SHILHANEK v. TRUCKING INC 50 17 1999 (2003)

ORDER

The Respondent, Canal Insurance Company (Canal), has filed a Petition for Rehearing, directed to a portion of the Court's opinion issued in this cause on April 29, 2003.   For the reasons set forth below, we GRANT the Petition for Rehearing.

At ¶ 22 of our Opinion, we held that Canal had a duty to pay the Shilhaneks' undisputed medical expenses, up to the limits of its coverage and without the benefit of a settlement agreement, after December 24, 1997.   Canal does not seek rehearing from this decision.   Canal does, however, take issue with our ensuing conclusion that Canal's failure to pay the plaintiffs' undisputed medical expenses was in violation of subsections (6) and (12) of § 33-18-201, MCA. Canal points out that the plaintiffs did not seek judgment as a matter of law on this issue in the District Court.   Thus, while Canal accepts our conclusion that it had a duty to pay the undisputed medical expenses, it maintains that a question of fact remains as to whether it breached that duty.   It cites Dean v. Austin Mutual Ins. Co. (1994), 263 Mont. 386, 869 P.2d 256, and other cases for the proposition that the question of whether an insurer had a reasonable basis for denying a claim is a question of fact for the jury.

Plaintiffs oppose the Petition for Rehearing, contending that this Court has the authority to enter judgment as a matter of law on this issue, and that the record more than amply demonstrates that Canal breached its duty to the plaintiffs under these subsections of the Unfair Trade Practices Act. In support of their contention, plaintiffs set forth what Canal knew within days of the accident, what it knew about Roxy Shilhanek's inability to work and inability to pay medical bills, and what Canal did in the face of this knowledge.   With all due respect to the plaintiffs' position, their arguments underscore Canal's contention here:  what Canal knew, and what it did in the face of that knowledge, goes to the question of whether Canal had a reasonable basis for denying payment of the plaintiffs' medical expenses, or not.   What Canal knew, and whether Canal acted reasonably in the face of that knowledge, are clearly factual issues suited to resolution by the trier of fact.   Accordingly,

IT IS HEREBY ORDERED that Canal's Petition for Rehearing is GRANTED.

IT IS FURTHER ORDERED that the opinion of this Court, entered April 29, 2003, is modified in one respect.   The following sentence shall be deleted from ¶ 22 of this Court's opinion:

We further hold that Canal's failure to pay such expenses was in violation of subsections (6) and (13) of § 33-18-201, MCA (1997).

IT IS FURTHER ORDERED that this Court's opinion shall, in all other respects, stand as written.   Remittitur shall issue forthwith.

IT IS FURTHER ORDERED that the Clerk of this Court give notice of this Order to all counsel of record and to the Honorable Russell Fagg.

/s/ KARLA M. GRAY

Chief Justice

/s/ PATRICIA COTTER

/s/ W. WILLIAM LEAPHART

/s/ JAMES C. NELSON

/s/ JIM RICE

Justices

The Hon. C.B. McNEIL, District Judge, joins in the foregoing order.