Montana Bad Faith Insurance Complaint (Civil Action — UTPA § 33-18-242)

COMPLAINT FOR BREACH OF INSURANCE CONTRACT, VIOLATION OF MONT. CODE ANN. § 33-18-201, AND PUNITIVE DAMAGES — MONTANA

TABLE OF CONTENTS

1. Caption
2. Parties, Jurisdiction, and Venue
3. General Allegations
4. Count I — Breach of Insurance Contract
5. Count II — Violation of the Montana Unfair Trade Practices Act (Mont. Code Ann. § 33-18-201) — Statutory Cause of Action under § 33-18-242
6. Count III — Common-Law Fraud / Constructive Fraud (alternative)
7. Count IV — Punitive Damages under Mont. Code Ann. §§ 27-1-220 and 27-1-221
8. Damages
9. Prayer for Relief
10. Demand for Trial by Jury
11. Signature Block
12. Verification
13. Certificate of Service
14. Montana Practice Notes
15. Sources and References

1. CAPTION

MONTANA [____] JUDICIAL DISTRICT COURT

[________________________________] COUNTY

Cause No. [________________________________]

Hon. [________________________________]

COMPLAINT AND DEMAND FOR JURY TRIAL

(Breach of Contract; Violation of Mont. Code Ann. § 33-18-201; Punitive Damages)

COMES NOW Plaintiff [PLAINTIFF NAME], by and through undersigned counsel, and for a Complaint against Defendant [INSURER NAME], alleges and states as follows:

2. PARTIES, JURISDICTION, AND VENUE

1. Plaintiff [PLAINTIFF NAME] is, and at all relevant times was, a resident of [COUNTY] County, Montana, and was the named insured (or beneficiary) under the policy of insurance described herein.

2. Defendant [INSURER NAME] is a [STATE OF INCORPORATION] corporation authorized to transact, and engaged in the transaction of, the business of insurance in the State of Montana, with a registered agent for service of process at [REGISTERED AGENT NAME AND ADDRESS].

3. This Court has subject-matter jurisdiction pursuant to Mont. Const. art. VII, § 4 and Mont. Code Ann. § 3-5-302, as this is a civil action seeking damages in excess of the jurisdictional minimum and arising under the laws of the State of Montana, including Mont. Code Ann. §§ 33-18-201 and 33-18-242.

4. Venue is proper in [COUNTY] County under Mont. Code Ann. § 25-2-122 because the contract of insurance was to be performed and the loss occurred in this County, and Defendant transacts business and may be served in this County.

5. All conditions precedent to the filing of this action have been satisfied, performed, waived, or excused.

3. GENERAL ALLEGATIONS

A. The Insurance Policy

6. On or about [__/__/____], Defendant issued Policy No. [POLICY NUMBER] (the "Policy") to Plaintiff, providing [TYPE OF COVERAGE — e.g., homeowners, automobile, commercial property, life, health, disability, UM/UIM] insurance with limits of $[POLICY LIMITS].

7. The Policy was in full force and effect at all times material to this action, and all premiums were paid when due.

8. The Policy is a written contract of insurance governed by Montana law and subject to the three-year statute of limitations of Mont. Code Ann. § 27-2-202(2) for the contract claim, and the two-year statute of limitations of Mont. Code Ann. § 33-18-242(8) for the statutory UTPA claim.

B. The Covered Loss

9. On or about [__/__/____], Plaintiff suffered a loss covered by the Policy when [DESCRIBE LOSS EVENT — date, location, cause, nature, and extent of damage or injury].

10. The loss is a covered peril (or covered occurrence) under the insuring agreement of the Policy, and no exclusion or limitation properly applies to bar coverage.

11. The amount of the covered loss is not less than $[LOSS AMOUNT], exclusive of consequential damages, statutory damages, attorney's fees, interest, costs, and punitive damages.

C. Plaintiff's Compliance with Policy Conditions

12. Plaintiff timely notified Defendant of the loss on or about [__/__/____] and has fully cooperated with Defendant's investigation, including:

• Submitting a sworn proof of loss on [__/__/____];
• Producing documentation, photographs, repair estimates, medical records, receipts, and inventories;
• Permitting inspection of the [property / vehicle / records] on [__/__/____];
• Submitting to an Examination Under Oath on [__/__/____] (if applicable); and
• Responding to all reasonable requests for information.

13. Plaintiff has performed all conditions precedent to coverage and recovery under the Policy.

D. Defendant's Wrongful Refusal to Pay

14. Notwithstanding Plaintiff's full performance and the absence of any reasonable basis in law or fact for refusal, Defendant has [denied the claim outright / underpaid the claim / unreasonably delayed payment] by [describe specific conduct, dates, and grounds asserted].

