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Lukk v. State Farm Mutual Automobile Insurance Co.

Superior Court of Delaware, New Castle

May 12, 2014


Submitted: March 31, 2014

Decided: March 31, 2014

Upon Plaintiff's Motion for Summary Judgment DENIED.

Joseph J. Longobardi, III, Esquire, Longobardi & Boyle, LLC, Wilmington, Delaware, Attorney for Plaintiff.

Colin M. Shalk, Esquire, Casarino, Christman, Shalk, Ransom & Doss, P.A., Wilmington, Delaware, Attorney for Defendant.


Paul R. Wallace, Judge.

I. Introduction

Plaintiff Cotty Jaak Lukk ("Mr. Lukk") has filed a claim against State Farm Mutual Automobile Insurance Company ("State Farm") for breach of contract for failing to pay underinsured motorist benefits pursuant Mr. Lukk's father's State Farm insurance policy (the "Policy").[1] Mr. Lukk alleges that he is entitled to benefits under a "Resident Relative" clause in the Policy.[2] He has moved for summary judgment, urging, inter alia, the Court to interpret the Policy's primary residency requirement as void against public policy.[3] State Farm argues that: (1) the Policy's language is valid and enforceable; (2) that language does not allow Mr. Lukk's father to claim that his son "resides primarily" in more than one household; and (3) the evidence demonstrates that Mr. Lukk did not primarily reside with his father as the Policy requires.[4] For the following reasons, Mr. Lukk's Motion for Summary Judgment is DENIED.

II. Factual and Procedural Background

On June 6, 2010, Mr. Lukk was seriously injured in an accident that took place in Indiana County, Pennsylvania while he was the passenger in a friend's truck.[5] Mr. Lukk's friend was liable for the one-vehicle accident and Mr. Lukk collected the $35, 000.00 policy limit from his friend's insurance company.[6] He then made a claim for Underinsured Motorist Coverage ("UIM") through the Policy.[7] State Farm denied coverage alleging that if Mr. Lukk's primary residence was with a parent, it was with his mother and, thus, he was not covered under the Policy.[8]

At the time of the accident, Mr. Lukk was an adult, living in his own apartment and attending a technical college in Western Pennsylvania.[9] During Mr. Lukk's childhood, his parents shared equal custody and he alternated between their houses week-by-week.[10] During his childhood and into adulthood, Mr. Lukk maintained a bedroom with furniture, clothing and personal effects in both his father's and his mother's home.[11] Mr. Lukk's father and mother jointly shared his expenses including his car insurance payments, cell phone payments and spending money.[12] Mr. Lukk had access to two vehicles, one registered to his father and the other registered to his mother.[13] Mr. Lukk's primary source of income was from both his parents and was additionally supplemented by student loans.[14]

Mr. Lukk has filed a breach of contract action in this Court against State Farm.[15] Mr. Lukk claims that he incurred substantial medical injuries from the accident while he was an insured resident relative pursuant to the Policy.[16]According to Mr. Lukk, State Farm breached the Policy when it refused to pay him underinsured motorist benefits and he demands full payment of those underinsured motorist benefits, costs and interest.[17] He now seeks summary judgment on this claim.[18]

III. Parties' Contentions

Mr. Lukk says that he is entitled to summary judgment because, in his view, the Policy improperly restricts access to uninsured/underinsured motorist benefits and is therefore void as against public policy.[19] Mr. Lukk challenges the Policy's "Resident Relative" definition which states:

Resident Relative means a person other than you, who resides primarily with the first person shown as a named insured on the Declarations Page and who is:
1. related to that named insured or his or her spouse by blood, marriage, or adoption, including an unmarried and unemancipated child of either who is away at school or otherwise maintains his or her primary residence with that named insured; or
2. a ward or a foster child of that named insured his or her spouse, or a person described in 1. above.[20]

