Liberty Mutual Fire Ins. Co. v. Dennison
| Decision Date | 11 October 2005 |
| Docket Number | No. 24975.,24975. |
| Citation | 120 P.3d 1115 |
| Parties | LIBERTY MUTUAL FIRE INSURANCE COMPANY, Plaintiff-Appellant, v. Donald H. DENNISON and Lynn T. Dennison, Individually and as Next Friend of Tyrone Dennison, a minor, Defendants-Appellees. |
| Court | Hawaii Supreme Court |
Randall Y. Yamamoto and Brian A. Kang (of Watanabe, Ing & Kawashima), Honolulu, on the briefs, for plaintiff-appellant.
Bert S. Sakuda, Gregory L. Lui-Kwan, and Geoffrey K.S. Komeya (of Cronin, Fried, Sekiya, Kekina & Fairbanks), Honolulu, on the briefs, for defendants-appellees.
This action for declaratory relief arises out of an automobile accident in which then-fifteen year old Tyrone Dennison (Tyrone) suffered severe injuries, including brain damage. The dispute on appeal centers around Tyrone's father, defendant-appellee Donald H. Dennison (Donald) and his separate claim for underinsured motorist (UIM) benefits. Briefly stated, although Donald was not involved in the accident, he claimed emotional distress as a result of seeing his son being attended to by emergency medical personnel at the triage area near the accident scene and eventually taken away by the medi-vac helicopter. Plaintiff-appellant Liberty Mutual Fire Insurance Company [hereinafter, Liberty Mutual] tendered a policy limit payment for UIM benefits1 to Donald and defendant-appellee Lynn T. Dennison [hereinafter, collectively, the Dennisons] as next friends of Tyrone. Donald also filed a separate claim for UIM benefits based on his emotional distress. Liberty Mutual subsequently filed this declaratory judgment action, requesting the Circuit Court of the First Circuit, the Honorable Richard W. Pollack presiding, to declare that, because Donald was not involved in nor witnessed the accident, he was not entitled to compensation under Hawai`i Revised Statutes (HRS) § 431:10C-306(b) (1993)2 and First Ins. Co. of Hawai`i v. Lawrence, 77 Hawai`i 2, 881 P.2d 489, reconsideration denied, 77 Hawai`i 373, 884 P.2d 1149 (1994) [hereinafter, Lawrence].3
Liberty Mutual appeals from the circuit court's: (1) September 26, 2001 order denying its motion for summary judgment [hereinafter, motion or motion for summary judgment]; and (2) February 5, 2002 judgment in favor of the Dennisons, individually and as next friends of their son, Tyrone. On appeal, Liberty Mutual contends that the circuit court erred in denying its motion and entering judgment in favor of the Dennisons based on its conclusion that Donald was not precluded from filing, under his insurance policy, a separate and independent claim for emotional distress allegedly arising from the instant accident.4 Liberty Mutual maintains that, because Donald was neither involved in the car accident nor witnessed the accident, he is precluded from recovering for any emotional distress under HRS § 431:10C-306(b) and Lawrence, 77 Hawai`i 2, 881 P.2d 489.
As discussed more fully infra in section III, we vacate the circuit court's September 26, 2001 order and February 5, 2002 judgment and remand this case for entry of judgment in favor of Liberty Mutual.
The parties stipulated to the following statement of facts:
1. At approximately 1:06 a.m. on Friday, February 21, 1997, [Tyrone] was a passenger in a 1992 Toyota Corolla driven by nineteen year old Michael Lutz.
2. [Lutz] had a blood alcohol level of .09 percent and had lost control of the Toyota Corolla which crashed into a utility pole on Kuloa Avenue in Kapolei.
3. [Tyrone], the son of [the Dennisons], was fifteen years old at the time (DOB January 19, 1982).
4. [Tyrone] suffered severe injuries, including brain damage and jaw injuries in the collision.
5. [Tyrone] was found unconscious and in critical condition in the back seat of the Lutz vehicle.
6. [The Dennisons] were not in the Lutz car when the collision occurred and they did not witness the actual collision.
7. At about 1:30 a.m., police officer Joseph Tabarejo, one of the investigating officers, went to the Dennison home and told [the Dennisons] that Tyrone was in an accident and that they were going to medevac him.
8. At that time, [Donald] had already heard a helicopter overhead.
9. Prior to notification by officer Tabarejo, [Donald] was not aware that his son had been involved or injured in an accident.
