Deane v. Liberty Mutual Fire Insurance Company

• Court: Superior Court of Delaware
• Decided: August 10, 2018
• Docket: N17C-04-355 AML
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

JOHN DEANE, ) ) Plaintiff, ) ) v. ) C.A. NO.: N17C-04-355 AML ) LIBERTY MUTUAL FIRE ) INSURANCE COMPANY, ) ) Defendant. )

Submitted: May 11, 2018 Decided: August 10, 2018

On Plaintiff’s Motion for Summary Judgment: DENIED On Defendant’s Motion for Summary Judgment: GRANTED

MEMORANDUM OPINION

Patrick C. Gallagher, Esquire, of JACOBS & CRUMPLAR, PA, Wilmington, Delaware, Attorney for Plaintiff.

Daniel A. Griffith, Esquire, and Kaan Ekiner, Esquire, of WHITEFORD TAYLOR & PRESTON, LLP, Wilmington, Delaware, Attorneys for Defendant.

LeGROW, J. This case arose after Plaintiff was injured in a motor vehicle accident that

occurred in Delaware while he was driving a vehicle registered and insured in

Georgia. Plaintiff recovered Personal Injury Protection (“PIP”) benefits from his

employer’s Georgia-issued insurance policy with New Hampshire Insurance

Company (“NHIC”). Plaintiff then sought PIP benefits through his personal

insurer, Liberty Mutual Fire Insurance Company (“Liberty Mutual”). Liberty

Mutual denied Plaintiff’s claim, arguing an “anti-stacking clause” in Plaintiff’s

insurance policy prevents insureds from stacking PIP benefits paid under the

Delaware Motorist Protection Act (“the Act”). Plaintiff argues the NHIC PIP

benefits were not paid under the Act because his vehicle was registered and insured

in Georgia. The issue before the Court is whether the Act requires a vehicle

insured in a state with no minimum PIP coverage to carry insurance equivalent to

Delaware’s minimum PIP coverage while operating in Delaware and, if so,

whether benefits paid under such coverage are subject to the insurance policy’s

anti-stacking provision. Because I find Georgia does not require PIP coverage, I

conclude NHIC was required to pay Plaintiff Delaware’s minimum PIP benefits

under the Act, and the policy’s anti-stacking provision therefore applies. My

reasoning follows. FACTUAL AND PROCEDURAL BACKGROUND On April 23, 2011, John Deane (“Plaintiff”) sustained personal injuries in a

motor vehicle accident while driving a vehicle owned by his employer, Covidien

PLC (“Covidien”). Covidien’s vehicle was registered and insured in Georgia

through NHIC, but included a Delaware PIP endorsement.1 NHIC paid Plaintiff

$15,000 in PIP benefits under its policy with Covidien to cover injuries Plaintiff

sustained in the accident. When NHIC paid the benefits, it stated it was doing so

under the “DE PIP Endorsement.”2

At the time of the accident, Plaintiff personally was insured through Liberty

Mutual. After receiving PIP benefits from NHIC, Plaintiff claimed additional PIP

benefits from Liberty Mutual. Liberty Mutual denied Plaintiff’s claim, arguing the

insurance policy’s anti-stacking provision prevented Plaintiff from seeking

additional PIP benefits because he already received PIP benefits paid under the

Delaware Motorist Protection Act (“the Act”).3 Plaintiff’s insurance policy with

Liberty Mutual provides, in relevant part:

We will not provide Personal Injury Protection Coverage for “bodily injury” sustained by the named insured or any “family member” while . . . “occupying” . . . any “motor vehicle” other than “your covered auto” . . . with respect to which the insurance is required by the Delaware Motorist Protection Act is in effect.4

1 Ex. A to Def.’s Suppl. Letter. 2 Ex. E to Def.’s Mot. Summ. J. at 1. 3 The Delaware Motorist Vehicle Act is the statutory name for 21 Del. C. § 2118. 4 Ex. D to Def.’s Mot. Summ. J. at 3. 2 Liberty Mutual maintained that because the PIP benefits in effect in NHIC’s

insurance policy were required by (and paid under) the Act, Plaintiff could not

stack them and receive double PIP recovery. On April 30, 2017, Plaintiff sued for

declaratory judgment and breach of contract. After discovery, the parties filed

cross-motions for summary judgment on the issue of whether Liberty Mutual’s

anti-stacking clause applies to Plaintiff’s claim for PIP benefits.

