IN THE UNITED STATES DISTRICT COURT
 

NORTHERN DISTRICT OF TEXAS
 

DALLAS DIVISION
 

FRED HARALSON, ET AL. §
 

§ 

Plaintiffs, § 

§ NO.3-05-CV-2513-BD 

VS. § 

§ (Consolidated With 

STATE FARM MUTUAL AUTOMOBILE § No.3-06-CV-1075-BD) 

INSURANCE COMPANY § 

§ 

Defendant. § 

MEMORANDUM OPINION AND ORDER 

Defendant State Fann Mutual Automobile Insurance Company ("State Fann") has filed a 

renewed motion for judgment as a matter of law or, in the alternative, motion for judgment in this 

civil action brought by its insured, Virginia Haralson, seeking underinsured motorist ("VIM") 

benefits under a standard Texas personal automobile policy. For the reasons stated herein, the 

motion is granted in part and denied in part. 

I. 

On March 6, 2005, Fred Haralson sustained serious bodily injuries when the car he was 

driving collided with a vehicle that ran a red light. (1t. PTO at 6 & 11, 3). His wife, Virginia, and 

daughter, Christina, were following behind in another car and witnessed the collision. (ld. at 11, 

5). As a result of her contemporaneous observance ofthe accident and seeing her injured husband 

trapped inside his wrecked car, Virginia suffered extreme emotional distress manifested by a variety 

of physical symptoms, including headaches, migraines, stomachaches, nausea, and sleeplessness. 

(See Def. Mot. at 4; P1f. Resp. at 1-2). 
Following the accident, the Haralsons settled their claims against the driver ofthe other car, 

Carmen Andrade-Silva, who had liability coverage in the amount of $20,048 per person or $40,048 

per incident. (See 1t. PTO at 11, 10). Fred Haralson accepted the per person policy limit of 

$20,048. (ld. at 11, 12). Virginia and Christina jointly settled their claims against Andrade-Silva 

for $18,000. (ld.). The Haralsons then filed a claim for UIM benefits under their policy with State 

Farm. The relevant portion of the policy provides: 

We will pay damages which a covered person is legally entitled to 

recover from the owner or operator of an uninsured motor vehicle 

because of bodily injury sustained by a covered person caused by an 

accident. 

(Def. Mot. App. at 28). It is undisputed that the Haralsons are "covered persons" and that the State 

Farm policy provides UIM coverage in the amount of $50,000 per person or $100,000 per accident. 

(See 1t. PTO at 11, 13). Although State Farm tendered the $50,000 per person policy limit to Fred 

Haralson,l it refused to pay Virginia because, inter alia, she did not sustain a "bodily injury ... 

caused by [the] accident." (See id. at 7 & 12, 15). 

Unable to resolve their claims through negotiation, the Haralsons filed separate lawsuits 

against State Farm in state district court. State Farm timely removed both cases to federal court, 

where they were consolidated into one action.2 In their most recent complaint, the Haralsons assert 

claims for breach of contract and violations of the Texas Insurance Code. (See F. Haralson Third 

) Fred refused to accept the original settlement check tendered by State Farm because it was made payable to 

"Robert Fred Haralson and Virginia Haralson, Individually and as Husband and Wife, & Law Offices ofVan Shaw, Their 

Attorney." (See Jt. PTO at 12, 16). Although State Farm subsequently reissued a $50,000 check to Fred and his 

attorney, that check also was rejected, ostensibly because State Farm waited nearly 10 months before reissuing the check 

in proper form. (See id. at 7 & 12, ~~ 18-21). That delay is the subject of Fred's claims for breach of contract and 

violations ofthe Texas Insurance Code. (Id.). 

2 Federal subject matter jurisdiction is proper because the Haralsons and State Farm are citizens of different 

states and the amount in controversy exceeds $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(1). 
Am. CompI. at 3, ~~ 4.1-4.2; V. Haralson Sec. Am. CompI. at 2-3, ~~ 4.1-4.2).3 Because an insurer's 

contractual obligation to pay UIM benefits does not arise until liability and damages are determined, 

see Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 818-19 (Tex. 2006), the court ordered 

separate trials--one trial on liability and damages and, if necessary, a second trial on the Haralsons' 

contract and extracontractual claims. Prior to the first trial, State Farm stipulated that the 

underinsured driver, Andrade-Silva, was liable for the accident and that Fred Haralson incurred 

medical expenses in excess of$1 00,000. (See Jt. PTO at 11, ~~ 8-9). The issues ofwhether Virginia 

sustained damages because of "bodily injury" and, if so, the amount of those damages were tried to 

a jury on October 9-10, 2007. After hearing the evidence, the jury found that Virginia sustained a 

"bodily injury" as a result ofwitnessing the automobile accident involving her husband and awarded 

$25,000 in compensatory damages, $15,000 for loss ofconsortium, and $1,000 for loss ofhousehold 

servIces. 

