Daley v. United Services Auto. Ass'n

• Decision Date: 01 September 1986
• Docket Number: No. 48,48
• Parties: Paul Joseph DALEY, Personal Representative et al. v. UNITED SERVICES AUTOMOBILE ASSOCIATION. ,
• Court: Maryland Court of Appeals

Page 550

312 Md. 550

541 A.2d 632

Paul Joseph DALEY, Personal Representative et al. v. UNITED SERVICES AUTOMOBILE ASSOCIATION.

No. 48, Sept. Term, 1986.

Court of Appeals of Maryland.

May 27, 1988.

David B. Lamb (Lamb & Ochs, on the brief), Washington, D.C., for appellant.

Don F. Ryder, Jr. (Schroeder, Ryder, Braden, on the brief), Rockville, for appellee.

Argued before MURPHY, C.J., ELDRIDGE, COLE, RODOWSKY, COUCH ^* and ADKINS, JJ., and ROBERT L. KARWACKI, Associate Judge of the Court of Special Appeals, Specially Assigned.

COLE, Judge.

The question presented in this case is whether solatium damages claimed in a wrongful death action by parents who were not present at the automobile accident in which their minor child was killed are "bodily injury" damages under the occurrence provisions of an automobile liability insurance policy. ¹

The facts giving rise to the question may be summarized as follows. Paul Daley Jr., a minor, was killed by a car driven by James Edward Dyer (Dyer). Paul's parents, Paul Joseph Daley Sr. and his wife, Mary B. Daley (the Daleys), neither of whom was present at the occurrence, brought wrongful death and survival actions against Dyer. Consent judgments totalling $225,000 were entered: $74,000 compensatory damages and $1,000 punitive damages on the survival claim and $75,000 compensatory damages to each parent on the wrongful death claim. Dyer's insurer, United Services Automobile Association (USAA), tendered $100,000 toward the judgment on the premise that only the decedent suffered a "bodily injury."

Dyer's policy with USAA provided in pertinent part as follows:

PART I--LIABILITY

Coverage A--Bodily Injury Liability ...: to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:

A. Bodily Injury, sickness or disease, including death resulting therefrom, hereinafter called "bodily injury" sustained by any person....

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Limits of Liability: The limit of bodily injury liability stated in the Declarations as applicable to "each person" is the limit of the company's liability for all damages, including damages for care and loss of services, arising out of bodily injury sustained by one person as the result of any one occurrence; the limit of such liability stated in the Declarations as applicable to "each occurrence:", is, subject to the above provision respecting each person, the total limit of the company's liability for all such damages arising out of bodily injury sustained by two or more persons as the result of any one occurrence.

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Coverages--Limits of Liability

A. Bodily Injury Liability each person--$100,000.00--Each Occurrence--$200,000.00

In sum, USAA's obligation to pay on Dyer's behalf was subject to two limits: (1) a $100,000 "each person" limit for all damages, including damages for care and loss of services arising out of bodily injury sustained by one person as the result of any one occurrence; and (2) a $200,000 "each occurrence" limit for all such damages arising out of bodily injuries sustained by two or more persons as a result of any one occurrence.

The Daleys were dissatisfied with the $100,000 payment and asserted that their solatium damages constituted bodily injuries independent of their son's, thereby making applicable the policy limit of $200,000. ² Consequently, USAA sought a declaratory ruling in the Montgomery County Circuit Court stating that its liability to the Daleys was fulfilled by payment of $100,000 pursuant to the one person limit. In granting USAA's motion for summary judgment, the Honorable L. Leonard Ruben held that only Paul Daley Jr. suffered "bodily injury" within the meaning of the policy and therefore the $100,000 limit applied. In the circuit court's view, the Daleys' solatium damages arose out of their son's injury and thus did not invoke the each occurrence $200,000 liability limit.

The Daleys appealed this result to the Court of Special Appeals, but we granted certiorari before consideration by the intermediate appellate court.

Automobile liability policies commonly limit the insurer's liability to a given amount where the insured's accident causes bodily injury to one person, and to a further amount where two or more persons suffer bodily injury in one accident. For example, USAA's policy with Dyer limited recovery to $100,000 per person suffering bodily injury, and to a total of $200,000 per occurrence, should more than one person suffer bodily injury.

Under policies fixing a maximum recovery for "bodily injury" to one person, the vast majority of courts have held that such a "per person" liability limitation applies to all claims of damage flowing from such bodily injury. Annotation, Construction and Application of Provision in Liability Policy Limiting the Amount of Insurer's Liability to One Person, 13 A.L.R.3d 1228, 1234 (1967 & Supp.1987). Therefore, such consequential or derivative damages are computed together with the claim for bodily injury of which they are a consequence.

