Carter v. Mississippi Farm Bureau Casualty Insurance

No. 04-052

IN THE SUPREME COURT OF THE STATE OF MONTANA

2005 MT 74

MICHAEL CARTER and TINA SCHMIDT,

Plaintiffs and Appellants,

v.

MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY,
d/b/a MISSISSIPPI FARM BUREAU INSURANCE, JOHN DOES 1-6
INSURANCE, JOHN DOES 1-6,

Defendant and Respondent.

APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula, Cause No. DV 2003-353
The Honorable Douglas G. Harkin, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Eric Rasmussen, Bulman Law Associates, Missoula, Montana

For Respondent:

Randall Nelson and Colette Davies, Nelson & Dahle, Billings, Montana

For Amicus:

Gene R. Jarussi, Jarussi & Bishop, Billings, Montana (Amicus MTLA)

Submitted on Briefs: July 7, 2004

Decided: March 23, 2005

Filed:

__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1 Michael Carter and Tina Schmidt (“Carter” and “Schmidt,” respectively), appeal from

an Order of the Montana Fourth Judicial District Court, Missoula County, in which the court

granted summary judgment to defendant Mississippi Farm Bureau Casualty Insurance

Company (“MFBCIC”) and dismissed Carter’s and Schmidt’s lawsuit for lack of personal

jurisdiction over MFBCIC. We affirm.

ISSUE

¶2 We restate the issue as follows: Did the District Court err when it granted MFBCIC’s

motion for summary judgment on the grounds that the court did not have personal

jurisdiction over MFBCIC?

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Carter and Schmidt filed a declaratory judgment action against MFBCIC in the

Montana Fourth Judicial District Court, Missoula County, and requested interpretation of an

insurance contract. In their Complaint, Carter and Schmidt alleged they were in a motor

vehicle collision in Sanders County, Montana, on December 28, 2001, in which they both

sustained head injuries. Carter was driving a Toyota pick-up truck which was insured by

MFBCIC and Schmidt was his passenger. The driver of the other vehicle involved in the

crash was insured by Metlife Auto and Home, which settled with Carter and Schmidt for the

policy limits of $25,000 per person, $50,000 per incident. Carter and Schmidt made claims

under Carter’s MFBCIC policy for medical payments coverage and underinsured motorist

coverage (“UIM coverage”). They allege in their Complaint that MFBCIC paid only $5,000

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to each of them for medical payment coverage and has refused to pay UIM coverage despite

demands to do so. They sought declaratory judgment from the District Court with regard to

issues surrounding the various coverages, stacking, and subrogation.

¶4 Carter and his family lived in Whitefish, Montana, for several years and then moved

to Mississippi. They lived in Mississippi approximately two years, and returned to live in

the State of Montana on December 5, 2001. The accident at issue occurred about three

weeks later. At that time, it was Carter’s intent to live in Montana year-round; however, he

has since decided to be a “snowbird” and spend winters in Mississippi and the rest of the

year in Montana. At the time of the accident, Carter asserted he was receiving his mail in

Montana, but he continued to maintain a post office box in Mississippi which his mother-in-

law checked and from which she forwarded important mail to his Montana address.

¶5 It appears that at the time of the accident, Carter had four motor vehicles insured

through MFBCIC. Each of the vehicles’ policies showed the vehicles to be garaged in

Lafayette County, Mississippi. Subsequent to insuring his motor vehicles with MFBCIC,

Carter relocated to Montana. However, he did not notify MFBCIC that he moved to

Montana. He explained that since the policy was paid in full, he did not see a need to notify

the insurance company that he had relocated. Carter stated that prior to the accident, he had

intended to let his MFBCIC policy lapse upon expiration, and that he had planned to

purchase a new policy in Montana.

¶6 Carter also testified that prior to leaving Mississippi, he spoke with his MFBCIC

insurance agent Cecil Staggs and asked if there would be any problems with coverage if he

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moved to Montana and Staggs assured him there would not. Staggs denied that Carter

informed him that he planned to move to Montana or that the insured vehicles would be

garaged outside of Mississippi.

