Evans v. Farmers Ins. Exchange

• Decision Date: 09 November 2001
• Docket Number: No. 00-28.,00-28.
• Citation: 2001 WY 110,34 P.3d 284
• Parties: Lee EVANS and Linda Evans, Appellants (Plaintiffs), v. FARMERS INSURANCE EXCHANGE, a California corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

34 P.3d 284
2001 WY 110

Lee EVANS and Linda Evans, Appellants (Plaintiffs),
v.
FARMERS INSURANCE EXCHANGE, a California corporation, Appellee (Defendant)

No. 00-28.

Supreme Court of Wyoming.

November 9, 2001.

Representing Appellants: Dennis W. Lancaster of Lancaster Law Offices, P.C., Evanston, WY.

Representing Appellee: George E. Powers, Jr. of Sundahl, Powers, Kapp & Martin, LLC, Cheyenne, WY.

Before LEHMAN, C.J., and GOLDEN, HILL and KITE, JJ.

LEHMAN, Chief Justice.

[¶ 1] Lee and Linda Evans suffered emotional distress as a result of witnessing the impact and immediate aftermath of an automobile accident in which their son was seriously injured as the result of a third party's negligence. When the third party's insurance coverage was exhausted, the Evans couple looked to the underinsured motorist (UIM) coverage they held through Farmers on the vehicle they had been driving at the time of witnessing their son's injuries. Farmers agreed that the Evanses had suffered

34 P.3d 285

trauma but refused to cover purely emotional or psychic injury unaccompanied by any kind of physical harm. Subsequently, the question of whether "bodily injury" as used in the policy affording Lee and Linda Evans UIM coverage may be read so as to embrace emotional distress was certified to this court. Under the specific terms of the insurance policy involved in this case, we answer in the affirmative

ISSUE

[¶ 2] The parties pose the following question:

Where an insured has sustained emotional distress as a result of witnessing the injury of another family member, are these emotional distress claims covered for purposes of establishing a claim for recovery of underinsured motorist coverage under the terms of the policy issued by Farmers Insurance Exchange (Policy No. 76-14686-97-07)?

FACTS

[¶ 3] The parties have stipulated to all of the material facts. Lee and Linda Evans are husband and wife and the natural parents of Cody Evans. About 7:25 p.m. on August 9, 1997, Lee and Linda were driving their 1997 Ford Expedition, followed closely by their son Cody, who was driving a 1990 Ford Ranger pickup. Due solely to the negligence of Bradley Vallee, Vallee's vehicle collided with Cody's pickup, causing serious bodily injury to Cody, including a broken collarbone, broken femur, cuts, and abrasions.

[¶ 4] Lee and Linda Evans were not involved in the collision, nor did their Expedition sustain any impact or damage as a result. They did, however, observe the accident and quickly turned back to witness the immediate aftermath of the accident, including the serious bodily injuries sustained by their son Cody. Although Lee and Linda sustained no physical injury, Farmers agrees that they sustained emotional distress as a direct result of observing the serious injuries sustained by Cody.

[¶ 5] Mr. Vallee was insured by Allstate Indemnity Company. His policy was subject to limits of $25,000 per person and $50,000 per occurrence. Allstate settled the claims against Vallee through payments to the Evans family and others not party to the instant action, exhausting the policy limits. Farmers Insurance Exchange consented to the settlement.

[¶ 6] Through Farmers Insurance Exchange, Linda Evans had insured the Ford Expedition in which she and her husband were riding at the time of their son's accident. That insurance contract, policy number XX-XXXXX-XX-XX, became effective July 16, 1997, and remained in full force and effect at the time of the collision. Subject to the stated terms of the policy, Farmers agreed to provide underinsured motorist coverage (UIM) to Lee and Linda Evans.

[¶ 7] Lee Evans has made a claim under Farmers UIM coverage for $20,000 as compensation for the emotional damage he suffered as a result of witnessing his son's accident and its immediate aftermath. Linda Evans has asserted a similar claim seeking emotional distress damages in the amount of $47,000. Believing that the emotional distress suffered by the Evanses falls outside the scope of "bodily injury" as described in the UIM coverage, Farmers has denied the emotional distress claims. However, to the extent that Lee Evans and Linda Evans may be able to establish that their emotional distress constituted bodily injury as contemplated by the UIM policy, Farmers has agreed that it will not contest the amount of the claims. All claims for UIM coverage asserted by Cody Evans have been settled and released by separate agreement of the parties.

STANDARD OF REVIEW

[¶ 8] An insurance policy constitutes a contract between the insurer and the insured. Helm v. Board of County Comm'rs, 989 P.2d 1273, 1275 (Wyo.1999). When called upon to determine the meaning of a contract, our focus is upon the intent of the parties. Wolter v. Equitable Resources Energy Co., 979 P.2d 948, 951...