## Facts

- Paul Revere appointed Marie Deonier & Associates (Deonier) as an independent agent authorized to solicit applications, deliver policies, collect premiums, and service policyholders.
- Kathryn Vestal bought a Paul Revere disability policy through Deonier; the policy contained an incontestability clause.
- Vestal later made a disability claim; Paul Revere denied benefits, asserting nondisclosure of prior medical treatment and effectively relying on a “Forman” theory permitting denial despite an incontestability clause.
- Paul Revere had developed an internal plan to assert the Forman theory in Montana but did not disclose this plan to Deonier.
- Vestal sued Paul Revere and Deonier for benefits and related damages; Deonier cross-claimed against Paul Revere for indemnity and breach of fiduciary duty (including punitive-damages theories based on alleged fraud/malice).
- Vestal settled and dismissed claims; the remaining dispute was Deonier’s claims against Paul Revere.
- The district court granted summary judgment to Paul Revere on fiduciary duty, held a bench trial on indemnity, ordered Paul Revere to indemnify Deonier (including defense fees), and declined to decide the legality of Paul Revere’s Forman-based position.

## Issues

1. Whether summary judgment was proper dismissing Deonier’s breach-of-fiduciary-duty claim against Paul Revere.
2. Whether the district court erred by refusing to decide the legality of Paul Revere’s Forman-based use of the disability policy’s incontestability clause under Montana law and policy.
3. Whether Paul Revere was required to indemnify Deonier for liability exposure and attorney’s fees arising from Vestal’s suit.

## Decision

- Reversed the summary judgment dismissing Deonier’s fiduciary-duty claim; genuine issues of material fact existed as to whether a fiduciary duty arose and was breached.
- Held the district court should have decided the legality of Paul Revere’s Forman-based position because it was central to Deonier’s remaining theories, including punitive damages.
- Affirmed, in substantial part and subject to limited modifications, the judgment requiring Paul Revere to indemnify Deonier, including attorney’s fees incurred defending Vestal’s action.
- Remanded for further proceedings consistent with these rulings.

## Legal Principles

- A fiduciary duty may arise from a relationship of special trust and confidence where one party has superior knowledge and influence; whether such a duty exists and is breached is commonly a fact question unsuitable for summary judgment when material facts are disputed.
- An insurer’s nondisclosure to its agent of a material, preplanned claims or litigation strategy that affects policy meaning, sales representations, and the agent’s exposure can support a fiduciary-duty claim and related punitive-damages theories, depending on proof.
- A trial court must decide central legal questions necessary to adjudicate remaining claims; settlement of the underlying insured’s claims does not moot legal issues integral to a surviving agent’s claims.
- A principal may owe indemnity to its agent for liability and defense costs incurred while the agent acted within the scope of authority, particularly where the agent’s exposure was precipitated by the principal’s policies or conduct.

## Conclusion

The court reinstated Deonier’s fiduciary-duty claim and required adjudication of the legality of Paul Revere’s Forman-based position, while largely upholding indemnity shifting Deonier’s defense-related losses to Paul Revere, and remanded for further proceedings.


Deonier & Associates v. Paul Revere Life Ins. Co., 301 Mont. 347, 9 P.3d 622 (Mont. 2000)