Opinion
C.A. No. 98C-08-088 WCC.
Submitted: August 3, 2000.
Decided: November 30, 2000.
On Plaintiffs' Motion for Summary Judgment. Denied. On Defendant's Motion for Summary Judgment. Granted.
Gary L. Smith, Esquire, 1400 Professional Building, Suite 110, Peoples Plaza, Newark, Delaware 19702-5706. Attorney for Plaintiffs.
Louis J. Rizzo, Jr., Esquire; 1225 North King Street, Legal Arts Building, Suite 900, Wilmington, Delaware 19801. Attorney for Defendant.
OPINION
This action arose from an automobile accident in which Lolita Temple died as a result of the injuries she sustained. The decedent's husband and children filed an action against Travelers Indemnity Company for underinsured motorist benefits, and the parties have filed cross motions for summary judgment. This is the Court's decision on the motions.
FACTS
On August 12, 1995, Lolita Temple ("Mrs. Temple"), a passenger in a church van, died as a result of injuries sustained in a car accident when the driver of the van, David Carter, lost control and hit a tree. Several other passengers were also injured. The church had liability insurance with a policy limit of $100,000.
Although the couple was separated, Plaintiff Leon W. Temple, Sr. ("Mr. Temple") was Mrs. Temple's husband. Plaintiffs, Leon W. Temple, Jr. ("Leon Jr."), Catherine Temple ("Catherine") and Venus Temple ("Venus"), were the couple's children. The Plaintiffs, along with other passengers of the van, initially brought suits against the church's insurance company. The Temple Plaintiffs received $15,000 each, totaling $60,000, and the remaining injured passengers shared the remainder of the policy limit. As such, the policy limit was exhausted and is no longer available. Following this settlement, Mr. Temple sought underinsured motorist benefits through his own insurance company, The Travelers Indemnity Company ("Travelers"), which denied coverage. While the parties raised several issues, the threshold question is whether Mrs. Temple was an "insured" under the policy thereby entitling the Plaintiffs to underinsured motorist benefits.
Once the complaint was filed against Travelers, it was amended to include the Temple children.
STANDARD OF REVIEW
Summary judgment will be granted when, in viewing the record in the light most favorable to the non-moving party, the movant has shown that no genuine issues of material fact exist and that the movant is entitled to judgment as a matter of law. In a case involving cross motions for summary judgment, such as presented here, the parties implicitly concede the absence of material factual disputes and acknowledge the sufficiency of the record to support their respective motions. On a motion for summary judgment, the Court is empowered to make factual determinations where the facts of the case are not in dispute and the inferences to be drawn therefrom point to a single conclusion.
Super. Ct. Civ. R. 56(c).
Browning-Ferris, Inc. v. Rockford Enters, Inc., Del. Super., 642 A.2d 820 (1993).
Engerbretsen v. Engerbretsen, Del. Super., 675 A.2d 13, 17 (1995) ( citing Faircloth v. Rash, Del. Supr., 317 A.2d 871 (1974)).
DISCUSSION
Because the central question in this case involves the proper interpretation of language in an insurance policy, the issue to be resolved is one of law. If the language of an insurance contract is clear and unambiguous, the Court will not destroy or twist the words under the guise of construing them. The parties will be bound by the plain meaning of the policy language because creating ambiguity where none exists could, in effect, create a new contract with rights, liabilities, and duties to which the parties have not assented.An ambiguity exists when the language of the contract permits two or more reasonable interpretations. When the language of an insurance contract is ambiguous and doubt exists as to coverage, the contract will be interpreted against the insurer who drafted the policy and in favor of the insured. In addition, the insurance contract will be read in accordance with the reasonable expectations of the insured so long as the contract language will permit.
Engerbretsen, 675 A.2d at 17 ( citing Hallowell, 443 A.2d at 926).
Engerbretsen, 675 A.2d at 17 ( citing State Farm Fire and Cas. Co. v. Hackendorn, Del. Super., 605 A.2d 3 (1991)).
Engerbretsen, 675 A.2d at 17 ( citing Hallowell, 443 A.2d at 926-27).
According to Travelers's policy, in order to be entitled to underinsurance benefits, the "insured" must sustain "bodily injury" caused by an "underinsured motor vehicle." Travelers's policy defines " Insured," in pertinent part, as "you" or any `family member,'" and defines " you" and " your" as (1) "[t]he named insured' shown in the Declarations" and (2) "[t]he spouse if a resident of the same household." " Family member" is defined as "a person related to you by blood, marriage or adoption who is a resident of your household."
