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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Wold v. Progressive Preferred Insurance Co. (8/2/2002) sp-5602

Wold v. Progressive Preferred Insurance Co. (8/2/2002) sp-5602

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,


CYNTHIA WOLD, individually         )
and as Personal Representative of  )    Supreme Court No. S-9775
the ESTATE OF HEIDI WOLD,          )
                              )    Superior Court No.
               Appellant,          )    3AN-99-10357 CI
          v.                  )
                              )    [No. 5602 - August 2, 2002]
               Appellee.      )

          Appeal  from the Superior Court of the  State
          of  Alaska, Third Judicial District, Brian C.
          Shortell, Judge.

          Appearances:  Laurel J. Peterson,  Laurel  J.
          Peterson,  P.C.,  Anchorage,  for  Appellant.
          Daniel T. Quinn, Richmond & Quinn, Anchorage,
          for Appellee.

          Before:   Fabe,   Chief  Justice,   Matthews,
          Eastaugh,  and Bryner, Justices.  [Carpeneti,
          Justice, not participating.]

          BRYNER, Justice.


          Heidi  Wold  was killed while riding in a pick-up  that

rolled over after its driver,  Koby Smith, swerved to avoid an on-

coming  car;  the  on-coming  car  kept  driving  and  was  never

identified.   Heidis estate and her parents settled  with  Smiths

insurer;  Heidis  mother, Cynthia, then  claimed  benefits   both

individually  and  as personal representative  of  Heidis  estate

from  Progressive  Preferred Insurance Company  on  Cynthias  own

uninsured/underinsured  motorists (UM/UIM)  policy.   Progressive

refused  to pay and sought a declaratory judgment, claiming  that

the  unknown  drivers conduct could not trigger  UM/UIM  coverage

without  a collision and that Smiths negligence could not trigger

UM/UIM coverage because the Wolds had not exhausted his liability

coverage.  The  superior court entered judgment for  Progressive.

We  affirm in part and reverse in part, agreeing that Alaska  law

treats  unidentified vehicles as uninsured only when there  is  a

collision  but  holding that Heidi Wolds estate  used  up  Smiths

liability  coverage  and  so  may  claim  UM/UIM  benefits   from



          On  December  27, 1995, Koby Smith rolled  his  pick-up

truck  when  he swerved to avoid a car coming toward him  in  his

lane of traffic.  Smiths truck did not hit the oncoming car;  the

car  kept  driving,  and its driver was never  identified.   Koby

Smiths passenger, sixteen-year-old Heidi Wold, was killed in  the

accident.   Heidis  mother was called to the accident  scene  and

arrived soon after, just before Heidi died.

          Smith  was  insured under a policy issued  by  Allstate

Insurance    Company   that   provided   both    liability    and

uninsured/underinsured motorists coverage, each having limits  of

$100,000  per  person  and $300,000 per  accident.   Heidi  Wolds

mother, Cynthia Wold, had her own UM/UIM policy with Progressive,

which  had  the  same  limits  as the  Allstate  policy.   It  is

undisputed  that Heidi qualified as an insured person under  both

the Allstate and Progressive policies.

          Through  their  attorney, Laurel  Peterson,  the  Wolds

negotiated  with Allstate for payment under Smiths liability  and

UM/UIM  coverages.  Cynthia Wold asserted a wrongful death  claim

as  the  personal  representative of Heidis estate;  on  her  own

behalf,   Cynthia  asserted  a  bystander  claim  for   negligent

infliction  of  emotional distress (NIED); and both  Cynthia  and

Heidis  father,  Greg Wold, evidently asserted individual  claims

for  loss  of  consortium or society.  The Wolds  asserted  these

claims  against both Smith and the unknown driver, alleging  that

each  had been negligent.  They maintained that Smith was covered

for his own negligence under Allstates liability policy and that,

under  Alaska  law, the unknown driver was considered  to  be  an

uninsured  motorist whose actions were covered under the  policys

UM/UIM provisions.1

          The  Wolds and Allstate reached a settlement on two  of

their  claims  in early December 1997.  On December  19  Allstate

sent Peterson two checks for $135,600, one representing a policy-

limits  settlement ($100,000 plus costs and attorneys  fees)  for

the estates wrongful death UM/UIM claim and the other for Cynthia

Wolds  NIED  UM/UIM claim.  Both of these claims arose  from  the

unknown  drivers  alleged  negligence.   Peterson  accepted  both

checks on behalf of the Wolds.

          Meanwhile,  two days earlier, on December 17,  Peterson

had  filed a superior court complaint against Smith in  order  to

prevent  the Wolds unresolved claims from being barred under  the

two-year tort statute of limitations,2 which otherwise would have

expired  on  December  27.  The complaint  listed  as  plaintiffs

Cynthia  Wold  individually, Cynthia Wold, as Appointed  Personal

Representative of the Estate of Heidi Wold, and Gary Wold.   Over

the  next two months Allstate and Peterson continued to negotiate

on the Wolds unresolved claims.  In February 1998 the Wolds filed

a  global  offer  of  judgment, proposing  to  settle  all  their

remaining  claims  against Allstate and Smith for  $100,000  plus

costs,  interest,  and  attorneys fees   a  total  that  Peterson

calculated  to be $137,883.81.  Allstate accepted the offer,  and

on  March 4, 1998, it delivered a settlement check to Peterson in

trust for Cynthia Wold, Gary Wold, [and] Cynthia Wold as personal

rep  of  the Heidi Wold Estate, in exchange for the Wolds release

of all claims against Allstate and Smith.

