IwsuneNCE COITISUMER COUNSELTS COIUUN
-frrBCeseAcerNstMoNtaN¡''sANII-STACKINGSTATUTE
BY PROFESJOR GREG MUNRO
It would be hard to identifY a
larger loss to insurance coflsumers
in Montana thân that dealt the Public the day the 1997 Legislature
bdll now
MCA
codified as
$33-23-203 and
passed the "antr-stacking'
known as the "anti-stacking stâtute." When that law took effect,
families with four cars suddenly had
one-quarter of the automobile UM,
UIM, and Med Pay coverages theY
had before the eFfectrve date but
still paid the same Premiums.
Before úe 7997 stah-¡te, consumers in Montana could stack their
auto insurance when theY Paid Premiums for coverage on more than
under separate policies with the
sârne compârì|, and in ChalTee v'
secured passage of the first "antistacking" bills in 1981, it only blocked
stacking where multiPle vehicles
rvere insured under the same policy'
The 1981 statute was later held, in
Fatmets Alliance MuL fns. Co. v'
I:[olemanr6 to aPPIY only to cornpulsory coverages of BodilY Iniury
one car. The SuPreme Court had
been dorng so since 1972when it
stacked UM coverages from different carriers ín SuIIívan v. Doe.2
I¡
Kemp v. AúIstate fns.
Fid. & Guar.
Co.,a held You
for muluPle
coverage
stack
could
same
the
cars under
PolicY.
When the insurance industrY
U.S.
Co.,3 in
7979,the court established that you
could stack multiPle UM coverages
LiaUillty and Uninsured Mototist.
The statute did not block stacking
of Medical Pay coverage and Underinsured Motorist coverage'
It is important to note the different choices auto insurers made
when covering multiple vehicles in
Montana in the Years after the 1981
statute took effect. State Farm
placed an insured's multrple vehicles
under separate policies and collected
separâte premiums, while Farmers
Insurance Company placed an insured's multiple vehicles under the
same policy collecúng sepatate premiums. On the other hand, USF&G
and Allstate placed multiple vehicles
under the same PolicY but rePortedly charged a singfe premium for
UM coverage. USF&G and Allst¿te
heeded the court's oft repeated reasoning that if the insurer charged
multiple premiums, the insured
'would be entitled to multiple coveraçs. On the other end of the marketing spectrum, State Farm contjnued to charç multiple Premiums
and never sought the benefit of the
1981 antr-stacking statute, since it
placed each vehicle under a separate
policy, a practice to which the stat-
ute did not apply.T
It was in the context of this
roughly two-decade stacking history
EnterErçertName: |ohn Smith ffi
MTIA may have the documents you need!
TRIALSMITH
Trialsmith.com
Search Free at
Formerly Depoconnect.com. A member service
Tnrar TnnNls - SPruNc 2002
800.443.1757
of Montana
Trial Lawyers Association'
PecB 3l
two llord Explorers near Ovando,
eral members did so. In this article, I
that the 1997 tægislature mandated
Monta¡ra on November 28,7998.
will give a status report on those cases
that regardless of the number of
State Farm reFused to stack the UM,
that have beeu reported as being frled
policies issued, the number of vehiUIM, or Med Pay coverages of
and briefed. I will then set out a syncles insured or the number of preCharles's pickup truck, which was
miums paid, coverages could not be
opsis of arguments that have been
not involved in the accident. Joe
developed by MTLA members. Please
stacked to provide the consumer
Bottornly filed and briefed the case
of
note that this is a compendium
any benefit for the additronal premion surilnary judgment. The brief is
ums they were charged for mulúple
those cases reported to me, and there
excellent containrng
vehicles. The legislamany wellture's act would
developed arguprove to havezcatzsCopÌes of the bdefs tefercnced Ín this artÍcle are
ments that will be
trophic impact on
avaÌIable on MTILI's website at www.monttla.com
the basis of much
families of those
that follows. Unformarmed and kìlled in
tunately, the case
auto accidents in
has
languished withMontana. Without a
out decision in Flathead County for
doubt, the 1997 anú-stacking stahrte
are bound to be others about which I
over 18 months. Bottomly's brief
is the number one problem faced by
am uninformed or have forgotten bewill be placed on the MTLA webplaintiffs' counsel rn Montana in atcause they were reported to me orally
site.
