MARIE SAINT HILAIRE, Individually and as Wife and Administratrix of the Estate of Therisson Augustin, and MARCEA AUGUSTIN, and EDNEST AUGUSTIN, Plaintiffs,
MARTHA IRENE GONZALEZ LANKFORD, and UNITED FARM FAMILY INSURANCE COMPANY, Defendants.
Submitted: December 15, 2017
the Parties' Claims for Declaratory Relief
E. Donovan, Esquire & Reneta L. Green-Streett, Esquire,
Morris James, LLP, Dover, Delaware, Attorneys for the
C. Malatesta, Jr., Esquire, Kent & McBride, P.C.,
Wilmington, Delaware, & Margaret Fonshell Ward, Esquire,
Ward & Herzog, LLC, Baltimore, MD, Attorneys for the
MEMORANDUM OPINION AND ORDER
matter involves a declaratory judgment action regarding
parties' rights under an umbrella policy. The insured, an
alleged tortfeasor in an automobile accident, did not obtain
underlying primary automobile bodily injury coverage at the
level required by the umbrella policy. As a result, the
umbrella insurer argues that it has no coverage obligations.
The injured parties (based on an assignment of rights by the
insureds) counter that the policy's language provides for
this contingency and that umbrella coverage is nevertheless
reasons discussed below, under Maryland law and based on
uncontroverted stipulated facts, the policy directly
addresses the issue. Namely, it provides that the injured
parties, now by assignment, have up to one million dollars of
umbrella coverage available. The insurer's obligation to
indemnify its insured and thus compensate the injured
parties, however, is not triggered unless and until the value
of the injured parties' claims are fixed by verdict or
settlement to exceed $250, 000. In the event damages exceed
that amount, the injured parties must absorb the gap in
coverage and are due no compensation from Farm Family for any
final damages fixed at less than $250, 000.
parties stipulated to the following facts in support of their
joint request that the Court decide this matter on the
briefing. The parties also agree that Maryland law applies.
On December 30, 2014, Defendant Martha Irene Gonzalez
Lankford (hereinafter "Mrs. Lankford") left a stop
sign and entered a roadway in Sussex County. She pulled into
the path of Plaintiff Therisson Augustin's (hereinafter
"Mr. Augustin's") vehicle and the two vehicles
collided. Mr. Augustin suffered injuries and later died as a
result of the collision. Presently, the parties include his
estate and those allegedly injured as a result of his death
(hereinafter "the injured parties") and Defendant
United Farm Family Insurance Company (hereinafter "Farm
time of the collision, Farm Family provided Mrs.
Lankford's vehicle with $100, 000 per person bodily
injury coverage. Also at the time of the collision, Mrs.
Lankford lived with her husband's father, Robert Lankford
(hereinafter "Mr. Lankford"), in Delmar, Maryland.
At that time, Farm Family separately insured Mr. Lankford
under a policy that provided one million dollars in umbrella
coverage. The parties stipulate that Mrs. Lankford qualified
as an insured under her father-in-law's Farm Family
2015, the injured parties partially settled their claims
against Mrs. Lankford. Pursuant to the settlement, the
injured parties accepted the $100, 000 in underlying policy
limits. In exchange, they (1) released Mrs.
Lankford from all further personal liability, and (2) Mr. and
Mrs. Lankford assigned all of their rights in the Farm Family
umbrella policy to the injured parties.
Family denied coverage under its umbrella policy because Mrs.
Lankford secured only $100, 000 per person bodily injury
coverage rather than the $250, 000 per person coverage
required by the umbrella policy. In response, the injured
parties (pursuant to the assignment of rights), claim that
although Mrs. Lankford did not secure and exhaust the limits
identified in the umbrella policy's declaration page, the
policy provides for this contingency and coverage is
triggered nevertheless. In the alternative, the injured
parties argue that the policy is ambiguous and, under
Maryland law, it should be interpreted against its drafter.
The Terms and Conditions of the Umbrella Policy
parties included a complete copy of the umbrella policy with
the stipulation of facts. The declaration page, in the only
portion in all capitals, bolded and italicized, provides:
TO AVOID GAPS IN COVERAGE, YOU MUST MAINTAIN THE MINIMUM
LIMTS OF LIABILITY STATED BELOW ON ALL PRIMARY INSURANCE
POLICIES WHICH APPLY TO YOU (emphasis omitted).
declaration page then lists bodily injury limits of $250, 000
per person as "primary insurance requirements."
Part II of the umbrella policy, discussing coverage, provides
We will pay on an INSURED'S behalf DAMAGES for which an
INSURED becomes legally responsible due to PERSONAL INJURY or
PROPERTY DAMAGE caused by an OCCURANCE. This coverage applies
only to DAMAGES in excess of the PRIMARY INSURANCE or the
RETAINED LIMIT, whichever applies.
policy defines primary insurance as "any insurance
collectible by the INSURED which covers the INSURED'S
liability for PERSONAL INJURY or PROPERTY DAMAGE." The
definition of primary insurance does not reference the amount
of coverage necessary other than to refer to that which is
"collectible." Germanely, this definition of
primary insurance, which is used throughout the policy, does
not reference a minimum amount of underlying coverage. In
addition, Part VII. 5. provides that "[t]his insurance
[the umbrella coverage] is excess over other collectible
Part IV of the policy, discussing limits of liability,
Regardless of the number of INSUREDS, claims or injured
persons, the maximum we pay as DAMAGES resulting from one
OCCURENCE shall not exceed the amount stated in the
declarations page, subject to the following:
1. This policy only pays after the limits of the PRIMARY
INSURANCE and excess insurance, and any other PRIMARY
INSURANCE and excess insurance covering the claim, have been
paid by you or on your behalf.
2. If the PRIMARY INSURANCE terminates or if the
limits are less than the limits show in the
declarations page, we pay DAMAGES we would have paid as if
the PRIMARY INSURANCE had not been terminated or if
its limits had not been less than the limits shown in
the declaration page (emphasis added).
Part V of the policy, discussing primary insurance
requirements, provides that:
This policy requires that all INSUREDS have and maintain the
PRIMARY INSURANCE coverage at or above the limits of
liability shown on the declarations page. ... If the
PRIMARY INSURANCE does not provide at least the limits
indicated, you will be responsible for the loss up to the
required limits. We only pay for the amount of
loss which is:1. above the
required PRIMARY INSURANCE limits, and
2. above any other insurance collectible for an occurrence,
stated previously, the definition of "primary
insurance", which is used in the provisions discussed
above, does not include a defined amount of underlying
coverage. The definition refers only to "any insurance
collectible by the insured." Separate from that
definition inserted throughout the policy, Part V of the
policy places an independent obligation upon the insured to