Harris v. AMERICAN GEN. LIFE INS. CO. OF DEL.

No. 82-219
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982

ALTON P. HARRIS,
Plaintiff and Respondent,

AMERICAN GENERAL LIFE INSURANCE
COMPANY OF DELAWARE,
Defendant and Appellant.

Appeal from: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin
Honorable Joseph B. Gary, Judge presiding.
Counsel of Record:
For Appellant:
Berg, Coil, Stokes & Tollefsen, Bozeman, Montana
Gig A. Tollefsen argued, Bozeman, Montana
For Respondent:
Nash & Nash, Bozeman, Montana
Donald Nash and Mike Nash argued, Bozeman, Montana

Submitted: November 10, 1982

Decided: February 9, 1983
FEB
Filed. 9 - 1983
Mr. Chief Justice Prank I. Haswell delivered the Opinion of
the Court.
Defendant insurance company appeals from a judgment
entered in the District Court of the Eighteenth Judicial
District assessing $30,000 in punitive damages against

defendant. We affirm.
On September 8, 1970, defendant issued a $10,000 life
insurance policy with a $10,000 accidental death benefit
rider to plaintiff's son, Tom Harris. The policy number was
B 697,465. Plaintiff, Tom's father, was the beneficiary.
The accidental death rider provided:
"The Accidental Death Benefit provided by
this supplementary agreement will not be
payable if the Insured's death:

"2. Results directly or indirectly from
any of the following causes:

"(c) Suicide or any attempt thereat,
while sane or insane;

"(f) Voluntary or involuntary

"(i) Asphyxiation from or inhalation of
gas except in the course of the Insured's
occupation, or
"(ii) Taking of any poison, drug, or
sedative . . ."
Tom Harris checked into the Rainbow Motel in Bozeman
about 11:30 p.m. on October 10, 1979. He appeared dazed and
had difficulty writing his name. The next morning (October
11) Harris paid for another day at the check-in desk and
appeared normal to the hotel manager.
Harris was found dead, slumped in the shower of his
room with the shower water pouring on him, at about 8:15
a.m. on G c t o b e r 1 2 , 1979. T h e r e was abour: two inches of

standing water i n t h e room, and w a t e r was r u n n i n g o u t u n d e r

t h e door t o t h e o u t s i d e .

On March 24, 1980, plaintiff filed a claim with

d e f e n d a n t f o r b e n e f i t s under t h e p o l i c y which was r e c e i v e d

by d e f e n d a n t on A p r i l 7 , 1980. The d e a t h c e r t i f i c a t e accom-

panying the policy listed t h e c a u s e of death a s "pending

r e s u l t s of s t u d i e s of s t a t e l a b " b e c a u s e an a u t o p s y had been

performed and no conclusive results received. Defendant

called a local ex-agent, requesting a certificate showing

t h e cause of d e a t h . By t h i s t i m e r e s u l t s had b e e n o b t a i n e d

showing t h e c a u s e o f d e a t h t o b e a n o v e r d o s e o f chloroform

througn i n h a l a t i o n .

On J u n e 11, 1 9 8 0 , d e f e n d a n t s e n t t o plaintiff a check

for the benefits due on the basic life insurance policy

($10,775.28, which included a premium refund, post-mortem

dividend and paid up additions) with the restrictive

e n d o r s e m e n t on t h e back of t h e check s t a t i n g , "Accepted i n

full and final settlement of all claims against American

General Life Insurance Company on Policy B 697465." The

e n d o r s e m e n t a p p e a r s t o be s t a m p e d on t h e back of t h e check

with a blank following the word "Policy" and the policy

number was h a n d w r i t t e n i n t h e b l a n k .

Defendant denied a c c i d e n t a l d e a t h b e n e f i t s because of

t h e p o l i c y l a n g u a g e s e t o u t above and t h e f a c t t h a t c h o l o r o -

f o r m i s b o t h a g a s and a d r u g a n d t h a t t h e fiozeman P o l i c e

Department concluded that the death was an accidental

overdose or suicide.

