PAYING A PREMIUM FOR AMBIGUOUS LANGUAGE – MISSOURI’S UNINSURED MOTORIST STATUTE AND EMOTIONAL DISTRESS DAMAGES

1. I. INTRODUCTION

With the passage of Missouri’s Uninsured Motorist Statute[1] the legislature established a bright line of mandatory coverage for uninsured motorists to protect insured drivers from those who failed to obtain automobile insurance. [2] Until 2009, however, insured motorists could only be compensated for damages that were the result of physical injury while being in the “zone of danger.”[3] With, Derousse v. State Farm Mut. Auto. Ins. Co., the court considered whether the Uninsured Motorists Statute was ambiguous in regards to emotional distress damages and whether negligent infliction of emotional distress was covered under Missouri’s Uninsured Motorist Statute. [4]

1. II. FACTS AND HOLDING

The body of an uninsured motorist was thrown from a vehicle during a crash and landed on the hood of Deborah Derousee. [5] The body of the victim, the uninsured motorist, rolled off the hood and was run over by the Claimant, Derousse. [6] When Derousse was able to stop her car, she recognized the uninsured motorist as the victims’ body lay by her car door. [7]

Derousse suffered no physical injuries or immediate medical treatment, but experienced an array of symptoms after the incident including nightmares, migraines, nausea, diarrhea, anxiety and headaches. [8] She was treated by her physician with Valium and Lexipro for depression and eventually sought treatment from three different therapists[9]

Derousse then made an uninsured motorist claim under her State Farm Insurance policy for damages related to her emotional distress. [10] The claim was denied by State Farm because the policy only provided for damages from bodily injury, which the policy defined as “bodily injury to a person and sickness, disease or death which results from it.” [11]

State Farm moved for summary judgment, which was granted in its favor. The trial court determined that Claimant had conceded she suffered no physical injuries, only emotional and mental distress. It concluded that her uninsured motorist coverage for “bodily injury” did not encompass coverage for “injuries solely of an emotional nature.” [12] Rather they determined that State Farm’s policy failed to proved uninsured motorist coverage for nonphysical injuries. The Supreme Court reversed the trial court, holding that Missouri’s uninsured motorist statute[13] requires coverage of all bodily injury, sickness, and disease. [14]

1. III. LEGAL BACKGROUND

Missouri’s adoption of the uninsured motorist statute allowed plaintiffs to recover damages from the uninsured if they incurred bodily injury, sickness and/or disease [15] however, Derousse’s recognition of emotional distress as “sickness” or “disease” is a new evolution in the recognition of emotional damages under Missouri law.[16] To understand Missouri law in this area we must examine both general tort principles and how they are applied to insurance policies.

1. GENERAL TORT PRINCIPLES AND EMOTIONAL DISTRESS

As early as 1881, Missouri required physical injury[17] to recover for emotional distress. The Court in Trigg v. St. Louis, K.C. & N. Ry. Co., held that an individual was not allowed to recover for the anxiety or suspense or for exposure to danger without suffering physical injury. [18] This so called “impact rule” remained the general rule in Missouri for nearly 100 years.[19] As the law evolved, Missouri began to recognize the need for recovery for negligent infliction of emotional distress and a liberalization of the impact rule began to occur. [20] In Bass v. Nooney Co.,[21] after considering the impact rule and its policy effects, the court determined the rule should be abandoned in favor of permitting plaintiff’s recovery for emotional distress provided the defendant should have realized his conduct created an unreasonable risk of causing the distress and said emotional distress or mental injury was medically diagnosable and of sufficient severity to be medically significant. [22] Bass however did not answer the question of “by-stander recovery”, where a plaintiff could recover for emotional distress suffered upon observing death or injury to a third party. [23] The Missouri Supreme Court finally addressed this question, nearly a decade later, in Asaro v. Cardinal Glennon Memorial Hospital.[24] In Asaro plaintiff sought damages for sever emotional distress she suffered because of the defendant doctor’s negligence that occurred during plaintiff’s five year old son’s heart surgery. [25] Here, the court determined that Bass did not apply because Ms. Asaro never faced an unreasonable risk of bodily harm, but rather sought recovery as a bystander. [26] As this was a question of first impression in Missouri, the court considered two competing tests, the Thing/ Dillon California test and the zone of danger test employed in New York.[27]

The zone of danger test was adopted by New York in Tobin v. Grossman. [28] This test only allows recovery of a plaintiff’s emotional damages from viewing injury to a third person if the defendant’s negligence threatened the plaintiff with bodily harm. [29] In contrast the Thing/Dillon test allowed a plaintiff to recover for emotional damages from viewing injury to a third party “caused by the negligence of another only if (1) the plaintiff is closely related to the victim; (2) the plaintiff is present at the scene of the injury…; (3) plaintiff suffers severe emotional distress as a result of viewing the injury to the third person and the defendant should have anticipated thee emotional distress because it is not an abnormal response.” [30]

