Opinion
No. 97C-07-175-WTQ.
Date Argued: March 27, 2000.
Date Decided: March 29, 2000.
Michael J. Hood, Esquire Tigani Hood, 300 Delaware Avenue P.O. Box 25046, Wilmington, DE. 19899.
Daniel L. McKenty, Esquire McCullough McKenty Kafader 824 Market Street, 4th Floor, P.O. Box 397 Wilmington, DE. 19899.
Paul J. Kania, Esquire 1201 King Street, Wilmington, DE. 19801.
Letter Opinion and Order on:
Defendant State Farm Mutual Automobile Ins. Co.'s Motion For Summary Judgment as to the Fussells — MOTION DENIED;
Plaintiff's Tonya and Diane Fussell's Cross Motion for Partial Summary Judgment — MOTION GRANTED;
Claim of Christina Davis DISMISSED WITHOUT PREJUDICE.
Gentlemen:
This is the Court's Letter Opinion and Order on Defendant State Farm Mutual Automobile Insurance Company's ("State Farm") Motion for Summary Judgment and Plaintiffs Tonya and Diane Fussell's (collectively "Fussell") Cross Motion for Summary Judgment. For the reasons stated herein, State Farm's Motion is DENIED and Fussell's Motion is GRANTED.
FACTS
The current Motion concerns the interpretation of an insurance policy. Named Plaintiff Christina Davis ("Davis") rented a car from Spallco Enterprises Incorporated ("Spallco") on July 18, 1995. Davis rented the automobile for her friend Tonya Fussell because Fussell's car was broken down. (Davis Dep. at 9, Dkt. No. 21, Ex. 2). Fussell needed transportation back and forth from work and her credit card did not have "any limit left on it," so Davis helped her out. Id. Davis waived additional insurance coverage offered by Spallco when she rented the vehicle because she believed the vehicle was covered by her personal State Farm policy as a "replacement vehicle." (Compl. ¶ 8).
Davis gave the car to Fussell to use, and, as luck would have it, on July 20, 1995, the second day after the rental, Tonya Fussell was driving the rented car when Darrell Devonshire ("Devonshire") struck the rental car at approximately 12:07 p.m. According to the Complaint, Devonshire was liable to Fussell for personal injuries and his insurance company, Prudential Property and Casualty, paid the full policy limits of his policy, $15,000 per person and 30,000 per accident. (Compl. ¶¶ 11, 12). Moreover, Fussell's own insurance was in the same amount and thus not available for underinsured coverage. See Allstate Ins. Co. v. Gillespie, Del. Super., 668 A.2d 757, 762-63 (1995), aff'd, Del. Supr., 676 A.2d 903 (1996).
The claim in this case is that Fussell had personal injury damages that far exceeded Devonshire's liability coverage. Fussell argues that she is entitled to coverage for her personal injuries under Davis' State Farm policy for underinsured motorist coverage. (Compl. ¶ 15). The UIM policy limits under the State Farm policy are $100,00 per person and $300,000 per accident. It is undisputed that the Davis policy was in effect on the loss date of July 20, 1995. (State Farm Certificate Dated Feb. 1, 2000, Dkt. No. 21, Ex. 3). State Farm challenges payment under the policy issued to Ms. Davis, claiming that the policy does not provide benefits in the situation involved in this case.
STANDARD OF REVIEW
When considering a Motion for Summary Judgment, the Court's function is to examine the record to determine whether genuine issues of material fact exist. Oliver B. Cannon Sons, Inc. v. Dorr-Oliver, Inc., Del. Super., 312 A.2d 322, 325 (1973). If, after viewing the record in a light most favorable to the non-moving party, the Court finds that there are no genuine issues of material fact, Summary Judgment will be appropriate. Id. Summary Judgment will not be granted if the record indicates that a material fact is in dispute or if it seems desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances. Ebersole v. Lowengrub, Del. Supr., 4 Storey 463; 180 A.2d 467 (1962). The Court finds the contract language in this case to be unambiguous and the issue appropriate for determination on summary judgment.