State Farm now moves for judgment as a matter oflaw on the grounds that: (1) Virginia did 

not suffer a "bodily injury" as required by the policy; (2) the evidence is legally insufficient to 

support a claim for bystander damages; (3) loss ofhousehold services and loss of consortium are not 

"bodily injuries" as a matter of law; and (4) any recovery should be offset by the amount of money 

available from the underinsured driver. The motion has been fully briefed by the parties and is ripe 

for determination. 

3 Section 541.003 ofthe Texas Insurance Code provides: 

A person may not engage in this state in a trade practice that is defined in this 

chapter as or detennined under this chapter to be an unfair method ofcompetition 

or an unfair or deceptive act or practice in the business of insurance. 

TEX. INS. CODE ANN. § 541.003 (Vernon 2008). One ofthe unfair or deceptive acts or practices prohibited by the statute 

is "failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement ofa claim with respect to which 

the insurer's liabili has become reasonably clear." 'd. § 541.060(a)(2)(A). 
II.
 

Judgment as a matter oflaw is appropriate if "there is no legally sufficient evidentiary basis 

for a reasonable jury to find for that party on that issue." Cano v. Bexar Co., No. 07-50921, 2008 

WL 2329203 at *1 (5th Cir. Jun. 4, 2008), quoting FED. R. CIY. P. 50(a)(l); see also Conkling v. 

Turner, 18 F.3d 1285, 1300 (5th Cir. 1994). The court "must draw all reasonable inferences in favor 

of the nonmoving party, and it may not make credibility determinations or weigh the evidence." 

Cano, 2008 WL 2329203 at *1, quoting Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 

150, 120 S.Ct. 2097, 2110, 147 L.Ed.2d 105 (2000). A Rule 50 motion should be granted only if 

"the facts and inferences point so strongly and overwhelmingly in favor of the defendant[ ] that 

reasonable jurors could not have arrived at the verdict reached in this case[.]" Fontenot v. Cormier, 

56 F.3d 669,673 (5th Cir. 1995), citing Crist v. Dickson Welding, Inc., 957 F.2d 1281, 1285 (5th 

Cir.), cert. denied, 113 S.Ct. 187 (1992). 

A. 

As a preliminary matter, Virginia contends that State Farm has failed to meet the procedural 

requirements for bringing a renewed motion for judgment as a matter of law. Under the federal 

rules: 

If the court does not grant a motion for judgment as a matter of law 

made under Rule 50(a), the court is considered to have submitted the 

action to the jury subject to the court's later deciding the legal 

questions raised by the motion. No later than 10 days after the entry 

ofjudgment ... the movant may file a renewed motion for judgment 

as a matter oflaw and may include an alternative or joint request for 

a new trial under Rule 59. 

FED. R. CIY. P. 50(b); see also Giles v. General Electric Co., 245 F.3d 474, 481 (5th Cir. 2001). 

Although State Farm made an oral motion for judgment as a matter of law at the close of the 

evidence, Virginia argues that the motion was procedurally deficient because it was not made in 
written fonn. However, there is no requirement that a Rule 50(a) motion be reduced to writing. The 

only requirement is that the moving party provide the court with a sufficient basis for ruling on the 

grounds raised in the motion. See, e.g. Tharling v. City ofPort Lavaca, 329 F.3d 422,426 & nA 

(5th Cir. 2003) (oral motion for judgment as a matter oflaw held sufficient); see also FED. R. CIv. 

P. 7(b) (motion must be in writing "unless made during a hearing or trial"). 

Virginia further contends, without citation to the record, that State Farm asserts grounds in 

its renewed motion for judgment as a matter oflaw that were not included in its Rule 50(a) motion. 

The court disagrees. At the close ofthe evidence, State Farm moved forjudgment as a matter oflaw 

on the grounds that Virginia did not suffer a "bodily injury" as required by the policy and that the 

evidence was legally insufficient to support a claim for bystander damages. Those are the same 

grounds raised in the instant motion. 

B. 

