Locke v. Estate of Davis

Locke v. Estate of Davis, 2015 MT 141 (May 26, 2015) (Cotter, J.) (5-0, aff’d & rev’d)

Issue: (1) Whether the district court properly denied the estate’s motion to alter or amend the judgment; (2) whether the district court abused its discretion by making findings and conclusions that effectively bind Safeco to a judgment when Safeco was not a named party and did not appear.

Short Answer: (1) No; and (2) yes.

Affirmed in part, vacated and remanded

Facts: In May 2011, Marian Davis lost control of her car and struck Amy Locke’s car. Davis died several hours later. Locke suffered multiple physical and emotional injuries.

Davis was insured by Safeco under a policy with $100,000 per person coverage. In August 2012, Locke filed a claim for damages against Davis’s estate. Safeco was not a named party defendant. Before trial, Safeco paid Locke $16,306.40 for her past medical expenses. Locke offered more than once to settle her claim within the policy limits, but Safeco rejected her offers.

Procedural Posture & Holding: Following a three-day trial on damages only, the jury awarded Locke $400,000 damages and the district court awarded her $1,800 in costs. The estate moved for relief from the judgment, arguing the judgment should be reduced to the policy limits because Locke did not file her claim within four months of the publication of Notice to Creditors or within one year of Davis’s death; the district court denied the motion. The estate appeals, Safeco intervenes, and the Court vacates and remands.

Reasoning: (1) The estate argues the district court failed to apply § 72-3-803(3)(b) when it allowed the entire judgment to stand rather than reducing it to the policy limits. It further argues that the advance medical payments and any costs and interest should be subsumed within the policy limits. Sections 72-3-801(1) and -803(1), MCA, require claims to be brought against an estate within four months of publication of notice to creditors or not later than one year after the decedent’s death. Late filings are allowed if the decedent was insured, but only up to the limits of the insurance policy. The estate is correct that Locke cannot execute against the estate for more than the $100,000 policy limits. Locke contends the full judgment should remain because it provides the basis for her to pursue an excess judgment against Safeco as allowed by Goettel. As noted by the estate, Goettel named the liability insurance carrier as a party defendant, whereas Locke did not file suit against Safeco. Nonetheless, because Locke can pursue recovery of the amount of the jury verdict in excess of $100,000 against Safeco, the Court declines to set aside the verdict.

Regarding an offset for advance medical payments, the district court abused its discretion in refusing to reduce the estate’s liability by the amount of the advance payments, and shall do so on remand.

(2) The district court erred in making findings against Safeco when it was not a party to the lawsuit. On remand, the court’s revised order shall not include any findings or conclusions regarding Safeco’s conduct.