The court in Asaro, relying on Tobin, held that in Missouri the plaintiff may recover for emotional distress resulting from observing physical injury to a third person only if the plaintiff is within in the zone of danger [31] The zone of danger test was the prevailing test for damages for emotional distress for nearly twenty years, until Jarrett v. Jones. [32]

In Jarrett, the plaintiff, a truck driver, sought to recover for emotional distress after, following an accident between himself and the defendant, he viewed the dead body of the defendant’s two year old daughter. First, the Missouri Supreme Court noted that Asaro did not limit the scope of bystander recovery for direct-victim plaintiffs but instead left intact the Bass analysis which allowed a bystander to recover for emotional distress from observing injury to a third party. [33] The court, in its holding expanded the direct-victim concept to include plaintiffs who suffer emotional distress when observing an injury or death of a third party, so long as the emotional distress was derived from an event in which the plaintiff was involved. [34]

B. INSURANCE POLICIES AND EMOTIONAL DISTRESS

Along with tort law, Missouri’s insurance law followed a similar path. The court strengthened uninsured motorist statutes by allowing the statute to override provisions in personal policies that were intended to limit damages resulting from uninsured motorists. [35] Initially insurers hoped to curb liability by requiring a physical-contact requirement for damages caused by uninsured motorists. [36] The Missouri Court of Appeals, in Dawson v. Dnney Parker[37], however held that the statutory requirement of uninsured motorist coverage existed regardless of any policy definition that physical contact occurs. [38] The court, in analyzing insurance policies to determine coverage, further defined the scope of bodily injury as it pertains to emotional distress,[39] however in analyzing policy language they determined that the phrase “bodily injury, sickness or disease” was ambiguous.[40] In a declaratory judgment action by Citizens Insurance Company against the insured Gary and Charlotte Leindecker, Citizens Insurance sought to have emotional distress excluded as a type of bodily injury in which the insured could recover under their home owners’ insurance policy. [41] The insurance policy, much like the policy in Derosse, defined bodily injury as “bodily harm, sickness or disease, including required care, loss of services and death that results.”[42] The court noted that the Eastern District has held the term bodily injury “as defined in two different insurance policies is limited to physical injury and does not include a claim for loss of consortium.”[43] Additionally, the Western District defined the term bodily injury as “bodily injury, sickness or disease sustained by a person including death resulting from any of these at any time” was ambiguous policy language” and physical harm was required, but where a policy is ambiguous it should be construed in favor of the insured.[44] The court held that as a matter of first impression and for the purposes of the insurance policy, emotional distress is not a type of bodily injury under which the insured could recover damages. [45]

1. IV. THE INSTANT DECISION

The majority in Derousse v. State Farm Mut. Auto. Ins. Co., focused on whether Insurer, State Farm, wrongly was granted summary judgment because its policy contravenes the requirements of section 379.203.1 by failing to provide uninsured motorist coverage for Derousse’s damages. [46] In its analysis the court focused on whether Ms. Derousse’s emotional distress damages were covered by her policy and whether the policy itself was ambiguous as to its coverage for emotional distress.

1. 1. Whether the Policy is Ambiguous

The court began its analysis by examining the insurance policy as compared to section 379.203.1[47] in order to determine whether the language of both the policy and the statute were ambiguous. The policy defined bodily injury as injury to a person and sickness, disease or death which results from it, while the statute provides broader language of bodily injury, sickness or disease, including death, resulting therefrom. [48] Because the language of the statute was broader, the court determined that the statutory language controlled and not the policy coverage language.[49] Next the court looked to the plain meaning of the statute and determined that the statute was ambiguous “to the extend that it is not evidence whether the word ‘bodily’ modifies only the word ‘injury’ or whether it also modifies the phrase ‘sickness or disease.’[50] Where a statute is ambiguous the court applies rules of statutory construction, the court resolves the ambiguity by determining legislative intent, or examining the plain and ordinary meaning of the words in the statute, using a dictionary. [51] The court, applying the rules of statutory construction, determined that the statute was ambiguous as to the definitions of the language in the statute; however, because of the comma after the phrase “bodily injury” the word “bodily” modified the word “injury”. [52] The court concluded that the statute uses a comma to separate bodily injury from the words that follow.[53] Because bodily modified only injury, the statute provided coverage for three distinct categories of harm which required uninsured motorist coverage: bodily injury, sickness, or disease. [54]

1. 2. Whether the Policy Covered Recovery for Emotional Distress

In determining the statutory construction the court noted that “if the word bodily were to modify only the word injury, then emotional distress damages unaccompanied by physical symptoms would be covered under the statute’s ‘sickness or disease’ language.”[55]

