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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State Farm Mutual Automobile Insurance Co. v. Dowdy (09/26/2008) sp-6312

State Farm Mutual Automobile Insurance Co. v. Dowdy (09/26/2008) sp-6312, 192 P3d 994

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

STATE FARM MUTUAL )
AUTOMOBILE INSURANCE ) Supreme Court Nos. S- 12687/12698
COMPANY, )
) Superior Court No. 4FA-02- 1684 CI
Appellant/Cross-Appellee, )
) O P I N I O N
v. )
) No. 6312 September 26, 2008
ASA DOWDY and BARBARA)
DOWDY, )
)
Appellees/Cross-Appellants. )
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Niesje J. Steinkruger, Judge.

          Appearances:  Paul W. Waggoner,  Law  Offices
          of     Paul    Waggoner,    Anchorage,    for
          Appellant/Cross-Appellee     State      Farm.
          Jonathon   A.   Katcher,  Pope   &   Katcher,
          Anchorage, for Appellees/Cross-Appellants Asa
          and Barbara Dowdy.

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

          MATTHEWS, Justice.


          Additional   per-person  limits  in   an   underinsured
motorist policy are available to persons who are injured  in  the
same  accident as another person.  The question in this  case  is
whether  this  language encompasses parents who  suffered  severe
emotional  distress   including  physical  manifestations    upon
viewing  their daughters body in the hospital after an automobile
accident.   We hold that it does not because injury in  the  same
accident cannot be reasonably construed to refer to injuries that
result  from  viewing  a  dead or injured  person  away  from  an
accident scene.
FACTS1
          Asa   and   Barbara  Dowdy  suffered  severe  emotional
distress  as  a  result of the death of their  seventeen-year-old
daughter,  Heather.2  Heather was mortally injured in a collision
with  an  underinsured  intoxicated driver,  Kirk  Jackson.   The
Dowdys  were not at the scene of the accident.  When they learned
of  the accident they went to the hospital where Heather had been
taken.   The Dowdys first saw Heather at the hospital  after  she
died.
          The Dowdys asserted claims against Jacksons insurer for
negligent  infliction  of  emotional  distress  (NIED),  loss  of
society,  and punitive damages.3  They settled for the  available
limits  of  Jacksons policy, $50,000.  The Dowdys were personally
insured by State Farm Mutual Automobile Insurance Company.  Their
policy  included underinsured motorist (UIM) coverage with policy
limits of $100,000 per person and $300,000 per accident.4   State
Farm  paid  Heathers estate UIM per-person limits.   The  present
case  involves  the Dowdys claim that separate per-person  limits
are available to them.
PRIOR PROCEEDINGS
          When  we  reviewed  this case previously  the  question
presented was whether policy coverage issues should be determined
by  arbitrators  or by the superior court.5  We  held  that  they
should be determined by the court.6  We noted that where coverage
issues  are  inextricably intertwined with issues  of  fault  and
liability  that are to be arbitrated, such coverage  issues  also
should  be  arbitrated even though they otherwise  would  not  be
subject  to arbitration.7   But we held that the coverage  issues
in this case were not inextricably intertwined with the liability
and damages issues that were subject to arbitration.8
          We   identified  two  relevant  coverage  issues:   (1)
whether  the Dowdys suffered bodily injury  and (2) whether  they
were  injured  in the same accident as their daughter  under  the
terms   of   the  policy.9   We  observed  that  the  arbitrators
determination  of  fault  and  liability  would  not  necessarily
resolve  these issues.  As to the in the same accident point,  we
observed  that the issue was clearly distinct from the issues  to
be decided by the arbitrators.  As to whether the Dowdys suffered
bodily injury, we noted that this issue would not necessarily  be
resolved  by  the arbitrators, but stated that if the arbitrators
did  resolve  the  issue,  their determination  should  be  given
binding effect by the court:
               The  arbitrators determination of  fault
          and  liability  will not necessarily  resolve
          the   coverage  issues  in  this  case.   The
          meaning  of  in the same accident  under  the
          policy is a coverage question that is clearly
          distinct from the determinations to  be  made
               by the arbitrator.  Because neither the NIED
          nor  the  loss  of society claims  require  a
          showing  of  physical  injury,  it   is   not
          necessary  for  the arbitrator  to  determine
          whether  the  Dowdys suffered bodily  injury.
          The   coverage   issues  are  therefore   not
          inextricably intertwined with the  fault  and
          liability questions to be arbitrated.
          
