                                                                                            June 16 2008


                                         DA 07-0076

                    IN THE SUPREME COURT OF THE STATE OF MONTANA

                                         2008 MT 207



DYLLON R. ROBERTUS,

              Plaintiff and Appellant,

         v.

FARMERS UNION MUTUAL INSURANCE COMPANY,

              Defendant, Appellee, and Cross-Appellant.




APPEAL FROM:          District Court of the Thirteenth Judicial District,
                      In and For the County of Yellowstone, Cause No. DV 05-0257
                      Honorable Gregory R. Todd, Presiding Judge


COUNSEL OF RECORD:

               For Appellant:

                      Steven J. Harman and Donald L. Harris, Cozzens, Harman, Warren & Harris,
                      Billings, Montana

               For Appellee:

                      Guy W. Rogers and Matthew I. Tourtlotte, Brown Law Firm, Billings,
                      Montana



                                                   Submitted on Briefs: February 13, 2008

                                                              Decided: June 16, 2008


Filed:

                      __________________________________________
                                        Clerk
Justice Brian Morris delivered the Opinion of the Court.

¶1        Dyllon Robertus (Robertus) appeals from an order of the Thirteenth Judicial District,

Yellowstone County, denying his motion for summary judgment. Farmers Union Mutual

Insurance Company (Farmers Union) cross-appeals from the District Court’s judgment

following a jury trial. We reverse and remand for new trial.

¶2        Robertus presents the following issues for review:

¶3        Whether the District Court properly determined that Farmers Union effectively had

notified Robertus of a change in his insurance coverage.

¶4        Whether the District Court properly determined that the modified insurance policy

precluded Robertus from stacking his underinsured motorists (UIM) coverage.

¶5        Farmers Union presents the following issues for review:

¶6        Whether the District Court properly allowed Robertus to testify regarding a claim for

future lost earning capacity.

¶7        Whether the District Court properly instructed the jury on Robertus’s future economic

losses.

¶8        Whether the District Court properly allowed a mortgage banker to testify as a non-

expert regarding interest rates as they relate to determining the value of future economic

losses.

                    FACTUAL AND PROCEDURAL BACKGROUND

¶9        Robertus sustained serious injuries to his back in a car accident on December 12,

1997, when he was 15 years old. Robertus had been driving a pickup truck insured under a


                                                2
Farmers Union policy issued to his parents. The driver of the other vehicle admitted

liability. The other driver’s insurer paid Robertus and his parents the liability policy’s

$50,000 limit. Robertus’s injuries have required ongoing medical treatment at a cost far in

excess of $50,000. Farmers Union agreed to pay up to $300,000 of UIM coverage.

¶10   Robertus’s parents purchased their Farmers Union policy in December 1994. The

parties renewed the policy the following December of each year leading up to the accident.

The policy covered the Robertus family’s seven vehicles. The policy specifically included

$300,000 uninsured motorists (UM) coverage and $300,000 UIM coverage. Farmers Union

charged the Robertuses separate premiums for UM/UIM coverage for each vehicle from

1994 to 1996. Farmers Union indicated the UM/UIM charges on the policy’s declarations

page. The declarations page listed each vehicle separately along with the UM/UIM coverage

limit and the specific amount of the premium for the listed vehicle. The declarations page

appeared as follows:




¶11   Farmers Union had taken notice of the trend in Montana toward allowing stacked

payments for UM/UIM coverage where the insured had paid separate premiums for multiple

vehicles. Farmers Union modified the way that it charged policy-holders for UM/UIM

coverage in 1996 in an attempt to avoid stacking of UM/UIM coverage. Farmers Union

changed the Robertuses’ UM/UIM coverage when the parties renewed the policy in
                                            3
December 1996. Farmers Union modified the policy’s UM/UIM coverage to charge the

Robertuses a single premium for all seven of the Robertuses’ vehicles. The change

decreased the total amount that the Robertuses paid for UM/UIM coverage for the seven

vehicles from $199 to $116. Farmers Union intended that the modified policy would limit its

UM/UIM obligation to the Robertuses to $300,000 per occurrence.

¶12     Farmers Union did not send a separate notice of the change to the Robertuses. The

policy’s declarations page provided the only indication that Farmers Union had changed the

Robertuses UM/UIM coverage. The declarations page previously had listed each vehicle

along with the amount of UM/UIM coverage for that vehicle. Farmers Union simply

replaced the column showing the separate UM/UIM premium charged for each vehicle with

the word “included.” Farmers Union listed a total UM/UIM premium amount separately at

the bottom of the list. The new declarations page appeared as follows:




¶13   Robertus brought this action against Farmers Union on March 4, 2005, alleging that

Farmers Union had failed to pay to Robertus the full amount of UIM coverage required

under the policy. Robertus moved for partial summary judgment on the issue of coverage.

