Conley v. First National Insurance Co. of America

MEMORANDUM ** Dale and Karen Conley (the “Conleys”) appeal the district court’s order denying their motion for summary judgment and granting defendant’s cross motion for summary judgment in this action against First National Insurance Company and American States Insurance Company (“Insurers”). Insurers cross-appeal the district court’s finding that there was a covered “occurrence” under the subject policy. We have jurisdiction under 28 U.S.C. § 1382, and we AFFIRM. The relevant insurance policy covered “bodily injury.” Under Montana law, “bodily injury” includes “mental or psychological injury that is accompanied by physical manifestations.” Allstate Ins. Co. v. Wagner-Ellsworth, 344 Mont. 445, 188 P.3d 1042, 1051 (2008). “Such conditions include those which are susceptible to medical diagnosis and treatment in a manner which distinguishes them from mental injuries.” Id. at 1052. The Conleys contend their allegation of “anxiety” triggered Insurers’ duty to defend because, unlike emotional distress or mental anguish, anxiety “is commonly understood to include physical manifestations.” They further argue this duty was triggered by their October 1, 2009, letter to Insurers, which explained, “[T]he dread of the tax liability that the Conleys face [has] taken a serious toll on their health.” Even if anxiety “typically includes such things as headaches, sleeplessness, muscle tension, [and] nausea,” an insurer need not assume physical manifestations rising to the level of “bodily injury” whenever “anxiety” is alleged. See id. “At a minimum, there must be allegations of physical man *766 ifestations supported by sufficient documented evidence in order for insurance coverage to be triggered.” Id. at 1052 (quoting State Farm Fire & Cas. Co. v. Basham, 206 Mich.App. 240, 520 N.W.2d 713, 715 (1994)). The district court correctly held that the Conleys’ letter “fails to make even a generalized reference to physical injury” and that it was reasonable to read “a serious toll on their health” in context with the rest of the paragraph, which discussed only the “ ‘emotional cost’ of Stolp’s bad advice.” The Conleys argue that, at the very least, their complaint and letter triggered a duty to investigate and that such an investigation would have revealed their extreme weight loss and chronic diarrhea. But Montana law supports the district court’s holding that it was “not the [Insurers’] responsibility to affirmatively disprove a bodily injury where none had been alleged.” See Revelation Industries v. St. Paul Fire & Marine Ins. Co., 350 Mont. 184, 206 P.3d 919, 926 (2009). Insurers fulfilled their duty to investigate by reading the complaint and submitted information and requesting “additional information, documentation or authority [that would] in any way help support [the] claim for coverage.” See Daly Ditches Irrigation Dist. v. National Sur. Corp., 234 Mont. 537, 764 P.2d 1276, 1279 (1988). We conclude that the district court was correct in granting summary judgment, because there was no genuine dispute as to any material fact relating to the asserted duty to defend, and defendants were entitled to judgment as a matter of law. Because we decide Insurers had no duty to defend, we do not reach other issues on appeal or cross appeal. AFFIRMED. Footnotes [**] This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.