DECISION
All written contracts, as well as legislative acts, are to be read, understood and interpreted according to the plain and ordinary meaning and import of the language employed in them. Neary v. Philadelphia, W B.R. Co., Del. Ct. Err. and App., 7 Houst. 419, 9 A. 405, 407 (1887); Phillips Home Builders v. Travelers Ins. Co., Del. Supr., 700 A.2d 127, 129 (1997) ("[I]f the relevant contract language is clear and unambiguous, courts must give the language its plain meaning"). Contract language must be susceptible to two or more reasonable interpretations to be deemed ambiguous. Rhone-Poulenc Basic Chem. Co. v. American Motorists Ins. Co., Del. Supr., 616 A.2d 1192, 1196 (1992); Fisher v. National Union Fire Ins. Co. of Pittsburgh, Del. Super., 95C-06-307, Quillen, J. (Dec. 11, 1997), aff'd, Del. Supr., 719 A.2d 490 (1998). However, an insurance contract is not rendered ambiguous solely because parties do not agree as to its construction. Rhone-Poulenc, 616 A.2d at 1196. If there is ambiguity in an insurance contract, the contract language is construed most strongly against the insurance company who drafted it. National Union Fire Ins. Co. of Pittsburgh v. Stauffer Chem. Co., Del. Super., 558 A.2d 1091, 1093 (1989); Delledonne v. State Farm Mut. Auto. Ins. Co., Del. Super., 621 A.2d 350, 352 (1992). If — language in an insurance contract is deemed to be ambiguous, the Court will construe the language in a manner that would reflect the reasonable expectations of the insured. Hallowell v. State Farm Mutual Auto. Ins. Co., Del. Supr., 443 A.2d 925, 927 (1982); Fisher, 95C-06-307, at *3
The first question the Court must decide is whether this policy is ambiguous. To make that determination, the question that must be answered in this case is whether the car rented by Davis for use by Fussell qualifies as a "temporary substitute car" or a "newly acquired car" under the Uninsured Motor Vehicle provisions of the policy. The relevant portions of the Uninsured Motor Vehicle section of the State Farm policy state:
We will pay damages for bodily injury and property damage an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury or property damage must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle.
(State Farm Policy at 11 (emphasis in original)).
Who is Insured
Insured — means the person or persons covered by uninsured motor vehicle coverage. This is:
1. the first person named in the declarations;
2. his or her spouse;
3. their relatives; and
4. any other person while occupying:
a. your car, a temporary substitute car, a newly acquired car or a trailer attached to such car. Such vehicle has to be used within the scope of the consent of you or your spouse; or
b. a car not owned by you, your spouse or any relative, or a trailer attached to such car. It has to be driven by the first person named in the declarations or that person's spouse and within the scope of the owner's consent.
5. Any person entitled to recover damages because of bodily injury to an insured under 1 through 4 above.
Id. at 12.
Temporary Substitute Car — means a car not owned by you or your spouse, if it replaces your car for a short period of time. Its use has to be with the consent of the owner. Your car has to be out of use due to its breakdown, repair, servicing, damage or loss. A temporary substitute car is not considered a non-owned car.
Id.at 3.
Newly Acquired Car means a replacement car or an additional car. Replacement Car — means a car purchased by or leased to you or your spouse to replace your car. This policy will only provide coverage for the replacement car if you and your spouse:
1. tell us about it within 30 days after its delivery to you or your spouse; and
2. pay us any added amount due.
Additional Car — means an added car purchased by or leased to you or your spouse. This policy will only provide coverage for the additional car if:
1. it is a private passenger car and we insure all other private passenger cars; or
2. it is other than a private passenger car and we insure all cars owned by you or your spouse on the date of its delivery to you or your spouse.
This policy provides coverage for the additional car only until the earlier of:
1. 2:01 a.m. on the 31st day after the delivery of the car to you or your spouse; or
2. the effective date and time of a policy issued by us or any other company that describes the car on its declarations page.
Id. at Amendment of Defined Words, Dkt. No. 21, Ex. 3.
