Moore v. The Travelers Indemnity Company et al

Filing 141

ORDER re ADOPTING IN FULL 97 FINDINGS AND RECOMMENDATIONS re 48 Cross MOTION for Summary Judgment Against Defendant Allstate Fire and Casualty Insurance Company filed by Dale D. Moore, 30 MOTION for Summary Judgment filed by Allstate Fire and Casualty Ins, 48 Cross MOTION for Summary Judgment Against Defendant Allstate Fire and Casualty Insurance Company filed by Dale D. Moore, 30 MOTION for Summary Judgment filed by Allstate Fire and Casua lty Insurance Company, 44 Cross MOTION for Summary Judgment Against Defendant Allstate Fire and Casualty Insurance Company filed by Dale D. Moore, 49 MOTION for Summary Judgment to Dismiss Certain Defenses filed by Dale D. Moor e, 34 MOTION for Partial Summary Judgment Regarding Loss of Consortium Claim filed by Allstate Fire and Casualty Insurance Company. The Final Pretrial Conference and Jury Trial are VACATED and RESET as follows: Proposed Pretrial Order due by 10/26/2016. Final Pretrial Conference RESET for 11/2/2016 at 2:30 PM in the Russell Smith Courthouse, Missoula, MT before Judge Dana L. Christensen. Jury Trial RESET for 11/14/2016 at 9:00 AM in the Russell Smith Courthouse, Missoula, MT before Judge Dana L. Christensen. Signed by Chief Judge Dana L. Christensen on 10/5/2016. (DLE)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
DALE D. MOORE, and JEANIE
NELSON, husband and wife,

CV 15–71–M–DLC–JCL

Plaintiffs,

ORDER

vs.
THE TRAVELERS HOME AND
MARINE INSURANCE COMPANY,
and ALLSTATE FIRE AND
CASUALTY INSURANCE
COMPANY,
Defendants.
United States Magistrate Judge Jeremiah C. Lynch entered his Findings and
Recommendations on September 15, 2016, recommending: (1) granting Plaintiffs
Dale Moore (“Moore”) and Jeanie Nelson’s (collectively “Plaintiffs”) crossmotion for summary judgment for coverage under Defendant Allstate Fire and
Casualty Insurance Company’s (“Allstate”) insurance policy (the “Policy”); (2)
granting Plaintiffs’ motion for summary judgment with respect to Allstate’s
affirmative defenses; (3) denying as moot Plaintiffs’ motion for summary
judgment against Defendant The Travelers Home and Marine Insurance Company

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(“Travelers”);1 and (4) denying Allstate’s motions for summary judgment.
Allstate timely filed objections and is therefore entitled to de novo review of
those Findings and Recommendations to which it specifically objects. 28 U.S.C.
§ 636(b)(1)(C). This Court reviews for clear error those findings and
recommendations to which no party objects. See McDonnell Douglas Corp. v.
Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313 (9th Cir. 1981); Thomas v.
Arn, 474 U.S. 140, 149 (1985). “Clear error exists if the Court is left with a
definite and firm conviction that a mistake has been committed.” United States v.
Syrax, 235 F.3d 422, 427 (9th Cir. 2000). The parties are familiar with the facts of
this case and they will not be repeated here.
I. Objections to Factual Findings
Allstate raises numerous objections to Judge Lynch’s factual findings and
legal recommendations. Specifically, Allstate asserts eight objections primarily
focusing on Judge Lynch’s interpretation of the Policy. Because the interpretation
of an insurance contract is a question of law in Montana, Modroo v. Nationwide
Mutual Fire Ins. Co., 191 P.3d 389, 395 (Mont. 2008), the Court will address
these “factual” objections in the context of Judge Lynch’s legal recommendations.

1

Travelers was dismissed from this case on September 20, 2016. (Doc. 100.)

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II. Objections to Legal Recommendations
Allstate objects to Judge Lynch’s recommendations to deny its motions for
summary judgment and grant Plaintiffs’ motions for summary judgment. The
Court will first discuss the recommendation to deny Allstate’s motions for
summary judgment.
A. Allstate’s Motions For Summary Judgment
Allstate raises five objections to the Magistrate Judge’s recommendation to
deny its motions for summary judgment. Almost all of these objections focus on
Judge Lynch’s conclusion that the term “policyholder” is an ambiguous term
because it is not defined in the policy. The Court will address each of these
objections in turn.
1. Plaintiffs Alleged Judicial Admission
Allstate contends that it is undisputed that the Policy Declarations identify
Shirley Moore as the policyholder. As evidence of this non-dispute, Allstate cites
to Plaintiffs’ admissions where they allegedly admitted that the Policy
Declarations identified Shirley Moore as the policyholder. Allstate contends that
this is a judicial admission and dispositively undermines Judge Lynch’s finding
that the term “policyholder” is an ambiguous term because it is not defined in the
policy. The Court disagrees.

