William Riordan v. State Farm Mutual Automobile I ( 2009 )


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  •                  FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    WILLIAM RIORDAN,                         No. 08-35874
    Plaintiff-Appellee,
    D.C. No.
    v.
       9:07-cv-00038-
    STATE FARM MUTUAL AUTOMOBILE                 DWM
    INSURANCE COMPANY,
    OPINION
    Defendant-Appellant.
    
    Appeal from the United States District Court
    for the District of Montana
    Donald W. Molloy, District Judge, Presiding
    Argued and Submitted
    July 7, 2009—Portland, Oregon
    Filed December 10, 2009
    Before: Harry Pregerson, Pamela Ann Rymer and
    A. Wallace Tashima, Circuit Judges.
    Opinion by Judge Pregerson;
    Partial Concurrence and Partial Dissent by Judge Rymer
    16359
    16362          RIORDAN v. STATE FARM MUTUAL
    COUNSEL
    Travis Dye, Kalkstein & Johnson, P.C., Missoula, Montana,
    for the defendant-appellant.
    Justin Starin, Tornabene & McKenna, PLLC, Missoula, Mon-
    tana, for the plaintiff-appellee.
    OPINION
    PREGERSON, Circuit Judge:
    Under the American Rule, civil litigants are generally
    required to pay their own attorney fees. The state of Montana,
    however, recognizes an exception to the American Rule in the
    RIORDAN v. STATE FARM MUTUAL              16363
    context of insurance disputes. We consider whether the claim-
    ant here, who was forced into litigation in order to recover the
    full benefit of his insurance contract, may recover attorney
    fees incurred as a result of that litigation. We have jurisdiction
    under 
    28 U.S.C. § 1291
    , and we affirm the district court’s
    award of attorney fees.
    I.    BACKGROUND
    A.   Riordan’s Accident and Recovery of Benefits Prior
    to Litigation.
    On October 21, 2004, William Riordan was injured in a car
    accident. It is undisputed that the other driver was at fault. At
    the time of the accident, Riordan and his wife were insured
    under three State Farm automobile insurance policies. Each
    policy provided uninsured motorist (“UIM”) coverage with
    limits of $50,000 per person and $100,000 per accident.
    In January 2005 Riordan retained an attorney, Mary Kay
    Starin, to help him obtain benefits from State Farm. Between
    the end of January and August 2006, State Farm paid Riordan
    UIM benefits totaling $30,586.59.
    B.   Commencement of Litigation to Recover Benefits.
    Represented by new counsel, Justin Starin, Riordan filed
    suit against State Farm in federal district court on March 28,
    2007, seeking “$150,000.00, less that which State Farm has
    already paid” and “for other and further relief as the Court
    shall deem just and proper.” Riordan asserted that State Farm
    was required to provide $150,000.00 of UIM coverage, the
    “stacked” total of UIM coverage under the three policies.
    After being served with Riordan’s Complaint but before filing
    an Answer, State Farm paid Riordan an additional $45,413.43
    in UIM benefits. This brought the total UIM benefits paid by
    State Farm to $76,000, leaving $74,000 in UIM benefits
    remaining under the insurance policies’ limits.
    16364           RIORDAN v. STATE FARM MUTUAL
    State Farm filed its Answer to the Complaint on June 14,
    2007. In its Answer, State Farm flatly “denie[d] liability for
    payment of uninsured motorist benefits requested by [Rior-
    dan] on the grounds that [Riordan] has been reasonably com-
    pensated for his alleged injuries.” State Farm denied that the
    nature, cause and extent of Riordan’s damages were caused
    by the car accident. Further, while it did not dispute the exis-
    tence of UIM coverage, State Farm asserted that Riordan was
    “not entitled to recover further under his underinsured motor-
    ist coverage . . . because his damages do not exceed amounts
    already received by him.” The district court set a trial date for
    February 25, 2008.