tempting to secure adequate comat MTLA seminars. Because of space
limitations, I will not treat opposing
pensation for clients' injuries arising
Farmers AIIÍance Mut. V.
out of the operation of automobiles.
arguments or the non-stacking issues
If anc o ck, (Settled) Fifteenth Judi
By May of 1998, the last of the
such as offsets that arc argued in out
ciaì District, Sheridan County,
members' briefs. I want the wtiters of
stackable policies expired and it was
job
Cause 10913. ¡ITLA members
counsel's
to tell families of those
these frne briefs to know how diffrGene Jarussr and Russ Plath, along
who suffered severe injury or death
cult I found the task of selecting, synwrth lawyers I-¿ura Christofferson
in auto accidents and owned multìthesizng, accurately dþsting and
and l,oren Toole all frled brieß in
ple vehicles that only a fraction of
appropriately attribuúng these argusuppoft of motions to stack.
ments given our space limitations. I
the coverage for which they paid
This was a head-on collision
was available to compensate them.
hope they will forgive me if aggrieved
on
The brutal economics of the
by -y many attempts to abridge their
June 25, t998, rn which an SUV
driven by Marilyn Smith crossed the
1997 ana-søcking stanrte, which
hne efforts to meet space consideracentedine north of Medicine Lake,
prohibits consumers from obtaining
tions here. Finally,I have selected
Montana colliding with a car ca.rrythe benefit of multrple coverages for
only the arguments that appear to me
ing five young baseball players on
which they paid while allowing into be viable for development. I have
their way to a baseball toumament.
surers a windfall by permitting them
not included or corrunented on other
Two baseball players were killed
fine argr.rments that arc faü speciFrc
to collect multiple and everand three severely in¡ured. For sepaincreasing premiums for no coveror made in difficult fact situations.
rate premiums and under the same
age, compelled counsel to attack the
policy, Farmers Alliance Mutual
statute. In the last three years, many
STATUS OF REPORTED
covered the car in which the hve
members of the MontanaTúal LzutSTACKING CASES FILED
were riding and a separate car for
AND BRIEFED
yers Association have Frled challenges to the statute and its zpplicz$300,000 UIM limits. Farmers,{llisued for declaraúon that they
fns.
ance
Cameron
v.
State.Fatm
uon. The most frequent questions I
judgment
one coverage'¿rd movecl
only
owed
íreld today are: What is happening
Co., (Summary
decision
for
summary fudgment. Judge Cyto the anti-stacking stâtute? Is there
pending) MTLA memberJoe Botbulskr ruled in favor of the insureds
anything hled at the Supreme
tomly, Eleventh Judicial District, Flatand stacked the coverages ruling
head County Cause No. DV-99-250
Court? Have any district court decithat the insurer's anti-stacking lrnisions come down? What ¿re lawyers
(B).
tation of liability clause was not a
arguing in the attacks on the statute?
Charles Cameron and his wife,
"reasonable limitation" as required
What are the best challenges?
Crndy, insured separate vehicles under
the statute. The carrier appealed
by
Consequendy, usrng MTLA's
separate State Farm policies. Cindy
listserve, I invited members to into the Montana Supreme Court, and
Cameron was killed, while Chades
form me of their stackurg cases and
the case was settled before briefìng
a¡ld his infant son Daniel suffered sesend copies of their briefs, and sevthere.
rious injuries in a head-on collision of
Pece 32
Tnrer- TnnNos - SpnrNc 2002
GoroskÍ v. Iltg:hlands fns.
Group and Nothwestern /rIa_
tional Cas ualqt Company,
(SettJed) MTLA Member óary
Zadick,seventh
Judicial Distrrct,
Wibaux County, Cause No. DV-10.
Lawrence Goroski was killed
while
a passenger
in a single-car ac-
cident. Goroski had eight separate
vehicles covered under a single policy for which he paid eight separate
premiums for UIM and Med Pay
coverage. Gary ZaÅick sued to
stack the coverages. Subsequently,
Gary drafted and showed to the
czrríer an excellent brief on motion
for summary judgment after which
the case settled without Írling the
brief. Again,I have cited extensively from his brief but urge members to read the entire brief, posted
on the MTL.{ website, a.longwith
the other ftre stacking briefs posted
there for the members'benefit.