Under the policy, " underinsured motor vehicle" "means a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident in limits equal to or greater than the minimum limits specified by the financial responsibility law of Delaware, but less than the limit of liability for this coverage."
The policy's definition of "insured" also includes the following "(2) any other person `occupying' `your covered auto,' or (3) any person for damages that person is entitled to recover because of `bodily injury' to which this coverage applies sustained by an person described in 1. or 2. above."
Mr. Temple was the only named insured listed on the policy. It is undisputed that Mrs. Temple was Mr. Temple's spouse but were living at different locations at the time of the accident. Thus, the issue central to the litigation is whether Mrs. Temple was a resident of Mr. Temple's household so as to be covered under the policy.
Mr. and Mrs. Temple were married on May 26, 1962 and purchased their home at 430 E. 35th Street, Wilmington, Delaware (the "Wilmington address"), in 1963. In 1987, the couple separated. Mr. Temple moved out of the residence, and Mrs. Temple remained at their marital home. For the first three years of the separation, Mr. Temple lived with his mother at 2618 Thatcher Street, Wilmington, Delaware. But, from 1990 through the date of the accident in 1995, Mr. Temple lived in an apartment in Delaware City (the "Delaware City address"). From the time of the separation in 1987 to the time of the accident in 1995, which constituted a span of eight years, they never divorced nor entered into a separation agreement. Mr. Temple remained on the 430 E. 35th Street deed and although he did not live at the Wilmington address, he occasionally stayed there and would keep a few items of clothing there. In 1994, the year before the accident, the Temples filed a joint tax return. Mr. and Mrs. Temple's relationship was amicable so he occasionally would run errands for her, but he did not contribute monetarily towards the upkeep of the residence.
Mr. Temple, the named insured, owned two vehicles at the time of the accident. The vehicles were insured by Travelers, which provided for uninsured/underinsured benefits in the amount of $100,000/$300,000. While the motor vehicle registration for these vehicles contained the Wilmington address and the policy listed that address, the vehicles were located at his Delaware City address. Mrs. Temple did not have a driver's license, nor did she own a vehicle.
In deciding the issue of whether Mrs. Temple was a resident of Mr. Temple's household, the Court finds that the application of "same household" is the focal point. In the majority of cases litigated in this area, the focus was on the residency factor because the named insured's household was not at issue. For example, in Engerbretsen v. Engerbretsen, a case relied upon by the Plaintiffs, the Court was asked to determine whether the defendant grandson and his parents were residents of the grandparents' undisputed household. Here, the focus is reversed. Mrs. Temple's residency is rather straightforward. She was only a resident of the Wilmington address because there was no evidence that she had any connection to the Delaware City address. Mr. Temple, the named insured, moved out of the house, and has resided in a separate residence for eight years prior to the accident, so it is his household at issue. As such, if the Wilmington address was not considered Mr. Temple's household, then Mrs. Temple is not covered under the policy.
See Mason v. USAA, Del. Super., C.A. No. 94C-09-013, Del Pesco, J. (Apr. 23, 1996), rev'd on other grounds, 697 A.2d 388 (1997) (son was found to be a resident of his mother's household, who was the policyholder, after he moved into his mother's house). See also Sligh v. Nationwide Mut. Ins. Co., Del. Super., C.A. No. 94C-05-098, Del Pesco, J. (Aug. 19, 1996) (son and his family were found to "regularly live" in the policyholder's household).
Del. Super., 675 A.2d 13 (1995), aff'd, Del. Supr., 676 A.2d 902 (1996).
In Engerbretsen, the grandparents were insured under a homeowners insurance policy when their minor grandchild was injured on their property. The homeowner's policy excluded liability for injuries to the named insured, which included relative residents of the named insured's household. As such, the issue was whether their minor grandchild and his parents were residents of the grandparents' household and therefore excluded from coverage.
It appeared that the analysis argued by the parties was focused on whether Mr. Temple was a resident of the Wilmington home. That focus is incorrect. The question was whether Mrs. Temple was a resident of Mr. Temple's household.
The Plaintiffs argue that Mr. Temple intended to maintain a permanent relationship with Mrs. Temple and had an on-going interest in the Wilmington home. The Plaintiffs also suggest that it is possible to have two households as recognized by the New Jersey Supreme Court in Gibson v. Callaghan and urge the Court to adopt that court's philosophy. In the alternative, the Plaintiffs urge that if the Court finds that Mrs. Temple was not a resident of Mr. Temple's household, then the term "household" is ambiguous in that it is susceptible to different interpretations and should be construed in favor of the insured.
N.J. Supr., 730 A.2d 1278 (1999).
