Sell v. American Family Mutual Insurance Company

Filing 80

ORDER denying 62 Plaintiff's Motion in Limine re Ridley. Signed by Judge Richard F. Cebull on 7/13/2011. (EMA)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
MARLYS SELL,

)
)
Plaintiff,
)
)
vs.
)
)
)
AMERICAN FAMILY MUTUAL )
INSURANCE COMPANY,
)
)
Defendants.
)
______________________________ )

CV-09-135-BLG-RFC

ORDER

Plaintiff Marlys Sell alleges claims for violations of Montana’s Unfair
Trade Practices Act (“UTPA”), Mont. Code Ann. §§ 33-18-201 & 242, against
Defendant American Family Mutual Insurance Company. The claims arise out of
American Family’s handling of an automobile insurance claim Sell filed against
Matthew D’Hont, an American Family policyholder. This Court has already ruled
that (1) American Family violated §§ 33-18-201(6) & (13) of the UTPA and

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Ridley v. Guaranty National Ins. Co., 951 P.2d 987 (Mont. 1997)1 by refusing to
pay Sell’s medical bills without a final settlement and release and (2) American
Family is bound by the state court judgment as to the amount of damages in excess
of D’Hont’s insurance policy limits. Docs. 55 & 57. The case is set for trial on
August 1, 2011.
Pending before the Court is Sell’s Motion in Limine (doc. 62), through
which she seeks an Order preventing American family from (1) presenting any
evidence relating to the Ridley v. Guarantee National standard, (2) presenting
evidence that its insured, Matthew D’Hont was not damaged by American
Family’s handling of Sell’s claim, and (3) offering the testimony of its expert
witnesses Gary Zadick and J. Kenneth Lind. American Family opposes the
motion.
Sell first argues that since this Court has ruled as a matter of law that
American Family violated Ridley when it refused to pay Sell’s medical bills
without a release, evidence relating to American Family’s Ridley violations is
irrelevant. Sell further argues it is well-established that ignorance of the law is not
a defense and that American Family should therefore be precluded from defending
its handling of her claim by arguing it was unaware of Ridley.
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Holding that §§ 33-18-201(6) & (13) of the UTPA require an insurer to pay an injured
third-party's medical expenses prior to final settlement if liability for those expenses has become
“reasonably clear.”
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American Family responds that Sell’s motion is premature because Sell has
not yet proved any damages occasioned by a Ridley violation, and that the Court
should be able to determine what evidence is relevant to counteract that evidence
during trial. American Family makes clear that it will govern its case consistent
with the Court’s prior rulings and will not try to suggest that the jury should
review the Court’s prior rulings. Finally, American Family asserts that it expects
Sell to put on evidence of malice in order to recover punitive damages and that
evidence of its state of mind, including whether it was aware of the Ridley rule, is
relevant to refute evidence of malice, citing Sunburst School Dist. No. 2 v Texaco,
Inc., 165 P.3d 1079 (Mont. 2007).
American Family is correct that under Sunburst School Dist, evidence it was
unaware of Ridley could be relevant to its defense of a punitive damages claim.
Moreover, the Court will hold American Family to its assertion that it will not try
to reargue to the jury the aspects of the case that have already been decided and
that it will govern its case consistent with the law of this case. Accordingly, this
aspect of Sell’s motion is denied.
Second, Sell argues American Family should be precluded in limine from
arguing that D’Hont, and therefore Sell, suffered no damages from its handling of
the auto insurance claim. In support, Sell cites this Court’s holding that the
stipulated judgment entered against D’Hont in the underlying personal injury
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lawsuit caused him sufficient damages to confer standing to bring a UTPA
claim–subsequently assigned to Sell–against American Family. Sell claims it is
the law of this case that D’Hont was damaged and that American Family should be
precluded from arguing otherwise.
American Family responds that the ruling that Sell–through D’Hont–had
standing because the entry of a judgment against him constitutes damages, was not
a ruling that American Family caused him damages and that denying it the ability
to put on evidence counteracting damage claims would deny it due process.
In the Court’s view that the stipulated judgment conferred standing to bring
a UTPA claim says nothing about the amount of damages D’Hont suffered from
American Family’s handling of the claim. As the Court understands the case, the
primary purpose of this trial is to determine the amount of damages suffered by
Sell–either in her own right or through D’Hont–and it would be unfair to prohibit
American Family from offering contrary evidence of damages.
The second portion of Sell’s motion must also be denied.
Finally, Sell also moves to preclude the testimony of two Montana lawyers
American Family has retained to provide expert testimony. Specifically, Gary
Zadick has been retained to provide expert testimony about Ridley and American
Family’s knowledge of Ridley and Kenneth Lind will provide expert testimony
about Ridley, American Family’s actions relating to Ridley, and that D’Hont
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suffered no damages as a result of American Family’s handling of the claim. Sell
argues that since the Court has already found a Ridley violation as a matter of law,
expert testimony regarding American Family’s compliance with Ridley is
irrelevant. Moreover, since ignorance of the law is no excuse, Sell argues expert
testimony concerning American Family’s knowledge of Ridley is also irrelevant.
Finally, Sell again argues that Lind should be precluded from testifying that
D’Hont suffered no damages from American Family’s handling of the claim due to
this Court’s ruling that the stipulated judgment caused sufficient damage to afford
him standing to bring the UTPA claim that was subsequently assigned to Sell.
As stated above, American Family’s knowledge of and compliance with
Ridley could be relevant to counteract evidence of malice. Further, American
Family will not be precluded in limine from counteracting D’Hont’s claimed
damages. Accordingly, this portion of Sell’s motion must also be denied.
While Sell may have valid arguments as to some of American Family’s
evidence and expert testimony, they are better addressed in the context of the trial.
IT IS HEREBY ORDERED that Sell’s Motion In Limine (doc. 62) is DENIED.
Dated this 13th day of July, 2011.
/s/ Richard F. Cebull_________
Richard F. Cebull
United States District Judge

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