Payment of
distress claims clarified
By
Tony Anderson
Wisconsin Law Journal
July
9, 2003
The
state Supreme Court has determined that a claim for emotional
distress over the death of a loved one must be paid out of the
bodily injury limits for the person who died, in line with the
“limits of liability” wording on an insurance policy.
The
Supreme Court’s July 1 ruling affirms a 1997 court of appeals
ruling in another case, which established payment to bystanders
for emotional distress from an insurance policy’s “each
person” bodily injury limits for the person who died. Last
week’s high court ruling affirmed and applied that to situations
where the person alleging emotional distress was also injured
in the accident.
The
case is Joseph Mullen and the Estate of Renee K. Petit v. Douglas
J. Walczak, et. al., Case no. 02-0129. Justice William A. Bablitch
authored the court’s unanimous decision.
Background
According
to the decision, in 1996, Walczak, who was uninsured, caused an
automobile accident, which took Petit’s life and seriously
injured Mullen, her husband. Mullen witnessed his wife’s
death at the scene of the accident.
In
1999, Mullen commenced an action for the wrongful death of Petit
and his own personal injuries. Those injuries included physical
injuries as well as emotional distress from watching his wife
die.
Mullen’s
American Family policy’s “limits of liability”
section indicated that the “limit for ‘each person’
is the maximum for all damages sustained by all persons as the
result of bodily injury to one person in any one accident.”
That policy established uninsured motorist limits of $100,000
per person and $300,000 per accident.
American
Family settled the wrongful death claim for $100,000 and reached
an agreement that the claim for Mullen’s physical injuries
was $50,000. American Family and Mullen stipulated that his ongoing
emotional distress arose solely from witnessing Petit’s death.
As a result, American Family denied Mullen’s claim for emotion
distress, noting that it had paid the per person limit for Petit’s
death.
Mullen
contended that the emotional distress was part of his bodily injuries,
therefore, $50,000 remained under the UM policy’s limits.
Lincoln County Circuit Court Judge J. Michael Nolan agreed with
American Family, granting a motion for summary judgment. Nolan
observed that the decision in Estate of Gocha v. Shimon, 215 Wis.
2d 586, 573 N.W.2d 218 (Ct. App. 1997), limited Mullen’s
claim for emotional distress to his wife’s bodily injury
limits.
Mullen
appealed, maintaining that Gocha referred to the emotional distress
of “bystanders,” whereas he was an injured party. Since
Mullen and his wife were injured parties, he argued there should
be two liability limits. Looking at Gocha, the court of appeals,
in Mullen v. Walczak, 257 Wis.2d 929 (Ct. App. 2002), affirmed
the trial court decision.
“[B]ut
for the death of his wife, Mullen would not have an emotional
distress claim based on witnessing her death,” the court
observed. Later it concluded, “The parties settled Mullen’s
claim for his physical injuries and any emotional distress that
arose from them for $50,000. The only claim at issue is Mullen’s
distress from witnessing his wife’s death. Under the policy,
that damage is subject to her ‘each person’ limit.”
Per
Person Limit
Mullen
petitioned the Supreme Court for review.
The
stipulation about Mullen’s emotional distress formed the
focal point for the Supreme Court’s decision. The justices
looked at that stipulation while discussing the 1997 court of
appeals decision in Gocha.
Bablitch
wrote, “In this case, even though Mullen was himself physically
injured, his claim for emotional distress resulted from his wife’s
injury. Under the terms of the policy, any damages sustained by
all persons as the result of Petit’s death are covered by
her ‘per person’ limit. Consequently, the emotional
distress suffered by Mullen, solely as the result of witnessing
his wife’s death, must be compensated out of her ‘per
person’ limit, not Mullen’s.”
The
Gocha decision focused on whether the “each person”
or “each accident” liability limit applied to claims
of emotional distress by family members who witness an individual’s
death. Kyle Gocha was fatally injured when the bicycle he was
riding was struck by a car. Four family members who were not involved
in the accident, but witnessed it, filed claims for emotional
distress.
The
Gocha’s argued for payment under the “each accident”
limit since the emotional distress suffered by each family member
resulted in a separate action. The court of appeals found, “The
bodily injury to Kyle includes all injury and damages to others
resulting from Kyle’s bodily injury. But for the bodily injury
to Kyle, the Gochas would not have suffered any emotional injuries.”
(emphasis original)
Mullen
maintained that he was not a bystander the way Kyle’s family
was, but the Supreme Court still found the per person limits applied.
