[00:00:00] Speaker 01:
Thank you, members of the court.

[00:00:02] Speaker 01:
Good morning, my name is Nate Wagner.

[00:00:04] Speaker 01:
I represent the appellant, Steven Kranska.

[00:00:07] Speaker 01:
And we are asking the court to reverse the district court's ruling and remand this case for trial by a jury of Mr. Kranska's peers.

[00:00:17] Speaker 01:
And the basis of our arguments is that Montana Supreme Court has never

[00:00:22] Speaker 01:
limited the holding of Ridley, which arises under the Unfair Trade Practices Act, to only apply in cases arising under car crashes or to only apply to cases where claimants medical bills are not being paid by some other form of insurance.

[00:00:38] Speaker 01:
And the district court has ruled that because this case arose outside of the automobile context and

[00:00:43] Speaker 01:
and it arose under circumstances where Mr. Kranska's medical bills were being paid by another source that Ridley doesn't apply and that there is a defense to the Unfair Trade Practices Act claim.

[00:00:56] Speaker 01:
District Court also ruled that Mr. Kranska's demand in excess of the statutory cap on

[00:01:02] Speaker 01:
medical malpractice damages is an absolute defense to the obligation to advance pay medical bills under Ridley and we think that's incorrect as well.

[00:01:12] Speaker 01:
This case arises from a Boston intubation and surgery and the

[00:01:17] Speaker 01:
The description was a chiseling action, and it bloodied him up pretty good.

[00:01:21] Speaker 01:
And we believe this is a case where liability was obviously clear from the get-go.

[00:01:25] Speaker 01:
Mr. Kranska incurred hundreds of thousands of dollars in medical bills, submitted a demand in accordance with the Montana Supreme Court's holding in Ridley that says these expenses need to be paid in advance without requiring a release and cannot be delayed.

[00:01:39] Speaker 01:
And the Montana Supreme Court has said that the statutory language requiring a prompt, fair, and equitable settlement means that that has to be paid

[00:01:46] Speaker 01:
as soon as it is clear that the damages are causative.

[00:01:52] Speaker 05:
The reason for that, as I understand it, is so that the plaintiff is not sitting there out of pocket with the judgment, with the pressure of medical bills, right?

[00:02:05] Speaker 05:
Isn't that the premise

[00:02:07] Speaker 01:
Not exactly.

[00:02:08] Speaker 01:
Not exactly, Your Honor.

[00:02:09] Speaker 01:
The Montana Supreme Court rejects the idea that there's duplicative payment taking place.

[00:02:15] Speaker 01:
Montana Supreme Court's holding is that you can recover damages both from your medical health insurance and from a tortfeasor.

[00:02:24] Speaker 05:
And the only way that... You recover double damages for the same medical expenses?

[00:02:29] Speaker 05:
The Montana Supreme Court's views, that's not double damages because... What is the case from Montana that says that's not double damages?

[00:02:35] Speaker 01:
It's a series of cases, and they're cited in the briefing, Your Honor.

[00:02:40] Speaker 05:
What's the best case?

[00:02:43] Speaker 01:
I think the best case is Swanson.

[00:02:48] Speaker 01:
I'm sorry, Your Honor.

[00:02:49] Speaker 01:
I would have to find that in my brief, but it's in the briefing.

[00:02:53] Speaker 05:
OK, well, we'll hunt and peck for that.

[00:02:56] Speaker 05:
But let me go back then.

[00:02:59] Speaker 05:
What about the...

[00:03:03] Speaker 05:
the Greenow case, which permits the third party insurer to offset their obligation by subtracting what's already been paid from the first party insurer.

[00:03:17] Speaker 05:
Is that applicable here?

[00:03:19] Speaker 01:
Are you referring to the Greenell v. Safeco case that's a district court, Montana State District Court case?

[00:03:26] Speaker 01:
Yes.

[00:03:27] Speaker 01:
So first, the Montana State District Court cases are not... I understand they're not presidential, but they're instructive.

[00:03:36] Speaker 01:
Well, and our argument is that they're not, because that case arose in 2013, and the Montana Supreme Court has subsequently issued two opinions in the Teeter case and the High Country Paving case to state that the Ridley test consists of two parts.

[00:03:55] Speaker 01:
Is liability reasonably clear?

[00:03:57] Speaker 01:
And are the damages, are the medical expenses causally related?

[00:04:00] Speaker 01:
That's the end of the test.

[00:04:01] Speaker 01:
The test doesn't include, are those expenses being paid by a third source?

[00:04:05] Speaker 01:
Or did this case arise outside of the automobile context?

[00:04:09] Speaker 01:
And the defense argues that, the insurers argue that, and the district court agreed, that there should be additional components to the test.

[00:04:18] Speaker 01:
And those components don't arise from any Montana Supreme Court case law.

