Ayotte v. American Economy Insurance Company, No. 2:2009cv00057 - Document 31 (D. Mont. 2010)
Court Description: ORDER ADOPTING FINDINGS AND RECOMMENDATIONS for 3 Motion for Summary Judgment filed by American Economy Insurance Company, 21 Findings and Recommendations. ORDERS Findings and Recommendations be adopted in their entirety. IT IS FURTHER ORDERED that AEIC's Mot for Sum Jgm (#3) is DENIED except that Ayotte's claim for declaratory relief related to AEIC's conduct other than its failure to make Ridley payment is DISMISSED WITHOUT PREJUDICE.AEIC shall answer the Complaint within 14 days of the entry of this Order. Signed by Judge Richard F. Cebull on 3/5/2010. (ELL, )
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Ayotte v. American Economy Insurance Company Doc. 31 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BILLINGS DIVISION 2010 fiHH SCOTT AYOTE, ) ) ) ) Plaintiff, VS. FilED 5 PrJ 12 ] L{ BY __ uEP1JTY eLE RK ) ORDER ADOPTING FINDINGS AMERICAN ECONOMY INSURANCE, ) AND RECOMMENDATIONS OF COMPANY, ) U.S. MAGISTRATE JUDGE ) ) Defendant. ---------------------------) United States Magistrate Judge Carolyn Ostby has entered Findings and Recommendation (Doc. 21) with respect to Defendant's Motion for Summary Judgment (Doc. 3). Magistrate Judge Ostby recommends that the motion be denied, except with respect to Ayotte's claims for declaratory relief related to ABIC's conduct other than its failure to make Ridley paymentsl, which she recommends be dismissed without prejudice. Upon service of a magistrate judge's findings and recommendation, a party has 14 days to file written objections. 28 U.S.C. § 636(b )(1). Here, AEIC filed timely objections (Doc. 22), to which Ayotte responded timely (Doc. 24). Since (1) neither lRidley v. Guar. Natl. Ins. Co., 951 P.2d 987,992 (Mont. 1997) (holding that when liability is reasonably clear, Montana's UTPA requires insurer to pay an injured third party's medical expenses before final settlement ofthe claim). 1 Dockets.Justia.com Rule 72 Fed.R.Civ.P. nor 28 U.S.C. § 636 authorize a reply in support of an objection to findings and recommendation and (2) by this stage of the proceeding the objecting party has had ample opportunity to make its case, this Court does not consider reply briefs in support of objections and has not considered ABIC's reply (Doc. 30). AEIC's objections require this Court to make a de novo determination of those portions of the Findings and Recommendations to which objection is made. 28 U.S.C. § 636(b)(l). ABIC's first objection is that in the context of a Ridley advance pay claim, the insurer's burden is different than in the ordinary summary judgment case and that Judge Ostby mistakenly interpreted the burden attributed to AEIC. Specifically, ABIC argues that Judge Ostby erroneously required AEIC to present summaryjudgment-type evidence demonstrating that liability was reasonably clear, when a prior Order of this Court requires only that "[t]o demonstrate their entitlement to summary judgment, [an insurer does] not need to establish the absence of disputed facts; [it needs] to demonstrate that the facts are sufficiently disputed to preclude a finding, as a matter of law, that liability was reasonably clear," citing Magistrate Judge Anderson's Findings and Recommendations in Pruitt v. St. Paul Fire and Marine Ins. Co. & ContI. Cas. Co., CV-04-90-BU-RWA, at 3, subsequently adopted in full by this Court. 2 Regardless, Pruitt requires that AEIC prove the facts are sufficiently disputed to preclude a finding that liability was reasonably clear, and on summary judgment, the evidence must be viewed in the light most favorable to the non-moving party. In light of this axiomatic principle of law, Judge Ostby concluded that AEIC's meager submissions-the complaint and answer in the underlying complaint, a third-party complaint, letters between counsel, and incomplete discovery responses-were insufficient to prove that liability for Ayotte's injuries is not reasonably clear. This case is in the very early stages, no answer has been filed and discovery has not yet commenced. This fact distinguishes this case from Pruitt and Giamba, which were both decided on cross-motions for summary judgment. AEIC has jumped the gun. If an insurer could prove that liability was reasonably clear with the simple fact of a pending lawsuit, Ridley would be largely meaningless. AEIC next objects that Judge Ostby erred in holding that Ayotte's declaratory judgment request for advance payment of medical expenses under Ridley presented a justiciable controversy. AEIC, however, does develop this argument. In any event, the nature of Ridley payments is that they must be paid before a final determination of the underlying action. AEIC refused to make those payments and Ayotte filed this lawsuit. Finally, AEIC objects to Magistrate Judge Ostby's conclusion that Ayotte's 3 common law bad faith claim has accrued, is not premature, and is now justiciable. In support of this argument, AEIC relies on policy arguments and comparisons to statutory bad faith claims. These arguments, however, do not change the fact that AEIC has presented no Montana authority holding that a claimant in a third-party common law bad faith action, outside the worker's compensation arena, must await final resolution of the underlying claim before bringing the action. Magistrate Judge Ostby's conclusion that the bad faith claim is justiciable is not erroneous. After a de novo review, the Court determines the Findings and Recommendation of Magistrate Judge Ostby are well grounded in law and fact and HEREBY ORDERS they be adopted in their entirety. Accordingly, IT IS FURTHER ORDERED that AEIC's Motion for Summary Judgment (Doc. 3) is DENIED except that Ayotte'S claim for declaratory relief related to AEIC's conduct other than its failure to make Ridley payments is DISMISSED WITHOUT PREJUDICE. AEIC shall answer the Complaint within 14 days of the entry of this Order. DATED this of March 2010. CHARD F. CEBULL UNITED STATES DISTRICT JUDGE 4
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