Opinion
C.A. No. 03C-04-022 ESB.
Submitted: March 31, 2004.
June 28, 2004.
Thomas J. Stumpf, Esquire, Stumpf, Vickers Sandy, P.A., Georgetown, DE.
Nancy Chrissinger Cobb, Esquire, Chrissinger Baumberger, Wilmington, DE.
Dear Counsel:
This is my decision on the motion for summary judgment filed by plaintiffs Robin P. Ruggiero and Anthony M. Ruggiero (the "Ruggieros") against defendant Montgomery Mutual Insurance Company ("Montgomery Mutual") in this insurance coverage case. The Ruggieros' motion is denied for the reasons stated herein.
STATEMENT OF THE CASE
Robin Ruggiero was injured in an auto accident on March 15, 1996. At the time of the accident, Robin Ruggiero was operating a vehicle she personally owned and was negligently struck by the driver of another vehicle, Linnie A. Bryan ("Bryan"). The liability carrier for Bryan paid the policy limits of $100,000 to Robin Ruggiero. In this declaratory judgment action, Robin Ruggiero claims that Bryan was underinsured in light of the severity of her injuries and damages. Robin Ruggiero now seeks additional compensation from Montgomery Mutual, which insured a small fleet of vehicles owned by her employer, Phillips Sign, Inc. ("Phillips Sign").
Robin Ruggiero was both an employee of, and corporate officer for, Phillips Sign for many years. Phillips Sign specifically notified Montgomery Mutual of Robin Ruggiero's authorization to drive company-owned and insured vehicles in March 1992 via a "Driver Information" sheet, which listed Robin Ruggiero as one of many permissible "drivers" under the applicable policy. At the time of the accident, however, Robin Ruggiero was not driving a company-owned vehicle, nor was she driving in the course or furtherance of her employer's business.
STANDARD OF REVIEW
Summary judgment may be granted only when no material issues of fact exist, and the moving party bears the burden of establishing the non-existence of material issues of fact. Once the moving party meets its burden, then the burden shifts to the non-moving party to establish the existence of material issues of fact. Where the moving party produces an affidavit or other evidence sufficient under Superior Court Civil Rule 56 in support of its motion and the burden shifts, then the non-moving party may not rest on its own pleadings, but must provide evidence showing a genuine issue of material fact for trial. If, after discovery, the non-moving party cannot make a sufficient showing of the existence of an essential element of her case, then summary judgment must be granted. If, however, material issues of fact exist or if the Court determines that it does not have sufficient facts to enable it to apply the law to the facts before it, then summary judgment is inappropriate.
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
Id. at 681.
Super. Ct. Civ. R. 56(3); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991), cert. den., 112 S.Ct. 1946 (1992); Celotex Corp., 477 U.S. 317 (1986).
Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962).
DISCUSSION
A. Ruggiero Was Not an "Insured" at the Time of the AccidentPhillips Sign and Phillips Outdoor Advertising are the "Named Insureds" under a "Business Auto Policy" issued by Montgomery Mutual. The policy covered the period from May 4, 1995 to May 4, 1996. The auto accident of March 15, 1996 falls within the covered period. The policy provides uninsured/underinsured coverage of $1,000,000 for each of the listed company-owned vehicles. When Robin Ruggiero received the policy limits of $100,000 from Bryan's liability carrier, she became legally entitled to claim that Bryan was underinsured.
The policy at issue contains the following language:
A. COVERAGE
1. We will pay all sums the "insured is legally entitled to recover as compensatory damages from the owner or driver of:
A. An "uninsured motor vehicle" or an "underinsured motor vehicle" because of "bodily injury" sustained by the "insured" caused by an "accident;"
B. WHO IS AN INSURED
1. You.
2. If you are an individual, any "family member."
3. Anyone else "occupying" a covered "auto" or a temporary substitute for a covered "auto." The covered "auto" must be out of service because of its breakdown, repair, servicing, loss or destruction.
4. Anyone for damages he or she is entitled to recover because of "bodily injury" sustained by another "insured."
Plaintiff's Motion for Summary Judgment Ex. A-2 at 1.
Pl.'s Mot. Ex. A-2 at 2.
Plaintiff's Motion for Summary Judgment Ex. A-2 at 1.
Pl.'s Mot. Ex. A-2 at 2.
