No. 02-346
IN THE SUPREME COURT OF THE STATE OF MONTANA
2003 MT 127
STATE OF MONTANA ex rel., DAWN GADBAW
and LAWRENCE GADBAW,
Relators,
v.
THE MONTANA EIGHTH JUDICIAL DISTRICT COURT,
CASCADE COUNTY, and THE HONORABLE JULIE MACEK,
presiding,
Respondents.
ORIGINAL PROCEEDING: Writ of Supervisory Control,
In and for the County of Cascade, Cause No. BDV-99-1188,
The Honorable Julie Macek, Judge presiding.
COUNSEL OF RECORD:
For Relators:
Gary M. Zadick, Ugrin, Alexander, Zadick & Higgins, Great Falls, Montana
Channing J. Hartelius, Hartelius, Ferguson, Baker & Kazda, Great Falls,
Montana
For Respondent (Eighth Judicial District Court):
Honorable Julie Macek, District Judge, Great Falls, Montana
For Respondent (Amanda Moon):
Paul R. Haffeman, Davis, Hatley, Haffeman & Tighe, Great Falls, Montana
Tiffany B. Lonnevik, Lonnevik Law Firm, Kalispell, Montana
For Respondent (Farmers Insurance Exchange):
Mark Williams, Williams & Ranney, Missoula, Montana
Submitted: August 8, 2002
Decided: April 29, 2003
Filed:
__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.
¶1 The District Court Plaintiffs, Dawn and Lawrence Gadbaw, filed an amended
complaint in the District Court for the Eighth Judicial District in Cascade County, in which
they alleged that the Defendant, Amanda Jo Moon, negligently injured Dawn by the manner
in which she operated her motor vehicle. They also alleged that they had been issued a
contract of insurance by the Defendant, Farmers Insurance Exchange, which included
underinsured motorist coverage and that their damages exceeded the limits of liability
coverage available to Moon. They alleged that they were, therefore, contractually entitled
to recover those underinsured benefits promised by Farmers. The District Court Defendants
moved to bifurcate the claim against Moon from the claim against Farmers and that motion
was granted. Gadbaws filed a motion for relief from the bifurcation order. In response, the
District Court sua sponte dismissed Farmers from the action entirely. Gadbaws have
petitioned this Court for supervisory control. We accept supervisory control and reverse the
orders of the District Court.
¶2 There are two issues presented by Gadbaws' Petition:
¶3 1. Are the circumstances in this case appropriate for the exercise of supervisory
control?
¶4 2. Did the District Court abuse its discretion when it bifurcated Gadbaws' claims and
subsequently dismissed their claim against Farmers Insurance Exchange?
DISCUSSION
¶5 On August 16, 2001, the Petitioners, Dawn and Lawrence Gadbaw, filed a complaint
in the District Court for the Eighth Judicial District in Cascade County, in which they alleged
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that Dawn Gadbaw had been injured while a passenger in a motor vehicle when that vehicle
was struck from behind by the vehicle operated by Amanda Jo Moon. Gadbaws sought
recovery for Dawn's injuries and for Lawrence's loss of consortium.
¶6 In their District Court complaint, Gadbaws also allege that at the time of the collision
with Moon, they had in effect a policy of insurance with Farmers Insurance Exchange which
included underinsured motorist coverage. They alleged that the damages they had sustained
as a result of Moon's conduct exceeded the limits of her insurance coverage and that, as a
result, they are entitled to recover the contractual benefits promised by Farmers.
¶7 Moon admitted that her negligence caused the collision by which Dawn claims to
have been injured. Farmers acknowledged the existence of underinsured motorist coverage
and its contractual obligations. However, neither Defendant admitted that Gadbaw was
injured to the extent she claimed. Nor did Farmers admit that Gadbaw's damages exceed
Moon's policy limits.
¶8 Moon, who was also insured against liability by Farmers, moved to bifurcate the claim
against her from the claim against Farmers and Farmers joined in that motion. The
Defendants alleged that unless the actions were bifurcated, they would be prejudiced by the
mention of insurance.
¶9 Gadbaws opposed the motion to bifurcate on the basis that evidence of insurance was
only inadmissible for the purpose of establishing liability and that liability had been admitted
and for the further reason that Montana law permits the joinder of an insurer who provides
uninsured or underinsured coverage.
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¶10 The District Court granted the motion to bifurcate and Gadbaws filed a motion for
relief from that order. They contended that without relief, they would be prejudiced by
having to prosecute two separate trials.
