Peterson v. State Farm Mutual Automobile Insurance Company

Filing 23

ORDER denying 4 Motion for Partial Summary Judgment; denying as moot 10 Motion to deny or defer ruling on 4 . Signed by Judge Charles C. Lovell on 5/15/2018. (MKB)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION

THEODORE PETERSON,

CV 17–105–H–CCL

Plaintiff,
ORDER

vs.
STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY,
Defendant.

Before the Court is Plaintiff Theodore Peterson’s Motion for Partial
Summary Judgment and Defendant State Farm’s Motion to Deny or Defer
Consideration of the Motion for Partial Summary Judgment. The Complaint was
filed on November 11, 2017. (ECF No. 1.) The Answer was filed on
December 21, 2017. (ECF No. 2.) This case is currently set down for a
preliminary pretrial conference on May 22, 2018.
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This case is a diversity jurisdiction case presenting claims of breach of
insurance contract and breach of the Montana Unfair Trade Practices Act (UTPA).
The case arises out of Peterson’s motorcycle accident in July 2013 in Bozeman,
Montana. State Farm insured both Peterson and the at-fault driver. Peterson
claims in his motion that the facts are not in dispute and they demonstrate that
State Farm has not conducted a reasonable investigation as to his payment
demands, has failed to effectuate a prompt, fair, and equitable settlement when
liability is reasonably clear, and has misrepresented insurance policy provisions.
Peterson informs the Court that State Farm has paid him the $100,000
policy limit for the at-fault driver and has also paid him $82,205 in additional
medical expenses. Peterson anticipates $80,000 in additional medical expenses.
Peterson has demanded the remainder of the $500,000 in stacked Underinsured
Motorist coverage (UIM) and left the offer open for 30 days. After requesting two
extensions in September and October, 2017, State Farm hired defense counsel and
demanded that Peterson submit to a medical exam. Peterson contends that State
Farm has failed to review his medical records, has denied certain of his expenses
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related to medical care (travel, hotel, rental car), and has refused to offer to settle
his claim, forcing Peterson to file this litigation in November 2017.
Legal Standard
To succeed on a motion for summary judgment, the movant must “show that
there is no genuine dispute as to any material fact” and that the movant “is entitled
to judgment as a matter of law.” Fed.R.Civ. P. 56(a). It is the movant’s burden to
demonstrate the legal basis for the motion and to identify evidence that shows an
absence of genuine dispute as to any material fact. See Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). The burden then shifts to the opposing party to
establish that there is a genuine dispute of material fact. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986). Conclusory
statements will not meet this burden, and if the opposing party cannot demonstrate
that a triable issue of fact exists, then the movant is entitled to summary judgment.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The Court must
view the evidence in the light most favorable to the non-moving party. Id. at 255.
Under Montana law, the UTPA prohibits insurers from misrepresenting
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facts or insurance policy provisions, refusing to pay claims without conducting a
reasonable investigation, and neglecting to attempt in good faith to settle when
liability is reasonable clear. MCA § 33-18-201(1), (4), (6). “Under Montana law,
‘liability is ‘reasonably clear’ when a reasonable person, with knowledge of
relevant facts and law, could conclude, for good reason, that the defendant is liable
to the plaintiff.’” Peterson v. St. Paul Fire and Marine Ins. Co., 239 P.3d 904
(Mont. 2010). However, “[a] court may determine reasonableness at the summary
judgment stage only when no material facts are disputed and the underlying basis
of law is grounded in a legal conclusion.” Jarvis v. Allstate Ins. Co., CV 11-132BLG-RFC-CSO (D. Mont. Dec. 11, 2012), citing Burton v. Mountain West Farm
Bureau Ins. Co., 214 F.R.D. 598, 602 (D. Mont. 2003). A reasonableness
determination can be made at the summary judgment stage when no material facts
are in dispute. Id.
Discussion
Defendant State Farm claims that it is still evaluating Peterson’s $500,000
UIM policy limit demand, which was submitted several months before this
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litigation was initiated. Peterson’s treating surgeon has opined that Peterson may
have to undergo future knee surgery. State Farm intends to have an Independent
Medical Evaluation conducted to determine whether all of Peterson’s medical
treatment is causally related to the accident and is medically necessary. (State
Farm asserts that Peterson refused to undergo an IME prior to the filing of the
Complaint.) State Farm will also seek an opinion on prognosis, future treatment
needs, and likely costs of future treatment. Finally, State Farm will seek an
opinion as to what, if any, physical or occupational limitations of Mr. Peterson’s
are causally related to the July 2013 accident. State Farm anticipates deposing
Peterson’s medical providers and conducting written discovery.
In defending its current position, State Farm asserts that there are
discrepancies in Peterson’s medical records and in his counsel’s communications
as to whether Peterson has had a total knee replacement or, instead, has had
arthroscopic surgery. State Farm disputes the accuracy of the amount of
compensatory damages claimed by Peterson’s under his UIM coverage. State
Farm is uncertain that all treatment providers have been disclosed at this point;
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furthermore, State Farm has learned that Peterson had arthroscopic surgery and
physical therapy on the same knee during the year prior to the accident (either in
2011 or 2012), and that his knee pained him continuously for two years thereafter.
State Farm has learned that the pre-accident arthroscopic surgery may have led to
a second surgery in 2017. Moreover, State Farm has learned that Peterson had two
accidents that injured his knee in May and July 2017. Other evidence obtained by
State Farm indicates that Peterson told a physical therapist in 2017 that “his knee
is doing so well that he forgets he even had surgery.” (ECF No. 11-1, Aff. Alison
Mayle,¶ 14 at 9.)
State Farm defends its inability to complete its evaluation by arguing that
Peterson has not been entirely cooperative. State Farm has sent numerous
Authorizations for Release of Information (ARI) to Peterson, and the last two
ARIs sent to Peterson in 2015 were not returned to State Farm. One of Peterson’s
treatment providers allegedly refuses to answer any questions unless he is
deposed.
In sum, State Farm disputes that the accident caused Peterson to need a total
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knee replacement or that the value of his UIM claim is $600,000. Nevertheless,
State Farm has paid approximately $190,000 to date (prior to filing of the
Complaint) and another $15,235.50 afterward. State Farm believes that after
further discovery it can and will complete its evaluation of Peterson’s claim. (ECF
No. 11-2, Aff. Guy Rogers, ¶ 7 at 5.)
It is apparent to the Court that Plaintiff’s motion is premature and that
because many, if not most, material facts are either unknown or in dispute, the
motion should be denied with leave to refile after the parties have had the
opportunity to conduct discovery in this case.
The Court notes that State Farm has asserted in its Answer that venue is
proper in the Butte Division. Pursuant to Fed. R. Civ. P. 12(i), the Court must
hear and decide such a motion (“whether made in a pleading or by motion”) prior
to trial. Because the parties require a pretrial schedule before they can begin
discovery, the Court will set a schedule first. Accordingly,
IT IS HEREBY ORDERED that Peterson’s motion for partial summary
judgment is DENIED with leave to refile after discovery is completed.
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IT IS FURTHER ORDERED that Defendant’s motion to deny Peterson’s
motion for partial summary judgment or defer consideration is DENIED as moot.
IT IS FURTHER ORDERED that the Court will hear the venue argument
asserted in State Farm’s Answer at the conclusion of the preliminary pretrial
conference on May 22, 2018.
Dated this 15th day of May, 2018.

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