Opinion
C.A. No. 06C-10-247 WCC.
Submitted: May 3, 2007.
Decided: July 30, 2007.
On Plaintiffs' Motion for Reargument. DENIED.
Michael D. Bednash, Esquire, Kimmel, Carter, Roman Peltz, P.A., Newark, Delaware.
Michael I. Silverman, Esquire, Silverman McDonald Friedman, Wilmington, Delaware.
Dear Counsel:
Plaintiffs William Emory and Lisa Emory (the "Plaintiffs") have filed a motion pursuant to Superior Court Civil Rule 59(e) seeking reargument of a series of motions for summary judgment filed by the parties in this case (the "Motion"). Upon review of the submissions by the parties, the Motion is hereby denied.
Background
The Plaintiffs are seeking underinsured coverage from the automobile insurance policy (the "policy") issued by the Defendant. The Plaintiffs demanded binding arbitration of the matter, but the Defendant has refused to participate. As a result, the Plaintiffs filed this suit seeking a declaratory judgment against the Defendant that the underinsured motorist arbitration hearing is in fact binding pursuant to the terms of the policy.
In addition, because the Plaintiffs have demanded binding arbitration and the Defendant has refused to participate in the arbitration, the Court was also asked to resolve whether the arbitration clause within the policy, as it relates to uninsured/underinsured motorist coverage, requires the Defendant to participate in arbitration upon the written demand of the Plaintiffs. The clause in question (the "arbitration clause") reads as follows:
If we and an "insured" disagree whether the "insured" is legally entitled to recover damages from the owner or driver of an "uninsured motor vehicle" or an "underinsured motor vehicle" or do not agree as to the amount of damages that are recoverable by that "insured", then the matter may be arbitrated. However, disputes concerning coverage under this endorsement may not be arbitrated. Either party may make a written demand for arbitration. . . .
Pl. Mot. Summ. J. Ex. A.
To resolve the dispute, both parties filed a motion for summary judgment. On March 1, 2007, oral argument on the Plaintiffs' Motion for Summary Judgment and the Defendant's Cross Motion for Summary Judgment was heard by this Court. Upon reviewing the parties' submissions and hearing the parties' arguments, the Court ruled from the bench as follows:
[I]t appears to The Court what the provision allows is that [in] the first part it sets forth the particularized items that the parties have agreed can be arbitrated and not arbitrated.
So, you have the contractual parties agreeing that damages, including uninsured motorist coverage and the amount of damages that are recoverable are items that may be arbitrated between the parties, and what is carved out is disputes concerning what's covered.
The next provision, which is, either party may make a written demand for arbitration, The Court views it as the mechanism that notices the other side that one of the parties to the contract prefers to have the matter resolved through arbitration and not by judicial action.
The language, however, does not reflect that if one side makes the written demand, the other party is obligated to proceed to arbitration.
I believe that language either party may make a written [sic] demand for arbitration is simply a mechanism that is set forth in the policy, and if it wasn't there then you would have this perhaps ongoing litigation and everybody wanting arbitration but no one asking for it.
So it specifically sets forth how one makes that demand.
It does not, however, reflect anywhere in this particular provision or anywhere else in the contract that the fact that one party makes the written demand, the other one is obligated to proceed to arbitration.
I think it is clear from the "may" language up above, that the policy intended to provide each side the opportunity if they wanted to, to continue to have the matter litigated in a civil forum beyond arbitration.
So, as to that provision, I do not believe it mandates arbitration.
I find if the arbitration does take place, subsection (b) does make that arbitration, binding.
But, the provision does not force First Delaware Insurance Company to be obligated to arbitrate the matter when they believe that's not in their best interest.
So, plaintiff's motion for summary judgment on that issue is denied and the defendant's motion for summary judgment on that issue, is granted.
Mot. Summ. J. Tr. 14-16, March 1, 2007.
The Court finds that it did not misapprehend the facts or controlling legal principles in rendering its above decision.
Discussion
A motion for reargument is the correct device to allow a court to correct any mistakes, prior to an appeal, which may have been made. To prevail on a motion for reargument, the proponent must show the Court has "overlooked a controlling precedent or legal principles, or [that] the Court has misapprehended the law or facts such as would affect the outcome of the decision." The Plaintiffs fail to meet this burden.
Kovach v. Brandywine Innkeepers Ltd. P'ship, 2001 WL 1198944 (Del.Super.Ct.), at *1 (citing Hessler v. Farrell, 260 A.2d 701, 702 (Del. 1969)).
Id.; see also, Murphy v. State Farm Ins. Co., 1997 WL 528252 (Del.Super.Ct.).
The Plaintiffs assert that the binding arbitration clause, read in conjunction with the remainder of the policy, requires arbitration if one party asserts its right to arbitration. The Plaintiffs are correct that "the public policy of this state favors the resolution of disputes through arbitration." However, "[a] party cannot be forced to arbitrate the merits of a dispute in the absence of a clear expression of such intent in a valid agreement," and here the Court again finds that the arbitration clause fails to clearly require arbitration of uninsured/underinsured claims. The arbitration clause states "the matter may be arbitrated," and does not state that it must be
Graham v. State Farm Mutual Automobile Ins. Co., 565 A.2d 908, 911 (Del. 1989).
DMS Prop.-First, Inc. v. P.W. Scott Assoc., Inc., 748 A.2d 389, 391 (Del. 2000) (citations omitted).
E.I. duPont de Nemours Co. v. Allstate Ins. Co., 693 A.2d 1059, 1061 (Del. 1997) ("a contract is ambiguous only when the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.") (citations omitted).
arbitrated. While it further states that "either party may make a written demand for arbitration," the arbitration clause does not state that once one party makes an arbitration demand, the other party is forced to arbitrate.
As indicated above, unless the contract clearly states that arbitration is mandatory, a party should not be forced to arbitrate. Here, while the Plaintiffs have asserted their right, per the terms of the policy, and have made a written demand for arbitration, the Defendant has equally asserted its right to refuse to commit to arbitration. There is no clear expression of the parties' intent to arbitrate an underinsured or uninsured claim; there is only a clear intent to allow arbitration if the parties so agree. Because "[t]he policy that favors alternate dispute resolution mechanisms . . . does not trump basic principles of contract interpretation," and because this Court interprets the arbitration clause as optional and not mandatory, the Defendant cannot be forced to participate in binding arbitration.
Majkowski v. Am. Imaging Mgmt. Serv., LLC, 913 A.2d 572, 582 (Del.Ch. 2006), citing DMS Properties-First, Inc., 748 A.2d at 391.
For the reasons set forth above, the Plaintiff's Motion for Reargument is hereby denied.
IT IS SO ORDERED this 30th day of July 2007.