INSURANCE CONSUMER COUNSEL COLUMN · loved one or the physical effects of such injury to a loved one likely ... “Emotional distress passes under various names such as mental suffering,

PAGE 26 TRIAL TRENDS - SUMMER 2004

INSURANCE CONSUMER COUNSEL’S COLUMN

BY PROFESSOR GREG MUNRO

INSURANCE COVERAGE FOR DAMAGES FOR EMOTIONAL DISTRESS IN MONTANA

IntroductionSociety has become more aware

of the mind-body connection. Wehave long recognized that severeinjury to a person’s body may causemeasurable limits on strength, endur-ance, and range of motion and pro-duce pain. Tort law has takencognizance of these physical manifes-tations of injuries to the person be-cause they are considered observable,verifiable, and therefore, real. At theleast, the civil justice system has rec-ognized that such physical manifesta-tions cost money to remedy andcause a person to lose work so theyconstitute measurable damages ofpecuniary import appropriate for juryconsideration.

The same system has been muchslower in recognizing damages to themind suffered by victims of torts,especially injury to the mind causedby watching loved ones get maimedor killed. Today, we know that notonly does severe injury to the bodycause injury to the mind, but thatwitnessing catastrophic injury to aloved one or the physical effects ofsuch injury to a loved one likelycauses the same mental damage.Therapists who treat patients nowrecognize the unique debilitatingeffects of such resulting maladies aspost-traumatic stress disorder andemotional distress. They understandthe import of symptoms such as

memory loss, anxiety, depression,mental preoccupation, tearfulness,personality change, and compulsivity,and appreciate their significance indiagnosing emotional distress andother trauma-related disorders of themind. Modern medicine recognizesthe intricate interrelationship betweenthe health of the body and that ofthe mind.

Hence, the standard of care forplaintiffs’ counsel is to identify emo-tional distress not only in the physi-cally injured plaintiff but in familymembers who may be suffering.Family members must be carefullyassessed for psychological or emo-tional injury to develop effectiveproof of the injury as a recoverabledamage for purposes of negotiationand trial. However, recovering dam-ages for emotional distress requiresthat the law recognize as compens-able the particular form of emotionaldistress suffered by the client. Inmany cases, recovery also requiresthat the insurance policy providingcoverage for the claim involvingemotional distress recognizes emo-tional distress as a covered damage.

This article has the twin purposesof exploring the circumstances inwhich Montana tort law recognizesemotional distress as compensableand examining the problem of secur-ing insurance coverage of emotionaldistress damages. Techniques for

investigation and proof of emotionaldistress damages must be left to othersources. As in many other areas, thelaw here is best understood by look-ing at the relevant line of cases andstatutes in their historical context.

History of the development of“emotional distress” in Montana

In England, in 1808, LordEllenborough held that, at commonlaw, there could be no recovery forthe wrongful death of a person.2

Parliament eventually sought to ad-dress the harshness of the rule byenacting Lord Campbell’s Act whichprovided an action for wrongfuldeath.3 The act provided for jurydetermination of damages as follows:

...[A]nd in every such actionthe jury may give such dam-ages as they may think propor-tioned to the injury resultingfrom such death to the partiesrespectively for whom and forwhose benefit such action shallbe brought...

However, Lord Campbell’s Actwas construed by the Queen’s Benchin 1852 to refuse recovery for mentalanguish in a wrongful death action.4The court said that the purpose ofthe Act was compensating families ofthose killed and not “solacing theirwounded feelings.” Hence, theQueen’s Bench found it error for thetrial court to have instructed that thejury, in addition to compensation forloss of support, could compensate awidow for her emotional pain. Thecourt reasoned that a jury could notfind some pecuniary measure for thedamage so as to make it too difficultto determine.

“Emotional distress passes under various names such as mental suffering,mental anguish, nervous shock, and includes all highly unpleasant mental

reactions, such as fright, horror, grief, shame, embarrassment, anger,chagrin, disappointment, and worry. However, it is only when emotional

distress is extreme that possible liability arises.”Roberts v. Saylor, (Kansas 1981)1

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The rule that, in a wrongfuldeath action, one could not be com-pensated for emotional pain becameknown as the “English rule” and wasfollowed by most American jurisdic-tions.5 In Montana, the rule was rel-egated to history by the SupremeCourt in 1983 in Dawson v. Hill &Hill Truck Lines at the urging ofthe late John Hoyt. Hoyt representeda couple whose 17-year-old son was ahigh school superstar slated to bevaledictorian of his class in May of1982. He was killed when a driver forHill & Hill Truck Lines attempted topass two cars during a snowstormnear Belt, Montana. The truck col-lided head-on with another oncomingsemi, and the careening trucks struckthe car in which Dawson’s son rode,killing him.