               If  the  arbitrator finds  liability  on
          either  or  both  claims, the  assessment  of
          damages  may, but need not, include  findings
          regarding whether the Dowdys suffered various
          physical    symptoms   alleged    in    their
          affidavits.   Although  whether  the   Dowdys
          suffered  bodily  injury  under  the   policy
          remains  a question for the court, the  court
          should  give  collateral estoppel  effect  to
          fact  determinations made by  the  arbitrator
          and   these  determinations,  if   made   and
          necessary  to the issues properly before  the
          arbitrator,   can  serve  to  establish   the
          underlying facts on which the court must base
          its coverage determination.[10]
          
          We  also  addressed the question of whether the  courts
determination  of  coverage issues should take  place  before  or
after arbitration, and we left that question to the discretion of
the court on remand.11
          On  remand  the parties filed supplemental motions  for
summary  judgment,  which the superior court initially  addressed
before  the  issues of fault and liability were arbitrated.   The
court  granted  State  Farms  motion for  summary  judgment  with
respect  to  the  Dowdys loss of consortium claims,  ruling  that
those claims were derivative and would not be covered by separate
per-person policy limits under the policy.  With respect  to  the
Dowdys NIED claims, the court ruled that if the Dowdys were  able
to  prove  these  claims to the satisfaction of the  arbitrators,
they  can  collect under the per accident policy limit,  separate
from the each person limit paid to their daughters estate.
          In   reaching  this  conclusion,  the  superior   court
addressed  the two coverage issues discussed in our opinion.   As
to  the  question of whether the Dowdys were injured in the  same
accident as their daughter within the meaning of the policy,  the
court concluded that if the Dowdys were found to have valid  NIED
claims,  they would necessarily satisfy the in the same  accident
requirement of the policy:
               There  is no question that if the Dowdys
          are  able  to demonstrate a valid NIED  claim
          for their shock upon seeing their daughter in
          the hospital, their injuries were part of the
          same  accident in which Heather  was  killed.
          This   is   clear  from  the   Alaska   cases
          establishing the parameters of NIED claims by
               parents who did not actually observe the
          accident  in  which their child was  injured.
          Beck   v.  State,  Dept  of  Transp.  &  Pub.
          Facilities,  837  P.2d  105,  109-11  (Alaska
          1992);  Mattingly v. Sheldon  Jackson  Coll.,
          743  P.2d  356, 364-66 (Alaska 1987);  Tommys
          Elbow Room, Inc. v. Kavorkian, 727 P.2d 1038,
          1040-43  (Alaska 1986).  If the  Dowdys  show
          that  their  emotional  shock  resulted  from
          observation  of their daughters injuries  and
          death during the continuous flow of events in
          the  immediate aftermath of the accident, and
          it  cannot  be  said they had time  to  steel
          themselves, then the Dowdys were  injured  in
          the  same accident.  To this extent at least,
          the    arbitrator   should   determine    the
          underlying   facts,  since   this   will   be
          necessary  to  determine whether  the  Dowdys
          have   a   valid  NIED  claim   against   the
          underinsured driver.
          
               Therefore,  if the arbitrator determines
          that  the Dowdys have valid NIED claims, then
          they  necessarily were injured  in  the  same
          accident as their daughter.[12]
          