The Engerbretsen decision provides guidance regarding the definition of the term "resident of the household". The Court found that it was not ambiguous on its face, and, as such, the term was given a plain and common meaning. It adopted the definition of "household" found in Amco Insurance Company v. Norton, which was defined as "those who dwell under the same roof and compose a family." It also adopted the following definition of "resident of the household" as "one who dwells or has an abode under the same roof as the named insured for a duration of sufficient length so that the occupiers can be said to compose a family."
Engerbretsen, 675 A.2d at 19.
Neb. Supr., 500 N.W.2d 542 (1993).
Engerbretsen, 675 A.2d at 19 ( citing Norton, supra).
Engerbretsen, 675 A.2d at 19 ( citing Norton, 500 N.W.2d at 546-47).
Using the Engerbretsen's definition as its guide, the Court finds that the Temples did not dwell under the same roof as a family. While he occasionally visited and stayed there overnight during his separation and had what appeared to be an amicable relationship with his wife, the Court cannot find that the Wilmington address was Mr. Temple's "household." Mr. Temple did not live permanently at the Wilmington address nor did he divide his time. While his name remained on the deed, he paid no financial support towards the maintenance and upkeep of the house. And while the vehicles were listed at the Wilmington address on the policy declarations, the vehicles were kept at the Delaware City address. Moreover, maintaining an apartment for five years is not indicative of a temporary place to live while reconciliation is sought to patch a marriage. Furthermore, prior to the Delaware City apartment, Mr. Temple lived with his mother from 1987 until 1990. The significance of moving from his mother's house to the Delaware City address after three years of separation further suggests that Mr. Temple had no intention of moving back to the marital home in Wilmington. The cumulative facts stress the permanency of the separation and the disassociation to the Wilmington address.
During his deposition, Mr. Temple even said that he was not living at the Wilmington address at the time of the accident in 1995, "I was living in Delaware City at the time."(Leon Temple, Sr. Dep. at 4.)
The Court also notes its unwillingness to adopt the New Jersey Court's findings in Gibson, supra, argued by the Plaintiffs. In Gibson, the named insured of a homeowner's policy moved out of her home to live with her daughter after she was injured. Because she intended to return to the house, she left her belongings and had her bills delivered to her home. In addition, she kept her homeowners policy. In order to watch the house and maintain the property, the named insured's grandson and his wife moved into the house and paid rent. When the grandson's wife was injured, the issue arose as to whether she was insured under the homeowners policy as a resident of the grandmother's household. Under the unique facts of that case, the New Jersey Supreme Court found that "household" was susceptible to more than one interpretation and allowed coverage.
Gibson, 730 A.2d at 1286.
But the Gibson case is clearly distinguishable to the instant case. In Gibson, the named insured had not abandoned her home and always intended to return. In the instant case, the facts suggest that after an eight year separation, which included a residency in Delaware City for five years, Mr. Temple's separation from his wife and his marital home was permanent. As such, the Court finds that the different interpretations of "household" in Gibson were warranted and that a finding of more than one interpretation in the instant case would be overreaching. Further, the Court reaffirms Engerbretsen finding that the term "resident in the household" is not ambiguous.
The Court wants to emphasize that a decision of this nature is fact sensitive. As such, by its decision, the Court is not implying that in situations of separation where the named insured moves out, the marital household can never constitute the named insured's household. But, in the facts presented to the Court in this case, it stretches the meaning of "household" to include the home in Wilmington.
For the reasons set forth above, the Court finds that the Delaware City address was Mr. Temple's household to which Mrs. Temple was not a resident. As such, she was not covered under Travelers's policy.
The Plaintiffs' argument regarding whether they were entitled to the "per person" limits or the "per accident" limit is moot by this decision.
Mr. Temple's Entitlement as an Insured
Notwithstanding the Court's finding, the Plaintiffs further argue that Mr. Temple and his son, Leon Jr., as insureds, are entitled to recover damages from the underinsured benefits for the wrongful death of Mrs. Temple. The pertinent part of Travelers's policy states that "we will pay damages which an `insured' is legally entitled to recover from the owner or operator of an . . . `underinsured motor vehicle' because of `bodily injury' sustained by an `insured,' and caused by an accident." The Plaintiffs argue that Travelers's policy improperly limits coverage to only those insureds who have sustained bodily injury, whereas the statute, 18 Del. C. § 3902 does not contain such a restriction. The Plaintiffs rely upon 18 Del. C. § 3902 (a), which provides:
No policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle shall be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or hit-and-run vehicles for bodily injury, sickness, disease, including death, or personal property damage resulting from the ownership, maintenance or use of such uninsured or hit-and-run motor vehicle.