At that time, Montana permittedrecovery for loss of society and com-panionship but imposed a pecuniaryloss rule allowing those losses only tothe extent that they had a pecuniaryvalue.6 The question Hoyt posed was:“Are damages for the sorrow, mentaldistress or grief of the parents of adeceased minor recoverable in awrongful death action brought pursu-ant to section 27-1-512, MCA,1979?” (Montana’s wrongful deathstatute.) The court, in holding that“damages for the sorrow, mentaldistress or grief of the parents of adeceased minor are recoverable,”retired the English rule and overruled“[a]ny previous Montana decisions, tothe extent they conflict with thisholding.”

Emotional distress of the“bystander”

The same day that Dawson v.Hill was decided, the Montana courtfollowed the landmark Californiacase of Dillon v. Legg,7 in recogniz-ing for the first time a cause of ac-tion for negligent infliction of mentaland emotional distress. In Verslandv. Caron Transport,8 Bert Verslandwas driving a hay bailer wagon on a

highway near Big Timber, Montana,when a semi-truck driver negligentlycollided with Versland causing hisdeath. Versland’s wife, Sharon, wit-nessed part of the collision and thensaw her husband’s body at the colli-sion scene. She sought to recover fornegligent infliction of emotionaltrauma caused by witnessing the colli-sion that caused her husband’s death.

Dillon represented the latestadvance in recovery for bystanders.Prior decisions had required first thatthe bystander herself suffer somephysical impact, and later, that thebystander at least be in the “zone ofdanger” before she could recover foremotional distress. The MontanaSupreme Court in Versland followedDillon in rejecting both limitationsand allowing recovery if it was rea-sonably foreseeable that defendant’sconduct which causes injury or deathto a family member would causemental distress to another familymember who witnessed the accident.The court considered the Dillonfactors to determine whether emo-tional distress would be consideredforeseeable so as to invoke a duty ofcare to the bystander and ultimatelyadopted its own three factors:

1) The shock must resultfrom a direct emotional impactupon plaintiff from the sen-sory and contemporaneousperception of the accident, ascontrasted with learning of theaccident from others after itsoccurrence.2) The plaintiff and victimmust be closely related, as con-trasted with an absence of anyrelationship or the presence ofonly a distant relationship.3) Either death or seriousphysical injury to the victimmust have occurred as a resultof defendant’s negligence.

Importantly, Versland held thatphysical manifestations of emotional

trauma would not be required tosupport a prima facia case for negli-gent infliction of emotional distress.

The problem with VerslandUnfortunately, the corollary to

Versland was that the family memberwho was not present at the scenecould not recover. The 1992 case ofMaquire v. State of Montana9 illus-trated that category of cases in whichthe Dillon/Versland tests woulddeny recovery to one who clearlysuffered emotional distress. Mrs.Maguire had an autistic and severelyretarded daughter who could notcommunicate. At age four, she placedher in the Montana DevelopmentCenter, an institution run by the Stateof Montana. When the daughter wasan adult, her caregiver at the MDCraped and impregnated her. The elderMrs. Maguire had to deal with a num-ber of difficult issues of the preg-nancy, including: 1) whether the babywould suffer the same diseases as itsmother; 2) whether to have the babyaborted in spite of her Catholic reli-gion; 3) whether to raise the baby orplace it for adoption; and 4) whetherher daughter was safe. Undoubtedly,Mrs. Maguire suffered greatly fromstress and depression and the result-ing symptoms of which she com-plained like trouble sleeping,nightmares, contemplation of suicide,and generally feeling run down. Sherequired multiple visits to her doctorand a psychologist.

The question facing the court inMaguire was whether Mrs. Maguirecould maintain an action in court forher emotional distress. Though shemanifested very substantial mentaland perhaps even physical injury, thecourt found she could not meetVersland’s “presence requirement”that “the shock must result from adirect emotional impact upon plain-tiff from the sensory and contempo-raneous perception of the accident ascontrasted with learning of the acci-dent from others after its occur-


rence.” Nor could she meet the pres-ence requirement of Restatement ofTorts § 46 (2) which provides forrecovery for injury to a claimant forextreme and outrageous conductdirected at a third person:

(2) Where such conduct is directed ata third person, the actor is subjectto liability if he intentionally orrecklessly causes severe emotionaldistress:(a) to a member of such person’simmediate family who is presentat the time, whether or not suchdistress results in bodily harm,or(b) to any other person who ispresent at the time, if such distressresults in bodily harm.

