Opinion ID: 1443756
Heading Depth: 1
Heading Rank: 5

Heading: emotional distress damages were a proper element of damages for the bad faith claim.

Text: The jury awarded $120,000 for the claim based on the breach of the duty of good faith and fair dealing in the handling of Walston's claim, the bad faith denial of benefits claim. A review of the trial record indicates that there were no damages for out-of-pocket expenses or other financial losses since the $3,800 amount was awarded elsewhere for the breach of contract. The only element of damage left is what falls into the category of emotional distress. In Brown v. Fritz, 108 Idaho 357, 699 P.2d 1371 (1985), this Court held that there can be no recovery for emotional distress suffered by a plaintiff in a breach of contract claim. Id. at 363, 699 P.2d at 1377: We hold that there is no significant, if in fact any, difference between conduct by a defendant which may be seen to justify an award of punitive damages, and conduct which may justify an award of damages for emotional distress. Justification for an award of damages for emotional distress seems to lie not in whether emotional distress was actually suffered by a plaintiff, but rather in the quantum of outrageousness of the defendant's conduct. Id. at 362, 699 P.2d at 1376. The next year this Court determined that when an insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort. White v. Unigard Mut. Ins. Co., 112 Idaho 94, 96, 730 P.2d 1014, 1016 (1986) (quoting Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566, 108 Cal.Rptr. 480, 510 P.2d 1032 (1973)). In White this Court announced the following rule: [W]here an insurer intentionally and unreasonably denies or delays payment on a claim, and in the process harms the claimant in such a way not fully compensable at contract, the claimant can bring an action in tort to recover for the harm done. The availability of an action for bad faith will provide incentive to insurers to honor their implied covenant to the insureds. 112 Idaho at 98-99, 730 P.2d at 1018-19 (footnotes and citation omitted). This Court has also recognized a special relationship between an insured and insurer due to the adhesionary aspects of the insurance contract. Id. at 99, 730 P.2d at 1019. White provided the following summary: The tort of bad faith breach of insurance contract, then, has its foundations in the common law covenant of good faith and fair dealing and is founded upon the unique relationship of the insurer and the insured, the adhesionary nature of the insurance contract including the potential for overreaching on the part of the insurer, and the unique, non-commercial aspect of the insurance contract. Accordingly, we hold that there exists a common law tort action, distinct from an action on the contract, for an insurer's bad faith in settling the first party claims of its insured. 112 Idaho at 100, 730 P.2d at 1020. Monumental argues that nothing in White abrogates the limitation set forth in Brown, asserting that a plaintiff can maintain an independent cause of action for bad faith but cannot recover emotional distress damages. Based on the common law tort set forth in White, a plaintiff who has proven bad faith by an insurer can recover damages normally recoverable in a tort case. A federal district court case has set forth the framework for the two types of emotional distress claimsnegligent and intentional infliction of emotional distress. Windsor v. Guarantee Trust Life Ins. Co., 684 F.Supp. 630, 632 (D.Idaho 1988). For a claim of negligent infliction of emotional distress to arise, there must be physical injury to the plaintiff. Id. at 632 (citing Gill v. Brown, 107 Idaho 1137, 695 P.2d 1276 (Ct.App.1985)). There is no evidence of a physical manifestation of injury for Mr. Walston, and that has not been argued on appeal. On the other hand, [a]n action for intentional infliction of emotional distress will lie only where there is extreme and outrageous conduct coupled with severe emotional distress. Davis v. Gage, 106 Idaho 735, 741, 682 P.2d 1282, 1288 (Ct.App.1984), appeal after remand, 109 Idaho 1029, 712 P.2d 730 (Ct.App.1985). The Davis Court concluded that evidence showing that the plaintiff was upset, embarrassed, angered, bothered and depressed did not demonstrate a severely disabling emotional condition adequate for intentional infliction of emotional distress damages. 106 Idaho at 741, 682 P.2d at 1288. It is apparent that the $120,000 damage award consists of emotional distress damages. It is necessary to determine if Monumental's conduct was extreme outrageous conduct to support the damage award. In this case the jury could properly find that Monumental engaged in extreme outrageous conduct. After marketing a policy utilizing misrepresentations as to the scope and nature of its coverage, it denied coverage on a specious theory involving an interpretation of the term treatment that would exclude coverage for anybody who had check-ups following an incident of cancer. Monumental impugned Walston's character and drew him into a prolonged dispute when he was grieving the loss of his wife. The jury could reasonably determine that this was extreme outrageous conduct. The next question is whether there is a problem with the award for emotional distress coexisting with the punitive damage award. The Brown Court commented that there is no significant, if in fact any, difference between conduct by a defendant which may be seen to justify an award of punitive damages, and conduct which may justify an award of damages for emotional distress. 108 Idaho at 362, 699 P.2d at 1376. While the conduct giving rise to a claim for emotional distress and a claim for punitive damages may be of the same quality, it does not follow that the award of damages is either duplicative or must be co-extensive. The emotional distress damages are awardable for a condition particular to the aggrieved party. Punitive damages are awardable primarily to deter future bad conduct. There need be no overlap between the two. In this case the trial court reviewed the awards and reduced the punitive damage award, cognizant of the award for bad faith. It is a reasonable conclusion that the trial court did not perceive a problem with overlapping damages following the reduction. In fact the trial court keyed the punitive damage award to the profits of Monumental, not the stress suffered by Walston.