INSURANCE: Owner/operator’s load not excluded from contractor trucking company’s policy as brokered load… death crash covered… Cebull.

Randall Dwyer was driving a semi from Roundup to Casper on Hwy 191 8/3/11 after delivering fracking sand for Cobra Trucking. He crossed the centerline north of Billings and struck a vehicle, killing Frank Rohr and severely injuring his wife Alice and their infant son. Alice is seeking recovery under Cobra’s Great West policy. Dwyer had hauled 16 loads of sand for Cobra 6/18/11-8/3/11. Cobra was under contract with Halliburton and other well service companies. It did not have enough employees, tractors, or trailers to handle all loads available, and contracted with owner/operators including Dwyer, who had his own DOT number and liability insurance. Cobra offered loads as they became available to drivers at the top of a list. Once a driver accepted a load he was obligated to pick it up in Casper. Cobra employees assisted in loading and completed a bill of lading listing Cobra as the carrier. The Great West policy stated that “Liability Coverage shall not apply to transportation broker or freight forwarder operations of the `insured’.” Great West seeks summary judgment that it has no duty to defend or indemnify Cobra for the Dwyer/Rohr accident.

Great West argues that “brokerage operations” can be conducted without a party acting as a “broker.” This is not logical. “Broker operations” is not defined in the policy. 49 CFR 371.2(a) states:

“Brokerage” or “brokerage service” is the arranging of transportation or the physical movement of a motor vehicle or of property. It can be performed on behalf of a motor carrier, consignor, or consignee.

“Broker” means a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.

Great West argues that 371.2(c) authorizes a carrier to act as a transportation broker. However, §371.2(a) states that a carrier is not a broker if it is arranging transportation for shipments that the carrier is legally bound to transport. Cobra was legally obligated to transport the sand in Dwyer’s truck 8/3/11, based on its contractual relationship with Halliburton. Dwyer did not have a contract with Halliburton. Even Cobra Pres. Donald Hollandworth confirmed that Dwyer’s load was not a brokered load. The bill of lading listing Cobra as the carrier is further confirmation of its contractual obligation with Halliburton to transport the load. Cobra was not acting as a broker and its dealings with Dwyer were not “brokerage operations” under the policy exclusion.

Further, given that the policy does not define “broker operations,” the Court could certainly find the term to be ambiguous and construe it against Great West.

Summary judgment for Alice.

Great West Casualty v. Cobra Trucking and Sieler-Rohr, 40 MFR 195, 2/4/13.

Brian Smith & Katy Mahe (Garlington, Lohn & Robinson), Missoula, for Great West; James Ragain (Ragain Law Firm), Billings, for Cobra; Torger Oaas (Oaas Law), Lewistown, and Kris Birdwell (Stogsdill Law Office, Lewistown, for Alice.

PRODUCT LIABILITY: Opinion that improper assembly of steering components of crashed Honda ATV caused “difficult and unpredictable” steering stricken for failure to satisfy Rule 702 reliability/relevance, leaving insufficient evidence to establish manufacturing defect claim… JML for Defendant following hung jury… Lynch.

Zane Johnson purchased a Honda ATV in 3/07. A few months later he failed to negotiate a right turn on a Forest Service road and crashed. He sued Honda alleging design & manufacturing defects, negligence, and breach of express warranty. He withdrew his negligence claim and the Court dismissed his design defect claim on summary judgment. Trial on his manufacturing defect and warranty claims began 10/22/12. The Court dismissed his warranty claim before instructing the jury 10/31. The Missoula jury deliberated 5 days on the manufacturing defect claim but was unable to reach a verdict. (MLW 12/15/12). Consistent with discussion in open court, Honda has moved to strike the testimony of Johnson’s expert ME Robb Larson and filed renewed motions for JML and sanctions for spoliation.

Larson testified that improper assembly of the right front axle shaft and CV joint caused the ATV to exhibit a “difficult and unpredictable steering response.” Honda moves to strike his testimony for failure to meet Rule 702 and Daubert (US 1993) requirements. It argues that his general expertise in mechanical engineering did not qualify him to offer expert testimony as to ATV operation, handling, and manufacturing, metallurgy, and forensic investigation, he never tested or objectively validated his theory, and his opinion was irrelevant because the difficult steering response he described was unlike the steering problem Johnson claimed before and at the time of the crash.