The court noted that it had al-lowed recovery of emotional distressdamages without physical injury inJohnson v. Supersave and Niles v.Big Sky Eyewear,10 but pointed outthat, in both cases, the victim was nota third party. Either the conduct hadto be directed at Maguire or Maguirehad to be present regardless of thecausal connection between thedefendant’s conduct and Mrs.Maguire’s resulting injury. Recoverywas denied.

Emotional distress of the claim-ant absent a showing of physicalor mental injury

Johnson v. Supersave,11 wasdecided shortly after Versland andrepresented another category ofemotional distress claims – thoseinvolving no physical or mental in-jury. Johnson was arrested and jailedon a bad-check warrant although hehad made complete restitution on thecheck six months before his arrest.Supersave had failed to tell its collec-tion agency, which filed the badcheck complaint with the countyattorney’s office, that the check hadbeen made good.

The jury found Supersave negli-gent and awarded $17,000 in dam-ages for emotional distress. At trial,Johnson proved no physical injury ormental injury, so that the questionwas “Whether emotional distressdamages are proper in a negligenceaction absent finding of injury.” TheJohnson court noted that in Verslandthey rejected any requirement thatsome physical manifestation must bepresent to support a “prima facia casefor negligent infliction of emotionaldistress.” They further noted thatthere is a difference between injuryand distress, confirming that wherethere is “either a psychic or physicalinjury causally related to the incidentin question there is compensability.”The court said, “Here we have notestimony supporting injury. We mustdecide whether to allow compensa-tion for mental distress absent injuryand, if so, under what circum-stances.” The decision states:

This court adopts the speciesof case approach which re-quires a factual analysis ofeach case to determinewhether the alleged “emo-tional distress” merits com-pensation. In determiningwhether the distress is com-pensable absent a showing ofphysical or mental injury, wewill look to whether tortiousconduct results in a substantialinvasion of a legally protectedinterest and causes a significantimpact upon the person ofplaintiff.

In Johnson, the court foundliberty to be the right substantiallyinvaded and held it proper for thejury to award Johnson damages foremotional distress.

Johnson was followed in 1989by First Bank (N.A.)–Billings v.Clark,12 a bank bad faith case inwhich the court held that the trialcourt erred in instructing the jury

about damages for emotional distressbecause the claimant failed to intro-duce any evidence of damage fromthe emotional distress. QuotingJohnson, the court required “someproof that plaintiff’s tortious conductresulted in ‘a substantial invasion of alegally protected interest and . . .[caused] a significant impact on theperson.’”

Of particular importance is thefact that the court found the neces-sary legally protected interest to be“the interest in freedom from emo-tional distress.” However, the courtnoted that “the cause of action arisesonly if the invasion of this interest issubstantial and the impact signifi-cant,” adopting comment (b) of theRestatement (Second) of Torts § 46(1965) which is quoted in the opinion:

Emotional distress passesunder various names such asmental suffering, mental an-guish, mental or nervousshock, or the like. It includesall highly unpleasant mentalreactions such as fright, hor-ror, grief, shame, humiliation,embarrassment, anger, cha-grin, disappointment, worry,and nausea. It is only where itis extreme that the liabilityarises. Complete emotionaltranquility is seldom attain-able in this world, and somedegree of transient and trivialemotional distress is a part ofthe price of living amongpeople. The law intervenesonly where the distress in-flicted is so severe that noreasonable person could beexpected to endure it. Theintensity and the duration ofthe distress are factors to beconsidered in determining itsseverity . . . The distress mustbe reasonable and justifiedunder the circumstances, andthere is no liability where theplaintiff has suffered exagger-


ated and unreasonable emo-tional distress, unless it resultsfrom a peculiar susceptibilityto such distress of which theactor has knowledge . . . It isfor the court to determinewhether on the evidence se-vere emotional distress can befound; it is for the jury to de-termine whether, on the evi-dence, it has in fact existed.

At trial, Clark alleged only thathe “felt bad, lost sleep, and becamewithdrawn” as a result of the Bank’sconduct. The court said its adoptionof the Restatement comment was“only a new interpretation of theexisting ‘significant impact’ require-ment” in refusing to remand for anew trial on emotional distress.

