IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

ADAM J. SCHMELZ,

Plaintiff,
CA. No.: Nl 8C-08-105 VLM
v.

CYNTHIA R. MARTONE,

Third-Party Plaintiff,
v.

LIBERTY MUTUAL FIRE

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Defendant/ )
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INSURANCE COMPANY )
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Third-Party Defendant.

Submitted: February 18, 2019
Decided: May 2, 2019

MEMORANDUM OPINION

Upon Consideration of Thira'-Party Defendant Liberly Mutual Fire Insurance
Company ’s Motion to Dismiss Thira’-Parly Complaz`nt,
GRANTED.

Robert T. Graney, Esq., Law Offlces of Chrissinger & Baumberger, Wilmington,
Delaware. Attorneyfor Third-Parly Defena’ant Lz`berly Mutual Fz`re lnsurance
Company.

Matthew E. O’Byrne, Esq., Casarino Christman Shalk Ransom & Doss, P.A.,

Wilmington, Delaware. Attorneyfor Defendant/Thz`rd-Party Plaz`ntifnynthia
Martone.

MEDINILLA, J.

INTRODUCTION

Plaintiff Adam J. Schmelz (“Schmelz”) brought a claim against
Defendant/Third-Party Plaintiff Cynthia R. Martone (“Martone”), the alleged
tortfeasor, seeking damages resulting from a motor vehicle accident between the
parties. Martone brings this third-party action against Third-Party Defendant
Liberty Mutual Fire Insurance Company (“Liberty Mutual”), Schmelz’s uninsured
motorist (“Ul\/I”) carrier, seeking contribution and/or indemnification Liberty
Mutual moves to dismiss the Third-Party Complaint arguing Martone does not have
standing to bring a claim against it and for failure to state a claim under Superior
Court Civil Rule l2(b)(6). For the reasons stated beloW, Liberty Mutual’s Motion
to Dismiss is GRANTED.

FACTUAL AND PROCEDURAL HISTORY

The allegations of negligence stem from a collision that occurred on July 31,
2017 While both Schmelz and Martone Were driving southbound on Route 896 on
the Summit Bridge in Nevv Castle County.l Schmelz claims he stopped his vehicle
When he came upon a couch in the roadway of the bridge and Was then rear-ended

by Martone.2 On August l3, 2018, Schmelz filed a Complaint in the underlying

 

l See generally Compl.
2 ld. 11 4.

action in this case, alleging a claim of negligence against Martone arising from this
motor vehicle accident.

Martone then filed a Third-Party Complaint against Liberty Mutual on
September ll, 2018.3 Liberty Mutual is Schmelz’s_not Martone’s_uninsured
motorist carrier.4 Martone asserts that a couch fell off an unidentified vehicle before
the accident and obstructed the roadway.5 Martone seeks contribution and/or
indemnification against Liberty Mutual as Schmelz’s Ul\/I carrier for any amount
that she may be required to pay Schmelz.6

Liberty Mutual filed this Motion to Dismiss on January ll, 2019, seeking
dismissal of the Third-Party Complaint for lack of standing and failure to state a
claim upon which relief may be granted under Superior Court Civil Rule l2(b)(6).7
Martone filed her response on February 4, 2019.8 Liberty Mutual’s reply was filed
on February ll, 2019.9 The Court held oral argument on February 18, 2019. The

matter is now ripe for review.

 

3 See generally Third-Party Compl.

4M1M.

5 Id. 1[ 21.

6 Third-Party Compl. 1111 25, 26. See Def./Third-Party Pl.’s Resp. to Third-Party Def.’s Mot. to
Dismiss Third-Party Compl. 11 3 [hereinafter Martone Resp.].

7 See generally Third-Party Def. Liberty Mutual Fire Ins. Co.’s Mot. to Dismiss Third-Party
Compl. [hereinafter Liberty Mutual Mot.].

8 See generally Martone Resp.

9 See generally Third-Party Def.’s Reply to Third-Party Pl.’s Resp. to Their Mot. to Dismiss
[hereinafter Liberty Mutual’s Reply].

