Opinion ID: 2552656
Heading Depth: 3
Heading Rank: 3

Heading: Were Damages for Emotional Distress Justified?

Text: The other main issue presented by this case is whether the $30,000 award to the Joneses for their emotional distress was legally and factually justified. The trial court in this case ruled that the Joneses suffered severe emotional distress between the time of Tyler's birth and the time that the state agreed to pay for Tyler's medical bills. The court awarded Justin and Sara $15,000 each for the emotional distress they experienced during this period. [35] Janssen challenges this award, arguing that it was legally unjustified because in the absence of physical injury no award for the negligent infliction of emotional distress can be made unless the defendant has a preexisting duty to the plaintiff which, if breached, would foreseeably result in emotional harm to the plaintiff. Such a duty is absent in this case, according to Janssen, because its run of the mill employment agreement with Justin does not fit the pre-existing duty requirement. The Trust makes a similar argument. It contends that the pre-existing duty that is required for emotional distress damages must be based on either a contractual or fiduciary relationship, neither of which existed between the Joneses and the Trust. The Trust also argues that the Joneses did not present evidence of emotional distress that was sufficiently severe to justify an award of emotional distress damages. The Joneses respond by arguing that misrepresentations concerning health insurance can with ready foreseeability lead to emotional distress. They also contend that the emotional distress they suffered was severe. The seminal case on damages for emotional distress in the absence of physical injury in Alaska is Chizmar v. Mackie. [36] The plaintiff in Chizmar was misdiagnosed by her physician as having AIDS. The physician reported this misdiagnosis not only to the plaintiff but to her husband, without authorization from the plaintiff. [37] Plaintiff brought a claim against her physician for emotional distress damages. [38] At trial the superior court directed a verdict against the plaintiff on such damages since the plaintiff did not suffer physical injury. [39] On appeal, we reversed holding that when a defendant stands in a pre-existing relationship with the plaintiff and a breach of the duties arising from this relationship would foreseeably result in emotional harm to the plaintiff, an accompanying physical injury is not a prerequisite for the recovery of damages for emotional distress. [40] In Chizmar we referred to an earlier case, Hancock v. Northcutt, [41] in which we held that a plaintiff may not recover damages for negligently caused emotional distress arising out of the negligent performance of a contract to build a house. We stated in Chizmar in explanation of our immediate holding and with reference to Hancock: We do not believe that the traditional tort principle of foreseeability, standing alone, properly defines the scope of a defendant's duty in an action for damages for negligently inflicted emotional distress. See Hancock, 808 P.2d at 258. Rather we believe that a plaintiffs right to recover emotional damages caused by mere negligence should be limited to those cases where the defendant owes the plaintiff a preexisting duty. In Hancock, we recognized that a plaintiff may recover emotional distress damages in certain cases where a contractual relationship exists between the parties. Id. at 258. In holding that the contract at issue in Hancock did not imply such a duty, we observed: In our view, breach of a house construction contract is not especially likely to result in serious emotional disturbance. Such contracts are not so highly personal and laden with emotion as contracts where emotional damages have typically been allowed to stand on their own. Examples of the latter include contracts to marry, to conduct a funeral, to sell a sealed casket, to conduct a cesarean birth, to surgically rebuild a nose, to provide promised maternity coverage, to provide medical services, and to keep a daughter informed of her mother's health. Id. at 258-59 (footnotes omitted) (emphasis added). Under Hancock, whenever a defendant stands in a contractual or fiduciary relationship with the plaintiff and the nature of this relationship imposes on the defendant a duty to refrain from conduct that would foreseeably result in emotional harm to the plaintiff, the plaintiff need not establish a physical injury in order to recover for the negligent infliction of emotional distress. A growing number of jurisdictions have adopted this approach. [42] Based on the above language, it is apparent that an undertaking to provide medical services, particularly one that provides coverage to a pregnant woman, qualifies as just the sort of emotionally laden promise which, if not fulfilled, properly may give rise to emotional distress damages. The requirement of foreseeability established in Chizmar is therefore satisfied. In the case of Janssen, the pre-existing contractual relationship requirement of Chizmar is also met. Janssen was Justin's employer. Providing health insurance was an important part of the employment contract, and Janssen's misrepresentations concerning coverage caused the Joneses to cancel their existing coverage. The Trust likewise made a negligent misrepresentation concerning medical coverage and did so specifically with respect to coverage for Sara's pregnancy. Thus the foreseeability element of the Chizmar test was met. But there is considerable doubt as to whether the pre-existing duty requirement of Chizmar was also satisfied with respect to the Trust. All, parties believed, for a time, that there was a contractual relationship between Janssen and the Trust under which the Trust would provide coverage for the Joneses. If this belief, in fact, had been true, the pre-existing duty requirement could have been satisfied. But, as we now know, this was not the case. Nonetheless, we think that because both Chizmar requirements were satisfied as to the claim against Janssen, the award against the Trust must be allowed to stand. The Trust, as the trial court found, not only made negligent misrepresentations on its own, it also bore a heavy responsibility for the negligent misrepresentations made by Janssen. It would be anomalous to hold that the Trustthe party most responsible for the misrepresentationsis not responsible for emotional distress damages while holding the less responsible partyJanssenliable. If the claim against the Trust for emotional distress damages was found wanting because of failure to meet the pre-existing duty requirement, this holding would mean that Janssen would have to pay the full amount of the damages. This result would be unjust to Janssen. In part, the requirement of a pre-existing relationship was imposed as a screening device in an effort to separate worthy claims for emotional damages from unworthy ones. [43] That purpose is served by focusing on the relationship between the Joneses and Janssen. The bona fides of the Joneses' claims are not made stronger by requiring the Joneses also to have a pre-existing relationship with the Trust. Indeed, if the Trust had not been sued by the Joneses or joined by Janssen in an action for equitable apportionment under Alaska Civil Rule 14(c), Janssen would have borne full responsibility for the whole award of emotional distress damages to the Joneses. Both Janssen and the Trust also argue that the Joneses' damages were not sufficiently severe to give rise to emotional distress damages. This decision is ultimately a question of fact. The trial judge explicitly addressed it, finding that both Joneses experienced severe emotional distress. In our view this finding is not clearly erroneous. [44] For the above reasons we believe that the award of emotional distress damages of $15,000 for each of the Joneses was legally and factually justified.