individuals who know nothing about insurance, to
experienced business persons knowledgeable about insurance, to large
corporations with batteries of lawyers. The relevant provisions of the
policy may be simple (the address of the insured premises, for example) or
complex. A jury should be allowed to consider two questions: Under the
relevant circumstances, was it unreasonable in the light of foreseeable risks
for the insured not to read the policy? If so, did the insured's unreasonable
failure to read the policy contribute to the insured's damages?
Martini, 838 P.2d at 1067. The court in Fiorentino explained how the reliance upon
one's agent affects the duty to read:
When the insured informs the agent of his insurance needs and the
agent's conduct permits a reasonable inference that he was highly skilled in
this area, the insured's reliance on the agent to obtain the coverage that he
has represented that he will obtain is justifiable. The insured does not have
an absolute duty to read the policy, but rather only the duty to act
reasonably under the circumstances. The circumstances vary with the facts
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of each case, and depend on the relationship between the agent and the
insured.
Fiorentino, 448 F. Supp. at 1369.
We agree with this line of reasoning as it applies to the facts before us. We
note
that the jury was properly instructed regarding the law that the failure to act
reasonably
can amount to contributory negligence. Therefore, we view the issue raised as not
being
whether the insureds had an absolute duty to read the policy, but rather was there
evidence from which the jury could have found that, in the circumstances of this
case,
it was not unreasonable for the insureds not to read the policy and whether the
insureds
acted reasonably in relying upon any representations made by their agent.
We review a jury's verdict to determine whether there is substantial credible
evidence in the record to support it. Tanner v. Dream Island, Inc. (1996), 275 Mont.
414, 422, 913 P.2d 641, 646; Barthule v. Karman (1994), 268 Mont. 477, 485, 886 P.2d
971, 976. In Tanner, we further defined this standard of review by explaining that:
Substantial evidence is defined as that evidence that a reasonable mind
might accept as adequate to support a conclusion. Head v. Central Reserve
Life (1993), 256 Mont. 188, 201, 845 P.2d 735, 743. Evidence which is
inherently weak and conflicting may still be considered substantial. Head,
845 P.2d at 743. When conflicting evidence exists, the weight and
credibility given to it are within the province of the jury. Whiting v. State
(1991), 248 Mont. 207, 213, 810 P.2d 1177, 1181. When determining if
substantial evidence exists, this Court views the evidence in the light most
favorable to the prevailing party. Whiting, 810 P.2d at 1181.
Tanner, 275 Mont. at 422, 913 P.2d at 646.
At trial, Steve Fillinger testified that he asked Jenkins to procure a policy
which
would cover everything, especially if anyone was hurt on a horse. He then testified
that
Jenkins answered affirmatively when he asked her if the policy she procured covered
anything that happens, especially on horses. Steve also testified that in each of
the
following years after the original policy was procured he confirmed with Jenkins
that the
policy contained the requested coverage. Jenkins and a former office manager
testified
that Steve frequently called to ask about coverage and was concerned about being
covered
properly and covered for any accidents while using horses. Furthermore, Steve
testified
that Jenkins represented that one specific page of the policy was a "horse rider" and
provided the coverage he had requested. Steve checked the policy each year to ensure
that it contained this rider. After the accident by BN employee, Mike O'Shaughnessy,
while on a horse, Jenkins told Steve that there was no problem with the claim and
that
the bills would be paid.
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Thus, after having reviewed this testimony and the further testimony and
evidence
introduced at trial we conclude that there is substantial credible evidence in the
record to
support the jury's verdict on the issue of negligent misrepresentation. We will not
overturn the jury's decision on this issue as it is within their realm of duties to
determine
the weight and credibility to be given to evidence presented at trial.
ISSUE 2
Did the District Court err by allowing evidence of the oral negotiations between
the Fillingers and Northwestern regarding their agreement to procure a specified
insurance coverage?
Northwestern asserts that the District Court erred when it denied its motion for
summary judgment, or in the alternative, motion in limine, regarding the exclusion
of
all extrinsic evidence of oral negotiations between the Fillingers and Northwestern
prior
to the Fillingers purchasing their insurance policy from Western Heritage.
Northwestern
argues that the parol evidence rule bars all evidence of these oral negotiations
because it
is a privy and not a stranger to the written contract between the Fillingers and
Western
Heritage. The Fillingers contend that this Court must reject Northwestern's
assertion that
the parol evidence rule applies to the oral negotiations, as Northwestern is a
stranger to
the written contract.