Recognition of the tort ofemotional distress

In 1995, recognizing that the lawof emotional distress had become acomplex patchwork in which theexceptions had eaten the rules, thecourt set out to simplify the area byrecognizing the torts of negligent andintentional infliction of emotionaldistress in Sacco v. High CountryIndependent Press, Inc.13 WhenDiane Poynter Sacco, a photographerand reporter for the High CountryIndependent Press at Belgrade,Montana, quit her employment, heremployer accused her of stealingphotographic negatives and proofsheets and filed criminal chargesagainst her. When the criminal pro-ceedings were ultimately dismissed,Sacco brought a civil action againstthe principals of HCIP and the policeofficer involved alleging maliciousprosecution, defamation, intentionalinfliction of emotional distress, negli-gent infliction of emotional distress,and civil rights violations. All fivecounts were dismissed on motionsfor summary judgment, resulting inan appeal to the Montana SupremeCourt. Hence, the court was pre-

sented with the issue of whetherMontana would recognize causes ofaction for intentional and negligentinfliction of emotional distress. Untilthat time, emotional distress wasrecognized primarily as a “parasitic”damage to a host cause of action, thetraditional rule having been that therecould be no recovery for the negli-gent infliction of mental distressalone.14

However, the court took the

occasion to recognize the tort ofnegligent infliction of emotionaldistress in Montana:

Therefore, we adopt the fol-lowing standard for determin-ing whether a plaintiff hasdemonstrated a cause of ac-tion for the negligent inflictionof emotional distress. A causeof action for negligent inflic-tion of emotional distress will

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arise under circumstanceswhere serious or severe emo-tional distress to the plaintiffwas the reasonably foreseeableconsequence of the defendant’snegligent act or omission.

The court emphasized repeatedlythat the standard required 1) provingthat the emotional distress sufferedwas severe or serious, and 2) that theemotional distress was the reasonablyforeseeable consequence of thedefendant’s negligent act or omission.The court cited Restatement (Second)of Torts15 for the role of judge andjury in determining emotional distress:

It is for the court to determinewhether on the evidence severe[serious] emotional distress canbe found; it is for the jury todetermine whether, on the evi-dence, it has in fact existed.

Again, the court defined “seri-ous” or “severe” emotional distressby quoting Restatement (Second) ofTorts, § 46, comment (j) at 77-78(quoted above).

The court then conceded onreview that it had tacitly approved

intentional infliction of emotionaldistress as a separate cause of actionin three cases16 and therefore pro-ceeded to state a new cause of ac-tion for intentional infliction ofemotional distress. In so doing, itabandoned the former requirementthat the damage of emotional dis-tress be appendant to “outrageous”conduct.

. . . an independent cause ofaction for intentional inflictionof emotional distress will ariseunder circumstances whereserious or severe emotionaldistress to the plaintiff was thereasonably foreseeable conse-quence of the defendant’s in-tentional act or omission.

The court reiterated that dam-ages for emotional distress arecompensatory and not punitive butconcluded:

We conclude that an award ofpunitive damages is the propermethod of addressing the cul-pability and intentional natureof the defendant’s conduct inan intentional infliction ofemotional distress case.

In essence, the elements of thetwo torts are the same, the only dif-ference being in the culpability ofdefendant’s conduct which may resultin punitive damages being awardedunder MCA § 27-1-220 in addition tothe damage for emotional distress.Sacco was intended to simplify andmodernize the rules with regard torecovery of damages for emotionaldistress. Hurdles such as the by-stander requirements of Versland,the “substantial invasion of a legallyprotected interest” of Johnson, andthe “outrageous” conduct require-ment of Maguire all were relegatedto the museum of past doctrines bythe court in Sacco.

Triggering the “per accident”limits of insurance coverage withemotional distress

Tactically, the effort to obtain anadequate recovery for the injuredparty often involves an attempt torecover an additional limit of insur-ance essentially doubling the poten-tial recovery of the clients in seriouscases. The only way to obtain the“per accident” limit as opposed tothe “per person” limit of auto insur-ance is to establish that anotherperson has suffered an injury cogni-zable by the court as an independentcause of action. Otherwise, a para-sitic damage suffered by a familymember and appendant to the claimof the person who suffered bodilyinjury will not trigger a separate limitof insurance. For example, in Bainv. Gleason,17 the court establishedthat a spouse’s loss of consortiumclaim is indeed a distinct and inde-pendent cause of action under tortlaw. However, the court held that thespouse’s consortium claim is deriva-tive of the bodily injury claim of theperson suffering the direct physicalinjury.

The standard ISO language ofinsurance policies tends to define“Bodily Injury” as follows:


“Bodily Injury means bodilyinjury, sickness, or disease,including death at any timeresulting therefrom, sustainedby a person.”

The same forms define the in-jured person’s “damages” to includethe services of that person:

“Damages with respect to Cov-erage A [bodily injury Cover-age] includes damages for careand loss of services.”