The Plaintiffs argue that since Mr. Temple is the legal administrator of the deceased in this wrongful death action, and any damages recovered will flow to him, and since he is the insured under the policy, the underinsured benefit provision of his policy is activated.
Travelers respond that the Plaintiffs erroneously rely upon the language in 18 Del. C. § 3902 (a), which refers to uninsured motorist benefits and not underinsurance benefits, which is alleged here, and is addressed in 18 Del. C. § 3902 (b):
(b) Every insurer shall offer to the insured the option to purchase additional coverage for personal injury or death up to a limit of $100,000 per person and $300,000 per accident or $300,000 single limit, but not to exceed the limits for bodily injury liability set forth in the basic policy. Such additional insurance shall include underinsured bodily injury liability coverage.
(1) Acceptance of such additional coverage shall operate to amend the policy's uninsured coverage to pay for bodily injury damage that the insured or his/her legal representative are legally entitled to recover from the driver of an underinsured motor vehicle.
Since the statutory provision limits coverage to the insured or, if deceased, his/her legal representative, Travelers argue that because the insured suffered no injury, he is not entitled to recovery under this provision. In addition, Travelers assert that the limitation is valid and standard in the industry and to extend the coverage would go beyond the intent of the parties.
The Court's initial reaction to the Plaintiffs' argument was to simply dismiss it as a desperate attempt to find a pool of money to compensate for the limited coverage available under the tortfeasor's policy. But, to the Court's surprise, it actually discovered several jurisdictions which appear to support the Plaintiffs' argument at least in the context of uninsured coverage. So, while the Court cannot say that the Plaintiffs' argument is totally without merit, this Judge finds it to be unpersuasive and inconsistent with any fair or reasonable reading of the statute or the terms of the policy.
Decisions allowing recovery include: Sexton v. State Farm Mut. Ins. Co., Ohio Supr., 433 N.E.2d 555 (1982); State Farm Mut. Auto. Ins. Co. v. Selders, Neb. Supr., 190 N.W.2d 789 (1971). Decisions disallowing recovery: Delancey v. State Farm Mut. Auto. Ins. Co., 5th Cir., 918 F.2d 491 (1990); Farmers Ins. Exch. v. Chacon, Colo. Ct. App., 939 P.2d 517 (1997); Livingston v. Omaha Property and Cas. Ins. Co., Mo. Ct. App., 927 S.W.2d 444 (1996); Lafleur v. Fidelity Cas. Co., La. Ct. App., 385 So.2d 1241 (1980).
The foundation of the Plaintiffs' argument is that Mr. Temple's mere status as Mrs. Temple's administrator, which enables him to bring legal action in a wrongful death suit, is sufficient to connect that legal action to his own personal policy and to activate his underinsured benefits. This line of reasoning is so outlandish that it is difficult to articulate. As such, perhaps, an example would assist in making this point.
Let us assume for a moment that Mark, a close personal friend, died in an automobile accident. Because of our friendship and Mark's trust and confidence in me, he appoints me in his will as the executor of his estate. As executor, I sue the driver of the other car in a wrongful death action. Unfortunately, that driver has a policy limit of $50,000. Wanting to maximize recovery for the estate under the Plaintiffs' theory, after exhausting the $50,000, I could then turn to my automobile policy, which has uninsured/underinsured motorist benefits in the amount of $300,000 and attempt to recover an additional $250,000 in underinsured benefits. In essence, this theory would allow coverage to an individual, who was in no way connected to my automobile insurance policy, who did not reside in my household, nor who, if had survived the accident, would have had any right of recovery under my policy. The Court cannot imagine that the General Assembly contemplated such conduct to be appropriate when the underinsurance coverage statute was enacted. The Plaintiffs' interpretation stretches beyond common sense and is simply a good lawyering effort to maximize his client's recovery.
The Court finds that a fair reading of 18 Del. C. § 3902 (b) limits recovery to bodily injuries suffered by the policy's insured or if those injuries had led to the death of the insured, those benefits may flow to his/her legal representative. It does not allow coverage for injuries sustained by non-insured individuals regardless of their relationship to the policyholder. Further, since the Court finds that the language found in Travelers' policy is consistent with 18 Del. C. § 3902 (b), the Court rejects the Plaintiffs' argument that the policy inappropriately limits coverage or is in any way void as against public policy.
CONCLUSION
For the reasons set forth above, Travelers's motion for summary judgment is GRANTED, and the Plaintiffs' motion for summary judgment is DENIED.