    Shortly before trial, on February 14, 2008, State Farm
    agreed to pay Riordan the approximately $74,000 in UIM
    benefits remaining under Riordan’s insurance policies. The
    district court ordered the parties to brief the issue whether
    Riordan was entitled to attorney fees. Riordan then filed his
    motion for attorney fees on February 29, 2008.
    C.    Riordan’s Motion for Attorney Fees.
    A magistrate judge held two hearings related to the claim
    for attorney fees. The first hearing on March 14, 2008 focused
    on the issue of State Farm’s liability for fees. At State Farm’s
    request, the magistrate judge held a second evidentiary hear-
    ing on July 15, 2008 on the issue of the value of the legal ser-
    vices received by Riordan. On July 16, 2008, the magistrate
    judge issued findings of fact and recommended that Riordan
    be awarded attorney fees totaling $30,759. The magistrate
    judge considered Riordan’s recovery from State Farm in three
    categories: (1) UIM benefits received before Riordan filed
    suit; (2) UIM benefits received after Riordan filed suit but
    before State Farm filed its Answer; and (3) UIM benefits
    received on the eve of trial. The magistrate judge recom-
    mended that Riordan receive no attorney fees for the UIM
    benefits received before Riordan filed suit. With respect to the
    $45,413.43 in UIM benefits received by Riordan shortly after
    RIORDAN v. STATE FARM MUTUAL               16365
    suit was filed, the magistrate judge found that Riordan should
    receive attorney fees “at an appropriate market rate for the
    attorney time reasonably spent” and recommended an award
    of $4,859. With respect to the $74,000 paid by State Farm on
    the eve of trial, the magistrate judge recommended an award
    of $25,900, an award based on the thirty-five-percent contin-
    gency fee Riordan entered into with his second attorney who
    represented him in the litigation.
    State Farm objected to the magistrate judge’s findings and
    recommendations and also moved to certify to the Montana
    Supreme Court the question whether State Farm was liable to
    Riordan for attorney fees. The magistrate judge responded
    with new findings and recommended denying the motion for
    certification. The magistrate judge reasoned that the state law
    issue was reasonably clear and provided the district court with
    a principled basis for its award of attorney fees. The magis-
    trate judge also recommended that the district court decline to
    exercise its discretion to certify questions to the Montana
    Supreme Court in light of the fact that State Farm was dila-
    tory and waited to seek certification until after it received an
    adverse determination on the claim for fees.
    On September 29, 2008, the district judge adopted in full
    the magistrate judge’s findings and recommendations and
    declined to certify State Farm’s questions to the Montana
    Supreme Court. State Farm timely appeals.
    II.   DISCUSSION
    We must first consider State Farm’s motion to strike from
    the Record on Appeal portions of depositions and a proposed
    pre-trial order included in Riordan’s Supplemental Excerpts
    of Record, and to strike the portions of Riordan’s Answering
    Brief relying on those documents.
    [1] Federal Rule of Appellate Procedure 10(a) states in per-
    tinent part that “[O]riginal papers and exhibits filed in the dis-
    16366               RIORDAN v. STATE FARM MUTUAL
    trict court” are part of the record on appeal. Fed. R. App. P.
    10(a) (emphasis added). “A paper is filed by delivering it” to
    the clerk or to a judge who agrees to accept it for filing.1 Fed.
    R. Civ. P. 5(d)(2) (emphasis added).
    [2] The deposition excerpts Riordan relied on before this
    court were appended as an exhibit to his Second Motion in
    Limine. The Second Motion in Limine was filed with the dis-
    trict court with the exhibits attached. Accordingly, the deposi-
    tion excerpts constituted “an exhibit filed in the district court”
    for the purposes of Federal Rule of Appellate Procedure 10(a)
    and are properly before us as part of the Record on Appeal.2
    We deny State Farm’s motion to strike.