STANDARD OF REVIEW

For purposes of a motion to dismiss for failure to state a claim under Superior
Court Civil Rule 12(b)(6), all well-pleaded allegations in the complaint must be
accepted as true.10 Even vague allegations are considered well-pleaded if they give
the opposing party notice of a claim.11 The Court must draw all reasonable
inferences in favor of the non-moving party;12 however, it will not “accept
conclusory allegations unsupported by specific facts,” nor will it “draw unreasonable
inferences in favor of the non-moving party.” 13 Dismissal of a complaint under Rule
l2(b)(6) must be denied if the plaintiff could recover under “any reasonably
conceivable set of circumstances susceptible of proof under the complaint.”14

When “the issue of lack of standing is so closely related to the merits, a motion
to dismiss based on lack of standing is properly considered under Rule 12(b)(6)
rather than Rule 12(b)(1).”15 Here the issue of lack of standing is closely related to

the merits, and the Court will consider it under Rule 12(b)(6).

 

'O Spence v. Funk, 396 A.2d 967, 968 (Del. 1978).

11 In re Gen. Motors (Hughes) S ’hola’er Litig., 897 A.2d 162, 168 (Del. 2006) (quoting Savor, Inc.
Vé FMR COrp., 812 A.2d 894, 896-97 (Del. 2002)).

1 ld.

13 Prz'ce v. E.I. DuPont de Nemours & Co. , 26 A.3d 162, 166 (Del. 2011) (internal citation omitted).
14 Spence, 396 A.2d at 968 (citing Klez`n v. Sunbeam Corp., 94 A.2d 385, 391 (Del. 1952)).

15 Appl'l'va Shar'el'lOlder Lil‘ig. C0., LLC v. EV3, IHC., 937 A.2d 1275, 1286 (Del. 2007)).

4

DISCUSSION
Ul\/l statutes are generally “designed for the benefit of insureds and not
insurers.”16 Delaware’s UM statute, 18 Del. C. § 3902,17 provides uninsured
motorist coverage, which is intended to protect persons who are injured in an
accident with an uninsured tortfeasor.18 The statute is intended to “provide

protection for the insured driver against the negligence of an uninsured motorist,”19

t.20 Here, Martone wishes to

rather than afford coverage to an uninsured motoris
pursue a third-party complaint against Schmelz’s UM carrier, seeking contribution
and/or indemnification for damages she may have to pay to him. Thus, the question

comes down to whether Martone has standing to bring an action against Liberty

Mutual for the alleged torts of an unidentified vehicle.

 

16 9 Steven Plitt, Daniel Maldonado, Joshua D. Rogers, & Jordan R. Plitt, Couch on Insurance §
122:11 (3d ed. 2018); See also Broadway v. Allstate Properly ana1 Casually Ins. Co., 2015 WL
4749176, at *3 (Del. Super. Aug. 11, 2015) (internal quotation and citation omitted).

17 18 Del. C. § 3902 (“No policy insuring against liability arising out of the ownership,
maintenance or use of any motor vehicle shall be delivered or issued for delivery in this State with
respect to any such vehicle registered or principally garaged in this State 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, sickness, disease, including death, or personal property damage resulting from
the ownership, maintenance or use of such uninsured or hit-and-run motor vehicle.”)

18 See 18 Del. C. § 3902(a).

19 Broadway, 2015 wL 4749176, at *3.

20 See ia’. (citing 8A Steven Plitt, Daniel Maldonado, Joshua D. Rogers, & Jordan R. Plitt, Couch
on Insurance § 122:11 (3d ed. 2015)).

Elements of Standing

Standing refers to a party’s right “to invoke the jurisdiction of a court to
enforce a claim or redress a grievance.”21 In Delaware, in order to bring an action a
party must establish standing by showing: “(1) an injury-in-fact_to a legally
protected interest_that is concrete and particularized, actual or imminent, and not
conjectural or hypothetical; (2) a causal connection between the injury and the
defendant’s conduct; and (3) that the claim is redressable by a favorable decision.”22
For the reasons that follow, Martone is unable to establish that she has a legally
protected interest in the UM contract between Liberty Mutual and Schmelz to assert
a claim against it as an insured or an intended beneficiary.

