Insurance Claims And Emotional Distress

Damages and coverages available under an insurance policy will vary depending on the circumstances and policy language. As it relates to a claim for emotional distress, a 1994, 5th Circuit Court of Appeals case is a good read. The opinion is styled, Travelers Indemnity Co. v. Holloway.
In this declaratory judgment action, the insurance carrier, Travelers contended that it had no duty to defend its insured, Wanda Holloway, against a lawsuit for intentional infliction of emotional distress, since it was not covered under the policy. Holloway, the mother of a junior high school student competing for a cheerleader position, allegedly plotted to kill Heath, the mother of one of her daughter’s competitors. The mother of the competitor brought suit against Holloway alleging “outrageous conduct causing severe emotional distress” or “intentional infliction of emotional distress.” Holloway sought a defense from Travelers. Travelers argued that Holloway was not entitled to a defense and that there was no coverage, since (1) the conduct did not constitute an “occurrence” under the policy, (2) the conduct was excluded from coverage as intentional conduct, and (3) the conduct was not alleged to have caused “bodily injury” as defined by the policy.
The 5th Circuit affirmed the District Court’s opinion that there was no duty to defend or coverage since there was no allegation or evidence of a bodily injury.
In so holding, the 5th Circuit relied upon the following definition of bodily injury in the policy:
The term ‘bodily injury’ means bodily injury, sickness or disease, including death resulting therefrom, sustained by any person.
The Court acknowledged that in order to determine whether Travelers had a duty to defend, the Facts alleged in the complaint must be examined to see whether they fall within the language of the policy. The Second Amended Complaint in the Heath suit contained only allegations of “extreme pain, suffering, emotional anguish, and emotional trauma” and allegations that Holloway “infringed” on the Heaths’ “rights” and that they suffered “severe emotional distress.”
Noting that Texas law had not yet decided the issue of whether “bodily injury” as defined by insurance policies refers to emotional injury in such situations, the Court held that the policy’s definition of “bodily injury” unambiguously excluded the types of nonphysical injuries asserted by the Heaths. The Court then noted that this holding comports with the “overwhelming weight of authority from other states.”