15. The grounds Defendant has asserted for its refusal to pay the loss are pretextual, contrary to the plain language of the Policy, contrary to Montana law, and unsupported by any reasonable investigation.

16. Defendant did not have a reasonable basis in law or in fact for contesting the claim, and the defense provided by Mont. Code Ann. § 33-18-242(6) does not apply.

4. COUNT I — BREACH OF INSURANCE CONTRACT

17. Plaintiff realleges and incorporates Paragraphs 1 through 16 as if fully set forth herein.

18. The Policy is a valid and enforceable contract between Plaintiff and Defendant.

19. Plaintiff performed all material obligations and satisfied all conditions of the Policy.

20. Defendant materially breached the Policy by failing to pay the covered loss in the amount of not less than $[LOSS AMOUNT] and by failing to provide the benefits owed under the express terms of the Policy.

21. As a direct and proximate result of Defendant's breach, Plaintiff has suffered damages including the unpaid policy benefits, foreseeable consequential damages, prejudgment interest under Mont. Code Ann. § 27-1-211, and costs of suit.

5. COUNT II — VIOLATION OF THE MONTANA UNFAIR TRADE PRACTICES ACT (Mont. Code Ann. § 33-18-201) — STATUTORY CAUSE OF ACTION UNDER § 33-18-242

22. Plaintiff realleges and incorporates Paragraphs 1 through 21 as if fully set forth herein.

23. Mont. Code Ann. § 33-18-242(1) creates an independent statutory cause of action by an insured (or third-party claimant) against an insurer for actual damages caused by the insurer's violation of subsections (1), (4), (5), (6), (9), or (13) of Mont. Code Ann. § 33-18-201.

24. Pursuant to Mont. Code Ann. § 33-18-242(2), Plaintiff is not required to prove that the violations were of a frequency to indicate a general business practice.

25. Defendant violated one or more of the following subsections of Mont. Code Ann. § 33-18-201:

• § 33-18-201(1) — Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue, by [describe];
• § 33-18-201(4) — Refusing to pay claims without conducting a reasonable investigation based upon all available information, by [describe];
• § 33-18-201(5) — Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed, by [describe];
• § 33-18-201(6) — Neglecting to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear, by [describe];
• § 33-18-201(9) — Attempting to settle a claim on the basis of an application that was altered without notice to, knowledge of, or consent of the insured, by [describe] (if applicable); and/or
• § 33-18-201(13) — Failing to promptly settle claims, when liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage, by [describe] (if applicable).

26. Defendant's violations of § 33-18-201 were the proximate cause of Plaintiff's damages.

27. Pursuant to Mont. Code Ann. § 33-18-242(5), Plaintiff is entitled to recover such damages as were proximately caused by Defendant's violations, together with exemplary damages as allowed by Mont. Code Ann. § 27-1-221.

6. COUNT III — COMMON-LAW FRAUD / CONSTRUCTIVE FRAUD (Alternative)

28. Plaintiff realleges and incorporates Paragraphs 1 through 27 as if fully set forth herein.

29. Mont. Code Ann. § 33-18-242(3) preserves an insured's common-law action for fraud as one of the three permitted remedies (along with breach of contract and the statutory UTPA action).

30. Defendant, by [describe specific misrepresentations or omissions, dates, persons], knowingly or recklessly made material misrepresentations or omissions concerning [coverage / claim status / policy provisions / settlement value], with the intent that Plaintiff rely upon them.

31. Plaintiff justifiably relied upon Defendant's misrepresentations or omissions to Plaintiff's detriment.

32. Defendant's fraudulent conduct proximately caused damages to Plaintiff in an amount to be proven at trial.

7. COUNT IV — PUNITIVE DAMAGES UNDER MONT. CODE ANN. §§ 27-1-220 AND 27-1-221

33. Plaintiff realleges and incorporates Paragraphs 1 through 32 as if fully set forth herein.

34. Mont. Code Ann. § 27-1-220(2)(b) expressly authorizes punitive damages in actions arising under Mont. Code Ann. § 33-18-201.

35. Defendant's conduct in handling Plaintiff's claim was undertaken with actual fraud and/or actual malice within the meaning of Mont. Code Ann. § 27-1-221, in that Defendant [describe conduct demonstrating knowing falsity or knowing/conscious disregard for facts creating high probability of injury, with deliberate indifference].

36. Plaintiff will establish actual fraud and/or actual malice by clear and convincing evidence as required by Mont. Code Ann. § 27-1-221(5).

37. Pursuant to Mont. Code Ann. § 27-1-220(3), Plaintiff seeks punitive damages in an amount sufficient to punish Defendant and deter future similar conduct, subject to the statutory cap of the lesser of $10,000,000 or 3% of Defendant's net worth.