Assuming for present purposes that Larson was properly qualified to testify as he did, the first question is whether his testimony was sufficiently reliable. Honda’s most compelling complaint is that he did not test or objectively validate his hypothesis. The post-trial record reflects that he failed to conduct any tests to verify or quantify a “difficult and unpredictable” steering response. He admitted as much on cross and went so far as to concede that he did “no validation testing” as to his theory. Presumably in light of his testimony, Johnson concedes that Larson “did not do any tests of the steering mechanism on the subject ATV or an exemplar ATV” and agrees that he indicated that “his opinion of the steering effects was a subjective one.” The scientific method involves generating hypotheses and testing them to determine whether they are correct. Daubert. By his own admission, Larson failed to follow this basic scientific process before he never tested his theory. He never verified that metal-to-metal contact between the axle shaft and CV joints would have caused any steering problem at all, and made no attempt to objectively quantify the extent of such a problem. Thus his opinion that improper assembly of the right front axle shaft had caused a “difficult and unpredictable” steering response was not supported by sufficient facts or data and was not the product of reliable methodology. Johnson takes the position that his testimony was otherwise supported by sufficient facts & data because he relied on information that he had “been made aware of or personally observed” as contemplated by Rule 703. To Johnson, it is significant that Larson “had possession of the physical components” of the ATV and visually inspected them. He notes that Larson found that “the axle did not look the way that an axle should look,” it “did not fit into its corresponding cv joint, and the cv joint had metal particles in it,” which is “objective information that a reasonable juror could understand and that an expert would rely on in the field.” However, Honda has not challenged Larson’s testimony under Rule 703, but claims that under Rule 702 he “cannot identify any objective data that is logically related to his opinions.” Johnson fails to explain how Larson’s basic observations as to the condition of the various parts substantiated or validated his theory that a difficult and unpredictable steering response would have resulted.

Johnson also claims Larson’s opinion was supported by sufficient facts & data because he had received information about the nature of the crash from Johnson and his family. As Johnson notes, Larson testified that “he knew the vehicle had a steering failure directly prior to the crash” and “the facts reported were that the axle was on the vehicle at the time of the crash.” He maintains that this was relevant data which Larson was entitled to accept at face value and properly considered in forming his opinions, and it was for the jury to determine how much weight to give to his opinion. However, Larson assumed that the axle was on the ATV at the time of the accident and disregarded evidence that might have suggested otherwise. When he first received the ATV there was dirt and mud-encrusted duct tape on the inboard CV joint and the outboard joint was filled with contaminated grease. He nonetheless “proceeded with the assumption that the shaft had been in place up until the time of the accident” and disposed of the duct tape and grease without testing or analyzing them. (Honda contends that because Larson did not preserve those materials it was deprived of the ability to establish that the axle was not in the ATV at the time of the crash. Because the Court finds that his testimony must be stricken under Rule 702, its motion for case-terminating sanctions based on spoliation is moot.) Larson essentially accepted that the axle shaft was in the ATV at the time of the crash and extrapolated to an unfounded conclusion that metal-to-metal contact between the shaft and CV joint had caused a “difficult and unpredictable” steering response. But because he never tested his theory and failed to rule out the possibility that the shaft may have been missing when Johnson crashed, the analytical gap between the available data and his ultimate opinion was simply too great.

Johnson nonetheless argues that Larson’s methodology was sound because he performed other tests “to inform his opinion.” For example, he did an Instron tensile exam, or “pull test,” on the left front axle to measure the static force necessary to overcome the circlip capture force and pull the shaft out of the CV joint, because “the shaft had apparently come out of the right side” in the crash and he “was very curious to find out how much force would have been required to extract that.” In Larson’s words, he “learned the maximum force to overcome the circlip tension,” learned that there was “some diminished force required to continue to pull the shaft all the way out,” and discovered that “the further it gets extracted, the lower that force value is until finally it drops to zero and the shaft pops free.” He did not claim to have learned anything about the ATV’s steering.

In an attempt to determine whether the axle had been inserted completely at the time of manufacture he cut the CV joint in half to determine if the circlip had expanded and left any marks inside the joint. He found “no obvious wear patterns,” and described the results as “inconclusive.” He sent some grease and metallic particles from the joint to a lab. That testing “ruled out the possible presence of foreign metallic materials within the CV joint recess” and had nothing to do with steering. He performed a Rockwell hardness test to find out why the right front axle appeared “shiny, smooth, rounded compared to the machined splined surface on a good axle.” That showed that “the splines were extremely hard and resistant to wear and the rounded portion and the core of the shaft was relatively soft.” To Larson, this simply “explained the rounded shape” of the axle shaft because they “seem to indicate that once the ends of those splines were chipped off or ground off or broken off, then what’s left would round off nicely into the form seen.” He did not claim to have learned anything about the steering mechanism.