THE PARTIES’ CONTENTIONS Liberty Mutual argues the anti-stacking provision in the policy precludes

Plaintiff from recovering PIP benefits under Liberty Mutual’s policy because

Delaware PIP benefits were available from NHIC. Liberty Mutual contends

NHIC’s PIP benefits were paid under Delaware law because the Act requires

vehicles operating in Delaware to have the minimum insurance coverage required

by the state in which the vehicle is registered or—if that state has no minimum

coverage—to have coverage consistent with Delaware’s minimum coverage.

Because Georgia does not require minimum PIP coverage, Liberty Mutual asserts

NHIC’s policy had Delaware’s minimum coverage in effect.

In response, Plaintiff argues the NHIC benefits were paid under Georgia law

because the vehicle was registered in Georgia and insured by a Georgia policy. In

support of his argument, Plaintiff cites this Court’s opinion in Gallaher v. USAA,5

arguing the Court held in that case that a similar anti-stacking provision did not 5 2005 WL 3062014 (Del. Super. Aug. 5, 2005). 3 apply to PIP benefits paid under insurance related to a vehicle registered and

insured in Georgia.

ANALYSIS “When opposing parties make cross motions for summary judgment, neither

party’s motion will be granted unless no genuine issue of material fact exists and

one of the parties is entitled to judgment as a matter of law.”6 Where, however, the

parties do not contend that a material factual issue precludes judgment as a matter

of law, the Court “will treat the cross motions as a stipulation for decision of the

case based on the submitted record.”7 Because the parties agree there are no

material factual disputes concerning the issue of Plaintiff’s coverage, the question

presented is one of law and summary judgment therefore is appropriate.

In Delaware, contract interpretation is treated as a question of law.8

“[W]hen the language of an insurance contract is clear and unequivocal, a party

will be bound by its plain meaning . . . .”9 A contract is not ambiguous simply

because the parties disagree about its construction. Rather, a contract is ambiguous

only when its’ provisions fairly are susceptible to different interpretations or may

have two different meanings. “Ambiguity does not exist where the court can

determine the meaning of a contract ‘without any other guide than a knowledge of

6 Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742, 745 (Del. 1997). 7 Gallaher, 2005 WL 3062014, at *1. 8 Emmons, 697 A.2d at 745. 9 Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925, 926 (Del. Super. 1982). 4 the simple facts on which, from the nature of language in general, its meaning

depends.’”10

A. The Act requires out-of-state vehicles operating in Delaware to carry insurance meeting Delaware’s minimum coverage if the state in which the vehicle is registered does not mandate any PIP coverage. During the hearing on the parties’ motions, Plaintiff asked for an opportunity

to submit supplemental briefing regarding the meaning of the Act and its effect on

this case. In his supplemental submission, Plaintiff acknowledged the Act,

specifically Section 2118(b), imposes criminal liability on an individual driving a

vehicle that is required to be registered in Delaware but that does not carry the

state’s minimum insurance coverage. Plaintiff also argued, however, that Section

2118(b) does not apply to vehicles registered in other states. Although criminal

liability is not at issue in this case, I address Plaintiff’s argument because it

challenges Section 2118(b)’s applicability to vehicles operating in Delaware but

registered and insured in other states. In support of his argument, Plaintiff cites