Therefore, the court in Bainconcluded that the spouse’s consor-tium claim is included within the“each person” limitation on autoinsurance coverage and does nottrigger the additional or “per acci-dent” limit:

“We therefore interpret themandatory motor vehicle in-surance statutes now in effectto mean that the cause of ac-tion for loss of consortium bythe deprived spouse and thecause of action for bodily inju-ries by the injured spouse aresubject together to the ‘oneperson limitation’ found in§ 61-6-103, MCA, as referredto in § 61-6-301, MCA.”

We should note, however, thatwhether consortium triggers an addi-tional limit depends on the insurer’sdefinition in the particular policy. Forexample, the court in Bain noted thatan Allstate policy that defined bodilyinjury as “bodily injury, sickness,disease or death to a person, includ-ing loss of services” resulted in trigger-ing additional coverage. Under thatdefinition, the spouse suffering lossof consortium has suffered “bodilyinjury” so as to trigger the “per acci-dent” limit of coverage.

Emotional distress of a familymember of the physically injuredvictim is so important because it

presents the potential for recoveringthe additional limit of coverage. InTreichel v. State Farm Mut. Auto.Ins. Co.,18 the Montana SupremeCourt held that negligent infliction ofemotional distress to a family mem-ber triggers the second or “per acci-dent” limit of insurance.

In Treichel, the petitioner,Carolyn Treichel, had been ridingbicycles with her husband on OldMontana Highway 200 near EastMissoula, Montana, when she wit-nessed a car collide with her husband,inflicting a grievous head injury andcausing his death. The parties agreedthat she met all necessary elements ofa cause of action for negligent inflic-tion of emotional distress. The courtrefused State Farm’s argument thather claim should be treated the sameas Bain’s claim for loss of consor-tium and considered derivative. In-stead, the court held that CarolynTreichel “was a second injured per-son in the accident” so that the“Each Accident” limits in the policyapplied.

Killing the risen specter ofbystander requirements

In Treichel, in the process ofdistinguishing the emotional distressclaim in that case from the Bain lossof consortium claim, the court stated:

Unlike Carolyn, the plaintiff inBain was not at the scene ofthe accident and did not wit-ness the injuries to his spouse.* * * Carolyn was a separateperson who received an inde-pendent and direct injury atthe accident scene. Her seriousand severe emotional distresswas the reasonably foreseeableconsequence of Hintz’s negli-gence.

On reading this language, de-fense counsel could not resist theposition that the court, in Treichel,had reintroduced the contemporane-

ous impact requirement fromVersland. Consequently, the issuewas again injected in Wages v. FirstNational Ins. Co. of America.19

There, a child, Skylar Wages, was runover by a truck while roller-blading infront of his home. The father, GeraldWages, was notified at work and wentto the hospital. Skylar’s serious inju-ries included pelvic fracture and com-plete urethral disruption whichrequired four major invasive surger-ies, physical therapy, and catheteriza-tion performed by his father three orfour times each day. Ultimately,Gerald suffered extensive work loss,medical expense, and other financialobligations by reason of his care forSkylar. He filed his own claim fornegligent infliction of emotionaldistress to which the defense took theposition that he could not sustain anindependent non-derivative claim fornegligent infliction of emotionaldistress without having witnessed theaccident so as to suffer some contem-poraneous impact. However, thecourt rejected the position quotingTreichel in holding:

“[I]n clarifying the elements ofa claim for negligent inflictionof emotional distress inSacco, we eliminated the othervarious sorts of theories bywhich independent torts ofnegligent infliction of emo-tional distress came into Mon-tana law such as the Verslandbystander analysis.”

The court said that its languagein Treichel was intended to supportthe distinction between NEID claimsand loss of consortium claims. Nordid the court accept the position thatone must be at the scene of the acci-dent to be a foreseeable plaintiffsaying, “In Sacco we severed thepreviously mandatory nexus betweenwitnessing the accident and foresee-ability, and established that a defen-dant can owe a duty to a NIED


claimant even in circumstances wherethe claimant was not at the scene ofthe accident.” The court then set outguidelines for determining foresee-ability in NEID cases:

For such a determination, thecourt may consider such fac-tors as the closeness of therelationship between the plain-tiff and victim, the age of thevictim, and the severity of theinjury of the victim, and anyother factors bearing on thequestion. Moreover, the courtmay consider whether theplaintiff was a bystander tothe accident. It may not, how-ever, rely exclusively on thefact that a plaintiff was not abystander to conclude thatsuch a plaintiff is an unfore-seeable plaintiff.

Wages appeared to establish thatthe law of emotional distress is thatwhich is set out in Sacco, unencum-bered by the theories and require-ments that had vexed those repre-senting injured persons during thedevelopment of emotional distresslaw.