8. DAMAGES

38. As a direct and proximate result of Defendant's conduct, Plaintiff has suffered damages including:

• Contract damages (unpaid policy benefits): $[AMOUNT];
• Consequential damages (additional living expenses, lost income, lost business, additional repair costs, financing costs, and other foreseeable losses): $[AMOUNT];
• Emotional distress damages (where recoverable in connection with the UTPA action): $[AMOUNT];
• Statutory actual damages under Mont. Code Ann. § 33-18-242: in an amount to be proven at trial;
• Punitive damages under Mont. Code Ann. §§ 27-1-220 and 27-1-221: in an amount to be determined by the jury, subject to the statutory cap;
• Prejudgment interest under Mont. Code Ann. § 27-1-211 and § 27-1-212;
• Postjudgment interest under Mont. Code Ann. § 25-9-205;
• Costs of suit under Mont. Code Ann. § 25-10-101 et seq.; and
• Reasonable attorney's fees to the extent permitted by contract, statute, or Mountain West Farm Bureau Mutual Insurance Co. v. Brewer, 2003 MT 98, 315 Mont. 231, 69 P.3d 652 (insured-vs.-insurer attorney's fees for compelling payment).

9. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully prays that this Court:

• A. Enter judgment in favor of Plaintiff and against Defendant on Counts I, II, III, and IV;
• B. Award Plaintiff contract damages in an amount not less than $[AMOUNT];
• C. Award Plaintiff consequential and statutory damages under Mont. Code Ann. § 33-18-242 in an amount to be proven at trial;
• D. Award Plaintiff punitive damages under Mont. Code Ann. §§ 27-1-220 and 27-1-221 in an amount to be determined by the jury, subject to the statutory cap;
• E. Award Plaintiff prejudgment and postjudgment interest as allowed by Montana law;
• F. Award Plaintiff reasonable attorney's fees and costs of suit; and
• G. Grant such other and further relief as the Court deems just and proper.

10. DEMAND FOR TRIAL BY JURY

Pursuant to Mont. R. Civ. P. 38 and Mont. Const. art. II, § 26, Plaintiff hereby demands a trial by jury on all issues so triable as a matter of right.

11. SIGNATURE BLOCK

DATED this [____] day of [_______________], 20[____].

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME]

Montana State Bar No. [________]

Counsel for Plaintiff

[STREET ADDRESS]

[CITY, MT ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

12. VERIFICATION

STATE OF MONTANA

COUNTY OF [________________________________]

I, [PLAINTIFF NAME], being first duly sworn upon oath, depose and state that I am the Plaintiff in the foregoing Complaint, that I have read the same, and that the facts stated therein are true and correct to the best of my knowledge, information, and belief.

[________________________________]

[PLAINTIFF NAME]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public for the State of Montana

(Printed Name: [_______________________])

(Residing at: [_______________________])

(My Commission Expires: [_______________])

13. CERTIFICATE OF SERVICE

I hereby certify that on the [____] day of [_______________], 20[____], I caused a true and correct copy of the foregoing COMPLAINT AND DEMAND FOR JURY TRIAL to be served upon Defendant by service of process through its registered agent at:

[REGISTERED AGENT NAME AND ADDRESS]

via:

☐ Personal service by sheriff or process server

☐ Certified mail, return receipt requested

☐ Other authorized method: [________________________________]

[________________________________]

[ATTORNEY NAME], Montana State Bar No. [________]

