Opinion
C.A. No. 08C-05-064 RRC.
Submitted: March 12, 2010.
Decided: March 31, 2010.
On Plaintiff's Motion for Partial Summary Judgment. GRANTED.
On Defendant's Motion for Partial Summary Judgment. DENIED.
Timothy E. Lengkeek, Esquire, Young Conaway Stargatt Taylor LLP, Wilmington, Delaware, Attorney for Plaintiff.
Nancy C. Cobb, Esquire, Chrissinger Baumberger, Wilmington, Delaware, Attorney for Defendant.
Dear Counsel:
INTRODUCTION
These cross motions for partial summary judgment arise out of an insurance contract between Plaintiff and Defendant, Liberty Mutual Fire Insurance Company. Plaintiff filed a complaint seeking uninsured/underinsured motorist coverage from Defendant, and later amended his complaint to seek reformation of Defendant's insurance policy. It is only Plaintiff's reformation claim that is the subject of these motions.
The only issue presented by these cross motions for summary judgment is whether Defendant made a "meaningful" offer to Plaintiff to purchase uninsured/underinsured motorist coverage in that Defendant clearly and unambiguously delineated the maximum amount of uninsured/underinsured motorist coverage potentially available to Plaintiff.
This Court has determined that Defendant's policy was "ambiguous" and did not adequately inform Plaintiff of the maximum available uninsured/underinsured motorist coverage. Accordingly, Plaintiff's motion for partial summary judgment seeking reformation of the insurance policy is GRANTED. Defendant's cross motion is DENIED.
FACTS and PROCEDURAL HISTORY
This case arises from a motor vehicle accident that occurred on I-95 on May 9, 2009. As a result of the accident, Plaintiff incurred numerous injuries and has undergone numerous medical procedures.Plaintiff settled his claim against the tortfeasor and subsequently filed a complaint against Defendant seeking uninsured/underinsured motorist coverage. Plaintiff later amended his complaint seeking reformation of Defendant's insurance policy. Plaintiff sought reformation of his insurance policy because he wants to increase the amount of potential uninsured/underinsured motorist coverage that is available.
Id. at ¶ 3.
Id.
Defendant's policy that was in effect at the time of the accident stated in pertinent part as follows:
6. Uninsured/Underinsured Motorist Coverage (Optional)
(Available in limits up to the Bodily Injury Liability Limits or $100,000/$300,000, whichever is less)
Id. at Ex. B (emphasis added).
Additionally, a document that was part of the application for insurance indicates that $100,000/$300,000 was checked on the policy and signed by Plaintiff. There were twelve other alternative amounts of UM/UIM listed on that form. Thus, according to that document signed by Plaintiff, $100,000/$300,000 was the amount of uninsured/underinsured motorist coverage purchased in 2006.
Id. at Ex. D.
Plaintiff's bodily injury limits in effect in the policy at the time of the accident were $250,000/$500,000. Additionally, Defendant's response to Plaintiff's Request for Admissions admitted:
Id. at Ex. A.
1. Admit that Liberty Mutual sold UM/UIM coverage of $250,000/$500,000 to its policyholders in 2006. ANSWER: Admitted.
2. Admit that Plaintiff had the option of purchasing UM/UIM coverage of $250,000/$500,000 in 2006. ANSWER: Admitted.
Id. at Ex. C.
Both parties have now filed cross motions for summary judgment seeking differing interpretations of the insurance policy and a determination by this Court of whether Defendant made a "meaningful" offer to Plaintiff to purchase uninsured/underinsured motorist coverage in that Defendant clearly and unambiguously delineated the maximum amount of uninsured/underinsured motorist coverage potentially available to Plaintiff.
CONTENTIONS OF THE PARTIES
Plaintiff asserts that reformation of the uninsured/underinsured motorist policy is necessary because Defendant never made Plaintiff a "meaningful" offer to purchase coverage. Specifically, Plaintiff argues that he did not have "all of the facts reasonably necessary for a person to be adequately informed to make a rational, knowledgeable, and meaningful determination. . . ." Plaintiff further argues that the insurance contract is "ambiguous" because it does not specifically state that Plaintiff may purchase coverage up to the amount of bodily injury even though Defendant's response to discovery establishes that Plaintiff could have purchased additional coverage if Plaintiff desired. Plaintiff contends that the ambiguity within the insurance policy means that the offer could not be "meaningful" as required.In contrast, Defendant asserts that "plaintiff understood that he could choose insurance equal to that of his liability policy, but he chose not to." Defendant argues that the offer met the statutory requirements because Plaintiff had all the information necessary to make an "informed decision" regarding coverage, and after being properly informed, knowingly purchased uninsured/underinsured coverage in the amount of $100,000/$300,000 rather than $250,000/$500,000 that Defendant acknowledges that Plaintiff could have purchased.
Def. Resp. to Mot. for Part. Summ. J.