On A u g u s t 2 2 p l a i n t i f f (through h i s attorney) returned

t h e c h e c k and demanded t h a t d e f e n d a n t remove t h e r e s t r i c t i v e
sndorsement. 'The f o l l o w i n g p a r a g r a p h was included in the

August 22, 1980, l e t t e r :

"We h e r e b y demana t h a t you r e t u r n t o t h i s
o f f i c e t h e f a c e v a l u e of p r o c e e d s of t h e
policy without r e s t r i c t i o n s a s t o r i g h t
of H a r r i s t o s e e k b a l a n c e o f d o u b l e
indemnity b e n e f i t s , together with any
a c c u m u l a t i o n of d i v i d e n d and i n t e r e s t t o
d a t e of your payment."

On S e p t e m b e r 5 , 1 9 8 0 , p l a i n t i f f f i l e d s u i t s e e k i n g t h e

$10,i)1)0 basic benefits, $10,000 accidental death benefits

and $ 5 0 , 0 0 0 i n p u n i t i v e damages. I n a l e t t e r d a t e d S e p t e m b e r

9, defendant mailed t h e same c h e c k back to plaintiff with

t h e r e s t r i c t i v e e n d o r s e m e n t c r o s s e d o u t a n d i n i t i a l e d by a

respresentative of defendant. Plaintiff then cashed the

c h e c k on S e p t e m b e r 1 6 , 1 9 8 0 .

Interrogatories were exchanged and in response to

d e f e n d a n t ' s i n t e r r o g a t o r y r e q u e s t i n g t h e names o f w i t n e s s e s

plaintiff i n t e n d e d t o c a l l a n d w h a t e a c h would t e s t i f y t o ,

plaintiff listed Kent Lewis ( a former a g e n t of defendant)

a n a s t a t e d t h a t Lewis would t e s t i f y r e g a r d i n g t h e d i f f i c u l t y

experienced in obtaining the i n i t i a l tender of money f r o m

defendant. Lewis l a t e r t e s t i f l e d a t t r i a l a b o u t d e f e n d a n t ' s

financial condition.

Eight days p r i o r to trial plaintiff furnished defen-

dant with an exhibit showing defendant's assets and lia-

b i l i t i e s which p l a i n t i f f had n o t l i s t e d a s a n e x h i b i t on t h e

pretrial order. 'The e x h i b i t was l a t e r admitted a t t r i a l ,

o v e r d e f e n d a n t ' s o b j e c t i o n , a s p l a i n t i f f ' s e x h i b i t no. 1 2 .

After a jury trial and i n s t r u c t i o n on p u n i t i v e dam-

a g e s , t h e j u r y r e t u r n e d a v e r d i c t on s p e c i a l i n t e r r o g a t o r i e s

denying the accidental death benefits but finding that

d e f e n d a n t had acted i n bad f a i t h and awarding $30,000 in
purl1 t i v e darnayes. D e f e n d a n t ' s m o t i o n s f o r judgment n o t w i t h -

standing the verdict ( o n e of the g r o u n d s was plaintiff's

f a i l u r e t o p r o v e a c t u a l d a m a g e s ) and f o r a new t r i a l were

d e n i e d i n a memorandum o r d e r w h e r e t h e D i s t r i c t C o u r t f o u n d

plaintiff's a c t u a l damages t o b e (1) t h e i n t e r e s t f r o m t h e

date the c l a i m should have been p a i d and (2) plaintiff's

being forced to pay an attorney to collect the basic

benefits.

D e f e n d a n t a p p e a l s from t h e judgment e n t e r e d and from

t h e d e n i a l o f h i s m o t i o n s f o r a new t r i a l a n d j u d g m e n t n o t -

w i t h s t a n d i n g t h e v e r d i c t and p r e s e n t s t h e s e i s s u e s f o r o u r

consideration:

1. Was the evidence insufficient to entitle the

p l a i n t i f f t o p u n i t i v e damages?

