Georgia Supreme Court Partially Upholds Ruling Affecting Georgia “Impact Rule” – by Rusty Grant

The Supreme Court of Georgia has partially affirmed, and partially vacated, a decision of the Georgia Court of Appeals related to the long-standing Georgia “impact rule.” The court held that there was an issue of fact as to whether a passenger’s emotional distress claim was related to his own injuries or to having witnessed the death of his friend during an automobile accident. Because it was “not possible to determine, as a question of fact, whether any portion of [his] emotional distress arises solely from witnessing the injuries to his friend,” summary judgment at the trial court level would not be appropriate.

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. See Nationwide 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.

Court of Appeals Ruling:  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 (Ga. App.), which was decided in July 2014, 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. John McDade was a passenger in an automobile operated by his friend, Matthew Wood. Jerome Oliver crashed into the vehicle McDade was a passenger in, killing Wood in the process. McDade sued for emotional distress.

Citing the longstanding impact rule, Oliver sought summary judgment on any claims that McDade had for emotional distress as the result of having witnessed Wood’s death. The trial court denied the motion, and Oliver appealed. The Court of Appeals held that notwithstanding the impact rule, McDade had a pecuniary loss insofar as he incurred medical expenses related to his mental health treatment. The Court of Appeals further held that McDade’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 represented 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.

In a dissenting opinion, Judge Gary Andrews lamented that the majority’s opinion “eviscerates the impact rule, permits litigants to routinely obtain damages for emotional distress without physical injury, and, by doing so, impermissibly supplies a remedy where none existed before.”

Supreme Court Ruling: Pecuniary loss rule does not apply, but question of fact survives summary judgment

The Supreme Court ruled that the case could survive summary judgment because of the question of fact regarding the true source of the emotional injuries alleged. However, the Supreme Court vacated that portion of the Court of Appeals decision related to the application of the “pecuniary loss rule.” The Supreme Court indicated that “the Court of Appeals went further to assume facts not fully developed and opined as to how the law would apply to assumed facts.” Accordingly, at least for now, the “pecuniary loss rule” is not a loophole to the Georgia “impact rule.”

Practical Application to Future Cases

The practical effect of this ruling is that, in future cases, a plaintiff needs only to create a question of fact as to the source of the emotional distress. If an injured motorist can testify that his or her emotional damages were caused in part by even minor injuries, the emotional distress claim survives and allows for testimony related to both that piece of the claim and the death of a friend. This creates a heavy burden for defense counsel in attempting to convince the jury to differentiate the two claims and ignore human sympathy for a plaintiff who may have been through such a tragedy.