                                                                                            May 29 2012


                                           DA 11-0488

                      IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2012 MT 116



CASSADIE PARISH and CHRIS PARISH,

              Plaintiffs and Appellants,

         v.

EMILY ANN MORRIS; UNITED FINANCIAL
CASUALTY INSURANCE COMPANY
and JOHN DOES 1-6,

              Defendants and Appellees.



APPEAL FROM:            District Court of the Eleventh Judicial District,
                        In and For the County of Flathead, Cause No. DV 08-746(A)
                        Honorable Ted O. Lympus, Presiding Judge


COUNSEL OF RECORD:

                For Appellants:

                        Michael A. Bliven, Alex K. Evans, Anderson & Bliven, P.C.,
                        Kalispell, Montana

                For Appellees:

                        Robert J. Phillips, Amy O. Duerk, Phillips Haffey PC, Missoula, Montana



                                                    Submitted on Briefs: April 17, 2012

                                                                Decided: May 29, 2012


Filed:

                        __________________________________________
                                          Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.


¶1     Cassadie and Chris Parish were injured in a motor vehicle accident on December

31, 2007, when their vehicle was struck by uninsured driver Emily Ann Morris. United

Financial Casualty Insurance Company (UFC) provided insurance coverage to the

Parishes, including uninsured motorist (UM) coverage.         The Parishes, who had two

vehicles insured on their UFC policy at the time of the accident, argued they should be

permitted to stack the UM benefits provided in their policy. UFC refused, stating the

Parishes’ policy did not allow stacking. The Parishes sued seeking declaratory judgment.

UFC filed a motion for summary judgment. The Eleventh Judicial District Court in

Kalispell, Montana, granted UFC’s motion. Parishes appeal. We affirm.

                                          ISSUE

¶2     A restatement of the dispositive issue on appeal is:

¶3     Did the District Court err in granting UFC’s motion for summary judgment?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶4     The Parishes obtained motor vehicle insurance coverage from UFC on May 8,

2007, and remained insured by UFC until September 18, 2008. Throughout this time, the

Parishes’ policy alternatively covered one or two vehicles per the Parishes’ instruction to

UFC. Specifically, from May 8, 2007, through January 8, 2008, the policy covered two

vehicles. From January 9 through February 22, 2008, the policy covered a single vehicle.

From February 23 until July 2008, the policy again covered two vehicles. For a few days




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in July 2008, the Parishes insured one car. At the time of cancellation, two cars were

covered by the policy.

¶5     From May 8, 2007, through May 7, 2008, irrespective of the number of vehicles

protected by the policy, the premium for UM coverage was $73. Upon renewal of the

policy on May 8, 2008, the UM premium increased to $82. The Declarations page of the

policy stated that for the UM premium—whether $73 or $82—the insured received a

“$50,000 each person/$100,000 each accident” coverage benefit. The policy further

stated “The policy limits shown for an auto may not be combined with the limits for the

same coverage on another auto, unless the policy contract allows the stacking of limits.”

The Parishes’ policy did not contain a provision allowing stacking. 1           Rather, the

applicable endorsement form stated “The limit of liability shown on the Declarations

Page for the coverages under this endorsement is the most we will pay regardless of the

number of claims made, or insureds, or lawsuits brought, or vehicles involved in the

accident.” The Parishes’ policy also provided medical payment (MP) benefits of $5,000

per person. The policy provided that MP benefits could not be stacked; however, UFC

acknowledges that the Parishes paid a separate premium for MP for each insured vehicle.

¶6     Following the accident, UFC paid Chris and Cassadie $60,000 each—$10,000 for

MP benefits and $50,000 for UM benefits. It is undisputed that the damages Chris


1
  “Stacking” means to add the policy limit of UM, underinsured motorist (UIM), or medical pay
coverage from an insurance policy on one vehicle with the UM, UIM and medical pay policy
limits from the policy on another vehicle. For example, an insured with three vehicles and
paying a separate premium for UIM coverage on each vehicle could “stack,” or add, the three
UIM coverages together and feasibly collect the triple amount. See Hardy v. Progressive
Specialty Ins. Co., 2003 MT 85, 315 Mont. 107, 67 P.3d 892.

                                             3
sustained did not exceed the $60,000 UFC paid to him. However, Cassadie’s damages at

the time this action was filed exceeded the $60,000 in benefits paid to her.

