Park Place Apts., L.L.C. v. Farmers Union Mut. Ins. Co.

Park Place Apts., L.L.C. v. Farmers Union Mut. Ins. Co.

Opinion

 [***237]  [**395]   W. William Leaphart delivered the Opinion of the Court.

 [*P1]  Plaintiff and Appellant Park Place Apartments, LLC ("PPA") appeals from  [****2] the order of Flathead County District Court granting summary judgment in favor of Farmers Union Mutual Insurance Company (FUMIC) and its former agent Bud Wilhelm (Wilhelm), and denying PPA's cross-motion for summary judgment. PPA sued FUMIC,  [**396]  Wilhelm, and Montana Farmers Union Insurance Agency (MFU) when FUMIC denied coverage on a claim made by PPA. This case was consolidated with a third-party claim by Wilhelm against Whitefish Insurance Agency, Inc., but that claim is not a subject of this appeal. We reverse.

 [*P2]  We consider the following issue on appeal:

 [*P3]  Whether the District Court erred in granting summary judgment in favor of FUMIC and Wilhelm, and in denying PPA's cross-motion for summary judgment.

FACTUAL AND PROCEDURAL BACKGROUND

 [*P4]  In 2001, PPA, through its sole owner, Whitefish attorney William Hileman, began investigating the purchase of a 24-unit apartment complex at 601 Park Avenue in Whitefish. Hileman had the property appraised, and the market value of the complex was estimated to be $ 750,000. The complex consists of a long, rectangular apartment building, a carport running along the length of the building, and a small laundry and storage building on the opposite side of the  [****3] carport. The $ 750,000 estimate included a value of $ 46,200 for the carport. In connection with the purchase, Hileman contacted Wilhelm, whom he had known for a decade and from whom he had previously purchased insurance. Hileman requested full casualty and liability coverage for the property, which he described as FUMIC's standard "business pack" of insurance products for commercial property owners. The policy limit was set at the appraised value of $ 750,000. Wilhelm filled out the application for insurance form on Hileman's behalf, and listed the two buildings (the 24-unit apartment building, and the laundry building) on the "Declarations" page. When shown the completed application, Hileman asked Wilhelm what the "second" building (meaning the laundry building) was. Wilhelm informed Hileman that listing the laundry building was not a necessary step, as "all buildings and structures on the property were covered," but that FUMIC "liked to see those buildings to which people were coming and going specifically identified." With Hileman's approval, Wilhelm submitted the application, both men believing that coverage had been obtained for the entire property. Hileman signed the application  [****4] on PPA's behalf on May 1, 2001, the closing date for the purchase of the complex.

 [*P5]  The policy was renewable annually, and PPA renewed its policy each year without any further inquiry as to the amount or scope of coverage. In 2005, Wilhelm retired, and his practice was assumed by Monte Sparby. PPA continued to renew through Sparby. Also in 2005,  [**397]  a reference to "BOP-54" was inserted into the policy. BOP-54, an "amendatory endorsement," was included in a long list of other such endorsements on the renewal declaration. BOP-54 stated that the policy, as modified by the endorsement, covered only those buildings and structures separately listed on the Declarations page for which a limit of coverage was shown.

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