          As  to whether the Dowdys suffered bodily injury within
the  meaning of the policy, the court noted that the  Dowdys,  in
affidavits, described physical effects from the shock  of  seeing
their  daughters  body soon after she had died  during  emergency
surgery.  The court ruled that these affidavits raised a  genuine
issue  of material fact as to whether the Dowdys suffered  bodily
injury,  and  that  this factual dispute should  be  resolved  at
arbitration.13
          A  panel  of  three arbitrators decided the  fault  and
liability issues.  A majority of the panel found that the  Dowdys
had  valid  NIED  claims, awarding Barbara  and  Asa  Dowdy  each
$250,000,  comprised  of  $100,000 in  compensatory  damages  for
severe  emotional distress and $150,000 in punitive damages.   In
the  process,  the  arbitrators found that both  Dowdys  suffered
physical consequences from the shock of observing their daughters
body after the accident.
          After  the  arbitrators made their award,  the  parties
again  moved  for  judgment in the superior  court.   State  Farm
argued that the policy did not cover what State Farm described as
the  Dowdys hospital NIED claim.  The Dowdys argued that judgment
should  be entered based on the arbitrators award.  The  superior
court  denied  State Farms motion and granted the Dowdys  motion.
The  court  decided  that the State Farm UIM policy  covered  the
Dowdys NIED claims.
          The  court  concluded based on the factual findings  of
the arbitrators that the parents both suffered bodily injury.  In
accordance   with  its  prior  decision  that   if   the   Dowdys
demonstrated valid NIED claims they were necessarily  injured  in
          the same accident as their daughter, the court reaffirmed that
the in the same accident requirement of the policy was satisfied.
Based on these conclusions the court decided that the Dowdys were
entitled  to recover $100,000 each under the separate UIM  policy
limits plus prejudgment interest, attorneys fees, and costs.
CONTENTIONS ON APPEAL
          State Farm appeals from the judgment on the merits.  It
raises  two main points although it expresses each of them  in  a
number  of different ways.  State Farms first point is  that  the
Dowdys  do  not  have valid NIED claims and that  to  have  valid
claims  the Dowdys would have had to have witnessed the  accident
or  at least have viewed Heather at the accident scene before any
material  change occurred.  Second, State Farm contends that  the
Dowdys did not suffer bodily injury in the same accident as their
daughter, and therefore there was no remaining coverage available
to them.  Because we agree with State Farms second point, we find
it  unnecessary to address the other points raised by State  Farm
on appeal.
          The  Dowdys cross-appeal, raising a question as to  the
award of attorneys fees.  We do not discuss this question because
it is mooted by our decision on State Farms appeal.
STANDARD OF REVIEW
          This  appeal involves a ruling on summary judgment  and
presents  a  question  of  law.  We therefore  apply  a  de  novo
standard  of  review,  adopting the rule  of  law  that  is  most
persuasive in light of precedent, reason, and policy.14  We  also
review  de  novo  as  a  question of law  the  interpretation  of
insurance policy language.15  Insurance policies are construed in
such  a way as to honor a lay insureds reasonable expectations.16
Policy  language  is construed in accordance  with  ordinary  and
customary usage.17  Ambiguities in an insurance policies are to be
construed  most  favorably to an insured,  but  ambiguities  only
exist  when  there are two or more reasonable interpretations  of
particular policy language.18
DISCUSSION
     Were  the  Dowdys  Injured in the  Same  Accident  as  Their
     Daughter Within the Meaning of the Policy?
     