2. Did t h e D i s t r i c t C o u r t p r o p e r l y i n s t r u c t t h e j u r y

on p u n i t i v e damages?

3. Did t h e D i s t r i c t C o u r t i m p r o p e r l y a l l o w t h e a d m i s -

s i o n of e v i d e n c e n o t l i s t e d i n t h e p r e t r i a l o r d e r ?

Regarding t h e f i r s t i s s u e d e f e n d a n t a r g u e s t h a t p l a i n -

tiff failea to prove two things which are required for

p u n i t i v e damages: (1) a v i o l a t i o n o f t h e Montana I n s u r a n c e

Code for which a penalty is prescribed, and (2) actual

damages. Defendant contends that the first element is

r e q u i r e d by t h e f o l l o w i n g l i n e o f c a s e s : W e s t f a l l v . Motors

Insurance Corporation ( 1 9 6 2 ) , 140 Mont. 564, 374 P.2d 96;

State ex rel. L a r s o n v. D i s t r i c t Court ( 1 9 6 7 ) , 1 4 9 Mont.

131, 423 P.2d 598; S t a t e ex r e l . Cashen v. D i s t r i c t Court

( 1 9 7 1 ) , 1 5 7 Mont. 4 0 , 482 P.2d 5 6 7 ; a n d , F i r s t S e c u r i t y Bank

o r Bozeman v. Goddard ( 1 9 7 9 ) , 1 8 1 Mont. 4 0 7 , 5 9 3 P.2d 1040.

D e f e n d a n t c o n c l u d e s t h i s a s p e c t o f i t s a r g u m e n t by c l a i m i n g
t h a t t h e r e were no i n s u r a n c e c o d e v i o l a t i o n s .

With regard to the second element, a c t u a l damages,

defendant argues that there must be a finding of actual

damages b e f o r e p u n i t i v e damages may be a w a r d e d . Defendant

contends there was no evidence of actual damages here

b e c a u s e t h e j u r y d e t e r m i n e d t h a t p l a i n t i f f was n o t e n t i t l e d

t o the accidental death benefits.

Appellant's arguments a r e n o t w e l l taken. F i r s t of

all, plaintiff showed a v i o l a t i o n o f t h e Montana I n s u r a n c e

Code f o r which a p e n a l t y i s p r e s c r i b e d . I t is uncontroverted

h e r e t h a t p l a i n t i f f was c l e a r l y e n t i t l e d t o t h e b a s i c l i f e

benefits of the policy and that defendant contested lia-

b i l i t y under t n e a c c i d e n t a l d e a t h r i d e r . Plaintiff filed a

c l a i m f o r b e n e f i t s on March 24, 1 9 8 0 , a n d i t was n o t u n t i l

J u n e 11, 1 9 8 0 , t h a t defendant tendered t h e check w i t h t h e

r e s t r i c t i v e endorsement a s noted. Even t h o u g h p l a i n t i f f was

a layman, he w i s e l y r e f u s e d t o n e g o t i a t e t h e check and i t

was n o t u n t i l S e p t e m b e r 9 , 1980, t h a t d e f e n d a n t t e n d e r e d a

check that plaintiff could cash without forfeiting his

rights under the accidental death portion of the policy.

The check was introduced into evidence as plaintiff's

e x h i b i t no. 7.