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First, reviewing Plaintiffs’ Statement of Disputed Facts, it appears that
Plaintiffs’ admission was limited. (See Doc. 43 at 2 (“Undisputed but vague as to
inference. The ‘policyholder’ name is Shirley Moore, however the Policy was
mailed (issued) to Mr. Moore’s [home] address.”).) Second, and most importantly,
in reviewing the citations to the record in Plaintiffs’ Statement of Disputed Facts,
it is not clear to the Court if the parties were discussing the letter preceding the
Policy Declarations, or the Declarations itself. Specifically, the admitted
statement references the “policyholder” in quotes. (Id.) However, this word does
not appear in the Declarations (See Doc. 42-1 at 4) and, instead, is only found in a
letter preceding the Declarations (Id. at 2). Thus, it is not clear to the Court which
document the parties were discussing. As discussed infra, because this letter is
not part of the Policy or the Declarations, it is not controlling on the issue of
coverage. Allstate’s first objection is thus overruled.
2. The Letter Preceding the Declarations
Next, Allstate asserts that the Findings and Recommendations’ conclusion
that the term “policyholder” is an ambiguous term is incorrect because a letter
accompanying the Policy and Declarations defined the policyholder as Shirley
Moore. This letter notified the recipient that the policy had been amended and
specified the amendments that took place. Allstate’s assertion then relies on
language in the upper right hand corner of the letter which states “Policyholder(s)
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Shirley Moore.” (Doc. 42-1 at 2.) Allstate argues that because this letter arguably
identifies the policyholder as Shirley Moore, Judge Lynch’s conclusion that the
term “policyholder” is an ambiguous term within the policy, and all other “factual
findings” supported by this preliminary finding, are incorrect and should be
rejected.2 The Court disagrees.
Contrary to Allstate’s argument, this letter is not part of the Policy and
thus has no bearing on the interpretation of the word “policyholder” within the
Policy. This finding is supported by both Montana case law and the terms of the
Policy. First, under Montana law, “it is well settled that the insurance contract
consists of the policy, declarations, and any riders, endorsements or application(s)
that are designated as part of the policy.” Am. States Ins. Co. v. Flathead
Janitorial & Rug Services, Inc., 355 P.3d 735, 740 (Mont. 2015) (citing Mont.
Code. Ann. § 33–15–316). Here, the letter was not part of the insurance contract
because it was not the Policy or its Declarations, or any other rider, endorsement
or application designated as part of the Policy. See Am. States Ins. Co., 355 P.3d

2

As discussed, Allstate contends that Judge Lynch erred by finding: (1) “that a reasonable
person attempting to identify the ‘policyholder’ on the declarations page would find only the
‘named insured’ and ‘listed drivers,’ not a ‘policyholder’”; (2) “that because the term
‘policyholder’ is not identified in the Allstate Policy declarations, that the definitions of ‘you’
and ‘policyholder’ are subject to differing reasonable interpretations”; (3) “that a reasonable
interpretation of the Policy through the eyes of a consumer with average intelligence is that
‘policyholder’ includes the ‘named insured,’ the ‘listed drivers,’ or both”; and (4) “that the Policy
is subject to the reasonable expectations doctrine due to lack of clarity in reference to the
‘policyholder.’” (Doc. 97 at 15–18.)

