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Brown v. Everett

Superior Court of Delaware

June 4, 2019

HARRY BROWN, Plaintiff,
v.
TALEAH EVERETT, USAA GENERAL INDEMNITY COMPANY, JEFFERY CAMPBELL, and CAMPBELL LANDSCAPE SERVICE, INC. Defendants.

          Submitted: April 8, 2019

          ORDER

          ABIGAIL M. LEGROW, JUDGE

         Defendant USAA General Indemnity Company's Motion for Summary Judgment[1]: Denied

         1. The plaintiff seriously was injured in a motor vehicle accident. The driver of the vehicle in which the plaintiff was riding solely was at fault in the accident. The driver's insurance paid the plaintiff the policy limits for bodily injury liability coverage, but that payment did not fully compensate the plaintiff for the injuries he suffered. The plaintiff then filed this action seeking underinsured motorist benefits under the driver's policy. The insurer moved for summary judgment, arguing that several provisions within the policy preclude payment of underinsured motorist benefits. The insurer's motion requires the Court to determine the validity of policy exclusions that purport to eliminate or limit underinsured motor vehicle benefits based on (i) whether the named insured owned the underinsured vehicle, or (ii) the amount of bodily injury coverage paid out under the policy. Because the exclusions are inconsistent with the uninsured/underinsured motorist statute's plain language, they are not valid. Accordingly, as explained below, the defendant's motion for summary judgment is denied.

         BACKGROUND

         2. The following facts are undisputed. The plaintiff, Harry Brown ("Plaintiff), suffered serious injuries in an October 31, 2016 motor vehicle accident. At the time of the accident, Plaintiff was a passenger in defendant Taleah Everett's 2002 Honda Accord. Ms. Everett failed to yield the right of way when making a left turn. The fault for the accident rests entirely with Ms. Everett.

         3. Ms. Everett and her father, George O. Rayfield, jointly owned the motor vehicle, which was insured with USAA General Indemnity Company ("USAA"). The USAA Policy Mr. Rayfield purchased (the "Policy") identifies Mr. Rayfield as the "named insured" and lists Ms. Everett as an operator of the vehicles insured under the policy. Under the Policy's definitions, Plaintiff was a "covered person" for purposes of the accident in question because he was an occupant of a covered motor vehicle.[2] The Policy provided bodily injury coverage in the amount of $100, 000 per person, $200, 000 per accident and uninsured/underinsured motorist ("UIM") coverage in the amount of $100, 000 per person, $200, 000 per accident.

         4. On May 10, 2017, USAA tendered the Policy's bodily injury coverage limits in satisfaction of Plaintiff s negligence claim against Ms. Everett. Plaintiff also maintains he is entitled to recover UIM benefits under Ms. Everett's Policy. USAA contends that, having tendered the policy limits for bodily injury coverage, it is not also required to pay UIM benefits under the Policy. USAA relies on several exclusions in the Policy to support its argument, namely: (i) the definition of underinsured motor vehicle, (ii) a limit of liability clause, and (iii) various non-duplication clauses. Plaintiff concedes that those provisions purport to eliminate his right to seek from the Policy UIM coverage for this accident. He argues, however, that those provisions contradict Delaware's Uninsured/Underinsured Motorist statute, 18 Del. C. § 3902, and therefore are void as a matter of law.

         ANALYSIS

         5. Summary judgment should be awarded if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."[3] The parties in this case agree there are no disputed factual issues relevant to USAA's motion. USAA raises three alternative arguments in support of its motion for summary judgment.

         A. The Policy's definition of Underinsured Motor Vehicle is inconsistent with Section 3902 and therefore is void.

         6. USAA first argues the vehicle in which Mr. Brown was riding is not an "Underinsured Motor Vehicle" as that term is defined within the Policy. The Policy relevantly provides that an '"underinsured motor vehicle do[es] not include any vehicle or equipment: (1) owned by or furnished or available for the regular use of you or any family member. . . .'"[4] USAA argues Mr. Rayfield purchased UIM coverage to protect himself, his family members, and occupants of his vehicles from "the negligence of unknown tortfeasors," and the coverage was not intended to protect occupants of Mr. Rayfield's vehicle from the negligent acts of the named insured or his family members.[5]

         7. Plaintiff acknowledges that the policy, as written, precludes his claim for UIM benefits in this case. He argues, however, that the policy definition of Underinsured Motor Vehicle contradicts 18 Del. C. § 3902 and therefore is void as a matter of law.[6] Plaintiff points out that Section 3902 specifically defines an underinsured motor vehicle as "one for which there may be bodily injury liability coverage in effect, but the limits of bodily injury liability coverage under all bonds and insurance policies applicable at the time of the accident are less than the damages sustained by the insured."[7] Plaintiff therefore argues the attempt to define an underinsured vehicle by reference to who owned it contradicts the statute, which defines an underinsured motor vehicle solely by reference to whether the injured party's damages exceed the available bodily injury liability coverage.

         8. Interpretation of language in an insurance policy or statute is a question of law.[8] The Court begins its analysis by examining the language at issue, and where that language is unambiguous, the parties are bound by its plain meaning.[9] Each section of the relevant statute or policy is read "in light of all the others to produce a harmonious whole."[10] When the Court is asked to determine whether a coverage limitation is valid in light of the statute, the Court only will consider the relevant public policy if it first determines the statutory language is ambiguous.[11]

         9. This Court has examined Section 3902 several times and on each occasion has concluded the statute is unambiguous.[12] Section 3902(b) expressly defines an underinsured motor vehicle as one for which bodily injury coverage is in effect, but the limits of that coverage are less than the damages the insured sustained. In other words, the statute defines an underinsured motor vehicle by reference to the injured party's damages and the scope of the available bodily injury coverage, not by reference to whether the motor vehicle in question was owned by the insured or one of his family members.

         10. Relying on that statutory definition, this Court has declared invalid policy exclusions that purport to reduce or eliminate UIM coverage on the basis of the number of vehicles involved in the accident or the fact that the insurer also provided bodily injury coverage for the accident under the same policy. For example, in Baunchalk v. State Farm Mutual Automobile Insurance Co., the Court declared invalid a non-duplication clause that purported to eliminate UIM coverage when the insurer already paid the policy limits for bodily injury coverage for the accident.[13] In Baunchalk, the insurer argued that a party injured in a single-vehicle car accident could not recover both bodily injury benefits and UIM benefits under the same policy.[14] In rejecting that argument, the Court reasoned that Section 3902(b) does not permit such an exclusion because the policy defines an underinsured motor vehicle based on the victim's injuries relative to the available bodily injury coverage, not based on the number of cars involved in the accident.[15]

         11. Similarly, in Tillison v. GEICO Secure Insurance Co. and Perez v. State Farm Mutual Automobile Insurance Co., this Court held policy definitions of an "uninsured motor vehicle" that excluded any vehicle covered by the bodily injury liability coverage of the policy were invalid under Section 3902.[16] The Tillison Court reasoned Section 3902's "underinsured motorist provisions are unambiguous" and "[c]ontrary to the interpretation urged by [the insurer], the statute's definition of 'underinsured motor ...


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