S e c t i o n 33-18-201(13), MCA, of t h e Montana Insurance

Code p r o v i d e s :

"Unfair claim s e t t l e m e n t p r a c t i c e s p r o -
hibited. No p e r s o n may, w i t h s u c h f r e -
quency a s t o i n d i c a t e a g e n e r a l b u s i n e s s
p r a c t i c e , do any of t h e f o l l o w i n g :

" ( 1 3 ) f a i l t o promptly s e t t l e claims, i f
l i a b i l i t y h a s become r e a s o n a b l y c l e a r ,
under one p o r t i o n of t h e i n s u r a n c e p o l i c y
coverage i n order t o i n f l u e n c e s e t t l e -
ments under o t h e r p o r t i o n s of t h e i n s u r -
 ance policy coverage; "
As indicated by the facts above, appellant violated
this statute. The assistant vice-president and manager of
life and disability claims testified regarding defendant's
general business practice under questioning by plaintiff's
attorney as follows:
"Q. When you sent your check, you indi-
cated that you had stamped on the back a
restrictive endorsement that, in effect,
says it is payment in full of all claims
against the company attributable to the
death of Thomas Harris, isn't that
correct? A. As is our custom, Mr. Nash.
. And it is your custom when there's
liability under one portion, liability to
pay, that is liability, for the company
to pay on the one portion and a disputed
liability under the other portion, to
tender the part you agree you have to
pay, in full settlement? A. I'm not
sure I understand what you're driving at.
"Q. That is your general practice, if
there's an agreed portion and a disputed
portion to a claim, you tender the agreed
portion in full settlement? A. Yes."
,That it is the defendant's practice to so endorse settlement
checks is underscored by the fact that an examination of the
check itself reveals that the endorsement has been stamped
thereon with a blank after the word "Policy" with plain-
tiff's number inserted in handwritten form. This leads one
to conclude that other policies are handled in similar

fashion.
Moreover, there is a general penalty prescribed for a
violation of section 33-18-201(13), MCA. Section 33-1-104,
MCA, gives a penalty for each violation of "this code,"
i.e., the Montana Insurance Code, Title 33 (section
33-1-101, MCA) and section 33-18-201(13), MCA, is clearly in

Title 33. This general penalty statute was correctly
a d d r e s s e d a n d a p p l i e a by J u s t i c e S h e e h y i n G o d d a r d , s u p r a .

A p p e l l a n t ' s n e x t c o n t e n t i o n on t h e f i r s t i s s u e is t h a t

t h e e v i d e n c e f a i l e d t o show a c t u a l d a m a g e s . Here a g a i n , w e

disagree. I t is u n d i s p u t e d t h a t t h e $10,775.28 check w i t h

t h e r e s t r i c t i v e e n d o r s e m e n t was d a t e d J u n e 11, 1 9 8 0 ( p l a i n -

t i f f ' s e x h i b i t no. 7). D i v i d e n d s , a premium r e f u n d a n d p a i d

up additions w e r e c a l c u l a t e d t o J u n e 11, 1 9 8 0 , by d e f e n d a n t

and included in t h e check. Defendant returned t h e check

w l t h o u t t h e e n d o r s e m e n t a c c o m p a n y i n g a l e t t e r d a t e d Septem-

ber 9, 1980, w i t h t h e s t u b s t a p l e d t o t h e l e t t e r showing t h e

c a l c u l a t i o n s t o J u n e 11, 1 9 8 0 ( p l a i n t i f f ' s e x h i b i t n o . 11).

Defendant did not issue a new check or recalculate the

amount d u e p l a i n t i f f t o September 9 , a s demanded by p l a i n -

tnff and as d i c t a t e d by sound business practice. Thus,

plaintiff l o s t approximately t h r e e months o f interest that

he would have gained had the insurance company initially

tendered the check without the endorsement. It is also

uncontroverted that plaintiff hired an attorney t o recover

benefits under the policy. P l a i n t i f f 's counsel on ora1

a r g u m e n t s t a t e d t h a t t h e premium r e f u n d shown by e x h i b i t no.

11 s h o r t e d p l a i n t i f f $ 1 4 . 1 1 .

