The Montana Supreme Court ruled that an insurer's "Other Insurance" clause does not constitute unlawful subrogation. The case is Scheafer v. Safeco Ins. Co., 320 P.3d 967 (Mont. 2014). 

Valerie Scheafer was involved in a car crash while driving a work vehicle. She submitted a claim for UIM benefits to her employer's insurer, Mountain West Farm Bureau (Mountain West), and a claim for med pay benefits only to her personal auto insurer, Safeco. Mountain West paid Scheafer the requested benefits. Safeco paid Scheafer $1,000, which was her med pay limit. Upon learning Scheafer was driving a work vehicle at the time of loss, Safeco informed her that her UIM benefits, which she had not requested, would only be available after the exhaustion of her employer's policy with Mountain West. 

Scheafer later filed suit against Safeco, alleging Safeco had breached both the policy and the duty of good faith and fair dealing because she had not received a payment for either her med pay or her UIM benefits. She claimed Safeco was engaged in unlawful subrogation because, under the "Other Insurance" clause, Safeco's coverage obligations would only trigger after the exhaustion of another party's policy limits. Scheafer also asserted she had not been paid for "incurr[ing] reasonable and necessary medical expenses and other damages and losses … causally related to the accident." However, there was no indication of the total expenses she incurred or any information concerning what she meant by "other damages and losses."