Mario De Los Santos v. Allstate Property and Casualty Insurance Company

• Court: Supreme Court of Delaware
• Decided: July 25, 2025
• Docket: 437, 2024
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

MARIO DE LOS SANTOS, § § Plaintiff Below, § No. 437, 2024 Appellant, § § Court Below: Superior Court v. § of the State of Delaware § ALLSTATE PROPERTY AND § C.A. No. N22C-08-418 CASUALTY INSURANCE § COMPANY and STATE FARM § MUTUAL AUTOMOBILE § INSURANCE COMPANY, § § Defendants Below, § Appellees. §

Submitted: April 30, 2025 Decided: July 25, 2025

Before SEITZ, Chief Justice; VALIHURA and GRIFFITHS, Justices.

ORDER

The Court, having considered the briefs and the record below, and after oral

argument, rules as follows:

(1) While driving his car, Mario De Los Santos was hit by an uninsured

motorist. He asked his car insurance providers, State Farm Mutual Automobile

Insurance Company and Allstate Property and Casualty Insurance Company, to

cover his injuries and medical costs. Each carrier claimed that De Los Santos was uninsured on the day of the accident. The Superior Court agreed and granted

summary judgment to both carriers.

(2) On appeal, De Los Santos argues that State Farm violated statutory law

by canceling his policy before verifying that he had replacement coverage. He also

argues that Allstate may have prevented the payment of his premium that led to his

policy being voided. After careful review, we find that the insurance statute did not

require State Farm to verify replacement coverage before canceling his policy. But

whether Allstate caused the nonpayment of his insurance premium raised a genuine

issue of material fact that must be resolved at trial. Accordingly, we affirm the

court’s judgment in favor of State Farm and reverse the judgment in favor of Allstate.

Facts

(3) We recite the facts in a light most favorable to De Los Santos.1 A State

Farm car insurance policy covered De Los Santos from September 27, 2021, to

March 27, 2022.2 After State Farm increased the premium, De Los Santos decided

to change his insurance carrier to Allstate.3

1 See Enrique v. State Farm Mut. Auto. Ins. Co., 142 A.3d 506, 511 (Del. 2016) (“The facts of record, including any reasonable hypotheses or inferences to be drawn therefrom, must be viewed in the light most favorable to the non-moving party.” (quoting Williams v. Geier, 671 A.2d 1368, 1375 (Del. 1996))). 2 App. to Appellant’s Opening Br. at A122 [hereinafter A__] (State Farm auto renewal notice, Aug. 20, 2021). 3 A50–51 (Tr. 45–46, De Los Santos Dep.).

2 (4) On September 28, 2021, De Los Santos visited Powell Insurance

Agency, Inc., to apply for an Allstate policy.4 He provided the agent with a check

to pay the initial insurance premium.5 The agent took the check from him and put it

on her desk to record the information.6 De Los Santos authorized Allstate to pay the

premium and requested that the policy begin on October 5.7 He also authorized

monthly withdrawals from his Citizens Bank account to pay for future policy

premiums.8

(5) Allstate then attempted to charge De Los Santos for the premium, but

the charge was returned unpaid.9 The account that Allstate charged ended in x4315,

which De Los Santos testified he did not recognize.10 Allstate did not attempt to

4 See A82 (Allstate insurance application, Sept. 28, 2021) (“Agent/Agency Name: PROVEY POWELL JR”). 5 A54 (Tr. 61, De Los Santos Dep.). 6 A55 (Tr. 62, De Los Santos Dep.). 7 A85 (Allstate notice of payment authorization, Sept. 29, 2021); A82 (Allstate insurance application, Sept. 28, 2021). 8 A267 (Allstate confirmation of monthly payment plan, Sept. 29, 2021). 9 Allstate notified De Los Santos that it would charge the recorded account “as early as 10/1/2021.” A85 (Allstate notice of payment authorization, Sept. 29, 2021). Allstate sent a notice of nonpayment on October 5. A87 (Allstate notice of nonpayment, Oct. 5, 2021). Although Allstate attempted to charge the account between October 1 and 5, the record is unclear on what date the attempt was made. 10 A85 (Allstate notice of payment authorization, Sept. 29, 2021); A54 (Tr. 60, De Los Santos Dep.).