[00:04:21] Speaker 01:
They arise

[00:04:22] Speaker 01:
arguably from the holding of Greeno and Bayer and the Helms case, the three district court cases that were state district court cases relied upon.

[00:04:31] Speaker 01:
But those cases all arose prior to the Montana Supreme Court's holdings in Teeter and High Country.

[00:04:36] Speaker 01:
And then following that, you only have one state district court that has reassessed this issue.

[00:04:40] Speaker 01:
And that court said, it's a two-part test, full stop, we can't go any further.

[00:04:45] Speaker 05:
And so... And the court here assumed that there is this reasonable basis, correct?

[00:04:51] Speaker 05:
the court said essentially there are five district court cases and the greater weight of the district court state district court cases that wasn't my question there's two parts to the test correct the court assumed the first part in terms of liability and then made a decision navigating them

[00:05:12] Speaker 05:
Montana law that Because the expenses were paid that the company didn't have to pay him and you're saying it doesn't matter that under part two of the test that the Insurance company has to pay not exactly right my argument would be that the court added two new parts of the test one of which is a

[00:05:38] Speaker 01:
Are the expenses being paid by another source?

[00:05:40] Speaker 05:
No, no, that's not my question.

[00:05:41] Speaker 05:
So listen to the question.

[00:05:44] Speaker 05:
My understanding of the two-part test, it's two parts, right, under Ridley?

[00:05:49] Speaker 01:
Liability reasonably clear.

[00:05:50] Speaker 05:
Liability reasonably clear.

[00:05:52] Speaker 01:
Expenses causally related.

[00:05:53] Speaker 05:
Expenses related.

[00:05:55] Speaker 05:
You would apply Ridley outside of the context of automobiles.

[00:05:59] Speaker 01:
Correct.

[00:05:59] Speaker 05:
Because you reasonably believe that, given the opportunity, the Montana Supreme Court would do so, right?

[00:06:06] Speaker 01:
More to the point, I believe that the Ridley did not arise under automotive insurance statutes.

[00:06:11] Speaker 01:
It arose under the Unfair Trade Practices Act that applies to all insurers.

[00:06:15] Speaker 01:
The question presented in Ridley is, does an insurer?

[00:06:18] Speaker 01:
The holding is an insurer must, and there is no limitation on

[00:06:23] Speaker 01:
whether it's automotive insurance or any other kind of insurance.

[00:06:26] Speaker 01:
There is reference, six paragraphs later in Ridley, to an additional rationale behind Ridley being the existence of mandatory minimum coverage.

[00:06:36] Speaker 01:
But that issue was presented kind of tangentially in the Shulhanik case, where the Montana Supreme Court said, no, we're not going to limit

[00:06:44] Speaker 01:
the requirement to advance pay medical expenses to the mandatory minimum coverages arising under automobile insurance statutes.

[00:06:50] Speaker 01:
It applies to all medical expenses that are causally related.

[00:06:54] Speaker 01:
And so in our view, the district court judge in this case did not apply the second part of the test, whether the expenses are causally related.

[00:07:02] Speaker 01:
They clearly are.

[00:07:02] Speaker 01:
There's no dispute that all of these medical expenses are causally related.

[00:07:08] Speaker 04:
Can you tell me what impact the settlement has on this claim?

[00:07:12] Speaker 04:
Did he agree or did the parties agree that they could carve out this second stage of litigation?

[00:07:19] Speaker 04:
Because it appears that he resolved everything and then was dissatisfied with what he received and then filed this case, right?

[00:07:28] Speaker 01:
No, respectfully, your honor.

[00:07:30] Speaker 01:
He did not release the insurer and the unfair trade practices claim can't arise until in the third party setting until the underlying claim is resolved.

[00:07:39] Speaker 01:
So he settled.

[00:07:41] Speaker 01:
He released his claim against the libel parties.

[00:07:43] Speaker 01:
not against the insurance carriers.

[00:07:46] Speaker 01:
And there is good authority that if an insurer tries to demand a settlement in that context, tries to demand a release, that is an additional act of bad faith.

[00:07:55] Speaker 01:
An insurance company can't leverage a settlement by demanding a release of the insurer.

[00:07:59] Speaker 01:
And so his settlement was against only the underlying claim.

[00:08:03] Speaker 01:
And that settlement occurred almost a year after he made his demand under Ridley to have those expenses paid in advance.

[00:08:10] Speaker 04:
But he was never out of pocket for those expenses, right?

[00:08:13] Speaker 01:
He was for a certain amount of time, but he wasn't out of pocket How so like maybe with his with the coverage that he's getting from his third from his own carrier And but again the Montana Supreme Court has ruled that that's not duplicative.

[00:08:29] Speaker 04:
Yeah, I know that's your position I just was factually speaking.

[00:08:33] Speaker 04:
Yeah, whether I mean I can only think of What what expenses would he be out of pocket if they were covering them?

