Georgia Court of Appeals Provides Loophole to “Impact Rule” – by Rusty Grant

rgrantThe Georgia Court of Appeals recently ruled that a passenger could recover for emotional injuries after witnessing the death of his friend in an automobile collision. This ruling creates a new theory of recovery for a plaintiff under the “pecuniary loss rule” by introducing evidence of medical expenses related to mental health treatment.

Previous Precedent: Impact Rule v. Pecuniary Loss

Under the “impact rule,” a claimant cannot recover damages for emotional distress unless: (1) there is a physical impact; (2) the physical impact causes physical injury; and (3) the physical injury causes the alleged mental suffering or distress. Historically, the lone exception to this rule had been that a parent could recover for the emotional scarring of watching his or her child’s death if that parent also suffered a physical injury. Lee v. State Farm Insurance Co., 272 Ga. 583 (2000).

The “pecuniary loss rule” arguably provided a separate exception. It allowed a claimant to recover for emotional injuries if he or she also suffered a pecuniary loss, such as damage to a vehicle.  SeeNationwide Mutual Fire Insurance Co. v. Lam, 248 Ga. App. 134 (2001). However, medical expenses related to the emotional injury alleged did not qualify as the pecuniary loss for the purposes of this exception.

New Rule: Evidence of medical expenses related to mental health treatment satisfies the pecuniary loss exception to the Georgia Impact Rule.

In Oliver v. McDade, 2014 WL 3510716 (July, 2014 Ga. App.), the Court of Appeals overruled its prior line of case authority and held that a passenger whose medical expenses arose from emotional injuries only had satisfied the requirements of the pecuniary loss rule and could therefore recover for emotional distress. The Court of Appeals held that notwithstanding the impact rule, plaintiff had a pecuniary loss insofar as he incurred medical expenses related to his mental health treatment. The Court of Appeals further held that plaintiff’s emotional suffering as related to his friend’s death was intertwined with any suffering related to his own injuries.  Accordingly, he was entitled to present claims to a jury for both.

This represents the first time that a Georgia appellate court has permitted a claimant to recover for the emotional distress related to witnessing a friend’s death.