He argued that Farmers Union’s failure to notify him properly of the change in coverage



                                            4
rendered the policy modification void pursuant to § 33-15-1106(1), MCA (1995), thereby

entitling him to up to $2.1 million in UIM coverage.

¶14    Farmers Union filed its own motion for summary judgment. Farmers Union asserted

that it effectively had prevented stacking under the policy by charging a single premium for

each vehicle under the Robertuses’ policy. Farmers Union contended that the decreased total

UIM coverage and the modified declarations page in the December 1996 policy constituted

sufficient notice to Robertus of the change in coverage.

¶15    The District Court decided that the modified policy excluded Robertus from receiving

stacked payments pursuant to Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, ¶ 47,

315 Mont. 107, ¶ 47, 67 P.3d 892, ¶ 47, in light of the fact that the policy charged a single

premium for UM/UIM coverage for all seven of the Robertuses’ vehicles. The District Court

arrived at seemingly contradictory conclusions, however, regarding whether the policy

modification constituted a change requiring notice. The court determined first that the

modification constituted a change requiring notice pursuant to Thomas v. Northwestern Nat.

Ins. Co., 1998 MT 343, ¶ 19, 292 Mont. 357, ¶ 19, 973 P.2d 804, ¶ 19. By contrast, the

District Court determined that the modification did not constitute a change requiring notice

under § 33-15-1106(1), MCA (1995). The court concluded, in any event, that Farmers

Union had satisfied any statutory notice requirement because the decrease in total UM/UIM

premiums charged and the changed format of the UM/UIM declarations page should have

put the Robertuses on notice of the change in coverage.




                                             5
¶16       The case proceeded to trial to determine the amount of compensatory damages to

which Robertus’s injuries entitled him. Robertus based his future lost wages claim on the

fact that his injuries caused his physical capacity to deteriorate and eventually would limit

his wage-earning abilities. Farmers Union submitted its first discovery request to Robertus

on May 4, 2005, including an interrogatory regarding future lost wages. Robertus responded

on June 2, 2005, that he could not provide an answer to this interrogatory without an expert

opinion. Robertus asserted that he would supplement his answer after consulting with an

expert.

¶17       Farmers Union submitted a second interrogatory on October 25, 2006, requesting

supplemental answers, including supplementation regarding Robertus’s answers to the

interrogatory regarding future lost wages. Robertus responded on November 22, 2006, more

than two months after the close of discovery and six months after the deadline to disclose

expert testimony. He reported that he earns $65 per hour as a welder, and that he would be

required to accept significantly less if his injuries required him to quit welding in favor of

teaching high school level industrial arts. Robertus did not elaborate on how he would

present evidence of lost wages. Farmers Union filed a motion in limine to prohibit Robertus

from presenting evidence regarding his claim for future lost earning capacity without expert

testimony. Farmers Union asserted that such testimony would be speculative and lack

foundation.

¶18       The District Court allowed Robertus to testify regarding future lost wages, but it

limited his testimony to “the amount of compensation he receives currently as a welder.”


                                              6
The court determined that Robertus lacked the qualifications to testify as to future wages,

interest rates, or other financial projections. The court ordered Robertus to rely on other

sources for any evidence regarding future wage loss. Robertus filed a brief on January 13,

2007, three days before trial that announced his intention to testify regarding the average

wage for secondary school industrial arts teachers in Montana in order to prove future lost

wages. Farmers Union responded that the brief constituted an untimely discovery response

and that the proposed evidence regarding teacher salaries lacked foundation. Farmers Union

argued that Robertus’s dilatory discovery tactics severely impaired its ability to defend as

Farmers Union had not had the opportunity to prepare witnesses, expert or otherwise, to

rebut Robertus’s vocational claims.

¶19    The District Court nevertheless allowed Robertus to testify as to the amount of

compensation that he received as a welder pursuant to the court’s instructions. Robertus’s

counsel also questioned Robertus during trial about his knowledge of teacher salaries.