Nonetheless, Larson concluded based on his tests that there was a manufacturing defect in the form of improper coupling of the right front axle shaft and CV joint, which caused a difficult and unpredictable steering response. While his tests may have “informed his opinion” as to a manufacturing defect, Johnson fails to explain how they substantiated, validated, or even related to his theory that the alleged defect affected the steering, while Larson made it abundantly clear on cross that he did no validation testing to determine whether metal-on-metal contact between the axle shaft and CV joint would have caused a steering problem, and conceded that his opinion was a “hypothesis that I did not test.” Johnson argues that Larson should not be faulted for failing to test his hypothesis because the steering “condition is inimitable, because there is no documentation of the exact conditions and placement of the axle at the moment of the steering failure.” But the point is not whether the exact condition and placement of the axle at the time of the accident can ever be known, but that Larson developed a hypothesis which he failed to test or otherwise validate. There is also no evidence that his “difficult and unpredictable” steering theory has been subjected to peer review or publication or is generally accepted in the scientific community. Barabin (9th Cir. 2012). His opinion that improper assembly of the axle shaft caused a “difficult and unpredictable” steering response was not based on sufficient facts or data and was the product of a fundamentally flawed methodology, and is not sufficiently reliable to be admitted under Rule 702.

Even if it could be said to be sufficiently reliable, it would still have to be stricken because it did not “fit” the facts developed at trial and so failed to satisfy Rule 702 “relevancy.” Daubert. Larson testified that the response would be felt during “operation of the vehicle in any condition other than when it’s going in a straight line” and “would be especially apparent at large turn angles.” He explained that “there would be feedback through the steering assembly that would cause a feeling by the operator that the vehicle wanted to return to a straight line condition” — that there would be a large degree of difficulty when the steering angle was severe and basically negligible when the vehicle is going in a straight line. However, as Johnson described it, he was “approaching the corner and went to turn,” the steering “was stuck, so I went straight off the corner and I wrecked.” He stated that the handlebars essentially “locked up” as he was making his straight approach to the turn and he “couldn’t move them” and was unable to force them loose, even as he stood in an attempt to do so, and they remained locked as he went straight off the edge of the road. He and his brother-in-law testified that the steering had similarly locked up earlier that day. However, Larson made clear that he “did not identify a condition where it was impossible to turn the handlebars.”

Honda moved for JML under Rule 50(a) at the close of Johnson’s case. The Court denied the motion after the jury was unable to reach a verdict, subject to Honda’s right to renew it in light of the evidence at trial. Honda has filed a renewed motion pursuant to 50(b). The Court instructed that for Johnson to prevail on his manufacturing defect claim he had to prove:

First, that at the time of sale by [Honda] the product was in a defective condition because of a manufacturing defect. A manufacturing defect exists when a product fails to conform to its design. Second, that the manufacturing defect caused injury to Mr. Johnson.

There can be no real dispute that ATV assembly and the effects that improper assembly may have on steering are beyond the common experience of the trier of fact, so it was necessary for Johnson to present expert testimony to establish that a manufacturing defect caused the steering problem that he alleges made it impossible to negotiate the turn. However, Larson’s opinion that improper assembly of the right front assembly and CV joint caused a “difficult and unpredictable” steering response is properly stricken because it does not satisfy Rule 702. Without Larson’s opinion Johnson has no evidence that the alleged manufacturing defect cause any steering problem, and without that he cannot show that it caused his injuries.

Honda’s renewed motion to strike Larson’s testimony is granted to the extent set forth. Its motion for JML is granted. Its renewed motion for a dispositive spoliation sanction is denied as moot.

Johnson v. American Honda Motor Co., 40 MFR 160, 1/31/13.

Martin Judnich & Vincent Pavlish (Judnich Law Offices), Missoula, and Mathew Stevenson, Missoula, for Johnson; Paul Cereghini & William Auther (Bowman & Brooke), Phoenix, and Gerry Fagan (Moulton Bellingham), Billings, for Honda.

WRONGFUL OCCUPATION: MCA 27-1-318 does not prevent pursuit of other claims, but Plaintiffs may not double-recover loss-of-use damages from alleged pollution under wrongful occupation and some other theory such as trespass or nuisance… Molloy.