          The  arbitration that was conducted in this  case  fell
within the coverage of Alaskas Uniform Arbitration Act.19   Under
the   act  both  findings  of  fact  and  legal  conclusions  are
unreviewable,  even  in the case of gross  error.20   As  already
noted, much of State Farms briefing is devoted to the proposition
that the arbitrators erred as a matter of law in finding that the
facts  of  this  case supported an NIED claim.  But  we  may  not
review  this  question  because of  the  doctrine  of  arbitrable
unreviewability.  We thus confine this opinion to the question of
policy coverage.
          State Farms argument on this point is that the coverage
it  provides is not necessarily coextensive with NIED  liability.
State  Farm  contends  that  even  if  the  arbitrators  decision
concerning  the Dowdys entitlement to NIED awards is correct  (or
incorrect   but  insulated  from  judicial  review),   per-person
coverage  under  the  UIM policy does not extend  to  the  Dowdys
          claims because the Dowdys were not injured in the accident with
Heather.
          The   Dowdys  argue  that  the  in  the  same  accident
requirement of separate coverage is necessarily satisfied because
the  arbitrators have determined that the Dowdys have compensable
NIED  bystander claims and this determination is legally  correct
and, in any case, not subject to judicial review on its merits.
          In  accordance  with the standard  of  review  that  we
employ  in  interpreting the language of insurance policies,  the
question  here is, could a reasonable person expect  that  policy
language  providing coverage for damages due to bodily injury  to
two  or  more  persons in the same accident would  apply  to  the
Dowdys who were not in the accident with their daughter, did  not
witness  it, and did not come upon it shortly after it  occurred?
In our view this question must be answered in the negative.
          The  accident referred to by the policy in the  context
of  this  case is, of course, the collision between the  vehicles
driven  by Kirk Jackson and Heather Dowdy.  When it occurred  Asa
and  Barbara Dowdy were miles away.  They did not view the  scene
of  the  accident before Heather was transported to the hospital.
The  arbitrators found that the accident occurred at  3:00  p.m.,
but  Barbara Dowdy did not learn of the accident until 5:00  p.m.
She  was  permitted to view her daughters body  at  the  hospital
sometime after 6:30 p.m.  Asa Dowdy learned of the accident about
7:40  p.m.,  rushed  to  the hospital, and viewed  Heathers  body
shortly after 8:00 p.m.  To conclude that either Barbara  or  Asa
Dowdy  were  injured  in  the same accident  with  Heather  would
stretch  the meaning of that phrase beyond any generally accepted
usage.
          There  is  case law in other jurisdictions  that  lends
support to this conclusion.  In Liberty Mutual Fire Insurance Co.
v.  Dennison, the Supreme Court of Hawaii was presented  with  an
NIED claim.21  The plaintiff did not witness the auto accident in
which his son was injured but he arrived at what was described as
the triage area some thirty minutes after the accident occurred.22
The plaintiff suffered serious emotional distress as a result  of
viewing his son in the triage area.23  Under a Hawaii statute, no
tort  recovery  was available except for a person  who  sustained
injury  in  a motor vehicle accident.24 The Hawaii Supreme  Court
stated that the issue before it was
          whether  [the  plaintiff],  who  was  not   a
          passenger in the . . . car [in which his  son
          was  a  passenger], did not witness  the  car
          accident,  and arrived down the  street  from
          the  collision  approximately thirty  minutes
          after  the  accident occurred, sustained  his
          emotional  distress in the car  accident  for
          purposes of [the statute in question].[25]
          
The court answered no to this question, but suggested that if the
father had witnessed the accident the statute would be satisfied.26
In  reaching these conclusions, the Dennison court relied  on  an
earlier Hawaii case, First Insurance Co. of Hawaii v. Lawrence,27
which had similarly held that NIED claimants who did not at least
witness the accident in which their relative was killed were  not
in the accident for purposes of the statute:  Although the Smiths
claim  that their emotional distress claims arose out of a  motor
vehicle  accident in which Christopher was killed,  none  of  the
Smiths sustained their accidental harm in the accident.28
          Both  Dennison  and  Lawrence cited  cases  from  other
jurisdictions  holding that separate per-person (or per-accident)
limits  were  available  to  NIED  plaintiffs  who  had  directly
witnessed  an accident giving rise to their injuries.  The  cases
relied  on  in Dennison are Employers Casualty Insurance  Co.  v.
Foust,29  Crabtree v. State Farm Insurance Co.,30 Wolfe v.  State
Farm  Insurance Co.,31 and State Farm Mutual Automobile Insurance
Co. v. Ramsey.32
          Of  these cases only Crabtree explicitly discusses  the
in  the same accident language.  In Crabtree a woman witnessed an
accident  in  which her husband was injured.33  He was  riding  a
motorcycle and she was following him in her car.34  The Louisiana
Supreme  Court held that the in the same accident language  in  a
State Farm policy was satisfied:
               Mrs.  Crabtree saw her husband violently
          struck  and  severely injured by an  oncoming
          car.   She  suffered mental pain and  anguish
          precisely  because  she witnessed  the  event
          which  caused  the  severe  injuries  to  her
          husband.  The same accident which caused  Mr.
          Crabtrees  bodily  injury  also  caused  Mrs.
          Crabtrees bodily injury.[35]
          
