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ATTORNEYS FOR APPELLANT Karl L. Mulvaney Nana Quay-Smith Candace L. Sage Indianapolis, Indiana ATTORNEYS FOR AMICI CURIAE INSURANCE INSTITUTE OF INDIANA, INC., NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES, AND PROPERTY CASUALTY INSURERS ASSOCIATION OF AMERICA ` Robert B. Clemens George T. Patton, Jr. Bryan H. Babb Indianapolis, Indiana

ATTORNEYS FOR APPELLEES John F. Townsend, III Indianapolis, Indiana W. Scott Montross Indianapolis, Indiana ATTORNEYS FOR AMICUS CURIAE THE INDIANA TRIAL LAWYERS ASSOCIATION Jeffrey S. Wrage Thomas F. Macke Valparaiso, Indiana

______________________________________________________________________________

In the

Indiana Supreme Court
_________________________________ No. 29S02-0704-CV-140 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,

FILED
Feb 28 2008, 2:17 pm
of the supreme court, court of appeals and tax court

CLERK

Appellant (Defendant below), v. PATRICIA JAKUPKO, NICHOLAS JAKUPKO, AND MATTHEW JAKUPKO, Appellees (Plaintiffs below). _________________________________ Appeal from the Hamilton Superior Court No. 1, No. 29D01-0308-CT-682 The Honorable Steven R. Nation, Judge _________________________________ On Petition to Transfer from the Indiana Court of Appeals, No. 29A02-0603-CV-207 _________________________________ February 28, 2008 Sullivan, Justice.

Richard Jakupko suffered severe injuries and his wife and children emotional distress in an automobile accident caused by an underinsured motorist. Their insurance company contends that their underinsured motorist insurance policy subjects any amount the wife and children can recover for their emotional distress to the per person liability cap applicable to Richard. Such a limitation would violate the requirements of Indiana's underinsured motorist insurance statute and be void; the wife and children are each entitled to their own per person liability limit.

Background In July 2002, Richard Jakupko was in an automobile accident caused by Brianne Johnson; Johnson was driving an underinsured auto. Richard, his wife, Patricia, and their children, Nicholas and Matthew, who were passengers in Richard's car, each sustained bodily injuries. Richard's injuries were exceptionally severe, including quadriplegia and a closed head injury resulting in permanent mental deficits. Patricia, Nicholas, and Matthew each suffered emotional distress from being in the accident.

Because the Jakupkos' damages greatly exceeded the limits of Johnson's coverage, they sought compensation under the terms of an automobile insurance policy Richard had with State Farm Mutual Automobile Insurance Company. The State Farm policy included underinsured motorist coverage coverage in the amount of $100,000 for "each person" and $300,000 for "each accident." State Farm paid $100,000 to the Jakupkos pursuant to this provision; when they sought to recover an additional $200,000 for Patricia's, Nicholas's, and Matthew's emotional distress, State Farm took the position that it had satisfied its obligations under the policy when it had paid the limits for Richard's injuries. In State Farm's view, because Patricia's, Nicholas's, and Matthew's claims for emotional distress were caused by Richard's injuries, they were included in the "each person" limit of liability for his bodily injury claim.

This litigation ensued. The trial court and Court of Appeals both ruled in favor of the Jakupkos. State Farm Mut. Auto. Ins. Co. v. Jakupko, 856 N.E.2d 778 (Ind. Ct. App. 2006). State Farm sought, and we granted, transfer. State Farm Mut. Ins. Co. v. Jakupko, 869 N.E.2d 454 (Ind. 2007) (table).

2

Discussion

I We begin our analysis with several observations about what is not at issue in this case.

State Farm agreed to "pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle." (Appellant's App. at 70.) Not at issue is whether Patricia, Nicholas, or Matthew were "insured[s]" for this purpose; both sides agree that they all were.

More importantly, both sides agree that Patricia, Nicholas, and Matthew were "legally entitled" to pursue negligent infliction of emotional distress claims against Brianne Johnson, the driver of the underinsured vehicle. Like the plaintiff who was permitted to seek recovery in Shuamber v. Henderson, 579 N.E.2d 452, 456 (Ind. 1991), Patricia, Nicholas, and Matthew were inside the vehicle when it was struck by Johnson's automobile and sustained an impact. The impact was severe enough to have caused catastrophic injuries to Richard. Patricia, Nicholas, and Matthew claim to have suffered emotional trauma at least in part as a result of being involved in the impact and witnessing Richard being so severely injured. Shuamber dictates that they would be entitled to present their evidence. This is not a case that requires us to expound on the common law of negligent infliction of emotional distress.

The crux of this case is whether, as a matter of underinsured motorist and contract law, Patricia's, Nicholas's, and Matthew's claims are included within Richard's "each person" limitation on liability or are entitled to their own. The significance of this is obvious

Download State Farm Mutual Automobile Ins. Co. v. Patricia Jakupko, et al.pdf

Indiana Law