¶7 In response to the Complaint, MFBCIC entered a limited appearance to contest the

District Court’s exercise of personal jurisdiction, and moved for summary judgment on the

issue. Carter and Schmidt opposed the motion and filed a cross-motion for summary

judgment regarding personal jurisdiction. The District Court granted summary judgment to

MFBCIC, concluding it did not have personal jurisdiction over MFBCIC. Carter and

Schmidt timely appeal. The Montana Trial Lawyers Association (“MTLA”) has also filed

an amicus curiae brief in this case.

STANDARD OF REVIEW

¶8 We review a district court’s grant of summary judgment de novo, applying the same

evaluation under Rule 56, M.R.Civ.P., as the district court. Glacier Tennis Club v. Treweek

Constr., 2004 MT 70, ¶ 21, 320 Mont. 351, ¶ 21, 87 P.3d 431, ¶ 21 (citations omitted). In

other words, the party moving for summary judgment has the initial burden of proving that

there are no genuine issues of material fact that would permit a non-moving party to succeed

on the merits of the case, and if the moving party meets that burden, then the non-moving

party must provide substantial evidence that raises a genuine issue of material fact in order

to avoid summary judgment in favor of the moving party. Glacier, ¶ 21 (citations omitted).

Once it is established that no genuine issues of material fact exist, the district court must then

determine whether the moving party is entitled to judgment as a matter of law, and this Court

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reviews that determination to determine whether the district court erred. Glacier, ¶ 21

(citations omitted).

DISCUSSION

¶9 Did the District Court err when it granted MFBCIC’s motion for summary judgment

on the grounds that the court did not have personal jurisdiction over MFBCIC?

¶10 Carter argues that, since MFBCIC “knew” he relocated but did not cancel his

insurance policies, MFBCIC maintained sufficient contact with Montana to subject itself to

personal jurisdiction within Montana’s courts. He claims that through conversations which

he had with Staggs, MFBCIC was aware that Carter had a “connection” with Montana and

“ties” to this state prior to the accident. Carter and Schmidt further argue that the District

Court relied upon an inapplicable case and erroneously considered the facts in a light most

favorable to MFBCIC in determining that personal jurisdiction over MFBCIC did not exist.

Carter and Schmidt maintain that Montana has specific jurisdiction over MFBCIC because,

by virtue of the automobile accident having occurred here, Montana is the place of

performance of the insurance contract.

¶11 MFBCIC responds that it has not engaged in any act which would give rise to specific

jurisdiction in this case, and asserts that it is a Mississippi corporation which has no presence

in Montana. It has no offices or agents in Montana, does not advertise here, and is not

authorized to conduct business in Montana as a foreign insurer. MFBCIC notes that Carter

was a Mississippi resident when MFBCIC issued his insurance policy, and the policy in

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effect at the time of the accident reflected that Carter’s insured vehicles were garaged in

Mississippi.

¶12 Carter offered four documents to support his contention that MFBCIC had sufficient

contacts with Montana to subject it to the jurisdiction of its courts. MFBCIC points out that

only one of Carter’s four documents pre-dated the accident, and that document is a Montana

bank lien, which was sent to Carter’s Mississippi address and listed a Mississippi county as

the garaging location of the subject vehicle. Two of the other three documents were

premium payments drawn on Carter’s Montana checking accounts after the accident and

both premium notices list a Mississippi county as the garaging location of the vehicles. The

final document was an Automobile Policy Change Request form, which was sent to Carter’s

Montana address about a year and a half after the accident. MFBCIC further argues that,

even if these documents could somehow impute knowledge to MFBCIC that Carter was

residing in Montana, the unilateral action of an insured who changes residency does not

automatically cause the insurer to become subject to personal jurisdiction in the courts of the

insured’s new state of residency.

¶13 In its Order and Memorandum, the District Court relied upon the two-part test we

enunciated in Bi-Lo Foods, Inc. v. Alpine Bank, Clifton, 1998 MT 40, ¶ 15, 287 Mont. 367,

¶ 15, 955 P.2d 154, ¶ 15. In order to determine whether a Montana court can exercise

personal jurisdiction over a nonresident defendant, the court first determines whether

jurisdiction exists either by way of the defendant being found within Montana or by way of

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the long-arm statutes; then, the court must determine whether exercising jurisdiction

comports with the defendant’s due process rights.