Ifardy v. Ptogressíve
Spe-
cíalty Ins. Co., (Summary ludgment decision pending) MTLA
member Kent Duckworth. Federal
District Court, Mrssoul¿ Division
fMolloy], Cause No. CV-01-130-M-
DWM.
Progressive charged the severely injured insured three separate premiums for 50,000 UIM limits for each of three separate vehicles insured under the same policy.
When the company refused tq srack
the UIM coverages, Kent filed suit
and moved for summary judgment.
.FíIban v. USAA Casualy
fns. Co. (Summary fudgment decision pending) MTLA member
Cathy læwis. EighthJudicial District, Cascade County, No. ,{DV
01-836. þcKittrickl
Filban and Scoggins were
killed in a head-on collision with
Maki, who was headed the wrong
way on I-L5 atHardy,Montana.
Filban had three vehicles under one
USAi policy with three separate
oremiurns for UIM and for Med
Þuy ror"rug". which also included
Tnr¡r, TnnNos - SPRTNG 2oo2
seatbelt/alrb ag and death benefi ts.
I-ewis sued the carrier and briefed
cross-motions for summary judgment.
Mitchell v. State Farm fns.
Co., (Decision pending) MTLA
member Steve Fletcher, Montana
Supreme Court No. 02-052.
Charles Mitchell was severely
injured as a passenger in a single car
accident nr Montana onJanuary 27,
1998. He covered five vehicles under separate State Farm policies issued in Califorr'ia and paid separate
premiums for UM and UIM coverage. The Fourth Judicial
District
court in Missoula County applied
Califomia law in spite of the I{emp
v. Allstate fns. Co.8 and Young-
blood v. Atnetican States fns.
Co.e decisions and upheld the car-
rier's definition of UIM to find no
coverage. Califomiahas an antistacking statute and a stahrtory definitron of UIM that defeats the coverage entirely in many cases. The
case is on appeal to the Montana
Supreme Court and under review by
the Amicus Committee of MTLA.
fast trackrng one case in particular. I
believe Alan Lemet has one or more
cases going and, in July, Roland Durocher reported he was pursuing a
case involving stacking of UM and
Med Pay coverage on four State
Farm policies. Richard Ramlet argued a stacking case before Judge
Guenther in Gallatin County in De-
cember. He said he inco¡porated
substantial portrons ofJoe Bot-
tornly's brief. Finally,Gary Rice reported wotking on a stacking case
involving Farmers Insurance Company. I do not know the present
status of these cases but report them
for networking putposes.
THE ARGUMENTS FOR
STACKING
Cathy Iæwis, in her brief n the
Fílban case, provides a thorough
history of stacking coveraçs in
Montana, especially noting that the
Montana coufts have an unbroken
chain of public policy statements in
regard to assuring coverage for
which the insured paid a separate
premium. This historical context is
important for the arguments that
follow.
O ther cas es :
DougMarshall
told me some time ago thathe was
briefing a case filed in the Butte Division of the Montana Federal District Court. He was planning attacks
on the statute for separation of
powers, impairment of contractual
obligations, denial of equal protecúon and substantive due process.
Mick McKeon reported havnga
stacking case against Progressive.
Dan Bidegaray indicated last April
that he and Mike Cok wcre pressing
to stack Med Pay limits in a State
Farm case. He said Mrke George
was also pressing a stacking case at
that time. Larry Grubbs reported he
was filing suit in a case seeking to
stack GEICO policy UM and Med
Pay limits. He said his partner, Mike
Eiselein, was also handling a stack-
ing case. Dale McGarvey indicated
many months ago that he had six
cases
involving stacking and was
Argumenü The carrier failed to
"clearþ inform or noti$ the insured in writing of the limits of
the coverage with respect to the
premium charged" as required in
MCA S 33-23-203 (3).
G ary Zzdìck, in Goroskì, asserts that before the 1997 antistacking statute, Montana cases
made clear that stacking of portable
coverages, UM, UIM, and Med pay,
was the "benefit of the bargain', for
auto insurance consutners. fnsr¡rers
knew that anti-stacking language in
"limits of liability" clauses in ttreir
policies was urvalid by teason
of
public policy in the state. Because
the statute changed the benef,rts, the
legislatrlre recognized the impor_
tance of notice to the insureds. Ac_
cordingly, subsect.ion (3) of the 1997
anti-stacking statute required the ul_
surers to
"notìfr the insured
rn writ_
Pacs 33
ing of the hmits of the coverage
with rcspect to the premium
be $0.00 for each additronal policy
where the canier intends to block
charged."