Martone Lacks Standing to Maintain Her Claims Against Liberty Mutual

The Superior Court addressed a similar issue in Lankford v. Richter.23 There,
State Farm Mutual Automobile Insurance Company (“State Farm”), the plaintiffs
Ul\/I carrier, was joined by the defendant for similar claims of contribution and

indemnification24 In Lankford, there was a seven-car chain collision, and the driver

of the first car was uninsured.25 lt was not until after the plaintiff s claim for Ul\/I

 

21 Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del. 1991) (citing 59 Am. Jur. 2d
Partz'es § 30 (1989)).

22 Broaa'way, 2015 WL 4749176, at *3 (citing Dover Hl`storical Socz`ety v. Cin of Dover Planning
Comm ’n, 838 A.2d 1103, 1110 (Del. 2003)).

23 1989 wL 12229(De1. super. Jan. 27, 1989).

24 See ia’. at *1.

25 See id.

benefits was denied by her Ul\/l carrier, default judgment was entered against the
uninsured driver of the first vehicle, and the plaintiff s claim for Ul\/l coverage was
barred by the statute of limitations, that the defendant filed a third-party complaint
against the plaintiffs UM carrier for contribution and indemnification26

First the Lanl§fora’ Court considered that the Contribution Act under 10 Del.
C. § 63 02 provides a right of contribution among joint tortfeasors27 Joint tortfeasors
are defined as “2 or more persons jointly or severally liable in tort for the same injury
to person or property, whether or not judgment has been recovered against all or
some of them.”28 The Lankford Court found that the Ul\/l carrier did not share a
common liability with the joint tortfeasor and it did not fall within the definition of
joint tortfeasor under the Contribution Act because it was not “j ointly or severally
liable in tort.”29

The Lanlg”ora’ Court held further that any of the Ul\/l carrier’s liability was

governed by the contract with the plaintiff and applicable insurance laws,30 based on

the Delaware Supreme Court’s holding that actions dealing with UM coverage

 

26 see Lan/g‘@rd, 1989 wL 12229, at *1.

27 Ia'. at *1 (citing 10 Del. C. § 6302(a)).

2810 Del. C. § 6301.

29 Lanlg‘ora', 1989 WL 12229, at *2 (explaining that if State F arm had any liability it was governed
by its contract with the plaintiff and that under contract law incidental beneficiaries to a contract
do not have standing to enforce the contract) (emphasis in original).

30 See id. (discussing State Farm’s liability based on its contract with the plaintiff and under
applicable insurance laws).

claims are “actions ex contractu.”31 The Court in Lanl§fora’ determined that the
defendant could not seek contribution from State Farm and dismissed the third-party
complaint.32 This Court agrees with Lanlg‘ora’ that any of Liberty Mutual’s
responsibility is governed by the contract with Schmelz.

Under contract law, incidental beneficiaries do not have standing to enforce a
contract,33 but a third-party intended beneficiary may be able to recover on the
insurance policy, even if the third-party is not a named insured.34 The parties need
to have intended to confer a benefit on the third-party in order to be an intended
beneficiary under the contract.35 The Court looks to the language of the insurance
policy “to determine the intent of the parties and whether an injured party is a third-
party beneficiary.”36 Unless the policy says otherwise, “injured parties are merely
incidental beneficiaries and have no right under the policy to sue the liability insurer

until a judgment has been obtained against the insured.”37

 

31 Lankfora’, 1989 WL 12229, at *2 (quoting Allstate Ins. C0. v. Spl'nelli, 443 A.2d 1286, 1290
(Del. 1982)).

32 See id. at *2-3 (finding the Court was “unable to impose a duty on plaintiff s uninsured motorist
carrier to compensate a joint tortfeasor” and also dismissed the defendant’s claim for
indemnification).