¶11 Subsequent to the hearing, at which the District Court considered Gadbaws' motion
for relief from its bifurcation order, the District Court sua sponte dismissed Farmers from
the action without prejudice. The District Court noted that because Farmers had agreed to
be bound by the judgment against Moon up to the limits of its underinsured motorist
coverage, Gadbaws had not stated a claim against Farmers for which relief could be granted.
Gadbaws then petitioned this Court for a writ of supervisory control reversing both the
District Court's order bifurcating proceedings and its order dismissing Farmers.
STANDARD OF REVIEW
¶12 Pursuant to Rule 42(b), M.R.Civ.P., a district court may order separate trials when
more than one claim has been joined in the same action "in furtherance of convenience or
to avoid prejudice. . . ." This Court has held that the decision whether to bifurcate pursuant
to this rule is a matter left to the discretion of the District Court. Malta Public School Dist.
v. Seventeenth Jud. Dist. (1997), 283 Mont. 46, 50, 938 P.2d 1335, 1338 (citing State ex rel.
McGinnis v. Dist. Court, (Mont. 1983), 673 P.2d 1207, 1208). We review discretionary
rulings of the trial court for an abuse of discretion. See In re R. F., 2001 MT 199, ¶ 21, 306
Mont. 270, ¶ 21, 32 P.3d 1257, ¶ 21.
¶13 Whether a party is entitled to dismissal of a claim pursuant to Rule 12(b)(6),
M.R.Civ.P., for failure to state a claim upon which relief may be granted presents a question
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of law. We review legal conclusions of a district court to determine whether they are correct.
Lundquist v. McBeth, 2001 MT 311, ¶ 13, 308 Mont. 1, ¶ 13, 38 P.3d 831, ¶ 13.
ISSUE 1
¶14 Are the circumstances in this case appropriate for the exercise of supervisory control?
¶15 In Malta Public School Dist., the School District sued its insurer for breach of
contract and bad faith based on its failure to pay for fire damage to the junior and senior high
school in Malta, Montana. The district court bifurcated the breach of contract and bad faith
claims for purposes of trial and denied the School District's request that the same jury be
impaneled to try both cases. The School District sought supervisory control and the insurer
responded that it was not appropriate to review a discretionary order of the court.
¶16 We first referred to the standard for supervisory control set forth in Plumb v. Fourth
Jud. Dist. Court. We stated:
In Plumb v. Fourth Jud. Dist. Court (1996), [279 Mont. 363], 927 P.2d 1011,
we clarified the standard for our exercise of supervisory control under Article
VII, Section 2(2) of the Montana Constitution and under Rule 17, M.R.App.P.
Citing State ex rel. Whiteside v. Dist. Court (1900), 24 Mont. 539, 63 P. 395,
we stated that, without trying to define its particular functions, supervisory
control enables this court 'to control the course of litigation in the inferior
courts where those courts are proceeding within their jurisdiction, but by a
mistake of law, or willful disregard of it, are doing a gross injustice, and there
is no appeal, or the remedy by appeal is inadequate.' Plumb, [279 Mont. 363],
927 P.2d at 1014.
Malta Public School District, 283 Mont. at 48, 938 P.2d at 1336-337.
¶17 Based on the convenience of the parties and the interests of judicial economy, we held
in Malta Public School Dist. that there was no adequate remedy by appeal for the district
court's abuse of discretion and that supervisory control was appropriate in that case.
Likewise, we conclude that supervisory control is appropriate in this case. Gadbaws have
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filed two separate claims related to the same factual transaction. They have claimed tort
damages from Amanda Jo Moon and contract damages from Farmers Insurance Exchange
as a result of the same motor vehicle collision and whatever injuries were caused by that
collision. If the District Court erred by bifurcating those claims and ultimately dismissing
the claim against Farmers, the remedy by appeal would be of little consolation to Gadbaws
following trial against Moon. The convenience of the parties and the interests of judicial
economy justify the exercise of supervisory control.
ISSUE 2
¶18 Did the District Court abuse its discretion when it bifurcated Gadbaws' claims and
subsequently dismissed their claim against Farmers Insurance Exchange?
