JAMES L. MARTIN, Plaintiff Below, Appellant,
NATIONAL GENERAL ASSURANCE COMPANY, Defendant Below, Appellee.
Submitted: March 22, 2019
Below-Superior Court of the State of Delaware C.A. No.
VAUGHN, SEITZ, and TRAYNOR, Justices.
Collins J. Seitz, Jr. Justice.
consideration of the parties' briefs and the record
below,  it appears to the Court that:
plaintiff below-appellant, James L. Martin, filed this appeal
from a Superior Court order granting the motion to dismiss
filed by the defendant-below National General Assurance
Company. We conclude that the judgment of the Superior Court
should be affirmed.
October 10, 2015, Martin was injured in a collision with a
car while riding his bicycle. Martin's insurance policy
with National General included $15, 000 for personal injury
protection ("PIP"), $5, 000 for loss of property
under PIP, and $15, 000 for bodily injury under the
uninsured/underinsured ("UM/UIM) provision, with $10,
000 for property damage. The driver's insurance policy
with State Farm included $15, 000 for PIP. Martin received
$15, 000 in PIP benefits from the driver's State Farm
policy. Martin alleged that his losses, including medical and
surgical expenses and lost income, from the accident exceed
the PIP and UIM limits.
Martin demanded PIP and UIM coverage under his policy with
National General. National General denied PIP coverage,
informing Martin that State Farm was exclusively liable.
National General also denied UIM coverage, initially
informing Martin that the $15, 000 policy limit did not
exceed the State Farm policy limit. National General
subsequently informed Martin that his bicycle did not fall
under the definition of a covered auto under the policy.
Finally, National General informed Martin that he was not
entitled to UIM coverage because the State Farm policy limit
was not exhausted.
an arbitration before a Delaware Department of Insurance
Arbitration Panel, the arbitrator found that Martin could not
recover PIP benefits under the National General policy
because the policy precluded stacking of PIP policies. The
arbitrator found that the UIM claim was outside of his
authority. The arbitrator entered a decision in favor of
January 11, 2018, Martin filed a complaint in the Superior
Court for PIP and UIM coverage under the National General
policy. He also alleged that he was entitled to exemplary
damages based on National General's bad faith denial of
UIM benefits based on an out-of-date version of 10 Del.
C. § 3902(b)(2), failure to investigate the cause
of the accident, and failure to pay the policy limit.
National General filed a motion to dismiss the complaint for
failure to state a claim under Superior Court Civil Rule
12(b)(6). National General argued that a policy exclusion
precluded the double recovery of PIP benefits. As to the UIM
claim, National General argued that Martin had not shown that
all of the policies available to him at the time of the
accident were exhausted as required by 18 Del. C.
§ 3902(b)(3). Martin opposed the motion and submitted
portions of the policy that he claimed entitled him to PIP
coverage. After oral argument, the Superior Court granted
National General's motion to dismiss. This appeal
review a trial court's granting of a motion to dismiss
de novo. On appeal, Martin argues that: (i)
National General was required to file the entire insurance
policy with its motion to dismiss; (ii) under the doctrine of
contra proferentem, the policy allowed the recovery
of PIP benefits under the State Farm and National General
policies; and (iii) National General was subject to a bad
faith claim based on its wrongful denial of his UIM claim.
Martin did not raise his first argument in the Superior Court
so we will not consider that argument for the first time on
Turning to Martin's next argument, the doctrine of
contra proferentem requires ambiguous language in an
insurance policy to be construed against the insurance
company. The National General policy endorsement
excluded PIP coverage for injuries sustained by the named
insured or any family member while a pedestrian injured by an
accident with any motor vehicle other than the covered auto
with respect to which the insurance required by the Delaware
Motorist Protection Act is in effect. In Gonzalez v.
State Farm Mut. Auto. Ins. Co.,  this Court found that
virtually identical language was unambiguous and precluded a
mother from collecting the $15, 000 PIP policy limit from her
insurance carrier after her son was hit by a car while riding
his bicycle and the driver's insurance company paid the
$15, 000 PIP policy limit. In light of the unambiguous policy
language, the doctrine of contra preferentem is not
applicable here. The plain language of the National General
policy precluded Martin from recovering the $15, 000 PIP
policy limit under both the State Farm policy and the
National General policy. He therefore failed to state a claim
for PIP benefits under the National General policy.
Finally, Martin failed to state a claim for UIM benefits or
bad faith. Under 18 Del. C. § 3902(b)(3),
National General was not obligated pay any UIM benefits
"until after the limits of liability under all bodily
injury bonds and insurance policies available to the insured
at the time of the accident have been exhausted by payment of
settlement or judgments." Martin did not allege and does
not claim that all limits of liability under all bodily
injury bonds and insurance policies available (specifically
the driver's State Farm policy) have been exhausted. Even
though National General initially denied UIM coverage based
on an out-of-date version of § 3902(b)(2),
National General subsequently denied coverage based on the