The principal argument made by State Farm, and the one advanced throughout this litigation, 

is that the physical symptoms experienced by Virginia are not "bodily injuries" covered by the VIM 

provision ofthe insurance policy. The State Fann policy does not define "bodily injury." The court 

therefore looks to Texas law for guidance. In Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 

(Tex. 1997), the Texas Supreme Court held that the tenn "bodily injury," which was defined by the 

policy as "bodily harm, sickness or disease:" 

does not include purely emotional injuries ... and unambiguously 

requires an injury to the physical structure of the human body. Our 

decision comports with the commonly understood meaning of 

"bodily," which implies a physical, and not purely mental, emotional, 

or spiritual harm. . . WEBSTER'S THIRD NEW INTERNATIONAL 

DICTIONARY 245 (1966) also defines "bodily" as "having a body or a 

material fonn: physical, corporeal." Likewise, BLACK'S LAW 

DICTIONARY 175 (6th ed. 1990) defines "bodily" as "[p]ertaining to 
or concerning the body; of or belonging to the body or the physical 

constitution; not mental, but corporeal." 

Cowan, 945 S.W.2d at 823. Thus, a purely emotional injury, unaccompanied by physical symptoms, 

does not qualify as a "bodily injury" in the insurance context. Id.; see also Southern Farm Bureau 

Casualty Ins. Co. v. Franklin, No. 07-05-0 134-CV, 2006 WL 1373359 at *1 (Tex. App. -- Amarillo, 

May 19,2006, writ denied) ("[T]he phrase 'bodily injury' appearing in an insurance policy does not 

encompass purely emotional injuries such as mental anguish, unless the policy states otherwise."). 

However, the evidence in this case shows that Virginia suffered extreme emotional distress 

accompanied by a variety of physical symptoms, including headaches, migraines, stomachaches, 

nausea, and sleeplessness, as a result of witnessing the accident in question. The Texas Supreme 

Court has never decided whether physical manifestations of emotional distress constitute a "bodily 

injury" sufficient to trigger coverage under a standard insurance policy. See Cowan, 945 S.W.2d at 

826 n.5 (expressly declining to consider whether "headaches, stomachaches, and sleeplessness, as 

proved at trial, would be a bodily injury sufficient to invoke Trinity's duty to indemnify"). Different 

panels of the same intermediate Texas appeals court have reached opposite conclusions. Compare 

Ginn v. Texas Farmers Ins. Co., No. 3-96-0264-CV, 1998 WL 717120 at *5-6 (Tex. App. -- Austin 

1998, no writ) (sleeplessness, nightmares, and nausea resulting from mental anguish were not "bodily 

injuries" covered by VIM policy) with Trinity Universal Ins. Co. v. Cowan, 906 S.W.2d 124, 130-31 

(Tex. App. -- Austin 1995), rev'd on other grounds, 945 S.W.2d 819 (Tex. 1997) (headaches, 

stomachaches, and loss of sleep resulting from mental anguish were "bodily injuries" covered by 

standard Texas homeowners' policy). The court must therefore make an Erie-guess as to how the 

Texas Supreme Court would decide the question. See American International Speciality Lines Ins. 

Co. v. Canal Indemnity Co., 352 F.3d 254, 260 (5th Cir. 2003). 
Erie requires that, in a diversity case, a federal court must follow state law on substantive 

matters not governed by the Constitution or federal law. Batts v. Tow-Motor Forklift Co., 66 F.3d 

743, 750 (5th Cir. 1995), cert. denied, 116 S.Ct. 1851 (1996). The court need not be prescient. Id. 

Instead, "[w]hen confronted with an unsettled issue of state law, a federal court sitting in diversity 

must make its best effort to predict how the state courts would decide the issue." Id., quoting 

DeWeerth v. Baldinger, 38 F.3d 1266, 1273 (2d Cir.), cert. denied, 115 S.Ct. 512 (1994). "While 

decisions ofintermediate state appellate courts provide guidance, they are not controlling." United 

Teacher Associates Ins. Co. v. Union Labor Life Ins. Co., 414 F.3d 558,565 (5th Cir. 2005). In 

making an Erie-guess, the court can consider, among other sources, "treatises, law review 

commentaries, decisions from otherjurisdictions whose doctrinal approach is substantially the same, 

and 'the majority rule.'" Jackson v. Johns-Manville Sales Corp., 781 F.2d 394, 398 (5th Cir.), cert. 

denied, 106 S.Ct. 3339 (1986), quoting 19 C. Wright, A. Miller & E. Cooper, Federal Practice and 

Procedure § 4507 at 100-03. It is not, however, the role ofa federal court "to create or modify state 

law, rather only to predict it." Batts, 66 F.3d at 750. 

