Insurance Claims For Emotional Distress

Someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Springtown, Azle, Brock, Millsap, Cool, Willow Park, or anywhere else in Parker County would have a hard time understanding the coverages in their insurance policy. Most policies cover an insured when they are sued but that is not always the case.
The United States Court of Appeals for the 5th Circuit issued an opinion in a case in 1994, that says the insurance company did not have to defend a case where the insured was sued for “emotional distress.” The style of the case is Travelers Indemnity Company v. Holloway. Here is some background and facts.
This was a declaratory judgment action wherein the insurance carrier, Travelers Indemnity Company of Rhode Island, contended that it had no duty to defend its insured, Wanda Holloway, against a lawsuit for intentional infliction of emotional distress, since this claim was not covered by 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.
In its holding in this case, the Fifth 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 Fifth 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 Heath’s “rights” and 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.”
The relevance of this case is pointing out how Travelers was able to avoid, not only possibly paying on this claim, but also even having to defend the claim. This meant that (1) Holloway had to pay and defend the claim at her own expense and (2) that Holoway would be responsible for any judgment obtained by Heath.
There are a number of ways that an experienced Insurance Law Attorney could have been helpful in this case. Here is one of those ways that may have been helpful.
The Heath’s primary concern would usually be to make a financial recovery in the case. In order to have success in making a financial recovery, one of the things the Heath attorneys would want to do is to get Holloway’s insurance company involved in the claim. This would be done best by crafting the pleading in the lawsuit in such a way as to force Travelers to defend and possibly pay on the claim. The attorneys for Travelers would not have any incentive for doing this. A private attorney working on behalf of Holloway would make contact with the Heath attorneys and work with them to craft appropriate pleading to accomplish ends that would be beneficial to both of them.
The way to appropriately craft the pleading would have been to allege a “physical manifestation” of the emotional distress. Ways of doing this are many. One example is as simple as alleging that the emotional distress caused Heath to “throw up.”