Farmers Union objected for lack of foundation, speculation, and late disclosure. Robertus

presented two documents not previously disclosed to the court to demonstrate that the

information Robertus intended to present constituted a matter of public record. The first

document, from the U.S. Department of Labor website, showed the average wage for

secondary school industrial arts teachers in Montana. The second document, the Billings

Public School District Master Agreement, showed the starting salary for a beginning teacher

with a bachelor’s degree and no experience. The District Court refused to allow Robertus to

testify as to the average wage for a secondary school industrial arts teacher in Montana as


                                             7
this information was too vague. The District Court took judicial notice of the starting salary

for a beginning teacher with a bachelor’s degree and no experience, and allowed Robertus to

testify to this information.

¶20    The court settled jury instructions. Farmers Union objected to Robertus’s proposed

instructions regarding future lost earning capacity based upon lack of foundation, late notice,

and speculation. Farmers Union also objected to Robertus’s proposed instructions regarding

adjustment of future economic losses to present cash value based upon lack of foundation

absent expert testimony. The District Court determined that Robertus had presented enough

evidence about future earning capacity to the jury to warrant the instructions.

¶21    Robertus’s brother, a mortgage broker, testified regarding interest rates as they relate

to determining present value of future economic losses. Farmers Union objected on the basis

that Robertus had not disclosed his brother as an expert witness. The District Court allowed

Robertus’s brother to testify as a non-expert witness regarding a fair rate of return for a safe

investment.

¶22    The jury awarded Robertus $1,375,292. Farmers Union already voluntarily had paid

$220,422 to Robertus. The court previously had limited Farmers Union’s UIM coverage to

$300,000 in light of its determination that Farmers Union’s policy modification effectively

had avoided stacking of UIM coverages. The District Court ordered Farmers Union to pay

Robertus the remaining amount of $79,577.

                                STANDARD OF REVIEW




                                               8
¶23    We review de novo a district court’s decision to grant summary judgment using the

same criteria applied by the district court under M. R. Civ. P. 56. Walters v. Luloff, 2008

MT 17, ¶ 17, 341 Mont. 158, ¶ 17, 176 P.3d 1034, ¶ 17. A district court properly grants a

motion for summary judgment when no genuine issue of material fact exists and the moving

party is entitled to judgment as a matter of law. Walters, ¶ 17. We review for abuse of

discretion a district court’s determination of the admissibility of the evidence. State v.

Roedel, 2007 MT 291, ¶ 35, 339 Mont. 489, ¶ 35, 171 P.3d 694, ¶ 35.

                                      DISCUSSION

¶24    Whether the District Court properly determined that Farmers Union effectively had

notified Robertus of a change in his insurance coverage.

¶25    The District Court addressed the parties’ summary judgment motions in a 21-page

order and memorandum. The court, in its own words, “travel[ed] through the looking glass”

to address alternate and hypothetical bases for granting partial summary judgment to Farmers

Union, in addition to reaching dispositive issues. As such, its order and memorandum

reaches several different conclusions. We shall attempt to clarify.

¶26    Whether an insurer has provided adequate notice of a change in insurance coverage

requires a two-step analysis. Contrary to the District Court’s analysis we first must

determine whether the policy modification constituted a change in coverage requiring notice

under § 33-15-1106, MCA. We then must determine whether the insurer provided adequate

notice of the change in coverage. Thomas, ¶ 29.

                                             I.


                                             9
¶27    Section 33-15-1106(1), MCA, governs an insurer’s duty to notify an insured of

certain policy changes. Section 33-15-1106(1), MCA (1995), the version of the statute

applicable to Robertus’s claim, provides in relevant part:

              If an insurer offers or purports to renew a policy but on less favorable
       terms, at a higher rate, or at a higher rating plan, the new terms, rate, or rating
       plan take effect on the policy renewal date only if the insurer has mailed or
       delivered notice of the new terms, rate, or rating plan to the insured at least 30
       days before the expiration date.

Thomas also clarified that “when an insurer renews a previously issued policy, it has an

affirmative duty to provide adequate notice to the insured of changes in coverage.”

Thomas, ¶ 19.

¶28    The District Court considered both the 1995 version of the statute and Thomas when it

addressed whether Farmers Union effectively had modified Robertus’s UIM coverage in

December 1996. The District Court asserted that this Court did not prohibit anti-stacking

clauses for UIM coverage until 1998 when it rendered its second opinion in the dispute

between Farmers Alliance Mutual Insurance Company and Kristi Holeman. Farmers

Alliance Mut. Ins. Co. v. Holeman, 1998 MT 155, 289 Mont. 312, 961 P.2d 114 (Holeman

II). The court thus reasoned that Montana law permitted stacking clauses for UIM coverage

at the time of Farmers Union’s 1996 modification. The court nevertheless determined that

the modification actually constituted a change in coverage because Dempsey v. Allstate Ins.