          Peterson  then  sent a demand letter  to  Cynthias  own

insurer, Progressive, asserting that the Allstate policys  limits

          had now been exhausted and that Cynthia and the estate had a

right to further reimbursement under Cynthias UM/UIM policy  with

Progressive.  Progressive denied any obligation to pay and  filed

a   superior  court  action  seeking  declaratory  relief.    The

declaratory  judgment complaint offered two  reasons  to  support

Progressives position that it had no legal duty to pay the UM/UIM

claims.   First,  insofar  as  Cynthia  and  the  estate  claimed

coverage  for injuries caused by the unknown drivers  negligence,

Progressive asserted that Alaska law precluded the unknown driver

from being considered an uninsured motorist because there was  no

physical contact between the vehicle driven by Koby Smith and the

phantom  drivers  vehicle.  Second, insofar as  Cynthia  and  the

estate  sought to recover for injuries resulting from Koby Smiths

negligence,  Progressive  asserted  that  Smith  could   not   be

considered  an underinsured driver under Alaska law  because  the

Wolds  had  not used up the policy limits available under  Smiths

Allstate liability policy.

          Following an evidentiary hearing into the circumstances

surrounding  the Wolds settlements with Allstate, Superior  Court

Judge  Brian  C. Shortell issued findings of fact and conclusions

of law sustaining Progressives position.

          Cynthia  appeals  in her own right  and  on  behalf  of

Heidis estate.


     A.   The Physical Contact Requirement

          Cynthia  challenges  the superior  courts  ruling  that

Progressive  had  no  duty to pay her claim for  UM/UIM  benefits

arising  from the unknown drivers negligence because the  unknown

drivers  car  did not collide with Smiths pick-up.  Although  she

acknowledges that Progressives policy required physical  contact,

Cynthia  argues  that  this  requirement  should  not  have  been

enforced  because it is undisputed that Koby Smiths accident  was

caused by an unidentified vehicle whose driver failed to stop  at

the scene of the accident.3

          But  the  trial courts ruling enforcing the Progressive

policys physical contact requirement was mandated by Alaska  law.

In  1984 Alaskas Motor Vehicle Safety Responsibility Act (MVSRA),

to  which  all automobile policies must conform,4 was amended  by

the  addition of a section relating to uninsured and underinsured

motorists coverage.  Alaska Statute 28.20.445(f) provides:

          If   both  the  owner  and  operator  of  the
          uninsured vehicle are unknown, payment  under
          the   uninsured  and  underinsured  motorists
          coverage  shall  be  made only  where  direct
          physical  contact  between  the  insured  and
          uninsured or underinsured motor vehicles  has
          occurred.  A vehicle that has left the  scene
          of  the  accident with an insured vehicle  is
          presumed  to  be  uninsured  if  the   person
          insured   reports   the   accident   to   the
          appropriate authorities within 24 hours.[5]
          The  Alaska Mandatory Automobile Insurance Act  (AMAIA)

contains similar language.  Alaska Statute 28.22.201(b) reads:

          If  both  the owner and operator of a vehicle
          are  unknown, payment under the uninsured and
          underinsured motorists coverage may  be  made
          only  where direct contact between the  motor
          vehicles has occurred. A vehicle and operator
          that  have left the scene of an accident with
          another  vehicle are presumed to be uninsured
          if the insured person reports the accident to
          the   appropriate   authorities   within   24
Thus,  under  both  the MVSRA and the AMAIA an insured  can  only

receive  UM/UIM  payments  for  accidents  involving  an  unknown

vehicle if there was physical contact between the vehicles.

          The  UM/UIM  coverage  in Cynthias  Progressive  policy

contained a clause that matched these statutory provisions.   The

Progressive  policy  defined  uninsured  or  underinsured   motor

vehicle to include:

          a  hit  and  run  vehicle  which  strikes  an
          INSURED PERSON, YOUR INSURED CAR, or, in  the
          case  of  BODILY INJURY, a vehicle  which  an
          INSURED  PERSON  is  OCCUPYING  which  causes
          BODILY   INJURY  to  an  INSURED  PERSON   or
          from  an  ACCIDENT  where there  is  physical
          evidence  of  contact  between  the   INSURED
          PERSON  or YOUR INSURED CAR and the  hit  and
          run vehicle, provided that:
          1)   the   operator   or  owner   cannot   be
          ascertained  at the time of the ACCIDENT  and
          remains unknown,
          2)  the  INSURED PERSON or someone on his  or
          her  behalf shall have reported the  ACCIDENT
          to  the  appropriate  law enforcement  agency
          within 24 hours.
The policy further specified:  If both the owner and operator  of

the  uninsured  vehicle are unknown, payment under the  Uninsured

and  Underinsured  Motorist Coverage shall  be  made  only  where

direct physical contact between the INSURED and the UNINSURED  or


          Cynthia  concedes that Smiths truck did not  physically

contact the unknown vehicle and that the literal terms of  Smiths

Progressive  UM/UIM  policy precluded recovery  for  the  unknown

drivers  actions.   But she nonetheless argues that  Progressives

physical  contact  clause  should not  be  enforced  because  she

offered  extrinsic proof of the presence of the phantom  vehicle.

