Shannon Moffitt-Ali v. State Farm Mutual Automobile Insurance Company

Opinion

IN THE SUPERIOR COURT

OF THE STATE OF DELAWARE

SHANNON MOFFITT-ALI, )

)

Plaintiff, )

)

v. ) C.A. No. N14C-04-117 WCC )

STATE FARM MUTUAL ) AUTOMOBILE INSURANCE ) COMPANY, a foreign corporation, ) and JOVANNA Y. MOFFITT-ALI, )

)

Defendants. )

Submitted: January 13, 2016 Decided: March 31, 2016

Defendant State Farm’s Motion for Summary Judgment --GRANTED

MEMORANDUM OPINION

Gary S. Nitsche, Esquire, Eileen M. McGivney, Esquire, Weik, Nitsche & Dougherty, 305 N. Union Street, P.O. Box 2324, Wilmington, DE 19899. Attorneys for Plaintiff.

Matthew E. O’Byrne, Esquire, Brian V. Demott, Esquire, Casarino Christman Shalk Ransom & Doss, P.A., 405 N. King Street, Suite 300, P.O. Box 1276, Wilmington, DE 19899. Attorneys for Defendant State Farm.

CARPENTER, J.

Presently before the Court is Defendant State Farm Mutual Automobile

Insurance Company’s (“State Farm”) Motion for Summary Judgment. For the

following reasons, State Farm’s Motion will be GRANTED.

FACTS

Underlying this Motion is Shannon Moffitt-Ali’s (“Plaintiff”) claim for

underinsured motorist (“UIM”) coverage relating to injuries she sustained in a

motor vehicle collision on December 2, 2012.1 At the time of the accident,

Plaintiff was a passenger in a vehicle operated by her step-daughter, Javonna

Moffitt-Ali (“Defendant Moffitt-Ali”).2 Defendant Moffitt-Ali was driving

westbound on Delaware Route 4 at the same time Rachel Reaume (“Reaume”) was

traveling eastbound when the two vehicles collided.3 The collision allegedly

occurred as a result of both drivers’ negligence.4

At the time of the accident, Reaume’s vehicle was insured by State Farm

with a liability coverage limit of $25,000.5 Defendant Moffitt-Ali was operating a

vehicle owned by Troy B. Moffitt-Ali and insured by a Liberty Mutual Insurance

Company (“Liberty Mutual”) policy with liability coverage limits of $100,000, as

1 Pl. Am. Compl. ¶ 14. 2 Id. ¶ 5. 3 Id. ¶ 6. 4 Id. ¶¶ 6-8. See also Pl. Resp. to Def. Mot. for Summ. J. ¶ 1 (“Liability was contested between Defendant Moffitt-Ali and Ms. Reaume.”). 5 Pl. Am. Compl. ¶ 10.

3

well as UIM coverage of $100,000.6 Plaintiff also had her own insurance policy

through State Farm, which included UIM coverage of $25,000.7

Plaintiff’s claim against Reaume was resolved in exchange for the $25,000

limits of her liability policy.8 Plaintiff then filed the present case against

Defendant Moffitt-Ali, Liberty Mutual, and State Farm on April 14, 2014.9 Liberty

Mutual has since tendered both the bodily injury liability and UIM policy limits.10

On October 21, 2015, this Court signed a partial stipulation of dismissal with

prejudice with respect to all claims against Liberty Mutual.11

Plaintiff now seeks secondary UIM coverage through her policy with State

Farm.12 State Farm filed the instant Motion for Summary Judgment on October 21,

2015. State Farm contends Plaintiff is not entitled to access her UIM coverage

because the combined liability coverage of the tortfeasors in this matter, Reaume

and Defendant Moffitt-Ali, exceeded Plaintiff’s underinsured limits. Plaintiff

argues that she remains entitled to access her UIM benefits because one of the

tortfeasor’s liability coverage was less making her underinsured as to that policy.