Co., 2004 MT 391, ¶ 37, 325 Mont. 207, ¶ 37, 104 P.3d 483, ¶ 37, had rendered retroactive

the prohibition on anti-stacking for UIM coverage announced in Holeman II.




                                               10
¶29    The District Court next discussed whether the modified UIM premium charges

constituted less favorable terms, a higher rate, or a higher rating plan under § 33-15-1106(1),

MCA (1995). The court reasoned that the modification only could be considered to have

been on less favorable terms if it had been certain in December 1996 that Montana law

would allow stacking of UIM coverage.           The court conceded that the modification

potentially would have had the effect of reducing Robertus’s UIM coverage from $2.1

million to $300,000.

¶30    The court examined our stacking precedent and again determined that Montana did

not recognize stacking of UIM coverage until January 1998 when this Court announced its

decision in Holeman II. The District Court decided that the modification did not present

Robertus with less favorable terms when Montana law did not entitle Robertus to stack UIM

payments, either before or after the modification. The District Court concluded therefore that

the modification did not constitute less favorable terms that would require notice under § 33-

15-1106(1), MCA (1995).

¶31    The District Court nevertheless analyzed separately the adequacy of the notice

pursuant to Thomas’s requirement and the statute’s requirement. It is true that Thomas, in

part, analyzes an insurer’s duty to notify under the common law. Thomas, ¶¶ 24-27. Thomas

provides no separate basis or separate analysis, however, for the requirement that an insurer

must provide the insured with notice of changes in coverage. The Court in Thomas rejected

the notion that an insured’s duty to read the insurance policy required a page by page

inspection as evidenced by the fact that “the requirements of § 33-15-1106, MCA (1991),


                                              11
suggest otherwise.” Thomas, ¶ 28. The Court’s conclusion that “the insurer has the burden

to prove that it provided adequate notice of policy changes to its insured” emanated from this

statutory basis. Thomas, ¶ 29. Section 33-15-1106, MCA (1991), set forth an insurer’s duty

to provide notice of policy changes. Thomas provides additional analysis of this statutory

duty.

¶32     Robertus asserts that this Court has upheld the public policy that “an insurer may not

place in an insurance policy a provision that defeats coverage” in the context of UIM

coverage since well before 1996. E.g. Bennett v. State Farm Mut. Auto. Ins. Co., 261 Mont.

386, 389, 862 P.2d 1146, 1148 (1993). This Court considered in Bennett, upon certification

from the Ninth Circuit Court of Appeals, whether Montana public policy rendered void a

clause that prohibited stacking of UIM coverage provided by separate policies. Bennett, 261

Mont. at 388, 862 P.2d at 1147.

¶33     Bennett asserted that she was entitled to stack UIM coverage for two separate State

Farm insurance policies that covered two different vehicles after an underinsured motorist

struck and injured her. Both policies limited Bennett’s UIM coverage to $100,000 per

person and $300,000 per accident. Bennett, 261 Mont. at 388, 862 P.2d at 1147-48. The

Court affirmed longstanding Montana public policy that “an insurer may not place in an

insurance policy a provision that defeats coverage for which the insurer has received

valuable consideration.” Bennett, 261 Mont. at 389, 862 P.2d at 1148. The Court concluded

that Montana public policy renders void an insurance clause that prohibits stacking of UIM

coverage provided by separate policies from the same insurer. Bennett, 261 Mont. at 390,


                                              12
862 P.2d at 1149. Robertus argues, therefore, that the Court’s decision in Holeman II plays

no part in the question of whether Montana law allowed stacked UIM coverage at the time of

his accident in December 1996.

¶34    Farmers Union counters that the District Court correctly concluded that Montana law

did not prohibit anti-stacking provisions for UIM coverage until the Court decided Holeman

II in 1998. Farmers Union points to the statement in Farmers Alliance Mut. Ins. Co. v.

Holeman, 278 Mont. 274, 924 P.2d 1315, (1996) (Holeman I), that the legislature had left to

policy interpretation the question of whether UIM coverage can be stacked. Farmers Union

further argues that the Court in Holeman II distinguished Bennett on the grounds that Bennett

involved two separate insurance policies. We disagree.

