State Farm Mutual Automobile Insurance Co. v. D.L.B. Ex Rel. Brake

DARDEN, Judge,

dissenting.

I would respectfully dissent. I believe that the only issue we must consider is whether State Farm’s insurance policy covers the claim asserted on behalf of D.L.B. against Wallace. As such, only the language of State Farm’s policy and Indiana law on contract interpretation should govern. Therefore, I find the United States Court of Appeals for the Seventh Circuit’s opinion in Allstate Ins. Co. v. Tozer, 892 F.3d 950 (7th Cir.2004) particularly instructive.4

The Tozer court determined that under Indiana law, “the question of whether the siblings’ claims fall under the ‘each person’ limit of liability ... is an issue of contract interpretation,” and therefore looked to the “terms of the policy to ascertain the scope of its coverage.” Id. at 953. Upon review of the policy’s terms, the Tozer court found that

the siblings’ claims do not amount to separate “bodily injuries” under the policy. A reasonable interpretation of the policy’s definition of bodily injury— *685“physical harm to the body, sickness, disease, or death” — does not include emotional distress, at least where, as here, the distress is not caused by physical trauma.

Id. The Tozer court continued:

Seeking to avoid this result, defendants point to cases from other jurisdictions holding that emotional distress qualifies as a separate bodily injury under policies similar to the one at issue in this case.... These cases frame the issue as whether the underlying tort— negligent infliction of emotional distress — is an independent or derivative cause of action.[ ] Because negligent infliction of emotional distress is an independent tort in those jurisdictions, that line of authority reasons that a claim of emotional distress also constitutes a separate “bodily injury” under the terms of an insurance policy.... Defendants assert that the Indiana Supreme Court would follow this line of reasoning and, given that negligent infliction of emotional distress is an independent tort in Indiana ... hold that the siblings’ claims are separate bodily injuries under the policy....
We disagree.... [Accepting the approach advocated by defendants would require us to ignore the settled principle of Indiana law that the construction of an insurance policy is a matter of contract interpretation.
... [T]he characterization of a claim as derivative or independent is irrelevant to whether the claim qualifies as a separate bodily injury under an insurance policy.
* * *
... [T]he extent of an insurer’s liability is a matter of contract interpretation governed by the terms of the policy.

Id. at 954-55 (internal citations and footnote omitted).

In this case, State Farm’s policy defines “bodily injury” as a “bodily injury to a person and sickness, disease or death which results from it.” (App.29). “Bodily injury” means “[pjhysical damage to a person’s body.” BLACK’S LAW DICTIONARY 801 (8th ed.2004). “Bodily” means “of or relating to the body[.]” Merriam-Webster Dictionary at http://vnm.m-w. com/dictionary/bodily (August 22, 2006). Injury means “hurt, damage, or loss sustained[.]” Id. Given these definitions, I agree with Armstrong v. Federated Mut. Ins. Co., 785 N.E.2d 284 (Ind.Ct.App.2003), trans. denied, which found that “the' phrase ‘bodily injury’ connotes physical damage to the body such as would result from an impact upon the body by a physical force.” 785 N.E.2d at 292. Thus, a person who has suffered a direct physical impact to his or her body may recover under State Farm’s policy. I do not find that D.L.B. suffered an impact upon his body.

I next question whether a person is entitled to recovery for sickness, disease or death, without an accompanying bodily injury, under State Farm’s policy. Again, State Farm’s policy provides coverage for “bodily injury to a person and sickness, disease or death which results from it.” (App.29). The word “and” is conjunctive. Thus, pursuant to the policy, to recover under State Farm’s policy for sickness, disease or death, a person must also have had a bodily injury, from which the sickness, disease or death arose. This is consistent with other cases where this court, in interpreting other insurance policies, has held that “the term ‘bodily injury’ does not include emotional damage that does not arise from a bodily touching.” Wayne Township Bd. of Sch. Comm’rs v. Indiana Ins. Co., 650 N.E.2d 1205, 1210 (Ind.Ct.App.1995), trans. denied; see also Armstrong, 785 N.E.2d at 293 (stating that even if loss of love and companionship *686were considered a bodily injury, the plaintiffs could not recover under insurance policy because they “suffered no physical impact”). Accordingly, I find that under the language of State Farm’s policy, liability coverage for bodily injury is not available to D.L.B. as he suffered no physical impact or touching to his body.