This Court reviews the district court's evidentiary rulings to determine whether
there has been an abuse of discretion. Cartwright v. Equitable Life Assur. (1996),
276
Mont. 1, 19, 914 P.2d 976, 987.
Northwestern contends that the parol evidence rule is applicable because the
oral
negotiations resulted in a written contract between the Fillingers and Western
Heritage
to which Northwestern is a privy, and not a stranger. This Court has examined the
application of the parol evidence rule in a dispute involving both a party or its
privy and
a stranger to the written contract. In Read v. Lewis & Clark County (1919), 55 Mont.
412, 178 P. 177, we held that:
In a controversy between parties to a written contract or their privies, parol
evidence cannot be introduced to vary, enlarge or contradict its terms,
except when a mistake or imperfection therein is put in issue by the
pleadings or when the validity of the contract is the fact in dispute. (Rev.
Codes sec. 7873.) In a controversy between a party to the contract and a
stranger, however, the rule does not apply. As against him, a party may
assert that the agreement was other or different in any respect from that
which the writing expresses.
Read, 178 P. at 180. This rule was restated in In re Perry's Estate (1948), 121
Mont.
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280, 318-19, 192 P.2d 532, 551 (Gibson, J., dissenting):
But even if it might be said to add to the writing or to vary its terms, it is
to be remembered that the rule, that the terms of a written contract cannot
be altered or contradicted by parol evidence, cannot be invoked either by
or against a stranger to a contract and it is not applicable in a controversy
between a party to the contract on the one hand and a stranger to it on the
other. Nissen v. Sabin, 202 Iowa 1362, 212 N.W. 125, 50 A.L.R. 1216.
And our statute provides that the parol evidence rule is only applicable
'between the parties and their representatives, or successors in interest.'
Sec. 10517, Rev. Codes 1935; Greening v. Gazette Printing Co., 108
Mont. 158, 88 P.2d 862.
Neither this Court nor the Legislature have chosen to depart from this rule and its
application to admission of parol evidence, and we agree, along with a majority of
jurisdictions, that it is still good law today. See, e.g., Silvicraft, Inc. v.
Southeast Timber
Co. (Ark. App. 1991), 805 S.W.2d 84, 87; Neeves v. Potter (Colo. 1989), 769 P.2d
1047; Smith v. Conn (Iowa 1968), 163 N.W.2d 407; Denha v. Jacob (Mich. App. 1989),
446 N.W.2d 303; Carolina Cas. Ins. Co. v. Oregon Auto. Ins. Co. (Or. 1965), 408 P.2d
198; Marr Scaffolding Co. v. Fairground Forms, Inc. (R.I. 1996), 682 A.2d 455, 459;
First Sec. Federal Sav. Bank v. McQuilken (Va. 1997), 480 S.E.2d 485, 487.
Northwestern argues that as a sales agency it is in privity with Western
Heritage
and it fits the definition of a "privie" as set out in Read, 178 P. 177. Therefore,
Northwestern submits that the parol evidence rule applies to bar the oral
conversations
between Northwestern and the Fillingers. Northwestern argues that this Court has
previously concluded in Sherrod, Inc. v. Morrison-Knudsen Co. (1991), 249 Mont. 282,
815 P.2d 1135, that an independent third-party representative can be a privy to a
written
contract and that in Sherrod we held the parol evidence rule applied to a privy to
the
written contract.
In Sherrod, the dispute involved the amount of material which was to be removed
from a construction site. Sherrod, as a subcontractor, entered into a written
contract with
COP Construction. COP Construction, in turn, entered into a written contract with the
general contractor, Morrison-Knudsen. At trial, Sherrod attempted to introduce
evidence
that a Morrison-Knudsen representative made fraudulent statements to him regarding
the
amount of excavation to be performed upon which he relied when he submitted his bid
to remove the material. This bid was accepted and a written contract was entered
into.
The written contract provided in its terms that Sherrod had, "by examination,
satisfied
himself as to the . . . character, quantity and kind of materials to be
encountered."
Sherrod, 815 P.2d at 1137. We held that any reliance on the alleged fraudulent
statement
of the Morrison-Knudsen representative was directly contradicted by the terms of the
written agreement which superseded all previous oral agreements, and that therefore
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the
parol evidence rule prohibited admission of any evidence of the oral statements made
by
the Morrison-Knudsen representative. In Sherrod, this Court did not state that the
representative was a privy to the contract nor did we address the issue of whether
misrepresentations were made by a stranger to the contract. We do not view Sherrod
to
be dispositive of the issue of whether one is a privy to a written contract which is
the
basis of Northwestern's contentions.
