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Deane v. Liberty Mutual Fire Insurance Co.

Superior Court of Delaware

August 10, 2018

JOHN DEANE, Plaintiff,
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.

          Submitted: May 11, 2018

         On Plaintiff's Motion for Summary Judgment: DENIED

         On Defendant's Motion for Summary Judgment: GRANTED

          Patrick C. Gallagher, Esquire, of JACOBS & CRUMPLAR, PA, Wilmington, Delaware, Attorney for Plaintiff.

          Daniel A. Griffith, Esquire, and Kaan Ekiner, Esquire, of WHITEFORD TAYLOR & PRESTON, LLP, Wilmington, Delaware, Attorneys for Defendant.

          MEMORANDUM OPINION

          LeGROW, J.

         This case arose after Plaintiff was injured in a motor vehicle accident that occurred in Delaware while he was driving a vehicle registered and insured in Georgia. Plaintiff recovered Personal Injury Protection ("PIP") benefits from his employer's Georgia-issued insurance policy with New Hampshire Insurance Company ("NHIC"). Plaintiff then sought PIP benefits through his personal insurer, Liberty Mutual Fire Insurance Company ("Liberty Mutual"). Liberty Mutual denied Plaintiff's claim, arguing an "anti-stacking clause" in Plaintiff's insurance policy prevents insureds from stacking PIP benefits paid under the Delaware Motorist Protection Act ("the Act"). Plaintiff argues the NHIC PIP benefits were not paid under the Act because his vehicle was registered and insured in Georgia. The issue before the Court is whether the Act requires a vehicle insured in a state with no minimum PIP coverage to carry insurance equivalent to Delaware's minimum PIP coverage while operating in Delaware and, if so, whether benefits paid under such coverage are subject to the insurance policy's anti-stacking provision. Because I find Georgia does not require PIP coverage, I conclude NHIC was required to pay Plaintiff Delaware's minimum PIP benefits under the Act, and the policy's anti-stacking provision therefore applies. My reasoning follows.

         FACTUAL AND PROCEDURAL BACKGROUND

         On April 23, 2011, John Deane ("Plaintiff") sustained personal injuries in a motor vehicle accident while driving a vehicle owned by his employer, Covidien PLC ("Covidien"). Covidien's vehicle was registered and insured in Georgia through NHIC, but included a Delaware PIP endorsement.[1] NHIC paid Plaintiff $15, 000 in PIP benefits under its policy with Covidien to cover injuries Plaintiff sustained in the accident. When NHIC paid the benefits, it stated it was doing so under the "DE PIP Endorsement."[2]

         At the time of the accident, Plaintiff personally was insured through Liberty Mutual. After receiving PIP benefits from NHIC, Plaintiff claimed additional PIP benefits from Liberty Mutual. Liberty Mutual denied Plaintiff's claim, arguing the insurance policy's anti-stacking provision prevented Plaintiff from seeking additional PIP benefits because he already received PIP benefits paid under the Delaware Motorist Protection Act ("the Act").[3] Plaintiff's insurance policy with Liberty Mutual provides, in relevant part:

We will not provide Personal Injury Protection Coverage for "bodily injury" sustained by the named insured or any "family member" while . . . "occupying" . . . any "motor vehicle" other than "your covered auto" . . . with respect to which the insurance is required by the Delaware Motorist Protection Act is in effect.[4]

         Liberty Mutual maintained that because the PIP benefits in effect in NHIC's insurance policy were required by (and paid under) the Act, Plaintiff could not stack them and receive double PIP recovery. On April 30, 2017, Plaintiff sued for declaratory judgment and breach of contract. After discovery, the parties filed cross-motions for summary judgment on the issue of whether Liberty Mutual's anti-stacking clause applies to Plaintiff's claim for PIP benefits.

         THE PARTIES' CONTENTIONS

         Liberty Mutual argues the anti-stacking provision in the policy precludes Plaintiff from recovering PIP benefits under Liberty Mutual's policy because Delaware PIP benefits were available from NHIC. Liberty Mutual contends NHIC's PIP benefits were paid under Delaware law because the Act requires vehicles operating in Delaware to have the minimum insurance coverage required by the state in which the vehicle is registered or-if that state has no minimum coverage-to have coverage consistent with Delaware's minimum coverage. Because Georgia does not require minimum PIP coverage, Liberty Mutual asserts NHIC's policy had Delaware's minimum coverage in effect.