Green v. Budget Rent A Car Corporation,11 where this Court concluded vehicles

operating in Delaware, but registered and insured in another state, are not required

to meet Delaware’s minimum PIP requirements under Section 2118(b).12

10 Rhone-Poulenc Basic Chemicals Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992) (quoting Holland v. Hannan, 456 A.2d 807, 815 (D.C. Cir. 1983)). 11 857 A.2d 1031 (Del. Super. 2004). 12 Id. at 1035. 5 In Green, the plaintiff was injured when he was struck by a rental car owned

by Budget Rent-A-Car (“Budget”).13 The rental car was registered and insured in

Pennsylvania, and the insurance policy met Pennsylvania’s minimum coverage

requirements.14 The plaintiff argued he was entitled to Delaware’s minimum PIP

benefits under Section 2118(b).15 The Court rejected the plaintiff’s argument,

citing the Delaware Supreme Court’s decision in Nationwide Insurance Company

v. Battaglia.16 In Battaglia, the Delaware Supreme Court held that where the out-

of-state vehicle is registered and insured in another state, Section 2118(b) “cannot

be held to impose Delaware’s minimum PIP insurance benefits requirement on the

defendant.”17 In Battaglia, the vehicle was insured in Maryland, and carried

Maryland’s $2500 minimum PIP coverage, which was less than Delaware’s

$10,000 PIP coverage. The Battaglia Court held Section 2118 did not require the

out-of-state vehicle to carry Delaware’s higher coverage minimums.18

After the Battaglia decision, however, Section 2118(b) was amended in

1992 to add the following language, on which Liberty Mutual now relies:

No owner of a motor vehicle being operated in this State shall operate in this State or authorize any other person to operate such vehicle in this State unless the owner has insurance on such motor vehicle equal to the minimum 13 Id. at 1031. 14 Id. at 1032. 15 Id. 16 410 A.2d 1017 (Del. 1980). 17 Id. at 1019. 18 Id. 6 insurance required by the State or jurisdiction where said vehicle is registered. If the State or jurisdiction of registration requires no minimum insurance coverage then such owner must have insurance on such motor vehicle equal to the minimum insurance coverage required for motor vehicles registered in this State.19 In Orija v. Verser,20 this Court noted the effect of the 1992 amendments on

the continued precedential value of the Battaglia decision. The Court found

“[s]ubsequent to these decisions, § 2118(b) was amended to add the insurance

coverage provisions governing out-of-state vehicles which are at issue in this

case.”21 The Court held Section 2118(b) unambiguously imposed Delaware’s

insurance minimums on out-of-state vehicles operating in Delaware if the state of

registration had no minimum PIP coverage requirements. The Court reasoned:

In interpreting a statute, the Court’s role is to determine and give effect to the legislature’s intent. Where that intent is clearly expressed by unambiguous language in the statue, the language itself controls. This Court finds that the pertinent portions of (b) are not ambiguous in requiring coverage equivalent to Delaware’s minimums where the home state has no lower minimums. Legislative history affirms the intent of (b). Such reference can be helpful to a court. In this instance, in addition to the clear statutory requirement the legislative synopsis says it all: This Bill will require insurance for all motor vehicles operating in this State whether they are registered in this State or not.22

19 68 Del. Laws ch. 331 (1992) (emphasis added). 20 2008 WL 853798 (Del. Super. April 1, 2008). 21 Id. at *4. 22 Id. at *7 (quoting 68 Del. Laws ch. 331 (1992)). 7 The facts in Orija are analogous to this case. In Orija, the plaintiff, a North

Carolina resident, sued the defendant, a Virginia resident, after their vehicles

collided in Delaware. The two vehicles were registered in North Carolina and

Virginia, respectively. The Court held the plaintiff’s insurer was required to

provide the plaintiff PIP coverage “in the same minimally required amount for

policies covering Delaware registered vehicles”23 because (1) North Carolina had

no minimum coverage requirements, and (2) Orija’s policy included an

extraterritoriality provision that provided the minimum coverage requirements of

states like Delaware if an auto accident occurred in the foreign state.24 The Orija

Court therefore concluded that Section 2118’s requirements may extend to vehicles

registered in other states.

