Tort Law - Emotional Distress impact cases (2008)

This will provide a summary of three Indiana Supreme Court decisions of February 28, 2008, addressing whether, and to what extent, direct physical impact is required to recover for emotional distress.

• State Farm v. Jakupko, No. 29S02-0704-CT-140

Jakupko was severely injured (quadriplegia, closed head injury, permanent mental deficit) in a two car collision with an underinsured driver. Three of Jakupko’s immediate family members, passengers in his car, sought to recover for emotional distress from having witnessed Jakupko’s trauma. Jakupko’s UIM policy with State Farm had limits of $100,000 per person/$300,000 per accident. State Farm paid Jakupko $100,000, but denied the family members’ emotional distress claims as the distress flowed from Jakupko’s injuries, so was already compensated by the $100,000 paid to Jakupko. The issue before the Indiana Supreme Court was whether the family members’ emotional distress, having been part of the accident and first-hand witnesses to Jakupko’s traumatic injuries, fell within the definition of “bodily injury,” such that each family member could recover separately from Jakupko up to the $300,000 per accident bodily injury limits of the State Farm UIM policy. The Court said “yes,” reasoning that: (1) the definition of “bodily injury” includes emotional distress; (2) to hold otherwise would contravene the intent of IC 27-7-5-2 (a)(1), which does not limit UM/UIM claims to the “per person” bodily injury policy limits.

• Elliott v. Allstate, No. 49S02-0704-CV-143

Elliott was seriously injured in a car accident with an uninsured driver. Elliott’s sister and son were passengers. Elliott’s Allstate UM policy had limits of $25,000 per person/$50,000 per accident. Elliott settled for $25,000. Her sister and son sought to recover for their emotional distress up to the per accident limits of $50,000 (so an additional $25,000 above Elliott’s recovery). Like State Farm in the Jakupko matter, Allstate rejected the separate emotional distress claims. As in Jakupko, the Supreme Court disagreed with the insurer, holding that emotional distress constitutes “bodily injury” as defined by the policy, and that the Indiana statute does not limit recovery to the “per person” limits.

• State Farm Insurance v. DLB, No. 89S05-0802-CV-102

Defendant’s car struck and killed six-year-old Baker while he rode his bicycle. Baker’s cousin, DLB, was with Baker at the time, but was not physically injured. DLB claimed emotional distress, including alleged PTSD, from witnessing the fatal accident. Defendant’s State Farm policy had limits of $100,000 per person/$300,000 per accident. State Farm paid $100,000 to Baker’s parents for their wrongful death claim, but denied DLB’s claim. While DLB did not suffer a direct physical impact, his mother argued that DLB’s emotional distress had physical effects. The Court distinguished these facts from Jakupko, in which “bodily injury” existed for emotional distress, but only where there was bodily touching of the additional claimant(s). The Court found for State Farm, reasoning that DLB’s alleged emotional distress did not stem from an impact, force or harm to his body, so there was no compensable “bodily injury” for DLB.

Conclusion: For purposes of UM/UIM, “bodily injury” includes emotional distress, but only where the person claiming emotional distress experienced bodily touching or physical contact in connection with the accident.