¶35    The Court decided Holeman I on the issue of whether the statutory prohibition against

stacking of required coverages pursuant to § 33-23-203, MCA (1995), precluded stacking of

UIM coverage. Holeman I, 278 Mont. at 275-76, 924 P.2d at 1316-17. Holman I did not

discuss whether Montana law otherwise prohibited anti-stacking provisions for UIM

coverage. The Court’s comments regarding the legislature’s intent to leave that question to

policy interpretation refers merely to the longstanding public policy affirmed in Bennett.

Holeman I, 287 Mont. at 281, 924 P.2d at 1320.

¶36    Holeman II also did not announce a new rule when it concluded that insurers may not

prohibit stacking of UIM coverages where one policy covered multiple vehicles. Holeman

II, ¶ 47. Farmers Union asserts that this holding constituted a new rule, and not a

continuation of Bennett’s statement of Montana public policy, as evidenced by the fact that


                                             13
Bennett concerned stacking of UIM coverages under more than one policy. Although the

Court in Holeman II stated that Bennett was “arguably distinguishable” on its facts, the

reasoning of Bennett nevertheless governed its analysis. Holeman II, ¶ 43. The Court

rejected as immaterial the fact that two separate policies were at issue in Bennett. Holeman

II, ¶ 43. The Court concluded that “the overriding public policy considerations upon which

we relied in Bennett mandate that Holeman be permitted to stack the [UIM] coverages in this

case.” Holeman II, ¶ 44. The Court affirmed Bennett’s rule; it did not clearly distinguish

Bennett. Holeman II, ¶¶ 43-44.

¶37    Bennett affirmed Montana public policy that this Court will not enforce an anti-

stacking provision regarding UIM coverage because “an insurer may not place in an

insurance policy a provision that defeats coverage for which the insurer has received

valuable consideration.” Bennett, 261 Mont. at 389, 862 P.2d at 1148. Holeman I and

Holeman II reinforced that public policy. The factual distinctions between Bennett and

Holeman I and II did not alter this basic public policy. This basic public policy existed and

governed insurance policies like the Robertuses’ before this Court decided Bennett in 1993,

and certainly in 1996, when Farmers Union modified the Robertuses’ insurance policy.

Bennett, 261 Mont. at 388-89, 862 P.2d at 1148.

¶38    Robertus would have been entitled to stack seven UIM coverages for which he paid

separate premiums under the pre-1996 policy according to longstanding Montana public

policy. Bennett, 261 Mont. at 388-89, 862 P.2d at 1148. Stacking of the Robertuses’ seven

UIM coverages would have obligated Farmers Union to pay up to $2.1 million in UIM


                                             14
coverage. Farmers Union admits that it intended to avoid that stacking when it modified the

policy in 1996. Avoiding stacking of the seven UIM coverages would have limited Farmers

Union’s total financial obligation to $300,000. A policy modification intended to reduce the

amount of UIM coverage to which Robertus was entitled by nearly $2 million dollars

constitutes less favorable terms that required Farmers Union to provide notice under § 33-15-

1106(1), MCA (1995).

                                             II.

¶39    We next must analyze the adequacy of the notice that Farmers Union provided

Robertus. The District Court concluded that the changed UIM premium and the declarations

page constituted adequate notice. The court contrasted the policy change from the one in

Thomas. The Court noted that the modification in Thomas represented a subtle change to an

obscure exclusion found within the main body of the policy. Thomas, ¶ 28. The District

Court relied on the fact that the Court emphasized the obscurity of the policy modification in

Thomas by noting that it was not of a kind that could be revealed on the declarations page or

the forms and exclusions page. Thomas, ¶ 28.

¶40    The District Court also attempted to distinguish Thomas by noting that the UM/UIM

modification accompanied other obvious changes. The court pointed to the fact that

UM/UIM payments decreased from $199 to $116, and that the Robertuses’ premium for the

entire policy increased from $2,532 to $2,944. The District Court stated that it would “take

judicial notice that a $400+ increase in ones [sic] insurance premiums from year to year is

usually enough to cause one to look at the declarations page to see why.” The District Court


                                             15
further deemed it to be reasonable to expect the Robertuses to have noticed such changes to

their UM/UIM coverage.

¶41    Robertus argues that the District Court improperly has placed upon an insured the

burden of “figuring out” that a modification to the policy exists. Robertus cites Montana

cases interpreting an earlier statutory duty to notify for the proposition that Montana law

requires more notice, including, in one instance, a separate, written summary of policy

changes. Home Insurance Company v. Pinski Bros., Inc., 156 Mont. 246, 257, 479 P.2d 274,

280 (1971); Fassio v. Montana Physicians’ Service, 170 Mont. 320, 327-28, 553 P.2d 998,

1001-02 (1976). Robertus also reasserts Thomas’s rule that “when an insurer renews a

previously issued policy, it has an affirmative duty to provide adequate notice to the insured

of the changes in coverage.” Thomas, ¶ 19.

