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IN THE SUPREME COURT OF THE STATE OF HAWAI'I
Electronically Filed
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Supreme Court
SCCQ-11-0000329
ELIZABETH MILLER and MARTIN KAHAE, as Co-Personal
28-DEC-2011
Representatives of the Estate of Penelope (Penny) 09:32 AM
Spiller,
Deceased, and as Party-Plaintiffs for Penelope (Penny) Spiller,
Plaintiffs,
vs.
HARTFORD LIFE INSURANCE COMPANY, a Connecticut Domestic
For-Profit Corporation and MEDAMERICA INSURANCE COMPANY,
a Pennsylvania Domestic For-Profit Corporation,
Defendants.
NO. SCCQ-11-0000329
CERTIFIED QUESTION FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI'I
(CIV. NO. 09-00381)
DECEMBER 28, 2011
RECKTENWALD, C.J., NAKAYAMA, ACOBA, DUFFY, AND MCKENNA, JJ.
OPINION OF THE COURT BY DUFFY, J.
The United States District Court for the District of
Hawai'i (District Court) certified the following questions of law
to this court:
1. If an insurer commits bad faith, must an insured prove
she suffered substantial economic or physical loss
caused by the bad faith to recover emotional distress
damages caused by the bad faith?
2. If an insured must suffer substantial economic or physical
loss to qualify for emotional distress damages caused by
insurer bad faith, what does Hawai'i law require as to how
that loss must be proven?
3. If a plaintiff must prove substantial economic or physical
loss, must any emotional distress damages bear a reasonable
relationship to that loss?
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Upon review of the Certified Questions, this court determined
that “the First Question -- and only that question -- is amenable
to answer by this court pursuant to Hawai'i Rules of Appellate
Procedure (HRAP) Rule 13, which requires that the question be
‘determinative of the cause.’” Order on Certified Questions
at 1. We now modify the question presented to (1) limit its
applicability to first-party insurance contracts, and (2) delete
“substantial” from “substantial economic or physical loss.” The
question now reads as follows:
If a first-party insurer commits bad faith, must an insured
prove the insured suffered economic or physical loss caused
by the bad faith in order to recover emotional distress
damages caused by the bad faith?
Based on the analysis below, we hold that if a first-
party insurer commits bad faith, an insured need not prove the
insured suffered economic or physical loss caused by the bad
faith in order to recover emotional distress damages caused by
the bad faith.
I. BACKGROUND
A. Factual Background
This lawsuit arises from an insurance contract between
Plaintiff Penelope (Penny) Spiller (“Ms. Spiller”)1
and
1
Ms. Spiller was the original Plaintiff in this action, filed July
9, 2009. She lost her battle with cancer on September 10, 2010. On
December 21, 2010, Elizabeth Miller and Martin Kahae were substituted as the
“Co-Personal Representatives of the Estate of Penelope (Penny) Spiller,
Deceased, and as Party-Plaintiffs for Penelope (Penny) Spiller.” Although two
continue...
2
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Defendants Hartford Life Insurance Company (“Hartford”) and
MedAmerica Insurance Company (“MedAmerica”).
1. Ms. Spiller’s Long-Term Care Policy and Her Cancer
Diagnosis
In 2001, Ms. Spiller, a State of Hawai'i employee on
the island of Moloka