NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JUL 18 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

JAMES BRODOWY; MARGARET No. 23-35621

BRODOWY,

D.C. No. 6:22-cv-00030-KLD Plaintiffs-Appellants,

v. MEMORANDUM*

PROGRESSIVE DIRECT INSURANCE

COMPANY, DBA Progressive Direct Auto,

Defendant-Appellee.

Appeal from the United States District Court for the District of Montana Kathleen Louise DeSoto, Magistrate Judge, Presiding

Argued and Submitted July 10, 2024 Seattle, Washington

Before: McKEOWN, CLIFTON, and BRESS, Circuit Judges.

James and Margaret Brodowy appeal a district court order granting summary

judgment to defendant Progressive Direct Insurance Company on the Brodowys’

Montana state law claims. We have jurisdiction under 28 U.S.C. § 1291. We review

the district court’s summary judgment ruling de novo. Donnell v. Kowell, 533 F.3d

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. 762, 769 (9th Cir. 2008). We affirm.

1. The district court properly granted summary judgment to Progressive

on the Brodowys’ Montana Unfair Trade Practices Act (UTPA) claims.

First, Progressive did not violate the UTPA by failing to advance pay medical

expenses in accordance with Ridley v. Guaranty National Insurance Co., 951 P.2d

987 (Mont. 1997). The UTPA prohibits certain unfair trade practices in connection

with insurance “claims.” See Mont. Code Ann. § 33-18-201(2), (4), (6), (13). The

Montana Supreme Court has further explained that the UTPA “addresses the

relationship between an insured and an insurance company once a claim has been

filed.” Thomas v. Nw. Nat. Ins. Co., 973 P.2d 804, 809 (Mont. 1998) (emphasis

added). From this, district courts in Montana have concluded that the advance

payment obligation under Ridley is triggered only when a plaintiff requests that an

insurer pays his medical bills. See, e.g., Moe v. GEICO Indem. Co., 2021 WL

4244986, at *6–9 (D. Mont. Sept. 15, 2021), vacated on other grounds, 73 F.4th 757

(9th Cir. 2023). Such a requirement often accords with many plaintiffs’ best

interests, as it allows claimants to first use health insurance to pay medical expenses

and then obtain those amounts from the tortfeasor’s insurer. Id. at *8.

The Brodowys do not seriously dispute that they were required to make a

claim in order for Progressive’s Ridley obligations to attach. Instead, they argue

they sufficiently made such a claim here. We conclude, however, that the Brodowys

2 did not make a Ridley demand, so Progressive did not violate the UTPA by failing

to advance pay medical expenses. Progressive was told by a hospital representative

that Margaret was “wondering” if the hospital could bill Progressive directly. This

was insufficient to constitute a claim for Ridley advance payments. The Brodowys

concede that Montana cases in this area have all involved explicit demands for

advance payment, and they point to no Montana precedent that has applied Ridley

absent such a request or in a situation like the one here.1

Second, Progressive did not violate the UTPA by including an optional release

with its payment of policy limits. Montana law prohibits leveraging payment with

conditional releases. See High Country Paving, Inc. v. United Fire & Cas. Co., 454

P.3d 1210, 1215 (Mont. 2019) (prohibiting conditional releases where the “only

reason” to support the conduct is leveraging); Shilhanek v. D-2 Trucking, Inc., 70

P.3d 721, 726–27 (Mont. 2003). But the Brodowys identify no Montana authority

prohibiting optional releases like the one here. And in this case, Progressive clearly

indicated that the Brodowys were not required to sign the release in order to receive

payment.

Third, Progressive’s inclusion of Margaret on the optional release did not

violate the UTPA. As the Brodowys recognize, Montana law provides that any

1 We reject the Brodowys’ argument that Progressive unreasonably delayed in responding to James’s accident. The record supports Progressive’s position that it acted reasonably promptly.

3 derivative claims Margaret would assert based on James’s injury would be subject

to the same “per person” limit under the policy. See Bain v. Gleason, 726 P.2d 1153,

1157 (Mont. 1986). The Brodowys cite no Montana precedent that required

Progressive to inform Margaret about any potential non-derivative claims she might

have had, nor have they identified any Montana authority prohibiting the actions

Progressive took here. Once it became clear that Margaret was making her own

claim, Progressive provided her with the amount due under the policy.

2. The district court did not err in granting summary judgment to

Progressive on the Brodowys’ common law claims. While the Brodowys separately

pleaded a common law bad faith claim, that claim is “not independently cognizable”

because the Brodowys have concurrently pleaded UTPA violations, and thus the

common law claim is “necessarily subsumed” into the statutory claim. Folsom v.

Mont. Pub. Emps. Assn., Inc., 400 P.3d 706, 717 (Mont. 2017). And even if the

Brodowys could bring a separate common law claim, it would fail for the same

reasons that the UTPA claim fails.

The Brodowys’ common law claim for breach of the covenant of good faith

and fair dealing lacks merit because there is no underlying contract between the

parties that would support this claim. See Cate v. First Bank (N.A.) Billings, 865

P.2d 277, 280 (Mont. 1993) (“We conclude that because no contract, express or

implied, existed . . . there could be no breach of the covenant of good faith and fair

4 dealing.”). While the Brodowys argue that some states allow third-party claimants

to bring such an action, they cite no Montana law that endorses such a theory, and

the California case they cite, Hand v. Farmers Ins. Exch., 29 Cal. Rptr. 2d 258, 264

(Cal. Ct. App. 1994), involves the different situation of judgment creditors. As

Montana law is “clear that the implied covenant of good faith and fair dealing does

not attach in the absence of an enforceable agreement,” we do not find support for

the Brodowys’ theory. See Chipman v. Nw. Healthcare Corp., Applied Health

Servs., Inc., 317 P.3d 182, 189 (Mont. 2014).

3. The district court did not err in granting summary judgment on the

Brodowys’ claim for punitive damages. Because the district court properly granted

summary judgment on the claims for compensatory damages, there is no basis for

punitive damages. See Stipe v. First Interstate Bank-Polson, 188 P.3d 1063, 1068

(Mont. 2008) (“Actual damages are a predicate for punitive damages, and an

individual with no real or actual damages has no right of action for punitive

damages.”).

AFFIRMED.

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