3 charge the Citizens Bank account that De Los Santos had provided for monthly

payments.

(6) On October 4, De Los Santos visited David Soleye Insurance Agency,

Inc., to cancel his State Farm policy.11 He requested that the State Farm policy end

on October 5.12 State Farm accepted his cancellation request and terminated the

policy on October 5.13 State Farm also processed a scheduled premium payment that

day.14 State Farm later informed De Los Santos that the policy was canceled as

requested, but that State Farm could not refund his premium until he submitted a

cash refund affidavit.15 Once De Los Santos submitted the form, State Farm issued

a refund check.16

(7) On October 7, an uninsured motorist drove into the back of De Los

Santos’s car, injuring him. That day, State Farm sent him a cancellation notice that

marked October 5 as the end date of his policy.17 The next day, Allstate voided De

11 A120 (State Farm cancellation record). 12 A57 (Tr. 71–73, De Los Santos Dep.). 13 A120 (State Farm cancellation record). 14 A275 (State Farm customer billing page for De Los Santos, Oct. 5, 2021). 15 A294 (State Farm cash refund notice, Oct. 14, 2021). 16 A296–97 (State Farm cash refund affidavit & refund check). 17 A280 (State Farm acknowledgement of cancellation request, Oct. 7, 2021).

4 Los Santos’s policy for nonpayment.18 Allstate’s cancellation was declared

retroactive to the policy’s issue date – October 5.19

(8) On October 11, De Los Santos visited Powell Insurance again to apply

for an Allstate policy.20 To pay for the premium on the new policy, he provided the

same check he had given in his first visit.21 This time, Allstate charged De Los

Santos’s account without any issues.22 The policy began on October 18 as De Los

Santos requested.

(9) De Los Santos asked State Farm and Allstate to provide uninsured

motorist coverage for the October 7 car accident. Both carriers denied coverage. De

Los Santos then filed suit in the Superior Court against State Farm and Allstate,

seeking damages for injuries and medical expenses arising from the car accident.

After discovery, both carriers moved for summary judgment.

(10) The court granted summary judgment to State Farm and Allstate. The

court rejected De Los Santos’s argument that the purpose of Title 18, Section 3915

of the Delaware Insurance Code was to ensure that an insured had valid coverage

18 A77 (Aff. of Allstate Emp. Thompson-McKenna). 19 A291 (Allstate notice of voided coverage, Oct. 12, 2021). 20 A56 (Tr. 66, De Los Santos Dep.). 21 Id. (Tr. 67, De Los Santos Dep.) (“Q. You took the exact same check with you? A. The same check. Q. Did you do it the same way you handed it to them? [sic] A. Yes.”). 22 Id. (Tr. 68, De Los Santos Dep.).

5 when switching to a new carrier.23 The court reasoned that Section 3915 was about

the “demand of a cash refund.”24 The court also found that “failure to pay a premium

is grounds to cancel a policy.”25 Furthermore, it held that De Los Santos’s argument

that Allstate caused the premium to go unpaid was “unsupported by any evidence.”26

(11) De Los Santos appeals the Superior Court’s summary judgment rulings.

He claims that the court misinterpreted Section 3915 to allow State Farm to cancel

his policy without verifying that he had replacement insurance. He also claims that

the cause of the failed Allstate premium payment was a disputed issue of material

fact to be resolved at trial. We review the Superior Court’s grant of summary

judgment de novo.27 We also review issues of statutory construction de novo.28

State Farm

(12) When interpreting a statute, our goal is to determine and give effect to

the intent of the legislature “as expressed in the statute.”29 We first “examine the

23 Ex. A, Order, De Los Santos v. Allstate Prop. & Cas. Ins. Co., N22C-08-418, at *2 (Del. Super. Ct. Oct. 1, 2024) [hereinafter Summ. J. Order]. 24 Id. 25 Id. 26 Id. 27 Richards v. Copes-Vulcan, Inc., 213 A.3d 1196, 1199 (Del. 2019). 28 McGuiness v. State, 312 A.3d 1156, 1200 (Del. 2024). 29 Wells Fargo Bank, N.A. v. Est. of Malkin, 278 A.3d 53, 64 (Del. 2022) (quoting Noranda Aluminum Holding Corp. v. XL Ins. Am., Inc., 269 A.3d 974, 978 (Del. 2021)).