In  Louisiana, NIED bystander claims can be maintained by persons
who  view  an  accident that causes injury to a relative,  or  by
persons  who  soon after such an accident come upon the  accident
scene.   Such  claims are referred to as Lejeune  claims.36   The
Louisiana Supreme Court observed that it was not deciding whether
a  person  who  meets the Lejeune requirements but  who  was  not
timely  present  at  the  immediate scene  of  the  incident  has
incurred  his  or her bodily injury in the same accident  as  the
bodily injury to the original injured party.37  Thus the court did
not  decide whether non-witness NIED claimants who come upon  the
scene  of an accident soon after it occurs would satisfy  the  in
the  same accident requirement.  The question in the present case
is  at  least  a full step removed from the question reserved  in
Crabtree  because the Dowdys did not suffer their injuries  as  a
result of coming upon the scene of the accident.
          The  Dowdys  contend  that  our  decision  in  Allstate
Insurance  Co. v. Teel38 indicates that they satisfy the  in  the
same  accident  requirement.  Teel involved a  coverage  question
arising out of an NIED claim.  The plaintiffs son was injured  in
an  automobile  accident while a passenger in  a  car  driven  by
OFlanagan.39   Plaintiff asserted an NIED claim under  OFlanagans
UIM  policy  issued by Allstate.  Allstate claimed that  coverage
was  not available to the plaintiff under its policy because  she
was  not  an insured person under OFlanagans UIM coverage  which,
under  the  policy,  included any other  person  who  is  legally
entitled to recover because of bodily injury to . . . an occupant
          of [the insureds] auto . . . .40  Allstate contended that since
the  plaintiff  had  an NIED claim and this claim  was  a  direct
rather  than  a  derivative claim under our case law,  plaintiffs
claim  was not because of bodily injury to her son.  We  rejected
this  argument  on the grounds that the because of  language  was
broad enough to encompass an NIED claim:
          The   injuries  suffered  by  an   individual
          entitled   to  recover  under  the  bystander
          exception   to   NIED  claims,   though   not
          derivative,  are  the  natural  and  probable
          consequence  of contemporaneously  witnessing
          the  bodily  injury suffered by someone  with
          whom  they  have  a  close relationship.   We
          therefore conclude that a party who  has  met
          the  burden of proving his or her NIED  claim
          would  satisfy the causal requirement between
          the accident and the injury that the Allstate
          policy requires.[41]
          
Unlike  in Teel, the policy language in the present case requires
that  a  person seeking separate per-accident coverage be injured
in  the  same  accident.  If the requirement  for  coverage  were
simply  that  the plaintiffs had suffered injury because  of  the
injuries  to  their daughter, a substantially different  coverage
question would be presented.
          The  Dowdys  argue  that because the arbitrators  found
that  they  have valid NIED claims, this necessarily  means  that
they  are entitled to separate per-person UIM limits.  They  base
this  conclusion  on  Crabtree, discussed previously,  and  three
other  opinions  involving State Farm policies decided  in  other
jurisdictions.  The other cases relied on by the Dowdys are State
Farm  Mutual Automobile Insurance. Co. v. Jakupko,42  State  Farm
Mutual  Automobile Insurance Co. v. Connolly ex rel.  Connolly,43
and  State Farm Mutual Automobile Insurance Co. v. D.L.B. ex rel.
Brake.44   But  each  of  these cases  involved  NIED  claims  of
witnesses to an underlying accident.45  It was therefore possible
to  say, as the Louisiana court did in Crabtree, that the  mental
distress  that the witnesses suffered was an injury that occurred
in  the  same accident that physically involved the relatives  of
the NIED plaintiffs.46  But since the Dowdys were far removed from
the accident involving their daughter, the same conclusion is not
possible here.
          The  Arizona case cited by the Dowdys, Connolly,  makes
it  clear that in Arizona the in the same accident requirement is
satisfied  because NIED plaintiffs must be in the zone of  danger
to be entitled to a recovery:
          Significantly, Arizona cases require that the
          negligent  infliction of  emotional  distress
          plaintiff  must  have been  in  the  zone  of
          danger  to  recover.   Thus,  the  successful
          plaintiff has been directly affected  by  the
          tortfeasors  negligence.  Unlike  a  loss  of
          consortium  claim, in which  the  tortfeasors
          injury   to  one  person  indirectly  affects
          another  person  by affecting the  emotional,
          physical,   and/or   financial   relationship
          between  the injured party and the plaintiff,
          a   plaintiff  who  successfully  asserts   a
          negligent  infliction of  emotional  distress
          claim    has    directly   experienced    the
          tortfeasors  negligence, and that  negligence
          has  caused  the  plaintiff  to  suffer  such
          severe   emotional  distress  that   physical
          injury  results.   The  tortfeasor  did   not
          merely   affect  the  plaintiff  by  injuring
          someone close to the plaintiff, so the injury
          to  the  plaintiff is not solely due  to  the
          bodily  injury  to another person.   Instead,
          the   negligent   infliction   of   emotional
          distress  plaintiffs injury  is  due  to  the
          unique  experience  of having  witnessed,  at
          such  close  range as to be in  the  zone  of
          danger,  the event that caused the injury  to
          the   other  person.  In  other  words,   the
          negligent  infliction of  emotional  distress
          claimants  physical injury results  from  the
          accident, not solely from the injury  to  the
          other person.
          