Again, in Henricksen v. State,20

the court confirmed that one is notrequired to be a bystander to recoverdamages for emotional distress suf-fered as a result of serious injury to afamily member. There, a motherwatched as her 3-year-old slippedthrough a stairway balustrade at theMontana State University library andfell head first 20 feet to the concretefloor below. Immediately after theaccident, she learned that anotherchild had fallen through the samestairway weeks earlier. Her positionwas that the knowledge of the earlierfall was a factor in causing her emo-tional distress (post-traumatic stresssyndrome). The State’s position wasthat she could not claim emotionaldistress damages caused by the earlierfall because there was no direct emo-

tional impact upon the plaintiff fromthe sensory and contemporaneousperception of the accident. However,the court cited Sacco and Wages forthe proposition that one need not bea bystander to claim emotional dis-tress damages. Being a bystander is afactor to be considered, but is not, byitself, determinative.

The court also found the trialcourt erred in concluding that theheightened standard of severe orserious distress required by Saccoonly applied in cases where there isno physical or mental injury. Thecourt clarified that emotional distressmust always be severe or seriousregardless of physical or mentalmanifestation. The court cited Re-statement (Second) of Torts, § 46,comment k for the proposition that“[n]ormally, severe emotional distressis accompanied or followed by shock,illness, or other bodily harm, which initself affords evidence that the distressis genuine and severe.” The courtsaid, “A jury instruction on emotionaldistress should state that the severeand serious standard applies and thatthis standard can be met by proofthat emotional distress resulted inshock, illness, or other bodily harm.”

Getting insurance to cover the tortExuberance over the develop-

ment and clarification of emotionaldistress law has been dampenedsomewhat by the recent reminderthat, for plaintiffs, all is lost if insur-ance will not cover the conduct ofthe tortfeasor or the resulting dam-age. The recent case of Jacobsen v.Farmers Union Mutual InsuranceCompany21 reflects that ugly fact oflife. Jacobsen was driving his vehicleon the four-lane highway nearVaughn, Montana, when he saw avehicle veer across the center median,cross the highway, and crash in awheat field. Jacobsen found Keyser inthe vehicle bleeding profusely fromthe head. He tried to control thebleeding until paramedics arrived and

removed Keyser from the vehicle. Atthat point, Jacobsen saw a gun under-neath the body. Keyser died laterfrom what was determined to besuicide by gunshot.

Jacobsen sought counseling foremotional distress from the eventsand ultimately made claim against hisown insurer, Farmers Union Mutual,for benefits under the uninsured andmedical pay coverages. (Keyser wasuninsured.) The district court grantedthe insurer summary judgment on thetwin grounds that 1) Jacobsen’s emo-tional injuries did not constitute“bodily injury” within the meaningof the UM statute § 33-23-201 or theUM policy agreement, and 2) theemotional distress did not arise fromuse of an uninsured motor vehiclebut from a handgun.

The UM basic insuring agree-ment contained standard language:

We will pay all sums the “in-sured” is legally entitled torecover as compensatorydamages from the owner ordriver of an “uninsured motorvehicle.” The damages mustresult from “bodily injury”sustained by the “insured”caused by an “accident.” Theowner’s or driver’s liability forthese damages must resultfrom the ownership, mainte-nance or use of the “unin-sured motor vehicle.”

The policy’s definition of “bodilyinjury,” which is consistent with thestatute’s, was as follows:

“Bodily injury” means bodilyinjury, sickness or disease sus-tained by a person includingdeath resulting from any ofthese.

Jacobsen argued that the court’sholding in Treichel, that CarolynTreichel’s emotional distress at watch-


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Sacco provides plaintiffs’ counsel with asimple and clear remedy for any person who

has foreseeably suffered severe or seriousemotional distress at the hands of one acting

negligently or intentionally.

ing her husband get killed in a bike/car collision was “bodily injury”under the provisions of the StateFarm policy, applied in his case.However, the court pointed out thatState Farm’s policy in Treichel didnot define bodily injury and that thepolicy clearly covered such claims asloss of consortium. Further, StateFarm was willing to coveremotional injuries but onlyup to the “one person”limitation in the policy. TheTreichel court had heldthat State Farm was simplyestopped to deny coverageand found that CarolynTreichel had suffered an“independent and direct”injury as was deemed com-pensable in Sacco.