[00:08:40] Speaker ?:
I

[00:08:40] Speaker 01:
Only only for the delay your honor and receiving coverage and and so our argument is not that he was under financial duress and that and that he That's not the basis of and your argument is that that's not the basis for that test in the first place correct, right?

[00:08:58] Speaker 01:
Correct.

[00:08:59] Speaker 04:
That's not what the tell me again what the basis for that test is if it's not to make sure that people aren't out of pocket and

[00:09:06] Speaker 01:
It's because the insurance companies have a duty to effectuate a prompt fare and equitable settlement.

[00:09:11] Speaker 01:
And they do not get to, the insurance companies are not allowed to factor in.

[00:09:16] Speaker 04:
Whether you're insured or not?

[00:09:17] Speaker 01:
Whether you have your own insurance, exactly.

[00:09:19] Speaker 01:
Because the fact that a person has had the foresight to spend some of their money to obtain an alternative form of insurance to make sure they're covered whether or not they're harmed by someone who has assets or insurance.

[00:09:29] Speaker 01:
That doesn't benefit the insurance companies.

[00:09:31] Speaker 01:
That benefits only the claimant.

[00:09:33] Speaker 01:
And the fact that it leads to a claimant being able to recover their medical expenses more than once, that's no different than someone who has two life insurance policies.

[00:09:42] Speaker 04:
Was there any reason that the insurance company would need to determine whether it was the doctor or the assistant or anything like that that caused the injury to his esophagus?

[00:09:51] Speaker 01:
And that's one of the arguments that we've made, Your Honor, is that the defendants, instead of coming together and saying, hey, we need to settle this guy out, pay him his medical expenses, and then we can figure out amongst ourselves how to apportion this, they pointed the finger at one another and said, no, it's their fault.

[00:10:07] Speaker 01:
No, it's their fault.

[00:10:08] Speaker 01:
And our view is there's plenty of opportunity for them to have that finger pointing amongst themselves.

[00:10:14] Speaker 01:
And that does not give them a basis to refuse to pay the medical expenses that Mr. Kranz can incur.

[00:10:20] Speaker 05:
I see.

[00:10:21] Speaker 05:
OK.

[00:10:22] Speaker 05:
which is also significant here relates to the settlement offer and the cap that Montana imposes.

[00:10:30] Speaker 05:
So is there a way to distinguish between contesting the claim and contesting the amount?

[00:10:38] Speaker 05:
And how does that fit into the construct here where Montana does provide this ceiling?

[00:10:45] Speaker 01:
Yeah, the cap, the statute that establishes the cap says that if an award is made in advance of the cap, that the court in post trial proceedings will reduce the award to the capped amount.

[00:10:57] Speaker 01:
And so that contemplates the idea that a claimant can ask a jury for an amount greater than the cap.

[00:11:02] Speaker 01:
It contemplates, in my view, that a claimant can make a demand to an insurance carrier in advance.

[00:11:08] Speaker 05:
And, in fact, there is—it would be— But let me ask, if you make the demand to the insurance carrier in excess of the cap, by virtue of state law, is the insurance company limited to having to pay just to the cap?

[00:11:27] Speaker 01:
We would argue that they have to advance pay medical expenses, pardon me, advance pay, they have to settle within, they can offer to settle within the cap, which is what they did in this case eventually.

[00:11:39] Speaker 01:
They settled for less than the capped amount.

[00:11:41] Speaker 01:
If an insurance carrier were to say, here's your medical expenses of 240,000,

[00:11:47] Speaker 01:
here's 250,000 of non-monetary damages, emotional distress damages, whatever, we're tendering that to you.

[00:11:54] Speaker 01:
We think that would comply with the requirements, but that's not what happened here.

[00:11:58] Speaker 01:
Instead, they didn't pay the medical expenses, and they didn't offer anything above the medical expenses until a year later at the mediation.

[00:12:06] Speaker 01:
And so the judge ruled that making a demand in excess of the cap essentially ends the statutory duties under the Unfair Trade Practices Act, and as announced by Ridley, and we think that's wrong.

[00:12:18] Speaker 01:
Unless there are further questions, I'd like to reserve.

[00:12:20] Speaker 03:
Yep, you got it.

[00:12:21] Speaker 01:
Thank you.

[00:12:21] Speaker 01:
We'll round up to three.

[00:12:32] Speaker 00:
Are we going to put nine minutes up?

[00:12:33] Speaker 00:
Yeah, let's go nine.

[00:12:34] Speaker 00:
Yeah.

[00:12:37] Speaker 00:
Good morning, Your Honors.

[00:12:38] Speaker 00:
My name is Randy Colbert and I represent UMIA Insurance.

[00:12:42] Speaker 00:
May it please the court.

[00:12:44] Speaker 00:
When viewed through the lens of well-established Montana bad faith law, it is clear the district court's order is correct and should be affirmed.