               In  short,  if  a  person  has  a  valid
          negligent  infliction of  emotional  distress
          claim,  she  has  suffered  a  bodily  injury
          arising  from the same accident as the  other
          injured party.[47]
          
          In Alaska, unlike Arizona, the NIED tort is not limited
to the zone of danger.  Similarly, unlike the other jurisdictions
relied  on  by  the  Dowdys, the NIED  tort  is  not  limited  to
witnesses  to an accident.  Thus it is not possible to  say  that
all  plaintiffs with NIED claims that are valid under Alaska  law
are  necessarily  injured in the same accident as  their  injured
relatives.
          Our  focus when this case was before us previously  was
on  the  question  of whether coverage issues should  be  decided
judicially  or  at  arbitration.  We did not decide  whether  the
absence of coverage could be determined as a matter of law.   But
that  is  the  question now and under the facts and circumstances
presented  it seems plain that the in the same accident  language
of  the policy cannot reasonably be construed to cover the Dowdys
NIED claim.  The Dowdys were not injured in an accident.  Rather,
they  were injured as a result of the death of their daughter  in
an  accident.   The policy provided coverage for their  resulting
injuries  but  only  under their daughters  per-person  coverage.
Since the limits for that coverage have been exhausted, they have
no  remaining  policy  coverage  under  which  they  may  recover
damages.
CONCLUSION
          For  the  reasons stated the judgment of  the  superior
          court is REVERSED.
_______________________________
     1     This  case  is before us for the second time.   Unless
otherwise noted, the following facts are taken from our  previous
decision.  State Farm Mut. Auto. Ins. Co. v. Dowdy, 111 P.3d  337
(Alaska 2005).

     2    Id. at 338-39.

     3    Id. at 339.

     4     In  our prior opinion in this case we stated that  the
Dowdys  had  three policies with $100,000/$300,000  limits  each.
Id. at 339.  That was the representation made in the Dowdys brief
and  it  was not contested by State Farm.  On the record  as  now
presented  there  is  uncertainty as to whether  the  Dowdys  had
three,  or  only  one,  $100,000/$300,000  policy.   State  Farms
complaint  alleges that there is one policy and  this  allegation
was  admitted  by  the Dowdys.  The superior courts  decision  on
remand  from this court and after arbitration only refers to  one
policy  and  to available limits of $100,000 per person  for  the
Dowdys  NIED claims even though the arbitrators awarded  $250,000
to  each  of the Dowdys.  The judgment from which this appeal  is
taken  likewise recognizes only one policy and awards to each  of
the  Dowdys  $100,000 plus interest, costs, and  attorneys  fees.
The  uncertainty as to whether there is one policy or three turns
out  not  to  be important in view of our decision in this  case.
For  purposes of discussion, we assume based on the judgment that
there was only one policy.

     5    Id. at 339-40.

     6    Id. at 343.

     7    Id. at 342.

     8     Id.  at 341-43.  For the purpose of examining  whether
coverage  issues  were inextricably intertwined with  the  Dowdys
NIED claims, we discussed what the Dowdys would have to prove  to
prevail on those NIED claims:

          [T]he Dowdys must show that (1) the defendant
          negligently   caused  injury   to   a   close
          relative,   (2)  the  plaintiffs  experienced
          shock  as  the  result of  a  sudden  sensory
          observation of the relatives injuries more or
          less  contemporaneously with learning of  the
          nature  of  the victims injury, and  (3)  the
          harm  suffered was severe, but need not  have
          resulted in physical illness or injury.
          