W f i n d t h e r e was s u f f i c i e n t e v i d e n c e o f
e a c t u a l dam-

ages before the Court. To s u p p o r t an award of punitive

damages, t h e a c t u a l damages need o n l y be nominal. Butcher

v. Fetranek ( 1 9 7 9 ) 1 1 8 1 Mont. 358, 5 9 3 P.2d 743 ($925 i n

actual damages--$20,000 in punitive damages upheld on

appeal). I n P a u v e r v . W i l k o s k i e ( 1 9 4 9 ) , 1 2 3 Mont. 228, 211

P . 2d 4 2 0 , t h e j u r y g a v e t h e p l a i n t i f f no a c t u a l damages b u t

awarded $2,500 in punitive d a m a g e s w h i c h was affirmed on

appeal. 'I'he Cour t n o t e d t h a t t h e plaintiff ' s o u t - o f - p o c k e t
e x p e n s e s shown on t h e r e c o r d , i n c l u d i n g a t t o r n e y f e e s , were

s u f f i c i e n t t o u p h o l d t h e p u n i t i v e damage award. See a l s o ,

Lauman v. Lee (1981), Pion t . 626 P.2d 830, 38

St.Rep. 499 ( t h e f a i l u r e of the jury to f i x t h e monetary

value as damages does not preclude an award of punitive

d a m a g e s ) and M i l l e r v . Fox ( 1 9 7 7 ) , 1 7 4 Mont. 5 0 4 , 5 7 1 P.2d

804 ( a n award of p u n i t i v e damages was affirmed where the

t r i a l j u d g e f a i l e d t o p u t a v a l u e on a c t u a l d a m a g e s ) .

The s e c o n d i s s u e r a i s e d by appellant focuses on the

District Court's Instruction 0 1 4 which addresses the

issue of punitive damages. The pertinent part of the

i n s t r u c t i o n a s g i v e n a p p e a r s below:

" P l a i n t i f f h a s a s k e d f o r p u n i t i v e exem-
p l a r y damages which may be a l l o w e d by
you. One who h a s s u s t a i n e d damage by t h e
o p p r e s s i o n , f r a u d , o r m a l i c e of a n o t h e r
may r e c o v e r i n a d d i t i o n t o h i s a c t u a l
damages, damages f o r t h e s a k e o f e x a m p l e
a n d by way o f p u n i s h i n g s u c h o t h e r
party."

Appellant correctly points out that t h e above para-

g r a p h i s n e a r l y i d e n t i c a l t o t h e f i r s t p a r a g r a p h o f Montana

J u r y I n s t r u c t i o n G u i d e No. 35, with t h e exception t h a t t h e

p h r a s e " p r o v i d e d you f i r s t f i n d t h a t t h e p l a i n t i f f h a s s u f -

f e r e d a c t u a l damage," which a p p e a r s a t t h e end o f the f i r s t

s e n t e n c e of MJIG No. 3 5 , was o m i t t e d . Appellant argues t h a t

I n s t r u c t i o n No. 14 i s improper because it does not state

t h a t t h e j u r y must f i n d t h a t d e f e n d a n t v i o l a t e d a p r o v i s i o n

of the Montana Insurance Code for which a penalty is

prescribed b e f o r e a w a r d i n g p u n i t i v e damages and b e c a u s e it

fails to require the jury to find actual damages before

a w a r d i n g p u n i t i v e damages.

A p p e l l a n t ' s c o n t e n t i o n regarding t h e i n s u f f i c i e n c y of

t h e i n s t r u c t i o n o n a c t u a l damages is d i s p o s e d o f t h e by t h e
Fauver case, supra. In Fauver, t h e Court noted that the

t r i a l c o u r t i n s t r u c t i o n s d i d n o t d e f i n e damages o r i n s t r u c t

the jury a s t o t h e e l e m e n t s of damage t o be c o n s i d e r e d by

t h e j u r y o r e x p l a i n a c t u a l damages o r c o m p e n s a t o r y damages