Cynthia  points  out that other courts have been willing  to  set

aside physical contact policy clauses when corroborative evidence

demonstrates  the  presence  and  responsibility  of  an  unknown

vehicle.  She argues that we should follow these cases because  a

physical  contact  clause  serves  no  useful  purpose  in  these

circumstances  and enforcing it allows an insurer to  breach  its

duty of good faith and fair dealing.

          But  Progressive  correctly observes that  when  courts

from other jurisdictions have been willing to invalidate physical

contact requirements in policy clauses, they have generally  done

so  under statutory regimes that differ from Alaskas.  As  Widiss

explains  in  his  treatise Uninsured and  Underinsured  Motorist

Insurance,   although  physical  contact   requirements   are   a

legitimate mechanism for preventing fraud by foreclos[ing] claims

arising  from  accidents that were allegedly   but  not  actually

caused  by the operation of an unidentified vehicle,7 many courts

          have declined to strictly enforce clauses in policies requiring

physical  contact:  Courts in approximately half the states  have

concluded that insurers are not entitled to enforce the  physical

contact  requirement because it is in derogation of the uninsured

motorist legislation and is therefore void.8           Yet almost

all of these courts have construed the disputed policy provisions

in  the absence of a statute that requires physical contact.   It

appears  that only West Virginia has judicially adopted the  rule

proposed by Cynthia by allowing a claimant to satisfy an  express

statutory physical contact requirement with extrinsic evidence of

a  miss-and-run  accident.  In Hamric v. Doe  the  West  Virginia

Supreme Court concluded that absolute enforcement of the physical

contact  requirement is contrary to public policy  and  that  the

physical  contact  requirement should not prevent  recovery  when

there   is   sufficient  independent  third-party   evidence   to

conclusively establish that the sequence of events leading to  an

injury  was  initially  set in motion by an  unknown  hit-and-run

driver or vehicle.9  But in reaching this decision, Hamric simply

adopted  the reasoning in Girgis v. State Farm Mutual  Automobile

Insurance  Co.,10  an  Ohio case decided  in  the  absence  of  a

statutory physical contact requirement.11

          With  the  exception of Hamric, courts in jurisdictions

whose   UM/UIM   statutes   include  express   physical   contact

requirements  invariably hold that the UM/UIM coverage  does  not

apply  in  a  miss-and-run case  that there must be  some  actual

contact with the unknown vehicle.12  Orpustan v. State Farm Mutual

Automobile  Insurance  Co. exemplifies  the  reasoning  of  these

courts.13   There,  the  California  Supreme  Court  enforced   a

statutory  physical contact requirement despite clear proof  that

the  claim  was not fraudulent,14 concluding that the legislature

had made a permissible policy choice in adopting the requirement:

The statute makes proof of physical contact a condition precedent

in  every  case for the recovery of damages caused by an  unknown

vehicle.   There are no exceptions.  If it is advisable that  the

          statute be changed, the solution lies within the province of the


          Here, Cynthias argument parallels Hamrics public policy

analysis.    But   as  mentioned  above,  Hamrics   analysis   is

unpersuasive because it relies on a case decided in a state  that

had  no  statutory  physical contact requirement.   Cynthia  also

relies  on the Oregon Court of Appealss decision in To  v.  State

Farm  Mutual  Insurance,16 which declined to  enforce  a  policys

physical  contact  clause and, instead,  allowed  a  miss-and-run

claim  to  be  corroborated by competent evidence other than  the

testimony  of  the  insured  or any person  having  an  uninsured

motorist  claim resulting from the accident. 17  But  To  reached

this  decision against the backdrop of a recently enacted statute

that had repealed Oregons former physical contact requirement and

replaced it with a corroboration requirement.18

          Here, by contrast, to accept corroborative evidence  as

a  substitute for physical contact, we would need to override the

express  terms  of AS 28.20.445(f) and AS 28.22.201(b).   Cynthia

thus  essentially  asks  us to nullify a  legislative  choice  on

public  policy  grounds.   Yet statutes  themselves  reflect  the

states  public  policy;  hence, we have  recognized  that  public

policy  .  . . cannot override a clear and unequivocal  statutory


          On  their  face, Alaskas physical contact statutes  are

absolute  and unambiguous.20  Yet because Alaska does not  follow

the  plain  meaning rule, the plain language of these  provisions

does  not itself end the inquiry.21  Under Alaskas sliding- scale

approach  to  statutory construction, strong legislative  history

may support a different meaning.22  But [when] a statutes meaning

appears  clear  and  unambiguous, . . .  the  party  asserting  a

different  meaning  bears  a  correspondingly  heavy  burden   of

demonstrating contrary legislative intent.23

          Here, Cynthia fails to identify any legislative history

suggesting  that  the statutory physical contact requirement  was

          intended to have limited application.  Since Cynthia has rested

her  case on general public policy considerations and has  failed

to  establish  any  legislative  history  suggesting  that  these

provisions  were meant to have limited application, we  find  her

arguments unpersuasive.  Because the Progressive policys physical

contact  clause comports with the express requirements of  Alaska

law,  we  affirm the superior courts decision precluding  Cynthia

and  Heidis  estate from claiming UM/UIM payments for  negligence

attributable to the unknown driver.