1. 

A logical starting point in predicting whether the Texas Supreme Court would interpret 

"bodily injury," as that term appears in the State Farm policy, to include physical manifestations of 

emotional distress is to survey the law in otherjurisdictions. See Hollins v. Rapid Transit Lines, Inc., 

440 S.W.2d 57, 59 (Tex. 1969) ("It has been held by this Court that when we are called upon to 

decide a question offirst impression in this state, we may look to other jurisdictions for guidance in 

reaching our decision on the question.").4 The clear weight of authority holds that physical 

4 Indeed, the Texas Supreme Court in Cowan relied on cases from other jurisdictions in deciding that a pure 

emotional injury, unaccompanied by physical symptoms, does not constitute a "bodily injury" in the insurance context. 

See Cowan, 945 S.W.2d at 823-24 (citing cases from New Jersey, New Mexico, Montana, Virginia, California, Georgia, 

Michigan, and Washington). 
symptoms of emotional distress constitute a "bodily injury" in the insurance context. See, e.g. 

Hartman v. Estate ofMiller, 656 N.W.2d 676, 685 (N.D. 2003) (tenn "bodily injury," as used in PIP 

endorsement, includes PTSD accompanied by non-transitory physical manifestations); Trinh v. 

Allstate Ins. Co., 109 Wash.App. 927, 936, 37 P.3d 1259, 1264 (2002), review denied, 147 Wash.2d 

1003,53 P.3d 1007 (2002) (physical manifestations ofPTSD are "bodily injuries" covered by VIM 

provision of insurance policy); Twin City Fire Ins. Co. v. Colonial Life & Accident Ins. Co., 124 

F.Supp.2d 1243, 1247 (M.D. Ala. 2000) (emotional trauma can constitute "bodily injury" if 

accompanied by physical symptoms); General Star Indemnity Co. v. Schools Excess Liability Fund, 

888 F.Supp. 1022, 1027 (N.D. Cal. 1995) (physical injury resulting from emotional distress 

constitutes "bodily injury"); State Farm Fire & Casualty Co. v. Nikitow, 924 P.2d 1084, 1089 (Colo. 

App. 1995) (although the tenn "bodily injury" in an insurance contract does not encompass pure 

emotional hann, coverage is available if the injury is accompanied by physical manifestations); 

Garvis v. Employers Mutual Casualty Co., 497 N.W.2d 254,257 (Minn. 1993) (emotional distress 

with appreciable physical manifestations can qualify as a "bodily injury" within the meaning of an 

insurance policy); Voorhees v. Preferred Mutual Ins. Co., 128 N.J. 165, 179,607 A.2d 1255, 1262 

(1992) (emotional distress resulting in headaches, stomach pains, nausea, and body pains constituted 

"bodily injury" under homeowner's policy); Western Casualty & Surety Co. v. Waisanen, 653 

F.Supp. 825, 832 (D.S.D. 1987) (emotional distress accompanied by high blood pressure was 

sufficient to establish physical hann); Kufalk v. Hart, 636 F.Supp. 309, 311-12 (N.D. Ill. 1986) 

(emotional distress resulting in high blood pressure, headaches, stomach pains, and diarrhea 

constituted "bodily injury" under general liability policy); McGuire v. American States Ins. Co., 491 

So.2d 606, 608 (Fla. Dist. Ct. App. 1986) (mental distress accompanied by headaches and muscle 
spasms, requiring treatment and medication, could be construed as "bodily injury" under insurance 

policy); Holcomb v. Kincaid, 406 So.2d 646, 649 (La. Ct. App. 1981 ) (emotional distress resulting 

in rash, hair loss, weight loss, and symptoms of stroke fell within definition of "bodily injury" in 

homeowner's policy). But see State Farm Mutual Auto. Ins. Co. v. D.L.B. ex rei. Brake, 881 N.E.2d 

665,666 (Ind. 2008) (emotional distress accompanied by physical manifestations was not "bodily 

injury" within the meaning of an automobile insurance policy); Dahlke v. State Farm Mutual Auto. 

