Opinion
C.A. No. 06C-08-069 CLS.
Submitted: August 8, 2007.
Decided: December 14, 2007.
Upon Consideration of Plaintiff's Motion for Partial Summary Judgment. DENIED.
Timothy E. Lengkeek, Esquire and Natalie Wolf, Esquire, of Young, Conaway, Stargatt, Taylor, LLP, Wilmington, Delaware, Attorneys for Plaintiff.
Arthur M. Krawitz, Esquire and Angela Pinto Ross, Esquire, of Doroshow, Pasquale, Krawitz, Bhaya, Wilmington, Delaware, Attorneys for Defendant.
MEMORANDUM OPINION
INTRODUCTION
Before the Court is plaintiff's motion for partial summary judgment on the issue of whether defendant is obligated to provide underinsured motorist benefits under a non-trucking policy as a matter of law. Plaintiff claims injuries from a motor vehicle accident and seeks recovery of underinsured motorist benefits pursuant to 18 Del. C. § 3902. The Court finds that underinsured motorist coverage is provided under the insurance contract; however, the motion for summary judgment is denied because a material issue of fact exists as to whether the contract was in effect at the time of the accident.
FACTS
The Lease and Insurance Agreements
Plaintiff entered into a leasing agreement with a third-party, International Motor Freight ("IMF") in 2003. Plaintiff leased his Volvo tractor to IMF and began driving for them. That agreement refers to plaintiff as an independent contractor. The lease agreement with IMF required plaintiff to keep a non-trucking liability insurance policy. Non-trucking policies provide coverage for those times when the tractor and trailer is not carrying goods for hire. Plaintiff purchased such a policy from defendant.
D.I. 36, Exhibit A at 29-31.
Id., Exhibit D.
Id.
Id., Exhibit D.
D.I. 36, Exhibit F.
D.I. 36, ¶ 6.
The policy certificate is attached to defendant's response to the motion for partial summary judgment. Plaintiff does not dispute the authenticity of this document. The certificate is entitled, "Certificate of non-Trucking Automobile Liability Insurance." The document states, "[n]o coverage is afforded when the described vehicle(s) [is]: Under motor carrier direction, control or dispatch. . ." The Accident
Id, Exhibit E.
Id.,
Id.,
Pursuant to the agreement with IMF, plaintiff made daily trips from his home in Newark, Delaware after picking up his tractor and trailer from a parking spot. Then, plaintiff would travel to New Jersey where he would pick up goods, which were loaded onto the trailer. He would travel to Perryville, Maryland and the goods would be unloaded. Then, he would return home to Delaware for the night. The next morning he would complete the same route. Plaintiff worked this route Monday through Friday each week. He was paid on a per trip basis.
Exhibit A, p. 36, 42.
Id. at 36.
Id. at 38.
Id. at 39.
Id. at 37.
Id. at 39.
Id. at 74.
On December 7, 2005, plaintiff was involved in a motor vehicle accident. Approximately five minutes after leaving the drop off destination in Maryland, plaintiff heard a noise coming from the trailer. He pulled over to the shoulder of the road to investigate. He departed the cab of the truck and made his way toward the trailer. At that point, plaintiff was struck and injured. Plaintiff claims several traumatic injuries as a result of this accident.
Id., Exhibit A, p. 50, 61-72.
Id. at 49.
Id. at 52.
Id. at 57.
Id. at 61.
D.I. 1 at 3.
The driver of the vehicle which struck plaintiff settled a claim for his insurance policy limits. Plaintiff then submitted a demand of the policy limits to defendant. That request was denied. This action followed.
D.I. 40 at 1.
Id. at 2.
Id.
Id.
PARTIES' CONTENTIONS
Plaintiff's Contentions
Plaintiff asks this Court to declare that defendant is "obligated to provide underinsured benefits under the Policy to [p]laintiff." To support this contention, plaintiff points to: (1) the plain meaning of the uninsured motorist insurance endorsement of the policy, (2) 18 Del. C. § 3902 and, (3) public policy.Plaintiff points to endorsement six of the policy provisions which state that defendant will pay compensation to plaintiff when he is legally entitled to recover for bodily injuries caused by an accident. Plaintiff argues that the plain language of this provision fit the facts of this case and that plaintiff is entitled to recover as a matter of law.
D.I. 40 at 2-3. Section F of this document defines uninsured motorist to include "a motor vehicle or trailer for which the sum of limits of liability available for payment to an `insured' under all policies . . . is less than . . . the amount the `insured' is legally entitled to recover. . ."
Id. at 3.
The next argument advanced by plaintiff is based upon 18 Del. C. § 3902. The statute, in relevant part, states as follows:
"No policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle shall be delivered or issued . . . unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or hit-and-run vehicles for bodily injury."
Plaintiff also cites to Delaware law which concludes that underinsured motorist coverage is designed for the individual, not the vehicle. As such, plaintiff argues that the terms under which the vehicle was being operated at the time of the accident are irrelevant for receiving the benefit. Plaintiff points out that underinsured motorist coverage is "personal to the insured and not vehicle specific."
Specifically, plaintiff cites to State Farm Mut. Ins. Co. v. Washington, 641 A.2d 449, 450 (Del. 1994) and Frank v. Horizon Assur. Co., 553 A.2d 1199, 1203 (Del. 1989).
D.I. 30 at 3 citing Frank v. Horizon Assur. Co., 553 A.2d 1199, 1203 (Del.Supr. 1989). In Frank the insurer's policy excluded coverage when the accident occurred with a vehicle owned by the insured by not insured by the company. The Court found that the exclusion was void as a matter of law.
Finally, plaintiff claims public policy prohibits restrictions on recovery of underinsured benefits as a matter of law. To support this contention, plaintiff points to Delaware cases in which policy provisions which limit recovery of underinsured benefits have been struck down as void against public policy.