6 text of the statute to determine if it is ambiguous.”30 A statute is ambiguous if it is

reasonably susceptible to different interpretations or if a literal interpretation of its

text creates an absurd result unintended by the legislature.31 We may “look behind

the statutory language itself only if the statute is truly ambiguous.”32 If the statute is

unambiguous, “the plain meaning of the statutory language controls.”33 Our role is

then limited to applying the “literal meaning of the statute’s words.”34

(13) Title 18, Section 3915 provides in relevant part:

(a) No insurer shall honor a request for a cash refund on cancellation of a policy by the insured until such time as the insured has provided sufficient evidence to the insurer that one of the following has occurred:

(1) The insured has other insurance in effect which provides at least . . . minimum insurance coverage . . . .35

De Los Santos contends that the Superior Court “undermine[d]” the purpose of

Section 3915 by narrowly interpreting it to cover only “the demand of a cash

30 Leatherbury v. Greenspun, 939 A.2d 1284, 1288 (Del. 2007) (citing Newtowne Vill. Serv. Corp. v. Newtowne Road Dev. Co., 772 A.2d 172, 175 (Del. 2001)). 31 Wilkerson v. State, 2025 WL 39625, at *7 (Del. Jan. 7, 2025) (citing Arnold v. State, 49 A.3d 1180, 1183 (Del. 2012)). 32 Wilkerson, 2025 WL 39625, at *7 (quoting In re Port of Wilm. Gantry Crane Litig., 238 A.3d 921, 927 (Del. Super. Ct. 2020)); see Noranda, 269 A.3d at 978 (“If there is a legitimate ambiguity, we consult the canons of statutory construction and may consider legislative history.”). 33 Protech Mins., Inc. v. Dugout Team, LLC, 284 A.3d 369, 375 (Del. 2022) (quoting Eliason v. Englehart, 733 A.2d 944, 946 (Del. 1999)). 34 Wilkerson, 2025 WL 39625, at *7 (quoting Arnold, 49 A.3d at 1183). 35 18 Del. C. § 3915.

7 refund.”36 He also claims that the court’s reading of Section 3915 produces an

absurd result.37 He interprets Section 3915 to require that an insurer verify that an

insured has “active replacement coverage” before canceling a policy.38 Therefore,

De Los Santos argues, summary judgment was improper because State Farm

canceled his policy before confirming that Allstate provided replacement coverage.

(14) De Los Santos’s argument is unpersuasive for two reasons. First, his

interpretation contravenes the statute’s clear text. Section 3915 requires an insurer

to verify an insured’s replacement coverage before “honor[ing] . . . a cash refund on

cancellation of a policy.”39 De Los Santos’s reading – requiring an insurer to verify

replacement coverage before canceling a policy – renders the language “cash refund

on” surplusage.40

(15) Despite this, De Los Santos contends that his reading is correct because

it implements the General Assembly’s intent to “prevent coverage gaps” and “reduce

36 Appellant’s Opening Br. on Appeal at 10 [hereinafter Opening Br.]; Summ. J. Order at *2. 37 See Oral Argument at 10:20, De Los Santos v. Allstate Prop. & Cas. Ins. Co., No. 437, 2024 (Del. Apr. 30, 2025) [hereinafter Oral Argument], https://vimeo.com/1078004721?fl=pl&fe=vl (“[T]hat narrow reading of . . . 3915, which certainly the lower court adopted and is the . . . reading that is set forth in the briefs by . . . State Farm, I think it produces some absurd results.”). 38 Opening Br. at 10. 39 18 Del. C. § 3915(a) (emphasis added). 40 See Taylor v. Diamond State Port Corp., 14 A.3d 536, 538 (Del. 2011) (“We also ascribe a purpose to the General Assembly’s use of statutory language, construing it against surplusage, if reasonably possible.” (citing Dewey Beach Enters., Inc. v. Bd. of Adjustment of Dewey Beach, 1 A.3d 305, 307 (Del. 2010))).

