Hoglund v. Dakota Fire Ins. Co.

• Decision Date: 05 December 2007
• Docket Number: No. 24471.,No. 24470.,24470.,24471.
• Parties: Kaden HOGLUND and Monte Hoglund, Plaintiffs and Appellants, v. DAKOTA FIRE INSURANCE COMPANY, Defendant and Appellee.
• Court: South Dakota Supreme Court

742 N.W.2d 853

2007 SD 123

Kaden HOGLUND and Monte Hoglund, Plaintiffs and Appellants, v. DAKOTA FIRE INSURANCE COMPANY, Defendant and Appellee.

No. 24470.

No. 24471.

Supreme Court of South Dakota.

Considered on Briefs on October 1, 2007.

Decided December 5, 2007.

Chet Groseclose, Sioux Falls, South Dakota and Kerry Cameron of Cameron Law Office Sisseton, South Dakota, Attorneys for plaintiffs and appellants.

Douglas M. Deibert of Cadwell, Sanford, Deibert & Garry Sioux Falls, South Dakota, Attorneys for defendant and appellee.

GILBERTSON, Chief Justice.

[¶ 1.] A motions hearing was held in the South Dakota Fifth Judicial Circuit on August 21, 2006, in regard to a declaratory judgment action filed by Monte and Kaden Hoglund, father and son (collectively Hoglunds), seeking a ruling that Monte could recover expenses from Dakota Fire Insurance Company (Dakota Fire) in connection with injuries to Kaden resulting from an automobile collision caused by its insured, Matthew West (West). Prior to the hearing, Dakota Fire filed a motion for summary judgment. On February 12, 2007, the circuit court entered its judgment and order granting Dakota Fire's motion. We affirm.

FACTS AND PROCEDURE

[¶ 2.] There is no dispute about the facts underlying this case. On January 24, 2004, at about 12:00 p.m., Kaden was severely injured in an automobile collision while driving to his home at Langford, South Dakota. The collision occurred at a rural intersection when West failed to stop for a stop sign.¹ Kaden suffered permanent injuries as a result of the collision.

[¶ 3.] At the time, Kaden was 17-years-old. He did not reach his 18th birthday until July 8, 2004. During the intervening period Monte incurred $38,627.21 in hospitalization, medical and surgical care expenses on Kaden's behalf.² In addition to this sum, Monte claimed that he was entitled to $1,630.00 attributable to his loss of after-tax income during a one-month period that he took off from work to care for Kaden after the accident. Kaden claimed damages, resulting from the collision with West in excess of $100,000.00 for pain and suffering, loss of enjoyment of life, permanent injuries and future medical expenses.

[¶ 4.] The auto insurance policy, issued to West by Dakota Fire, capped the insured's liability coverage at $100,000.00 per person and $300,000.00 per accident. Dakota Fire offered to settle with Hoglunds for $100,000.00 in exchange for West's release. On December 2, 2005, Hoglunds commenced an action against Dakota Fire seeking a declaratory judgment that Dakota Fire was also liable under the policy for a second "per person" limit to cover Monte's expenses and services provided on Kaden's behalf.³

[¶ 5.] On December 20, 2005, Dakota Fire answered the complaint and counterclaimed seeking a determination that it was liable for no more than $100,000.00 under a single "per person" limit. On July 13, 2006 Dakota Fire filed a motion for summary judgment. The matter was heard by the circuit court on August 21, 2006. The court, in its memorandum opinions of October 12, 2006 and December 28, 2006, concluded that while Dakota Fire was not obligated for a second "per person" limit under the policy, Monte was entitled to $1,630.00 for the value of services provided to Kaden. On February 12, 2007, the circuit court entered findings of fact and conclusions of law in this regard and entered judgment and order granting Dakota Fire's motion for summary judgment in all other respects.

[¶ 6.] In addition to Hoglunds' appeal, Dakota Fire raises issues by notice of review. We combine Hoglunds' first appeal issue and Dakota Fire's first review issue as follows:

1. Whether Monte's claims were separate from Kaden's.

The following issues were raised by Hoglunds on appeal:

2. Whether the terms of the insurance policy that Dakota Fire issued to West were ambiguous such that they should have been construed in favor of Hoglunds, thereby entitling Monte to recovery for damages under a second "per person" liability limit.

3. Whether Monte and Kaden both sustained "bodily injury" within the meaning of the policy. Dakota Fire raises an additional issue by notice of review:

4. Whether there was sufficient evidence to sustain the circuit court's award of $1,630.00 for the value of Monte's services rendered to Kaden.

STANDARD OF REVIEW

[¶ 7.] "In reviewing a grant of summary judgment under SDCL 15-6-56(c) we must determine whether the moving party has demonstrated there is no genuine issue of material fact and he is entitled to judgment as a matter of law." Rogers v. Allied Mut. Ins. Co., 520 N.W.2d 614, 615 (S.D.1994) (citations omitted). Once we determine that the material facts are undisputed, our review is limited to whether the law was correctly applied. Pauley v. Simonson, 2006 SD 73, ¶ 7, 720 N.W.2d 665, 667 (citations omitted). "We review questions of law de novo with no discretion given to the circuit court." Id. (citations omitted).

