STATE FARM MUT. AUTO. INS. CO. v. Houle, 269 P.3d 654

Automobile accident in August 2001 injured Caroline Noel and killed Nolan Houle.
Houle and Noel families held UIM policies with State Farm; they stacked per-person limits against a $300,000 per-accident liability payout.
State Farm paid up to $750,000 (Houle) and $300,000 (Noel) under UIM; aggregate per-accident limits remained unexhausted.
Dispute centers on whether multiple family members’ injuries trigger separate per-person UIM limits or exhaust a single per-person limit.
Superior court reformed the policies to allow emotional distress claims to arbitration and dismissed loss of consortium as outside coverage; court of appeals denied reformation.
Alaska Supreme Court reversed the reformation, holding no separate per-person coverage is required and that the policies are consistent with statutes.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do UIM policies provide separate per-person coverage for emotional distress claims?	Houle argues for separate per-person limits for each injured family member.	State Farm contends only the per-person limits tied to Nolan/Caroline apply.	No; no separate per-person coverage for emotional distress claims.
Are Alaska statutes requiring separate per-person UIM coverage for family emotional distress claims?	Statutes require coverage for each insured harmed by an accident.	Statutes permit only per-accident limits; no separate per-person requirement.	Statutes do not require separate per-person coverage; reformation unnecessary.
Were the family members’ injuries incurred “in the same accident”?	Some family members were present at the scene or in proximity to the accident.	Injuries must be incurred in the same accident as the primary injured persons.	Not; the family members were not injured in the same accident as Nolan/Caroline.
Should the policies be reformed to provide coverage for bystander emotional distress?	Reform is necessary to align with statutory purpose and prior cases.	Reformation not required if policy terms are consistent with statutes.	Reformation unnecessary; terms are consistent with statutory requirements.

State Farm Mut. Auto. Ins. Co. v. Lawrence, 26 P.3d 1074 (Alaska 2001) (establishes framework for separate per-person coverage and waiver issues)
State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994 (Alaska 2008) (interprets ‘in the same accident’ and limits on NIED; guides statutory interpretation)
Allstate Ins. Co. v. Teel, 100 P.3d 2 (Alaska 2004) (broad construction of grants of coverage; bystander claims analysis)
State Farm Mut. Auto. Ins. Co. v. Harrington, 918 P.2d 1022 (Alaska 1996) (mirrors doctrine; statutory coverage alignment between UM/UIM and liability policies)
C.P. ex rel. M.L. v. Allstate Ins. Co., 996 P.2d 1216 (Alaska 2000) (exclusion clarity requirement; ambiguous exclusions affect coverage)