Mlekush v. Farmers Insurance Exchange

Summary

The Montana Supreme Court held that when a first-party insured is compelled to litigate an underinsured motorist claim and obtains a jury verdict exceeding the insurer’s last settlement offer, the insured is entitled to recover reasonable attorney fees under Montana’s insurance exception to the American Rule. The court reversed the order denying Tanya Mlekush’s fee request and remanded for determination of reasonable fees, costs, and interest.

Holdings

1. When a first-party insured is compelled to pursue litigation and a jury returns a verdict exceeding the insurer's last offer to settle an underinsured motorist claim, the insurer must pay the insured's reasonable attorney fees.
2. The district court must determine the reasonable amount of attorney fees, costs, and interest, and may account for conduct that unreasonably multiplies litigation or increases costs.

Questions Presented

1. Whether a first-party insured who is compelled to litigate a UIM claim and obtains a jury verdict exceeding the insurer's last settlement offer is entitled to attorney fees under Montana's insurance exception to the American Rule.

Disposition

reversed_and_remanded