8 the number of uninsured drivers.”41 But in the absence of ambiguity, the statute’s

text “must be regarded as conclusive of the legislature’s intent.”42 Here, De Los

Santos does not offer a reasonable alternative interpretation of Section 3915 that

makes the statute ambiguous.43

(16) Second, the Superior Court’s interpretation of Section 3915 does not

lead to an absurd result. De Los Santos argues that, under this interpretation, an

insurer may keep a premium payment without providing coverage if an insured fails

to submit proof of replacement insurance. He claims that this result would contradict

the General Assembly’s intent to “prevent coverage gaps” and “reduce the number

of uninsured drivers.”44 Here, for example, this reading would allow State Farm to

41 Appellant’s Reply Br. at 4–5 [hereinafter Reply Br.]. 42 Grand Ventures, Inc. v. Whaley, 632 A.2d 63, 68 (Del. 1993); see Gonzalez v. Devlin, 792 A.2d 188 (Del. 2002) (TABLE) (“Where the intent of the General Assembly is clear from the language of the statute, there is no room for statutory interpretation.” (citing Giuricich v. Emtrol Corp., 449 A.2d 232, 238 (Del. 1982))). 43 De Los Santos relies on State Farm Mutual Automobile Insurance Co. v. Mundorf, 659 A.2d 215 (Del. 1995), and DiMenco v. Selective Insurance Co., 833 A.2d 984 (Del. Super. Ct. 2002), aff’d, 832 A.2d 1250 (Del. 2003) (TABLE), to argue that Delaware has a strong public policy of protecting consumers against lapses in insurance coverage. As stated above, we need not review Delaware’s public policy when applying the plain text of an unambiguous statute. But even if we did, Mundorf and DiMenco are inapposite. Mundorf reviewed whether an insurer is required to give notice when it declines to renew an insured’s policy under an Assigned Risk Plan. 659 A.2d 215. DiMenco reviewed whether a third-party insurance financer may send a notice of cancellation to an insured under 18 Del. C. § 4809. 833 A.2d 984. Both cases address Delaware’s public policy of protecting insureds by requiring insurers to provide adequate notice when insurers cancel coverage. De Los Santos does not claim that State Farm failed to provide him adequate notice of cancellation. 44 Reply Br. at 4–5.

9 cancel De Los Santos’s policy, hold the premium for his canceled policy, and not

provide coverage for the October 7 accident. Because we avoid “patent absurdity”

when interpreting statutes, De Los Santos argues that we should reject this reading

of Section 3915.45

(17) But, assuming De Los Santos’s description of legislative intent is

accurate, the Superior Court’s reading of Section 3915 does not contradict it. If an

insured fails to obtain replacement insurance, she forfeits the premium held by the

insurer. By requiring insurers to withhold cash refunds until they verify replacement

insurance, consumers are encouraged to obtain replacement insurance. This in turn

may reduce the number of uninsured motorists in Delaware. Our interpretation does

not yield “illogical or absurd results” that are “manifestly contradictory to common

reason.”46

(18) Accordingly, we need not look beyond the plain meaning of the text to

implement the legislature’s intent. Section 3915 regulates when an insurer may

refund an insured’s premium, not whether an insurer may cancel an insured’s policy.

Here, State Farm complied with Section 3915 by withholding De Los Santos’s

45 See Doroshow, Pasquale, Krawitz & Bhaya v. Nanticoke Mem’l Hosp., Inc., 36 A.3d 336, 343 (Del. 2012) (“We read statutes by giving language its reasonable and suitable meaning while avoiding ‘patent absurdity.’” (citation omitted)). 46 State v. Cooper, 575 A.2d 1074, 1075 (Del. 1990); Reddy v. PMA Ins. Co., 20 A.3d 1281, 1288 (Del. 2011) (quoting 1 William Blackstone, Commentaries *91).

