Wages v. First Nat. Ins. Co. of America

• Decision Date: 13 November 2003
• Docket Number: No. 02-604.,02-604.
• Citation: 2003 MT 309,79 P.3d 1095
• Parties: Gerald WAGES, Plaintiff and Appellant, v. FIRST NATIONAL INSURANCE COMPANY OF AMERICA and Phillip Pegar, Defendants and Respondents.
• Court: Montana Supreme Court

79 P.3d 1095

2003 MT 309

Gerald WAGES, Plaintiff and Appellant, v. FIRST NATIONAL INSURANCE COMPANY OF AMERICA and Phillip Pegar, Defendants and Respondents.

No. 02-604.

Supreme Court of Montana.

Submitted on Briefs January 9, 2003.

Decided November 13, 2003.

For Appellant: Scot Schermerhorn, Edmiston, Schermerhorn & Colton, Billings, Montana.

For Respondents: John E. Bohyer, Tammy Wyatt-Shaw, Fred Simpson, Phillips & Bohyer, P.C., Missoula, Montana (for First National Insurance Company); Geoffrey R. Keller, Matovich & Keller, P.C., Billings, Montana (for Phillip Pegar).

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Skylar Wages was seven years old when he was struck by a vehicle driven by Phillip Pegar and was seriously injured. Skylar's resulting major medical problems and treatments have been complicated and painful. While his father, Gerald Wages (Wages), did not witness the accident, he has taken an extremely active role in Skylar's medical treatment. Wages sued Pegar and Pegar's automobile liability insurer, First National Insurance Company of America (FNIC), claiming that he has sustained severe emotional distress as a result of Pegar's negligent operation of his vehicle. Both Wages and FNIC filed motions for summary judgment. The District Court denied Wages' motion and granted FNIC's motion. Wages appeals. We reverse and remand.

ISSUE

¶ 2 The only issue before this Court is whether the parent of a minor child who does not witness an accident, wherein the child is seriously injured, is entitled to maintain an independent, non-derivative claim for negligent infliction of emotional distress.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 On January 5, 2000, while seven-year old Skylar was roller-blading in front of his parents' mobile home, Phillip Pegar drove through the mobile home park and struck Skylar, causing serious injury. Skylar's mother, who was home at the time, ran to the scene and removed Skylar from under Pegar's truck. An ambulance arrived and took Skylar and his mother to the hospital. Wages was notified of the accident by telephone and left work, rushing to the hospital.

¶ 4 Skylar experienced bilateral pelvic fractures and complete urethral disruption. He has undergone at least four major, invasive and expensive surgical procedures since January 5, 2000, as well as considerable physical therapy. Due to the extensive nature of Skylar's urethra injury and the failure of surgery to correct the problem, Wages has had to catherize his son between three and four times per day with a large catheter tube. To adequately provide care for his son, including taking him to the children's hospital in Salt Lake City on several occasions for surgery and treatment, Wages has missed substantial time at work. As a result, he has lost income while at the same time his financial obligations for medical expenses have risen dramatically.

¶ 5 Skylar's prognosis remains unclear. He is behind in his education due to the accident and his ongoing medical treatment. His parents have noticed a distinct change in his personality. Moreover, the prospect of his future ability to participate in physical activities is questionable as is his ability to have children.

¶ 6 On the date of Skylar's accident, Pegar was insured by FNIC. Pegar had $25,000/$50,000 liability coverage. Skylar, through a court-appointed guardian and conservator, settled his claim for the policy limits of $25,000. Wages subsequently submitted a claim to FNIC for $25,000 to settle his independent claim of negligent infliction of emotional distress (NIED). FNIC denied the claim, maintaining that under state law Wages could not sustain an independent, non-derivative claim for NIED without having witnessed the accident.

¶ 7 On June 29, 2001, Wages filed suit for declaratory relief against FNIC, seeking a determination that FNIC must indemnify Pegar pursuant to Pegar's liability policy with FNIC. Wages claimed that a parent of a minor child need not witness an accident in order to maintain an independent claim for NIED. While the declaratory proceeding was pending, Pegar stipulated to a consent judgment in favor of Wages in the sum of $150,000. In return, Wages agreed not to execute against Pegar's assets. Pegar also assigned any of his rights as against FNIC to Wages. The District Court entered this consent judgment in favor of Wages and against Pegar in the sum of $150,000 on November 20, 2001.

