Scott Ayotte v. American Economy Insurance Company

MEMORANDUM *

The district court granted summary judgment in favor of American Economy Insurance Company (“American Economy”) on Ayotte’s claims for advance medical payments under Ridley v. Guaranty National Insurance Co., 286 Mont. 325 , 951 P.2d 987 (1997) and common law bad faith. Ridley holds that under a Montana *658 statute, a liability insurer may not defer payment of an injured third party’s medical expenses until final settlement, if liability is “reasonably clear,” and it is “reasonably clear that the expense is causally related to the accident in question.” Id. at 992. The district court ruled against Ay-otte’s entitlement to these payments because the liability of American Economy’s insured was not “reasonably clear.” For the same reason, the court ruled that American Economy did not commit common law bad faith by not making the payments.

Though Ayotte appealed, the appeal was never adjudicated. While the appeal was pending, American Economy’s insured confessed judgment for an amount in excess of what American Economy claims is the policy limit. Ayotte then moved to dismiss his appeal as moot and to vacate the summary judgment.

In a separate action, Ayotte is now…

concurring:

I concur in the disposition. I write to clarify that the stipulated judgment here should not be given controlling — or even much — weight in the equitable analysis we direct, and to point to a second consideration relevant to that analysis.

I.

The circumstances here are that the third-party litigation was going to terminate, one way or the other — that is, through settlement or through litigation— independently of this federal court litigation about the interim payment of medical expenses, the so-called Ridley payments. This litigation was not settled; it was mooted because it concerned an inherently time-limited obligation, covering only the period during which the separate litigation between the alleged tortfeasor and the plaintiff was pending. That time period could be longer or shorter, depending upon whether the parties litigated or settled, but it was going to end, and was going to do so independently of whether the insurance company was ultimately determined to have owed Ridley payments before termination.

In other words, had the tort litigation not been settled but terminated through litigation, the question in this case— whether Ridley payments were due…

FILED

NOT FOR PUBLICATION JUN 10 2014

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

SCOTT AYOTTE, No. 13-35012

Plaintiff - Appellant, D.C. No. 2:09-cv-00057-RFC

v.

MEMORANDUM*

AMERICAN ECONOMY INSURANCE

COMPANY,

Defendant - Appellee.

Appeal from the United States District Court for the District of Montana Richard F. Cebull, Senior District Judge, Presiding

Argued and Submitted May 14, 2014 Seattle, Washington

Before: O’SCANNLAIN, KLEINFELD, and BERZON, Circuit Judges.

The district court granted summary judgment in favor of American

Economy Insurance Company (“American Economy”) on Ayotte’s claims for

advance medical payments under Ridley v. Guaranty National Insurance Co.,

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. 951 P.2d 987 (Mont. 1997) and common law bad faith. Ridley holds that under a

Montana statute, a liability insurer may not defer payment of an injured third

party’s medical expenses until final settlement, if liability is “reasonably…