¶19 Gadbaws contend that the District Court abused its discretion by first bifurcating the
claims against Moon and Farmers and then dismissing Farmers altogether. They contend that
Montana has always permitted a direct action against an injured party's underinsured motorist
insurer and that, in fact, being joined as a party to a lawsuit is directly contemplated by the
terms of the underinsured motorist policy. They contend that Rule 411, M.R.Evid., is
inapplicable to this situation because insurance is not being offered to prove liability and
that, in fact, liability is not in dispute. They contend that if they are forced to try their claims
against Moon and Farmers separately, then they will incur duplicate expense, unnecessary
delay and inadequate relief.
¶20 On behalf of the Respondent, Eighth Judicial District Court, Moon and Farmers
contend that the District Court properly exercised its discretion when, in the first instance,
it bifurcated the claims because Moon and Farmers would have been prejudiced by the
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introduction of insurance into the case and that Rule 411, M.R.Evid., specifically prohibits
evidence of the existence of insurance. Respondents contend that this Court's recent decision
in Dill v. Montana Thirteenth Judicial Dist. Court, 1999 MT 85, 294 Mont. 134, 979 P.2d
188, is distinguishable because in that case the tortfeasor had settled with the plaintiff and
the action was based solely on the uninsured motorist carrier's contractual obligation. They
contend that there will be no duplication of proceedings because Farmers has conceded
coverage and agreed to be bound by the jury's judgment. Neither Respondent has made a
serious effort to defend the District Court's sua sponte decision to dismiss Farmers
altogether.
¶21 The District Court held as follows:
Based on the repeated stipulation of Defendant Farmers Insurance Exchange
to be bound by the jury verdict in this matter up to its policy limits, the Court
had determined sua sponte to dismiss Defendant Farmers Insurance Exchange
from this action without prejudice. The Court finds that at this time the
plaintiff has not asserted a claim against Defendant Farmers Insurance
Exchange for which relief can be granted. At this time there is no breach of
contract action because Defendant Farmers Insurance Exchange has stipulated
that they will pay up to the limits of its underinsured motorist coverage limits
if the verdict of the jury exceeds the coverage amounts available through the
insurance policy of Defendant Moon.
¶22 In Dill, 294 Mont. 134, 979 P.2d 188, the plaintiffs brought an action for damages
sustained by their son when he was hit as a pedestrian by a vehicle operated by the
defendant. They joined as a defendant State Farm Automobile Insurance Company, which
not only insured the defendant, but provided underinsured motorist coverage to the plaintiffs.
After filing the complaint, plaintiffs settled their claims against the tortfeasor and reserved
their right to proceed against their insurer. However, State Farm then moved the district
court to amend the caption of the case by removing its name as a defendant and to restrict
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the plaintiffs from mentioning to the jury that the tortfeasor had been insured or that they
carried underinsured motorist coverage with State Farm. The district court granted those
motions and held that the action against State Farm was not "ripe for adjudication" until the
tortfeasor's fault had been established and damages assessed in the negligence action.
¶23 On appeal, we first noted in Dill that the action against State Farm sounded in contract
and that because State Farm and the plaintiffs could not agree on the amount due under the
contract, litigation between the parties was the appropriate remedy. In response to State
Farm's contention that the introduction of evidence of insurance in the district court would
have been prejudicial and reversible error, we held that:
Rule 411, M.R.Evid., by its terms, applies only to liability insurance and
therefore does not preclude the admissibility of the underinsured motorist
policy between the Dills and State Farm. The Dills' complaint against State
Farm is a coverage dispute pursuant to the terms of the State Farm policy, not
a negligence action. Therefore, the result here does not contravene the
purpose of Rule 411, M.R.Evid., on the admissibility of insurance. The rule
only prohibits the introduction of insurance when it is offered for the purpose
of showing negligence or liability. Here, the issues to be tried are separate and
the rule is not violated. See Klaudt v. State Farm Mut. Auto. Ins. Co. (1983),
202 Mont. 247, 253, 658 P.2d 1065, 1068. Accordingly, Rule 411, M.R.Evid.,
does not preclude the admission into evidence of the underinsured motorist
policy. [Emphasis added.]
Dill, 294 Mont. at 142, 979 P.2d at 192-93.
