Tidyman’s Management Services Inc., a Washington Corporation; Lenora Davis Bateman, Vicki Earhart, Carol Heald…

Summary

The Court held that Montana law governed the insurance dispute, that NUFI breached its duty to defend by refusing to continue defending claims that potentially implicated its policy, and that the resulting stipulated settlements were subject to review for substantive reasonableness. The Court affirmed the award of prejudgment interest beginning when the settlements were approved and judgment entered, but reversed approval of the $29 million settlements because NUFI had raised a genuine factual issue concerning their reasonableness and remanded for a hearing. Justice McKinnon, concurring in part and dissenting in part, would have required analysis of the complaint and policy to determine the duty to defend and would have allowed inquiry into collusion and disputed facts concerning NUFI’s defense obligations.