Plaintiffs, alleging zinc and creosote pollution of groundwater from a tie-treating plant, claim that BNSF violated MCA 27-1-318:

The detriment caused by the wrongful occupation of real property in cases not otherwise provided for in this code is deemed to be the value of the use of the property for the time of such occupation, not exceeding 5 years next preceding the commencement of the action or proceeding to enforce the right to damages, and the costs, if any, of recovering the possession.

BN moves to dismiss Plaintiffs’ wrongful occupation claims, arguing that “in cases not otherwise provided for in this code” means a plaintiff cannot bring a wrongful occupation claim if he has a different, potential cause that addresses the same conduct. Plaintiffs argue that the statute merely defines how damages are calculated when they are not otherwise specified by statute. The MSC has not addressed the phrase; thus it is necessary to attempt to ferret out how it would interpret it.

The plain language of 27-1-318 is clear. When a plaintiff claims wrongful occupation, the measure of damages is governed by 27-1-318 and not some other statute. Martin (Mont. 1981) (27-1-318 governs the measure of damages in wrongful occupations and therefore 27-1-317 (breach of obligation other than contract) is not applicable). The MSC has never employed 27-1-318 to preclude other claims. Nothing in 27-1-318 prevents a plaintiff from making a wrongful occupation claim in addition to other claims that might involve the same conduct. Corporate Air (Mont. 2008) (possible to allege several individual causes based on same injury). Plaintiffs commonly make a wrongful occupation claim alongside nuisance, trespass, and unlawful detainer. Sunburst (Mont. 2007);Kuck (Mont. 2009); GPC (Mont. 1997). For example, a plaintiff may allege nuisance or trespass and, if successful, recover restoration damages or diminution, depending on the circumstances. Sunburst. These damages are designed to redress injury to the property itself. 27-1-318 permits recovery for an additional type of injury — the owner’s inability to use the property on account of the wrongful occupation. However, a plaintiff cannot recover loss-of-use damages under a wrongful occupation theory in addition to the same loss-of-use damages under a different theory, such as trespass or nuisance. French (Mont. 1983) (plaintiffs may recover loss-of-use damages under a trespass claim). To award the same loss-of-use damages under both theories would be impermissible double recovery. Waffle House (US 2002) (“It goes without saying that the courts can and should preclude double recovery by an individual.”); Burk (Mont. 1990).

BN cites cases from the 1st and 6th Judicial Districts which summarily concluded that the plaintiffs could not bring a wrongful occupation claim because they had other claims available. Neither provided any reasoning other than that the plain language of the statute precluded the wrongful occupation claims. That view seems incorrect in light of the principles reflected in MSC decisions. The MSC would likely disagree, too. The plain language of the statute does not bar a wrongful occupation claim if another statutory claim and remedy are available. It simply states that when one makes a wrongful occupation claim the measure of damages is the lost rental value, unless a different statute provides the measure of damages. Again, though, the plaintiffs cannot recover twice for loss of use of their property.

California, SD, ND, and Oklahoma have adopted a similar wrongful-occupation statute, and none of those courts adopted the interpretation BN advances. California, for example, permits a wrongful occupation claim in addition to other claims covering the same conduct, such as trespass or nuisance. Those states apply their wrongful occupation statutes merely as a measure of damages for other claims like trespass or nuisance.

BN’s motion to dismiss Plaintiffs’ wrongful occupation claim is denied. BN also moves to dismiss their unjust enrichment claim; Plaintiffs do not object; the motion is granted.

Graham et al v. BNSF, 40 MFR 153, 1/24/13.

David Slovak, Mark Kovacich, and Tom Lewis (Lewis, Slovak, Kovacich & Marr), Great Falls, for Plaintiffs; Daniel Hoven, William Tietz, and Christy McCann (Browning, Kaleczyc, Berry & Hoven), Helena, for BN.

EXPERTS: Plaintiffs’ expert’s report does not adequately explain “basis & reasons,” but Defendants failed to give opportunity to cure before moving to exclude per LR… motion to exclude denied, Plaintiffs may renew motion if they comply with LR… Molloy.

Plaintiffs move to exclude testimony of Gregory Moore on the basis that his report does not adequately explain the “basis and reasons” for his opinions. Rule 26(a)(2)(B)(i). The Court agrees, but the motion is denied.

