The Pennsylvania Supreme Court does not hear very many cases involving liability coverage issues. So when it agrees to take one it is usually a big deal in Keystone State coverage circles. The appeal is closely watched, the decision eagerly anticipated and when it finally comes discussion of it follows. But Lipsky v. State Farm, a recent decision from Pennsylvania’s top court, did not get this kind of treatment. While the case did not go unnoticed, it certainly flew under the radar compared to the attention that other Supreme Court coverage cases attract. This is especially unfortunate when you consider that the issue was an important one – whether emotional injury qualifies as “bodily injury.” More about this below.

It is not hard to figure out why Lipsky played out this way. First, the Pennsylvania Superior Court’s (intermediate appellate court) decision in Lipsky was non-precedential and unpublished – as in, not even available on Westlaw unpublished (which is often-times not the case for many states’ unpublished opinions). Right there Lipsky never attracted the kind of attention that even Superior Court coverage decisions get. So when the Supreme Court agreed to hear the case it also didn’t come with much fanfare. Then, creating the perfect storm for keeping Lipsky out of the spotlight, the Supreme Court announced that the Justices eligible to vote were equally divided. As a result, by operation of law, the Superior Court’s decision was affirmed and there was no Supreme Court opinion issued. Once again Lipsky will be MIA on Westlaw.

At issue in Lipsky was the all important question whether emotional injury qualifies as a sufficient injury for purposes of triggering “bodily injury” coverage. While the issue arose in the context of an automobile policy, the decision is applicable to general liability policies. [When it comes to this issue, courts nationally treat automobile and liability policies interchangeably.]

Pennsylvania was sorely in need of a high court decision on this issue. The existing Pennsylvania cases were a hodgepodge of federal and state decisions. While many courts nationally hold that emotional injury, when accompanied by physical manifestation, qualifies as “bodily injury,” there was some case law stating that Pennsylvania was not willing to go so far. If not, Pennsylvania would have probably offered the narrowest view of coverage nationally on this issue. Many state supreme courts have addressed this issue. An authoritative voice on the question was overdue in Pennsylvania.

The Pennsylvania Superior Court in Lipsky addressed coverage, under a tortfeasor’s automobile policy, for “bystander” emotional distress sustained by the Lipskys upon witnessing a family member being struck and killed by an automobile. The tortfeasor was insured under a State Farm automobile policy. The Lipskys filed a complaint seeking a declaration that the emotional distress of each Lipsky plaintiff constituted an original “bodily injury” under the State Farm policy, qualifying for the $100,000 “each person” limit -- subject to the aggregate limit of $300,000 for “each accident.” This is a common scenario in which this issue arises.

The State Farm policy defined “bodily injury” as follows: “bodily injury to a person and sickness, disease, or death which results from it.” State Farm argued that “the clarity of this common sense definition is apparent when read against other defining sources such as Black’s Law Dictionary, which defines bodily injury as ‘physical damage to a person’s body,’ and several Pennsylvania cases distinguishing between emotional and physical injuries in the process of interpreting similar policies to exclude emotional distress from the ‘bodily injury’ definition.”

The Pennsylvania Superior Court disagreed: “Here, the Lipskys’ underlying complaints plead no list of specific physical manifestations of their emotional distress. They do, however, allege ‘physical complaints’ in their complaint for declaratory judgment and, in their original civil complaint, indicate under the [negligent infliction of emotional distress] cause of action that they ‘continue to suffer emotional distress and mental anguish all to their great detriment and loss’ in their original civil complaint. It is incomprehensible under these circumstances that one could suffer great detriment and loss from having witnessed the sudden and unexpected death of a minor child or brother at the hands of a drunk driver absent immediately debilitating, physical manifestations recognized in the common law.” The Superior Court held: “[T]he Lipskys’ claims of ‘physical complaints’ and ‘great detriment and loss’ from their mental and emotional anguish bring their [negligent infliction of emotional distress] claims within the ambit of the ‘bodily injury to a person’ definition for ‘bodily injury’ in the State Farm policy.”

This was no easy case for the Superior Court as there were also concurring and dissenting opinions. In other words, there were three judges and three opinions issued. I was hopeful that the Supreme Court’s opinion in Lipsky would have clarified some of this back and forth between the three opinions. But, as noted above, since the Supreme Court Justices eligible to vote were equally divided, the Superior Court’s decision was affirmed by operation of law and there was no Supreme Court opinion issued.

So without much fanfare, Pennsylvania now has much needed Supreme Court authority on the question whether emotional injury qualifies as a sufficient injury for purposes of triggering “bodily injury” coverage. Pennsylvania has now joined the majority of courts nationally that hold that emotional injury, when accompanied by physical manifestation, qualifies as “bodily injury.”