¶14 The District Court determined that Carter and Schmidt, by relying upon cases which

did not ever address the issue of personal jurisdiction, failed to state a compelling argument

upon which the court could conclude that it had specific jurisdiction over MFBCIC. The

District Court further noted that MFBCIC was not made aware of Carter’s move to Montana

until after the accident occurred, and in fact Carter’s own evidence revealed that his

MFBCIC membership renewal notices subsequent to the accident were mailed to a

Mississippi address.

¶15 In its amicus brief, MTLA asserts that neither party in this case has applied the

appropriate law, and draws our attention to language within the MFBCIC insurance policy

which states that its territory of coverage applies to automobile accidents within the United

States. MTLA further asserts that Carter’s deposition testimony that he told his MFBCIC

insurance agent that he and his wife resided part of the year in Montana is pivotal to the

outcome of this case. MTLA argues that this Court should extend the benefits and

protections of Montana law to part-time residents during the time that they are actually

residing in Montana, and not consider part-time residents to be in the same class as those

people who are merely passing through the state.

¶16 However, amici curiae are not parties. They cannot assume the functions of parties,

nor create, extend, or enlarge issues. We consider the briefs of amici only insofar as they

coincide with the issues raised by the parties to the action. Montana Power Co. v. Carey

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(1985), 216 Mont. 275, 277, 700 P.2d 989, 990-91 (citations omitted); Montana Wildlife

Federation v. Sager (1980), 190 Mont. 247, 265, 620 P.2d 1189, 1200 (citations omitted).

Furthermore, we note that although MTLA warns us of dire consequences to the substantial

number of people who call Montana home for part of the year, the fact is that this is the first

such case to come before us. Moreover, this case encompasses a very narrow set of

circumstances in which a part-time resident of Montana insures his or her automobile

through a remote and strictly regional insurance carrier which does not do business in

Montana. Thus, this case is distinguishable from the vast majority of cases in which personal

jurisdiction is never an issue for the simple reason that the insurer is a national carrier doing

business in Montana.

¶17 In support of their contention that jurisdiction exists over MFBCIC on the grounds

that the motor vehicle accident occurred within this State--and thus Montana became the

“place of performance” of Carter’s MFBCIC policy--Carter and Schmidt argue that we have

consistently held that “when a motor vehicle accident occurs on the roadways of the State

of Montana, insurance policies formed outside the State of Montana, will be interpreted by

the courts of Montana,” citing Kemp v. Allstate Ins. Co. (1979), 183 Mont. 526, 601 P.2d 20;

Youngblood v. American States Ins. Co. (1993), 262 Mont. 391, 866 P.2d 203; Mitchell v.

State Farm Ins. Co., 2003 MT 102, 315 Mont. 281, 68 P.3d 703; and Swanson v. Hartford

Ins. Co. of Midwest, 2002 MT 81, 309 Mont. 269, 46 P.3d 584, in support of their position.

They also claim that, in Farmers Ins. Ex. v. Portage La Prairie Mut. Ins. Co. (1990), 907

8
F.2d 911 (“Farmers”), the Ninth Circuit Court of Appeals ruled that Montana has jurisdiction

over foreign insurers.

¶18 MFBCIC responds that Kemp, Youngblood, Mitchell, and Swanson are inapposite, as

personal jurisdiction was not at issue in those cases. These cases all involve national

insurance companies which routinely transacted business in the State of Montana on the date

of the loss at issue, whereas MFBCIC is a regional Mississippi insurer. MFBCIC also points

out that these cases address which state’s law governs the applicable insurance contracts--not

whether a particular state’s courts have personal jurisdiction over the defendant insurance

company.

¶19 Summary judgment is appropriate only when there are no material facts in dispute.

Rule 56(c), M.R.Civ.P. Summary judgment is not appropriate if any material issue of fact

remains which would entitle the nonmoving party to recover. Howard v. Conlin Furniture

No. 2, Inc. (1995), 272 Mont. 433, 436, 901 P.2d 116, 118. The only disputed fact of record

is whether Carter informed his MFBCIC agent that he was moving to Montana. Thus, we

must determine whether Carter’s informing his insurance agent that he intended to move to

Montana would be material to the outcome of this case.