    State Farm argues that the final pretrial order was never
    “filed” but was merely “lodged” by the parties with the dis-
    trict court, and is therefore not properly part of the record on
    appeal. The pre-trial order is stamped “LODGED” with the
    name of the clerk of the court. The district court docket also
    contains an entry showing that the pre-trial order was “sub-
    mitted for review” on February 8, 2008.
    [3] Here, the pre-trial order bears the clerk’s stamp, show-
    ing that the document was in the possession of the clerk. This
    indicates that it was “delivered to the clerk” in compliance
    with Rule 5(d)(2), governing the filing of documents. That the
    proposed pre-trial order was delivered to the court is also
    reflected in the district court docket entered by the clerk,
    which shows that the proposed final pretrial order was “[sub-
    mitted] for review by William Riordan, State Farm Mutual
    Automobile Insurance Co.” Riordan also specifically pointed
    1
    Electronic filing is also permitted by local rule. Fed. R. Civ. P. 5(d)(3).
    2
    State Farm’s reliance on Barcamerica International USA Trust v.
    Tyfield Importers, Inc., 
    289 F.3d 589
     (9th Cir. 2002) is misplaced. There
    was no dispute in that case that “portions of . . . depositions and exhibits
    filed appended to the motion to summary judgment” were part of the
    record on appeal. 
    Id. at 594
    .
    RIORDAN v. STATE FARM MUTUAL                      16367
    to the pre-trial order in his brief in support of his motion for
    attorney fees, noting the pre-trial order’s docket number and
    quoting it as saying that “Bill Riordan ‘will seek attorney’s
    fees pursuant to the insurance exception to the American
    Rule.’ ” The pre-trial order was properly called to the district
    court’s attention and is part of the Record on Appeal.3
    A.    Whether the Claim for Attorney Fees was Properly
    Raised.
    Turning to Riordan’s claim for attorney fees, State Farm
    next argues that the claim was not properly raised. State Farm
    asserts that Riordan was required to specifically request attor-
    ney fees in his complaint, and that it suffered prejudice
    because Riordan “surprised” it on the eve of trial with the
    claim for attorney fees, depriving State Farm of adequate
    notice. The district court concluded that under Federal Rule
    of Civil Procedure 54(d)(2), Riordan properly raised his claim
    for attorney fees by motion after filing his complaint.
    Whether Riordan followed the correct procedure to raise
    the claim is a question of federal law, which we review de
    novo. Carnes v. Zamani, 
    488 F.3d 1057
    , 1059 (9th Cir. 2007)
    (citing In re Larry’s Apartment, L.L.C., 
    249 F.3d 832
    , 837-38
    (9th Cir. 2001)) (“In a diversity case, the law of the state in
    which the district court sits determines whether a party is enti-
    tled to attorney fees, and the procedure for requesting an
    award of attorney fees is governed by federal law.”); P.N. v.
    Seattle Sch. Dist. No.1, 
    474 F.3d 1165
    , 1168 (9th Cir. 2007)
    (citing Carbonell v. INS, 
    429 F.3d 894
    , 897 (9th Cir. 2005)
    and Barrios v. Cal. Interscholastic Fed’n, 
    277 F.3d 1128
    ,
    3
    In any event, review of the pre-trial order in the Supplemental Excerpts
    of Record does not affect our disposition. On appeal, Riordan uses the pre-
    trial order to support his argument that State Farm had adequate notice of
    his claim for attorney fees. As explained below, even without considering
    the pre-trial order, we have no difficulty concluding that State Farm had
    adequate notice of Riordan’s claim for attorney fees.
    16368              RIORDAN v. STATE FARM MUTUAL
    1133 (9th Cir. 2003)) (“[E]lements of legal analysis and statu-
    tory interpretation underlying the district court’s attorneys’
    fees decision are reviewed de novo[.]”) We also review de
    novo a district court’s interpretation of the Federal Rules of
    Civil Procedure. Schwarzschild v. Tse, 
    69 F.3d 293
    , 295 (9th
    Cir. 1995).
