Smith v. Farmers Union Mutual Insurance Company

Summary

The Montana Supreme Court reviews summary judgment in a dispute over whether an insurance policy was reinstated after the insureds mailed a money order following nonpayment of a renewal premium. The court holds that the insurer's employee's alleged statements were admissible as party-opponent statements and created a genuine issue of material fact regarding acceptance or promissory estoppel. It also concludes that the unsigned money order was not necessarily invalid payment as a matter of law, reversing summary judgment for the insurer while affirming denial of the insureds' partial summary judgment motion.

Holdings

1. The Smiths' knowledge that Treweek was no longer affiliated with FUMIC defeated a reasonable belief in actual or ostensible agency, so Treweek's receipt of the payment, without more, could not be imputed to FUMIC as timely receipt.
2. The mailbox rule did not make the Smiths' payment effective upon mailing because the reinstatement offer expressly required payment to be received by the due date.
3. FUMIC's investigation of the fire did not constitute a binding admission of an insurance contract or estop FUMIC from denying coverage.
4. The alleged statements by FUMIC's agent, Terri Humble, were not hearsay under Montana Rule of Evidence 801(d)(2)(D), and the dispute over what was said created a genuine issue of material fact concerning FUMIC's acceptance of the payment.
5. The unsigned money order was not necessarily invalid payment merely because it did not qualify as a negotiable instrument or did not comply with the agreement printed on the money order. Whether it would have been honored presented a genuine issue of material fact.
6. FUMIC was not entitled to summary judgment because genuine issues of material fact remained regarding whether its agent accepted the payment and whether the money order would have been honored.

Questions Presented

1. Whether the District Court erred in granting FUMIC summary judgment on the grounds that the Smiths failed to make timely payment and that the unsigned money order was invalid payment.
2. Whether statements by FUMIC's agent concerning acceptance of the payment were admissible under Montana Rule of Evidence 801(d)(2)(D) and created a genuine issue of material fact.
3. Whether the Smiths were entitled to partial summary judgment declaring that the loss was covered.

Disposition

reversed_and_remanded