[00:12:52] Speaker 00:
In addition, and there was issues raised about liability from, I think, a couple of justices, does that exist?

[00:12:59] Speaker 00:
We believe that defendants are entitled to judgment for the additional reason that liability, especially as to our client, UMIA, and it's ensured the hospital was never reasonably clear.

[00:13:12] Speaker 00:
Now, a couple of facts to indicate the kind of differences that bear on our client's defenses.

[00:13:19] Speaker 00:
One, the hospital was not directly involved in the intubation of Mr. Kranska.

[00:13:24] Speaker 00:
That was completed by Dr. Robertson, who was with Northern Rockies.

[00:13:31] Speaker 00:
The hospital is not responsible for his alleged actions or inactions.

[00:13:35] Speaker 00:
And the student who performed the intubation was a student at Flyhead Valley Community College.

[00:13:41] Speaker 00:
And that community college had agreement with the hospital to allow students to participate.

[00:13:48] Speaker 00:
And the college had to defend and identify the hospital if any actions of the student caused an injury to somebody.

[00:13:58] Speaker 05:
So the practical result, if I hear your argument, is that you would want to remand for a determination on whether liability was reasonably clear.

[00:14:10] Speaker 00:
No, absolutely not.

[00:14:11] Speaker 05:
What do you want?

[00:14:12] Speaker 00:
Well, we just think there's an additional reason.

[00:14:15] Speaker 00:
And so we already have the judge's reason why Ridley didn't apply.

[00:14:19] Speaker 00:
Right.

[00:14:19] Speaker 05:
And if we disagreed with you that- He disagreed.

[00:14:22] Speaker 00:
We also argued, well, Ridley doesn't even apply.

[00:14:27] Speaker 00:
There's no duty to advance pay unless liability is reasonably clear.

[00:14:32] Speaker 00:
And that's a high standard.

[00:14:34] Speaker 00:
The Montana Supreme Court has addressed it.

[00:14:37] Speaker 00:
first in Peterson, well, I shouldn't say first, primarily in Peterson, which was a bad faith case.

[00:14:44] Speaker 00:
And the court said, oh, to hold and ensure liable for bad faith, liability has to be more than a preponderance of the evidence, essentially a clear and convincing standard.

[00:14:58] Speaker 00:
as to whether liability is reasonably clear.

[00:15:01] Speaker 00:
So that's a standard you have to look at as to whether liability is reasonably clear, a very high standard.

[00:15:08] Speaker 03:
But just so we're clear to follow up on Judge McEwen's question, so we have the question of whether they would be liable in terms of

[00:15:15] Speaker 03:
at fault.

[00:15:17] Speaker 03:
But the question that the district court decided this case under Ridley was that whether there was a reasonable belief that there would be a duty to pay.

[00:15:23] Speaker 03:
And those are two different things.

[00:15:24] Speaker 03:
You're saying we should win for another reason.

[00:15:27] Speaker 03:
Sure.

[00:15:27] Speaker 03:
Exactly.

[00:15:28] Speaker 03:
All right.

[00:15:28] Speaker 03:
But if we can put the other reason aside for a moment.

[00:15:31] Speaker 03:
For the reason the district court said it was under Ridley that there was no duty here because for various different reasons.

[00:15:37] Speaker 03:
Absolutely.

[00:15:38] Speaker 03:
OK.

[00:15:39] Speaker 00:
So first,

[00:15:40] Speaker 00:
The judge didn't say, really doesn't apply outside of the auto context.

[00:15:45] Speaker 00:
The judge didn't say, really doesn't apply to expenses that have already been advance paid.

[00:15:50] Speaker 00:
What the judge said was, Montana law is unclear on those two issues.

[00:15:55] Speaker 00:
And when Montana law is unclear on those two issues, that provides a defense for the insurance companies to contest it.

[00:16:04] Speaker 00:
So why was it unsure if Ridley would apply outside the auto context or to expenses that have already been advanced paid?

[00:16:12] Speaker 00:
That's in the Ridley decision itself.

[00:16:15] Speaker 00:
So the Ridley decision interpreted the UTPA.

[00:16:20] Speaker 00:
Nowhere in the UTPA does it say, you must advance pay medical expenses if liability is reasonably clear.

[00:16:29] Speaker 00:
In fact,

[00:16:31] Speaker 00:
In the Ridley decision, the court noted that two prior federal district courts had said, no, the UTPA doesn't require advance payments.

[00:16:39] Speaker 00:
And in fact, the Ridley decision noted that in 1995, the legislature sought to amend, or somebody raised a bill to amend the UTPA to include a requirement that you advance pay.

[00:16:52] Speaker 00:
That didn't come through.

[00:16:54] Speaker 00:
So this was a judicially created rule in Ridley.

[00:16:58] Speaker 04:
Can you give me an example where it's applied, where they said, reasonably clear insurance companies, you need to pay now in advance?

[00:17:07] Speaker 04:
Do you have cases like that?