This express language of the Policy, he contends, creates a class of persons, then restricts the scope of the insurance coverage for such persons, and in doing so improperly reduces the minimum coverage benefits provided under 18 Del. C. § 3902.[21] Mr. Lukk argues that Delaware's public policy requires this Court to interpret any attempt to limit any person's claim to uninsured/underinsured motorist protection narrowly and against imposing any limitations on coverage.[22]He argues further that he is entitled to UIM benefits because he satisfies the Policy's "Resident Relative" definition which he suggests should account for any person living in more than one residence.[23]

According to State Farm, the Policy is unambiguous, is not against public policy and, therefore, is enforceable.[24] The Policy's language, State Farm argues, does not allow Mr. Lukk to claim that he "reside[d] primarily" in more than one household or with more than one parent.[25] Lastly, State Farm contends that if at the time of the accident he resided primarily with one parent or the other, then the evidence presented demonstrates that Mr. Lukk's primary residence is with his mother. This is so because, among other things, his mother's address was that listed on the Complaint, was listed on his driver's license, was used to determine his school district, and was used for his school loans.[26]

IV. Standard of Review

Summary judgment is appropriate where the record indicates that there are no genuine issues of material fact and where, viewing the facts in the light most favorable to the non-moving party, the moving party is entitled to summary judgment as a matter of law.[27] The moving party has the burden of proof to show that there are no genuine issues of material fact.[28] If a motion is properly supported, the burden shifts to the non-moving party to establish the existence of material issues of fact.[29] Here the burden did not shift, but even if it arguably did, State Farm provided sufficient evidence showing a genuine issue of material fact.[30]

V. Discussion

A. The adjective "primarily" used in a "Resident Relative" requirement is not per se contrary to Delaware statutory insurance requirements.

Section 3902(a) of Title 18 requires that uninsured motorist coverage be "provided" in or "supplemental" to every automobile insurance policy, unless such coverage is expressly rejected by the insured.[31] And Section 3902(b) requires that each insured be offered the option to purchase additional underinsured bodily injury liability coverage.[32] As a whole, Section 3902 advances the longstanding public policy of ensuring the availability of uninsured and underinsured motorist coverage to "protect innocent persons from impecunious tortfeasors."[33] Section 3902 has been interpreted to include statutory minimum coverage -- addressing both monetary and party concerns -- which insurance companies must offer to all insureds.[34] Delaware courts have consistently held that policy provisions which reduce or limit uninsured motorist coverage to less than the prescribed amounts are void.[35] And in Delaware, insurance policies may not carve out classes of potential claimants "based upon the relationship of the tort victim/plaintiff to the tortfeasor/defendant, " for special exclusion from UIM coverage.[36] But that means only that, the Delaware Financial Responsibility Laws and the statute mandating insurance on registered vehicles prohibits the exclusion or restriction of claims of a "household" claimant against the tortfeaseor/insured. The operative language here does neither, but instead defines who is covered by the insured's Policy.

Mr. Lukk argues that the adjective "primarily" included in the "Resident Relative" provision of the Policy is impermissible and void because it restricts a class of persons covered by UIM.[37] Mr. Lukk reasons that the adjective acts as a disqualifying exclusion void against public policy.[38] Not so.

Whether this definition of "Resident Relative" per se violates Delaware public policy is a matter of first impression in this Court. This State's well-established case law prohibits broad, categorical exclusions that degrade coverage such that if falls below statutory minimums or excludes an injured's claims because of his or her affiliation to the policy holder who injured him or her.[39]However, the same case law certainly does not void all express insurance policy provisions that may limit coverage.[40] In determining the enforceability of insurance policy provisions, Delaware courts balance the language and nature of the insurance policy, the language, framework and history of the applicable statute, and the overall public policy concerns.[41]

The Policy's "Resident Relative" language does not act as the type of broad, categorical exclusions disfavored by Delaware law. The Policy's "Resident Relative" provision merely defines who is eligible for coverage under the terms of the Policy; the adjective "primarily" operating as a qualifying standard for such coverage.