    State Farm relies on the notice and pleading requirements
    of Rule 8(a) (requiring the pleader to make a demand for
    judgment for the relief the pleader seeks) and Rule 9(g)
    (requiring special damages to be specifically pleaded in the
    complaint) to argue that Riordan was required to specifically
    request attorney fees in his complaint. State Farm contends
    that it suffered prejudice because Riordan “surprised” it on
    the eve of trial with the claim for attorney fees, rendering
    State Farm unable to conduct discovery on the fees claim,
    challenge the claim through summary judgment, or conduct a
    complete evaluation of Riordan’s claim. These arguments fail.
    Riordan was not required to raise his claim in his complaint.
    Under Federal Rule of Civil Procedure 54(d)(2), Riordan
    properly raised his claim by motion.
    [4] Rule 54(d)(2) provides that claims for attorney fees
    must be made by motion, and then sets out exceptions to that
    general rule. Subparagraph A of Rule 54(d)(2) provides that
    “[a] claim for attorney’s fees and related nontaxable expenses
    must be made by motion unless the substantive law requires
    those fees to be proved at trial as an element of damages.”
    Fed. R. Civ. P. 54(d)(2)(A). The text of Rule 54(d)(2) lays out
    a general rule that a claim for attorney fees must be made by
    motion, with the exception that when the substantive law
    requires those fees to be proved at trial as an element of dam-
    ages. The text of the rule supports the conclusion that Riordan
    properly raised the attorney fees claim by motion.4
    4
    The advisory committee notes accompanying Rule 54(d)(2) also sup-
    port the district court’s ruling that Riordan properly raised his claim for
    attorney fees by motion. Subdivision (d)(2) was added to Rule 54 in 1993
    RIORDAN v. STATE FARM MUTUAL                     16369
    [5] In examining this Rule, our court has held that raising
    claims for attorney fees by motion is proper. We specifically
    rejected the argument that such a claim must be raised in the
    pleadings:
    [T]he Federal Rules of Civil Procedure . . . establish
    the method by which a federal litigant must obtain
    attorneys’ fees . . . . Each party [in this case] has
    assumed that some form of initial pleading—either
    a complaint or a counterclaim—is the appropriate
    manner by which the [party seeking attorneys’ fees]
    should seek its costs. Yet, such is not generally the
    case in our federal system. Federal Rule of Civil Pro-
    cedure 54(d)(2)(A) establishes that “[c]laims for
    attorneys’ fees and related nontaxable expenses shall
    be made by motion unless the substantive law gov-
    erning the action provides for the recovery of such
    fees as an element of damages to be proved at trial.”
    (emphasis added). And the Rules make clear that
    pleadings and motions are distinct. Compare Fed. R.
    Civ. P. 7(a) (defining “Pleadings,” including coun-
    terclaims), with Fed. R. Civ. P. 7(b) (defining “Mo-
    tions and Other Papers”).
    Port of Stockton v. W. Bulk Carrier KS, 
    371 F.3d 1119
    , 1120-
    21 (9th Cir. 2004). Our discussion in Port of Stockton makes
    clear that, (subject to the exceptions laid out by Rule
    54(d)(2)), it is proper to raise a claim for attorney fees by
    motion, and not in the pleadings.
    Our examination of the text of Rule 54(d)(2) leads us to
    conclude that Riordan properly raised the claim for attorney
    because attorney fees were not expressly addressed by the Rules. Fed. R.
    Civ. P. 54 Advisory Committee’s Note (1993). The purpose of the revision
    was “to provide for a frequently recurring form of litigation not initially
    contemplated by the rules—disputes over the amount of attorneys’ fees to
    be awarded in the large number of actions in which prevailing parties may
    be entitled to such awards . . . .” 
    Id.
    16370           RIORDAN v. STATE FARM MUTUAL
    fees by motion. Port of Stockton also undermines State
    Farm’s argument that Riordan should have included his claim
    for attorney fees both in his complaint and again by motion.