Ins. Co., 451 N.W.2d 813,815 (Iowa 1990) ("bodily injury" does not include physical manifestations 

of emotional distress); Zerr v. Erie Ins. Exchange, 446 Pa.Super. 451, 457, 667 A.2d 237, 240 

(1995), appeal denied, 544 Pa. 613, 674 A.2d 1075 (1996) (term "bodily injury" in an insurance 

policy does not include mental illness manifested by physical symptoms). 

Even jurisdictions that deny "bodily injury" coverage for pure emotional injuries have 

suggested that coverage may exist ifthe emotional harm is accompanied by physical symptoms. See, 

e.g. Economy Pre/erred Ins. Co. v. Jia, 135 N.M. 706, 709-10, 92 P.3d 1280, 1283-84 (2004); Aim 

Ins. Co. v. Culcasi, 229 Cal.App.3d 209, 222, 280 Cal.Rptr. 766, 773-74 (1991); Greenman v. 

Michigan Mutual Ins. Co., 173 Mich.App. 88,92,433 N.W.2d 346,349 (1988); Albin v. State Farm 

Mutual Auto. Ins. Co., 498 So.2d 171, 174 (La. Ct. App.), writ denied, 498 So.2d 1088 (1986); 

Artcraft a/New Hampshire, Inc. v. Lumberman's Mutual Casualty Co., 126 N.H. 844, 846,497 A.2d 

1195,1196 (1985); Farm Bureau Mutual Ins. Co. v. Haag, 136 Mich.App. 326, 335, 356 N.W.2d 

630,633 (1984). See also K. Kolb, General Liability Coverage/or Claims a/Emotional Distress: 

An Insurance Nightmare, 45 DRAKE L.REv. 981, 993-94 (1997) (collecting cases). 

Ofall the cases addressing this issue, two are particularly instructive. In Trinh, the plaintiff 

sought UIM benefits from her insurance company for damages related to post-traumatic stress 

disorder ("PTSD"). According to the evidence, plaintiff called a friend for assistance after she got 
a flat tire while driving on a busy highway. The friend arrived and began changing the tire when he 

was struck and killed by a drunk driver. Although plaintiff was standing next to her friend at the 

time, she was not hit by the car and did not immediately seek medical treatment. Following the 

accident, plaintiffexperienced frequent headaches, stomach pains, hair loss, fragile fingernails, and 

muscle aches. Her physical symptoms were accompanied by feelings of depression and anxiety, 

nightmares, insomnia, and chronic crying. A psychologist diagnosed plaintiffwith PTSD "that was 

entirely and solely related" to witnessing the accident. In reversing a summary judgment in favor 

of the insurance company, the Washington court of appeals held that the term "bodily injury," as 

defined by the policy, was unambiguous and included emotional injuries that are accompanied by 

physical manifestations. The court wrote: 

We find it significant that Allstate's policy in this case defines "bodily 

injury" to mean "sickness" or "disease." Physically-manifested PTSD 

clearly and unambiguously falls within these broad terms . . . An 

insurance purchaser would reasonably interpret the term "bodily 

injury" to include physically-manifested emotional distress, and we 

hold that where there are physical manifestations of PTSD, it 

qualifies as a "bodily injury" under a UIM policy like Trinh's. 

Trinh, 37 P.3d at 1264. 

A similar result was reached by the New Jersey Supreme Court in Voorhees. In that case, 

a school teacher sued plaintiff and other parents who made derogatory comments about her 

competency and fitness. The complaint filed by the teacher in the underlying action alleged that the 

false statements made by plaintiff caused her "severe humiliation, embarrassment, emotional 

distress, and mental anguish." Evidence provided during discovery revealed that the teacher also 

experienced a variety of physical symptoms related to her emotional distress, including headaches, 

stomach pains, nausea, and body pains. At the time of the lawsuit, plaintiff was insured under a 

homeowner's policy that obligated the insurer to pay "all sums for which any insured is legally liable 
because ofbodily injury[.]" The policy defined "bodily injury" as "bodily harm, sickness, or disease 

to a person including required care, loss of services and death resulting therefrom." When plaintiff 

asked her insurance carrier to defend the teacher's lawsuit, the carrier refused. Plaintiff then sued 

for breach ofthe insurance agreement. One ofthe issues raised on appeal was whether a claim for 

emotional distress resulting in physical consequences is covered under a bodily injury insurance 

policy. The Voorhees court reached the same conclusion as the Trinh court, albeit for different 

reasons. Whereas Trinh holds that an emotional injury accompanied by physical manifestations 

unambiguously falls within the broad definition of "bodily injury," when defined to mean "sickness" 

or "disease," the Voorhees court concluded that: 

the term "bodily injury" is ambiguous as it relates to emotional 

distress accompanied by physical manifestations. That ambiguity 

should be resolved in favor of the insured. Moreover, we find such 

an interpretation to be in accord with the insured's objectivelyreasonable expectations. That emotional distress can and often does 

have a direct effect on other bodily functions is well recognized. An 

insured who is sued on account of an injury involving physical 

symptoms could reasonably expect an insurance policy for liability 

for bodily injuries to provide coverage. 

