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                                                                No. 00-491



                           IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                               2001 MT 152




DAN ENSEY,

Plaintiff and Appellant,



v.



COLORADO CASUALTY, a

Colorado Corporation,



Defendant and Respondent.




APPEAL FROM: District Court of the Thirteenth Judicial District,

In and for the County of Yellowstone,

The Honorable Susan P. Watters, Judge presiding.




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COUNSEL OF RECORD:



For Appellant:



Michael K. Rapkoch, Felt, Martin, Frazier, Jacobs & Rapkoch, P.C., Billings, Montana



For Respondent:



James R. Halverson, Christie L. Hobbs, Herndon, Sweeney & Halverson, P.C., Billings, Montana




Submitted on Briefs: May 31, 2001

Decided: August 9, 2001

Filed:



__________________________________________

Clerk



Justice Jim Regnier delivered the Opinion of the Court.

    1. ¶Dan Ensey appeals from orders issued by the Thirteenth Judicial District Court,
         Yellowstone County, dismissing his claim against Colorado Casualty for advance
         medical payments and living expenses. One issue is dispositive of Ensey's appeal:
         Whether the District Court correctly determined that Colorado Casualty provided

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       Ensey with a reasonable explanation for its denial of his claim for advance
       payments. We affirm.

                                                         BACKGROUND

   1. ¶On October 14, 1999, Ensey, an independent drywall contractor, fell from a tripod
      ladder while working for Bakken Drywall at a construction site in Billings,
      Montana. Shortly thereafter, Ensey, through counsel, sent a letter to Bakken Drywall
      informing it of his condition and requesting that Bakken Drywall notify its insurers
      of his claim. Colorado Casualty, Bakken Drywall's insurer, sent a letter to Ensey's
      counsel indicating that it was performing an in-depth investigation of Ensey's claim.
   2. ¶On January 21, 2000, Ensey sent a demand letter to Colorado Casualty requesting
      advance payments of lost earnings and medical expenses. Ensey contended that
      Colorado Casualty's liability for these damages was reasonably clear because its
      insured, Bakken Drywall, breached its duty to provide safe scaffolding equipment.
      In his letter, Ensey described the accident as follows: Bakken Drywall had provided
      him with a Perry scaffold during the first two days of the job. On the day of his
      injury, two other persons working for Bakken Drywall took the Perry scaffold which
      he had been using and replaced it with two sawhorses. The time came when Ensey
      needed to reach higher in order to complete his work. However, despite numerous
      calls to Bakken, no appropriate replacement scaffold was supplied. Ensey used the
      only available means to reach the area where he needed to work, a ladder owned by
      ID Corporation. Ensey was on the second to the top rung when the ladder walked
      out from underneath him causing him to fall and sustain serious injuries.
   3. ¶On February 1, 2000, attorney James R. Halverson sent a letter to Ensey's counsel
      stating that he had been retained by Colorado Casualty to represent the interest of
      Bakken Drywall and that Ensey's demand letter had been referred to him for a
      response. On March 27, 2000, Halverson informed Ensey that Bakken Drywall was
      declining his request for advance payments because liability was not reasonably
      clear. Halverson stated that his investigation indicated that there were multiple safe
      devices available and that Mr. Ensey personally chose the ladder he used over the
      other equipment that was available.
   4. ¶On April 10, 2000, Ensey filed a complaint against Colorado Casualty. Ensey
      claimed that he was entitled to advance payments of lost wages and medical
      expenses prior to a final settlement of all of his claims pursuant to the Unfair Trade
      Practices Act. Ensey claimed that Colorado Casualty had not responded to his
      demand letter and sought a declaration that he was entitled to advance payments, an

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       injunction compelling Colorado Casualty to make such payments, and damages. On
       April 12, 2000, Ensey filed a motion for a temporary restraining order. The District
       Court granted Ensey's motion and ordered Colorado Casualty to appear and show
       cause why a preliminary injunction requiring advance payment of living and
       medical expenses should not be granted. Upon motion by Colorado Casualty, the
       District Court subsequently dissolved its temporary restraining order.
    5. ¶The court held a hearing on Ensey's request for a preliminary injunction on April
       25, 2000. On May 3, 2000, the court issued an order denying Ensey's preliminary
       injunction. The court concluded that Ensey was not entitled to advance payments
       because liability was not reasonably clear, noting that Colorado Casualty had
       provided two affidavits from Ensey's co-workers which stated that other scaffolding
       and equipment was available. The court determined that these affidavits created an
       issue of fact with regard to Colorado Casualty's liability. The court further
       determined that Colorado Casualty provided a reasonable explanation for its denial
       of advance payments. Lastly, the court concluded that Ensey's contention that
       Colorado Casualty did not respond to his demand letter was "disingenuous, at best."
       As a result, the court determined that Ensey did not have a cause of action and
       granted summary judgment in favor of Colorado Casualty. Ensey appeals.

                                                  STANDARD OF REVIEW

    1. ¶We review a district court order granting summary judgment de novo applying the
        same evaluation as the district court pursuant to Rule 56, M.R.Civ.P. Bruner v.
        Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. In Bruner, we
        set forth our inquiry:

The movant must demonstrate that no genuine issues of material fact exist. Once this has
been accomplished, the burden then shifts to the non-moving party to prove, by more than
mere denial and speculation, that a genuine issue does exist. Having determined that
genuine issues of fact do not exist, the court must then determine whether the moving
party is entitled to judgment as a matter of law. We review the legal determinations made
by a district court as to whether the court erred.