[00:17:08] Speaker 04:
Well, there's cases that talk about- Yeah, and are they all the automobile cases?

[00:17:11] Speaker 00:
Yeah, and that's the thing.

[00:17:13] Speaker 00:
Ridley was decided almost 28 years ago.

[00:17:17] Speaker 00:
And Mr. Hayhurst has more precise numbers than I. But I think over 100 cases have addressed it.

[00:17:23] Speaker 00:
It has not been applied outside the auto context in all that time.

[00:17:27] Speaker 00:
Could it be later?

[00:17:28] Speaker 00:
It could.

[00:17:30] Speaker 00:
But it hasn't been.

[00:17:32] Speaker 00:
And the underpinning.

[00:17:34] Speaker 05:
So let's assume that we were to determine that Ridley should be extrapolated to the non-automobile context.

[00:17:45] Speaker 05:
If that were the case, I assume you would want a court to make a determination that liability was not reasonably clear.

[00:17:53] Speaker 05:
So you don't even jump over to that, right?

[00:17:56] Speaker 00:
That's the thing that's in particular.

[00:17:58] Speaker 00:
Yeah.

[00:17:59] Speaker 05:
Well, that's what I was trying to, you know, because you, you're arguing these kinds of multi-headed things and we're trying, we have to figure out what's your argument.

[00:18:07] Speaker 05:
Do you win on this?

[00:18:08] Speaker 05:
Do you win on that?

[00:18:09] Speaker 05:
Do you lose on this?

[00:18:10] Speaker 05:
Do you lose on that?

[00:18:11] Speaker 05:
What, you know, so if we don't buy the Ridley is limited to autos, then you still think that you're,

[00:18:20] Speaker 05:
client should not be liable because liability was not reasonably clear.

[00:18:24] Speaker 00:
In any event, whether-whatever context you're looking at, Ridley, it requires reasonably clear liability to exist before the duty to advance pay or even the duty to effectuate prompt, fair, and equitable settlement exists.

[00:18:40] Speaker 00:
Right.

[00:18:40] Speaker 00:
But fundamentally-oh, I'm sorry.

[00:18:41] Speaker 05:
Is your colleague going to address the cap on damages, or is that part of your argument?

[00:18:48] Speaker 00:
Well, I can ask questions about it or respond to questions about it.

[00:18:54] Speaker 00:
We didn't really split it up on which arguments each side will respond to.

[00:18:58] Speaker 03:
But at the end of the day, just so I understand, your position is that there has to be a insurance company has to be on notice that they're going to have to pay.

[00:19:05] Speaker 03:
I'm changing the language a little bit here.

[00:19:07] Speaker 03:
I'm trying to think of this as almost like qualified immunity we deal with with officers when they're being sued, police officers, where the officer has to be on notice that, look, if you do this thing, you're going to be on the hook to pay.

[00:19:16] Speaker 03:
And you're saying your client is not on the hook to pay for, I think, at least three reasons.

[00:19:21] Speaker 03:
One, not outside the automobile context.

[00:19:24] Speaker 03:
There's actually four.

[00:19:24] Speaker 03:
Not outside the automobile context.

[00:19:28] Speaker 03:
Some awards have already been, or compensation already been paid by the, metal expenses have been covered.

[00:19:34] Speaker 03:
damages over the cap, and they wouldn't be on the hook anyway, as a matter of fact.

[00:19:40] Speaker 03:
It seems to me that those are the four points you're making.

[00:19:42] Speaker 00:
Well, those are four points, but not maybe necessarily in that way that you presented it.

[00:19:49] Speaker 00:
I mean, to say an insurance company's on notice of paying, every claim is handled on its individual merits.

[00:19:54] Speaker 00:
And so when a claim like this comes up and someone demands a relief payment, the first step is, well, does it apply in this context?

[00:20:03] Speaker 00:
Is our client liable, reasonably liable?

[00:20:06] Speaker 00:
That term is defined in the UTPA and by Montana courts.

[00:20:12] Speaker 04:
Well, your client responded that we're not liable because it went over the cap and it wasn't reasonably clear, right?

[00:20:18] Speaker 04:
That was like your response immediately.

[00:20:19] Speaker 00:
Well, that wasn't the response during the handling of the claim.

[00:20:22] Speaker 04:
Right, right.

[00:20:23] Speaker 00:
Yeah.

[00:20:24] Speaker 00:
We insured the hospital.

[00:20:25] Speaker 00:
We weren't involved in the intubation.

[00:20:29] Speaker 00:
There's been no evidence.

[00:20:30] Speaker 00:
You haven't submitted an expert.

[00:20:31] Speaker 00:
Montana, it's black letter law.

[00:20:33] Speaker 00:
In a case like this, you have to have expert testimony to show there's a medical malpractice claim.

[00:20:38] Speaker 04:
This is who did it.