Voorhees, 607 A.2d at 1261 (internal citations and quotations omitted). 

State Farm ignores Trinh, Voorhees, and the other cases holding that physical manifestations 

ofemotional distress constitute "bodily injury" in the insurance context. Instead, State Farm focuses 

on Ginn, an unpublished panel decision from an intermediate Texas appeals court. In that case, the 

plaintiff was sitting in her living room watching television when she heard a collision outside the 

house. After being told by her husband that their 16 year-old son was seriously hurt in the wreck, 

plaintiffrushed to scene. She comforted her injured son, who had blood running down his face, deep 

cuts on his neck, and a bone protruding from his broken leg, for 20 or 30 minutes until an ambulance 

arrived. Following the accident, plaintiff could not sleep, experienced horrible nightmares, and 
became sick after she ate. On these facts, the Texas appeals court held that plaintiffwas not entitled 

to recover UIM benefits for injuries she suffered as a bystander. According to the court: 

Here, the evidence showed that [plaintiff] suffered mental anguish, 

which is understandable, but she suffered no physical injury. 

[Plaintiff] testified that after the accident she could not sleep or eat, 

that she had horrible nightmares, and that she was sick after she ate. 

She stated that she did not seek psychological or psychiatric 

counseling for her emotional trauma. [Plaintiff] further testified that 

she had not been to doctors, incurred medical bills, or been prescribed 

medication for any condition resulting from the accident. Without 

evidence of a physical harm to her, [plaintiff] was not entitled to 

recover [UIM benefits] for any bystander cause of action. 

Ginn, 1998 WL 717120 at *6. 

Notwithstanding any superficial similarities between Ginn and the instant case, there are two 

significant differences. First, the symptoms experienced by the plaintiffin Ginn--sleeplessness, loss 

ofappetite, and nightmares--lack any distinct physical component. See, e.g. Era Franchise Systems, 

Inc. v. Northern Ins. Co. ofNew York, 208 F.3d 225, 2000 WL 192834 at *6 (lOth Cir. Feb. 17, 

2000) ("Although sleeplessness may affect the body, it is usually considered an aspect of mental 

suffering. It is not ordinarily considered a physical injury to the body or a sickness of the body."); 

SL Industries, Inc. v. American Motorists Ins. Co., 128 N.J. 188, 201-02, 607 A.2d 1266, 1273 

(1992) (same). By contrast, the jury in this case implicitly found that Virginia Haralson suffered 

physical symptoms in the form of headaches, migraines, stomachaches, and nausea. Second, the 

Ginn court provided little analysis and no authority for its conclusion that sleeplessness, nightmares, 

and becoming sick after eating are not physical injuries. Indeed, just three years earlier, a different 

panel of the same appeals court held that headaches, stomachaches, and loss of sleep were "bodily 
injuries" covered by a standard Texas homeowner's policy. See Cowan, 906 S.W.2d at 130-31.5 

Because of these important distinctions, and the fact that Ginn is an unpublished opinion from an 

intermediate appeals court, it is of little value to this court in making an Erie-guess. See TEX. R. 

ApP. P. 47.7 (opinions not designated for publication by the court of appeals have no precedential 

value). 

2. 

In light of the overwhelming number of well-reasoned decisions from other jurisdictions 

holding that physical manifestations of emotional distress constitute a "bodily injury" in the 

insurance context, the court predicts that the Texas Supreme Court would reach the same conclusion 

if presented with the facts of this case. The headaches, migraines, stomachaches, and nausea 

experienced by Virginia have a distinct physical component, separate and apart from pure emotional 

distress. Moreover, the State Farm policy does not define "bodily injury." Although the failure to 

define a term in an insurance policy does not render that term ambiguous if it still can be given a 

certain, definite meaning, see United Services Auto. Ass'n v. Pennington, 810 S.W.2d 777,779 (Tex. 