These principles have been applied in wrongful death actions. For example, where a widow and two children sued over the death of the husband-father, the limit of liability was that for bodily injury to one person. "[T]he limit[ ] as to 'each person' relates to a person suffering bodily injury and not to the person or persons who may suffer damages in consequence of such injury." Williams v. Standard Acc. Ins. Co. of Detroit, 188 F.2d 206 (5th Cir.1951). See also Lopez v. State Farm Fire & Casualty Co., 250 Cal.App.2d 210, 58 Cal.Rptr. 243 (1967); Valdez v. Interinsurance Exchange of the Auto. Club of So. Calif., 246 Cal.App.2d 1, 54 Cal.Rptr. 906 (1966); Hutton v. Martin, 43 Wash.2d 574, 262 P.2d 202 (1953).

Where state law creates a right to damages for mental anguish suffered by those in specified relationships to the person who suffers bodily injury or death, it has been held that the damages for mental anguish are, in effect, derivative of the single bodily injury. In Florida the wrongful death act in part provides that "[e]ach parent of a deceased minor child may also recover for mental pain and suffering from the date of injury." Fla.Stat.Ann. § 768.21 (1986). Skroh v. Travelers Ins. Co., 227 So.2d 328 (Fla.App.1969), involved a father whose son had been killed in an automobile accident. The father sued for his own emotional suffering resulting from the son's death and also sued as administrator of the son's estate. Judgments totalling $31,250 were entered. Two carriers covered the adverse operator for liability and each paid the $10,000 maximum under its policy for damages resulting from bodily injury or death to one person. The father contended that his pain and suffering constituted a "sickness or disease" within the policies' definition of "bodily injury." Rejecting this contention the court said:

The bodily injury referred to in the policy, we think, clearly indicates only such injury to the body of the injured, or a sickness or disease contracted by the injured as a result of injury, the same as the death resulting therefrom, and cannot be properly construed to include the pain and suffering of a survivor as falling within the terms "sickness or disease" resulting to the injured.

Id. at 330.

To like effect is West American Ins. Co. v. Buchanan, 11 Wash.App. 823, 525 P.2d 831 (1974). A Washington statute provided that a parent could "maintain an action as plaintiff for the injury or death of a minor child" in which "damages may be recovered for the loss of love and companionship of the child and for injury to or destruction of the parent-child relationship...." Id. at 824 n. 1, 525 P.2d at 832 n. 1. Parents whose ten year old daughter had been seriously injured in an automobile accident but who had not themselves sustained any direct physical impact claimed that the statute permitted them to recover for their own "bodily injury" so that the occurrence limit applied. The court held:

Grief, mental anguish and suffering are arguably more similar to the "pain and suffering" element of direct damages for a "bodily injury" than to such consequential damages as medical expenses and loss of wages. But we are persuaded that grief and mental anguish are also consequential damages rather than direct damages because their recovery is necessarily dependent upon the injury to another person--the child.

Id. at 827, 525 P.2d at 833.

In a similar case involving the same Washington statute, the court said that "the damage award for injuries to the child is combined with the damage award for the parent's anguish and grief which are derivative of and entirely dependent on the injury to the child." United Pacific Ins Co. v. Edgecomb, 41 Wash.App. 741, 743, 706 P.2d 233, 234 (1985).

The Daleys' claim for solatium damages is also similar to a claim for loss of consortium, e.g., Thompson v. St. Paul Fire and Marine Ins. Co., 108 Idaho 802, 702 P.2d 840 (1985) (spouse's loss of consortium claim derives from the patient's injury and thus does not trigger a second liability limitation for damages); United Services Auto. Ass'n v. Warner, 64 Cal.App.3d 957, 135 Cal.Rptr. 34 (1976) (loss of consortium is a loss sustained because of injuries to one person, making the "per person" limit applicable); and to consequential financial injury, e.g., Pacific Indemnity Co. v. Interstate Fire & Casualty Co., 302 Md. 383, 488 A.2d 486 (1985) (father's claim for financial injury arising out of infant's personal injuries is governed by single per injury limit of liability); Gaines v. Standard Acc. Ins. Co., 32 So.2d 633 (La.App.1947) (father's consequential financial injury due to son's bodily injury is governed by per person limit, not per occurrence limit). ³ See also cases collected at Annotation, supra, 13 A.L.R.3d 1228 and 8A J. ApplemanInsurance Law and Practice § 4893, at 60 n. 22 (1981).

In Warner, supra, a California intermediate appellate court construed a USAA...