10 refund until it received proof of replacement insurance. We affirm the Superior

Court’s grant of summary judgment to State Farm.

Allstate

(19) When reviewing a summary judgment decision, this Court applies the

same standard as the trial court.47 Summary judgment is granted if the evidence,

including depositions, shows that there is no genuine issue of material fact and the

movant is entitled to a judgment as a matter of law.48 We review the record to

determine whether, considering the facts and inferences in the light most favorable

to the nonmovant, a genuine dispute of material fact exists.49 “If material issues of

fact exist or if a court determines that it does not have sufficient facts to enable it to

apply the law to the facts before it, then summary judgment is inappropriate.”50

(20) Whether De Los Santos or Allstate caused the nonpayment of the first

Allstate premium raised a genuine issue of material fact. De Los Santos testified in

his deposition that he gave a check to the Powell Insurance agent. The agent took

the check to record his account information. Later, Allstate charged an account

47 Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009) (citing Berns v. Doan, 961 A.2d 506, 510 (Del. 2008)). 48 Super. Ct. Civ. R. 56(c). 49 GMG Ins. Agency v. Edelstein, 328 A.3d 302, 309 (Del. 2024) (citing Jones v. Crawford, 1 A.3d 299, 301–02 (Del. 2010)). 50 Wilm. Tr., Nat’l Ass’n v. Sun Life Assurance Co. of Canada, 294 A.3d 1062, 1071 (Del. 2023) (quoting Motorola, Inc. v. Amkor Tech., Inc., 849 A.2d 931, 935 (Del. 2004)).

11 number that De Los Santos did not recognize. This raises two possibilities – De Los

Santos’s account number was either misprinted on the check or improperly recorded

by the agent. But De Los Santos also testified that he provided the same check

during his second visit to pay for the new premium.51 As that payment was processed

without error, it is unlikely that the check had an incorrect account number. On this

limited factual record, a reasonable inference is that the agent improperly recorded

De Los Santos’s account information. Thus, viewing the facts in a light most

favorable to De Los Santos, Allstate likely caused the premium charge to return

unpaid.52

(21) Allstate argues that no insurance statute in Delaware “require[s]

insurance coverage when the premium was not paid.”53 But Allstate “may not

escape contractual liability” by relying on the failure of a condition precedent after

the party “wrongfully prevented performance of that condition precedent.”54 Here,

51 A56 (Tr. 67, De Los Santos Dep.). 52 During oral argument, Allstate contested whether Powell Insurance was its agent. See, e.g., Oral Argument at 17:36 (arguing that Powell is an “agent[] in some fashion” of Allstate). Allstate did not raise this issue with the Superior Court or in briefing to this Court. Under our rules, Allstate waived this argument. Supr. Ct. R. 14(b)(vi)(A)(3) (“The merits of any argument that is not raised in the body of the opening brief shall be deemed waived and will not be considered by the Court on appeal.”). 53 Corrected Answering Br. by Appellee Allstate Prop. & Cas. Ins. Co. at 11. 54 BitGo Hldgs., Inc. v. Galaxy Digital Hldgs., Ltd., 319 A.3d 310, 333 (Del. 2024) (quoting Mobile Commc’ns Corp. of Am. v. MCI Commc’ns Corp, 1985 WL 11574, at *4 (Del. Ch. Aug. 27, 1985)); see 13 Richard A. Lord, Williston on Contracts § 39:6 (updated 4th ed. 2025) (“[T]he [prevention]

12 the facts reviewed in the light most favorable to De Los Santos support his argument

that Allstate prevented the insurance premium from being paid. If so, Allstate cannot

use the nonpayment of the premium to evade its obligation to provide uninsured

motorist coverage to De Los Santos.

NOW, THEREFORE, IT IS HEREBY ORDERED that the judgment of the

Superior Court is AFFIRMED in part, REVERSED in part, and REMANDED to the

Superior Court for further proceedings consistent with this Order. Jurisdiction is not

retained.

BY THE COURT:

/s/ Collins J. Seitz, Jr. Chief Justice

doctrine is based on the long-established principle of law that a party should not be able to take advantage of its own wrongful act.”).