App.--San Antonio 1991, writ denied), the combination of the lack of a definition and the hybrid 

nature of the injury suffered by Virginia--i.e, extreme emotional distress accompanied by physical 

symptoms--renders the term "bodily injury" ambiguous in this case. Where a policy provision is 

vague or ambiguous, and is subject to two or more reasonable interpretations, the court must adopt 

a construction which affords coverage. See Gonzalez v. Mission American Ins. Co., 795 S.W.2d 734, 

737 (Tex. 1990). It was reasonable for the jury to determine, based on the language ofthe policy and 

5 The court recognizes that the panel decision in Cowan was reversed by Texas Supreme Court. However, the 

issue in that case was whether the pleadings were sufficient to trigger a duty to defend. Because the plaintiff failed to 

plead any physical manifestations of her alleged mental injuries, the state supreme court held that she did not plead a 

"bodily injury," as that tenn was defined in the policy. See Cowan, 945 S.W.2d at 826. The court expressly declined 

to decide "whether Cowan's headaches, stomachaches, and sleeplessness, as proved at trial, would be a bodily injury 

sufficient to invoke Trinity's duty to indemnify." [d. at 826 n.5. 
the evidence presented at trial, that Virginia sustained a "bodily injury" as a result of witnessing the 

automobile accident in question. 

c. 

State Farm also challenges the sufficiency ofthe evidence to support a claim for bystander 

damages. Under Texas law, the elements of a bystander claim are: 

(1) The plaintiff was located near the scene of the accident, as 

contrasted with one who was a distance away from it; 

(2) The plaintiff suffered shock as a result of a direct emotional 

impact upon the plaintiff from a sensory and contemporaneous 

observance ofthe accident, as contrasted with learning ofthe accident 

from others after its occurrence; and 

(3) The plaintiffand the victim were closely related, as contrasted 

with the absence of any relationship or the presence ofonly a distant 

relationship. 

United Services Auto. Ass'n v. Keith, 970 S.W.2d 540,542 (Tex. 1998). Virginia testified that she 

was traveling in a vehicle directly behind the car driven by Fred Haralson and saw the violent 

collision made the basis of this suit. Moments after the crash, Virginia rushed to her husband as he 

lay injured and trapped inside his car. She believed that Fred had been killed. As a direct and 

proximate result of witnessing the accident and her seriously injured husband, Virginia suffered 

extreme emotional distress manifested by physical symptoms, including headaches, migraines, 

stomachaches, nausea, and sleeplessness. (See Def. Mot. at 4; Plf. Resp. at 1-2). 

State Farm posits that Virginia's physical symptoms were the result of seeing her husband 

in the hospital after the accident--not from her contemporaneous observance ofthe accident. At the 

conclusion of the trial, the jury was instructed that "[d]amages in this case are limited to the bodily 

injuries suffered by Virginia Haralson as a result ofa direct emotional impactfrom her sensory and 
contemporaneous observance o/the accident in question." (See Jury Chrg. at 8) (emphasis added). 

The court defined "bodily injury" as: 

an injury to the physical structure ofthe human body. Purely mental, 

emotional, or spiritual injuries, unaccompanied by any physical 

manifestations ofhann, are not "bodily injuries." However, physical 

illness resulting from mental anguish or emotional distress may be a 

"bodily injury." 

(Id. at 7). Relying on these instructions, the jury found that Virginia sustained a "bodily injury" as 

a result ofwitnessing the automobile accident and awarded her $25,000 in compensatory damages. 

(Id. at 8-9). The evidence adduced at trial was more than sufficient to support the verdict. See Pulte 

Home Corp. v. Brown, No. 01-89-00087-CV, 1991 WL23620 at *5 (Tex. App.--Houston [1st Dist.], 

Feb. 14, 1991, writ dism'd) (plaintiffs testimony, standing alone, held sufficient to support award 

of mental anguish damages); Kneip v. Unitedbank-Victoria, 734 S.W.2d 130, 134-36 (Tex. 

App.--Corpus Christi 1987, no writ) (same). 

D. 

The court reaches a different conclusion with respect to the jury award for loss ofconsortium 

and loss of household services. 6 It is well-settled that loss of consortium is not a "bodily injury" as 

thatterm is used in the insurance context. See McGovernv. Williams, 741 S.W.2d373, 374-75 (Tex. 