[00:20:39] Speaker 04:
And you didn't say anything about the fact in your letter that we know you're covered by insurance and it's being covered right now.

[00:20:46] Speaker 00:
Well, there was a

[00:20:47] Speaker 00:
KRMC, the hospital's attorney, was detained directly by the hospital.

[00:20:52] Speaker 00:
And he responded to the limit of effect of, oh, I understand all your medical expenses have already been paid.

[00:20:58] Speaker 00:
Is that correct?

[00:20:59] Speaker 00:
And this was when they made the settlement demand in April of 2020.

[00:21:04] Speaker 04:
But he made the Ridley demand before that.

[00:21:07] Speaker 00:
Not to our client.

[00:21:08] Speaker 04:
Oh, not to your client.

[00:21:09] Speaker 00:
No, there was no really demand ever made until April.

[00:21:12] Speaker 00:
And well, April, there was a settlement demand that said, hey, we demanded Ridley before.

[00:21:16] Speaker 04:
Right.

[00:21:17] Speaker 00:
And we clarified through Mr. Gokuchia.

[00:21:20] Speaker 00:
No, in fact, you never made a really.

[00:21:21] Speaker 04:
Oh, that's that's what it was.

[00:21:22] Speaker 04:
There's a dispute regarding that.

[00:21:24] Speaker 04:
Right.

[00:21:24] Speaker 04:
But you don't have any documentation that he ever demanded it before April.

[00:21:29] Speaker 00:
Yes, there is no, they did not.

[00:21:32] Speaker 04:
They did not.

[00:21:32] Speaker 04:
Got it, okay.

[00:21:33] Speaker 00:
They never requested the demand of us prior to April.

[00:21:38] Speaker 04:
And when is the settlement?

[00:21:40] Speaker 04:
October?

[00:21:41] Speaker 00:
It was in November 2020.

[00:21:42] Speaker 00:
Okay.

[00:21:47] Speaker 04:
I'm set, thank you.

[00:21:48] Speaker 03:
All right, thank you very much, Council.

[00:21:49] Speaker 03:
All right, thank you.

[00:22:01] Speaker 02:
May it please the court.

[00:22:02] Speaker 02:
My name is Matt Hayhurst, and I'm here today on behalf of PPM, which is the insurer for the anesthesiologist, Dr. Corey Robertson, and also his medical group up in Kalispell, Montana.

[00:22:16] Speaker 02:
So first off, like Judge Kendall coming from Chicago, coming here from Montana where they got seven inches of snow last night at my favorite ski resort, we're happy for the change of weather.

[00:22:26] Speaker 02:
So time and context are important in this case for two reasons.

[00:22:31] Speaker 02:
One, just by way of background.

[00:22:33] Speaker 02:
The acts relating to this claims handling occurred in the fall of 2019 and in 2020 in the midst of COVID.

[00:22:41] Speaker 02:
And yet you have a medical malpractice claim that was resolved within a matter of months of the demand being made without the plaintiff having to hire an expert, which can be expensive, without them having to go through the Montana Medical Legal Panel, which is the required adjudicatory process in Montana, and without them having to file a lawsuit.

[00:23:01] Speaker 02:
And there was a settlement, there was a release, it did not include the insurer, but it was a full settlement of all the claims relating to the alleged malpractice itself against the anesthesiologist, against the anesthesiology group, and the other potential defendants.

[00:23:16] Speaker 02:
So time and context are important for that reason.

[00:23:20] Speaker 02:
Time and context are also important because this case doesn't require the court to determine what the law is.

[00:23:27] Speaker 02:
not what the law is now, not even what the law was back in 2019, 2020.

[00:23:31] Speaker 02:
All this court is required to do is to look at the district court's order and determine whether we had a reasonable basis for the decisions that were made at that time.

[00:23:42] Speaker 02:
And here you had an Article III judge, Dana Christensen, who has decades of experience doing complex litigation before he took the bench, issuing a thorough opinion.

[00:23:54] Speaker 02:
The conclusions he reached were not surprising.

[00:23:57] Speaker 02:
As was pointed out by the panel already, the medical bills were paid, so it was not unreasonable for the insurers to reach the conclusion that they didn't have to double pay the medical bills.

[00:24:10] Speaker 02:
As Judge McEwen pointed out, the Greeno opinion, it's a district court case, it's helpful, it provides input.

[00:24:16] Speaker 02:
There were three district court cases that provided input and said, you know what, if medical expenses have already been paid, you don't have to pay them again.

[00:24:25] Speaker 04:
But we're really talking about only a period of time then if the request for the Ridley payments was April, then you have six months between that and the settlement.

[00:24:36] Speaker 04:
Is that correct?

[00:24:37] Speaker 02:
It is, Your Honor.

[00:24:37] Speaker 02:
Although the request, there was a Ridley request to my... To your client.

[00:24:41] Speaker 02:
Yes.