In applying the rule as set forth in Read, we determine that Northwestern is not
a privy to the written contract between Western Heritage and the Fillingers.
Northwestern did not have a direct agency contract with Western Heritage. It had no
binding authority from Western Heritage. Northwestern did not receive any commission
from Western Heritage for procuring the insurance contract for the Fillingers.
Furthermore, Northwestern did not have a written contract with the Fillingers.
Thus, we
fail to see any privity between Northwestern and the parties to the contract which
would
remove Northwestern from its role as a stranger to the written contract. Therefore,
under
this rule, the Fillingers may use parol evidence against Northwestern, as a stranger
to the
contract, to assert that the agreement was other or different in any respect from
that
which the writing expressed.
We hold that the District Court did not abuse its discretion by allowing the
evidence of the oral negotiations, including the representations made by
Northwestern,
regarding the insurance contract as purchased by the
Fillingers. ISSUE 3
Did the District Court err in failing to instruct the jury on the applicable
law in
regard to the necessity of expert testimony to establish the standard of care of an
insurance agent in a negligence action by a client for failure to procure the
coverage
requested by the client?
Again, we have held that a district court has discretion regarding the
instructions
it gives or refuses to give to a jury and that we will not reverse a district court
on the
basis of its instructions absent an abuse of discretion. Cartwright v. Equitable
Life Assur.
(1996), 276 Mont. 1, 26, 914 P.2d 976, 992; Cechovic v. Hardin & Assoc. (1995), 273
Mont. 104, 116, 902 P.2d 520, 527. When we examine whether jury instructions were
properly given or refused, we consider the instructions in their entirety, as well
as in
connection with the other instructions given and the evidence at trial. Story v.
City of
Bozeman (1993), 259 Mont. 207, 222, 856 P.2d 202, 211.
Northwestern asserts that the District Court erred in instructing the jury
because
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the Fillingers are pursuing a professional negligence claim and therefore they must
have
provided expert testimony as to the standard of care, duty of care, and breach of
that duty
by the insurance agent. This Court has previously addressed the legal standard of
care
for insurance agents with respect to insurance procurement. In Gay v. Lavina State
Bank
(1921), 61 Mont. 449, 202 P. 753, we explained:
[A]s between the insured and his own agent or broker authorized by him to
procure insurance there is the usual obligation on the part of the latter to
carry out the instructions given him and faithfully discharge the trust
reposed in him, and he may become liable in damages for breach of duty.
If he is instructed to procure specific insurance and fails to do so, he is
liable to his principal for the damage suffered by reason of the want of such
insurance.
Gay, 202 P. at 755, followed in Lee v. Andrews (1983), 204 Mont. 527, 667 P.2d 919.
Jenkins herself testified as an insurance agent to what the duties and
responsibilities
are of an insurance agent when asked to procure specific insurance coverage. No
additional independent expert testimony is required to establish the standard of
care.
Although we have not specifically addressed this issue, it is clear to this
Court that
the determination of whether an insurance agent reasonably fulfilled his or her duty
and
procured the coverage requested is easily within the common experience and knowledge
of lay jurors. No expert testimony is required as there are no technical insurance
issues
beyond the understanding of the trier of fact. See, e.g., Shahrokhfar v. State Farm
Mut.
Auto. Ins. Co. (1981), 194 Mont. 76, 634 P.2d 653 (holding that the question whether
the actions of an insurance agent and his attorney were negligent was well within the
realm of knowledge of a layperson); Salt Lake City School Dist. v. Galbraith & Green,
Inc. (Utah App. 1987), 740 P.2d 284 (applying the majority rule that "expert
testimony
is not required in matters involving insurance agents and brokers unless technical
insurance issues beyond the understanding of the average trier of fact are
involved").
We have reached a similar conclusion in Durbin v. Ross (1996), 276 Mont. 463,
916 P.2d 758, where we held that "expert testimony . . . [is] not required to
establish a
duty and a breach of that duty in [a] . . . negligent misrepresentation claim."
Durbin,
916 at 765. In Durbin we held:
A determination of whether the Realtors made a representation and
whether that representation was false is clearly within the common
knowledge of a layperson. In the instant case, scientific, technical, or other
specialized knowledge is not necessary to assist the jury to understand the
evidence because the statute and the regulations establish the conduct to
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which the Realtors must conform regardless of whether other brokers
conform to that same conduct. Accordingly, we conclude that the Durbins
were not required to provide expert standard of care testimony to establish
the relevant statutory violations.