     B.   The Exhaustion Requirement

          The superior court determined that by settling for less

than  the  limits of Smiths Allstate liability policy  the  Wolds

failed  to exhaust the liability policy; thus, Smith was  not  an

underinsured  driver under Alaskas UIM statute, and  Cynthia  and

Heidis  estate  were  not  entitled  to  payment  under  Cynthias

Progressive   UIM  coverage.  On  appeal  Cynthia  advances   two

arguments  against this ruling: first, that the  Wolds  were  not

required  to  exhaust  Smiths liability; and  second,  that  they

actually did exhaust the limits.24

          The  first  argument can be readily answered.   Alaskas

Motor Vehicle Code provides that UM/UIM coverage may not apply  .

.  .  until  the  limits of liability of all  bodily  injury  and

property damage liability bonds and policies that apply have been

used up by payments or judgments or settlements.25  In Curran  v.

Progressive  Northwestern Ins. Co., which  we  issued  after  the

present  case had already been briefed and argued, we  held  that

this  provision requires a UIM claimant to exhaust or use up  all

underlying  liability  coverage before  recovering  under  a  UIM

policy.26   Curran governs here and supports the superior  courts

conclusion that the Wolds were required to use up Smiths Allstate

liability coverage before turning to Cynthias own Progressive UIM


          Whether  the  Wolds actually did use  up  the  coverage

available  under  Smiths Allstate liability policy  is  a  harder

          question to answer.  Some additional background is necessary to

frame  our review of the superior courts findings and conclusions

on this issue.

          The  superior  courts ruling that the  unknown  drivers

negligence  could  not have triggered Progressives  duty  to  pay

under  Cynthias  UM/UIM  policy left open  the  question  whether

Cynthia and the estate might recover UIM benefits attributable to

Koby  Smiths  negligence.  As indicated above,  the  trial  court

correctly  recognized that Alaskas Motor Vehicle Code  would  not

consider  Smith  to  be an underinsured driver  for  purposes  of

triggering  Progressives duty to pay UM/UIM  benefits  until  the

limits of Smiths Allstate liability policy [had] been used up  by

payments or judgment or settlements.27  The crucial issue  before

the  superior  court  thus became whether  the  three  settlement

checks that the Wolds had received from Allstate  two in December

1997  and  one  in March 1998  had used up the limits  of  Smiths

liability policy.

          At  the  evidentiary hearing below, the  chief  factual

controversy  centered on what specific legal claims Allstate  and

the  Wolds had settled and what available Allstate policy  limits

those settlements affected.  As mentioned earlier, Koby Smith was

covered  by two Allstate automobile policies: a liability  policy

and  a  UM/UIM policy.  The first protected Smith from  liability

for  property  damage and bodily injury arising out  of  his  own

negligent  driving; the second protected Smith and his passengers

(including  Heidi  Wold)  against loss  resulting  from  property

damage  or  bodily  injury by uninsured or underinsured  drivers,

including Smith himself once his liability coverage was  used  up

by settlement.

          Smiths liability and UM/UIM policies each provided  for

maximum  payments  of  $100,000  per  person  and  $300,000   per

accident.   The  maximum limits specified for  each  policy  were

independent:  a policy-limit liability payment would  not  reduce

the  payments available under the UM/UIM policy limits,  or  vice

          versa. Furthermore, a person settling for nominal policy limits

$100,000   would  be entitled to receive additional  compensation

from Allstate for attorneys fees and prejudgment interest.

          In  their early negotiations with Allstate, the  Wolds,

through  their attorney, Laurel Peterson, asserted three distinct

types  of claims.  First, Cynthia Wold asserted a wrongful  death

claim  as representative of Heidi Wolds estate;28 second, on  her

own  behalf,  Cynthia  asserted a bystander claim  for  negligent

infliction of emotional distress;29 and third, both parents appear

to  have  individually asserted claims for loss of consortium  or

society.30  Allstate regarded the estates wrongful death claim and

Cynthias  NIED claim to be subject to separate per person  policy

limits.   Moreover,  unlike Progressive,  Allstate  conceded  the

unknown  drivers  status  as  an  uninsured  motorist,  expressly

waiving  its  right  to rely on Alaskas direct  physical  contact


          In   negotiating  the  Wolds  claims,  then,   Allstate

recognized  and  accepted that the Wolds were asserting  each  of

their  claims against both Smiths liability and UM/UIM  policies:

Allstate  thus assumed that the estate could potentially  recover

$100,000  plus  add-ons  (attorneys fees  and  interest)  on  its

wrongful  death  claim  under each of Smiths  policies  and  that

Cynthia could potentially recover an additional $100,000 plus add-

ons on her bystander NIED claim under each of those policies.  By

contrast,  Allstate  regarded the potential claims  for  loss  of

consortium  or  society to fall under the same per person  policy

limit as the estates wrongful death claims.

          In  deciding Progressives declaratory judgment  action,

the  superior  court  heard  testimony  concerning  the  Allstate

settlements  from Peterson and reviewed a deposition from  Rodney

Layton,  the  Allstate adjuster who negotiated the  Wolds  claims

with  Peterson.  The court also reviewed all relevant  settlement

correspondence.   Based  on  this evidence,  the  superior  court

concluded  that  the two $135,600 checks that  Allstate  gave  to

          Peterson in December 1997 represented two per person policy-limit

payments  plus add-ons resolving the Wolds claims against  Smiths

UM/UIM  policy  for  injuries arising from  the  unknown  drivers

negligence   one check settling the estates wrongful death  claim

against  that  policy; the other settling Cynthia Wolds  separate

NIED  claim.  Thus,  the court found, these  settlements  had  no

effect  on the policy limits available to pay any claims  against

Smiths liability policy.