[00:24:41] Speaker 02:
When was that?

[00:24:42] Speaker 02:
That was in the fall, in November of 2019.

[00:24:44] Speaker 02:
Okay.

[00:24:45] Speaker 04:
So November to November.

[00:24:47] Speaker 04:
So one year.

[00:24:47] Speaker 04:
Okay.

[00:24:48] Speaker 02:
Yep.

[00:24:48] Speaker 02:
Exactly.

[00:24:49] Speaker 02:
And the response from the defense counsel hired by PPM was to say,

[00:24:54] Speaker 02:
it looks like your medical expenses were already paid.

[00:24:57] Speaker 02:
And that's an undisputed fact in this case.

[00:24:59] Speaker 05:
And then I think your colleague on the other side for Kranska says, but Montana law permits you to recover medical expenses as part of your damages, even when they've already been paid.

[00:25:15] Speaker 02:
is that true it is common in montana or at least at the time for plaintiffs to double dip to recover twice but that's a different analysis of whether you have to advance pay those expenses and the rule recreating the advance payment rule

[00:25:33] Speaker 02:
explain that the entire purpose was to keep an innocent automobile victim from being in financial distress.

[00:25:40] Speaker 02:
It makes sense.

[00:25:41] Speaker 02:
If you're a person of ordinary means and you get rear-ended and have a broken arm, you may have $25,000 in medical bills and that could create a hardship.

[00:25:49] Speaker 02:
And so the court said, you know what, you have to advance pay those.

[00:25:52] Speaker 05:
So you're distinguishing between the advance payment and then the ultimate, either going to trial or settling, in which you can, as you put it, double dip, or as they say, there's no restriction on recovery, even though the expenses have been paid.

[00:26:06] Speaker 02:
Yes, Your Honor.

[00:26:06] Speaker 02:
Although I will say there's fights about that.

[00:26:08] Speaker 02:
So there's times where there are fights about whether you can double dip, depending on the insurance circumstances and whatnot.

[00:26:14] Speaker 02:
But as a general proposition, they have the ability to try to capture those damages twice.

[00:26:19] Speaker 02:
But it's different than whether we have to advance pay them.

[00:26:22] Speaker 05:
So what then do we make of this statutory cap on the non-economic damages?

[00:26:32] Speaker 02:
It's a great question, Your Honor.

[00:26:34] Speaker 02:
And it's another one of the reasons why I believe Judge Christensen's decision was just common sense.

[00:26:39] Speaker 02:
So if you're going to request triple the cap, half a million dollars more than the cap for non-economic damages, then an insurance company has a reasonable basis to dispute the amount of the claim.

[00:26:53] Speaker 02:
And that's what the statute says.

[00:26:54] Speaker 02:
That's the absolute defense.

[00:26:56] Speaker 02:
So it's not a surprising conclusion.

[00:26:59] Speaker 02:
And it doesn't mean that you can't try to recover those damages later.

[00:27:05] Speaker 02:
It doesn't mean you can't try to beat the cap or get it ruled unconstitutional, but you can't have your cake and eat it too.

[00:27:12] Speaker 02:
You can't claim that liability is reasonably clear as to an amount of damages that clearly exceeds the cap in the same breath, right?

[00:27:21] Speaker 02:
And then briefly on the automobile context for Ridley,

[00:27:26] Speaker 02:
This, as we have found in the 26, 27 years since this case was decided, there's well over 100 opinions that have been issued.

[00:27:34] Speaker 02:
None of them have applied it outside the auto context.

[00:27:37] Speaker 02:
And I will say that's because part of Ridley's holding is based on the auto rule.

[00:27:42] Speaker 02:
So again, it's not whether that's the right decision or the wrong decision or what the law is, it's whether there's a reasonable basis to reach that decision.

[00:27:51] Speaker 02:
And just two quick points, if I may.

[00:27:53] Speaker 02:
One is the court didn't dismiss the entire case.

[00:27:56] Speaker 02:
The court allowed Mr. Kransky to proceed to trial on some claims, and he elected not to do that.

[00:28:01] Speaker 02:
He voluntarily dismissed those with prejudice.

[00:28:04] Speaker 02:
And finally, and I think Judge Owens has made this clear, we believe you can just affirm for the grounds given by the district court, but there's an alternative reason supported by the record that would allow you to affirm as well.

[00:28:15] Speaker 02:
Thank you very much.

[00:28:16] Speaker 03:
Thank you.

[00:28:17] Speaker 03:
Thank you, counsel.

[00:28:17] Speaker 03:
Thank you.

[00:28:29] Speaker 01:
Thank you your honors the citations that the court had asked requested earlier that I did not have available are the holding of Skaugi That's 565 P second 628 the holding of DTN That's 879 P second 704 and the holding of Swanson, which is 46 P third 584 and those are found in the reply brief page 23 of 32

[00:28:53] Speaker 01:
And they all affirm that the Montana Supreme Court does not consider those payments to be duplicative.