6 Pl. Resp. to Def. Mot. for Summ. J. ¶ 2. 7 Id. 8 Pl. Am. Compl. ¶ 10. 9 Plaintiff filed an Amended Complaint on September 2, 2014 to include the allegations against State Farm. 10 Pl. Resp. to Def. Mot. for Summ. J. ¶ 3.

11 D.I. 43.

12 Pl. Resp. to Def. Mot. for Summ. J. ¶ 3.

4

The Court heard oral argument on December 4, 2015. On January 13, 2016, the

Court signed an Order reflecting the parties’ agreement to stipulated damages of

$25,000, the State Farm UIM policy limits, should Plaintiff’s claim survive

summary judgment. This is the Court’s decision on the matter.

STANDARD OF REVIEW

In reviewing a motion for summary judgment pursuant to Rule 56, the Court

must determine whether any genuine issues of material fact exist. 13 Specifically,

the moving party bears the burden of showing that there are no genuine issues of

material fact so that he is entitled to judgment as a matter of law.14 Further, the

Court must view all factual inferences in a light most favorable to the non-moving

party.15 Therefore, summary judgment will not be granted if it appears that there is

a material fact in dispute or that further inquiry into the facts would be

appropriate.16

DISCUSSION

Title 18, Section 3902 of the Delaware Code was enacted to provide

innocent victims of motor vehicle accidents a means of recovering for injuries

13 Super. Ct. Civ. R. 56(c); Wilm. Trust Co. v. Aetna, 690 A.2d 914, 916 (Del. 1996). 14 Moore v. Sizemore, 405 A.2d 679 (Del. 1979). 15 Alabi v. DHL Airways, Inc., 583 A.2d 1358, 1361 (Del. 1990). 16 Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. Super. 1962), rev’d in part on procedural grounds and aff’d in part, 208 A.2d 495 (Del. 1965).

5

“inflicted by impecunious tortfeasors.” 17 The statute aims to achieve this objective

by permitting “a claim for UIM benefits where an operator of an underinsured

motor vehicle causes the claimant bodily injury.” 18 The necessary first step in

seeking to collect UIM benefits, then, is to show that the tortfeasor was operating

an underinsured motor vehicle.19 This threshold determination is governed by 18

Del. C. § 3902(b)(2), which, prior to its 2013 amendment, provided:

An underinsured motor vehicle is one for which there may be bodily injury liability coverage in effect, but the limits of bodily injury liability coverage under all bonds and insurance policies applicable at the time of the accident total less than the limits provided by the uninsured motorist coverage. These limits shall be stated in the declaration sheet of the policy.20

This definition has since been amended to provide that a vehicle is underinsured if

the limits of all applicable policies “are less than the damages sustained by the

insured.” 21 However, this language affects only those policies renewed or secured

17 See Deptula v. Horace Mann Ins. Co., 842 A.2d 1235, 1236 (Del. 2004). See also Hurst v. Nationwide Mut. Ins. Co., 652 A.2d 10, 12 (Del. 1995) (citing Frank v. Horizon Assur. Co., 553 A.2d 1199, 1201 (Del. 1989)). 18 See White v. Liberty Ins. Corp., 975 A.2d 786, 788 (Del. 2009) (emphasis added) (citing 18 Del. C. § 3902(b)(1)). 19 See id. See also Nationwide Mut. Ins. Co. v. Williams, 695 A.2d 1124, 1126 (Del. 1997) (“[T]he definition of underinsurance in Section 3902(b)(2) operates as a prerequisite to a right of recovery from the claimant's underinsurance motorist policy.” (citing Nationwide Mut. Auto. Ins. Co. v. Peebles, 688 A.2d at 1378)). 20 18 Del. C. § 3902(b)(2) (1995). 21 18 Del. C. § 3902(b)(2) (2013) (“An underinsured motor vehicle is one for which there may be bodily injury liability coverage in effect, but the limits of bodily injury liability coverage under all bonds and insurance policies applicable at the time of the accident are less than the damages sustained by the insured. These limits shall be stated in the declaration sheet of the policy.”).