          The  superior  court went on to find that Allstate  and

the  Wolds continued negotiating after reaching the two  December

1997  settlements  and  eventually settled  all  their  remaining

liability claims in March 1998 in exchange for Allstates March  3

payment  of  $137,833.81.   In the courts  view,  [t]hese  claims

included  [Cynthia]  Wolds individual NIED liability  claim,  the

Estates   liability   claim  and  Gary  Wolds   [loss-of-society]

claim(s).    Since  the  court  had  ruled  that   the   December

settlements  did  not use up any of Smiths liability  limits,  it

found  that,  at the time of the March liability settlement,  the

liability  portion  of  the Allstate  policy  had  at  least  two

$100,000  limits  still available for the  protection  of  claims

against Koby Smith, one for the estate and one for Cynthia  Wolds

NIED  claim.  The court further noted that, [w]ith add-ons, these

two  limits  would  have  exceeded $270,000.   Because  Allstates

payment  of  $137,833.81 fell well below this total and,  in  the

courts view, represented two distinct liability claims, the court

reasoned that the March liability settlement did not use  up  the

remaining funds available to Cynthia Wold and the Estate from the

Allstate liability policy.  And since the Wolds had failed to use

up  Smiths  liability  limits, the court concluded,  they  [were]

precluded from pursuing a UM/UIM claim against Progressive  based

on the liability of Koby Smith.

          On  appeal,  Cynthia  insists that the  superior  court

erred in characterizing Allstates March settlement payment  as  a

settlement  resolving  her NIED liability  claim.   Although  she

argues the point in her opening brief,31 Cynthia acknowledges  in

her  reply  brief that the superior court did not err  in  ruling

that  Allstates  December  1997 settlement  checks  resolved  the

estates and Cynthias separate claims against Smiths UM/UIM policy

and  therefore  used up only the Allstate UM/UIM  policy  limits.

But  Cynthia  nonetheless insists that upon settling  her  UM/UIM

NIED  claim  in December, she abandoned that claim, relinquishing

her  right  to assert it as a basis for any further UIM liability

payments.   Thus, Cynthia reasons, the only claims that  remained

on  the table for settlement after December 1997 were the estates

wrongful  death  liability  claim and  the  individual  liability

claims  for  loss of society  all of which Allstate  regarded  as

accruing to the estates per person liability limit.  According to

Cynthia,  then, the March settlement check must  have  paid   and

must have used up  the policy limits of Smiths liability coverage

available to the estate:

          In   December,   1997,  Allstate   had   paid
          [Cynthia]  $135,600, whereupon she agreed  to
          waive  further NIED claims. With an identical
          payment  to  the  Estate,  Allstates   UM/UIM
          insurance exposure was fully exhausted.  With
          the  final  March 8th settlement, the  Estate
          had  recovered  two per-person limits[:]  one
          each  from  Allstates  UM/UIM  and  liability
          coverages.  [Total $273,433.81]  Progressives
          UM/UIM   coverage  was necessarily  triggered
          vis   a  vis  the  Estate,  the  only  viable
          claimant asserting a claim at the time of the
          March  settlement.   Demand  on  Progressives
          UM/UIM coverage was made accordingly.[32]
          The record supports Cynthias argument.  In his December

12,  1997, letter to Layton accepting Allstates December 10 offer

to  settle  the  estates  and Cynthias  separate  UM/UIM  claims,

Peterson  broadly indicated that the settlement would settle  and

resolve  all  future  NIED claims and that [n]ot  at  anytime  in

future  litigation will Mrs. Wold be allowed to argue  additional

damages  flowing from her cause of action rights  under  existing

emotional   distress   claims.   By  comparison,   Peterson   was

considerably more circumspect in the waiver language he used with

          respect to the estates December 1997 wrongful death settlement,

stating only that [n]o further underinsured motorist claim can be

made by the estate in future litigation. (Emphasis added.)

          On  December  17,  1997, five days  after  writing  the

letter  accepting  Allstates offers  to  settle  the  two  UM/UIM

claims,  Peterson  filed  a  formal complaint  against  Smith  to

preserve  the  Wolds  liability claims  against  the  statute  of

limitations.  While the complaint expressly asserted the  estates

wrongful death claim and the Wolds individual claims for loss  of

society,  it conspicuously omitted any allegation of a  cause  of

action  for NIED by Cynthia Wold.  Three days later, on  December

21,   Peterson  wrote  Layton  a  settlement  letter,   seemingly

confirming  that  Cynthias entire NIED claim had  been  resolved:

Please  note  that  we  have settled only  Mrs.  Wolds  negligent

infliction  of emotional distress claim (NIED), as  well  as  the

underinsured motorist coverage available to the estate.   And  on

December 27, 1997, the two-year statute of limitations apparently

expired  on  the NIED claim with no cause of action  having  been


          None  of  Petersons or Allstates subsequent  settlement

correspondence or documents make any reference to  any  potential

or  still-pending NIED claim by Cynthia.  And in a letter written

to  Progressive  shortly  after concluding  the  March  4,  1998,

Allstate  settlement,  Peterson requested UM/UIM  payments  under

Cynthias Progressive policy only on behalf of the estate:  Please

be aware that the Estate of Heidi Wold has, in fact, resolved its

claims against the driver of the vehicle in which Heidi Wold  was

a passenger shortly prior to her death. . . . Clearly the maximum

liability  policy  applicable to the  estate  is  less  than  the

damages sustained.  Thus, . . . I hereby make demand for the full

policy  limits  to  be tendered immediately.  Furthermore,  in  a

letter  to  Progressive dated April 21, 1998,  Peterson  made  it

clear  that Cynthia could not have been claiming UM/UIM  payments

from  Progressive for NIED based on Smiths conduct, since Cynthia

          claimed only to have exhausted Allstates UM/UIM coverage on her

NIED  claim and made no similar claim of exhaustion with  respect

to Allstates liability coverage for NIED:

          Please  note  that  the estate  settled  with
          Allstate  for  the full and  complete  UM/UIM
          coverage  in  December 1997.  Thereafter,  in
          March  the  estate settled the full liability
          claim   for  a  maximum  liability   coverage
          available.   Also,  you  will  note  that  we
          settled   with  Allstate  on  the  full   and
          complete  coverage of Mrs. Wolds underinsured
          motorist claim also in December.
          In  summary,  then,  the record  seems  to  contain  no

evidence indicating that  Cynthia Wold ever asserted or purported

to  assert  an  NIED  liability claim against Allstate  based  on

Smiths  conduct  after she successfully settled her  NIED  UM/UIM

claim  in  December.   To  the  contrary,  Peterson  consistently

professed to have abandoned any such claim, omitted it  from  the

Wolds  formal complaint against Smith, and allowed the  claim  to

expire under the statute of limitations as of December 27,  1997.

Thus, although Layton testified as to his subjective belief  that

the  Wolds  March 1998 global settlement and release  included  a

settlement of Cynthia Wolds unresolved NIED liability claim,  the

record fails to establish that this belief was reasonable: as  of

March 1998, the Wolds were not asserting or threatening to assert

against Allstate or Smith Cynthias NIED liability claim;  and  it

appears  that  the  possibility of  any  legally  colorable  NIED

liability claim no longer existed.

          Because  we  find no justification for concluding  that

Allstates  March 4 settlement encompassed a pending or  potential

claim  for  NIED  asserted or assertable against Smiths  Allstate

liability  policy by Cynthia Wold, we hold that it was error  for

the trial court to conclude the settlement used up a portion of a

separate per person liability policy limit attributable to such a


          But  this  conclusion  does not  fully  answer  whether

Allstates  settlement  payments used up  the  liability  coverage

available to the estate under Smiths policy.  Allstates March  4,

1998,  global  settlement agreement with the Wolds  resolved  not

only  the  estates wrongful death claim against Smiths  liability

policy,  but also the individual claims for loss of society  that

Cynthia  and  Gary  Wold set out in their  complaint.   If  those

claims   triggered  separate  per  person  limits  under   Smiths

liability  policy, then any payments allocated  to  the  loss-of-

society  claims would not have reduced the coverage available  to

pay the estates wrongful death claim; hence, the estate would not

have  used up its available per person limits of Smiths liability


          Because  we  have  not  previously  decided  whether  a

Gillispie34  loss-of-society claim can  trigger  a  separate  per

person   policy   limit,  we  requested  the  parties   to   file

supplemental   briefing  on  this  issue.   In  its  supplemental

briefing, Progressive argues that the Wolds claims for  the  loss

of  their  daughters society were subject to the same per  person

limit in the Allstate liability policy as Heidis estates wrongful

death claim. Progressive bolsters its argument by discussing case

law  from other jurisdictions, which generally seems to hold that

all  consequential damages flowing from bodily injury to a single

person fall within a one per-person limit.35

          We   find   it   unnecessary  to  resolve   the   issue

definitively here.36  In the present case, it appears that Rodney

Layton,  the  Allstate  claims adjuster  who  settled  the  Wolds

claims,  took the same position as Progressive, viewing  a  claim

for loss of consortium or society  as opposed to a claim for NIED

as  a  derivative  claim that would not trigger  a  separate  per

person  Allstate policy limit.  Given that Layton and Progressive

both  agree on the proper treatment of the loss-of-society claims

under Smiths Allstate policy, we find no reasonable basis in this

case  for allocating any portion of the March 4 global settlement

attributable to Cynthia and Greg Wolds individual loss-of-society

claims  to  a  separate per person policy limit  than  the  limit

          covering the estates wrongful death claim.  And because the

claims  for  wrongful  death and loss of  society  are  the  only

specific  liability  claims that the Wolds were  still  asserting

when  they  negotiated  the global settlement,  it  follows  that

Allstates March 3 settlement payment exhausted the limits of  the

liability  coverage available to Heidi Wolds estate under  Smiths

Allstate policy.

          For  this reason, we hold that it was error to  declare

that  the  estate had failed to use up Smiths Allstate  liability

coverage  and  was barred from asserting a UM/UIM  claim  against



          We  AFFIRM  the superior courts ruling on the  physical

contact  issue, REVERSE its ruling on the estates  exhaustion  of

the Allstate liability coverage, and REMAND for entry of judgment

in conformity with this opinion.

     1     AS  28.20.445(f) and AS 28.22.201(b) both provide,  in
relevant  part,  that a vehicle that has left  the  scene  of  an
accident  with an insured vehicle is presumed to be uninsured  if
the  person  insured  reports  the accident  to  the  appropriate
authorities within 24 hours.

     2    See AS 09.10.070.

     3     Cynthias  argument  that the  unknown  driver  was  an
uninsured  motorist presents questions of statutory construction,
which  we answer using our independent judgment.  See Progressive
Ins. Co. v. Simmons, 953 P.2d 510, 512 (Alaska 1998).