An expert report should be sufficiently complete as to include the substance of what the expert is expected to give in direct testimony, and the reasons for such testimony. The report should offer the “how and why” of the results, not mere conclusions. Wilderness Dev. (D. Mont. 2009) (quoting Allgood (SD Ind. 2006); citing Salgado (7th Cir. 1998).

The rationale is “the elimination of unfair surprise to the opposing party and conservation of resources.” Wilderness (quoting Reed (D.NJ 1996); see also Rule 1 (The rules “should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”)

Moore’s report contains a statement of facts, 5 sentences of opinion, and a complete void of reasoning in between. Contrary to Defendants’ argument, stating the facts is not the same as stating the reasoning; there is no “how and why” connecting the facts to the opinions.

Many of the LR are also designed to eliminate unfair surprise and conserve resources. LR 7.1(c)(1) states:

The text of the motion must state that other parties have been contacted and state whether any party objects to the motion. Parties that have not yet appeared in the action or whose default has been entered need not be contacted.

When this is followed, a party who believes that the opposing party’s expert report is inadequate must first contact the opposing party and express that concern before filing a motion to exclude. The parties can work out the dispute without having to involve the Court. Plaintiffs’ counsel filed the motion without contacting opposing counsel, thus failing to abide by the very principles he now advances. The bench trial was still several months away. Had Plaintiffs informed Defendants of their concern, Defendants might have supplemented without prejudice to Plaintiffs.

Plaintiffs may renew their motion if they comply with the LR. If they renew it and Defendants have offered to supplement, they must explain why supplementation would be prejudicial, particularly in light of the delay caused by this unsuccessful motion.

Templin et al v. US, Sibbitt, and Montana Interventional & Diagnostic Radiology Specialists, 40 MFR 149, 1/17/13.

Daniel Buckley (Buckley Law Office), Bozeman, for Plaintiffs; AUSA George Darragh; Carlo Canty, Evan Thompson, and Daniel Hoven (Browning, Kaleczyc, Berry & Hoven), Helena, for Sibbitt and MIDRS.

INSURANCE/JURISDICTION: Insurer’s dec action retained in Federal Court rather than returning to State Court where case stayed by stipulation and insurer only intervenor… coverage of claims against road contractor barred by failure of contractor to give timely notice, showing of prejudice not required…. Molloy.

GTL contracted with Tanglewood Investors and John Greytak in 7/09 to improve property in Granite Co. including construction of a road. GTL sued in 3/10 to foreclose its construction lien. Greytak/Tanglewood hired a lawyer and sent a demand letter to GTL contesting the lien and alleging construction defects. Greytak/Tanglewood pled the claims from their demand as counterclaims. That case settled 4/13/11. GTL’s CGL insurer Atlantic Casualty was first notified of the claims in the underlying suit 5/23/11 and hired an adjuster to investigate. While it was investigating, Greytak/Tanglewood moved for entry of judgment in the state suit pursuant to the settlement agreement. Judgment was entered 6/21/12, and Atlantic moved to intervene and set it aside 8/6/12. Judge Dayton granted its motion to intervene and set aside judgment 9/18. Pursuant to stipulation he ordered the suit stayed. Atlantic claims that notice of Greytak/Tanglewood’s claims against GTL was insufficient and thus there is no coverage of their claims. It filed this declaratory action 1/23/12. Greytak/Tanglewood counterclaimed. GTL was served but did not appear and default was entered against it 7/9/12. The parties filed summary judgment motions in 8/12. Atlantic unsuccessfully sought cooperation of GTL and its counsel for production of files related to the counterclaims. A protective order sought by GTL asserting attorney-client relationship in response to a subpoena by Defendants was denied 10/17/12.