14. MONTANA PRACTICE NOTES

• Unique statutory private right of action. Mont. Code Ann. § 33-18-242 makes Montana one of a small minority of states that affords a private cause of action under the Unfair Trade Practices Act to both insureds and third-party claimants. Most jurisdictions deny third parties any direct UTPA remedy. Always plead the specific § 33-18-201 subsection(s) violated; only (1), (4), (5), (6), (9), and (13) support the § 33-18-242 action.
• No separate common-law tort of bad faith. Section 33-18-242(3) expressly limits insured remedies to (a) breach of contract, (b) fraud, and (c) the statutory § 33-18-242 action. Section 33-18-242(4) similarly limits third-party claimants. The Montana Supreme Court has held that § 33-18-242 is the exclusive statutory remedy for first-party bad-faith conduct, while preserving fraud and contract actions. Do NOT plead a separate "common-law bad faith" count for an insured plaintiff.
• Brewington and the third-party private right. Brewington v. Employers Fire Ins. Co., 1999 MT 312, 297 Mont. 243, 992 P.2d 237, confirmed third-party claimants' standing under § 33-18-242 even though they have no contract with the insurer. A third-party claim must wait until the underlying claim is settled or judgment entered, and must be filed within ONE YEAR thereafter (§ 33-18-242(8)).
• Statutes of limitations.
• Insured's § 33-18-242 statutory action: TWO YEARS from the date of the violation.
• Third-party claimant's § 33-18-242 statutory action: ONE YEAR from settlement or judgment of the underlying claim.
• Written insurance contract: THREE YEARS — Mont. Code Ann. § 27-2-202(2). (Some authority applies the eight-year written-contract period of § 27-2-202(1); confirm based on policy form.)
• Common-law fraud: TWO YEARS — Mont. Code Ann. § 27-2-203.
• "Reasonable basis" defense. Section 33-18-242(6) provides a complete defense if the insurer "had a reasonable basis in law or in fact for contesting the claim or the amount of the claim." Develop facts negating any such basis. Palmer ex rel. Diacon v. Farmers Ins. Exch., 261 Mont. 91, 861 P.2d 895 (1993), held that the "fairly debatable" defense is not absolute and the question is generally for the jury.
• Punitive damages procedure. Punitive damages must be specifically pleaded (Mont. Code Ann. § 27-1-221(7)) and proved by clear and convincing evidence of actual fraud or actual malice. The jury determines liability and compensatory damages first; punitive amounts and net-worth discovery come in a bifurcated proceeding (§ 27-1-221(7); § 27-1-222). Cap: lesser of $10,000,000 or 3% of defendant's net worth (§ 27-1-220(3)).
• Bifurcation of contract vs. UTPA claims. Section 33-18-242(7)(b) permits the trial court to bifurcate the contract claim from the UTPA claim. Plaintiff should consider whether trying the contract claim first (to establish coverage) advances or delays the UTPA recovery.
• Captive insurers. Section 33-18-242(9) excludes captive insurance companies (other than risk retention groups) from the private right of action. Confirm carrier status before filing.
• CSI complaint. A complaint to the Montana Commissioner of Securities and Insurance (csimt.gov) is permissible and may produce useful documents through the regulatory process. It is not a prerequisite to suit and does not toll the SOL.
• Tidyman's limitation. Tidyman's Mgmt. Servs. Inc. v. Davis, 2014 MT 205, 376 Mont. 80, 330 P.3d 1139, addressed insurer disclosure of reservation-of-rights and indemnity exposures; review for any duty-to-defend implications.
• Attorney's fees against the insurer. Under Mountain West Farm Bureau Mutual Insurance Co. v. Brewer, 2003 MT 98, an insured who is forced to assume the burden of legal action to obtain the benefit of the policy may recover attorney's fees as compensatory damages. This is a common-law equitable doctrine independent of any fee-shifting statute.

15. SOURCES AND REFERENCES

• Mont. Code Ann. § 33-18-201 — Unfair claim settlement practices prohibited — https://mca.legmt.gov/bills/mca/title_0330/chapter_0180/part_0020/section_0010/0330-0180-0020-0010.html
• Mont. Code Ann. § 33-18-242 — Independent cause of action; burden of proof — https://mca.legmt.gov/bills/mca/title_0330/chapter_0180/part_0020/section_0420/0330-0180-0020-0420.html
• Mont. Code Ann. § 27-1-220 — Punitive damages: when allowed; limitation — https://mca.legmt.gov/bills/mca/title_0270/chapter_0010/part_0020/section_0200/0270-0010-0020-0200.html
• Mont. Code Ann. § 27-1-221 — Punitive damages: liability, proof, award — https://mca.legmt.gov/bills/mca/title_0270/chapter_0010/part_0020/section_0210/0270-0010-0020-0210.html
• Mont. Code Ann. § 27-2-202 — Written contracts statute of limitations — https://mca.legmt.gov/bills/mca/title_0270/chapter_0020/part_0020/section_0020/0270-0020-0020-0020.html
• Brewington v. Employers Fire Ins. Co., 1999 MT 312, 297 Mont. 243, 992 P.2d 237 (third-party private right under § 33-18-242)
• Palmer ex rel. Diacon v. Farmers Ins. Exch., 261 Mont. 91, 861 P.2d 895 (1993) (fairly debatable defense)
• Ridley v. Guaranty Nat'l Ins. Co., 286 Mont. 325, 951 P.2d 987 (1997) (reasonable investigation duty)
• Tidyman's Mgmt. Servs. Inc. v. Davis, 2014 MT 205, 376 Mont. 80, 330 P.3d 1139
• Mountain West Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, 315 Mont. 231, 69 P.3d 652 (insured-vs.-insurer attorney's fees)
• Montana Commissioner of Securities and Insurance — https://csimt.gov/
• Montana CSI File a Complaint — https://csimt.gov/file-a-complaint/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. A Montana-licensed attorney must review and customize this document before filing. Laws, citations, and court rules change frequently; verify all authorities against the current Montana Code Annotated before use.