    As explained in Port of Stockton, pleadings and motions are
    distinct, and there is no requirement that the fees claim be first
    raised in the complaint, then again by motion. Port of Stock-
    ton, 
    371 F.3d at 1121
    .
    [6] State Farm’s argument that it was prejudiced by lack of
    notice is not persuasive. Rule 54(d)(2) allows parties to sub-
    mit evidence and arguments regarding attorney fees, and pro-
    vides that the motion may be referred to a magistrate judge
    for disposition. Fed. R. Civ. P. 54(d)(2)(C), (D). State Farm
    was afforded all these procedural protections. The attorney
    fees claim was fully briefed by the parties and referred to a
    magistrate judge for consideration. At State Farm’s request,
    the magistrate judge held an evidentiary hearing at which
    Riordan presented witnesses attesting to the value of the legal
    services Riordan received, and State Farm cross-examined
    those witnesses. State Farm filed objections to the magistrate
    judge’s findings and recommendations, and both the magis-
    trate judge and the district judge responded to those objec-
    tions. State Farm cannot credibly claim it was prejudiced after
    availing itself of the full protections available under Rule
    54(d)(2). We hold that Riordan properly raised his attorney
    fee claim by motion.
    B.    Entitlement to Fees.
    We now consider whether the district court erred when it
    determined that Riordan was entitled to attorney fees under
    Montana’s insurance exception to the American Rule.
    [7] “Montana follows the general American Rule that a
    party in a civil action is not entitled to attorney fees absent a
    specific contractual or statutory provision.” Mountain W.
    Farm Bureau Mut. Ins. Co. v. Brewer, 
    69 P.3d 652
    , 655
    (Mont. 2003) (citing Mountain W. Farm Bureau Mut. Ins. Co.
    RIORDAN v. STATE FARM MUTUAL              16371
    v. Hall, 
    38 P.3d 825
    , 828 (Mont. 2001)). Montana recognizes
    an exception to the American Rule, however, where “the
    insurer forces the insured to assume the burden of legal action
    to obtain the full benefit of the insurance contract . . . .”
    Brewer, 
    69 P.3d at 660
    .
    The Montana Supreme Court provided a lengthy discussion
    of Montana’s insurance exception in Brewer. 
    Id. at 652
    . In
    that case, the parents of a child injured in a car accident suc-
    cessfully established through litigation that the at-fault driv-
    er’s insurance company was obligated to cover them. 
    Id. at 654
    . They then moved for attorney fees. 
    Id.
    On appeal, the Montana Supreme Court examined Montana
    and other states’ insurance exceptions to the American Rule.
    
    Id.
     After a detailed examination of the law in other jurisdic-
    tions and other persuasive legal authority, the court held:
    We decline to further propagate the arbitrary legal
    fiction that a substantive distinction exists between
    a breach of the duty to defend and the breach of the
    duty to indemnify. It seems inherently inconsistent
    that courts universally afford attorney fees incurred
    to establish a contested duty to defend and yet,
    simultaneously, reject such an award incurred in
    coverage disputes brought to preserve or eviscerate
    the obligatory defense . . . .
    Accordingly, we hold that an insured is entitled to
    recover attorney fees, pursuant to the insurance
    exception to the American Rule, when the insurer
    forces the insured to assume the burden of legal
    action to obtain the full benefit of the insurance con-
    tract, regardless of whether the insurer’s duty to
    defend is at issue.
    16372             RIORDAN v. STATE FARM MUTUAL
    
    Id. at 660
    .5
    The first paragraph of Brewer quoted above focuses on the
    distinction between an insurance company’s duty to defend
    and its duty to indemnify. State Farm argues that because
    Riordan’s claim involves neither the duty to defend nor the
    duty to indemnify, Riordan’s claim does not fall under Mon-
    tana’s insurance exception to the American Rule.