1987); Carter v. State Farm Mutual Auto Ins. Co., 33 S.W.3d 369, 372 (Tex. App.--Fort Worth 

2000, no writ). Rather, loss ofconsortium, which involves hann to "the intangible and sentimental 

elements" of a marriage, is a derivative claim that arises solely as a consequence of injuries to a 

spouse. McGovern, 741 S.W.2d at 374, citing Whittlesey v. Miller, 572 S.W.2d 665, 667 (Tex. 

6 Virginia argues that State Farm waived this claim by failing to object to the jury charge as required by Fed. 

R. Civ. P. 51(c). However, that rule applies only to defective jury instructions. Here, State Farm does not challenge the 

instructions on loss ofconsortium and loss ofhousehold services damages. Rather, the issue raised post-trial is whether 

such damages constitute "bodily injuries" under the State Farm policy. 
1978). The same is true for loss of household services. See Rosenzweig v. Dallas Area Rapid 

Transit, 841 S.W.2d 897, 898 (Tex. App.--Dallas 1992, writ denied); Dougherty v. Gifford,826 

S.W.2d 668, 681 (Tex. App.--Texarkana 1992, no writ). The court therefore sets aside the jury 

verdict awarding Virginia $15,000 for loss ofconsortium and $1,000 for loss ofhousehold services. 

E. 

Finally, State Farm contends that the amount of any recovery should be offset by $20,000-­

the amount payable to Virginia by other sources. Under the State Farm policy: 

Subject to this [UIM] maximum, our limit of liability will be the 

lesser of: 

a.	 The difference between the amount of a covered person's 

damages for bodily injury or property damage and the amount 

paid or payable to that covered person for such damages, by 

or on behalf of persons or organizations who may be legally 

responsible; and 

b. The applicable limit of liability for this coverage. 

(Def. Mot. App. at 29). In this case, the underinsured driver, Carmen Andrade-Silva, had liability 

coverage in the amount of $20,048 per person or $40,048 per incident. (See Jt. PTa at 11, 10). 

Fred Haralson settled his liability claim for the per person policy limit of $20,048. (ld. at 11, 12). 

Virginia and her daughter, Christina, jointly settled their claims for $18,000, or $2,000 less than the 

remaining available proceeds. (ld.). 

Virginia argues that State Farm, at most, is entitled to an offset for only a portion of the 

$18,000 paid to her and Christina. However, the UIM policy plainly states that liability is limited 

to the difference between the amount ofdamages for bodily injury and "the amount paid or payable 

to [the] covered person for such damages, by or on behalf of persons or organizations who may be 

legally responsible." (Def. Mot. App. at 29) (emphasis added). Under Texas law, an injured party 
bears responsibility for the consequences of settling a claim for less than the full amount of the 

tortfeasor's liability coverage. See State Farm Mutual Auto. Ins. Co. v. Norris, 216 S.W.3d 819,822 

(Tex. 2006); Olivas v. State Farm Mutual Auto. Ins. Co., 850 S.W.2d 564,565-66 (Tex. App. -- El 

Paso 1993, writ denied). Where, as here, an injured party settles a liability claim against an 

underinsured motorist for less than the policy limits, the UIM carrier is entitled to an offset for the 

full amount of liability coverage available. See Allstate Indemnity Co. v. Collier, 983 S.W.2d 342, 

344 (Tex. App. -- Waco 1998, writ dism'd) (UIM carrier entitled to $100,000 offset, the full amount 

of coverage available under tortfeasor's liability policy, even though injured party settled with 

tortfeasor for only $75,000); Olivas, 850 S.W.2d at 565-66 (UIM carrier entitled to offset equal to 

$25,000 policy limit where insured settled with tortfeasor for $15,000). 

The jury awarded $25,000 to Virginia as compensation for her bodily injuries. After Fred 

Haralson settled his claim against the underinsured driver, $20,000 remained available, or "payable," 

to settle Virginia's liability claim. Therefore, State Farm is entitled to a $20,000 offset against the 

amount of damages found by the jury. 

CONCLUSION 

State Farm's renewed motion for judgment as a matter of law or, in the alternative, motion 

for judgment [Doc. #123] is granted in part and denied in part. The court sets aside the jury verdict 

awarding Virginia Haralson $15,000 for loss of consortium and $1,000 for loss of household 

services. State Farm also is entitled to a $20,000 offset against the $25,000 in bodily injury damages 

found by the jury. In all other respects, the jury verdict stands. 

SO ORDERED. 
DATED: July 8, 2008. 

A LAN 

STATES MAGISTRATE JUDGE