Durbin, 916 P.2d at 766. Unlike Durbin, there are no statutes or regulations which
establish the conduct to which an insurance agent must conform when requested to
procure specific insurance. Regardless of this minor distinction, we have already
addressed that issue in Gay, 202 P. at 755, where we stated that if the agent is
"instructed
to procure specific insurance and fails to do so, he is liable."
Therefore, we hold that in the context of an insurance agent's alleged failure
to
procure requested coverage, expert testimony is not required as the issue is not one
which
involves technical insurance issues outside the common experience and knowledge of
lay
jurors. The jury determined that Jenkins, through Northwestern, did make negligent
representations and breached her duty to procure specific insurance coverage when she
failed to procure the coverage requested by Steve Fillinger. This Court will not
substitute
its judgment for that of the trier of fact with regard to weighing the evidence and
determining the credibility of the witnesses. Wunderlich v. Lumbermens Mut. Cas. Co.
(1995), 270 Mont. 404, 408, 892 P.2d 563, 566. Thus, the District Court did not
abuse
its discretion in its instructions to the jury on the issue of expert testimony in a
negligence
action against an insurance agent.
ISSUE 4
Did the District Court err in submitting the Fillingers' claim to the jury
under an
Unfair Trade Practices Act theory, specifically 33-18-201(1), MCA, as it applied to
Northwestern?
As we previously stated, this Court reviews discretionary trial court rulings,
such
as the giving of jury instructions, to determine whether the trial court abused its
discretion. Busta v. Columbus Hosp. Corp. (1996), 276 Mont. 342, 916 P.2d 122;
Hislop v. Cady (1993), 261 Mont. 243, 862 P.2d 388.
Northwestern asserts the District Court committed reversible error by
instructing
the jury that Northwestern, as a sales agency with no claims-handling authority, was
subject to the provisions of the Unfair Trade Practices Act. The District Court's
Instruction No. 33 stated in part:
You are instructed that Fillinger Outfitters also claims that
Northwestern Agency violated 33-18-201(1) of the Montana Code
Annotated. This statute, among other things, provides that no person may,
with such frequency as to indicate a general business practice, misrepresent
pertinent facts or insurance policy provisions relating to coverages at issue.
Northwestern contends that this is err, as this Court has not decided that 33-18-
201,
MCA, is applicable to an insurance agency.
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The language of the Unfair Trade Practices Act aids in resolving this argument.
Section 33-18-101, MCA, states that the purpose of the UTPA "is to regulate trade
practices in the business of insurance." The Act further provides that "[n]o person
shall
engage . . . in any trade practice which is defined . . . to be an unfair method of
competition or an unfair or deceptive act or practice in the business of insurance."
Section
33-18-102, MCA. Furthermore, the Act does not exclude misrepresentations committed
by an insurance agent in the sale of a policy. Section 33-18-201(1), MCA, provides
specifically that "[n]o person may . . . (1) misrepresent pertinent facts or
insurance policy
provisions relating to coverages at issue."
The Fillingers correctly assert that the actions of Northwestern and Jenkins
fall
squarely within these prohibited practices. In O'Fallon v. Farmers Ins. Exch.
(1993),
260 Mont. 233, 859 P.2d 1008, we considered the individual liability of the claims
adjustor assigned to handle the claim and concluded that:
[I]ndividuals, as well as insurers, are prohibited from engaging in the unfair
trade practices set forth in 33-18-201, MCA, and that when an individual
breaches the obligations imposed by that statute, the claimant who is
damaged by that breach has a common law cause of action against that
individual.
O'Fallon, 859 P.2d at 1015. Although O'Fallon specifically involved a claims
adjustor
and not an insurance agent or agency, we do not find this difference to be a true
distinction.
It is clear that the relationship between Northwestern, as the insurance agent,
and
the Fillingers, as the client, involves the "business of insurance." The
misrepresentations as to the extent of coverage under the Fillingers' policy, made
by the
individual insurance agent, Jenkins, through the insurance agency, Northwestern, are
trade practices which are prohibited under 33-18-201, and -202, MCA. We therefore
conclude that the District Court did not abuse its discretion in giving the jury its
Instruction No. 33.
We affirm.
/S/ JIM REGNIER
We Concur:
/S/ J. A. TURNAGE
/S/ W. WILLIAM LEAPHART
/S/ WILLIAM E. HUNT, SR.
/S/ JAMES C. NELSON
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