It is the public policy of this State to narrowly construe exclusions and limitations on statutorily required insurance coverage. State Farm Mut. Auto. Ins. Co. v. Washington, Del. Supr., 641 A.2d 449, 451 (1994). In this case, the policy is not ambiguous. Here it is clear that a "newly acquired car" is an "additional car." An "additional car" includes a car that is "leased to you or your spouse." (State Farm Policy at Amendment of Defined Words, Dkt. No. 21, Ex. 3 (emphasis supplied)). A "temporary substitute car" is one that "replaces your car for a short period of time" when "[y]our car has to be out of use due to its breakdown, repair, servicing, damage or loss." Id. at 3.
Under the facts presented, in light of Ms. Davis' testimony, the car could not fairly be called a "temporary substitute car" because the Davis's vehicles were not "out of use due. to its breakdown, repair, servicing, damage or loss." Id. at 3. That fact alone, however, does not mean that State Farm is off the hook.
The car rented by Davis from Spallco for Fussell must be considered a "newly acquired car" because a "newly acquired ear" is defined as an "additional car" as well as a "replacement car." An "additional car" is defined by the policy as one that is "purchased or leased by you [the policy holder] or your spouse." The policy at page 12 unambiguously provides uninsured/underinsured motorist coverage to any other person occupying a "newly acquired car." Id. at 12. The unambiguous language does not give the Court leeway for policy considerations; the language dictates a result, one with which the Court is not particularly happy as a matter of policy.
But, the question logically becomes whether the terms "lease" and "rent" are synonymous because the policy provides coverage for a "lease[d]" car, and Davis admittedly "rented" the car. It does not appear that the term "lease" is defined in the policy. A lease, when used with reference to tangible personal property, means "a contract by which one owning such property grants to another the right to possess, use and enjoy it for specified period of time in exchange for periodic payment of a stipulated price, referred to as rent." Black's Law Dictionary 461 (5th Abridged Ed. 1983). Rent is "[c]onsideration paid for use or occupation of property. In a broader sense, it is the compensation or fee paid, usually periodically, for the use of any property, land, buildings, equipment etc." Id. at 673. In this context, the terms "rent" and "lease" are synonymous because the term "lease" is referred to as "rent" as part of its definition. Id. at 461.
For common usage as a verb, "lease" can be defined as: "to hold under a lease: take a lease of [a tenant [leases] his land from the owner." Webster's Third New International Dictionary (1993) at 1286. Similarly, "rent" as a verb can be defined as: "to take and hold under an agreement to pay rent: pay rent for [the tenant [rents] the house by the month under a one-year lease]." Id at 1923.
Therefore, because this car was "leased" from the rental company for a period of less than 30 days, State Farm is obligated to provide uninsured/underinsured motorist coverage for the "newly acquired" or "additional" car to any other person who was occupying the car at the time of the accident. (See State Farm Policy at 12 Amendment).
The Court is certainly sympathetic to State Farm's argument that the "sole intent of the transaction in this case was to provide a temporary substitute vehicle for the Fussells, [and] not for Ms. Davis." And, while that certainly may be true, the Court must construe the insurance contract against the insurance company who drafted it. Here there is little to construe. The plain language of the Davis policy mandates coverage for Fussell for a period of 30 days after Ms. Davis leased it from Spallco because "any other person . . . occupying a . . . newly acquired car" is granted coverage. (State Farm Policy at 12 Amendment). State Farm was free to define the term "lease" in its policy to distinguish it from "rent" but it did not do so.
Therefore, for the foregoing reasons, State Farm's Motion for Summary Judgment as to Fussell is DENIED and Fussell's Cross Motion for Partial Summary Judgment is GRANTED. IT IS SO ORDERED. In addition, there appears to be no reason why Christina Davis is a party Plaintiff; the Complaint does not appear to state a claim on her behalf. Consequently, State Farm's Motion for Summary Judgment as to Davis appears to have merit. The most appropriate remedy is to DISMISS Davis' claim without prejudice. IT IS SO ORDERED.
Sincerely, _____________________ William T. Quillen
WTQ/mw, caj oc: Prothonotary