[¶ 8.] "When interpreting insurance contracts, we have uniformly held them reviewable as a matter of law under the de novo standard." Friesz ex rel. Friesz v. Farm & City Ins. Co., 2000 SD 152, ¶ 5, 619 N.W.2d 677, 679 (citing DeSmet Ins. Co. v. Gibson, 1996 SD 102, ¶ 5, 552 N.W.2d 98, 99; Economic Aero Club, Inc. v. Avemco Ins. Co., 540 N.W.2d 644, 645 (S.D.1995); State Farm Mut. Auto. Ins. Co. v. Vostad, 520 N.W.2d 273, 275 (S.D. 1994)). "This includes determining whether an insurance contract is ambiguous." Id. (citing Rogers, 520 N.W.2d at 616).

ANALYSIS AND DECISION

[¶ 9.] 1. Whether Monte's claims were separate from Kaden's.

[¶ 10.] While the circuit court found for Dakota Fire in rejecting Monte's claim to coverage under a second "per person" limit, it nonetheless concluded that he had a separate cause of action for medical expenses incurred prior to Kaden's 18th birthday, and for the value of service that he provided to Kaden.⁴ We agree.

[¶ 11.] This Court has reviewed appeals dealing with facts similar to those of this case. In Knowles v. United States 1996 SD 10, 544 N.W.2d 183, we discussed several cases that considered the nature of parent claims arising out of tortious injury to children. In Knowles we reviewed certified questions submitted by the United States Court of Appeals for the Eighth Circuit, pertaining to claims filed against the United States under the Federal Tort Claims Act. Id. ¶ 4, 544 N.W.2d at 185.

[¶ 12.] The claims in Knowles, were brought by the parents of an infant who suffered severe brain damage following hospitalization and routine treatment at the Ellsworth Air Force Base Hospital near Rapid City, South Dakota. Id. ¶¶ 5, 6, 544 N.W.2d at 185. The parents brought claims on their own behalf and for the infant for medical malpractice, emotional distress, and loss of consortium. Id. ¶ 6, 544 N.W.2d at 185. Pertinent to the instant case was the Court's analysis of the third and fourth certified questions, respectively; whether South Dakota law recognized parental claims for emotional distress or loss of consortium that arose from injuries to a minor child; and, whether South Dakota's statutory limitation for malpractice damages applied separately to the claims and to the plaintiffs. Id. ¶ 6, 544 N.W.2d at 185-86.

[¶ 13.] We rejected the existence of parental claims for emotional distress and loss of consortium.⁵ Id. ¶ 43, 544 N.W.2d at 193. However, we reiterated our prior holding "that a parent may bring a cause of action to recover consequential damages incurred because of negligent injury to a child." Id. ¶ 40, 544 N.W.2d at 192 (citing Barger for Wares v. Cox, 372 N.W.2d 161, 164 (S.D.1985)). The basis for a parent's cause of action against a tortfeasor, for recovery of medical expenses resulting from negligent injury to a child, arises from the common-law rule that obliges the parent to provide medical attention for the minor child.⁶ Id. ¶ 42, 544 N.W.2d at 193 (citing Prosser and Keeton, The Law of Torts § 125, 934 (5thEd 1984)). See also SDCL 25-7-6.1 (codifying the parent's obligation to a minor child).

[¶ 14.] We also analyzed whether the surviving medical malpractice claims of the parents were separate and distinct or derivative actions. Id. ¶¶ 45-49, 544 N.W.2d at 193-94. In arriving at the answer to this question we relied heavily on our prior holding in Barger.

[¶ 15.] Barger was another case that involved a claim brought by a parent on behalf of a tortuously injured minor child and a parental claim to recover medical expenses incurred on the behalf of the child. 372 N.W.2d at 164. In Barger, the child's claim was barred by our former guest statute.⁷ The issue this Court addressed was whether the parent's claim was similarly barred. The Court's task in addressing the issue was to decide whether the parent's claim was derivative of the child's or separate and distinct.

[¶ 16.] The Court observed that the parent's claim was not a true derivative action in so much as that designation belongs to those causes of action which accrue to fatally injured persons and survive their deaths, which are then maintainable by the representatives of the estates. Id. at 165 (quoting Irlbeck v. Pomeroy, 210 N.W.2d 831 (Iowa 1973)). Such claims are subject to any defense that could have been raised against the decedent. Id. The Court went on to conclude that while claims such as the one in Barger, brought by the parent to recover medical expense incurred on behalf of the child, are not truly derivative in that the parent who incurred them was the injured party, such claims nevertheless arise out of and are consequential to the injury sustained by the child. Id. We also observed:

An act or omission of a person which causes a loss of the services of a minor child to a parent, or necessitates expenditures to cure an injury done to the child, entitles the parent to recover damages when it appears that the act or omission is one which the law holds to be a legal wrong.... [I]n such a case as this, where...