¶20 Carter and Schmidt argue that Carter’s informing his agent of his plan to move to

Montana caused MFBCIC to purposefully avail itself of Montana’s laws because it did not

cancel his policy when he moved, although he concedes he did not specifically inform

MFBCIC that the move had occurred. MTLA argues that Carter’s part-time residence is

critical for, if we were to deny him the ability to sue his out-of-state insurer here, we would

9
deprive him of the benefits and protections of Montana law during the time in which he

resides in this State. However, it is important to emphasize that this appeal is not about

whether Carter and Schmidt are covered by Carter’s MFBCIC policy; rather, the question

is whether or not they can litigate the coverage dispute in Montana. The underlying dispute

Carter has with MFBCIC relates to his coverage and has nothing to do with the fact that the

accident at issue occurred in Montana or that Carter was living here at the time. Thus,

whether or not Carter informed Staggs that he intended to move to Montana is not material

to the outcome of this case, and is not a material fact for the purposes of summary judgment

pursuant to Rule 56, M.R.Civ.P.

¶21 MFBCIC argues that the unilateral act of an insured moving to another state cannot

in and of itself provide sufficient minimum contact of the insurer to the forum, regardless of

its knowledge of the move, citing National Grange Mut. Ins. Co. v. White (Ky. 2002), 83

S.W.3d 530, 535-36. In National Grange, the Kentucky Supreme Court reasoned that even

if the insurance company was aware that its insured had moved to another state (in that case,

Kentucky), the insurance company’s purported “act” of not canceling the insured’s policy

was insufficient to permit an inference that the insurer was purposefully availing itself of

conducting activities in the insured’s new state of residency, and that the requisite minimum

contacts with the state could not be established merely by the insured changing residency

after the policy was issued. National Grange, 83 S.W.3d at 536. It thus argues that Carter’s

residency change--without more--is insufficient to demonstrate that MFBCIC established

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minimum contacts with Montana merely by failing to cancel Carter’s insurance policy when

he moved here.

¶22 In Strickland Ins. Group v. Shewmake (Fla. Dist. Ct. App. 5th Dist. 1994), 642 So.

2d 1159, 1161 (citing Meyer v. Auto Club Ins. Ass’n (Fla. 1986), 492 So. 2d 1314), the Fifth

District Court of Appeal of Florida explained that where an insurer and the insured were both

out-of-state residents at the time the contract of insurance was issued, the fact that there was

an accident in Florida does not give Florida courts jurisdiction over the insurer even if the

insured, by a unilateral act, moves to Florida. “The policy of insurance,” the court explained,

“can not be read so broadly as to allow the insurer to be sued wherever the insured is

involved in an accident, even though the contract of insurance applies to accidents and losses

which occur in any of the 50 states. . . .” Strickland, 642 So. 2d at 1161. Similarly here,

Carter and MFBCIC were both Mississippi residents at the time the insurance contract was

issued, and it was only a few weeks before the accident that Carter, the insured, moved to

Montana in a unilateral act.

¶23 MFBCIC notes that other courts have held that in insurance coverage disputes, selling

automobile insurance to someone who drives the covered vehicle into another state does not

automatically grant personal jurisdiction over an insurance company that does not do

business in that state. This is so even though the automobile is within the company’s

territory of coverage. See State ex. rel. Ill. Farmers Ins. v. Koehr (Mo. Ct. App. 1992), 834

S.W.2d 233. While a promise to provide coverage throughout the United States may

establish that an insurer has agreed to submit to jurisdiction in any forum that has jurisdiction

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to adjudicate claims against its insured, this agreement to defend and indemnify its insured

in any state does not imply an agreement to allow its insured to bring suit against it in any

state. Bahn v. Chicago Motor Club (Md. 1993), 634 A.2d 63, 71 (citation omitted).

Similarly, the Supreme Court of Arizona held that in defining when a defendant should

“reasonably anticipate” out-of-state litigation, the foreseeability of an injury in another state

is not a sufficient benchmark for exercising personal jurisdiction in a breach of contract

action filed by the insured against the insurer. Batton v. Tennessee Farmers Mut. Ins. Co.

(Ariz. 1987), 736 P.2d 2, 5 (citing World-Wide Volkswagen Corp. v. Woodson (1980), 444

U.S. 286, 295, 100 S.Ct. 559, 566, 62 L.Ed.2d 490, 500, and Burger King Corp. v.