[00:29:01] Speaker 01:
Thank you.

[00:29:02] Speaker 05:
I think your opposing counsel agrees with you.

[00:29:04] Speaker 05:
Or at least there's, you can argue it in Montana, but that's generally been the practice.

[00:29:09] Speaker 01:
And it's subject to our Montana's version of the Made Whole Doctrine, which says that the only time subrogation is allowed where an insurance company can go recover from a tortfeasor is if the claimant has been fully compensated for all injuries.

[00:29:21] Speaker 01:
obviously, where a person has lasting injuries or where a person has paid attorney's fees in order to recover that money, they've not been made whole under Montana law.

[00:29:29] Speaker 01:
And so, under the circumstances of this case, I think Mr. Hayhurst said it's common for a plaintiff to be able to recover from both their medical insurance and from a tort fee insurance.

[00:29:40] Speaker 05:
I appreciate that clarification.

[00:29:41] Speaker 01:
Thank you.

[00:29:41] Speaker 01:
Yeah.

[00:29:42] Speaker 01:
And I think it's not only common.

[00:29:43] Speaker 01:
I think at least at the time that this case arose, that was the law in Montana.

[00:29:47] Speaker 01:
Absolutely.

[00:29:50] Speaker 01:
Now, the defense argues that you're not required to determine what the law was in 2020, and we totally disagree with that.

[00:29:58] Speaker 01:
We believe that the court does need to determine what Montana standards were in 2020 when this claim was being adjusted by the insurance carriers.

[00:30:08] Speaker 01:
You know, one of the cases I didn't discuss in my opening remarks was the Eulich case, which is a non-cite opinion, but we've included it in our briefing because it is indicative of what the Montana Supreme Court would do if presented with this question about medical expenses that have been paid by another source.

[00:30:24] Speaker 01:
And the court stated in that case that the district court properly advanced paid the medical expenses even though they had been paid.

[00:30:31] Speaker 01:
And the defense had argued that.

[00:30:33] Speaker 01:
Unfortunately, they didn't appeal it.

[00:30:34] Speaker 01:
And so that issue wasn't before the Montana Supreme Court.

[00:30:37] Speaker 01:
But they noted in their recitation of the facts that those do need to be advance paid.

[00:30:42] Speaker 01:
Now, the other point I would like to make is the issue of this automobile context.

[00:30:49] Speaker 01:
And the Shilhanik case is very important.

[00:30:51] Speaker 01:
And this is found at page 25 of our opening brief.

[00:30:54] Speaker 01:
The Montana Supreme Court held as follows, quote, our holding in Ridley regarding Section 3318.201 of the UTPA is not circumscribed by the requirements of Section 61-6-103.2 of the MVRA.

[00:31:09] Speaker 01:
Thus, to interpret Ridley as applying only to the medical expenses which are within the mandatory minimums required by the MVRA is to interpret Ridley too narrowly.

[00:31:18] Speaker 01:
We further note that the UTPA itself contains no reference to the MVRA.

[00:31:22] Speaker 01:
That is, the UTPA, which is enacted to regulate trade practices in the business of insurance, contains no language indicating that it is limited by the MVRA, which lists the responsibilities of vehicle owners and users.

[00:31:35] Speaker 01:
And so what we've got here is another attempt by insurance carriers to

[00:31:40] Speaker 01:
graphed limitations onto the Ridley requirements.

[00:31:43] Speaker 01:
The Montana Supreme Court, every time this has come up, has rejected it.

[00:31:46] Speaker 01:
They rejected it in Shulhanik.

[00:31:48] Speaker 01:
They rejected it in Teeter and in High Country, where they said it is a two-part test.

[00:31:53] Speaker 01:
Is liability reasonably clear?

[00:31:55] Speaker 01:
Are the medical expenses causally related?

[00:31:57] Speaker 01:
That's the end of the story, and there should not be any new parts.

[00:32:02] Speaker 01:
Who's paying the medical bills?

[00:32:04] Speaker 01:
What was the context of the crash?

[00:32:05] Speaker 01:
And the argument that it's never been applied outside of the automotive setting, that's kind of a sample size issue.

[00:32:11] Speaker 01:
You've got lots of car crashes where liability is reasonably clear.

[00:32:16] Speaker 01:
You have a relatively rare number of

[00:32:19] Speaker 01:
medical malpractice claims where liability is reasonably clear.

[00:32:22] Speaker 01:
This is one of those cases.

[00:32:24] Speaker 01:
It's an exceptional case where liability is so clear that the duties apply.

[00:32:30] Speaker 03:
Thank you, counsel.

[00:32:30] Speaker 01:
Thank you.

[00:32:31] Speaker 03:
Thank you to all counsel for their briefing and argument in this case.

[00:32:34] Speaker 03:
This matter is submitted and we are in recess till tomorrow.