¶24 As to whether Rule 411, M.R.Evid., prohibited the introduction of evidence of the
tortfeasor's liability coverage, we stated:
Rule 411, M.R.Evid., precludes evidence of liability insurance 'upon the issue
of whether the person acted negligently or otherwise wrongfully.' As
explained above, the Dills demonstrate that they are legally entitled to collect
damages from the underinsured driver by collecting the limits of his liability
coverage from State Farm. Because the policy does not impose upon the
insured, the obligation to demonstrate the legal liability of the tort-feasor, the
State Farm liability policy would not be utilized to demonstrate that the tort-
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feasor 'acted negligently or otherwise wrongfully.' As Rule 411, M.R.Evid.,
allows, the policy would be offered 'for another purpose'; to establish that the
Dills have complied with the policy terms by settling with the tort-feasor's
liability insurer before turning to their own underinsurance carrier for relief.
The liability policy is relevant and admissible only to establish the Dills'
compliance, and not to establish fault.
Dill, 294 Mont. at 142, 979 P.2d at 193.
¶25 It is clear from our decision in Dill that Rule 411, M.R.Evid., does not prohibit the
introduction of evidence of insurance when the evidence is not offered for the purpose of
establishing negligence or liability. In this case, negligence or liability has been admitted.
Therefore, it is equally clear that Rule 411, M.R.Evid., does not prohibit the introduction of
Moon's liability coverage or the fact that Gadbaws have underinsured motorist coverage and
that Farmers has an obligation to pay Gadbaws pursuant to that coverage in the event their
damages exceed the amount of Moon's liability coverage.
¶26 Nevertheless, Moon and Gadbaws argue that the introduction of insurance would be
prejudicial and unfairly influence the jury's verdict. We recently addressed that same
contention in Dias v. Healthy Mothers, Healthy Babies, 2002 MT 323, ¶ 17, 313 Mont. 172,
¶ 17, 60 P.3d 986, ¶ 17, where we stated:
The notion that the mere mention of insurance can move a jury to ignore the
law and award a windfall to the plaintiff is an ancient myth unsupported by
any empirical data which has been brought to this Court's attention. Common
sense dictates that the opposite is true. Jurors concerned that an individual
might not have insurance are more likely to protect that individual and his or
her assets from damages which, unless personal to the individual, often seem
abstract and theoretical. For example, in Million v. Rahhal (Okl. 1966), 417
P.2d 298, 300, cited in Sioux v. Powell (1982), 199 Mont. 148, 153, 647 P.2d
861, 864, the Oklahoma court stated:
'The prejudice created by a showing of the absence of insurance is likely to be
greater than when the existence of insurance coverage is shown. Sympathy is
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one of the most controlling human emotions. In City of New Cordelle v. Lowe,
[Okl. 389 P.2d 103], this court said:
'Such information encourages sympathy for a party who presumably has no
way of being reimbursed for his loss than by a favorable verdict.' '
Dias, ¶ 17.
¶27 Likewise, in this case, we conclude that it is not the evidence of Gadbaws'
underinsured motorist coverage which would prejudice a jury and possibly skew the
determination of Gadbaws' damages, but the misleading impression which the Respondents
wish to create that it is in fact Amanda Jo Moon, regardless of her financial wherewithal,
who is responsible for the entirety of Gadbaws' damages.
¶28 The issue for the jury to decide is simply the amount by which Gadbaws have been
damaged. We are not convinced that their determination would be unfairly influenced by
the knowledge that Gadbaws had purchased underinsured motorist coverage for the purpose
of covering those damages. There is certainly no more risk of prejudice under the
circumstances in this case than there was where the tortfeasor had previously settled with the
plaintiff as was the case in Dill. Any factual distinction between the two cases makes no
meaningful difference. Furthermore, were we to accept the Respondents' argument, then
every major corporation in the state should be able to conceal its identity from the jury even
though properly joined in a lawsuit. That obviously is not allowed.
¶29 Finally, we conclude that the District Court erred when it held that because a jury has
not yet determined Gadbaws' damages, and because Farmers has agreed to pay the amount
of the verdict up to its policy limits, there is no dispute between Gadbaws and Farmers.
Farmers has an obligation to pay those damages sustained by Gadbaws in excess of the
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amount which will be paid by the liability limits of Moon's policy. Unless the facts have
changed since this case was presented to us, Gadbaws and Farmers disagree on that amount.
Therefore, there is a dispute with Farmers over its obligation which Gadbaws are entitled to
litigate and a jury is entitled to consider.
¶30 For these reasons, we accept supervisory control in this matter and reverse the orders
of the District Court which bifurcated Gadbaws' claims against Amanda Jo Moon and
Farmers Insurance Exchange and which dismissed Farmers Insurance Exchange, and remand
this case to the District Court for further proceedings consistent with this Opinion.