     4    Id. at 522.

     5    Ch. 70,  12, SLA 1984 (creating AS 28.20.445).

     6     For  the  source  of this language  see  chapter  108,
section 1, SLA 1989.

     7     1  Alan I. Widiss, Uninsured and Underinsured Motorist
Insurance   9.2,  at 565 (Rev. 2d ed. 1999); see  also  David  J.
Marchitelli,    Annotation,   Uninsured   Motorist   Indorsement:
Construction  and  Application  of  Requirement  that  There   Be
Physical  Contact  with the Unidentified or Hit-And-Run  Vehicle;
Miss-And-Run Cases, 77 A.L.R. 5th 319,  2[a] at 340 (2000).

     8    1 Widiss  9.7, at 612.

     9    499 S.E.2d 619, 623-24 (W. Va. 1997).

     10    662 N.E.2d 280 (Ohio 1996).

     11    Hamric, 499 S.E.2d at 623-24.

     12     See  1  Widiss  9.5; Marchitelli, 77 A.L.R. 5th  319,
4[a];  see, e.g., Autry v. Nationwide Gen. Ins. Co., 948 F. Supp.
615,  619  (S.D.  Miss.  1996) (applying  Mississippi  law  which
contains a statutory physical contact requirement);  Orpustan  v.
State  Farm Mut. Auto. Ins. Co., 500 P.2d 1119, 1123 (Cal.  1972)
(in banc) (rejecting the insureds theory that solid evidence that
the no-contact accident was caused by the negligence of a phantom
driver  should  satisfy  the fraud-prevention  statute  requiring
physical  contact  as one that could not be judicially  adopted);
Texas  Farmers Ins. Co. v. Deville, 988 S.W.2d 331, 333-34  (Tex.
App. 1999) (interpreting Tex. Ins. Code Ann. art. 5.06-1(2)(d) to
limit  coverage for accidents caused by unknown vehicles to cases
in  which  there  was physical contact between  the  insured  and
unknown vehicles);  Mayer v. State Farm Mut. Auto. Ins. Co.,  870
S.W.2d  623, 624-25 (Tex. App. 1994) (same); Young v. State  Farm
Mut.  Auto.  Ins.  Co., 711 S.W.2d 262, 262-63 (Tex.  App.  1986)
(same); Hayne v. Progressive N. Ins. Co., 339 N.W.2d 588,  590-96
(Wisc.  1983) (determining that statute defining uninsured  motor
vehicle  to include an unidentified motor vehicle involved  in  a
hit-and-run accident required actual physical contact between the
insured and unidentified vehicles).

     13    500 P.2d 1119 (Cal. 1972).

     14    See id. at 1123.

     15    Id.

     16    860 P.2d 294 (Or. App. 1993), revd in part and affd in
part, 873 P.2d 1072 (Or. 1994).

     17    See To, 860 P.2d at 295-97 (quoting ORS 742.504(2)(g)).

     18     See  id.   To thus implicitly draws a line permitting
courts  to override physical contact insurance clauses on  public
policy   grounds  only  in  the  absence  of  parallel  statutory
requirements.  Though the facts of this case make it tempting  to
tilt  toward  not toeing Tos tacit line in toto,  to  do  so,  we
think,   would   allot  too  little  deference   to   legislative

     19     Curran v. Progressive Northwestern Ins. Co., 29  P.3d
829, 833 (Alaska 2001).

     20    See AS 28.20.445(f); AS 28.22.201(b).

     21     See Homer Elec. Assn v. Towsley, 841 P.2d 1042,  1044
(Alaska  1992); Univ. of Alaska v. Geistauts, 666 P.2d  424,  428
n.5  (Alaska  1983);  State v. Alex, 646  P.2d  203,  208-09  n.4
(Alaska 1982).

     22    See Progressive Ins. Co. v. Simmons, 953 P.2d 510, 516
(Alaska 1998); Geistauts, 666 P.2d at 428 n.5; Alex, 646 P.2d  at
208-09  n.4;  State, Dept of Natural Res. v. City of Haines,  627
P.2d 1047, 1049 n.6 (Alaska 1981).

     23     Geistauts, 666 P.2d at 428 n.5; see also Homer  Elec.
Assn, 841 P.2d at 1044.

     24    Determining whether the Wolds settled with Allstate for
less  than  the  liability limits of the  Allstate  policy  is  a
question  of  contract  interpretation.   See  Leisnoi,  Inc.  v.
Stratman,  956 P.2d 452, 454 (Alaska 1998);  Singh v. State  Farm
Mut.  Auto.  Ins. Co., 860 P.2d 1193, 1199 (Alaska 1993)  (It  is
well established that a settlement is a contract.).  The superior
courts  answer  to that contract question was based  on  evidence
relating to the process by which the Wolds settled with Allstate.
Because  the  superior courts decision was  made  by  reconciling
conflicting  extrinsic evidence, we review to  determine  whether
substantial  evidence  supports the trial courts  interpretation.
See  Little Susitna Const. Co. v. Soil Processing, Inc., 944 P.2d
20,  23  (Alaska 1997) ([W]e do not reweigh the evidence but  ask
only  whether  it  creates room for diversity  of  opinion  among
reasonable  people.); Municipality of Anchorage v.  Gentile,  922
P.2d  248,  256 (Alaska 1996) ([W]here the trial court relies  on
conflicting  extrinsic  evidence  .  .  .  we  are  confined   to
determining   whether  the  facts  support   the   trial   courts
interpretation.  ) (quoting Fairbanks N. Star Borough  v.  Tundra
Tours,  Inc., 719 P.2d 1020, 1025 (Alaska 1986)); see also Tundra
Tours,  719  P.2d  at 1024-25 ([T]he standard used  in  reviewing
factual findings must be applied where extrinsic evidence  is  in
dispute.); Jackson v. Nagle, 677 P.2d 242, 247 n.4 (Alaska 1984).