         In response, Plaintiff argues the NHIC benefits were paid under Georgia law because the vehicle was registered in Georgia and insured by a Georgia policy. In support of his argument, Plaintiff cites this Court's opinion in Gallaher v. USAA, [5]arguing the Court held in that case that a similar anti-stacking provision did not apply to PIP benefits paid under insurance related to a vehicle registered and insured in Georgia.

         ANALYSIS

         "When opposing parties make cross motions for summary judgment, neither party's motion will be granted unless no genuine issue of material fact exists and one of the parties is entitled to judgment as a matter of law."[6] Where, however, the parties do not contend that a material factual issue precludes judgment as a matter of law, the Court "will treat the cross motions as a stipulation for decision of the case based on the submitted record."[7] Because the parties agree there are no material factual disputes concerning the issue of Plaintiff's coverage, the question presented is one of law and summary judgment therefore is appropriate.

         In Delaware, contract interpretation is treated as a question of law.[8]"[W]hen the language of an insurance contract is clear and unequivocal, a party will be bound by its plain meaning . . . ."[9] A contract is not ambiguous simply because the parties disagree about its construction. Rather, a contract is ambiguous only when its' provisions fairly are susceptible to different interpretations or may have two different meanings. "Ambiguity does not exist where the court can determine the meaning of a contract 'without any other guide than a knowledge of the simple facts on which, from the nature of language in general, its meaning depends.'"[10]

         A. The Act requires out-of-state vehicles operating in Delaware to carry insurance meeting Delaware's minimum coverage if the state in which the vehicle is registered does not mandate any PIP coverage.

         During the hearing on the parties' motions, Plaintiff asked for an opportunity to submit supplemental briefing regarding the meaning of the Act and its effect on this case. In his supplemental submission, Plaintiff acknowledged the Act, specifically Section 2118(b), imposes criminal liability on an individual driving a vehicle that is required to be registered in Delaware but that does not carry the state's minimum insurance coverage. Plaintiff also argued, however, that Section 2118(b) does not apply to vehicles registered in other states. Although criminal liability is not at issue in this case, I address Plaintiff's argument because it challenges Section 2118(b)'s applicability to vehicles operating in Delaware but registered and insured in other states. In support of his argument, Plaintiff cites Green v. Budget Rent A Car Corporation, [11] where this Court concluded vehicles operating in Delaware, but registered and insured in another state, are not required to meet Delaware's minimum PIP requirements under Section 2118(b).[12]

         In Green, the plaintiff was injured when he was struck by a rental car owned by Budget Rent-A-Car ("Budget").[13] The rental car was registered and insured in Pennsylvania, and the insurance policy met Pennsylvania's minimum coverage requirements.[14] The plaintiff argued he was entitled to Delaware's minimum PIP benefits under Section 2118(b).[15] The Court rejected the plaintiff's argument, citing the Delaware Supreme Court's decision in Nationwide Insurance Company v. Battaglia.[16] In Battaglia, the Delaware Supreme Court held that where the out-of-state vehicle is registered and insured in another state, Section 2118(b) "cannot be held to impose Delaware's minimum PIP insurance benefits requirement on the defendant."[17] In Battaglia, the vehicle was insured in Maryland, and carried Maryland's $2500 minimum PIP coverage, which was less than Delaware's $10, 000 PIP coverage. The Battaglia Court held Section 2118 did not require the out-of-state vehicle to carry Delaware's higher coverage minimums.[18]

         After the Battaglia decision, however, Section 2118(b) was amended in 1992 to add the following language, on which Liberty Mutual now relies:

No owner of a motor vehicle being operated in this State shall operate in this State or authorize any other person to operate such vehicle in this State unless the owner has insurance on such motor vehicle equal to the minimum insurance required by the State or jurisdiction where said vehicle is registered. If the State or jurisdiction of registration requires no minimum insurance coverage then such owner must have insurance on such motor vehicle equal to the minimum insurance coverage required for motor vehicles registered in this State.[19]

         In Orija v. Verser, [20] this Court noted the effect of the 1992 amendments on the continued precedential value of the Battaglia decision. The Court found "[s]ubsequent to these decisions, § 2118(b) was amended to add the insurance coverage provisions governing out-of-state vehicles which are at issue in this case."[21] The Court held Section 2118(b) unambiguously imposed Delaware's insurance minimums on out-of-state vehicles ...


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