Daley v. Allstate Ins. Co.

Decision Date16 July 1998
Docket NumberNo. 65644-4,65644-4
Citation135 Wn.2d 777,958 P.2d 990
CourtWashington Supreme Court
PartiesPaul DALEY, Respondent, v. ALLSTATE INSURANCE COMPANY, a foreign insurance company, Petitioner.

Harbaugh & Bloom, Gary N. Bloom, Debra Stephens, Bryan Harnetiaux, Spokane, amicus curiae on behalf of Washington State Trial Lawyers Association.

Reed, McClure, Michael Rogers, William Hickman, Seattle, for Petitioner.

Hames, Anderson & Whitlow, William Hames, Kennewick, for Respondent.

MADSEN, Justice.

Allstate Insurance Company (Allstate) petitioned for review of a Court of Appeals opinion reversing summary judgment in its favor. Allstate contends the Court of Appeals incorrectly held that an underinsured motorist (UIM) policy providing "damages for bodily injury" covers emotional or psychological damages unrelated to the insured's physical injuries. We agree and, accordingly, reinstate the decision of the trial court.

STATEMENT OF THE CASE

On January 17, 1990, Paul Daley was on duty as a Benton County sheriff's deputy when he stopped his vehicle to assist a man whose motorcycle had stopped running. State Patrol Trooper Raymond Hawn also stopped to assist Daley. As the two officers were talking with the motorcyclist, a car driven by Jan Spencer struck both Daley and Hawn.

Trooper Hawn suffered head and internal injuries and later died. Daley suffered bruises and swelling to his leg and bruises and lacerations to his arm. Daley was also diagnosed with depression and late onset posttraumatic stress disorder which surfaced approximately a year after the accident when a good friend and co-worker died in an automobile accident. His depression and late onset posttraumatic stress disorder were attributed, in large part, if not entirely, to the trauma of the accident and witnessing the death of Trooper Hawn.

Daley received a $25,000 settlement from Spencer's insurance company, which covered damages related to his physical injuries, and then sought benefits under the UIM for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles, hit-and-run motor vehicles, and phantom vehicles because of bodily injury, death, or property damage, resulting therefrom....

provision in his Allstate insurance policy for damages related to his emotional distress. Washington's UIM statute requires that issuers of automobile insurance policies offer UIM coverage

RCW 48.22.030(2) (emphasis added). Pursuant to the statute, Allstate's policy provides the following UIM coverage:

We will pay damages for bodily injury or property damage which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. Injury must be caused by accident and arise out of the ownership, maintenance or use of an underinsured motor vehicle. Bodily injury means bodily injury, sickness, disease or death. Property damages means injury to or destruction of property.

Clerk's Papers (CP) at 118 (emphasis added). Based on its policy language which allows recovery only for "bodily injury," Allstate denied coverage for Daley's emotional distress, and Daley filed this action.

Allstate moved for summary judgment arguing the term "damages for bodily injury" does not include emotional or psychological damages unrelated to an insured's physical injuries. The superior court agreed and dismissed Daley's action. The Court of Appeals, however, reversed finding that Daley could recover damages for his emotional injuries. See Daley v. Allstate Ins. Co., 86 Wash.App. 346, 936 P.2d 1185 (1997). The court reasoned that emotional or psychological injuries suffered as a direct result of an incident that also caused physical injury to the insured are "bodily injury" for purposes of the insurance contract and the UIM statute regardless of whether the emotional injury is directly related the physical trauma. Id. at 355, 936 P.2d 1185.

Allstate petitioned for review which this court granted.

DISCUSSION

Allstate seeks review of the Court of Appeals decision reversing summary judgment in its favor. An appellate court reviews a trial court's decision to grant summary judgment de novo. Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982). Summary judgment is proper only when the evidence presented shows there is no issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Wilson, 98 Wash.2d at 437, 656 P.2d 1030. All facts and reasonable inferences are resolved in favor of the nonmoving party and summary judgment is granted only if reasonable minds could reach but one conclusion from the evidence. Id..

The Washington Legislature mandates UIM coverage for insured persons who are legally entitled to recover damages from owners of underinsured motor vehicles for "damages ... because of bodily injury, death, or property damage...." RCW 48.22.030(2). The Allstate policy issued to Daley provides for the required coverage allowing recovery for "damages for bodily injury or property damage which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle." CP at 118.