Rudzewicz (1985), 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542). This is

in line with our situation here: while MFBCIC could reasonably anticipate that its insured

could suffer an injury within its fifty-state coverage area, thus triggering its duty to defend

and indemnify, the foreseeability of that injury--without more--is not sufficient to subject the

insurer, MFBCIC, to specific personal jurisdiction within Montana’s courts.

¶24 Carter and Schmidt urge us to apply the Ninth Circuit’s holding in Farmers to the

facts presented here. In Farmers, Portage, a foreign insurer, insured a vehicle that was

involved in an accident in Montana. The driver of that vehicle was insured by Farmers.

When the driver was sued, demand was made upon Portage, as the insurer of the vehicle, to

appear and defend the driver. Portage refused to appear and defend, so Farmers stepped in

and settled the claim. Farmers then sued Portage, which in turn raised the absence of

personal jurisdiction as a defense. Farmers, 907 F.2d at 912. The district court ruled in

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favor of Portage, but the Ninth Circuit reversed, concluding that Portage failed to rebut the

prima facie showing that it had voluntarily injected itself into the Montana forum. Farmers,

907 F.2d at 915.

¶25 We decline to apply Farmers here. In that case, Portage arguably had an obligation

to appear and defend the driver who had been sued in Montana as a result of an accident,

while here, MFBCIC had no similar obligation to appear and defend because neither its

insured or an omnibus insured was sued in this state. It is the defendant’s forum-related

conduct that is at issue, and here, there simply is none on the part of MFBCIC.

¶26 MFBCIC further directs our attention to OMI Holdings, Inc. v. Royal Ins. Co. of

Canada (10th Cir. 1998), 149 F.3d 1086, 1093-94, in which the Tenth Circuit found the

holding in Farmers to be “troubling,” because the court relied upon the location of the

accident in determining whether personal jurisdiction could be had over the non-resident

insurance company. The court reasoned that the acts of the insured and of third parties were

not relevant in measuring the defendant insurance company’s minimum contacts with

Montana. OMI, 149 F.3d at 1094. While the court agreed that, by contracting to defend an

insured in a given forum state, the insurer creates some contact with that forum state, the

court further explained that it was troubled by the apparent assumption in Farmers that,

by agreeing to defend its insured in any forum, an insurer foresees being sued
by its own insured in any forum when a coverage dispute arises. An insurance
company who issues a policy in which it agrees to defend its insured in a
certain forum can undoubtedly foresee that it may have to provide a defense
for its insured who is haled into court there. It does not follow, however, that
by agreeing to defend in the forum, that the insurance company also by
implication agrees that it will litigate disputes between it and its insured

13
 regarding the terms of an insurance contract in a foreign forum. While it is
reasonably foreseeable that an insured would be involved in litigation with a
third-party in another forum, it is not necessarily foreseeable that a dispute
between the insured and the insurer over an insurance contract prepared,
negotiated, and executed pursuant to Canadian law in Canada with a Canadian
company would be litigated in a foreign forum where neither party has any
contacts.

OMI, 149 F.3d at 1095 (emphasis in original). We determine that the reasoning behind the

case law cited by MFBCIC is persuasive. While Montana is part of the area of coverage

found within Carter’s insurance policy with MFBCIC, and while MFBCIC may very well

have been obligated to defend Carter in Montana’s courts, that is not the situation before us.

¶27 It is important to differentiate between a case in which a company’s insured is sued

as a result of a car accident in a foreign state, and the case at hand, where the insured is suing

its regional insurer in a foreign state for breach of contract. The cases are distinguishable

on multiple levels. First, Farmers involved an indemnity policy, while this case involves

first-party coverage. In the former case, the insurer is obligated by the terms of its policy

to appear for and defend its insured, wherever an accident and resulting lawsuit occurs.