The court then proceeded to define these terms and using their plain meaning. [56] The court defined sickness as the condition of being ill…a disordered, weakened or unsound condition…a form of disease, and disease as an impairment of the normal state of the living animal…sickness, illness…a cause of discomfort or harm. [57] After considering the definitions of “bodily”, “injury”, “sickness” and “disease” they determined that the plaintiff could recover damages for emotional distress under Missouri’s uninsured motorist statute. [58] The court held that “considering these definitions, Claimant’s damages are compensable under the ‘sickness’ or ‘disease categories” but the court declined to discuss whether Claimant’s emotional distress damages met the definition of bodily injury as defined by the statute or the insurance policy. [59] As a result, the court held further that summary judgment was granted improperly because Claimant, Derousse, pleaded claims that were covered by section 379.203.1. [60]

1. V. COMMENT

The majority in Derousse aimed to alleviate the ambiguity in the statutory language of Missouri’s Uninsured Motorist Statute. [61] Missouri law has held that the policy of the Uninsured Motorist statute forbids the impairment of prescribed minimum uninsured motorist coverage by the insurer’s policy provision which attempts to limit liability.[62]This resolution is important because ambiguity in the statute had prevented Missourians from compensation for damages that were historically not recognized, such as emotional distress damages for bystanders or third parties who did not suffer physical harm as a result of their involvement in the accident or occurrence. [63] “Courts generally hold that in the context of purely emotional injuries without physical manifestations the phrase bodily injury is not ambiguous” and a majority of courts interpret the phrase to exclude purely emotional harm.[64] Here, the majority propounded that the statutory language was ambiguous as to what constituted a bodily injury, but also ambiguous with regard to sickness or disease. Moreover, they concluded that the policy was vague and as such, applying the reasoning of Lannigan[65], the broader language of the statute must control.[66] The majority ultimately concluded that emotional distress could be categorized as either sickness or disease under Missouri’s Uninsured Motorist Statute, thus alleviating the need for the victim to be directly involved in the accident and suffer physical harm. [67] The court noted that given the statutory construction and plain meaning definitions, they need not even consider whether the “severe mental and emotional distress” suffered by Ms. Derousse met the definition of bodily injury. [68]

This is a starkly different interpretation of the statute when compared to earlier Missouri decisions[69], in which emotional distress was not recognized unless it was accompanied by some physical harm. However the decision is more in line with the Restatement (Third) of Torts, in that Ms. Derousse’s emotional disturbance could be considered to be caused “occurs in the course of specified categories of activities, undertakings, or relationships in which negligent conduct is especially likely to cause serious emotional disturbance.”[70]

The majority seems, on its face, to set the standard for severe emotional distress bar quite high, though they do not establish a clear standard that emotional distress must reach to meet the statute. The majority clearly recognized that, first Ms. Derousse was the victim of an accident involving an uninsured motorist, but additionally she was a victim of rare circumstances. She did not suffer emotional distress from being in a collision, but rather from a body being thrown from a car in front of her on to her hood which she then proceeded to run over. While this would be traumatic in and of itself, the severity increases when Ms. Derousse realized she recognized the individual whom she had run over. [71] These factors, when taken as a whole, would be indicative of an event that could cause severe emotional distress. The majority, however, does not outline the fact that emotional distress need rise to this severe level, instead they write that the Uninsured Motorist Statute “requires coverage for all bodily injury, sickness and disease.”[72] The majority goes to great lengths to resolve the ambiguity of the statutory language, but does not establish the standard emotional distress must rise to, to meet their definitions.

Yet by clearing up the statute they have created significant policy implications. Judge Wolff, in his concurrence, seems to recognize this dilemma presented in the language of the majority. He writes, “The policy implications of today’s decision, of course, are beyond the scope of this Court’s interpretation of the statute.” [73] The concurrence states that while the ambiguity must be cleared up, and is by the majority, the legislature should take it upon themselves to address the vast policy concerns that the inclusion of emotional distress as sickness and/or disease as well as coverage for “all” sickness and disease could have on insurance costs, premiums and coverage.[74] Because the majority held that “all” sickness and disease are required to be covered by the statute, and through their definitions any emotional distress could be categorized as a disease or sickness, there could be a firestorm of litigation. Any and every Insured’s claim could include damages for pain and suffering, emotional distress and the like. The majority however, appears to fail to recognize this dilemma. They instead focus on the fact that the statute is ambiguous in its definitions, clean up the language of the statute, and then state that Ms. Derousse’s severe anxiety and severe emotional distress fall into the category of sickness or disease. [75]

1. VI. CONCLUSION

The majority decision that all bodily injury, sickness or disease must be covered by Missouri’s Uninsured Motorist Statute could open the floodgates to litigation for damages that are not necessarily quantifiable. Judge Wolff’s concurrence warns that the legislature need be aware of this problem if they are to adequately and accurately compensate victims of uninsured motorists. While the policy of the statute makes sense, protecting drivers from those who choose to act negligently and then cannot compensate those whom they harm, is a good policy, the incorporation of all emotional distress damages without a standard by which they must meet leaves the door open for Plaintiff’s to claim just about anything as simple as severe anxiety, to depression, to insomnia in order to collect further damages from insurance companies. This in turn would force the insurance companies to raise premiums and the cost of this litigation would be shifted back to the insured in the long run.