or inform t h e j u r y how s u c h damages d i f f e r from e x e m p l a r y

damages or punitive damages. Yet t h e Court affirmed the

award o f p u n i t i v e d a m a g e s , r e a s o n i n g t h a t t h e r e c o r d showed

t h a t t h e p l a i n t i f f had s u f f e r e d a c t u a l damages. Similarly,

here we have found that plaintiff has suffered actual

damages and a c c o r d i n g l y , w e w i l l n o t r e v e r s e t h e judgment
for the f a i l u r e t o include the phrase " p r o v i d e d you f i r s t

f i n d t h a t t h e p l a i n t i f f h a s s u f f e r e d a c t u a l damage." More-

o v e r , we n o t e t h a t t h e g i v e n i n s t r u c t i o n s t a t e s t h a t p l a i n -

t i f f may r e c o v e r p u n i t i v e damages i n a d d i t i o n t o h i s a c t u a l

damages i f he c a n show o p p r e s s i o n , fraud or malice. The

r e a s o n a b l e c o n c l u s i o n t h e r e f r o m i s t h a t a c t u a l damages m u s t

f i r s t be shown.

W r e a s o n similarly w i t h r e g a r d t o t h e f a i l u r e o f
e the

D i s t r i c t C o u r t t o i n s t r u c t t h e j u r y t h a t p l a i n t i f f m u s t show

a violation of the Montana Insurance Code for which a

p e n a l t y i s p r e s c r i b e d b e f o r e b e i n g a w a r d e d p u n i t i v e damages.

I n I n s t r u c t i o n No. 1 3 t h e c o u r t r e a d t o t h e j u r y t h e s t a t u t e

which d e f e n d a n t v i o l a t e d ( s e c t i o n 33-18-201(13), MCA). As

dlscusseu earlier, the uncontroverted evidence showed a

v i o l a t i o n of this statute. W f a i l t o s e e how t h e f a i l u r e
e

t o i n s t r u c t a s p l a i n t i f f contends w a r r a n t s a r e v e r s a l of t h e

judgment.

The t h i r d i s s u e r e l a t e s t o t h e a u m i s s i o n o f evidence

not listed in the pretrial order. Appellant here argues

that the plaintiff's exhibit no. 12, indicating the
Jetendant's assets and liabilities, should not have been

admitted because it was not listed in the pretrial order.
Also, plaintiff did not indicate in answers to interroga-
tories that Lewis, a former agent of defendant, would
tsstify about defendant's financial condition.
Appellant was furnished with the exhibit eight days
prlor to trial and eight days is a sufficient time to

prepare rebuttal evidence for the exhibit. Moreover, from
tne time defendant was served witn plaintiff's complaint,
defendant was aware of the fact that plaintiff was seeking
punitive damages. It requires no recitation of authority
that a jury nay take into account a defendant's wealth when
punitive damages are sought.
Defendant did not request a continuance to prepare for

the exhibit, submitted its case to the jury, and after an
adverse verdict seeks a retrial on the punitive damages
Issue. Defendant has had its day in court. We fail to see
how defendant's rights were prejudiced by the admission of

the exhibit or the testimony regarding defendant's financial
condition.
Affirmed.

.
, - 7 -

Chief Justice

We concur:
/1
P r Justice prank
l. 8. Morrison, Jr., specially concurring.
I concur in the result but dissent from that portion of