In essence, what the court said inJacobsen is that finding a person hassuffered an emotional “injury” forpurposes of tort law does not meanthe emotional injury is “bodily in-jury” under insurance contract law.The court quoted with approvalFarmers Union’s assertion that“[t]here is no dispute that Montanatort law allows for recovery of purelyemotional damages. However, thiscase involves the interpretation ofcontract, and tort law is wholly irrel-evant to that interpretation.” Thecourt held that “the term ‘bodilyinjury,’ as defined in Farmers UnionUM policy, is limited to physicalinjury to a person caused by an acci-dent and does not include emotionaland psychological injuries stemmingtherefrom. Consequently, the courtdeclined to answer whether Keyser’sinfliction of emotional distress onJacobsen arose from the use of theauto as opposed to the handgun.

Where the applicable insurancecoverage is for “bodily injury,”Jacobsen makes it imperative thatcounsel approach development of theclaim the way Monte Beck apparentlydid in Henricksen. In reviewingHenricksen, the court noted:

In this case, expert medicaltestimony was introduced attrial which described Kristin’sPTSD symptoms. The expertstated this well-recognizedmental injury has physicalcomponents, including brainchemistry and hormone levelalterations. PTSD symptoms

are a response to an emotionaltrauma that leads to a physicalimpact upon the brain.

Counsel needs to develop thetheory with experts that a manifestmental injury is nothing but a reflec-tion of physical impacts in brainchemistry, hormone levels, andother components of the body’sphysiology.

Suffice it to say that counselshould always consider the potentialunintended (and undesirable) conse-quences of pleading intentional inflic-tion of emotional distress as anintentional tort. While it presents thedefendant with a risk of punitivedamages, it may allow the tortfeasors’liability insurers off the hook underan intentional acts exclusion or onthe ground that the basic coverageagreement only covers “accidents.” Iffeasible and not in violation of Rule11, counsel may be wise to accom-pany a count for intentional inflic-tion of emotional distress with onefor negligent infliction of emotionaldistress. Then, under the “four cor-ners” rule, the carrier will likely haveto defend and still cope with thepotential conflicts injected by the

intentional tort and its punitive dam-age claim.

If the emotional distress arisesfrom an auto accident and thetortfeasor is uninsured, one can stillallege intentional infliction of emo-tional distress and recover underuninsured motorist coverage. TheMontana Supreme Court has held

that conduct can be inten-tional so as to fall outsidethe tortfeasor’s liabilitycoverage and still be “acci-dental” from the victim’sperspective so as to fallwithin the victim’s UMcoverage.22

ConclusionThe tort law of emo-

tional distress that devel-oped in Montana came about as atortured system for getting aroundharsh common law rules that disal-lowed emotional distress recoveryentirely. Sacco provides plaintiffs’counsel with a simple and clear rem-edy for any person who hasforeseeably suffered severe or seriousemotional distress at the hands ofone acting negligently or intentionally.Bystander’s restrictions, requirementsfor proof of invasion of substantialpersonal interests, and other require-ments of the pre-Sacco cases shouldnot hinder counsel anymore. How-ever, if the emotional distress claimcannot be supported by evidence thatit is severe or serious, it will lackcredibility and may not merit pros-ecution.

As with all claims, counsel plead-ing and proving the emotional dis-tress claim must keep one eye onpotential insurance coverage. Insur-ance benefits depend on the languageof the insurance coverage, and ulti-mately recovery may hinge entirelyon whether, under the facts of theparticular case and the language ofthe applicable policy, the claimant’semotional distress is a “bodilyinjury.”


Endnotes1. 637 P.2d 1175 (1981).

2. Baker v. Bolton, 70 Eng. Rep. 1033(KB 1808).

3. Fatal Accidents Act, 1846, 9&10Vict. c. 93.

4. Blake v. Midland Railway Co., 118 Eng.Rep. 35, (QB 1852).

5. Prosser, The Law of Torts, (4th ed.1971, § 127, pp. 906-907. William LloydProsser, The Law of Torts, §127, 906-907 (4th ed. West 1971).

6. Mize v. Rocky Mountain Bell TelephoneCo., 38 Mont. 521, 100 P. 971 (1909);Hollingsworth v. Davis-Daly Estates CopperCo., 38 Mont. 143, 99 P. 142 (1909).

7. 441 P.2d 912,(1968).

8. 206 Mont. 313, 671 P.2d 583 (1983).

9. 254 Mont. 178, 835 P.2d 755.

10. 236 Mont. 455, 771 P.2d 114 (1989).

11. 211 Mont. 465, 686 P.2d 209 (1984).

12. 236 Mont. 195, 771 P.2d 84.

13. 271 Mont. 209, 896 P.2d 411.

14. Rodriguez v. State, 472 P.2d 509(1970).

15. §46, comment (j) (1965).