stacking of coverage. Instead, the
declaratìons pages lead the consumer to believe full limits of each
coverage are av:oiable for each pre-
Zadick ìtt Goroskí ugoed:
"Defendant insurer failed to give
notice to the insured that for the
same premium charged on each of
eight vehicles, the insurer was only
going to extend one single underinsured limit
one single medical
experìse limit. The failure to give
the notice is contrary to the abovequoted statute and urvalidates the
attempted renewal on less favorable
terms." Zadick argues this was critical in light of the previous public
policy statements ìn Bennett v.
ar"rd
State Fatm Mut. Auto. fns. Co.rro
Ruckdashchel v. State Fatm
Mut. Auto. fns. Co.rlt Fatmets
AIIÍance Mutual v. Ifolemanrlz
artd Grietv. Natíonwide Mut.
fns. Co.r3 that separate benefrts be
provided when separate premiums
are charged. læwis similady argued
that those cases ga.ve rise to the
customer's "reasonable expectation" that the coverage could be
stacked increasing the need for notrce.
Zadick also bases his notice
argunent on MCA S 33-15-110ó,
which requires insurers to give 30day notice before a policy term expires of any change by which the
policy will be renewed "on less favorable tems." That the coverages
could not now be stacked was
cleady a less favorable term in October of 1997.The courttn Tho-
mas v. lYorthwestem NatI. Ins.
Co.t+ tndicated that insurance consumefs expect the same covefage
upon renewal unless they are given
mium. As Bottomly's brief says, if
"the premiums Chades paid for UM
and UIM coverage entitled him to
nothing [for the additronal coverages], then he should have been so
informed. He was not." Additionally, the brief points outrhat Bennett v, State Fatmts held that the
insurer's basic ursuring agreement
"unambiguously provides a¡r insured a reasonable expectation to
recover damages up to the limit of
both policies under which she was
an insured and for which separate
premiums had been paid."
.Argumenû A policy provision
blocking stacking of UM coverage is void as a violation of MCA
s 33-23-20r.
Bottornly, kt Cameron ârgues
if
the carrier is blocking stacking of UM coverage by using a family exclusion, then that exclusion
violates the UM statute MCA S 3323-207. The Montana Supreme
Court treats UM coverage as a compulsory coverage required by statute,16 so that it cannot be diminished below the statutory minimum
by a policy provision.
that,
UM, UIM, and À.{ed Pay
could not be stacked could be read
by the consumer to mean that he
could not add his UM, UIM, and
Med Pay coverage under the same
policy. I{e cites additional conflicting interpretations and concludes
that the notice is. defrcient under the
statute.
Argument: A policy provision restricting coYerege to only one
limit where multiple premiums
have been paid is not a
"reasonable limitation" authorized þ the stâtute.
This argument was advanced
by Gene Jarussi in Ifancock.He
contended that UM and UIM coverages, being portable like life insuraflce, zre personal and follow the
insured regardless of whether he is a
pedestrian, passenger, or driver at
the time of the accident. To allow
the ursured to buy multiple coveràges,ply multrple premiums and
then, by "limitation of liability" provision, restrict him to one limrt is
not a "reasonable limit"
as
allowed
by the statute.
Judge Cybulski so ruled in
Farmets Alliance Mutual v. Ifancockll on September 8, 2000. Gary
Zadtck and Czthy læwis also argue
this point in their briefs relymg on
Cybulski's decision. Kent
Duckworth makes the same àrgument in
Ifardy
u. Prcgressíve.
Argumenc The carrier failed to
inform the insured "whether the
coverage from one policy or mo-
Argumenfi The insurer simpþ
g ve no notice
tor vehicle may be added to the
coverâge of another policy or
This is an argument fact speciFrc to each case. Laura Christoffer-
motor vehicle" as required in
MCA S 33-23-203 (s',).
Bottomly, in Cameton, dis-
son, briefurg on behalf of the rnsured, Daniel Olson, n the Ifancockczse argued, after review of the
facts, that the insurer srnply ga.ve no
notice. With regard to the insurer's
conspicuous notifi cation of change.
Furthermore, the court, n Thomasrheld that insurance consumers were not oblþted to read the
renewal policy. Failure to give appropriate notice estopps the carrier
from denying the benefits.