/S/ TERRY N. TRIEWEILER
We Concur:
/S/ PATRICIA COTTER
/S/ JIM REGNIER
/S/ JAMES C. NELSON
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Justice Patricia O. Cotter specially concurs.
¶31 I agree with all that is said in the Court’s Opinion. I write separately to add that there
is no reason to afford special protection to an insurance company properly named as a
defendant in a lawsuit simply because of the fact that it is an insurance company. Where,
as here, liability is not in dispute, Rule 411, M.R.Evid., does not apply. Thus, there is no
evidentiary basis for prohibiting the jury from learning of the existence of the coverage, the
insurer’s refusal to pay the proceeds of its underinsured coverage, and the filing of the
resulting contract claim.
¶32 Moreover, the policy of insurance between Gadbaw and Farmers contemplates
litigation if the parties are unable to resolve the insured’s claim. Although we do not have
the full policy before us, I presume that nothing in the policy provides that, if sued, Farmers
is entitled to conceal its identity and its decision to deny payment during litigation, or
Farmers would have cited it. So, there is no contractual justification for the District Court’s
action, either. In sum, there is no legal authority for the District Court’s sua sponte decision
to protect the insurer from the trial process.
¶33 I cannot identify one fundamental difference between this and any other breach of
contract case. Absent Rule 411 application, an insurer is entitled to no greater protection
from litigation or disclosure of its identity than is any other defendant in a breach of contract
case.
¶34 I therefore concur in the court’s decision.
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/S/ PATRICIA COTTER
Justice James C. Nelson concurs in the foregoing special concurrence.
/S/ JAMES C. NELSON
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Justice Jim Rice dissenting.
¶35 I dissent. The Court justifies its intervention in this matter by creating a “straw man”
crisis and then gallantly knocking the straw man down. The Court attacks a nonexistent
problem and, in so doing, neglects the true problem.
¶36 The Court purports to respond to “duplication of proceedings,” “duplication of
expense,” “unnecessary delay” and “inadequate relief,” which it contends will occur because
of the District Court’s decisions herein. However, none of these problems will occur and are
entirely illusory. There is no possibility of a second trial, with its attendant duplication and
expense, by reason of the District Court’s removal of Farmers from the Gadbaw/Moon trial,
because Farmers has already agreed to pay whatever amount the jury would award to
Gadbaws in excess of Moon’s liability coverage, up to the limits of the policy. Thus, there
are no remaining issues in regard to Farmers which would require a second trial, and no basis
upon which to justify supervisory control.
¶37 The real issue is whether this Court will accept the District Court’s efforts to make
the trial between Gadbaws and Moon–the only trial which will occur–a fair one. In rejecting
the District Court’s efforts, this Court creates another illusory, and erroneous, crisis. The
Court asserts that it must act to correct the “misleading impression which the Respondents
wish to create that it is in fact Amanda Jo Moon, regardless of her financial wherewithal,
who is responsible for the entirety of Gadbaws’ damages.” See ¶ 27.
¶38 The problem with this rationale is that it is inaccurate: Amanda Jo Moon, regardless
of her financial wherewithal, is responsible for the entirety of Gadbaws’ damages. There is
nothing “misleading” about this reality. Further, it is not merely impression, but fact. A
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judgment awarded for Gadbaws’ injuries will be entered, in the entire amount, against Moon.
That a judgment may also create a contractual obligation on the part of another–here,
Farmers–to pay a portion of those damages does not change the original judgment against
Moon. And at this point, Moon is hoping against hope that the financial arrangements she
has made to address the risk she now faces because of her negligence will be sufficient to
protect her ability to maintain her livelihood after the trial is over and any judgment is
entered. To protect those interests, she also wants a fair trial.
¶39 In its misplaced focus on Dill v. Montana Thirteenth Jud. Dist. Court, 1999 MT 85,
294 Mont. 134, 979 P.2d 188, the Court has failed to consider Moon’s interests in having a
fair trial. Dill addressed a breach of contract claim between insureds and their insurer, State
Farm, and rightfully concluded that a trial determining State Farm’s obligation under its
contract with the insureds should include State Farm. However, nothing in that holding can
be construed as requiring that a defendant being sued for negligence, as Moon is here, face
trial together with an insurance company being sued for breach of contract. Whether those
matters should be tried together or separately is a matter properly placed within the sound
discretion of the District Court, who must determine the potential prejudice in each case after
an assessment of the parties and issues therein. Here, because a second trial will not occur,
it was logical for the District Court to remove Farmers from the negligence trial to eliminate
the potential prejudice from which Moon sought relief.