Bruner, 272 Mont. at 264-65, 900 P.2d at 903 (citations omitted).



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                                                           DISCUSSION

   1. ¶Did the District Court err when it determined that Colorado Casualty provided a
        reasonable explanation for denying Ensey's claim?
   2.   ¶The Unfair Trade Practices Act provides that no person may "fail to promptly
        provide a reasonable explanation of the basis in the insurance policy in relation to
        the facts or applicable law for denial of a claim or for the offer of a compromise
        settlement." Section 33-18-201(14), MCA. The District Court concluded that
        Colorado Casualty complied with its duty to provide Ensey with a reasonable
        explanation for the denial of his claim through Halverson's letter dated March 27,
        2000. In this letter, Halverson informed Ensey that Bakken Drywall was declining
        his request for advance payments because liability was not reasonably clear.
        Halverson stated that his investigation indicated that there were multiple safe
        devices available and that it was Mr. Ensey's personal choice to choose a ladder
        over other available equipment.
   3.   ¶Ensey contends that Colorado Casualty completely failed to respond to his demand
        for advance payments, let alone promptly provide a reasonable explanation for its
        denial of his claim. Ensey argues that the March 27, 2000, letter from Halverson is
        not evidence that Colorado Casualty complied with its duty because the letter was
        from the insured, Bakken Drywall, and not the insurer, Colorado Casualty. Ensey
        maintains that it would subvert the policy of the Unfair Trade Practices Act to let an
        insured deny advance payments because the insurer's duty to defend the insured
        could cause the insurer to assert that liability was not reasonably clear, even though
        the insurer has determined that there is no defense.
   4.   ¶The duties created by § 33-18-201, MCA, are duties clearly owed by the insurer
        and not the insured. Title 33, Chapter 18, Part 2 of the Montana Code Annotated is
        entitled "Insurer's Relations with Insured and Claimant." (Emphasis added.) We
        believe that in the instant case, however, Halverson's letter dated March 27, 2000, is
        sufficient to be considered a response from the insurer. In a letter dated February 1,
        2000, Halverson informed Ensey that he had been retained by Colorado Casualty to
        represent the interest of Bakken Drywall, that Ensey's demand letter had been
        referred to him for a response, and that he would be reviewing the file and
        responding to Ensey's demand shortly. Ensey was well apprised that Colorado
        Casualty's response to his demand was being handled by Halverson.
   5.   ¶Given Colorado Casualty's notice to Ensey that it was responding through
        Halverson, the real issue is whether Halverson's letter contained an adequate
        response. In this regard, Ensey contends that Halverson's March 27, 2000, letter was

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       insufficiently detailed to be considered a reasonable explanation of Colorado
       Casualty's denial of his claim. Ensey argues that Halverson's response was
       conclusory in that it failed to identify other available safety devices, failed to
       explain how those devices could have provided for Ensey's safety, and failed to
       explain how Bakken Drywall satisfied its duties.
    6. ¶Colorado Casualty responds that it provided a reasonable explanation for why it
       concluded that liability was not reasonably clear. Colorado Casualty notes that
       Ensey claimed liability was clear because no appropriate scaffold was supplied thus
       forcing him to use an unsafe ladder. It contends that Halverson's letter to Ensey
       directly responded to Ensey's claim of liability by informing Ensey that the
       investigation indicated that there were multiple safe devices available to perform the
       work tasks at hand and that it was Ensey's personal choice to choose the ladder he
       used over the other available equipment.
    7. ¶Halverson's letter dated March 27, 2000, provided, in relevant part:

Bakken Drywall respectfully declines your request for advance payments because liability
is not reasonably clear. Our investigation indicates that there were multiple safe devices
available to perform the work tasks at hand. It was Mr. Ensey's personal choice to choose
a ladder over the other equipment, [sic] that was available. If there are persons other than
Mr. Ensey who will support his position, please let us know so we may speak with them.
Again, thanks for allowing the additional time to respond.



    1. ¶We believe that Colorado Casualty performed its duty to provide Ensey with a
       reasonable explanation of its denial of Ensey's claim. Colorado Casualty informed
       Ensey of the legal basis for its denial, namely that liability was not reasonably clear.
       It also provided Ensey with the factual basis for its conclusion that liability was not
       reasonably clear, informing Ensey that its investigation had revealed that other
       appropriate devices were available to safely perform the work at hand but that Ensey
       chose not to use them. This is not a general denial. Colorado Casualty promptly
       informed Ensey that it was denying his claim and provided the specific reason for its
       denial. Section 33-18-201(14), MCA, requires nothing more. Therefore, we
       conclude that the District Court correctly determined that Ensey was not entitled to a
       preliminary injunction or a declaratory judgment on the basis that Colorado
       Casualty had failed to comply with its duty to provide a reasonable explanation of
       its denial of Ensey's claim.
    2. ¶Affirmed.

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/S/ JIM REGNIER



We Concur:



/S/ KARLA M. GRAY

/S/ JAMES C. NELSON

/S/ PATRICIA COTTER

/S/ TERRY N. TRIEWEILER




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