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Vaughn v. Stillwater Property & Casualty Insurance Co.

Superior Court of Delaware

June 23, 2017

John Vaughn
v.
Stillwater Property & Casualty Insurance Co.

          Submitted: March 31, 2017

          "J" Jackson Shrum, Esquire Werb & Sullivan

          Artemio C. Aranilla, II, Esquire Marshall Dennehey Warner Coleman & Goggin

         Dear Counsel:

         The plaintiff, a homeowner whose residence and personal property were damaged in a fire, seeks coverage under a homeowner's policy on which his ex-wife was the sole named insured. At the beginning of the policy period, the plaintiff and the named insured were married and residing together. On the date of the fire, however, the plaintiff was divorced from the named insured and she no longer resided in the home. The insurance company covered the damage to the residence, but denied coverage for damage to the plaintiffs personal property because he was neither a named insured nor a relative of the named insured on the date of loss. The insurance company maintained its denial of coverage after the plaintiff submitted a policy amendment adding himself as a named insured. This case presents two core issues. First, what is the relevant date for determining coverage under an insurance policy: the effective date of the policy or the date of loss? Second, if the date of loss is the determinative date, is the policy amendment retroactive to the date of loss? I conclude the date of loss is the relevant date for coverage purposes and the policy amendment was not retroactive. I therefore grant summary judgment for the insurance company. My reasoning follows. Background

         The following facts are undisputed or drawn from the uncontested documents attached to the parties' briefs. The parties filed cross-motions for summary judgment and neither party contends material disputed facts preclude entry of judgment as a matter of law.

         On December 17, 2009, the plaintiff, John Vaughn, jointly purchased 1803 Belfield Avenue, Wilmington, Delaware (the "Property") with non-party Samantha Brocklesby ("Ms. Brocklesby"). Both the plaintiff and Ms. Brocklesby were named on the deed and in the mortgage documents associated with the purchase of the Property.[1] For unknown reasons, however, only Ms. Brocklesby, who at the time was unmarried, filled out an application for homeowner's insurance. Ms.

          Brocklesby was the only named insured under the homeowner's insurance policy issued for the Properly (the "Policy").[2]

         The Policy initially was issued by a predecessor-in-interest to the defendant, Stillwater Property & Casualty Insurance Company ("Stillwater"), and the Policy annually was renewed. The Policy in effect on the date of the fire covered the period from December 17, 2013 to December 17, 2014. The premium payments for the Policy were escrowed through the mortgage company and paid by Vaughn or Ms. Brocklesby as part of their mortgage.[3] The bills for the Policy identified only Ms. Brocklesby as the named insured, but it is unclear whether bills were mailed to the Property since the premium payments were escrowed.[4]

         Although Ms. Brocklesby was the only named insured on the Policy until August 29, 2014, the Policy covered certain others who resided with her. Specifically, the Policy defined "Insured" as:

(a) You and residents of your household who are:
(1) Your relatives; or
(2) Other persons under the age of 21 and in your care or the care of a resident of your household who is your relative;
(b) A student enrolled in school full-time . . . provided the student is under the age of:
(1) 24 and your relative; or
(2) 21 and in your care or the care of a resident of your household who is your relative.[5]

         The Policy also defined "You" and "Your" as "the 'named insured' shown in the

         Declarations and: (1) The spouse; or (2) a Party who, with the 'named insured', has entered into a civil union recognized under Delaware law; If a resident of the same household."[6]

         Although they were not married at the time the Policy initially was issued, Vaughn and Ms. Brocklesby married on December 28, 2012.[7] They separated less than a year later, on or about July 22, 2013, and formally divorced on March 6, 2014.[8] Two months later, Vaughn and Ms. Brocklesby's agreement regarding the division of assets was entered by the Family Court as an order of that Court (the "Ancillary Order").[9] It appears Ms. Brocklesby still was residing in the Property with Vaughn at the time the Family Court entered the Ancillary Order. As to the Property, the Ancillary Order provided:

The parties are joint owners of [the Property]. The parties agree that [the Property] shall be [Vaughn's] property. [Vaughn] does not have to pay any monies to [Ms. Brocklesby] for her interest in the [P]roperty, but [Vaughn] must refinance the mortgage into his sole name within sixty (60) days of the date of this agreement. [Vaughn] shall also remove [Ms. Brocklesby's] name from all other debts and liabilities associated with the [P]roperty within sixty (60) days of the date of this agreement. At the time [Vaughn] removes [Ms. Brocklesby's] name from the mortgage, [Ms. Brocklesby] shall sign the deed to the home into [Vaughn's] sole name. Until [Ms. Brocklesby's] name is removed from the mortgage on the home, she shall be entitled to reside in the home.
If [Vaughn] cannot refinance the mortgage into his sole name within sixty (60) days, then [the Property] shall immediately be placed on the market for sale. ... As long as [Ms. Brocklesby] is residing in the [P]roperty, [Vaughn] shall pay the mortgage and [Ms. Brocklesby] shall pay the other ordinary monthly expenses for the home .... Once [Ms. Brocklesby] moves from the home[, ] [Vaughn] shall be solely responsible for all expenses for the home.

         It appears Vaughn was unable to refinance the mortgage into his sole name within the 60-day time period established in the Ancillary Order, but Vaughn and Ms. Brocklesby agreed to extend that period.[10] Shortly thereafter, on August 3, 2014 (the "Date of Loss"), a fire occurred on the Property, damaging both the residence and Vaughn's personal property. On ...


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