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Hampton v. Titan Indemnity Co.

Superior Court of Delaware

June 23, 2017

TITAN INDEMNITY COMPANY, Defendant/Third-Party Plaintiff,
CHERYL BROWN, Third-Party Defendant.

          Submitted: June 5, 2017

         Upon Consideration of Defendant/Third-Party Plaintiff's Motion for Summary Judgment, DENIED.

         Upon Consideration of Plaintiff/Third-Party Defendant's Motion for Summary Judgment, GRANTED.

          Patrick Gallagher, Esquire, of Curley, Dodge, Funk & Street, LLC, of Dover, Delaware. Attorney for Plaintiff & Third-Party Defendant.

          Roger K. Pearce, Esquire, of Reger, Rizzo & Darnall, L.L.P., of Wilmington, Delaware. Attorney for Defendant/Third-Party Plaintiff.


          Vivian L. Medinilla, Judge


         This case probes the confines of "no-fault" Personal Injury Protection ("PIP") benefits under Delaware's Financial Responsibility Law, 21 Del. C, §2118. It does so in two ways. First, Titan Indemnity Company ("Titan") contends that, "what's good for the goose is [not] good for the gander." Plaintiff Howard Hampton, someone with myriad convictions for driving under the influence, was injured while helping his platonic living companion, Third-Party Defendant Cheryl Brown, extricate her vehicle from a snowy ditch adjacent their mobile home. While steering her vehicle-coaxing it forward and backwards out of the ditch-he was struck by a negligently-operated snow plow traveling in the opposite direction on the two-lane country road. Were Mr. Hampton a stranger, a friend, a foe to Ms. Brown, or simply a Good Samaritan-or anyone else on the planet-he would be entitled to PIP benefits. But, Titan argues, his unique status as a "roommate" of the insured's "household" retroactively voids the insurance policy, prohibiting him from receiving PIP benefits for his injuries.

         Titan's conclusion begets the second issue: whether Ms. Brown is responsible for failing to disclose Mr. Hampton as a "roommate" in a portion of the insurance application that requested the presence of other "drivers" in the household. The agent who issued her the application never asked Ms. Brown about any roommates with whom she lived. Equally, Ms. Brown did not read the application before signing it. Remarkably, Titan concedes that even had the agent been told of Mr. Hampton, she would not have named him as a driver on the application because he was unlicensed. Nevertheless, Titan contends that Ms. Brown materially misrepresented Mr. Hampton's status as a roommate and potential driver of her vehicle. Titan asks to declare the policy null and void under 18 Del. C. § 2711 as a material misrepresentation.

         Titan and Ms. Brown have cross-moved for summary judgment. After considering the parties' motions, responses, and oral arguments, the Court finds that the relevant portion of the insurance contract is fairly susceptible to two different interpretations: that Mr. Hampton was at once a "roommate" within the policy's definition of "household members, " but not a "driver" as contemplated by the same section of the application. In light of this ambiguity, the doctrine of contra proferentem requires the contract be interpreted in favor of coverage. Therefore, the Court DENIES Titan's Motion for Summary Judgment and GRANTS Plaintiff/Third-Party Defendant's Motion for Summary Judgment.


         Factual Background

         Titan underwrites insurance policies underneath the banner of Nationwide Insurance. It does so through several licensed but independent insurance agencies.

         A to Z Insurance Company ("A to Z") is one such agency. The insurance policy at issue in this case was issued to Ms. Brown by A to Z and underwritten by Titan.

         It is undisputed that Ms. Brown and Mr. Hampton co-inhabit a double-wide mobile home in Magnolia, Delaware. They pay separate rent to the landlord of the trailer, a relative of Ms. Brown's. They have their own private space, including their respective bathrooms and bedrooms. They share a common kitchen, living room, and dining room. They share utility expenses. Mr. Hampton performs yard work and household maintenance at the residence as a credit towards his rent. They purchase their own groceries and cook their own food. The two rarely speak to one another.

         A. The Accident

         On January 24, 2016, Ms. Brown was traveling home in her insured automobile. Her car became stuck in a snow ditch adjacent the road within two to three driveways of her residence. She called Mr. Hampton to help extricate the vehicle from the ditch. Mr. Hampton looked out of his trailer and walked over to assist her.

         At first, Mr. Hampton and his sister-a passenger in the vehicle at the time it became stuck-pushed from behind the vehicle with Ms. Brown in the driver's seat. Their attempts failed. As cars in her original direction of travel began to stop and wait to pass, Mr. Hampton replaced Ms. Brown at the wheel. While he tried in vain to move the vehicle out of the ditch, a passing snow plow careened into the car and injured him in the collision.

         After the police arrived, Mr. Hampton was cited for driving without a license and without proof of insurance. Mr. Hampton has not had a driver's license for fifteen years, primarily as a result of Driving while Under the Influence ("DUI") offenses. In 2014, he was convicted of his fifth DUI, and was on probation at the time Ms. Brown applied for insurance through A to Z.

         B. The Application

         One month before the accident, on December 23, 2015, Ms. Brown sought to insure two of her vehicles and met with Kathleen Joyner, a licensed insurance agent at A to Z. The agent began the application by asking Ms. Brown a series of eligibility questions. She did not read the application verbatim and inputted Ms. Brown's verbal responses into her computer. After the interview, Ms. Joyner printed the three-page application for signature. Without reading the application, Ms. Brown signed the third page of the application, attesting to the veracity of her responses.

         The crucial portion of the application was a section that appeared in the upper half of the first page, entitled "DRIVER INFORMATION:' This section reads:

NOTE: All household members age 15 or older, including spouse, domestic partner, roommate(s), as well as those drivers outside the household to whom the insured auto(s) is furnished or available for his or her use, including military and children away at college, must be identified below.[1]

         Both the insured and the agent agree that, as to this section of the application, Ms. Brown was not asked if she had a roommate. Ms. Brown testified that she recalls being asked only about other "household members, " which she interpreted to refer to those members of her "household" whom she considered her dependents. To her, this meant her two adolescent sons and not Mr. Hampton. However, at the time of the application, neither son was living in her home-they had left the residence as late as July 2015. Nevertheless, one of her sons is listed on the final page of the application as an excluded driver, because "he [is] no longer in [the] household."[2]

         As a Titan agent, Ms. Joyner stated that she did not read the entire section to Ms. Brown because she asks the applicant to review the information provided at the conclusion of the interview. Also, Ms. Joyner stated in her deposition that she did not interpret the driver's section of the application to mean that the applicant is required to list unlicensed drivers, such as Mr. Hampton. As such, the record clearly establishes that had Ms. Brown disclosed Mr. Hampton on this portion of the application, the agent would not have included him as a driver because he had suffered a loss of license.

         Procedural Background

         As a result of the January 24, 2016 accident, Mr. Hampton submitted medical bills to Titan for reimbursement under the policy's $15, 000 PIP limits. Titan responded that it was investigating the circumstances of the accident on the basis of Ms. Brown's omission regarding Mr. Hampton's occupancy of the shared residence. Before this investigation was completed, Mr. Hampton filed the present suit seeking a determination that Titan is obligated to pay his PIP bills.

         The Complaint was filed on March 21, 2016 and amended on May 19, 2016. Titan then filed a Third Party Complaint against Ms. Brown on May 24, 2016. Discovery in the original action is stayed pending the resolution of the Third Party Complaint. At the close of discovery in the latter case, the parties stipulated to present the pending cross-motions for summary judgment.

         Both parties' motions were filed on March 31, 2017. Responses were filed on May 8. Reply briefs were submitted on May 25. The parties presented their oral arguments on the motions at ...

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