¶42    Thomas considered whether a common law principle obligating an insured to read and

examine the insurance policy tempers the insurer’s duty to notify. Thomas, ¶ 26. The Court

affirmed that “the extent of an insured’s obligation to read the policy depends upon what is

reasonable under the facts and circumstances of each case.” Thomas, ¶ 27 (citing Fillinger v.

Northwestern, 283 Mont. 71, 77, 938 P.2d 1347, 1351-52 (1997)). The Court determined

that an insured does not have an absolute obligation to read a renewed insurance policy page

by page to discover policy changes. Thomas, ¶ 28. The Court concluded that the statute

instead imposed upon the insurer the burden to prove that it had provided to its insured

adequate, affirmative notice of policy changes. Thomas, ¶¶ 25, 29.




                                             16
¶43    Farmers Union argues that the District Court correctly distinguished Thomas based

upon the nature of the modification at issue. The Court in Thomas stated that “a fair

comparison of the policies . . . would reveal no significant changes in either the declaration

page or the second page which scheduled the forms and exclusions.” Thomas, ¶ 28. The

District Court determined, and Farmers Union argues on appeal, that, here, by contrast, the

change itself should have put the Robertuses on notice to an extent that relieves the insurer of

providing additional notification.

¶44    We refuse to interpret Thomas so narrowly. The Court cited Fillinger for the

proposition that “the extent of an insured’s obligation to read the policy depends upon what

is reasonable under the facts and circumstances of each case.” Thomas, ¶ 27. Fillinger

determined that the facts and circumstances include the nature of the relationship between

the parties. Fillinger, 283 Mont. at 77-78, 938 P.2d at 1351-52. The relationship involves

whether the insured is an “‘unsophisticated individual[] who know[s] nothing about

insurance,’” an “‘experienced business person[] knowledgable about insurance,’” or a “‘large

corporation[] with batteries of lawyers.’” This reasoning also considers the complexity of

the provision at issue. Fillinger, 283 Mont. at 78, 938 P.2d at 1352 (quoting Martini v.

Beaverton Ins. Agency, Inc., 838 P.2d 1061, 1067 (Ore. 1992)).

¶45    The modification to the Robertuses’ policy appeared on the declarations page and

accompanied a decrease in the amount that Farmers Union charged for UIM coverage and a

$400 increase in the total premium. Farmers Union did not bury the modification deep

within the policy. The modification cannot be considered, however, a simple, easy concept


                                              17
to understand. To the contrary, the modification concerned stacking of UIM coverage for

multiple vehicles covered under a single policy. Nothing in the record indicates that

Robertus and his parents are experienced business people with knowledge of insurance, or a

large corporation with batteries of lawyers. Fillinger, 283 Mont. at 78, 938 P.2d at 1352.

The District Court unreasonably expected the Robertuses to grasp the significance of the

policy changes based solely on the declarations page and the changed cost of the overall

premium.

¶46    Section 33-15-1106(1), MCA (1995), imposed upon Farmers Union an affirmative

duty to provide the Robertuses with adequate notice of a change in coverage that resulted in

terms less favorable to the insured. Thomas, ¶¶ 28-29. The modified declarations page and

modified amount that Farmers Union charged for the policy, standing alone, did not

constitute adequate notice based upon the facts and circumstances of this case. We conclude

that § 33-15-1106(1), MCA (1995), rendered ineffective the modification inserted into the

Robertus’s renewed insurance policy in December 1996 based upon Farmers Union’s failure

to provide adequate notice pursuant to Montana law. Thomas, ¶¶ 28-29. We need not

address whether the District Court properly determined that the modified insurance policy

precluded Robertus from stacking his UIM coverage in light of the fact that we determine

that Farmers Union did not effectively modify Robertus’s UIM coverage.

¶47    Whether the District Court properly allowed Robertus to testify regarding a claim for

future lost earning capacity.




                                            18
¶48    Farmers Union claims that Robertus’s late discovery responses resulted in substantial

prejudice to its defense. Farmers Union asserts that it could not reach a settlement as it had

no opportunity to evaluate Robertus’s claim for future lost earning capacity. Farmers Union

points out that it was unable to assess Robertus’s future lost wages claim, and, therefore, it

could not conduct further discovery and obtain an expert to rebut Robertus’s testimony.

