Montana has a statutory cap on tort damages for county governments.  See Montana Code §2-9-108(1).  Tort damages are capped at $750,000.  In Daniels v. Gallatin County, 2022 Mt 137, 513 P.3d 514 (Mt 2022), the Montana Supreme Court held that where an insurance company issues a liability policy with limits in excess of $750,000 (the tort liability cap), issuance of the policy qualified as a waiver under Montana Code §2-9-108(3), which provides that the insurance company is liable for damages in excess of the $750,000 cap only if the insurer “specifically agrees by written endorsement” to provide coverage in excess of a cap.

The insurer argued that it did not include a separate endorsement referencing the statutory liability cap, nor did the insurer “specifically” agree to pay damages in excess of the cap.  In fact, the policy did not reference the statutory tort liability cap at all.  Nevertheless, the trial court considered the policy’s failure to mention the tort liability cap as being relevant to the question of waiver.  According to the trial court, the failure to mention the cap was evidence that it did not apply.  The trial court’s ruling was affirmed by the Montana Supreme Court.

The high court noted that the insurer was arguing that the insuring agreement in the policy covered only what the county was “legally obligated to pay in damages” which Section 2-9-108(1) limited to a $750,000 liability cap on damages.  The Court noted that the insurance company misunderstood the effect of Section 2-9-108(1), reasoning that nothing in the statute precluded the trial court from determining the full measure of plaintiff’s damages.  The statute only limited possible recovery against the county and Section 2-9-108(1) provided a right to recover the balance from the insurer if the insurer “specifically agrees” to waive the cap.  The waiver did not need to be contained in a separate endorsement.  The Supreme Court upheld the trial court’s ruling that the limits stated in the policy’s declaration page, which were in excess of the $750,000 cap, constituted a specific waiver.