As this Court held in Orija, a vehicle registered in a state with no minimum

PIP coverage is required, when operating in Delaware, to carry insurance meeting

Delaware’s PIP minimums. Unlike Orija, the Battaglia and Green decisions are

not analogous to this case. Both cases involved vehicles registered in states that

mandated PIP coverage, and Battaglia was decided before the 1992 statutory

amendments that added the language at issue in this case.

B. Georgia does not mandate any PIP coverage. 23 Id. at *8. 24 Id. at *7. 8 Confronted with the unambiguous language discussed above, Plaintiff

nonetheless claims the anti-stacking provision does not apply to his PIP benefits

from NHIC because those benefits were paid under Georgia law, not under the

Delaware Act. In support of his argument, Plaintiff cites this Court’s decision in

Gallaher.

In Gallaher, the plaintiff was injured in Delaware when he caught his foot in

the frame of a tractor-trailer owned by his employer.25 The tractor-trailer was

registered and insured in Georgia, where the plaintiff’s employer was based.26 The

plaintiff received PIP benefits from his employer’s insurance carrier and applied

for additional PIP benefits from his personal policy with USAA. 27 USAA argued

the plaintiff was prohibited from collecting additional benefits under the policy’s

anti-stacking provision, which substantively was identical to the anti-stacking

provision at issue here.28

In its decision, the Court held, consistent with the analysis in Section A,

above, that the Act requires vehicles operating in Delaware, but registered and

insured in other states, to meet the Act’s minimum coverage requirements under

the Act if the state of registration does not mandate PIP coverage. The Gallaher

Court, however, held that Georgia Code 33-7-11 required a minimum of $25,000

25 Id. 26 Id. 27 Id. 28 Id. at *2. 9 in PIP coverage per person and $50,000 per accident.29 Because the Court found

Georgia’s coverage requirements exceeded Delaware’s requirements, the Court

held plaintiff’s employer was not insured under the Act, and the policy’s anti-

stacking provision therefore did not preclude plaintiff from recovering PIP benefits

under his Delaware policy.

As set forth above, I agree with the Gallaher Court’s reasoning that a motor

vehicle, registered and insured in another state, is not insured under the Act when

the state of registration requires PIP coverage and the vehicle’s coverage meets or

exceeds that state’s minimum coverage. The parties, however, have not provided

any record to support a conclusion that Georgia mandates any minimum PIP

coverage. Upon review, Section 33-7-11, on which the Gallaher Court relied,

applies to uninsured motorist coverage. That Section states, in relevant part:

No automobile liability policy or motor vehicle liability policy shall be issued or delivered in this state to the owner of such vehicle or shall be issued or delivered by any insurer licensed in this state upon any motor vehicle then principally garaged or principally used in this state unless it contains an endorsement or provisions undertaking to pay the insured damages for bodily injury, loss of consortium or death of an insured, or for injury to or destruction of property of an insured under the named insured's policy sustained from the owner or operator of an uninsured motor vehicle, within limits exclusive of interests and costs which at the option of the insured shall be:

29 Gallaher, 2005 WL 3062014, at *2. 10 (A) Not less than $25,000.00 because of bodily injury to or death of one person in any one accident, and, subject to such limit for one person, $50,000.00 because of bodily injury to or death of two or more persons in any one accident, and $25,000.00 because of injury to or destruction of property . . . .30 The statute sets coverage minimums for injuries sustained from uninsured

motorists, but does not set minimums for coverage outside that context, including

minimum no-fault, or PIP, coverage. Section 33-7-11’s narrow scope is reflected

by the language in the statute’s 2008 amendments, which provide, in relevant part:

“Title 33 of the Official Code of Georgia Annotated, relating to insurance, is

amended by revising subsections (a) and (b) of Code Section 33-7-11, relating to

uninsured motorist coverage under motor vehicle liability policies, as follows . . .