Joe Bottomly similarly argues
that the czrùer must give notice
that the limits of coverage with re-
to show that it really doesn't give
the statutory notice required but instead, refers back to the policy language which is in fact an exclusion
(family), not an anti-stacking provision. Jarussi, rn lfancoclç argres
that the puqported notice grven by
spect to the premium charçd will
Farmer's Alliance Mutual that cov-
Pece 34
erage$ for
sects the notice sent by State Farm
purported notice, she said:
This notrce is not directed to
Mr. Olson specifically, does
not state what the limrts of
the coverage are or were with
regard to his vehicles, what
the premium is nor does it
Tn¡er TnnNos - SpnrNc 2002
cleady define what effect this
change may have uPon Mr.
Olson.'Ihere is no indication
when the noúce was sent or
that Ndr. Olson even received
or whether it was acn:ally
sent to him.
Chris tofferson no ted that
shortly after the enactrnent of the
smtute there were policy renewals to
which the statute applied with no
notice grven the insured so he could
increase his limits for his protection
if he chose.
Argumenfi A PolicY contract that
requires multiPle Premiums for
multiple coverâges but restricts
the benefrt to a single limit is unconscionable.
'
Zadick asserts that the Court
in Leibnnd v. Natíonal Fatmers
[fnion Prop. & Cas.18 indicated
that the unconscionability doctrine
of the Uniform Commercial Code
can be applied to insurance policy
contracts. He says the two-fold test
for unconscionability is (1) contractual terms unreasonably favorable
to the draFter and Q) no meaningful
choice on the part of the other
party regarding acceptance of the
provision. Zzdick contends that
policies providing for multrple premiums and restricting benefits to a
single limit meet this test. Note that
this argument avoids getting tangled
in or challengng the statute.
Similarly,I-ewis cites the 9ú
Circuit's decision upholding Judge
Molloy's fi nding of unconscionability in Ticlrnor v. Choice lforcls,
fnll, fnc,lt for the proPosition
that, in Montana, it requires "a f,tnding that the contract: 1) was one of
adhesion; 2) was not within the
weaker party's reasonable expectations, or 3) if within its exPectations, it was undulY oPPressive, unconscionable or against public pol-
icy." She builds her argument on
insurance standardized forms, takeit-odeave-it offers, unequal barganingposition, and the insured's
TRrtr TRENoS - SptuNc 2002
reasonable expectations to argue
that anti-stacking contracts are unconscionable if the insurer collects
mulúple premiums.
Argumenü Policies Providing
multiple coverages for seParate
ptemiums but restricting benefits
to a single limit should be reformed by the court in equitY.
Zadick,ìn Goroski, notes that
MCA S 28-2-76II grves a court the
power to reform a contract "due to
mutual mistake, unilateral mistake,
or fraud." He notes that the insurers
continued to charge multiple premiums when they had "presumablY
made a corporate decision to no
longer stack benef,rts." 1'he multiple
premiums paid wete consideration
for an zgregate limit, and a similar
premium had been charged in Previous years for limits that could be
stacked. It is unlikely that the insured wanted or exPected a reduction to a fraction of his former covenge for the same premium' Zzdick
argues that these flacts at most establish fraud and, at least, establish
unilateral mistake. Hence, he submits that the contract should be relormed to provide a single Premium
and a single aggregate limit of liabrlity. One can argue that this aPproach does not seek to stack but
only to reform the cotltract, so that
it is not in derogatron of the antistacking statute.
Argumenfi The policy doesn't
really prohibit stacking and,
therefore, falls under the
ttprovides otherwiset' excePtion
to the anti-stacking stâtute.
Iæwis, in the Filban case,arcareful reading of USAÂ's
that
gues
clause shows it
liability"
"lirrut of
stacking.
block
does not actually
The anti-stacking statute starts with
this exception: "Unless a motor vehicle liability policy specifically provides otherwise. . ." If the policy
cloesn't block stacking, then it
"provides otherwise"'¡rd the statute
doesn't apply. Similarly, Gene Ja-
russi argnes
'n lfancock that Farm-
ers Alliance Mutual's limit ofliability
clause doesn't actually preclude
stacking of UIM coverage so that it
falls in the exception created by the
starute. In several ofthe cases fded,
counsel have carefully snrdied the
offending provisions to see if they
are ambiguous, don't apply, or don't
on their face do what the insurer
thinks they do. The arguments are
too specific and volumi¡rous to
cover here. Suffice it to say that
such careful analysis needs to be
panof each challenge. I note that
Iæwis has a good section on court
const¡uction of ambiguity in her
brief as do Zadick and Duckworth.