Id. at 343.

     9     Id.  at  343.  The relevant clause in the  State  Farm
policy giving rise to these issues provides as follows:

               The  amount of coverage is shown on  the
          declarations  page under Limits of  Liability
          U1 Bodily Injury, Each Person, Each Accident.
          Under  Each Person is the amount of  coverage
          for  all damages due to bodily injury to  one
          person.  Bodily injury to one person includes
          all  injury  and damages to others  resulting
          from this bodily injury.  Under Bodily Injury
          Each   Accident  is  the  total   amount   of
          coverage,  subject to the amount shown  under
          Each  Person, for all damages due  to  bodily
          injury  to  two or more persons in  the  same
          accident.
          
     10    Id.

     11    Id. at 342-43.

     12     Case  citations have been modified  to  reflect  this
courts  preferred  citation  style.   A  footnote  citation   was
omitted.

     13    The superior court also decided that punitive damages,
if  awarded, would be covered by the Dowdys UIM coverage  subject
to applicable limits.

     14     State Farm Mut. Auto Ins. Co. v. Lestenkof, 155  P.3d
313, 316 (Alaska 2007).

     15     Simmons v. Ins. Co. of N. Am., 17 P.3d 56, 59 (Alaska
2001).

     16     Allstate  Ins.  Co. v. Falgoust, 160  P.3d  134,  138
(Alaska 2007).

     17    Id. at 139.

     18    Id. at 138.

     19    AS 09.43.010.180.

     20     The  only  exception  is for legal  conclusions  that
pertain  to questions of arbitrability.  Kinn v. Alaska  Sales  &
Serv., Inc., 144 P.3d 474, 487 (Alaska 2006).

     21    120 P.3d 1115 (Haw. 2005).

     22    Id. at 1117.

     23    Id. at 1118.

     24    Id. at 1120.

     25    Id.

     26    Id. at 1121-22.

     27    881 P.2d 489 (Haw. 1994).

     28     Id.  at  495.   Although the court  in  Lawrence  was
construing  the  language of a statute, the court  observed  that
similar policy language had the same meaning:

               Of  particular significance is the  fact
          that  the  phrase  in any one  auto  accident
          contained  in the policy coincides  with  the
          threshold requirement of [the statute] which,
          as previously noted, provides that persons or
          their representatives may bring an action  in
          tort  due to death or injury as long as  they
          are   such  person[s]  in  a  motor   vehicle
          accident.  Again, none of the Smiths were  in
          the accident.
          
Id. at 502-03.

     29    105 Cal. Rptr. 505 (Cal. App. 1972).

     30    632 So. 2d 736 (La. 1994).

     31    540 A.2d 871 (N. J. Super. App. Div. 1988).

     32    368 S.E.2d 477 (S.C. App. 1988).

     33    Crabtree, 632 So. 2d at 737.

     34    Id.

     35    Id. at 745.

     36      The  case  in  which  bystander  claims  were  first
recognized in Louisiana is Lejeune v. Rayne Branch Hosp., 556 So.
2d 559 (La. 1990).

     37    Crabtree, 632 So. 2d at 745 n.19.

     38    100 P.3d 2 (Alaska 2004).

     39    Id. at 3.

     40    Id. at 4.

     41    Id. at 5.

     42    856 N.E.2d 778 (Ind. App. 2006), vacated by State Farm
Mut. Auto. Ins. Co. v. Jakupko, 881 N.E.2d 654 (Ind. 2008).

     43    132 P.3d 1197 (Ariz. App. 2006).

     44    862 N.E.2d 678 (Ind. App. 2007), vacated by State Farm
Mut. Auto. Ins. Co. v. D.L.B. ex rel. Brake, 881 N.E.2d 665 (Ind.
2008).

     45     In Jakupko the NIED claimants were passengers in  the
automobile involved in the underlying accident at the time of the
collision.  Jakupko, 856 N.E.2d at 780.

     46    See Crabtree, 632 So. 2d at 745.

     47    Connolly, 132 P.3d at 1203 (citations omitted).

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