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21st Century Assurance Co. v. Liberty Mutual Insurance Co.
Superior Court of Delaware, New Castle
March 23, 2015
21st CENTURY ASSURANCE CO.,
LIBERTY MUTUAL INSURANCE CO., Defendant.
Submitted: March 6, 2015
Upon Defendant's Motion for Summary Judgment GRANTED.
Amanda L. H. Brinton, Esquire, The Law Offices of Amanda L. H. Brinton, Attorney for Plaintiff 21st Century Assurance Company.
David L. Baumberger, Esquire, Law Offices of Chrissinger & Baumberger, Attorney for Defendant Liberty Mutual Insurance Co.
Ferris W. Wharton, J.
This 23rd day of March, 2015, upon consideration of Defendant's Motion for Summary Judgment, Plaintiff's Opposition, oral argument, the audio recording of the Court's ruling on Defendant's previous Motion for Summary Judgment and the parties supplemental submissions, it appears to the Court that:
1. Plaintiff 21st Century Assurance Co. ("21st Century") initiated this action on June 20, 2013 by filing a Complaint, seeking, inter alia, subrogation against Liberty Mutual Insurance Company ("Liberty Mutual"). The claim arises out of a motor vehicle accident in which a vehicle insured by 21st Century was involved in an accident with a vehicle insured by Liberty Mutual. As a result of the accident expenses in the form of personal injury protection ("PIP") benefits were paid to or on behalf of the occupant of the vehicle insured by 21st Century. 21st Century is seeking judgment against Liberty Mutual for those PIP benefits as well as future PIP payments.
2. On December 20, 2013, Liberty Mutual moved for summary judgment on the basis that the matter was adjudicated in arbitration, barring 21st Century's claim by operation of law. Liberty Mutual argued that 21 Del. C. § 2118(g)(3) requires that disputes among insurers as to liability or payments are required to be arbitrated and that arbitrators' decisions are not appealable. In Liberty Mutual's view, it was entitled to summary judgment because the arbitrator determined that 21st Century did not have a right of PIP subrogation since 21st Century's insured vehicle was insured and registered in New Jersey and PIP subrogation is only applicable to vehicles registered in Delaware and affording Delaware PIP benefits. 21st Century opposed the motion, arguing that the matter was ejected from arbitration without a determination on the merits and that it was entitled to appeal the arbitrator's decision under 21 Del. C. § 2118(j)(5).
3. On April 29, 2014 the Court held oral argument on Liberty Mutual's motion. At the conclusion of argument, the Court denied the motion for summary judgment, but directed that 21st Century amend its complaint to reflect the case as an appeal, holding that an appeal from the arbitrator's decision was permissible. A form of order was submitted and signed by another judge because the initial judge had retired in the interim.
4. On September 3, 2014, 21st Century filed an amended complaint captioned "Amended Complaint/Appeal From Arbitration Forums, Inc. Decision Dated June 3, 2013." With the exception of the caption, the new filing was identical to the original Complaint. Liberty Mutual again moved for summary judgment "pursuant to 21 Del. C. § 2118(g)(3) and Rules 12 and 56 for lack of subject matter jurisdiction." 21st Century opposed the motion for the same reasons it opposed Liberty Mutual's first Motion for Summary Judgment as well as asserting a common law right of subrogation.
5. The Court heard argument on Liberty Mutual's Motion for Summary Judgment on January 27, 2015. Because the Court subsequently determined that the previously assigned judge had ruled that 21st Century was entitled to an appeal, the Court requested the parties to submit memoranda on the applicability of any exceptions to the law of the case doctrine. The parties have submitted the requested memoranda.
6. Three issues are presented for the Court's determination: 1) whether the ruling on Liberty Mutual's initial motion for summary judgment was correct; 2) if not, whether an exception to the law of the case doctrine allows for a different result; and 3) whether a common law right of subrogation exists so as to allow 21st Century to bring a complaint for subrogation directly in this Court.
7. Two courts of this state have addressed the issue of whether an insurer has a right to appeal from an adverse arbitration ruling. In New Hampshire Ins. Co. v. State Farm Ins. Co. New Hampshire Insurance Company sought to appeal an adverse arbitration ruling to this Court. The dispute in that case, as in this case, was between insurance companies, and, hence, subject to the mandatory arbitration provision of 21 Del. C.
§ 2118(g)(3). The Court held that the silence of § 2118 as to the right of an insurer to appeal the decision of an arbitrator was fatal to the claim that an appeal lies with the Superior Court.
8. In Zurich American Ins. Co. v. St. Paul Surplus Lines, Inc. the Court of Chancery was called upon to determine whether the court could review an arbitrator's dismissal of a PIP insurance case for lack of jurisdiction based on the internal rules of the arbitration forum and the governing arbitral agreement. The matter was before the Vice-Chancellor on a petition to correct and confirm the arbitration award, filed after the arbitrator had dismissed the claim on jurisdictional grounds despite finding that Zurich's damages had been proven, and after Zurich's subsequent Superior Court action had been dismissed.The Court of Chancery reviewed the applicable statutes, including 21 Del. C.§ 2118, and determined ...
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