    [8] On the other hand, the second paragraph of Brewer
    quoted above plainly holds that insureds who are forced to sue
    their insurers to obtain their bargained-for insurance benefits
    are entitled to attorney fees. Reading that clear language, the
    district court concluded that this case falls squarely within the
    holding of Brewer because Riordan was forced to litigate in
    order to receive the full benefit of his insurance policies.
    The Montana Supreme Court has further discussed its hold-
    ing in Brewer in subsequent cases and has emphasized the
    importance of the contractual relationship between insureds
    and insurers in applying its insurance exception to the Ameri-
    can Rule. In Sampson v. National Farmers Union Property &
    Casualty Co., the Montana Supreme Court described its hold-
    ing in Brewer this way:
    [W]e have held that an insured is entitled to recover
    attorney fees under the “insurance exception” to the
    American Rule when the insurer forces the insured
    to commence legal action to obtain the full benefits
    of the insurance contract between them; however, we
    have declined to extend this exception to third party
    actions, where there is no privity of contract—no
    “previously bargained for benefit”—that the third
    party was forced into litigation to vindicate. See
    Brewer, [
    69 P.3d at 661
    ].
    5
    The plaintiffs in Brewer were nevertheless denied attorney fees,
    because they were third-party claimants who were not in privity with the
    insurance companies they sued. 
    Id. at 661
    .
    RIORDAN v. STATE FARM MUTUAL                16373
    Sampson, 
    144 P.3d 797
    , 801 (Mont. 2006). In Sampson, the
    Montana Supreme Court observed that the key similarity
    between Brewer and Sampson was that the plaintiffs in both
    cases were third-party claimants and therefore not covered by
    the insurance exception. This reading of Brewer further sup-
    ports the view that the Montana insurance exception encom-
    passes the claim of Riordan, who is a first-party claimant. See
    also Jacobsen v. Allstate Ins. Co., 
    215 P.3d 649
    , 656 (Mont.
    2009) (“Our decision in Brewer was based upon the lack of
    fiduciary duty running from an insurer to a third-party claim-
    ant . . . . The rationale underlying the insurance exception to
    the American Rule is the existence of a fiduciary duty, and no
    such duty exists here.”)
    [9] We conclude that the Montana Supreme Court’s deci-
    sion in Brewer and the Montana Supreme Court’s subsequent
    interpretation of Brewer‘s language supports the district
    court’s award of attorney fees. By its own terms, Brewer
    states that “an insured is entitled to recover attorney fees, pur-
    suant to the insurance exception to the American Rule, when
    the insurer forces the insured to assume the burden of legal
    action to obtain the full benefit of the insurance contract . . . .”
    Brewer, 
    69 P.3d at 660
    . Riordan’s first-party claim against his
    insurance company falls within Montana’s exception.
    [10] State Farm unequivocally denied further liability to
    Riordan, and only settled with Riordan on the eve of trial.
    Riordan was forced to litigate to obtain the full benefit of his
    contract with State Farm. He is entitled to attorney fees under
    the insurance exception recognized in Brewer.
    C.   The District Court’s Decision to Award Attorney
    Fees to Riordan
    State Farm next argues that the district court should not
    have awarded attorney fees on the facts of this case. We
    review the district court’s decision to award attorney fees for
    abuse of discretion. Tutor-Saliba Corp. v. City of Hailey, 452
    16374           RIORDAN v. STATE FARM MUTUAL
    F.3d 1055, 1059 (9th Cir. 2006). “A district court abuses its
    discretion if its ruling on a fee motion ‘is based on an inaccu-
    rate view of the law or a clearly erroneous finding of fact.’ ”
    Richard S. v. Dep’t of Dev’l Servs. of Cal., 
    317 F.3d 1080
    ,
    1086-87 (9th Cir. 2003) (quoting Barjon v. Dalton, 
    132 F.3d 496
    , 500 (9th Cir. 1997)). As explained above, the district
    court’s view of the law was not inaccurate. The remaining
    question is whether the fee award was based on a clearly erro-
    neous finding of fact.