At issue is whether emotional distress damages unrelated to an insured's physical injury are recoverable. Allstate concedes that an insured "can recover UIM benefits for his emotional distress ... if the emotional distress ... existed 'because of bodily injury' sustained by the insured, resulting from the accident." Pet. for Review of Allstate Ins. Co. at 5; see also Supplemental Br. of Pet'r at 8 ("[t]he UIM statute does not require coverage for emotional distress not caused by bodily injury to the insured."). This is consistent with cases in Washington and elsewhere recognizing that "damages for bodily injury" include damages for emotional distress which arise as a result of a physical In this case, the record reflects that Daley's emotional distress did not occur as a result of his physical injuries, which were relatively minor. Daley's depression and late onset posttraumatic stress disorder surfaced over a year after the accident, well after his physical injuries had healed. His emotional injuries appear to be largely, if not entirely, due to the guilt and emotional trauma related to witnessing Trooper Hawn's fatal injuries in addition to the emotional trauma of the accident itself. Evidence in the record indicates that other problems, also unrelated to his physical injuries, may have contributed to his condition. 1 On appeal, Daley contends that some emotional distress was a result of his physical injuries suffered in this case. However, Daley points to no portion of the record indicating that his posttraumatic stress disorder and depression are directly related to his physical injuries. 2 Accordingly, this case can be decided as a matter of law based on whether the term "damages for bodily injury" includes damages for emotional distress unrelated to an insured's physical injury. 3

injury. See Thompson v. Grange Ins. Ass'n, 34 Wash.App. 151, 161, 660 P.2d 307 (1983) (damages for loss of consortium are allowed where a spouse suffers bodily injury and can no longer perform the spousal functions); Michael Sean Quinn & L. Kimberly Steele, Insurance Coverage Opinions, 36 S. Tex. L.Rev. 479, 527 (1995) (mental anguish as a consequence of bodily injury is covered).

Interpretation of an insurance contract is a question of law. Queen City Farms, Inc. v. Central Nat'l Ins. Co. Daley asserts that he should be able to recover under his UIM policy to the extent that he has an action in tort against the underinsured driver in this case. Daley argues that since he would have a cause of action in tort against the driver of the underinsured vehicle for negligent infliction of emotional distress 4 that he should be able to recover under his Allstate UIM policy for emotional distress related to the driver's negligent conduct regardless of whether the emotional distress is directly related to a physical injury.

126 Wash.2d 50, 65, 882 P.2d 703, 891 P.2d 718 (1995). Courts interpret insurance contracts as an average insurance purchaser would understand them and give undefined terms in these contracts their " 'plain, ordinary, and popular' " meaning. Kish v. Insurance Co. of N. Am., 125 Wash.2d 164, 170, 883 P.2d 308 (1994) (quoting Boeing Co. v. Aetna Cas. & Sur. Co., 113 Wash.2d 869, 877, 881, 784 P.2d 507, 87 A.L.R.4th 405 (1990)). If a policy provision is ambiguous, the interpretation most favorable to the insured applies. Id. An ambiguity exists only ' "if the language on its face is fairly susceptible to two different but reasonable interpretations." ' Id. at 171, 883 P.2d 308 (quoting Washington Pub. Util. Dists'. Utils. Sys. v. PUD No. 1, 112 Wash.2d 1, 11, 771 P.2d 701 (1989)).

Daley, however, can recover for such emotional injuries only if they constitute "bodily injury" pursuant to the terms of the policy. "Bodily injury" is defined in the Allstate UIM policy as "bodily injury, sickness, disease or death." CP at 118. The clear majority of states, 5 including Washington, have held that the term "bodily injury" does Courts generally hold that "in the context of purely emotional injuries, without physical manifestations, the phrase 'bodily injury' is not ambiguous. Its ordinary meaning connotes a physical problem." SL Indus., Inc. v. American Motorists Ins. Co., 128 N.J. 188, 205, 607 A.2d 1266 (1992); accord Allstate Ins. Co. v. Diamant, 401 Mass. 654, 658, 518 N.E.2d 1154 (1988); Farm Bureau Mut. Ins. Co. v. Hoag, 136 Mich.App. 326, 333-34, 356 N.W.2d 630 (1984). Courts simply interpret the word "bodily" in the term bodily injury to mean physical injury to the body. See Chatton v. National Union Fire Ins. Co., 10 Cal.App.4th 846, 854, 13 Cal.Rptr.2d 318 (1992); Aim Ins. Co. v. Culcasi, 229 Cal.App.3d 209, 220, 280 Cal.Rptr. 766 (1991). In addition, dictionary...

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