D.I. 30 at 4; Cropper v. State Farm Mut. Auto. Ins. Co., 671 A.2d 423 (Del.Super. 1995) holding that a limitation where the vehicle was government-owned is uneforceable; Jeanes v. Nationwide Ins. Co., 532 A.2d 595 (Del.Ch. 1987) policy exclusions for UIM benefits when the insured operated the vehicle for a fee are invalid.
Washington, 641 A.2d 449, 450; Frank, 553 A.2d 1199, 1203; Hurst v. Nationwide Ins. Co., 652 A.2d 10 (Del. 1995); Cropper, 671 A.2d 423 (Del.Super.Ct. 1995); Jeanes, 532 A.2d 545.
Defendant's Response
Defendant points out that the certificate of the policy issued to plaintiff is entitled " Non-Trucking Automobile Insurance" ( emphasis added). Defendant argues that plaintiff was operating the vehicle at the direction of IMF at the time of the accident, and so the policy was not in effect. Therefore, rather than arguing that any provision of the policy limits plaintiff's entitlement to underinsured coverage, defendant's position is that, as a threshold matter, the policy as a whole does not apply.
Next, defendant points to the Master Policy Endorsement which includes the following exclusion:
"This insurance does not apply to [a] covered "auto" while used to carry property in any business."
Defendant argues that plaintiff was transporting property for commercial benefit and thus the exclusion applies. Exclusions on liability insurance are not per se invalid argues defendant, citing Universal Underwriter's Ins. Co. v. The Traveler's Ins. Co.
D.I. 30 at ¶ 14 citing 669 A.2d 45. See also, 21 Del. C. § 2118(f) but see, Cropper v. State Farm Mutual Auto. Ins. Co., 671 A.2d 423 (Del.Super. 1995).
Defendant's next contention is that the protections of the policy are limited to when the tractor and trailer is in personal use of the owner. Defendant argues that, under federal law, "`the authorized carrier/lessee shall assume complete responsibility for the operations of the equipment for the duration of the lease.'" An "authorized carrier" is defined as "a person or persons authorized to engage in the transportation of property as a motor carrier under the provisions of 49 U.S.C. 13901 and 13902." Equipment includes a tractor and trailer. At oral argument, both parties conceded there is no federal preemption at issue in this matter.
D.I. 35 at 2-3 citing 49 C.F.R. 376.12(c)(1).
49 C.F.R. § 376.2.
Id.
STANDARD OF REVIEW
The Court may grant summary judgment if it concludes that "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 summary judgment as a matter of law." The moving party bears the initial burden of showing that no material issues of fact are present. Once such a showing is made, the burden shifts to the nonmoving party to demonstrate that there are material issues of fact in dispute. In considering a motion for summary judgment, the Court must view the record in a light most favorable to the nonmoving party. The Court's decision must be based solely on the record presented and not on all evidence "potentially possible."
Super. Ct. Civ. R. 56(c); Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991).
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
Id. at 681.
Burkhart, 602 A.2d at 59.
Rochester v. Katalan, 320 A.2d 704, 708 (Del. 1974) ( citing United States v. Article Consisting of 36 Boxes, 284 F.Supp. 107 (D. Del. 1968), aff'd, 415 F.2d 369 (3d Cir. 1969)).
DISCUSSION
As a threshold matter, 18 Del. C. § 3902 controls underinsured motorist benefits. While 21 Del. C. § 2118(f) authorizes customary and statutorily consistent coverage exclusions, a similar provision is not included under 18 Del. C. § 3902. Therefore, exclusions are not permitted. This interpretation is similar to Cropper, wherein the Court found that although policy clauses excluding government owned vehicles from the definition of uninsured motor vehicles are standard in the industry, such an exclusion is invalid under § 3902.Endorsement six does, in fact, provide plaintiff with underinsured motorist coverage. Delaware law has thus far invalidated exclusions of underinsured motorist benefits in an insurance policy. However, plaintiff must first establish that the policy itself is in effect.
In each of the cases cited by plaintiff, the matter concerned a provision within the policy which limited the insured's right to recover underinsured or uninsured benefits. Under those circumstances, ruling that such an exclusion is invalid promotes the public policy of allowing risk-averse individuals to purchase additional coverage for their own personal injuries in the event that they are harmed by an irresponsible tortfeasor. When policy exclusions are slipped into a lengthy insurance contract, honoring such limitations would thwart the purpose of the statute.
Here, however, the facts are distinguishable. This is not a case of an exclusion buried within the pages of an insurance policy. Instead, the very title and purpose for which this policy was purchased was limited. The policy applies when the vehicle is in a "non-trucking" situation. This coverage developed in the industry as individuals began leasing their tractor and trailers to companies which only provided coverage while the vehicle was used for commercial purposes. When the individual owner/operator was using the vehicle on a personal basis, there was no coverage under the company's insurance policy.
Rather than a policy exclusion, this case involves a contract whose scope was limited. While public policy favors granting underinsured motorist benefits, the issue in this case is whether the policy applies at all. At this point in the proceedings, material issues of fact remain open and therefore summary judgment is not appropriate.
With regard to defendant's argument that Federal law requires plaintiff to assume complete responsibility for the operations of the equipment, the applicable federal statute has been construed to require the carrier to secure insurance for liability and cargo, which are not at issue in this matter. See Wilson v. IESI NY Corp., 444 F. Supp. 2d 298 (D. Pa. 2006).
CONCLUSION
For the foregoing reasons, Plaintiff's Motion for Summary Judgment is, hereby, DENIED. The Court finds genuine questions of material fact remain in the present matter.IT IS SO ORDERED.