¶ 8 Both Wages and FNIC subsequently filed motions for summary judgment. A hearing was held on June 28, 2002. On July 23, 2002, the District Court denied Wages' motion for summary judgment and granted FNIC's motion. The court subsequently entered Judgment dismissing Wages' complaint and ordered Wages to pay FNIC's costs of defense with ten-percent interest.

STANDARD OF REVIEW

¶ 9 Our review of a summary judgment order is de novo. Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P. The initial burden is on the moving party to establish that there is no genuine issue of material fact; and once met, the burden shifts to the party opposing the motion to establish otherwise. Sacco v. High Country Independent Press (1995), 271 Mont. 209, 215, 896 P.2d 411, 415. Once the court determines that genuine issues of fact do not exist, "the court must then determine whether the moving party is entitled to judgment as a matter of law." We review this legal conclusion to determine whether the court erred. Treichel v. State Farm Mut. Auto. Ins. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663.

DISCUSSION

¶ 10 The issue before this Court is whether Wages, as the father of a minor child who did not witness the accident that resulted in his child being seriously injured, is entitled to maintain an independent, non-derivative claim for negligent infliction of emotional distress. While the parties still dispute whether Pegar was negligent in causing Skylar's injuries despite Pegar's stipulated consent judgment, they nonetheless agree that no genuine issues of material fact exist relative to their summary judgment motions.

¶ 11 "The decision to recognize emotional distress as an independent tort has been in gradual evolution for courts nationwide, and Montana is no exception." So began this Court's analysis in Sacco, 271 Mont. at 220,896 P.2d at 417. We then engaged in a comprehensive summary of our case law and relevant case law from other jurisdictions, and analyzed the various elements of a NIED claim as applied by these jurisdictions. Ultimately, we developed the following rule: An independent cause of action for negligent or intentional infliction of emotional distress arises under circumstances where 1) serious or severe emotional distress to the plaintiff was 2) the reasonably foreseeable consequence of 3) the defendant's negligent or intentional act or omission. See Sacco, 271 Mont. at 234 and 237, 896 P.2d at 426 and 428.

¶ 12 Wages argues that he has met each element of the Sacco NIED rule. FNIC does not dispute Wages' claim that his emotional distress is "serious" as defined by the Restatement (Second) of Torts, § 46, comment j at 78; it argues, however, that because Wages did not witness Skylar's accident, his emotional distress was not reasonably foreseeable.

¶ 13 In response to FNIC's argument, Wages maintains that he need not have witnessed Skylar's accident for it to be foreseeable that he could suffer severe emotional distress as a result of Pegar's negligent driving and Skylar's injuries. He asserts that this Court in Sacco expressly rejected the "bystander rule" previously set forth in Versland v. Caron Transport (1983), 206 Mont. 313, 671 P.2d 583.

¶ 14 In Versland, we set forth the following test for establishing a claim for damages for NIED:

1. The shock must result from a direct emotional impact upon the plaintiff from the sensory and contemporaneous perception of the accident, as contrasted with learning of the accident from others after its occurrence.

2. The plaintiff and victim must be closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.

3. Either death or serious physical injury of the victim must have occurred as a result of the defendant's negligence.

Versland, 206 Mont. at 322-23, 671 P.2d at 588. Later, in Sacco, we said: "[w]e recognize that negligent infliction of emotional distress as an independent tort action under the narrow Versland analysis is archaic and does not fully address all plaintiffs who are deserving of relief." Sacco, 271 Mont. at 232, 896 P.2d at 425. We then proceeded to establish the rule stated in ¶ 11 above, and we expressly overruled Versland and other "prior cases dealing with independent causes of action involving negligent or intentional infliction of emotional distress, to the extent [such cases are] inconsistent with this opinion." Sacco, 271 Mont. at 239, 896 P.2d at 429. Thus, Wages argues, "sensory and contemporaneous perception of the accident" is no longer a required element of a NIED claim.

¶ 15 Wages maintains that Pegar had a duty to him and to Skylar under § 28-1-201, MCA, "to abstain from injuring the person... of another...." Moreover, Wages claims that Pegar negligently breached that duty by injuring Skylar and inflicting emotional distress on Wages. He strongly asserts that it is "indisputably foreseeable" that a parent could suffer serious emotional distress as a result of the type of accident in which Skylar was involved and the ongoing injuries with which he continues to suffer.

¶ 16 FNIC, in turn, argues that Wages' emotional distress was not foreseeable. It relies for its position on Treichel, which was decided after Sacco. In Treichel, we were asked to determine whether the "Each Person" or "Each Accident" limits of liability set forth in the State Farm policy held by plaintiff and her...