16. Frigon v. Morrison-Maierle, Inc., 233Mont. 113, 760 P.2d 57 (1988); Foster v.Albertsons, Inc., 254 Mont. 117, 835 P.2d720 (1992); Doohan v. Bigfork School Dist.No. 38, 247 Mont. 125, 805 P.2d 1354(1991).

17. 223 Mont. 442, 726 P.2d 1153 (1986).

18. 280 Mont. 443, 930 P.2d 661 (1997).

19. 318 Mont. 232, 79 P.3d 1095 (2003).

20. 319 Mont. 307, 84 P.3d 88 (2004).

21. 320 Mont. 375, 87 P.3d 995 (2004).

22. Wendell v. State Farm Mutual Ins. Co.,293 Mont. 140,974 P.2d623 (1999).

LET’S GET REALARE AMERICANS SUE-HAPPY? YOU BE THE JUDGE.

Myth #1: “Americans sue at the drop of a hat.”Fact: Very few injured Americans file lawsuits. Only ten percent of injuredAmericans ever file a claim for compensation, including informal demands andinsurance claims, and only two percent file lawsuits. Compensation for AccidentalInjuries in the United States, Rand Institute for Civil Justice (1991).

Myth #2: “More and more tort cases are being filed each year.”Fact: Tort lawsuit filings have decreased nine percent since 1992, according tothe country’s most accurate and comprehensive overview of state court litigationstatistics. Examining the Work of State Courts, 2002, a joint project of the Confer-ence of State Court Administrators, the Bureau of Justice Statistics and the Na-tional Center for State Courts’ Court Statistics projects (2003).

Myth #3: “Jury verdicts are exploding.”Fact: According to data released April 1, 2004, median jury awards in personalinjury cases “fell significantly,” dropping 30% in 2002 to $30,000, from nearly$43,000 in 2001. “Malpractice Awards Remain Flat,” Wall Street Journal, April 1,2004. Jury Verdict Research is the source for this statistic, so it is likely the dropis even more significant since JVR data is highly inflated. Also, the top 10 juryverdicts dropped to the lowest total amount since 1997, and the number oneverdict was the lowest in a decade. Bill Ibelle, “Top Ten Jury Verdicts MuchSmaller in 2003,” Lawyers Weekly USA.

Myth #4: “Civil jury trials are clogging the courts.”Fact: The vast majority of tort cases are resolved by neither juries nor judges. Instate courts, only five percent of tort cases were disposed of by trial in 2001.Examining the Work of State Courts, 2002 (2003).

During fiscal years 1996- 1997, a jury or bench trial decided only 3 percentof federal tort cases, meaning that 97 percent of tort cases were not decided bytrial. “Federal Tort Trials and Verdicts, 1996-97,” NCJ 172855, U.S. Departmentof Justice, Bureau of Justice Statistics (1999).

Myth #5: “The legal system’s ‘cost to society’ is an estimated $200 billion a year.”Fact: This widely-discredited $200 billion figure is a calculation based on allinsurance premiums – even auto insurance for minor fender benders that nevercome close to a courtroom.

In other words, the figure has nothing to do with lawsuits or the legal system.It also includes the immense costs of operating the incredibly wasteful and ineffi-cient insurance industry. Moreover, most of the costs of the system are the resultof corporate wrongdoing causing injury.

More importantly, such numbers fail to factor in the cost savings, particularlyto the taxpayer, of compensation and product safety. See Americans for Insur-ance Reform, “Tillinghast’s ‘Tort Cost’ Figures Vastly Overstate the Cost of theAmerican Legal System (January 2004).

Myth #6: “Huge, multi-million-dollar punitive damages awards are routine.”Fact: Awards of punitive damages in tort cases are both infrequent and modestin size. According to the most recent data from the Bureau of Justice Statistics ofthe U.S. Justice Department, punitive damages are imposed in only 3.3 percent ofcases, and the median (typical) punitive damages award is $38,000. “Tort Trialsand Verdicts in Large Counties, 1996,” U.S. Department of Justice, Bureau ofJustice Statistics, NCJ 179769 (August 2000).

Reprinted with permission from the Center for Justice & Democracy, www.centerjd.org

Facts About Lawsuits That Tort“Reformers” Ignore

Business cases account for 47%of all punitive damage awards.In contrast, only 4.4% and 2%of punitive damage awards are dueto product liability and medicalmalpractice cases respectively.(Rand Institute for CivilJustice,1996)

Documents

INSURANCE CONSUMER COUNSEL COLUMN · loved one or the physical effects of such injury to a loved one likely ... “Emotional distress passes under various names such as mental suffering,