6

after the amendment’s July 3, 2013 effective date, which is not the case here.22

Accordingly, whether Plaintiff is entitled to UIM coverage will “depend[] upon the

applicable policy limits.”23 In other words, an underinsured tortfeasor for present

purposes is one “with liability policy limits that are less than the limits of the

claimant's uninsured motorist coverage.”24

In the context of this initial comparison, an injured claimant is permitted to

look to the limits of “any one” applicable UIM policy.25 While addressing a

different, yet related, issue in Colonial Insurance Co. of Wisconsin v. Ayers, the

Court held that a claimant is precluded from stacking UIM benefits “for purposes

of the threshold inquiry into whether…[UIM] coverage provided by any one UIM

policy is triggered.” 26 While rejecting the construction asserted by the plaintiff

there as contrary to the “unambiguous language of the statute,” the Court’s

22 See Lamanna v. Prime Ins. Co., 2013 WL 9769255, at *3 (Del. Super. Nov. 25, 2013) (“The amendment to § 3902(b)(2), effective July 3, 2013, did ‘not affect existing insurance policies, and will apply only to renewing or new policies that become effective six (6) months after the law is enacted.’”) (quoting 79 Del. Laws 2013, ch. 91, § 1)). 23 See White, 975 A.2d at 789. 24 See Williams, 695 A.2d at 1126 (emphasis in original). 25 See Garnett v. Liberty Mut. Fire Ins., 2006 WL 2441969, at *3 (Del. Super. Aug. 23, 2006) (“[A]n injured party is not limited to looking to the vehicle policy when determining the threshold question of whether they qualify for UIM coverage. The injured party may look to ‘any one’ policy to determine the threshold question of whether they qualify for UIM coverage, including their personal policy.” (citing Deptula, 842 A.2d at 1236-38)). 26 See Colonial Ins. Co. of Wisconsin v. Ayers, 772 A.2d 177, 181 (Del. 2001). But see Deptula, 842 A.2d at 1238 ( holding “that stacking to determine the extent or amount of UIM coverage is permitted after one UIM policy establishes that the tortfeasor was driving an ‘underinsured motor vehicle’”).

7

comments as to the reading of § 3902 are helpful to a resolution of the issue

presented in this litigation:

The General Assembly…used the plural term “policies” to describe the liability coverage…to be considered but simultaneously used the singular term “policy” to characterize the [UIM] coverage to which [it]…was to be compared. Moreover, with regard to “bodily injury liability coverage,” the statute…also employs the words “all” and “total” to indicate that liability coverage must be considered in the aggregate. The omission of the[se] terms…in reference to UIM coverage, in conjunction with…the singular word “policy,” reflects a concerted decision by the legislature to have each [UIM] policy considered separately vis-à-vis all liability policies.27

Here, the parties appear to agree Plaintiff had two UIM policies available to

her at the time of the accident: the Liberty Mutual policy with UIM coverage limits

of $100,000 and the $25,000 limits of her personal UIM policy with State Farm.

While the Plaintiff is presently seeking to recover under her State Farm policy, she

is permitted to use the limits of “any one policy”—here, the $100,000 Liberty

Mutual policy—for purposes of determining UIM eligibility.28 The issue,

however, is whether this amount must initially be compared against the combined

liability coverage limits of both alleged tortfeasors.

In its Motion for Summary Judgment, State Farm argues the alleged

tortfeasors, Reaume and Defendant Moffitt-Ali, were not “underinsured” because,

27 Ayers, 772 A.2d at 181. See Garnett, 2006 WL 2441969, at *2-3 (emphasizing that the statute’s legislative intent and 28

Delaware case law make clear that “any one policy” may qualify an injured party as underinsured).