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at 740 (finding that letter preceding the policy was not part of the policy).
Second, and dispositive of this issue, the Policy Declarations listed all
documents encompassing the insurance Policy, and the letter was not included in
that list. (Doc. 42-1 at 6 (providing that the “automobile policy consists of this
Policy Declarations and the documents in the following list[:]” (1) “Allstate Fire
and Casualty Insurance Company Auto Policy - AFA23”; and (2) “Claim
Satisfaction Guarantee Amendatory Endorsement - AP4783-1”).) Therefore,
because the letter accompanying the Amended Declarations is not designated as
part of the Policy itself, it may not be used when interpreting the meaning of
“policyholder.” Allstate’s second objection is overruled.
3. Ambiguity of the Policy Terms
Allstate’s third objection centers on the alleged common sense meaning of
“named insured” and “policyholder.” Essentially, Allstate argues that these terms
have a common sense meaning and Judge Lynch impermissibly read ambiguity
into the Policy where none existed. Again, the Court disagrees.
Judge Lynch throughly analyzed the Policy for language explaining
coverage and found that the Policy provided coverage for an “Insured Person(s).”
(Doc. 97 at 15 (citing Doc. 42-1 at 18, 22).) He then looked to the definition of
“Insured Person” and found that it meant “You and any resident relative.” (Doc.
97 at 15 (citing Doc. 42-1 at 18).) The Policy furthered defined “You” as “the
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policyholder named on the Policy Declarations.” (Doc. 42-1 at 12) However, the
Policy Declarations did not name the policyholder. Instead, it only identified
“Shirley Moore” under the caption “Named Insured(s).” (Doc. 42-1 at 4.)
Curiously, it also named Moore as one of the “Listed drivers.” ( Doc. 42-1 at 5.)
Judge Lynch then determined that because the Policy Declarations failed to
identify the policyholder, and, instead, only discussed the “Named insured(s)” and
“Listed drivers,” the term policyholder was ambiguous because it was not clear
whether “You,” i.e., the policyholder, referred to “Named Insured(s),” the “Listed
drivers,” or both. (Doc. 97 at 16.)
Here, Allstate’s objection ignores Judge Lynch’s analysis and, instead,
attempts to interject everyday meaning to a term that was to be defined within the
Policy Declarations. Because the Policy specifically states that “policyholder”
was to be named under the Policy Declarations and it was not, the Court overrules
Allstate’s objection to Judge Lynch’s conclusion that the term policyholder was
ambiguous.3
4. Non-Owned Auto Exclusion
Under its fourth objection, Allstate contends that even if Moore was a

3

Likewise, the Court overrules Allstate’s first five “factual” objections. (Doc. 102 at
5–10.) These hinge on the argument that the term “policyholder” was unambiguous and cannot
be supported by the Court’s finding to the contrary. (See Doc. 97 at 15–18.)

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policyholder, the Policy excludes coverage under the “non-owned auto exclusion.”
(Doc. 102 at 19 (citing Doc. 42-1 at 22).) However, Allstate’s objection is the
exact argument put before Judge Lynch and subsequently rejected. Judge Lynch
determined that this “exclusion” was merely a limitation on someone who was not
an “insured person” under the Policy’s “General Statement of Coverage” (Doc. 421 at 18), but who still sought an alternative avenue for coverage because he/she
was operating an “insured auto.” (Doc. 97 at 19–20.)
Allstate’s objection fails to cite any specific reasons why Judge Lynch’s
interpretation was erroneous and, instead, reargues the identical arguments put
forth in its briefing. Accordingly, the Court will review Judge Lynch’s conclusion
concerning the non-owned auto exclusion for clear error, and finding none, will
adopt this recommendation and overrule Allstate’s objection. See Montana
Shooting Sports Ass'n v. Holder, 2010 WL 4102940, at *2 (D. Mont. Oct. 18,
2010), aff'd, 727 F.3d 975 (9th Cir. 2013) (stating that clear error review is
appropriate when an “objecting party . . . merely restate[s] arguments made before
the magistrate”).4

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Because Allstate’s six and eighth “factual” objections (Doc. 102 at 6–11, 13–14) rely on
the Court sustaining this objection, the Court will similarly overrule these “factual” objections.

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5. Listed Driver Language
Allstate’s fifth objection centers on the Findings and Recommendations’
conclusion that Moore’s status as a “Listed driver” created a reasonable
expectation of coverage. Allstate disputes this conclusion and states that this
expectation of coverage is not reasonable when compared against the express
terms of the Policy. The Court disagrees, however, and notes that the express
terms of the policy creates the ambiguity in question. As discussed in part II.A.3
of this Order, the Declarations fail to expressly identify the policyholder. Instead,
it mentions both “Named Insured(s)” and “Listed drivers,” then fails to explain the
significance of either. Allstate’s fifth objection is overruled.5
B. Plaintiffs’ Motions for Summary Judgment
Lastly, Allstate objects to Findings and Recommendations’ determination
that Plaintiffs’ motions for summary judgment should be granted. Allstate
contends that a factual dispute remains as to the reasonableness of Moore’s
expectation of coverage. Allstate is mistaken.
Under the reasonable expectations doctrine, the Court looks to the
“objectively reasonable expectations of applicants and intended beneficiaries” to
determine if there was an expectation of coverage. Transamerica Ins. Co. v.