The first issue to be resolved in insurance contract disputes is whether the policy language is ambiguous. Clear and unambiguous language in insurance contracts will be given its plain and ordinary meaning. When this Court finds the language to be ambiguous, it is typically construed against the insurer. Where language in an insurance policy is reasonably susceptible to at least two different interpretations, it is deemed ambiguous. If the Court finds the language at issue to be ambiguous, it will construe the language in accordance with the reasonable expectations of the insured.
Rhone-Poulen Basic Chems. Co. v. American Ins. Co., 616 A.2d 1192, 1995 (Del. 1992).
Nationwide Mut. Ins. Co. v. Hockessin Const., Inc., 1996 WL 453325 (Del.Super.Ct.), citing Delledonne v. State Farm Mut. Auto. Ins. Co., 621 A.2d 350, 352 (Del.Super.Ct. 1992).
Rhone-Poulen Basic Chems. Co., 616 A.2d at 1196.
Nationwide Mut. Ins. Co., 1996 WL at *3, citing Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925, 927 (Del. 1982).
The named insured in this case is Phillips Sign, a corporation. It is well established in Delaware that a corporation cannot have "family members" or sustain "bodily injury." In Derrickson v. American Nat'l Fire Ins. Co., Del. Supr., Nos. 214, 226 (Cons.), Walsh, J. (Jan. 13, 1988) (ORDER) at 4, the Delaware Supreme Court found similar language in a commercial automobile policy to be ambiguous because corporations cannot have family members. This Court examined similar language in Fisher v. Nat'l Union Fire Ins. Co. of Pittsburgh, 1997 WL 817893 (Del.Super.Ct.), aff'd by 719 A.2d 490 (Table), 1998 WL 665074 (Del.), and found the language to be ambiguous because corporations cannot have family members or sustain bodily injury. Therefore, this Court found the plaintiff in Fisher to be an "insured" under an insurance policy identical to the one at issue. Since the language in the insurance policy at issue fails to distinguish between corporate insureds and individual insureds, it is ambiguous. The terms "you" and "individual" may be construed to include Robin Ruggiero because she was a designated driver of the vehicles insured under the policy during the time of her injury.
Fisher v. Nat'l Union Fire Ins. Co. of Pittsburgh, 1997 WL 817893 (Del.Super.Ct.), aff'd by 719 A.2d 490 (Table), 1998 WL 665074 (Del.); See also Derrickson v. American Nat'l Fire Ins. Co., 538 A.2d 1113 (Del. 1988); Nationwide Mut. Ins. Co., 1996 WL 453325 (Del.Super.Ct.); Donegal Mut. Ins. Co. v. Action Business Center, Inc., 1999 WL 1568618 (Del.Super.Ct.).
Fisher, 1997 WL at *4.
Nationwide Mut. Ins. Co., 1996 WL at *3.
Fisher, 1997 WL at *4.
Although Delaware legal precedent supports a finding that the language at issue is ambiguous, the analysis does not stop there. This Court will construe the ambiguous language in the policy in accordance with the reasonable expectations of the insured. This Court finds that Ruggiero could only reasonably expect to be covered under paragraph B(2) of the policy at issue either while operating a company-owned vehicle, or working in the course of her employment. Robin Ruggiero was listed as a designated and authorized driver for Phillips Sign on Montgomery Mutual's "Driver Information" sheet. Therefore, it is also reasonable for Phillips Sign to expect that Ruggiero would be covered under the insurance policy while she is either working or operating one of the company's vehicles. In a similar situation, this Court found coverage to extend to only those individuals that the company reasonably expected to be insured while using company vehicles. When examining another situation comparable to the case at bar, this Court held the following:
Hallowell, 443 A.2d 925, 927 (Del. 1982).
Fisher, 1997 WL at *4. (Emphasis added.).
Given that a Schedule of Drivers was included with the policy documents, the insured reasonably expected UM/UIM coverage to extend to those listed drivers . . . [W]here language in a policy is ambiguous, an interpretation finding coverage will be applied given the sound public interest for UM/UIM coverage in . . . Delaware.
Reese v. Wheeler, 2003 WL 22787629, at 5 (Del.Super.Ct.), citing Nat'l Union Fire Ins. Co. v. Fisher, 692 A.2d 892 (Del. 1997).