Bablitch
wrote, “We agree with Mullen that he was not a ‘bystander,’
as that term is used in Gocha, since he was physically injured
in the accident in which Petit was killed. We also agree with
Mullen that bodily injury may include emotional distress. Doyle
v. Engelke, 219 Wis. 2d at 288. However, even though we agree
with Mullen on these points, they are not dispositive for determining
whose ‘per person’ limit applies to Mullen’s claim
for emotional distress, resulting solely from witnessing the death
of his wife. Rather, we must look to the relevant policy language
and apply the limits of liability as provided in the policy.”
The
Supreme Court looked at the policy language, which limited per
person recovery to “all damages sustained by all persons
as the result of bodily injury to one person in any one accident.”
The court determined that Mullen’s emotional injury resulted
in a claim that had to be compensated out of Petit’s per
person limit.
|
What
the court held
Case:
Mullen v. Walczak, No. 02-0129
Issue:
Should coverage from an uninsured motorist policy for the
emotional distress of watching a spouse die in an automobile
accident be paid from the per person limits of the person
who died or the injured party who watched the death?
Holding:
When the claim for emotional distress comes solely from
witnessing the death of a spouse, payment should come from
the decedent’s per person limits as stated in the limits
of liability provision of the policy.
Counsel:
D. James Weis, Rhinelander, for plaintiff-appellant; John
A. Kramer, Michael J. Roman, Wausau, for defendant-respondent.
|
Finally,
the Supreme Court stressed the importance of the stipulation regarding
the source of Mullen’s emotional distress. Bablitch pointed
to the court’s 1972 decision in Redepenning v. Dore, 56 Wis.
2d 129, 143, 201 N.W.2d 580, where a mother tried to recover for
injuries from a car accident. Her daughter died and the mother’s
claim included emotional distress from her own injuries as well
as watching her daughter die. The high court upheld the jury’s
damage award, holding that it was impossible to separate the two
causes of emotional distress.
Affirmation
of Gocha
John
A. Kramer of Zalewski, Klinner & Kramer LLP, in Wausau, represented
American Family at oral arguments. Kramer noted the importance
of the Supreme Court’s decision in Mullen and its impact
on Gocha and several other court of appeals decisions, which followed
it.
“The
biggest significance it’s going to have is that it’s
going to affirm what the court of appeals said in the Gocha case,”
Kramer said. “So when you have a bystander claim where there
is no physical injury sustained by the claimant, clearly it’s
appropriate when there is emotional distress to take that out
of the bodily injury limits of the injured person or the decedent.”
Kramer
also noted the importance of the stipulation that Mullen’s
emotional distress arose from watching his wife die. Because of
that stipulation regarding the source of emotional distress, he
said, the court was able to apply Gocha, even though Mullen wasn’t
a bystander.
As
a result of this decision, Kramer said, a defense attorney dealing
with a case involving a husband and wife situation for a wrongful
death situation where there is an emotional component to it needs
to carefully determine the source of emotional injury. If the
emotional injury results from the other person’s injury,
it must be treated accordingly under the limits of liability language.
“You
have to be in tune with what the policy says as far as where the
limits of liability compensate in particular claims,” Kramer
said. “Be careful to discover where that emotional injury
comes from.”
D.
James Weis of Habush Habush & Rottier, S.C., in Rhinelander,
represented Mullen. He noted that “Gocha is now firm law”
as a result of this decision. He also expects that plaintiff’s
attorneys will approach discussions of emotional injury very cautiously
after this decision.
“In
light of this decision, a plaintiff’s lawyer should not stipulate
as to what damages are caused from the emotional distress of seeing
a loved one dying or a loved one who is injured and what damages
come from the distress relating to their own injuries,” Weis
said.
He
also sees the court’s statement about Redepenning as an important
clarification regarding the ability to separate the sources of
emotional distress.
“A
judge does not have a right to put two separate questions on a
verdict, which would divide out what damages are what,” Weis
said. “Whether damages are relating to the emotional distress
from watching somebody die or whether it’s emotional distress
from their own injuries. The court seems to very clearly say that
those are not severable.”
Kramer
challenged that interpretation stating, “I don’t read
it that broadly at all ... no doubt there are cases out there
where the source of emotional distress cannot be separated out.”
However, Mullen shows there are cases where it can be separated
out, he said. If the parties won’t do it by stipulation,
then it may be up to a court or a jury to make that determination.”
Tony
Anderson can be reached by email.