The procedural posture is the most significant consideration for keeping this action in Federal Court. While there is generally no presumption in favor of abstention, Dizol (9th Cir. 1998), “gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided,”Brillhart (US 1942). If a declaratory case in federal court is reactive — filed after institution of state proceedings involving the same issues and parties — a presumption arises in favor of abstention. Chamberlain (9th Cir. 1991). This action comes on the heels of a state suit based on the same subject, but the configuration of the parties here differs in important respects. Atlantic was not an original party to the state suit, and GTL, the insured plaintiff in the underlying suit, defaulted. These differences skew the parallelism of the proceedings, disturbing a condition precedent to the presumption for abstention. The imperfect parallelism also affects the Brillhart factors. While notions of federalism and comity are of special importance in areas traditionally governed by state administrative structures like insurance regulation, Dizol, where a state court proceeding is inadequate to adjudicate the rights of all parties these concerns must yield to considerations of justice, practicality, and sound administration which motivate the other Brillhart factors. The interest of avoiding prejudice counsels in favor of entertaining Atlantic’s dec action. Its interests were not represented until its intervention. If this action were stayed or dismissed, lacking complete diversity, its only recourse would be in the state forum selected by its insured for adjudication of the underlying dispute. The outcome would bind it to the forum selected by its insured despite the fact that the insured failed to appear in this dec action and, after settlement, the interests of both parties in the underlying suit are now aligned against Atlantic. There is no risk of gratuitous interference with the orderly & comprehensive disposition in the state case, as Dayton stayed it based on the stipulation. Keeping the case and entering judgment on the merits serves the interest of judicial economy. The parties have exhaustively briefed the central legal questions, and the Court heard argument on their summary judgment motions. A decision on the claims is appropriate at this time and in this forum, rather than forcing the parties to return to a state proceeding where Atlantic appears only as an intervenor.

The dispositive substantive issue is sufficiency of GTL’s notice to Atlantic of Greytak/Tanglewood’s claims. The CGL policy requires the insured to provide notice as soon as practicable in the event of an occurrence, offense, claim, or suit. It defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Suit” is defined as “a civil proceeding in which damages … to which the insurance applies are alleged.” “Claim” and “offense” are not defined, but their plain meaning in the context of an insurance contract is easy to discern. A reasonable insured would understand “claim” to mean “a demand for compensation, benefits, or payment.” Webster’s. A reasonable insured could not help but understand “offense” to mean “a breach of moral or social conduct.” Id. Steadle (Mont. 2011) found an identical provision “simple, clear, unambiguous and easy to understand,” intended to allow the insurer “opportunity to defend its interests and to prevent or mitigate adverse judgments,” and explained that a notice requirement is a condition precedent to coverage. The bar of deficient notice includes injured 3rd-party claimants. Id.

GTL first received notice of pendency of a claim against it 4/30/10 when Greytak/Tanglewood dispatched a written demand to its counsel asserting claims for compensation for faults in construction of the road. The plain language as would be understood by a reasonable insured presents a “claim” and raises the possibility of a “suit.” Therefore it triggered the notice condition. Greytak/Tanglewood stated the claims in the demand letter as counterclaims in the state case 11/5/10. This definitively constitutes a “suit.” The counterclaims could also be considered an event which triggered the notice condition. GTL did not notify Atlantic as soon as practicable after these triggering events. Atlantic first heard about the claims and suit from a letter mailed 5/23/11, over a year after the demand letter and over 6 months after the filing of the counterclaims. In Steadle, with an identical notice condition, a 5-month delay was deficient. GTL’s notice to Atlantic was deficient and Atlantic has no duty to defend or indemnify it. Greytak/Tanglewood’s claims are not covered.

Greytak/Tanglewood argue that Atlantic must show prejudice as a result of the deficient notice, relying on XL (D.Mont. 2009, not reported in F.Supp). XL was decided before Steadle, and is predicated on Montana Supreme Court authority applying a prejudice rule to UM and UIM claims because of public policy. The more recent and pertinent binding authority is contrary to Defendants’ prejudice claims.

Greytak/Tanglewood claim Francis Nugent’s affidavit, which Atlantic cites for the proposition that notice was not provided until 5/11, does not meet the personal knowledge requirement of Rule 56(c)(4) and relates inadmissible hearsay. Her position as a litigation examiner for Atlantic is sufficient to infer personal knowledge. Kaypro (9th Cir. 2000). She stated that she knows the facts to be true, and her position places her in direct responsibility for handling complex claims involving coverage, liability, and damages. She has been employed in this capacity for over 5 years and was the primary adjuster for the Greytak/Tanglewood claims. The alleged hearsay relates to Defendants’ degree of cooperation with Atlantic’s investigation of the claims. Resolution of this is not required to reach the conclusion that GTL provided inadequate notice.

Atlantic Casualty Ins. v. GTL, Greytak, and Tanglewood Investors, 40 MFR 130, 1/14/13.

Matthew Hutchison (Kaufman, Vidal, Hileman & Ramlow), Kalispell, for Atlantic; Liesel Shoquist & Quentin Rhoades (Sullivan, Tabaracci & Rhoades), Missoula, for Defendants.