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Gallatin County and a snowplow driver who was involved in a 2017 collision have filed a complaint in federal district court against Atlantic Special Insurance Company, alleging that the insurer acted in bad faith and breached its contract with the county.

The case is related to — but separate from — a lawsuit that was prompted by the 2017 crash that left a woman severely injured.

In that case, a Gallatin County plow being driven by Rick Blackwood failed to stop at a stop sign and collided with a car being driven by Sarah Daniels.

The snowplow’s blade broke through the windshield and roof of the car and Daniels spent several months in the hospital and has permanent impairments from the crash, according to court documents.

The resulting lawsuit from that crash was brought by Don Daniels, the conservator of Sarah Daniels’ estate.

Gallatin County District Court Judge Rienne McElyea found the county and the snowplow driver negligent and awarded damages to Daniels to the tune of $12.4 million. McElyea later reduced the amount based on a prior payment of $750,000 to $11.6 million.

In a complaint filed on April 5, 2021, Gallatin County and Blackwood allege that Atlantic Special Insurance Company breached its duty to Gallatin County and Blackwood by not paying its full policy amount of $6.5 million.

According to the complaint, ASIC paid Sarah Daniels $750,000 in early 2018. The company contended that its payment to Daniels was limited by statute in this instance to $750,000, not the $6.5 million that the Eighteenth Judicial District ordered by summary judgement the company pay to Daniels.

Gallatin County Attorney Marty Lambert said the next step in this case will be for ASIC to file a response.

ASIC did not answer a Monday afternoon call for comment on the case.

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Melissa Loveridge can be reached at mloveridge@dailychronicle.com or at (406) 582-2651.

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