Farmers Union asserts that Robertus’s dilatory discovery tactics amount to a blatant abuse of

discovery.

¶49    The Court in Morris v. Big Sky Thoroughbred Farms, 1998 MT 229, 291 Mont. 32,

965 P.2d 890, concluded that the plaintiffs had abused the discovery process when they

repeatedly had evaded a request for an admission that a civil rights claim did not apply to

one of the defendants. Morris, ¶¶ 2-3, 16. The Court upheld the district court’s imposition

of discovery sanctions against the plaintiffs after two months had passed since the

defendants’ final request for admission. Morris, ¶¶ 4, 18. The Court concluded that the

district court appropriately had sanctioned the plaintiffs for abusing the discovery process

whether the plaintiffs’ discovery deficiencies resulted from tactical trickery or mere

carelessness. Morris, ¶ 16.

¶50    Discovery serves to “promote the ascertainment of truth and the ultimate disposition

of the lawsuit in accordance therewith . . . [by] assuring the mutual knowledge of all relevant

facts gathered by both parties which are essential to proper litigation.” Massaro v. Dunham,

184 Mont. 400, 405, 603 P.2d 249, 252 (1979) (citing Hickman v. Taylor, 329 U.S. 495, 507,

67 S. Ct. 385, 392 (1947)). Adherence to discovery and pre-trial procedures produces a


                                              19
“‘fair contest with the basic issues and facts disclosed to the fullest practicable extent.’”

Richardson v. State, 2006 MT 43, ¶ 22, 331 Mont. 231, ¶ 22, 130 P.3d 634, ¶ 22 (quoting

United States v. Procter & Gamble, 356 U.S. 677, 682, 78 S. Ct. 983, 986-87 (1958)). This

Court follows “a strict policy that dilatory discovery actions shall not be dealt with

leniently.” Morris, ¶ 13 (internal citation omitted).

¶51    Robertus provided an incomplete answer to Farmers Union’s May 4, 2005, request for

information regarding his claim for future lost wages. Robertus failed to consult an expert

and to supplement his answer as he had promised in his initial response. Robertus finally

answered Farmers Union’s second interrogatory requesting supplemental answers relating to

future lost wages on November 22, 2006, more than two months after the close of discovery

and six months after the deadline to disclose expert testimony. Robertus’s answer discussed

future lost wages, but it failed to elaborate on how he would present evidence of future lost

wages at trial. Robertus did not disclose his intention to testify himself regarding future lost

wages until three days before the start of trial.

¶52    Robertus’s conduct amounted to dilatory discovery tactics. This conduct prevented

Farmers Union from assessing the merits of the Robertus’s case. Farmers Union could not

prepare adequately its defense, could not conduct follow-up discovery, and could not obtain

its own expert to rebut Robertus’s testimony regarding future lost wages in time for trial.

The District Court abused its discretion when it allowed Robertus to testify regarding his

claim for future lost earning capacity. Morris, ¶ 18; Roedel, ¶ 35. We remand for a new trial




                                              20
on damages in light of the prejudice that Farmers Union suffered. We need not address

Farmers Union’s two additional cross-appeal issues for this reason.

¶53    We reverse and remand for further proceedings consistent with this opinion.



                                                   /S/ BRIAN MORRIS


We Concur:


/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ JOHN WARNER


Justice W. William Leaphart, dissenting in part and concurring in part.

¶54    I dissent as to the question of whether the District Court properly allowed Robertus to

testify regarding a claim for future lost earning capacity. I concur in the Court’s analysis of

the other issues.

¶55    Robertus’s actions in the discovery phase of the litigation do not rise to the level of

abuse discussed in Richardson v. State, 2006 MT 43, 331 Mont. 231, 130 P.3d 634.

Robertus eventually provided responses to Farmers Union’s specific request for

supplementation, including information about his new full time job. Contrary to Richardson,

Farmers Union did not seek a motion to compel; Robertus did not fail to respond to a court

order. Richardson, ¶¶ 7, 13. Farmers Union did not move to seek clarification of Robertus’s




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answers as it could have under M. R. Civ. P. 37(a)(2), and (3) nor did it ask that discovery be

reopened to allow further depositions or ask that the trial be postponed.

¶56    I cannot conclude that the District Court abused its discretion when it allowed

Robertus to testify as to future lost earnings despite his late discovery responses. State v.

Roedel, 2007 MT 291, ¶ 35, 339 Mont. 489, ¶ 35, 171 P.3d 694, ¶ 35.



                                                          /S/ W. WILLIAM LEAPHART




Justice Jim Rice, concurring in part and dissenting in part.



