Moore v. State Farm Fire and Casualty Company

• Court: Superior Court of Delaware
• Decided: March 25, 2024
• Docket: S22C-08-018 MHC
• Status: Published

Opinion

SUPERIOR COURT OF THE STATE OF DELAWARE

Sussex County Courthouse MARK H. CONNER 1 The Circle, Suite 2 JUDGE Georgetown, DE 19947

March 25, 2024

Donald M. Ransom, Esq. D. Miika Roggio, Esq. CASARINO CHRISTMAN SHALK SILVERMAN McDONALD RANSOM & DOSS, P.A. & FRIEDMAN 1000 North West Street, Suite 1450 1523 Concord Pike, Suite 400 Brandywine Building Wilmington, DE 199803 South P.O. Box 1276 Attorney for Plaintiffs Elyse Wilmington, DE 19899-1276 and Robert Moore. Attorney for Defendant State Farm Fire and Casualty Company

RE: Elyse and Robert Moore v. State Farm Fire and Casualty Company C.A. No. S22C-08-018 MHC

Dear Counsel,

On October 18, 2023, I denied State Farm’s motion for summary judgment on

Plaintiff’s breach of contract claim because genuine issues of material fact existed

that require determination by a jury. In doing so, I failed to specifically address the

claims of bad faith and punitive damages. State Farm moved this Court for reargument limited to those claims pursuant to Rule 59(e). Oral argument was held

on February 16, 2024, and I asked the parties to provide supplemental briefs.

Motions for reargument will be denied unless the court has overlooked

controlling precedent or legal principles or has misapprehended the law or facts such

as would have changed the outcome of the underlying decision.1 In failing to address

the summary judgment motion as it pertained to the limited claims of bad faith and

punitive damages, I overlooked controlling precedent that, if considered, would have

changed the outcome of my underlying decision to deny summary judgment with

regards to Plaintiffs’ claims of bad faith and punitive damages. Therefore,

reargument is appropriate as it pertains to the claims of bad faith and punitive

damages.

Substantively, a genuine factual dispute exists with regards to the source of

the leak. Likewise, a genuine factual dispute exists as to whether water leaking

above ground, but ultimately entering the Plaintiffs’ basement below ground, is

subsurface water not covered by Plaintiffs’ policy. Based on these factual disputes,

I determined on October 18, 2022, summary judgment is not appropriate as to

Plaintiffs’ breach of contract claim.

1 Beatty v. Smedly, 2003 Del. Super. Lexis 437 (Del. Super. Ct. March 12, 2003). 2 For Plaintiffs to prevail on a claim of bad faith State Farm must have acted

“clearly without any reasonable justification” in failing to honor their obligations

under the policy.2 Similarly, Delaware law “permit[s] punitive damages in the

insurance ‘bad faith’ context.”3 “[P]unitive damages may be available in the context

of a contract action if the denial of coverage is willful or malicious.” 4 Punitive

damages are also justified when an insurers bad faith denial of coverage is done with

reckless indifference to the plight of the insured.5 Similarly, “an insured may be

entitled to the recovery of punitive damages in a bad faith action if the insurer's

breach is particularly egregious.”6 “When judging reasonableness [of coverage

denial] in this context, ‘[t]he ultimate question is whether at the time the insurer

denied liability, there existed a set of facts or circumstances known to the insurer

which created a bona fide dispute and therefore a meritorious defense to the insurer's

liability.’”7

In sum, for a plaintiff to recover punitive damages on bad faith claims in a

breach of insurance contract case, the plaintiff must show egregious behavior on the

2 Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254, 264 (Del. 1995) (citing Casson v. Nationwide Ins. Co., 455 A.2d 361, 369 (Del. Super. Ct. 1982)). 3 E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 446 (Del. 1996). 4 Pierce v. Int'l Ins. Co. of Illinois, 671 A.2d 1361, 1367 (Del. 1996). 5 Id. 6 Tackett, 653 A.2d 254, 265 (Del. 1995). 7 RSUI Indemnity Company v. Murdock, 248 A.3d 887, 910 (Del. 2021) (citing Casson v. Nationwide Ins. Co., 455 A.2d 361, 369 (Del. Super. Ct. 1982)). 3 part of the insurer without reasonable justification. In the present matter, a factual

dispute exists as to whether Plaintiffs are covered by State Farm’s policy, preserving

the breach of contract claim for trial. Logically, the existence of such a bona fide

dispute as to coverage means that State Farm’s denial of coverage was not egregious

or unreasonable, entitling State Farm to summary judgment to those claims as a

matter of law. Therefore, Defendant’s motion for summary judgment as to the claims

of bad faith and punitive damages is hereby GRANTED.

Sincerely,

/s/ Mark H. Conner

Mark H. Conner Judge

cc: Prothonotary Daniel Ballard, Esquire, Pro Hac Vice Attorney for Plaintiffs