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USAA Casualty Insurance Co. v. Fosnaught

Superior Court of Delaware

October 14, 2019

USAA CASUALTY INSURANCE COMPANY, Defendant Below/Appellant,
v.
JOSEPH FOSNAUGHT, Plaintiff Below/Appellee.

          Date Submitted: July 15, 2019

         Upon Defendant USAA Casualty Insurance's Motion to Dismiss in Lieu of Answer Denied.

          Dennis A. Mason II, Esquire, The Freibott Law Firm, P.A., Wilmington, DE, Attorney for Plaintiff Below/Appellee.

          Lisa M. Grubb, Esquire, Marshall Dennehey Warner Coleman & Goggin, Wilmington, DE, Attorney for Defendant Below/Appellant.

          ORDER

          The Honorable Calvin L. Scott, jr.

         USAA Casualty Insurance ("Defendant") filed a Motion to Dismiss in Lieu of Answer, arguing that Joseph Fosnaught ("Plaintiff) lacks standing. For the following reasons, Defendant's motion is DENIED.

         Background

         On July 20, 2018, Plaintiff was injured in an automobile collision. Plaintiff alleges he suffered injuries as a result of this collision. Plaintiff subsequently received medical care from Christiana Care for these injuries.[1] At the time of the collision, Plaintiff alleges he was insured by Defendant under an automobile insurance policy that included personal injury protection ("PIP") coverage with limits of $300, 000/$500, 000.[2]

         After the accident, Plaintiff alleges that Defendant failed to pay the full amount of PIP costs to which Plaintiff was entitled under the policy limits.[3]Defendant alleges that it was only obligated to pay an amount which it considered reasonable for the services rendered.[4] Plaintiff and Defendant engaged in arbitration proceedings to resolve this matter. On April 15, 2019, a Department of Insurance Arbitration Panel awarded Plaintiff $2, 394 in unpaid PIP expenses. Defendant appealed this decision on May 8, 2019.

         In his Complaint on Appeal, Plaintiff alleges Defendant's conduct constitutes a breach of contract and violates 21 Del C. §§ 2118, 2118B. Plaintiff claims he is entitled to special and statutory damages.[5] In response to Plaintiffs complaint, Defendant filed this motion to dismiss.

         Parties' Assertions

         Defendant argues that Plaintiffs claim must be dismissed for lack of standing. Defendant cites the Delaware Department of Insurance's Bulletin 10 ("Bulletin 10") in support of its argument that Plaintiff lacks standing.[6] Specifically, Defendant contends that Bulletin 10 gives standing only to medical providers to bring a claim for lack of payment.[7]

         In response, Plaintiff argues that he has standing to bring this claim as a matter of contract law.[8] Plaintiff further contends that Bulletin 10, as an advisory opinion, cannot trump Delaware's statutorily-created financial responsibility laws.[9] Plaintiff also points to the existence of regulations creating an arbitration process for actions between an insured and an insurer as further proof of Plaintiff s standing to bring a breach of contract claim against his insurer.[10]

         Standard ...


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