¶57    I concur with the Court’s resolution of the cross appeal, but dissent from the Court’s

reversal of the District Court on the appeal issues. I do not believe that Farmers Union was

required to provide notice of the 1996 change in the method it calculated Robertuses’

premium for UIM coverage.

¶58    The Court reasons that Holeman II “did not announce a new rule” permitting stacking

of single-policy coverages because previous, generalized public policy statements against

provisions which “defeat[ed] coverage for which the insurer has received valuable

consideration,” ¶ 36, were sufficient enough to communicate the specific message that anti-

stacking provisions would not be enforced. According to the Court, even though the

Robertuses’ pre-1996 policy contained an explicit anti-stacking provision, “Robertus would

have been able to stack seven UIM coverages for which he paid separate premiums under the
                                              22
pre-1996 policy,” ¶ 38, despite the fact that no case or statute then permitted Robertus to

ignore the anti-staking provision of his single policy. In my view, this is not a fair rendering

of the law as it stood in 1996 and places a divination requirement upon Farmers Union which

is unreasonable.

¶59    The pre-1996 policy contained express anti-stacking language notifying the Robertus

family that only one $300,000 payment was available under their single Farmers Union

policy. At the time Farmers Union changed its pricing structure to charge a single premium

for UIM coverage on all vehicles, Montana law had not prohibited this anti-stacking

provision. Bennett, decided in 1993, did not apply to this policy. Although we offered the

observation eleven years later in Dempsey that anti-stacking policies had been “discouraged”

in Bennett, the actual holding in Bennett permitted stacking of two separate policies for

which separate premiums were paid. Bennett, 261 Mont. at 390, 862 P.2d at 1149 (“Bennett

could reasonably expect to recover damages up to the limit of both policies under which she

was an insured and for which separate premiums had been paid.”) Beyond that, Bennett’s

general statement of public policy, that “an insurer may not place in an insurance policy a

provision which defeats coverage,” Bennett, 261 Mont. at 389, 862 P.2d at 1148, was

certainly not a broad prohibition against all anti-stacking provisions. Indeed, two years later,

we rejected stacking of coverages in Chilberg v. Rose, 273 Mont. 414, 417, 903 P.2d 1377,

1379 (1995), because the injured party was a passenger in a vehicle owned by an individual

with three separate policies covering three separate vehicles. Holeman I, decided in 1996,

merely determined that § 33-23-203, MCA, did not prohibit stacking of UIM coverages.


                                              23
Holeman I did not hold that UIM coverages could be stacked if separate premiums were

charged for each vehicle and, as the Court correctly observes, “Holeman I did not discuss

whether Montana law otherwise prohibited anti-stacking provisions for UIM coverage.” ¶

35. Nonetheless, the Court concludes that a clear rule had somehow emerged from this

uncertain precedent so that Holeman II “did not announce a new rule.” I must disagree.

There remained uncertainty in the law which generated considerable litigation over this

issue. It was not until 1998, when Holeman II held that UIM coverages could be stacked

because “separate premiums were charged for coverage of each motor vehicle listed within

the policy,” Holeman II, ¶ 47, that the rule applicable to this case emerged. That was after

Farmers Union had changed the premium structure of the Robertus policy.

¶60    The Court’s decision begs an interesting practical question. Given the facial validity

of the pre-1996 policy under then-existing law, just what notice would Farmers Union have

been required to give of the policy change at that time? Are insurance companies really

required to give notice that they are revising a policy in a manner which does not change

existing coverages, but so that, in the event the law changes in the future, the coverages in

the policy will remain the same as currently provided? Are they supposed to notify insureds

of policy changes made for the purpose of confirming an existing belief that an explicit

provision of the policy which requires payment of the UIM limits only once is legal?

Neither statute nor caselaw require that insurers give notice of such “nonchanges” in policy

coverages for the purpose of satisfying potential future legal developments. Here, the Court

takes the easy way out—it declares that Farmers Union’s notification of the change in


                                             24
premium was “inadequate,” but offers not insight regarding how Farmers Union could have

provided “adequate” notice under the law as it existed in 1996.

¶61    Farmers Union should not be held retroactively liable for its failure to comply with a

rule pronounced subsequent to its actions in 1996. Although Dempsey made the stacking

rule retroactive, the purpose of retroactivity is to apply the rule to pending cases—it does not

require that Farmers Union bear responsibility for a rule announced years after it acted. I

would affirm the District Court.


                                                   /S/ JIM RICE




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