    [11] Under Montana law, a district court may award the full
    amount agreed upon under a contingency fee agreement so
    long as the amount of attorney fees is reasonable. Stimac v.
    State, 
    812 P.2d 1246
    , 1249 (Mont. 1991). The district court
    awarded Riordan a total of $30,759 in attorney fees. This fee
    award was not based on a clearly erroneous finding of fact.
    State Farm argues that, assuming Riordan was entitled to
    fees, he should not have been awarded more than $1,233.40.
    Riordan’s agreement with his first attorney, Mary Kay Starin,
    who represented him before litigation commenced, required
    Riordan to pay Ms. Starin one-third of any recovery. State
    Farm calculates this as one-third of $74,000, or $24,666.64.
    Riordan’s agreement with his second attorney, Justin Starin,
    who represented him during the litigation, required Riordan to
    pay Mr. Starin thirty-five percent of any recovery. State Farm
    calculates this amount as thirty-five percent of $74,000, or
    $25,900. State Farm contends that Riordan should receive the
    difference between what he would have paid his first attorney
    had she recovered the full amount of the benefits owed, and
    the amount he owes his second attorney he retained for litiga-
    tion. State Farm calculates the difference as $1,233.40.
    [12] We agree with the district court that State Farm’s argu-
    ment lacks merit. Although State Farm provides its own pro-
    posal of what Riordan’s attorney fees should be, State Farm
    does not explain why the district court’s calculation of the fee
    award was clearly erroneous. The district court based its fee
    RIORDAN v. STATE FARM MUTUAL              16375
    award on Riordan’s contingency fee agreement and took into
    consideration proper factors articulated in Stimac, including
    the experience and skill of the attorneys, the time and labor
    required to perform the legal services, the ability of Riordan
    to pay for the services, and the risk to Riordan of no recovery.
    See Stimac, 
    812 P.2d at 1249
    . It was not clear error for the
    district court to follow Montana law and calculate the award
    according to a reasonable hourly rate and the contingency fee
    agreement.
    State Farm posits that even if Brewer applies, the district
    court erred by ignoring its argument that attorney fees are not
    warranted on the facts of this case. In State Farm’s view, there
    were “significant questions” regarding whether Riordan’s
    more recent medical treatment stemmed from injuries from
    the car accident, and awarding fees would be unjust where it
    was merely investigating Riordan’s new claims. Contrary to
    State Farm’s contentions, the district court did not largely
    ignore this argument. The district judge and the magistrate
    judge both considered State Farm’s argument and rejected it
    as lacking merit. Before the trial court, State Farm had flatly
    denied that it was responsible for any further payments to
    Riordan. We cannot say that the district court abused its dis-
    cretion in awarding fees here.
    D.   State Farm’s Motion to Certify Questions to the
    Montana Supreme Court.
    Lastly, State Farm argues that the district court should have
    granted its motion to certify questions to the Montana
    Supreme Court. See Montana Rule of Appellate Procedure
    15(3) (permitting the Montana Supreme Court to answer a
    question of law certified by a court of the United States). We
    review for abuse of discretion the district court’s decision
    whether to certify a question to a state supreme court. See
    Eckard Brandes, Inc. v. Riley, 
    338 F.3d 1082
    , 1087 (9th Cir.
    2003) (“The decision to certify a question to a state supreme
    court rests in the ‘sound discretion’ of the district court.”
    16376             RIORDAN v. STATE FARM MUTUAL
    (quoting Louie v. United States, 
    776 F.2d 819
    , 824 (9th Cir.
    1985)); Micomonaco v. Washington, 
    45 F.3d 316
    , 322 (9th
    Cir. 1995) (same).
    [13] Even where state law is unclear, resort to the certifica-
    tion process is not obligatory. See Lehman Bros. v. Schein,
    
    416 U.S. 386
    , 390 (1974). Furthermore, “[m]ere difficulty in
    ascertaining local law is no excuse for remitting the parties to
    a state tribunal for the state tribunal for the start of another
    lawsuit.” 
