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Legal Memorandum: Intentional Infliction of Emotional Distress Claim

Issue: May a party bring a claim for intentional infliction of emotional distress against an insurer under the laws of the Virgin Islands?

Area of Law: Insurance Law, Personal Injury & Negligence
Keywords: Intentional infliction of emotional distress; Fiduciary relationship; Insurer
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: Restatement (Second) of Torts § 46
Date: 03/01/2005

The Virgin Islands is guided by Restatement (Second) of Torts § 46 statement of the requirements for an intentional infliction of emotional distress claim. Heywood v. Cruzan Motors, Inc., 792 F.2d 367, 371 (3d Cir. 1986).  Physical injury is not an element of this tort.   As comment k makes clear, “[t]he rule stated is not, however, limited to cases where there has been bodily harm; and if the conduct is sufficiently extreme and outrageous there may be liability for the emotional distress alone without such harm.” 

Especially because a primary reason for purchasing insurance is the peace of mind and security it is expected to provide, other jurisdictions recognize an insured should be able to recover for the emotional distress inflicted by bad-faith acts in denying payment of a valid claim.  See Ingalls v. Paul Revere Life In. Group, 561 N.W.2d 273, 283 (N.D. 1997); Jarchow v. Transamerica Title Ins. Co., 122 Cal. Rptr. 470, 486 (Ct. App. 1975).  Moreover, because an insurer’s relationship with its insured is akin to that of a fiduciary, in this light the acts of an insurer may be regarded as more extreme, outrageous and egregious than might be the case if the parties were of equal bargaining strength in an arm’s length relationship.  See Charleswell, 308 F. Supp. 2d at 572-73.

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