¶40 This Court’s determination that Moon should not feel prejudiced by being forced into
a trial along side Farmers is not only presumptuous of Moon’s position, but is erroneous.
For decades this Court has recognized that prejudice in these circumstances can legitimately
15
exist. See State ex rel. Hereim v. District Court (1969), 154 Mont. 112, 115, 460 P.2d 755,
756 (“[t]his court has repeatedly condemned the injection of the insurance issue into damage
actions”). I would defer to the District Court’s judgment that such prejudice exists here,
particularly when there will be no duplication of effort or expense.
¶41 The District Court acted fairly in balancing Moon’s interests and Gadbaws’ interests.
Although it was not necessary for the District Court to dismiss Farmers from the action, as
the company should properly remain a party until its contractual obligation is satisfied, that
error is harmless, given the posture of the case, as explained above. With respect to the
bifurcation issue, the District Court’s decision to conduct the trial of the negligence action
separate from the contract action was not, in this matter, an abuse of discretion. I would
decline to exercise supervisory control, but, supervisory control having been exercised by
the Court, it was necessary to illuminate the Court’s error herein.
/S/ JIM RICE
Chief Justice Karla M. Gray and Justice W. William Leaphart join in the dissenting opinion
of Justice Rice.
/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
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Justice W. William Leaphart dissenting.
¶42 I dissent for the reasons set forth in Justice Rice’s dissent and for the following
reasons. The Court goes to considerable length to explain that Rule 411, M.R.Evid., only
prohibits evidence of insurance on the issue of liability. Since liability is admitted in the
present matter, the Court reasons that insurance evidence is thus not prohibited. A list of
facts which are not prohibited could be rather extensive. For example, there is nothing
prohibiting introduction of evidence that a plaintiff is a millionaire. Does that mean that that
fact is relevant? Obviously not. In the present matter, the fact that insurance evidence is not
prohibited by Rule 411 does not address the separate question of whether it is admissible.
¶43 Rule 411 itself recognizes that relevancy is a separate and necessary inquiry when it
allows insurance evidence “when offered for another purpose, such as proof of agency,
ownership, or control, or bias or prejudice of a witness.”
¶44 As the Court recognizes, “[t]he issue for the jury to decide is simply the amount by
which Gadbaws have been damaged.” Given that simple issue, the question is what is the
relevance of the fact that Gadbaws had purchased underinsured motorist coverage? Rule
402, M.R.Evid., provides that all relevant evidence is admissible and that evidence which is
not relevant is not admissible. Relevant evidence is defined as “evidence having any
tendency to make the existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the evidence.” Rule 401,
M.R.Evid. Tellingly, the Court fails to cite any fact of consequence which would be more
or less probable with evidence of the Gadbaws’ underinsured motorist coverage.
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¶45 In a brash ipse dixit, the Court asserts that any factual distinction between this case
and our decision in Dill v. Montana Thirteenth Judicial District Court, 1999 MT 85, 294
Mont. 134, 979 P.2d 188, “makes no meaningful distinction.” I beg to differ. Dill involved
a coverage dispute: whether Dill, the insured, under the terms of the policy, was legally
entitled to collect damages. The Court specifically addressed the relevance of the policy
when it stated:
As Rule 411, M.R.Evid. allows, the policy would be offered “for another
purpose”; to establish that the Dills have complied with the policy terms by
settling with the tort-feasor’s liability insurer before turning to their own
underinsurance carrier for relief. The liability policy is relevant and
admissible only to establish the Dills’ compliance, and not to establish fault.
Dill, ¶ 22.
¶46 Here, in contrast, there is no coverage issue. Farmers concedes that there is coverage
and has agreed to pay whatever amount the jury would award to Gadbaws in excess of
Moon’s liability coverage, up to the limits of the Farmers policy.
¶47 Since the existence of Gadbaws’ insurance coverage is not relevant to the simple
issue, i.e. the amount by which Gadbaws have been damaged, I cannot conclude that the
District Court, in bifurcating the contract claim from the damage claim, abused its discretion.
I would deny the petition for supervisory control.
/S/ W. WILLIAM LEAPHART
Chief Justice Karla M. Gray and Justice Jim Rice join in the foregoing dissenting opinion
of Justice Leaphart.
/S/ KARLA M. GRAY
/S/ JIM RICE
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