NYIA DELOACH, PATRICIA TROWERY AND CINCINNATI INSURANCE COMPANY, Plaintiffs,
MEGHAN BUTTERS HOUSER, ESQUIRE, as Administratix of the ESTATE OF CHERYL SIGVARDSON, Defendant.
Submitted: September 19 2018.
Charles E. Butler, Judge.
9th day of November, 2018, upon consideration of
Defendant's, Meghan Butters Houser, as Administrator of
the Estate of Cheryl Sigvardson, Motion for Partial Summary
Judgment, it appears that:
is a consolidated action resulting from a fire at an
apartment complex. Two of the actions were filed by tenants
against the tenant said to be responsible for the fire. A
third action was a subrogation case filed by Cincinnati
Insurance Company ("Cincinnati"), which seeks to
recover payments it made on behalf of its insured, the
apartment complex. The fire was allegedly caused by the
negligence of one of the tenants, Cheryl Sigvardson. Ms.
Sigvardson perished in the fire and suit was brought against
the administrator of her estate.
defendant has moved to dismiss the Cincinnati case. She
argues that it is settled Delaware law that a tenant is a
"co-insured" under a landlord's fire insurance
policy and that the insurer may not obtain subrogation
against a co-insured.
order for Cincinnati to prevail, it must distinguish this
case from the case of Lexington Ins. Co. v.
Raboin This is so because of the remarkable
factual similarities between Lexington and this
Lexington, the defendant Raboin was a tenant of an
apartment complex insured by Lexington when, it was alleged,
he caused a fire resulting in over $700, 000 in damages to
the apartment complex. Lexington paid on the claims and
sought subrogation against Raboin, with Raboin defending on
the grounds that Lexington could not seek subrogation against
issue in Lexington, as it is here, was whether the
negligent, fire-starting tenant of an apartment complex is a
co-insured of the landlord on a landlord's fire insurance
policy, absent some express provisions to the contrary.
Judge Del Pesco's ruling in Lexington, she
surveyed the law of multiple jurisdictions in holding that
the "trend of modern jurisprudence holds that fire
insurance secured by the landlord has been obtained for the
mutual benefit of landlord and lessee." There are many
sound policy considerations supporting this rule: each tenant
cannot reasonably be expected to purchase their own insurance
for damage to a multi-million dollar apartment complex, the
tenant's only insurable interest being in his own
apartment, and landlords are better able to insure the whole
premises and pass the cost of such insurance on to all
tenants in rent.
Lexington Court expressed its holding thus: "in
the absence of an express agreement or provision in the lease
that would place liability on the tenant for the tenant's
negligence in causing the fire, the landlord's carrier
cannot obtain subrogation against the
tenant." This remains the law of Delaware.
distinguish the Lexington holding, Cincinnati
directs the Court to various lease provisions concerning the
tenant's obligation to return the property in good
condition, to pay for damages in excess of normal wear and
tear, and to pay for any damages to the landlord's
property caused by the tenant or his relatives or guests.
Each of these provisions, however, deal with subjects far
afield of loss caused by fire due to the negligence of the
tenant. They hardly qualify as an "express
agreement" shifting the risk of fire loss to the tenant.
Indeed, the only language that even deals with fire loss
merely sets forth the tenant's available remedies to
abrogate the lease under the landlord-tenant code in the
event of a fire. None of the provisions to which the Court
was directed satisfy Lexington 's mandate that a
risk-shifting provision placing the risk of loss by fire to
the rental unit or the whole property caused by the
tenant's negligence be stated clearly and unequivocally
in the lease.
rule adopted in Lexington is referred to as the
"Sutton Rule," from its namesake decision,
Sutton v. Johdahl. And the Court would be remiss if
we did not acknowledge that there are differences of opinion
in the decisions of the various states whether the
Sutton rule is good policy. At the risk of irrelevancy,
the Court here reaffirms its belief that Sutton and
Lexington express the better rule that residential
tenants should be considered co-insureds under a
landlord's policy, absent specific and explicit language
shifting the risk of fire loss to the tenant. The Court
finding no such specific and explicit language in the lease
in question here, must dismiss Cincinnati's subrogation
Motion for Partial Summary Judgment is therefore