Reese v. Wheeler, 2003 WL 22787629, at 5 (Del.Super.Ct.), citing Nat'l Union Fire Ins. Co. v. Fisher, 692 A.2d 892 (Del. 1997).
In these cases, coverage was warranted. Both of the plaintiffs were listed as designated drivers and both sustained injuries in the course of, or in the furtherance of, their employment. Fisher was injured while on duty as a patrolman and Reese was injured while returning to his vehicle after checking to see if his truck was in the proper position at the loading dock to unload his trailer full of carrots.
See Reese, 2003 WL at *1; See also Fisher, 1997 WL at *1.
Reese, 2003 WL at *1; Fisher, 1997 WL at *1.
This is clearly not the case here. Robin Ruggiero was not working for her employer or driving a company-owned vehicle at the time of the accident. Therefore, it is not reasonable for Robin Ruggiero to expect coverage under the Montgomery Mutual policy. It is also not reasonable to believe that Phillips Sign intended Robin Ruggiero to be covered under the policy while she was engaged in personal activities and driving her own vehicle. That is the purpose of personal insurance coverage. Thus, in this particular factual situation, Robin Ruggiero was not an insured at the time of the accident.
B. Ruggiero Is Not Eligible for Compensation Under the Terms of the Applicable Policy
Robin Ruggiero was not operating a company-owned vehicle, nor did she sustain bodily injury in the course of her employment. Therefore, she is not an insured and she is not eligible for compensation under the terms of the Montgomery Mutual policy. The applicable insurance policy provides that Montgomery Mutual is liable to pay compensatory damages for "bodily injury" sustained by an "insured" in an accident where the tortfeasor is uninsured or underinsured. As determined above, in this particular factual situation, Robin Ruggiero is not an "insured" under the policy. If Robin Ruggiero had been operating a company-owned vehicle at the time of the accident or had been injured in the course of her employment, then she would qualify as an insured under paragraph 2(B) of the policy.
It is true that this Court has held that underinsured motorist ("UIM") coverage is not vehicle specific, but rather it is personal to the insured. Moreover, "the `letter and spirit of Section 3902 require UIM coverage to be personal to the insured. Once coverage is purchased, the insurance consumer is entitled to the full extent of those benefits.'" It therefore follows that the insurance policy at issue covers an "insured" who is struck by a tortfeasor no matter which vehicle she is driving or whether she is a passenger or a pedestrian on the street. The Court recognizes that the language contained in this policy is broad, but the Court has also recognized there are still limitations on the scope of the coverage. For example, in Fisher, the defendant insurance company argued that the number of persons included under the insurance policy would substantially increase to a total of 3,120 people if the plaintiff were to be included as an insured. However, in rejecting this argument, the Court cited State Farm Mut. Auto. Ins. Co. v. Harris, Del. Super. Ct., C.A. No. 94C-04-048, Herlihy, J. (Mar. 18, 1996), which "found that the reasonable expectations of the parties was not to include the entire 1,000 to 1,100 Union members as insureds but to include only those employees authorized to drive the vehicles." Therefore, the Court in Fisher found that the coverage only extends to those individuals who the employer could reasonably expect to be insured while using its vehicles. Otherwise, corporate insurance policies would replace the need for personal insurance coverage. Thus, in this specific factual instance, Robin Ruggiero is not an insured and is not eligible for compensation under the terms of the Montgomery Mutual insurance policy.
Jones v. Horace Mann Ins. Co., 723 A.2d 390 (Del.Super.Ct. 1998), citing Hurst v. Nationwide Mut. Ins. Co., 652 A.2d 10, 14 (Del. 1995); Frank v. Horizon Assur. Co., 553 A.2d 1199, 1203 (Del. 1989); Georgeopoulos v. State Farm Mut. Auto. Ins. Co., 1990 WL 91085, at *4 (Del.Super.Ct.).
Id. at 393, quoting Frank, 553 A.2d at 1205. The Court refers to 18 Del. C. § 3902, which covers uninsured and underinsured vehicle coverage and insolvency of an insurer.
Hurst, 652 A.2d at 15, citing State Farm Mut. Auto. Ins. Co. v. Washington, 641 A.2d 449, 452 (Del. 1994).
1997 WL at *4.
Id. (Emphasis added.).
CONCLUSION
The Ruggieros' Motion for Summary Judgment is denied for the reasons stated herein.