Two days later, a fire rose from the ashes of Mr. Fitte's burn and erupted into a wildfire that became known as the Corral Fire. The Corral Fire burned over 1,800 acres owned by approximately 35 landowners, including a 224-acre parcel owned by the Associated Dermatology and Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan and Trust for the Benefit of Stephen D. Behlmer, M.D. (“Behlmer”).

At the time of the fire, Mr. Fitte carried an insurance policy issued by Mountain West Farm Bureau Mutual Insurance Company that provided $500,000 in commercial automobile coverage.

Mr. Fitte conceded negligence and, following arbitration on damages, stipulated to entry of a judgment in favor of Behlmer in the amount of $500,000.

Mr. Fitte and Behlmer subsequently entered into an agreement in which Mr. Fitte assigned his rights in the Mountain West policy to Behlmer in exchange for an agreement that Behlmer would not execute against Mr. Fitte personally.

Behlmer then went to court, seeking a declaration that the Mountain West commercial automobile policy provided coverage for the Corral Fire damages and enforcement of its judgment against Mr. Fitte. Mountain West counterclaimed for a declaration that the automobile policy did not provide coverage. The trial court ruled in favor of Behlmer, reasoning that:

By removing and disposing trees to prevent damage to his vehicles, [Mr.] Fitte caused the Corral Fire. Thus, [Behlmer's] property damage flowed from, grew out of, or originated from [Mr.] Fitte maintaining his insured vehicle.

Mountain West appealed to the Montana Supreme Court.

The Mountain West Commercial Auto Policy

Mountain West's commercial automobile policy provided:

We [Mountain West] will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto.”

The Montana Supreme Court reversed the trial court's coverage ruling, finding that Behlmer's property damage had not “result[ed] from the ownership, maintenance or use of” Mr. Fitte's covered vehicles.

In its decision, the court explained that, even if assumed for the sake of argument that cutting down trees constituted maintenance of a vehicle, the Mountain West policy did not extend coverage for the damages in this case because the damage did not “result from” the maintenance of the covered vehicles.

The court pointed out that Mr. Fitte's decision to dispose of the branches by burning them and his action of starting the fire had occurred after the trees had been cut down. Mr. Fitte's perceived risk to his vehicles had been “eliminated when he felled the trees,” the court added. In the court's view, he could have disposed of the trees in any number of ways, which demonstrated that “his decision to burn the branches was not an inherent part of vehicle maintenance.”

Thus, the court ruled, the trial court's conclusion that burning the trees was a necessary part of preventing damage to, and thus maintaining, Mr. Fitte's vehicles, was incorrect, and its declaration of coverage under the Mountain West commercial automobile policy had to be reversed.

The case is Associated Dermatology and Skin Cancer Clinic of Helena, P.C. Profit Sharing Plan and Trust for the Benefit of Stephen D. Behlmer, M.D. v. Mountain West Farm Bureau Mutual Ins. Co., No. DA 16-0098 (Mont. Feb. 21, 2017). Attorneys involved include: For Appellant: Erik B. Thueson, Thueson Law Ofice, Helena, Montana, Scott Peterson, Morrison, Sherwood, Wilson and Deola, PLLP, Helena, Montana. For Appellee: Randall G. Nelson, Nelson & Dahle, P.C., Billings, Montana, Martha Sheehy, Sheehy Law Firm, Billings, Montana.