Although he did not suffer a direct impact to his body, D.L.B. argues that his claim constitutes a bodily injury entitled to coverage because his emotional distress was accompanied by physical manifestations. I disagree.

" The physical manifestations are a result of D.L.B.’s emotional distress. They are not a result of an impact, force or harm to D.L.B.’s body. Therefore, I cannot say they constitute bodily injury.

Furthermore, even if the emotional distress, resulting in physical manifestations, constituted a bodily injury, it is clear that D.L.B. only suffered such bodily injury as a result of witnessing Seth’s bodily injury. State Farm limits its liability as follows: “Under ‘Each Person’ is the amount of coverage for all damages due to bodily injury to one person. ‘Bodily injury to one person’ includes all injury and damages to others resulting from this bodily injury.” (App.32) (emphases in original and added). Clearly, D.L.B.’s damages resulted from Seth’s bodily injury, and his claim therefore is subject to the $100,000 limit applicable to Seth’s injuries. Because State Farm has paid $100,000 for all injuries and damages resulting from Seth’s injuries, I find that State Farm’s liability for additional claims resulting from Seth’s injuries, including D.L.B.’s claim, has been exhausted.

Finally, even assuming that D.L.B.’s emotional distress constituted a bodily injury, I assert that D.L.B. cannot be subject to the liability limit of $300,000 for “Each Accident” under State Farm’s policy. The policy provides that “[ujnder ‘Each Accident’ is the total amount of coverage, subject to the amount shown under ‘Each Person’, for all damages due to bodily injury to two or more persons in the same accident.” (App.32) (emphases in original and added). Subject to the limits imposed by the “Each Person” provision of the policy, the “Each Accident” provision limits State Farm’s total liability for all damages due to bodily injury to $300,000. The “Each Accident” allowance, however, is available only to persons “in the same accident.” (App.32) (emphasis added). In this case, D.L.B. witnessed the accident between Wallace and Seth. D.L.B., as a bystander, was not in the accident. Therefore, I find that coverage under the limits for “Each Accident” is not available to D.L.B.5

. In Tozer, three siblings were involved in an automobile accident. One brother sustained severe injuries and died. His siblings sustained minor injuries. The automobile owner had insurance through Allstate Insurance Company ("Allstate”). The insurance policy limited Allstate's liability for bodily injury claims to $100,000 for "each person” and $300,000 for "each accident.” The policy defined bodily injury as " 'physical harm to the body, sickness, disease or death.’ " 392 F.3d at 953. The policy limited its liability to $100,000 for "each person” and $300,000 for "each accident” and defined those limits as follows:

The limit stated for each person for bodily injury is our total limit of liability for all damages because of bodily injury sustained by one person, including all damages sustained by anyone else as a result of that bodily injury. Subject to the limit for each person, the limit stated for each accident is our total limit of liability for all damages for bodily injury.

Id. (emphasis omitted).

Allstate paid the brother's estate $100,000 under the insurance policy. The siblings then filed a complaint, seeking damages for emotion distress caused by seeing their brother’s injuries and death. Allstate filed suit in the United States District Court for the Southern District of Indiana, seeking a declaration that the siblings’ claims were subject to the $100,000 "each person” limit of liability applicable to their brother’s injuries and that it had exhausted its liability by paying his estate $100,000. The district court "interpreted the policy’s definition of bodily injury to include a claim for emotional distress so long as the plaintiff sustained a physical impact at the time of the event triggering the claim, even if that impact did not cause the emotional distress.” 392 F.3d at 951. Accordingly, the district court held that each sibling had a separate bodily injury claim under the policy. Allstate appealed.

. Of course, my opinion does not imply that emotional distress to a person, which arises from that person's bodily harm or injury, is not covered by State Farm’s policy. Furthermore, it does not imply that D.L.B. does not have a claim for negligent infliction of emotional distress against Wallace under Groves v. Taylor, 729 N.E.2d 569 (Ind.2000).