Farmers, 907 F.2d at 913. Personal jurisdiction in such cases never becomes a question, as

the insured’s involvement in an accident in the foreign state is sufficient to confer

jurisdiction upon him, and his contract of insurance follows him. Farmers, 907 F.2d at 914

(citing Eli Lilly and Co. v. Home Ins. Co. (D.C.Cir. 1986), 254 U.S. App. D.C. 1, 794 F.2d

710, 721, cert. denied, 479 U.S. 1060, 107 S.Ct. 940, 93 L.Ed.2d 991 (1987)). In the latter

case, however, the place of the accident is immaterial for purposes of jurisdiction, as the

action is one to enforce a contract. And in such cases, as in any action between residents of

14
different states, the question of whether the forum has personal jurisdiction over the other

contracting party is a question that must be answered before--and separate and apart from--

the inquiry into whether the contract is enforceable. See Edsall Constr. Co., Inc. v. Robinson

(1991), 246 Mont. 378, 382, 804 P.2d 1039, 1042 (entering into a contract with a Montana

resident insufficient to subject nonresident to personal jurisdiction). In this connection, it

bears repeating that the question here is not whether Carter and Schmidt may sue MFBCIC;

the question is where the suit may be maintained.

¶28 As the District Court noted in its Order and Memorandum, personal jurisdiction can

be had over a non-resident defendant in two ways: the defendant must either be “found

within” Montana, or must become subject to specific jurisdiction by committing any of the

acts enumerated under Montana’s “long-arm” jurisdiction statute, pursuant to Rule 4(B)(1),

M.R.Civ.P. Should specific jurisdiction be found, the court must further determine whether

exercising jurisdiction comports with the defendant’s due process rights. Bi-Lo, ¶ 15.

¶29 The difficulty in the case before us is that Carter and Schmidt do not offer any basis

under Rule 4(B)(1), M.R.Civ.P., for conferring long-arm jurisdiction over MFBCIC; in fact,

they do not even cite the Rule in their argument. In order to reach and resolve the question

of whether it had long-arm jurisdiction over MFBCIC, the District Court interpreted their

contention that the “place of performance” of the insurance contract was Montana to be an

argument for the application of Rule 4(B)(1)(d), M.R.Civ.P. This provision states that

specific jurisdiction may be had over a non-resident defendant if the defendant contracts “to

insure any person, property or risk located within this state at the time of contracting[.]” It

15
is undisputed that at the time of contracting, Carter resided in Mississippi, and the property

to be insured under the contract was garaged in Mississippi. Thus, there was no basis for a

finding of jurisdiction under this provision. Nor do the other provisions of Rule 4(B)(1),

M.R.Civ.P., provide a basis for the assertion of long-arm jurisdiction. While Carter has

every right to sue MFBCIC over its coverage issues, the courts of this State do not have the

personal jurisdiction over MFBCIC that is required as a predicate to the maintenance of such

an action here. Therefore, we conclude that the District Court did not err in granting

summary judgment in favor of MFBCIC.

CONCLUSION

¶30 For the foregoing reasons, we affirm the District Court.

/S/ PATRICIA O. COTTER

We Concur:

/S/ KARLA M. GRAY
/S/ JOHN WARNER
/S/ JIM RICE

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Justice W. William Leaphart dissenting.

¶31 I respectfully dissent.

¶32 The courts of Montana have personal jurisdiction over MFBCIC. The exercise of

jurisdiction is consistent with both the Constitution and Montana’s long-arm statute, Rule

4(B)(1), M.R.Civ.P.

¶33 In discussing the issue of due process, the Court relies upon several cases that seek

to distinguish (1) personal jurisdiction derived from an insurance contract’s indemnity policy

from (2) (the absence of) personal jurisdiction derived from an insurance contract’s first-

party coverage. Although the Court has non-binding precedent on its side, that is all it has.

The cases the Court relies on distinguish between the two situations in two different ways,

both of which do not stand up to a reasonable inquiry.

¶34 First, although the Court does not say so, the Bahn case it relies on attempts to

distinguish (1) from (2) by arguing that in (1) personal jurisdiction arises from tort liability,

whereas in (2) personal jurisdiction arises from contract liability. Bahn, 634 A.2d at 71.

Indeed, in a suit by a third-party driver against the insured, the underlying matter is one of

tort. However, the court’s personal jurisdiction over the insurer is based upon contract (the

indemnity clause). Similarly, in (2) the insured’s claim against the insurer is also one of

contract (the underinsured motorist clause). There is no reason to conclude that jurisdiction

arises out of the indemnity clause but not the underinsured motorist clause of the same

contract.

