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Stoms v. Federated Service Insurance Co.

Superior Court of Delaware, New Castle

November 20, 2014

EPIPHANY F. STOMS, individually and as Administratrix of the Estate of DAVID W. STOMS, decedent, and as Guardian ad Litem of ALEXIS D. STOMS and CHAD D. STOMS, Plaintiff
v.
FEDERATED SERVICE INSURANCE COMPANY, Defendant

Submitted: August 14, 2014

Upon Plaintiff's Motion for Summary Judgment, DENIED.

Upon Defendants' Motion for Summary Judgment, GRANTED.

Jonathan B. O'Neill, Esquire, Kimmel, Carter, Roman, Peltz & O'Neill, P.A., 56 W. Main Street, Plaza 273, 4th Floor, P.O. Box 8149, Newark, Delaware 19714, Attorney for Plaintiff.

James S. Yoder, Esquire, White and Williams LLP, 824 N. Market Street, Suite 902, Wilmington, Delaware 19899, Attorney for Defendant.

OPINION

M. JANE BRADY, SUPERIOR COURT JUDGE

I. Introduction

On November 3, 2012, David W. Stoms ("Decedent") was involved in an automobile accident with an uninsured driver. Decedent was killed in the accident, and Decedent's minor daughter was seriously injured. At the time of his death, Decedent was driving a car owned by his employer, Diamond Motor Sports, Inc. ("Diamond Motor"). The vehicle was insured by Federated Service Insurance Company ("Federated").

Plaintiff Epiphany F. Stoms was married to Decedent and lived with Decedent until his death. Alexis D. Stoms ("Alexis") and Chad D. Stoms ("Chad") are the minor children of Plaintiff and Decedent. On January 18, 2014, Plaintiff filed the instant action on behalf of herself, on behalf of Decedent's estate, and on behalf of Alexis and Chad, demanding that Federated pay supplemental uninsured motorists benefits, beyond the statutory minimum, to compensate the family for medical expenses, funeral expenses, pain and suffering, and punitive damages against the uninsured motorist.

The parties have both moved for Summary Judgment. A hearing in this Court was held on August 14, 2014, at which the Court determined that the Plaintiff's claim for punitive damages is proper. The Court now finds that Plaintiff's cause of action against Federated is precluded as Decedent did not have supplemental uninsured/underinsured motorists coverage under the Federated policy. For this reason, Plaintiff's Motion for Summary Judgment is DENIED; Defendant's Motion for Summary Judgment is GRANTED; and Plaintiff's claim for punitive damages is MOOT.

II. Facts

A. The November 3, 2012 Accident

On November 3, 2012, at approximately 10:15 p.m., Decedent and Alexis were involved in a two-car automobile accident (the "Accident") on Delaware Route 1, near Dover, in Kent County, Delaware. Decedent was killed in the Accident, and Alexis was severely injured. It is undisputed that the Accident was caused by the negligent and reckless conduct of the other driver, Matthew E. Bair ("Bair"), an uninsured motorist.

At the time of Accident, Decedent was employed as a "finance manager" at Diamond Motor located in Dover, Delaware. When the Accident occurred, Decedent was driving a 2010 Toyota Yaris, owned by Diamond Motor and registered in Delaware. Decedent was permitted to use the company car for personal use during non-business hours. At the time of the Accident, Decedent and Alexis, who was the sole passenger in the car, were returning from a family outing.

B. The Insurance Policy

Defendant Federated provided uninsured motorist coverage to Diamond Motor as part of a Commercial Package Policy (policy number 9361613), which was in effect on the date of the Accident ("Policy"). There is a provision of the Policy that specifically addresses supplemental uninsured motorists coverage. This provision is contained in a document entitled, "Delaware Commercial Automobile Uninsured Motorists Coverage Option Form."[1] This provision states, "Delaware law requires that Uninsured Motorists Insurance must be provided for limits at least equal to State Financial Responsibility limits… Delaware law allows [the insured] to select higher limits up to $300, 000[, ] but not greater than the policy's liability limit, or [the insured] may REJECT this coverage."[2] The document directs the insured to indicate its choice by checking boxes below and signing and dating the form.

The section below, entitled "Limit Options, " contains two selections that the insured must make. The first reads, "Limit for directors, officers, partners or owners of the named insured and family members who qualify as insureds." This first selection is followed by four check-boxes, indicating different monetary amounts that the insured may select. In this case, Diamond Motor selected a $300, 000 limit for "directors, officers, partners or owners."[3] The second selection reads, "Limit for any other person who qualifies as an insured." This selection is followed by five check-boxes, four of which indicate monetary amounts and the fifth of which indicates that coverage is declined. Diamond Motor checked the fifth box, which says, "I hereby REJECT [supplemental] Uninsured Motorists Insurance including Underinsured Motorists Insurance for this group of persons only."[4]

C. The Instant Action

On January 18, 2014, Plaintiff filed the instant action on behalf of herself, on behalf of Decedent's estate, and on behalf of Alexis and Chad.[5] Plaintiff demands damages including damages for the wrongful death of Decedent and resulting damages to herself and her children, medical expenses and pain and suffering for Alexis, and funeral and other expenses for Decedent.[6] Plaintiff also demands punitive damages for the tortuous conduct of Bair.[7] Plaintiff originally brought suit against both Federated and Liberty Mutual Fire Insurance Company ("Liberty Mutual"), who was believed to have provided uninsured motorists coverage for Decedent. However, Plaintiff subsequently voluntarily dismissed Liberty Mutual.[8]

On March 10, 2014, Federated filed an Answer. In the Answer, Federated argues that the Policy does not provide coverage for punitive damages.[9] Federated also argues that imposing punitive damages against Federated would violate various Constitutional provisions as well as public policy.[10] Additional defenses include that Plaintiff's claims may be barred by the terms of the insurance contract, [11] barred by Diamond Motor's failure to fully comply with its obligations under the policy, [12] and barred by Plaintiff's failure to demonstrate the non-existence or exhaustion of the tortfeasor's insurance.[13]

III. Present Motions

A. Federated's Motion for Summary ...


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