.”31

Additionally, this Court’s research into decisions applying Section 33-7-11

only found decisions applying the coverage to cases involving uninsured

motorists.32 Accordingly, a plain reading of the statute and its application by

30 GA CODE ANN. § 33-7-11 (2018) (emphasis added). 31 2008 Ga. Laws 801 (emphasis added). 32 See, e.g., Coker v. American Guar. & Liab. Ins. Co., 825 F.3d 1287, 1292 (11th Cir. 2016) (“Georgia’s UM statute is found at Ga. Code Ann. § 33-7-11.”); Progressive Mountain Ins. Co. v. Alvarado, 2017 WL 3525440, *4 (N.D. Ga. March 8, 2017) (awarding Section 33-7-11’s statutory minimums after finding the tortfeasor was not covered under Progressive’s insurance policy); American Ins. Co. v. Horton, 2017 WL 3498705, *3 (N.D. Ga. March 27, 2017) (“In Georgia, drivers are not required to carry UM insurance, but insurers are nevertheless required to offer UM coverage to their insureds whenever an ‘automobile liability policy or motor vehicle liability policy’ is issued or delivered in Georgia. O.C.G.A. § 33–7–11(a)(1). Such policies must include UM coverage unless the insured rejects such coverage in writing. If the insured fails to reject the coverage in writing or specify some other limit of UM coverage, the subject 11 courts indicates Section 33-7-11 does not require PIP coverage. As a result,

Georgia-insured vehicles operating in Delaware are required under Section 2118(b)

to carry Delaware’s minimum coverage under the Act.33

C. Because Covidien’s vehicle was one for which the insurance required by the Act was in effect, the anti-stacking provision applies. Here, Covidien’s vehicle was insured in Georgia, which has no PIP coverage

requirements. The minimum coverage requirements under Section 2118 therefore

were in effect when the vehicle was operating in Delaware. NHIC’s policy terms

and the manner in which it processed Plaintiff’s claim reflect this. Covidien’s

NHIC policy included a list of endorsements that represented compliance with

several states’ coverage requirements.34 The endorsement list included an

endorsement for Delaware’s “Personal Injury Protection.”35 Additionally, NHIC’s

coverage selection form for Covidien’s policy in Delaware is titled “Delaware

‘automobile liability policy or motor vehicle liability policy’ is deemed to provide UM coverage in the amount of the liability coverage limits of the policy.”); Selective Ins. Co. v. Gwartney, 2014 WL 12659900, *2 (S.D. Ga. May 29, 2014) (“The amount of UM coverage shall be (A) [n]ot less than $25,000.00 because of bodily injury to or death of one person in any one accident, and, subject to such limit for one person, $50,000.00 because of bodily injury to or death of two or more persons in any one accident, and $25,000.00 because of injury to or destruction of property . . . .”). 33 Plaintiff does not argue that Georgia requires PIP coverage. Rather, Plaintiff argues the Gallaher Court held all vehicles insured in Georgia are not insured under the Act. In support of his argument, Plaintiff relies on Gallaher’s conclusion that “the [vehicle] here, being insured under Georgia law, is not insured under the Delaware Motorist Protection Act and therefore does not come within the exclusion.” Gallaher, 2005 WL 3062014, at *2. This argument misconstrues the Gallaher decision, however, which held the plaintiff’s vehicle was not insured under the Act because it concluded Georgia’s minimum insurance requirements exceeded Delaware’s insurance requirements. 34 Ex. A to Def.’s Suppl. Letter. 35 Id. 12 Motorist’s Protection Act Required Statement to Policyholders.”36 Further, NHIC

paid Plaintiff $15,000 in “DE PIP” benefits after the April 2011 accident.37

Accordingly, the PIP benefits paid under the NHIC policy were benefits required

by Section 2118, thereby triggering the anti-stacking provisions of Liberty

Mutual’s policy. Plaintiff cannot stack PIP benefits from Liberty Mutual to the

benefits he received from NHIC under the Act.

CONCLUSION For the foregoing reasons, Plaintiff’s motion for summary judgment is

DENIED, and Defendant’s motion for summary judgment is GRANTED.

IT IS SO ORDERED.

36 Ex. B to Def.’s Suppl. Letter. 37 Id. 13