Emotional Distress Covered by UM Policies

8/26/2010 - The Missouri Supreme Court has opened the doors to permit the recovery of damages under uninsured motorist (UM) policies for emotional distress in cases in which the insured has sustained no bodily injury.  The Supreme Court’s decision may impact areas of insurance law beyond the UM context and permit courts to conclude that liability coverage for “bodily injury” may be interpreted to afford coverage for strictly mental injuries.

In DeRousse v. State Farm Mut. Auto. Ins. Co., 298 S.W.3d 891 (Mo. banc 2009), a body was ejected from an uninsured motorist’s vehicle during an accident.  The body hit the windshield of Debra DeRousse’s car as she drove down the highway, rolled off her hood, and fell under her car.  Once she was able to stop, she saw the body and realized she knew the victim.  While she was not physically injured and sought no medical treatment, DeRousse suffered emotional and mental injuries following the accident, including vomiting, nightmares, migraines, nausea, and anxiety. She was prescribed medication for anxiety and depression and eventually received counseling.

DeRousse sought coverage for her mental injury under her State Farm UM coverage.  State Farm denied her claim and she sued for coverage.  The trial court granted summary judgment for State Farm, finding UM coverage for “bodily injury” did not encompass emotional and mental distress.  The Missouri Court of Appeals, Eastern District, affirmed the trial court’s summary judgment for State Farm, rejecting DeRousse’s argument that there was a growing trend in the case law that defined “bodily injury” to include mental or emotional injury without physical manifestations.  DeRousse v. State Farm Mut. Auto. Ins. Co., 2009 WL 792066 (Mo. App. E.D. 2009).

DeRousse, in support of her claim, relied on a Western District case, Lanigan v. Snowden, 938 S.W.2d 330 (Mo. App. W.D. 1997); however, the Eastern District found that decision to be in the minority and further found it distinguishable because State Farm’s definition for “bodily injury” was unambiguous in contrast to the definition at issue in Lanigan.

The State Farm policy defined “bodily injury” as “bodily injury to a person and sickness, disease or death which results from it.”  The Eastern District found the definition clearly referred to conditions of the body and excluded mental suffering or emotional distress, citing Citizens Ins. Co. of America v. Leiendecker, 962 S.W.2d 446 (Mo. App. E.D. 1998), as the majority rule in Missouri.  The court in Leiendecker interpreted a homeowner’s policy and, relying on two older Eastern District cases, held that “bodily injury,” as defined by the policy, required some physical harm to the person claiming bodily injury to establish coverage.

DeRousse further argued the trial court’s ruling for State Farm should be reversed because the court’s interpretation of her policy did not comply with the Missouri Motor Vehicle Financial Responsibility Law, Section 379.203.1, R.S.Mo. 2000.  Section 379.203.1 requires auto liability insurers to provide UM coverage for “bodily injury, sickness or disease, including death” caused by the owners and operators of uninsured motor vehicles.  (Emphasis added.)

Again, the Eastern District disagreed, finding no conflict with the statute, which the court found to be “virtually identical” to State Farm’s “bodily injury” definition.

The Missouri Supreme Court saw the question differently, however, and sided with DeRousse.  The Supreme Court held the trial court erred in granting summary judgment for State Farm because the policy failed to provide the coverage mandated by state law.  At oral argument, State Farm conceded its policy language was not as broad as Section 379.203.1’s mandate.  Because the policy’s language was less broad than that of the statute, the Court held the statute’s broader language controlled.

The Supreme Court further found the statute’s language to be ambiguous because it was not evident to the Court whether the word “bodily” modified only the word “injury” or whether it also modified the phrase “sickness or disease.”  Applying statutory construction rules, the Supreme Court held the term “bodily” modifies only “injury” and not the phrase “sickness or disease, including death.”  As a result, the Supreme Court concluded DeRousse’s mental injuries were compensable under the statute’s “sickness” or “disease” prongs.  The Supreme Court reached essentially the same result as in Lanigan v. Snowden where the Western District found the policy’s “bodily injury” definition to be ambiguous because it was unclear whether “bodily” also modified “sickness or disease.”

It is unclear whether the Missouri Supreme Court’s decision will be limited to cases involving UM benefits.  However, as the Missouri Supreme Court has now decided that the word “bodily” does not modify “sickness or disease,” we anticipate that claimants will now rely on the Court’s decision to seek coverage for mental and emotional harm, in the absence of any actual bodily injury, under other types of insurance policies as well.

For example, in the Leiendecker case, the insureds sought coverage for emotional distress under their homeowner’s policy after their life insurance broker had defrauded them.  The definition of “bodily injury” under the policy was similar to that in Section 379.203.1, R.S.Mo. -- “bodily harm, sickness or disease….”  Leiendecker, 962 S.W.2d at 451.  While in that case, the Court rejected the insured’s argument that the definition in the policy was ambiguous, the DeRousse decision will likely impact future decisions unless the policy definition includes specific language excluding mental injury and emotional distress and does not conflict with any applicable statutory law.

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