¶7     The Parishes made a claim with UFC for $100,000 per person/$200,000 per

accident in UM benefits, claiming a right to stack coverages for each vehicle insured.

When UFC refused to stack the UM coverage of their policy, the Parishes sought

declaratory judgment.2 UFC moved for summary judgment asserting that no material

facts were in dispute. It argued that the issue before the District Court was purely the

interpretation of the insurance contract and the applicable statute. The insurer submitted

that (1) it was in compliance with Montana’s anti-stacking statute, § 33-23-203, MCA;

(2) its insurance forms clearly stated that stacking is not allowed; and (3) the Parishes did

not pay separate premiums for UM coverage on separate vehicles and therefore, in

accordance with applicable case law, UFC was not required to stack UM benefits.

¶8     Parishes challenged UFC’s claim of compliance with § 33-23-203, MCA. They

argued that UFC did not file its premium rates with the Montana Commissioner of

Insurance until October 2007—after the Parishes had purchased their policy—and

because such filing cannot be applied retroactively, UFC did not meet the requirements of

the statute. The Parishes further asserted that the insurance policy was ambiguous and

should be construed against UFC and that they had a reasonable expectation that they

could receive stacked UM coverage.




2
  The Parishes also sued Morris, the other driver, for negligence and negligence per se. Their
action against Morris is not the subject of this appeal.

                                              4
¶9     Noting the evidence presented by UFC to the effect that it had submitted its

premium rates to the Insurance Commissioner in November 2006 and that the Parishes

paid one premium, not two, for UM coverage on both cars, the District Court granted

UFC’s motion for summary judgment. Parishes appeal.

                               STANDARD OF REVIEW

¶10    We review the grant of summary judgment de novo, using the same M. R. Civ. P.

56 criteria used by the district court. Summary judgment is appropriate when the moving

party demonstrates both the absence of any genuine issues of material fact and

entitlement to judgment as a matter of law. Kichnet v. Butte-Silver Bow County & Mont.,

2012 MT 68, ¶ 11, 364 Mont. 347, ___ P.3d ___. The district court’s conclusion that no

genuine issue of material fact exists and that the moving party is entitled to judgment as a

matter of law is a conclusion of law which we review for correctness. Krajacich v. Great

Falls Clinic, LLP, 2012 MT 82, ¶ 8, 364 Mont. 455, ___ P.3d ___. (Citations omitted.)

                                       DISCUSSION

¶11    Did the District Court err in granting UFC’s motion for summary judgment?

¶12    The relevant statute in this case, § 33-23-203(1), MCA, was revised by the

Montana Legislature in 2007 and became effective on April 17, 2007. The amended

statute provides the following limitation of liability under a motor vehicle liability policy:

       (1) Unless a motor vehicle liability policy specifically provides otherwise,
       the limits of insurance coverage available under each part of the policy
       must be determined as follows, regardless of the number of motor vehicles
       insured under the policy, the number of policies issued by the same
       company covering the insured, or the number of separate premiums paid:

                                           .   .   .

                                               5
             (c) the limits of the coverages specified under one policy or under
      more than one policy issued by the same company may not be added
      together to determine the limits of insurance coverages available under the
      policy or policies for any one accident if the premiums charged for the
      coverage by the insurer actuarially reflect the limiting of coverage
      separately to the vehicles covered by the policy and the premium rates have
      been filed with the commissioner.

¶13   To alert insurers of the newly amended statute, the Insurance Commissioner issued

an Advisory Memorandum on August 29, 2007, stating, among other things:

              Prior to the . . . amendments, insureds in many circumstances have
      been able to “stack” (combine in the aggregate) their medical payments
      coverages, uninsured motorist coverages (UM), and underinsured motorist
      coverages (UIM) when separate premiums were paid for each coverage for
      each vehicle.
              The new statute provides that an insurer can avoid stacking “if the
      premiums charged for the coverage by the insurer actuarially reflect the
      limiting of coverage separately to the vehicles covered by the policy and
      the premium rates have been filed with [C]ommissioner.” An insurer
      seeking to avoid stacking must file new premium rates with an actuarial
      certification and supporting actuarial documentation demonstrating that the
      new rates reflect limiting coverage. New policy forms stating that coverage
      will be limited (not stacked) would also need to be filed separately from the
      rate filing and approved by the Commissioner.