     25    AS 28.20.445(e)(1).  An identical provision appears in
AS 28.22.201(a)(1).

     26     29  P.3d  829,  833  (Alaska 2001)  (interpreting  AS

     27    AS 28.20.445(e)(1).

     28    See AS 09.55.580.

     29     See generally Mattingly v. Sheldon Jackson Coll., 743
P.2d 356, 365 (Alaska 1987).

     30     See AS 09.15.010; Gillispie v. Beta Constr. Co.,  842
P.2d  1272,  1273  (Alaska 1992) (AS 09.15.010  creates  parental
cause  of  action for loss of child separate from wrongful  death
action brought by childs estate).

     31     Cynthias  opening brief contends, for  example,  that
[t]he  facts  show  that  $135,600,  was  paid  by  Allstate   to
compromise  .  .  .  Cynthias  NIED  claim  under  the  liability
provisions  of  the Allstate[ ] policy.  An additional  $135,600,
was  paid  to  compromise the Estates UM claims . . .  associated
with the phantom vehicle.

     32    (Record cites omitted.)

     33    See AS 09.10.070.

     34    Gillispie v. Beta Constr., 842 P.2d 1272 (Alaska 1992).

     35     Progressive identifies Gonzalez v. Allstate Ins. Co.,
921  P.2d  944 (N.M. 1996), Spaur v. Allstate Ins. Co., 942  P.2d
1261 (Colo. App. 1996), and Medley v. Frey, 660 N.E.2d 1079 (Ind.
App.  1996),  as  demonstrating that  other  courts  interpreting
similar  policy language hold that emotional damage to a survivor
is  not  a  separate bodily injury triggering a  second  unit  of

     36     Indeed, the issue may not be amenable to a definitive
resolution,  since much of the case law cited by the  parties  in
their supplemental briefing seems to suggest that whether a loss-
of-society claim should trigger separate per person coverage  may
hinge more on a particular policys definition of the scope of its
bodily injury coverage than on the inherent nature of a cause  of
action  for loss of society.  Compare, e.g., Abellon v.  Hartford
Ins. Co., 212 Cal. Rptr. 852, 854-55 (Cal. App. 1985);  Employers
Cas. Ins. Co. v. Foust, 105 Cal. Rptr. 505, 508 (Cal. App. 1972);
Giardino  v.  Fierke,  513 N.E.2d 1168, 1173  (Ill.  App.  1987);
Williamson v. Historic Hurstville Assn, 556 So. 2d 103, 107  (La.
App. 1990); Valliere v. Allstate Ins. Co., 596 A.2d 636, 638 (Md.
1991)  (holding that although loss of consortium or other service
was  not a bodily injury within meaning of usual policy language,
policy  in  question specifically defined term bodily  injury  to
include   loss  of  services  and  insurer  was  bound  by   that
definition); Voorhees v. Preferred Mut. Ins. Co., 607 A.2d  1255,
1261 (N.J. 1992); Wolfe v. State Farm Ins. Co., 540 A.2d 871, 873-
74  (N.J. Super. App. Div. 1988); Lavanant v. Gen. Accident  Ins.
Co.  of  Am.,  595  N.E.2d 819, 822 (N.Y. 1992) (concluding  that
bodily  injury defined in a property insurance policy  as  bodily
injury,  sickness, disease or death was ambiguous); and  Allstate
Ins.  Co.  v. Handegard, 688 P.2d 1387, 1388-89 (Or. App.  1984),
with  Spaur v. Allstate Ins. Co., 942 P.2d 1261, 1263 (Colo. App.
1996); Medley v. Frey, 660 N.E.2d 1079, 1080-81 (Ind. App. 1996);
Allstate Ins. Co. v. Diamant, 518 N.E.2d 1154, 1156 (Mass.  1988)
(The  term  personal  injury is broader  and  includes  not  only
physical  injury but also any affront or insult to the reputation
or sensibilities of a person. Bodily injury, by comparison, is  a
narrow  term and encompasses only physical injuries to  the  body
and  the consequences  thereof.); State Farm Mut. Auto. Ins.  Co.
v.  Descheemaeker,  444  N.W.2d 153, 154-55  (Mich.  App.  1989);
Gonzales v. Allstate Ins. Co., 921 P.2d 944, 946-47 (N.M.  1996);
and  Richie  v. Am. Family Mut. Ins. Co., 409 N.W.2d 146,  147-48
(Wis.  App.  1987)  (distinguishing between personal  injury  and
bodily injury).

     37     Because we have limited our decision to the propriety
of  allocating the Wolds loss-of-society settlement  to  separate
per  person limits under the Allstate policy, we express no  view
as  to  the proper handling of these individual claims under  the
specific  terms of Progressives UM/UIM policy  an issue that  the
parties  have  not  addressed and that we think  should  properly
remain open for consideration by the superior court in the  first
instance, if it arises.