Other states accept just such "resident relative" requirements when considering the availability of UIM coverage.[42] The Policy does not reduce or limit coverage minimums prescribed by Section 3902, nor is it inconsistent with other requirements of Section 3902. In turn, this Court is not convinced that "primarily" used in this "Resident Relative" provision violates any Delaware public policy, but is instead a valid and fully enforceable part of this insurance contract.

Lastly, Mr. Lukk notes that Delaware's overwhelming public policy "establish[s] that the fundamental purposes of 21 Del. C. §2118(a) and of 21 Del. C. Ch. 29 generally, is to compensate fully victims of car accidents. . . . [and that] [o]ne way to achieve that purpose is to encourage the Delaware driving public to purchase more than the statutorily minimum amount of coverage."[43] While he suggests that the Policy frustrates the overall purpose of Delaware's insurance statutes to require minimum insurance coverage, Mr. Lukk overlooks some salient facts. First, UIM coverage offered under Section 3902 is not a statutorily mandated minimum found in 21 Del. C. §2118. Second, the requirement to offer this supplemental coverage[44] was followed here; State Farm offered UIM coverage to Mr. Lukk's father for himself and those relatives who "reside[d] primarily with [him]."

B. There is a genuine issue of material fact with respect whether Mr. Lukk "reside[d] primarily" with his father at the time of the accident.

Delaware courts have noted that generally the determination of "residence . . . is a question of fact, to be answered by an examination of the circumstances of each individual case."[45] A factual determination will only be made on a motion for summary judgment when the underlying facts are not disputed and the inferences drawn from those facts "point inescapably to a single conclusion."[46] Here they do not.

This case is a breach of contract matter and the Court has held that the contested language of the Policy is valid and enforceable. The Policy provides UIM coverage for a "Resident Relative, " that is, one who "resides primarily with the first person shown as a named insured on the Declarations Page and who is: (1) related to that named insured . . . including an unmarried and emancipated child of either who is away at school and otherwise maintains his or her primary residence with that named insured."[47] Mr. Lukk believes that he can meet that definition even if he resided equally with his mother and father.[48] State Farm argues that Mr. Lukk can "reside primarily" only in one residence and that the evidence demonstrates that if Mr. Lukk resided primarily with either parent, it was with his mother.[49]

In determining the common meaning of insurance policy terms, courts have examined and adopted dictionary definitions.[50] The Oxford English Dictionary defines "primarily" as "to a great or the greatest degree; for the most part, mainly."[51] Established case law broadly defines the term "reside" to mean "to live with."[52] Reading these two definitions together, this Court concludes, as have many others construing such language, Mr. Lukk can "reside primarily" only in one residence only and the jury will be so instructed.

The record demonstrates that Mr. Lukk had a designated bedroom in each of his parents' residences, had furniture, clothing and personal effects at each residence, and split his time evenly between his mother and father. Furthermore, Mr. Lukk's parents testified that they attempted to split all of his expenses evenly. While State Farm argues that Mr. Lukk used his mother's address as his address-of-record for school and licensing purposes, these facts are not conclusive as to where Mr. Lukk "reside[d] primarily."

This Court in deciding a summary judgment motion must identify disputed factual issues whose resolution are necessary to decide the case, but the Court must not decide those issues.[53] And "[u]nless the [] Court is reasonably certain that there is no triable issue, it is within the [] Court's discretion to decline to decide the merits of the case in a summary adjudication, and to remit the parties to trial."[54]There exists here a genuine issue of material fact and the jury, as finder of fact, must resolve this issue.

VI. Conclusion

For the foregoing reasons, there remains a genuine issue of material fact and Mr. Lukk has failed to demonstrate he is entitled to summary judgment as a matter of law. Consequently, his Motion for Summary Judgment is DENIED.


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