State ex rel. National Union Insurance v. District Court

441 P.2d 305, 151 Mont. 238, 1968 Mont. LEXIS 307
CourtMontana Supreme Court
DecidedJune 3, 1968
DocketNo. 11476
StatusPublished
Cited by1 cases

This text of 441 P.2d 305 (State ex rel. National Union Insurance v. District Court) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. National Union Insurance v. District Court, 441 P.2d 305, 151 Mont. 238, 1968 Mont. LEXIS 307 (Mo. 1968).

Opinion

MR. CHIEF JUSTICE JAMES T. HARRISON

delivered the Opinion of the Court.

[239]*239This is an original proceeding in which the petitioner seeks an appropriate writ.

Generally.; the application contained these allegations: That a civil action was filed in the District Court of Glacier County against Ray Abercrombie, doing business as Abercrombie Construction Company, and Jerry Abercrombie, seeking damages for personal injuries received in an accident. At the time of the accident, the plaintiff, one French, was employed by,the National Tank Company which had. a contract to lay pipe .in a trench which Ray Abercrombie was digging for Humble Oil Company. Jerry Abercrombie was an employee of his.father, Ray Abercrombie. Ray Abercrombie carried a policy of liability insurance with the petitioner National Union Insurance Companies of Pittsburgh, Pennsylvania, hereinafter referred to as National. National entered upon the defense of the suit for Ray Abercrombie and also extended to Jerry Abercrombie what is known as a “courtesy defense” under a written agreement which provided that National assumed no responsibility as to any judgment against defendant Jerry Abercrombie and also could withdraw the courtesy defense upon notice.

National engaged professional legal services to defend the French suit and on December 26, 1967, though its agency, sent an “excess letter.” to Ray Abercrombie advising him that his coverage was limited to the amount set forth in the policies and the amount sought in the suit exceeded such amount and if he desired another attorney to represent him above the policy limits he should engage one.

Ray Abercrombie consulted his personal counsel; said counsel thereupon entered into a series of communications directed to defending counsel; appeared at a pre-trial conference “specially” and “not as counsel of record;” and in the course of said hearing joined with French’s counsel in putting Ray Abercrombie on the witness stand, inquiring into matters pertaining to the' insurance coverage and excess exposure, neither [240]*240of which were issues in the case and had nothing to do with the pre-trial conferencce.

Defending counsel strenuously objected to this procedure and to the comments of personal counsel, contending that he was not a counsel of record and had no authority to appear and, further, the procedure constituted a direct challenge to defending counsel’s authority to represent Ray Abercrombie and the same was devastating so far as the relationship between attorney and client was conccerned. Within a few days after this pre-trial conference concluded, Ray Abercrombie’s personal counsel, by letter to defending counsel, directed the addition of other parties defendant.

Thereafter defending counsel, being of the opinion that the professional relationship of attorney and client between themselves and Ray Abercrombie could no longer be carried on within the concept of that relationship, sought to withdraw and substitute present defending counsel. Personal counsel refused to permit Ray Abercrombie to consent to this substitution. Present defending counsel, however, were added as counsel of record and then defense counsel filed formal motion for leave to withdraw and this motion was granted by the court.

During the time the motion was pending before the court National notified Jerry Abercrombie, who was being represented by the same personal counsel as his father, that it was withdrawing its courtesy defense and that he should engage his own attorney. Thereafter present defense counsel filed a motion to withdraw as attorneys of record for Jerry Abercrombie and, at the time noticed for hearing thereon, personal counsel appeared as “special counsel” and filed a motion in opposition thereto. The motion to withdraw as attorneys of record for Jerry Abercrombie was denied by the court.

Because the order of the district court denying the motion-for leave to withdraw was not an appealable order and petitioners had no other plain, speedy or adequate remedy, [241]*241this. original proceeding was instituted on April 9, 1968. Following an ex parte presentation this court issued an order to show cause on the same day and the return day was later continued at the request of the parties and came on to be heard on May. 8, 1968.

The respondents, being the district court and the acting judge thereof, Jerry Abercrombie, and his personal counsel, filed a joint answer in which, inter alia, they alleged that no policy of insurance had been delivered to Ray Abercrombie; that while the petitioner insurance company had entered upon a full and complete defense of the French suit, that the insurance company had contracted to insure both Ray B. Abercrombie and Jerry Abercrombie “for full coverage” against liability; that the signature of Jerry Abercrombie to the “courtesy defense agreement” was obtained as a result of misunderstanding and ignorance on the part of Jerry Abercrombie as to the terms of the policy or policies which were not issued or delivered; that the alleged “courtesy defense agreement” is without consideration, unethical, unconscionable, contrary to public policy, sham, frivolous, deceitful, and null and void.

It is further alleged that the sending and delivery of the “excess letter” three and one-half weeks before trial, after an action has been pending for over two years, is a violation of duty of good faith on part of insurer, negligent, unethical, unconscionable, unjustified, contrary to public policy, overreaching, grossly inequitable, and a void- act insofar as the insureds are concerned.

It is further alleged that nothing contained in any . communications from personal counsel was detrimental to the defense strategy but, on the contrary, served to enlighten defense counsel. Respondents prayed that the petition be denied. While many other allegations appear in the answer, those mentioned will suffice for our discussion of the issue involved.

. We will refer to the exhibits annexed to the petition that are - pertinent. First, we have the excess letter from the insur[242]*242anee company to Ray B. Abercrombie which, after commenting that the damages' sought are in excess of the liability limits of the policy, states: “You may; if you wish, engage your personal attorney, at your own expense, for the protection of your interests beyond the limits of coverage afforded by your policy.

“All information concerning the case in our possession is at all times, at your request, available to you, or your attorney.” The names and address of the defense attorneys were also stated.

On January 2, 1968, a letter was written to defense counsel on the letter head of personal counsel, signed by Ray Abercrombie, which requested that the personal attorney be furnished with all correspondencé and investigative reports. On January 10, 1968, defense counsel advised Ray Abercrombie by letter that they were sending to the personal attorney all of the correspondence and investigative reports which they deemed. pertinent and advised further they would be glad to talk to him and to his personal counsel at any time.

Under date of January 11, 1968, the personal attorney wrote defense counsel advising that Ray B. Abercrombie, doing business as Abercrombie Construction Company of Cut Bank, Montana, and Jerry Abercrombie must hold the insurance company completely responsible and liable for a full defense to, and full indemnity against, the entire demand of the French suit by reasons of their conduct in the matter.

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Bluebook (online)
441 P.2d 305, 151 Mont. 238, 1968 Mont. LEXIS 307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-national-union-insurance-v-district-court-mont-1968.