8

in total, their bodily injury liability limits equal $125,000.29 According to State

Farm, the Court should consider this amount as representing “the limits of bodily

injury liability under all bonds and insurance policies applicable at the time of the

accident total” under § 3902(b)(2).30 Applying this construction, no

underinsurance situation would exist because the bodily injury liability of

$125,000 exceeds the $100,000 of UIM coverage under the Liberty Mutual

policy.31

Plaintiff, on the other hand, responds that § 3902(b)(2) contemplates only a

single tortfeasor’s total liability coverage.32 Accordingly, Plaintiff argues Reaume

operated an underinsured motor vehicle since her only liability coverage totaled

$25,000, which is less than the Liberty Mutual UIM limits of $100,000.33 In

support of her position, Plaintiff emphasizes that the statutory language requiring

consideration of “total” liability coverage “modif[ies] the definition of a single

entity,” the underinsured motor vehicle.34 In other words, Plaintiff reads the

provision, not as including multiple tortfeasor scenarios, but rather as illustrating

that a single tortfeasor may have more than one liability policy.35

29 Def. Mot. for Summ. J. ¶ 9. 30 See id. (quoting § 3902(b)(2)). 31 See id. 32 Pl. Resp. to Def. Mot. for Summ. J. ¶ 5. 33 Id. ¶ 9. 34 Id. ¶ 7. 35 Id.

9

State Farm’s position finds support in Delaware case law. In Sload v.

Nationwide Mutual Insurance Co., the plaintiffs, passengers in a vehicle operated

by George Sload, were injured when Sload collided with a vehicle operated by

Dennis Lloyd Brown, Jr.36 Both tortfeasors offered the limits of their bodily injury

liability policies, with Sload’s in the amount of $100,000 and Brown’s in the

amount of $15,000.37 In considering whether the plaintiffs were entitled to access

their UIM limits of $100,000, this Court held:

Plaintiffs received, through the combined liability policy limits of Mr. Sload and Mr. Brown, a total of $115,000 per person. Plaintiffs' UIM limit is therefore less than the liability limits of both tortfeasors, Mr. Brown and Mr. Sload, combined and equal to the liability limits of the tortfeasor Mr. Sload, the driver of the vehicle in which Plaintiffs were riding. In either case, the total applicable liability limits are more than or equal to the UM/UIM limits, and thus, by definition, there is no “underinsured” motorist coverage available to Plaintiffs.38

The Court rejected the plaintiffs’ argument that Delaware’s UIM statute was

intended to apply exclusively to single tortfeasor cases. Rather, to the Sload Court,

“[a] simple reading of the statute suggests inclusion of multiple tortfeasors in the

definition of underinsured motor vehicle.” 39 Specifically, the Court recognized the

Legislature’s use of the language “all bonds and insurance policies applicable at 36 See Sload v. Nationwide Mut. Ins. Co., 723 A.2d 388, 388 (Del. Super.) aff'd, 723 A.2d 398 (Del. 1998). 37 See id. at 388-89. 38 Id. at 389. 39 Id.

10

the time of the accident” as evidencing its intent, “with regard to total liability

coverage, to focus on the ‘totality of the accident’ and thus an intent to apply the

statute to multiple tortfeasors.” 40 This rationale also appears consistent with the

Delaware Supreme Court’s construction of the statute in Ayers, where the Court

emphasized the legislature’s use of “the words ‘all’ and ‘total’ to indicate that

liability coverage must be considered in the aggregate.” 41

Ultimately, at the time of the accident, the tortfeasors in this case held

combined liability coverage limits of $125,000, which Plaintiff has since

recovered. This amount well-surpasses the UIM benefits available to Plaintiff

under both the Liberty Mutual policy and her policy with State Farm. Thus, State

Farm’s M otion for Summary Judgment is GRANTED.

CONCLUSION

While the Court believes this is a legally correct decision under the law at

the time of the accident, it finds comfort that the General Assembly has recognized

the previous statute was being used by insurance companies to limit coverage in

cases where the plaintiff was significantly injured and the liability coverage was

not sufficient to provide fair compensation. Clearly this was not intended by the

framers of the original statute and was inconsistent with the intent of the law.

40 Id. at 389-90.

41 See Ayers, 772 A.2d at 181.

11

Fortunately the statute as changed will prevent such injustice from continuing.

Unfortunately for Plaintiff the previous statute controls and State Farm’s Motion

must be granted.

IT IS SO ORDERED.

/s/ William C. Carpenter, Jr. Judge William C. Carpenter, Jr.