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¶35 Second, the Court relies on cases holding that an insurer meets the “reasonably

anticipates” requirement of World-Wide Volkswagen in (1) but not in (2). See Batton, 736

P.2d at 6-7. Although the Court is correct that the indemnity clause does not give rise to a

reasonable anticipation by the insurer that it may be sued by the insured in Montana, that is

a strawman argument. The insured’s suit is not grounded in the indemnity clause. It is based

upon the first party coverage under the underinsured motorist clause.

¶36 The circumstances of the present case are different from World-Wide Volkswagen, a

products liability case which did not involve a contract of insurance. World-Wide

Volkswagen, 444 U.S. at 288, 100 S.Ct. at 562, 62 L.Ed.2d at 495. In contracting to insure

a driver in all fifty states (as in this case), the insurer must reasonably expect that the insured

driver can be involved in an accident in any one of those states and, in that event, the insurer

may as a matter of contract have to appear and defend in that state either under the indemnity

clause or the underinsured motorist clause. Given that the insured’s injuries occur in the

state of the accident and that the witnesses to the accident are most likely residing there, the

insurer, MFBCIC, could reasonably anticipate being summoned into the courts of the state

of the accident to litigate liability for underinsured motorist coverage.

¶37 Rule 4(B)(1), M.R.Civ.P., provides:

Jurisdiction of persons. (1) Subject to jurisdiction. All persons found within
the state of Montana are subject to the jurisdiction of the courts of this state.
In addition, any person is subject to the jurisdiction of the courts of this state
as to any claim for relief arising from the doing personally, through an
employee, or through an agent, of any of the following acts: . . . (d)
contracting to insure any person, property or risk located within this state at
the time of contracting . . . .

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¶38 In analyzing the long-arm statutes, the Court, at ¶ 29, reasons as follows:

It is undisputed that at the time of contracting, Carter resided in Mississippi,
and the property to be insured under the contract was garaged in Mississippi.
Thus, there was no basis for a finding of jurisdiction under this provision. Nor
do the other provisions of Rule 4(B)(1), M.R.Civ.P., provide a basis for the
assertion of long-arm jurisdiction.

Although the Court places Carter (the “person”) and his vehicle (the “property”) in

Mississippi at the time of contracting, and thus outside the reach of Montana’s long-arm

statute, the Court ignores the other factor which can trigger jurisdiction, “risk.”

¶39 In Parker v. Fireman’s Insurance Co. of Newark, N.J. (S.C. App. 1988), 375 S.E.2d

325, 326-27, Merit, an Illinois insurer, insured an automobile owned by Fernie, a Florida

resident. Merit had never been licensed to conduct business in South Carolina and did not

sell Fernie his policy or collect any premiums from him in South Carolina. Parker was

injured in a collision with Fernie’s insured vehicle in South Carolina. Parker filed a

declaratory judgment against Merit in South Carolina. The lower court denied Merit’s motion

to dismiss, in which Merit had argued that it had not acted so as to authorize the South

Carolina court’s exercise of personal jurisdiction.1 On appeal, the court quoted from South

Carolina’s long-arm statute, which like Montana’s includes: “(f) contracting to insure any

person, property or risk located within this state at the time of contracting.” Although neither

Fernie (the “person”) nor his vehicle (the “property”) were in South Carolina at the time of

contracting, the court, nonetheless, concluded that jurisdiction was proper under subsection

1
Although the Parker case involves a third-party claim, rather than a direct suit by
an insured, there is no suggestion that Merit was subject to personal jurisdiction in South
Carolina by virtue of an indemnity clause.

19
(f) since Merit had contracted to insure Fernie’s automobile while it moved through the

eastern United States, including South Carolina. In other words, the Court, by negative

implication, relied on the “risk” factor for exercise of long-arm jurisdiction.

¶40 In similar fashion, Carter was insured against a “risk located within this state at the

time of contracting.” Rule 4(B)(1)(d), M.R.Civ.P. His policy stated, “This policy applies

only to automobile accidents during the policy period within the United States of America

. . . .” Carter was insured by MFBCIC for the “risk” of being injured by an underinsured

motorist while in the State of Montana, one of the fifty states. Carter satisfied the

constitutional and long-arm requirements for the exercise of jurisdiction of the insurer. I

would reverse the District Court’s grant of summary judgment.

/S/ W. WILLIAM LEAPHART

Justice James C. Nelson joins in the dissent of Justice Leaphart.

/S/ JAMES C. NELSON

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