Argumenü The anti-stacking
statute is unconstitutional for
violation of separation of powers.
Bottomly argues the statute
"interferes with the proper separatron of powers between the court
and the legislature. I'Ie says the legislature's mandate that "the limits of
insurance coverage available under
each pzrt of the policy must be determined as follows . . ." requires a
specific interpretation of the contract and usurps the Power of the
court to intetpret contracts thereby
violaúng Art. WI, $ 1, which vests
all judicial power of the state in the
courts. That section also forbids
persons "charged with the exercise
of power propedy belonging to one
branch" to exercise "any power
properly belongrng to either of the
others . . )' Gary Zadick, in the
Goroskí búef doesn't raise constitutional challenges but makes a, gre t
statement of the court's role in interpreting conffacts.
Argument: The anti-stacking
statute is unconstitutional for
violation of equal protection.
Bottornly argues the statute
violates equal protectron of ,\rt. II,
$ 4, because the statute treats simi-
larly situated individuals (those who
bought identical coverages) differently, FIe notes that, under the statPAGE 35
insurance to be an illegtimate purpose fbr the statute.
I submit that another avenue
to argue denial of equal protection is
to compare that class of insurance
consumers who buy all of the Personal portable life insurance they
wish a¡-rd are secure in the benefits,
witì that class that similadY Purchases all the UM, UIM, and Med
Pay pcrsonal portablc auto insurancc
they wish. The anti-stacking stâtute
deprives the latter class of the benefìt of a-ll but one policy coverage.
quiring, possessing and protecting
properry, 'and seeking theit safèty,
health and happiness in all lawfui
ways." It argues tltat securing insurance benefits is such a right, which
the statute abrogates without compelling it-Iterest or even a rational
basis. As the argument is developed,
"'l'he statute unilaterally prevents a
person from recovering damages to
himself and his family for which he
has paid.It thereby impairs the individual's nght to protect these inalienable rights."
of insureds had the rþht to choose a
treatu"rg physician while another cre-
Argument: The anti-stacking
stâtute is unconstitutional for
violation of inalienable right to
protect property and Pursue life's
necessities.
Bottomly's brief cites Art. Ii,
its "inalienable tights" which
for
3,
$
include "the rights of pursuing life's
ated by the statute did not. The
court there held reducing costs of
basic necessities, enioying and defending their lives and liberties, ac-
Argumenü The anti-stacking statute is unconstitutional for violation of substantive due Process.
..Bottornly bases this argument
II, $ 17's guarantee of due
r\rt.
on
process of law. Ín Newuille v.
State Dept, of Family Seruices2l
alrd Plumb v. FourthJudicial
Disttictrzz the Montana Supreme
Court developed the test that re-
ute, the alnount of UM or UIM coverage the insured actuaily gets de-
pends on the coverage of the car
lnvolved in the accident arrd not the
insurance the insured purchased. i-Ie
argues as follows:
'fhe court must
apply a compclling statc interest test
for constitutionaliry. One of the
"inalienable rights" in Art. II, $ 3 is
the right to pursue liFe's necessities,
and insurance benefits are a necessity, makurg securing the benefits of
insurance a fundamental rþht requiring a compelling state interest to
make the stahrte valid. Even if the
statute does not affecta fundamental interest, it must pass the tationa)
basis test, which it cä1not do. Bottomly compares Ifeisler v. Ifines
*¡-t .n found violation
of equal protection where one class
Motot
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TnBNos - Sr,ruNc 2002
strictions placed on remedies and
procedures must be reasonable
when balanced agarnst the PuqPose
of the legrslature in enacting the
sarute. The means chosen bY the
legislature must be reasonably reIaied to the result sought. The statute here is an unreasonable restricdon not rationally related to a legitirnate govemment purpose.
Argumenfi The anti-søcking
stâtute is unconstitutional for
violation of the right to full legal
redress.