    Id.
     The district court did not abuse its discretion
    when it declined to certify to the Montana Supreme Court the
    question whether “Montana’s insurance exception to the
    American Rule governing attorney’s fees extend[s] to first-
    party claims where the dispute is over the value of the claim
    rather than the existence of a duty to defend or indemnify.”
    As explained above, the language of Brewer and the Montana
    Supreme Court’s subsequent holdings illustrate that Mon-
    tana’s insurance exception to the American Rule encompasses
    Riordan’s claim.6
    [14] On appeal, State Farm renews its motion to certify and
    asks us in an exercise of our discretion to certify the same
    questions to the Montana Supreme Court. As explained above
    we do not find it necessary to further prolong these proceed-
    ings where the state law is clear. We deny State Farm’s
    motion to certify attorney fee questions to the Montana
    Supreme Court.
    III.    CONCLUSION
    State Farm’s Motion to Strike Documents from Appellee’s
    6
    The dissent relies on Burkett v. State Farm Mutual Automobile Insur-
    ance Co., No. DDV-05-076, Mont. 8th Jud. Dist. Ct., Cascade County
    (May 23, 2007) for the proposition that Montana courts disagree on the
    reach of Brewer. We note that in Burkett, State Farm, the appellant here,
    received an adverse ruling, but did not appeal that ruling to the Montana
    Supreme Court.
    RIORDAN v. STATE FARM MUTUAL              16377
    Supplemental Excerpts of Record and Corresponding Argu-
    ment in Response Brief is DENIED. State Farm’s Motion to
    Certify Questions to the Montana Supreme Court is also
    DENIED. The district court’s award of attorney fees is
    AFFIRMED.
    RYMER, Circuit Judge, concurring in part and dissenting in
    part:
    I agree that Riordan did not need to plead attorney’s fees
    in order to seek them, but disagree that we should decide
    whether Montana’s insurance exception to the American Rule
    extends to disputes over value of an UIM claim. I would cer-
    tify this question.
    Neither in Mountain W. Farm Bureau Mut. Ins. Co. v.
    Brewer, 
    69 P.3d 652
     (Mont. 2003), nor elsewhere has the
    Montana Supreme Court addressed whether the insurance
    exception extends beyond the duty to indemnify, to cover
    claims and disputes over UIM benefits of the sort presented
    here. Montana courts disagree about whether Brewer extends
    to this context. See Burkett v. State Farm Mut. Auto. Ins. Co.,
    No. DDV-05-076, Mont. 8th Jud. Dist. Ct., Cascade County
    (May 23, 2007) (awarding attorney’s fees under Brewer
    where the plaintiff sought UIM benefits under a contract
    because “this is a first-party insurance action that [the plain-
    tiff] was required to prosecute in order to obtain the benefit
    of her contract.”); Rand v. State Farm Mut. Auto. Ins. Co.,
    No. DV-03-312, Mont. 18th Jud. Dist. Ct., Gallatin County
    (Mar. 4, 2005) (denying award of attorney’s fees under
    Brewer where plaintiff had brought an action for UIM bene-
    fits under his contract because Brewer concerned the duty to
    indemnify, which did not involve UIM benefits). UIM cover-
    age does not fit either recognized exception, where the duty
    to defend, or the duty to indemnify, is at issue.
    16378          RIORDAN v. STATE FARM MUTUAL
    It makes sense to give the Montana Supreme Court the first
    shot at the question. Montana trial courts see Brewer differ-
    ently, the issue of attorney’s fees in insurance disputes is
    obviously important, and insurance is quintessentially a mat-
    ter of state law. To do otherwise also raises the spectre of
    forum shopping. Accordingly, I would certify the question
    whether Montana’s insurance exception to the American Rule
    extends to first-party claims for underinsured motorist cover-
    age where the dispute is over value of the claim.