¶14   On appeal, Parishes raise the following arguments in support of their demand for

stacked UM benefits: (1) UFC did not file their forms under § 33-23-203(1)(c), MCA,

until October 11, 2007, more than five months after issuing the Parishes’ policy, and such

filing cannot be applied retroactively; (2) UFC documents filed with the Insurance

Commissioner indicate that UFC was charging UM on a “per vehicle” basis rather than a

“per policy” basis; (3) UFC’s policy is ambiguous because UFC stacked MP coverage for

the Parishes but refused to stack UM coverage; (4) UFC’s insurance agreement created a

reasonable expectation of stacked UM coverage; and (5) UFC failed to meet its summary

                                            6
judgment burden because the affidavits submitted to the District Court to support its

motion were inadmissible based upon irrelevancy.

¶15   UFC addresses each argument. It asserts that it began charging insureds a single

premium for UM coverage in December 2006, irrespective of the number of vehicles

insured under a policy. Evidence of UFC’s change to a single premium UM policy was

presented by an initial affidavit and a supplemental affidavit of Matthew Marcinek, a

product manager and actuary for UFC. Attached to Marcinek’s affidavit is UFC’s rate

filing document filed with the Montana Commissioner of Insurance by UFC analyst

Hollie O’Toole on November 6, 2006. This document was filed before UFC began

selling the single UM premium insurance in December 2006.           Marcinek’s affidavit

acknowledges that UFC filed its rate calculations again with the Insurance Commissioner

on October 11, 2007, as claimed by the Parishes. The affidavit further indicates that the

premium charged for the UM coverage actuarially reflected the limitation of coverage

separately to the vehicles covered by the Parishes’ policy (as required by § 33-23-203(1),

MCA) and that the premium calculation formula utilized for UM coverage did not change

during the time the Parishes were insured by UFC. UFC therefore maintains that it was

in compliance with § 33-23-203, MCA.

¶16   The Parishes claim that UFC charged its UM premiums based on a “per vehicle”

rather than a “per policy” basis. Marcinek’s affidavits and the Parishes’ policy establish

the contrary. As noted in ¶ 5, UFC charged Parishes one premium for UM coverage,

regardless of the number of vehicles currently insured.         Parishes’ claim that the

calculation of the premium was done on a per vehicle basis notwithstanding, the question

                                            7
here is whether Parishes were charged separate UM premiums for each insured vehicle.

The evidence clearly establishes they were not.

¶17    UFC also denies that its policy is ambiguous. First, it contends the policy clearly

and expressly notifies insureds that stacking UM coverage is not allowed. Second, UFC

acknowledges that while the policy also precludes stacking MP coverage, it nonetheless

stacked the MP coverage for the Parishes. It submits, however, that because MP benefits

are not at issue in this matter, it is irrelevant that UFC stacked the Parishes’ medical

benefits. UFC further maintains that stacking MP did not in any way create an ambiguity

regarding UM coverage under the policy. UFC explains that its decision to stack MP was

based upon Montana public policy requiring stacking if an insured paid separate

premiums for benefit coverage on multiple vehicles. Hardy, ¶ 40 (“[A] Montanan could

reasonably expect coverage up to the aggregate limit of the separate policies when a

separate premium for . . . coverage was charged for each.”); State Farm Mut. Auto. Ins.

Co. v. Gibson, 2007 MT 153, ¶ 11, 337 Mont. 509, 163 P.3d 387 (“Although Hardy . . .

involved underinsured motorist coverage, we have applied the same public policy

considerations to [medical payments coverage] and held that when an insurer receives

valuable consideration for each policy, the insurer cannot refuse to pay the benefits due

pursuant to each policy.”).

¶18    We must interpret an insurance contract as we would any contract. The words of

the policy must be understood in their usual meaning. Dakota Fire Ins. Co. v. Oie, 1998

MT 288, ¶ 15, 291 Mont. 486, 968 P.2d 1126. We acknowledge that the Declarations

page of the Parishes’ policy does not address stacking. However, the Declarations page

                                            8
is designed to give the insured an overview of the major aspects of the policy and not to

provide the detailed terms and conditions. Farmers Alliance Mut. Ins. Co. v. Miller, 869

F.2d 509, 512 (9th Cir. 1989).