5

Allstate’s seventh “factual” objection is likewise overruled for the reasons described
above and in part II.A.3 of this Order.

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Royle, 656 P.2d 820, 824 (Mont. 1983) (citing Robert E. Keeton, Insurance Rights
at Variance with Policy Provisions, 83 Harv. L. Rev. 961, 967 (1970)). Contrary
to Allstate’s argument, the Court finds many objective reasons exist to support
Moore’s expectation that he was covered under the Policy, including: (1) his status
as a “Listed driver”; (2) his communications with his insurance agent where both
clearly thought he was covered under the Policy; and (3) the listing of his home
address on the Policy. Because these reasons support an objective expectation of
coverage under the Policy, the Court will overrule Allstate’s final objection and
adopt the Findings and Recommendations in full.
III. Final Pretrial Conference and Trial Schedule
In anticipation of the upcoming final pretrial conference, scheduled for
October 6, 2016, and trial, scheduled for October 17, 2016, the parties have filed
their pretrial materials. However, because this Order dramatically narrows the
issues for trial, the Court will vacate and reset these proceedings to a later date to
allow the parties to refile these materials in accordance with the rulings of this
Order. Further, if the parties request a United States Magistrate Judge for
settlement purposes, the Court will assist in that request. Finally, the Court
stresses that vacating and resetting these proceedings will not affect Judge Lynch’s
Order, dated October 4, 2016 (Doc. 137), which granted Allstate’s motion for a
protective order. The Court agrees with Judge Lynch that Plaintiffs’ request for
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depositions is untimely and should not be allowed.
Accordingly, the Court reviews the remainder of Judge Lynch’s Findings
and Recommendations for clear error and, finding none,
IT IS ORDERED that:
(1) Judge Lynch’s Findings and Recommendations (Doc. 97) are
ADOPTED IN FULL;
(2) Defendant Allstate’s Motion for Summary Judgment (Doc. 30) is
DENIED;
(3) Defendant Allstate’s Motion for Partial Summary Judgment Regarding
Loss of Consortium Claim (Doc. 34) is DENIED;
(4) Plaintiffs’ Cross-Motion for Summary Judgment (Doc. 44) is
GRANTED;
(5) Plaintiffs’ Cross-Motion for Summary Judgment (Doc. 48) is
GRANTED; and
(6) Plaintiffs’ Motion for Summary Judgment to Dismiss Certain Defenses
(Doc. 49) is GRANTED against Allstate and DENIED as moot against Travelers.
IT IS FURTHER ORDERED the Final Pretrial Conference, set for October
6, 2016, and the Jury Trial, set October 17, 2016, are VACATED and RESET
according to the following schedule. Further, the following schedule will govern
all further pretrial proceedings:
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Attorney Conference to Prepare
Final Pretrial Order:

week of October 17, 2016

E-file Final Pretrial Order,
Proposed Jury Instructions,
Proposed Voir Dire Questions,
and Trial Briefs and e-mail
to [e-mail]
(Trial Briefs are optional):

October 26, 2016

Notice to Court Reporter of
Intent to Use Real-Time:

October 26, 2016

Notice to I.T. Supervisor of
Intent to Use CD-ROM or
Videoconferencing:

October 26, 2016

Final Pretrial Conference:

November 2, 2016 at 2:30 p.m.
Missoula, Montana

Jury Trial (7-member jury):

November 14, 2016 at 9:00 a.m.6
Russell Smith Courthouse
Missoula, Montana

IT IS FURTHER ORDERED that the Court’s Order dated September 15,
2015 (Doc. 21), shall remain in full force and effect in all other respects.
Dated this 5th day of October, 2016.

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Pursuant to 18 U.S.C. § 3161(h) and Fed.R.Crim.P. 50, criminal matters take priority
over civil matters in the event of a conflict. Accordingly, all civil trial settings are subject to the
Court’s criminal calendar.

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