Bottornly zrgues that Art' II,
a right to "full legal
provides
$16
redress" whuch the court found to
be fundamentalín Pfost v. State'23
Though it later held the right was
not fundamental in Meech v' IfilI
Ifaven lVes\ fnc.r2a he argues that
subsequent to
Meech,in
Wadsworth v. Statés and MEIC
v. Dept. ofEnuircnmental QuaIityr26 the court again indicates that
rights found in the Declaration of
Iùghts of the Montana Constitution
are "fundamental." From this he
argues that the statute violates a fundamental right of legal redress bY
clepnving the insured of his or her
right to have the courts interpret the
insurance contract on issues of
stacking.
The Bottomly brief integrates
the constitutional issues described
above into a single argument' but
each constitutronal violation is well
addressed.
Argument: The anti-s tacking
s tâtute is unconstitutional
because it imPairs the obligation
of contracts.
Loren Toole in lfancock cites
Art. II, $ 33 for the proposition that
"No. . . law impairing the obligauon
ofcontracts. . ' shall be Passed bY
the legrslature." He argues that the
legrslature has attempted to create a
"limitation of liability under motor
vehicle liability policy" and has
thereby imPaired the contracts'
T'he statute's drafters tried to avoicl
TRrar TnBNns - SPntNc 2002
this impairment by not applying the
anti-stackir"rg provisions to then existing policy corltracts during their
terms.
I
suggest that the argument
that the anti-stacking statute impairs
contracts should be bolstered bY
arguing further that auto insurance
is *arÈeted in the form of automatically renewable contracts' AII the
consumer does is contillue to pay
premiums on the same Periodic bails and the conffact is renewed without ally further applicatron, disclosures or signatures' (fhis should be
the subject of iudicial notice') This
in ThoNadonal
Nofthwestetn
mas
fns. Co.27 in which the court noted
was implicitly recognized
v.
that the consumer assumes the contract is being renewed on the same
terms and doesn't even have a durY
to read the renewal policy. Prior to
the effective date of the antistacking contract, these ongoing renewable contracts were governed by
Mofltana case law that allowed the
consumer the benefit of receiving
the limit of UM, UIM, or Med PaY
coverage for each vehicle for which
she had paid aPremium' Even after
the 19 B1 anti-stacking statute
blocked stacking for multiple autos
insured under the same PolicY, companies like State Farm strll freely
ãhot. to place their insured's vehicles under separate renewable policy
contracts and charge separate premiums. They continued to do so even
after the Montana SuPreme Court
ruled such practices rendered their
contract benef,tts stackable. In this
context of renewable continuing
policy contracts that provided for
multiple premiums and multiple recoveries, the legislature passed a
statute mandating that all such contracts would be interpreted to provide only a sirlgle lirrut where the
insurecl pard multiple premiums.
'fhis is the unconstitutional impairment of the contracts.
Argurnent: If the insurer collects
multiple premiurns when the
stâtute and the policY saY there
can be no multiPle benefits, then
the insurer should be equiøblY
estopped from refusing the full
søcked benefits.
Steve Fletcher in one section
of his brief in rhe MítcheII case at
the Montana SuPreme Court, makes
an inuiguing altemative arg.rment.
If the language of the stahrte and
the policy contract prohibiting multiple coverages is valid, then the carrier's act of charging multiple premrums should be an unlawñ;l act'
Steve argues that the carrier who
does so should be estoPPed from
denying benefits. This line of argument merits further develoPment
because one could avoid chalìengrrg
the statute or policy provisions and
even base the argument on assumed- for- the- sake-o f-argument
validity.
ArgumenÍ The anti-søcking
stâtute onlY aPPlies to Prevent
søcking "to Prevent Pa)rments
for the same element of loss.
Pat Sheehy would add this argument, which he Points out
"allows the court to rnterpret the
anti-stacking statute according to its
terrns." He argues that the overarching intent a¡rd PurPose of the
statute, "to prevent duplicate payments for the same element of
loss," is stated in subsection (2).
Sheehy says: "1-he legislature was
passing the anti-stacking statute to
prevent people from buYing multiple coverages and then collecting
twice for medical bills or other
losses from the same claim." FIe
concludes, the statute should not
apply when the damages of the msurecl far exceed any single limrt uncler any single coverage. Then, it is
important that the insureds get the
stacked coverage they Paid for to
cover all their damages.
DEALING WITH TH.E CTIRISTENSON V. MOUNTA]N
WEST FAR]UT BUREAU MUT.
-¿ /s.28 CASE
P¡.cs
37