STANDARD OF REVIEW
"Upon cross motions for summary judgment, this Court will grant summary judgment to one of the moving parties. No genuine issues of material fact exist as a matter of law where opposing parties have each sought summary judgment." Superior Court Civil Rule 56(h) provides:
HLTH Corp. v. Clarendon Nat. Ins. Co., 2009 WL 2849777, at * 22 (Del. Super.).
Where the parties have filed cross motions for summary judgment and have not presented argument to the Court that there is an issue of fact material to the disposition of either motion, the Court shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions.
Here, the parties have agreed that there are no issues of material fact pertinent to these cross motions. Thus, the issue before this Court is an issue of law and is ripe for decision on the merits.
DISCUSSION
The only issue presented by these cross motions for summary judgment is whether Defendant made a "meaningful" offer to Plaintiff to purchase uninsured/underinsured motorist coverage in that Defendant clearly and unambiguously delineated the maximum amount of uninsured/underinsured motorist coverage potentially available to Plaintiff.
The duty of an insurance carrier to provide uninsured/underinsured motorist coverage is prescribed by 18 Del. C. § 3902(b), which states:
Every insurer shall offer to the insured the option to purchase additional coverage for personal injury or death up to a limit of $100,000 per person and $300,000 per accident or $300,000 single limit, but not to exceed the limits for bodily injury liability set forth in the basic policy. Such additional insurance shall include underinsured bodily injury liability coverage.
"Under this statute, the insurance carrier has an affirmative duty to offer the insured additional coverage . . . `so that the insured can make an informed decision' regarding the limits of coverage." "An informed decision can be made only if all of the facts reasonably necessary for a person to be adequately informed to make a rational, knowledgeable and meaningful determination have been supplied."
Mason v. United Servs. Auto Ass'n, 697 A.2d 388, 393 (Del. 1997) (citations omitted).
Id.
The burden of proof in establishing compliance with the statute is on the insurer. "[I]nsurance policies typically are not negotiated agreements and that the industry has its own terminology which, despite efforts towards plain language policies, is difficult for the typical insured to understand." "As a general rule, for example, an insurance contract is construed strongly against the insurer, and in favor of the insured, because the insurer drafted the language that is interpreted."
Id.
Id. (citation omitted).
Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925, 926 (Del. 1982). But cf. Apotas v. Allstate Ins. Co., 246 A.2d 923, 924-25 (Del. 1968) (holding that this rule does not apply unless there is ambiguity "or confusion resulting from the deliberate selection of language."). In this case, there appears to be "confusion resulting from the deliberate selection of language."
To satisfy the requirements of 18 Del. C. § 3902(b), an insurer must make a "meaningful offer." The elements of such an offer are "(1) an explanation of the cost of the coverage, and (2) communication that clearly offers the specific coverage in the same manner and with the same emphasis as was on the insured's other coverage." If an insurer does not make a "meaningful offer," "Delaware courts treat the offer as a continuing offer for additional coverage, which the insured may accept even after the insured's accident."
Mason, 697 A.2d at 393 (Del. 1997)
Shukitt v. United Servs. Auto Ass'n, 2003 WL 22048222, at * 3 (Del. Super.) (citations omitted).
Here, Defendant has not met its burden of making a "meaningful offer" because the offer does not make it clear what amount of uninsured/underinsured motorist coverage was available to Plaintiff. The document informing Plaintiff of his ability to buy uninsured/underinsured motorist coverage states that uninsured/underinsured motorist coverage is "[a]vailable in limits up to the Bodily Injury Liability Limits [$250,000/$500,000] or $100,000/$300,000, whichever is less." This phrase seems to indicate that Plaintiff could only purchase uninsured/underinsured coverage up to $100,000/$300,000 because the $100,000/$300,000 UM/UIM is "less" than $250,000/$500,000, despite the other form offering varying amounts of UM/UIM coverage.
Mot. for Part. Summ. J. at Ex. B (emphasis added).
This "whichever is less" language contradicts Defendant's discovery admission that Plaintiff had the ability to purchase coverage up to $250,000/$500,000. Defendant, in making a higher amount of coverage available to Plaintiff, had a duty to explain the coverage in a way that Plaintiff could understand. This was not done here because the "offer" could fairly be construed to make coverage of $100,000/$300,000 the ceiling of coverage available to Plaintiff, since $100,000/$300,000 is "less" obviously than $250,000/$500,000. Thus, the offer was not "meaningful."
See Mason, 697 A.2d at 393-94.
Despite Defendant's assertion that "[t]his offer also informed plaintiff that he could chose up to his bodily injury policy limits . . ." this assertion is incorrect because the offer of coverage in the amount of bodily injury was constrained by the phrase "whichever is less."
This Court holds that the language of the policy did not clearly inform Plaintiff that he was entitled to coverage up to bodily injury even though Plaintiff was entitled to such coverage as admitted in discovery.
Accordingly, Plaintiff's motion for partial summary judgment is GRANTED. The policy limit available to Plaintiff for uninsured/underinsured motorist coverage is now $250,000/$500,000. Defendant's cross motion for summary judgment is DENIED.