10. Immediately after speaking with officer Tabarejo, [Donald] did not hesitate, and he ran out the side door of his garage, jumped a wall behind his house and ran to the triage area where the ambulance and firemen had congregated which was down the street from the site of the collision. [Donald] estimated that the distance from the wall behind his house to the ambulance may have been about the length of a football field.
11. [Donald] looked closely at two boys who were on gurneys. Neither was his son Tyrone. Both boys were conscious, and nothing seemed to be wrong with them. After he saw those two boys, [Donald] knew that the medevac helicopter was for his son.
12. [Donald] proceeded toward the ambulance at the scene and looked inside.
13. Medical technicians and a fireman were in the ambulance intubating a patient, i.e. placing a mask attached to a manual pump, over the patient's nose and mouth.
14. The patient's face was partially covered, so [Donald] could not recognize his son.
15. One of the medical technicians asked [Donald] "who you looking for?" [Donald] said "my son." The attendant said "what, the kid with the tattoo?" [Donald] said "yeah" and the medical technician said "that's him there[]", referring to the individual the medical technicians were working on.
16. [Tyrone] was unconscious and completely unresponsive.
17. [Donald] knew that his son's condition was serious when he saw the medical technicians intubating Tyrone. He wondered how long his son had not been breathing and how long his brain had been deprived of oxygen.
18. [Donald] asked if Tyrone was going to make it and no one would give him an answer. The medical technicians just told [Donald] that they were going to fly [Tyrone] to Queen's Medical Center and that he should go there.
19. The medical technicians then took Tyrone out of the ambulance and wheeled him by gurney to the helicopter which was waiting. [Donald] could see blood on his son's face.
20. As [Tyrone] was being taken to the medevac helicopter, [Donald] told him to "hang on" and "I love you".
21. [Donald] ran back to his house and told his wife what happened. [Donald] then broke down and cried.
22. [The Dennisons] then went to the hospital and were told that Tyrone was in critical condition. [Tyrone] was in a coma, which lasted approximately two months.
23. After the accident, [Donald] underwent individual and group counseling on the mainland for psychological injuries.
24. Robert C. Marvit, M.D. has also reviewed medical records and examined [Donald] and states in his February 20, 2001 report that "it is [his] opinion with reasonable probability that indeed, [Donald] had suffered a significant, severe, mental and emotional distress of this automobile accident and his coming upon the scene in the manner described."
25. At the time of the accident, [the Dennisons] were the named insureds under a motor vehicle insurance policy issued by Liberty Mutual, with a policy period of January 10, 1997 to January 10, 1998, which included an [UIM coverage] endorsement.
26. The insuring agreement for the UIM endorsement provided in pertinent part:
We will pay damages which an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury:
1. Sustained by an insured; and
2. Caused by an accident.
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the underinsured motor vehicle.
We will pay under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements.
27. The UIM endorsement provided that the [UIM] policy limit was $35,000 per accident, stacked times two vehicle[s], or $70,000.
28. At the time of the underlying accident, [Lutz] was insured by AIG Hawaii ("AIG"), with a bodily injury policy limit of $25,000 per person. On August 30, 1999, AIG, on behalf of [Lutz], tendered the sum of $50,000. One $25,000 policy limit was paid for the injuries to [Tyrone]. A separate policy limit of $25,000 was paid for what AIG characterized as [Donald]'s independent claims.
29. Thereafter, Liberty Mutual tendered a UIM policy limit in the amount of $70,000 to [the Dennisons], as Next of Friend of [Tyrone].
30. [Donald] made a demand for a separate UIM policy limit under Liberty Mutual's policy for his claim of emotional distress.
31. Liberty Mutual refused to pay on a separate UIM policy limit for [Donald]'s claims and filed the above-captioned declaratory judgment action on April 24, 2000.
(Brackets and underscored emphases added.) (Bold emphases in original.)
On April 24, 2000, Liberty Mutual filed a complaint for declaratory judgment, wherein it sought "[a] declaration that [Donald] is not entitled to [UIM] benefits under the policy arising out of the underlying accident[.]" On May 17, 2000, the Dennisons filed an answer to the complaint.
On August 14, 2001, Liberty Mutual filed a motion for summary judgment, acknowledging that "the crux of this case is whether [Donald]'s alleged emotional distress is derivative of Tyrone's injuries in the accident." Liberty Mutual contended: "Under the controlling authority of First Insurance Co. of Hawai`i v. Lawrence, 77 Hawai`i 2, 881 P.2d 489 (1994), [Donald]'s alleged emotional distress is clearly derivative of Tyrone's injuries, and [Donald] is therefore not entitled to a separate UIM policy limit as a matter of law." (Emphases in original...
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