¶19    As noted above, the policy and the endorsement form made it clear that stacking

would not be permitted. The policy was not ambiguous.

¶20    Addressing the Parishes’ claim that they reasonably expected to be able to stack

their UM benefits, UFC counters that given that its policy language on this point is clear

and unambiguous, there is nothing in the policy that could be reasonably interpreted as

stating or implying that UM liability coverage could be stacked.        UFC argues that

“expectations which are contrary to a clear exclusion from coverage are not objectively

reasonable.” Lee v. USAA Cas. Ins. Co., 2001 MT 59, ¶ 30, 304 Mont. 356, 22 P.3d 631.

(Citation omitted.)

¶21    It is apparent from the evidence in the record that the Parishes paid one premium

for UM coverage for both of their vehicles. In all cases cited by the Parishes, the

insurance companies were charging their insureds separate premiums for each insured

vehicle. In those cases, we held that the insurance company was receiving valuable

consideration to provide coverage on every insured vehicle, and therefore the insureds

should be allowed to stack their coverages upon filing a legitimate claim. These cases are

inapposite to the case before us.    Hardy, ¶ 42 (“[A]n anti-stacking provision in an

insurance policy that permits an insurer to receive valuable consideration for coverage

that is not provided violates Montana public policy. To the extent that the premium

charged for the second and third vehicles were disproportionate to the coverage provided,

                                            9
the anti-stacking provisions in Hardy’s policy cannot be enforced.”); Bennett v. State

Farm Mutual Auto. Ins. Co., 261 Mont. 386, 388-898, 62 P.2d 1146, 1148 (1993)

(“[W]here separate premiums have been charged and collected on each vehicle for

uninsured motorist coverage, the insured is entitled to recover up to the aggregate sum of

the coverages on all the vehicles so insured.”). Here, only one premium was charged for

UM coverage throughout the life of the policy.

¶22    Lastly, UFC argues that the District Court did not err in refusing to strike certain

affidavits and attachments from the record. UFC notes the Parishes did not file a motion

to strike in District Court and, furthermore, there was no basis for striking the evidence.

The insurer posits that the Declarations pages submitted were presented as evidence that

UFC charges one premium for UM coverage regardless of the number of vehicles insured

under a single policy and therefore, and despite the post-accident date of the submitted

evidence, it was relevant.

¶23    We conclude that the District Court did not err in admitting UFC’s affidavits and

attachments. First, the Parishes did not ask the District Court to strike the evidence. And

second, the evidence was relevant. UFC submitted the Parishes’ policy covering the

period from May 8, 2007, through May 7, 2008. It indicated a single UM premium of

$73 for two vehicles. The Parishes’ accident occurred during the term of this policy.

After the accident, they notified UFC to remove their wrecked vehicle from the policy.

As a result a new policy was issued for a single vehicle. The Declarations page for the

new policy indicated one vehicle but the UM premium of $73 remained the same. UFC

also submitted the Declarations page for the Parishes’ subsequent policies, each

                                            10
illustrating that regardless of the number of vehicles being insured the UM premium

remained the same. We conclude such evidence was relevant to the issue before the

District Court and was correctly admitted.

¶24    Parishes raise a new legal argument in their reply brief in which they assert that

Marcinek’s affidavit should have been stricken for lack of personal knowledge of the

Parishes’ insurance policy. They claim that because Marcinek was not working for UFC

at the time UFC first issued its policy to the Parishes in May 2007, he had no personal

knowledge of the circumstances. As the Parishes did not present this legal argument to

the District Court, they did not preserve it for appeal. Hunt v. K-Mart Corp., 1999 MT

125, 294 Mont. 444, 981 P.2d 275. Moreover, we do not allow appellants to raise new

legal arguments in their reply briefs. Arguments must be raised in an appellant’s initial

brief to allow the appellee an opportunity to respond. M. R. App. P. 23(c).

¶25    As the Parishes do not prevail on appeal, we need not address their claim for

attorney fees.

                                    CONCLUSION

¶26    For the foregoing reasons, we affirm the District Court’s ruling granting UFC’s

motion for summary judgment.


                                                       /S/ PATRICIA COTTER

We concur:

/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ BRIAN MORRIS
/S/ JAMES C. NELSON

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