the opinion which relies upon a violation of the insurance
code as the basis for an award of punitive damages.
The jury in this case was permitted to award punitive
damages by making a finding that defendant insurance company
failed to negotiate in good faith. It is true that the jury
was instructed regardinq the provisions of section
33-18-201(13), MCA, and that this statute could have formed
the basis for their finding in favor of plaintiff and their
resulting award of $30,000 in punitive damages. However, the
jury was not instructed that a violation of the statute was
required for their verdict and in fact they were given the
option of simply returning a verdict in favor of plaintiff
based upon the "bad faith" case law which has developed.
The majority opinion fails to deal with the question of
whether a plaintiff can recover punitive damages in Montana
in an action premised upon "bad faith" negotiation without a
violation of the insurance code. Instead the majority relies
upon the fact that, in this case, there was a violation of
the insurance code as a matter of law and, therefore, any
error in allowing the jury to return a verdict for plaintiff
absent a finding of violation of the insurance code, would be
harmless.
I do not agree that there was a violation of the
insurance code as a matter of law. The question of whether
this insurance company failed to promptly settle claims as a
general business practice was a question for the jury.
Prior to our decision in Lipinski v. Flathead Title Co.
39 St.Rep. 2283 a plaintiff's riqht to recover punitive
damages for bad faith arising out of an insurance contract
was not clearly recognized in absence of a statutory
violation. However, in Lipinski we said:
"Should there be any doubt, we now expressly hold
that insurance companies have a duty to act in good
faith with their insureds, and that this duty
exists independent of the insurance contract and
independent of statute."
An award of punitive damages without a statutory violation
was approved.
In this case the plaintiff presented the evidence from
which a jury could find that defendant insurance company
engaged in bad faith in its negotiation of this claim. The
claim is grounded in tort. Therefore, this jury was entitled
to make an award of punitive damages if it found defendant's
conduct was sufficiently culpable to satisfy the statutory
requirements of oppression and/or implied malice.
I concur in the affirmance.
Mr. Justice Fred J. Weber dissents as follows:
I respectfully dissent from the majority opinion. My
basic disagreement relates to the majority's interpretation
of section 33-18-201(13), MCA. In substance I would hold
that section does not give rise to an action in tort in the
event of a failure to promptly settle a claim with an
insured. Reference is made to my dissent in Klaudt v.

Flink, P.2d- I - St.Rep. , and which case has
Supreme Court No. 82-247.
Mr. J u s t i c e D a n i e l J . S h e a , c o n c u r r i n g :

I would a f f i r m t h e j u d g m e n t , b u t I c a n n o t do s o on t h e

ground r e l i e d on by t h e m a j o r i t y . S e c t i o n 33-18-201 ( 1 3 ) ,

MCA, was n o t i n t e n d e d t o c r e a t e a s e p a r a t e c a u s e o f a c t i o n

i n f a v o r o f t h e i n s u r e d w h e r e h i s i n s u r a n c e company h a s n o t

d e a l t w i t h him i n good f a i t h . J u s t l i k e our recent d e c i s i o n

i n Klaudt v. F l i n k ( 1 9 8 3 ) , Mont . 1 - P.2d I

- St.Rep. (No. 82-247, d e c i d e d J a n u a r y 28, 1 9 8 3 ) , t h e

m a j o r i t y h a s c r e a t e d a s t a t u t o r y c a u s e of a c t i o n o u t of t h i n

air.

The v e r d i c t a n d j u d g m e n t c a n , h o w e v e r , be a f f i r m e d i n

any e v e n t b e c a u s e t h e r e is ample e v i d e n c e t h a t t h e i n s u r a n c e

company was n o t a c t i n g i n good f a i t h w i t h i t s i n s u r e d . As

i n d i c a t e d by J u s t i c e M o r r i s o n , w e h e l d i n L i p i n s k i v . Flat-

head C o u n t y T i t l e Co. (1982), Plont. -1 - P.2d
, 39 S t . R e p . 2283, a p u n i t i v e damage award i n f a v o r o f

t h e i n s u r e d a g a i n s t a n i n s u r a n c e company " e x i s t s i n d e p e n d e n t

of t h e i n s u r a n c e c o n t r a c t and i n d e p e n d e n t o f s t a t u t e . " Here

t h e i n s u r a n c e company had a c l e a r d u t y t o i m m e d i a t e l y s e t t l e

with the insured that part of the c l a i m w h i c h was u n d i s -

puted. A jury could, under these facts, conclude t h a t its

f a i l u r e t o d o s o was i n bad f a i t h .