33 Id. (citing Insurance Co. of North Arnerica v. Waterhouse, 424 A.2d 675, 679 (Del. 1980)).

34 Broadway, 2015 WL 4749176, at *5 (citing Wl`llis v. City of Rehoboth Beach, 2004 WL
2419143, at *2 (Del. Super. Oct. 14, 2004)).

33 See id. (citing Delmar News, Inc. v. Jacobs Oil Co., 584 A.2d 531, 534 (Del. Super. 1990))
(explaining that “indirectly or coincidentally” benefitting from performance of the contract does
not provide the third-party with rights under the contract).

36 Ia'. (citing Greater New York Mut. Ins. C0. v. Travelers Ins. C0., 2011 WL 4501207, at *3 (D.
Del. Sept. 28, 2011); Willis, 2004 WL 2419143, at *2).

37 Id. (quoting Willis, 2004 WL 2419143, at *2).

8

The rationale in Broadway v. Allstate Property and Casually Insurance
Cornpany38 is also persuasive where the Superior Court considered a similar issue in
the context of subrogation There, the Court looked at both the UM statute and the
insurance contract to determine if the defendant Ul\/l carrier could maintain a direct
action against the third-party defendant liability insurance carrier.39 The Court held
no direct claim could be brought by the defendant as a subrogee-insurer, also finding
that the defendant was not a third-party beneficiary to the liability insurance contract
with the tortfeasor,40 and dismissed the claim for lack of standing.41 Here, Martone
cannot interject herself into the contractual relationship between Liberty Mutual and
Schmelz. Schmelz’s contract with Liberty Mutual does not specifically provide
coverage to injured parties like Martone. Under the contract, she is not a named
insured, a permissive operator, or an occupant of Schmelz’s vehicle.

This Court finds that Martone fails to establish that she was an insured or that
she was an intended beneficiary of the contract between Schmelz and Liberty
Mutual. Although Martone argues that Evans v. Stuard 42 is applicable, this Court

disagrees There are two distinctions that distinguishes Evans from this record.

 

38 2015 WL 4749176 (Del. Super. Aug. ll, 2015).

39 See ia'. at *3-6.

40 See id. at *5-6.

41 See ia’. at *6 (granting third-party defendant’s motion to dismiss the third-party complaint).
42 1989 wL 167406 (Del. super. oct 6, 1989).

First, in Evans, the existence of a “phantom” vehicle that caused the
emergency situation was not disputed by the parties.43 Second, the plaintiffs
insurance carrier accepted responsibility to defend and assume payment for an
uninsured motorist that causes an injury to its insured.44 The Evans Court focused
in large part on the social policy behind Delaware’s UM statute and on the interests
of judicial economy to allow the defendant to maintain a claim for contribution
against the plaintiff s Ul\/l carrier.45 Here, unlike Evans, Liberty Mutual disputes the
existence of an unidentified uninsured vehicle and it does not accept responsibility
for payment of Ul\/l benefits. Although there is no dispute that there was a couch in
the roadway of the Summit Bridge, it is unknown how the couch got there. Although
inferences could certainly be made that it could have fallen from or been thrown
from a vehicle_there is no evidence that the placement of the couch on the roadway,
in fact, involved an unknown or phantom vehicle to trigger any obligation for
uninsured motorist coverage. Further, the Ul\/I statute is intended to provide
coverage to insured drivers, and the “Ul\/I carrier stands in the shoes of the absent

tortfeasor for the purpose of providing coverage to its own insured.”46 Even if it

 

43 Evans, 1989 wL 167406, at *1.

44 See id. at *3 (“Nationwide willingly accepted the responsibility to defend and assume the risk
attributable to an uninsured motorist causing injury to its insured and accepted payment for
assuming that potential liability.”).

43 Id. at *2-4 (denying the plaintiffs uninsured motorist carrier’s motion for summary judgment).
46 Broadway, 2015 WL 4749176, at *5 (citing Withrow v. Spears, 2013 WL 5615573, at *4 (D.
Del. Oct. 15, 2013); Price v. State Farm Mut. Auto. Ins. Co., 2013 WL 1213292, at *6 (Del. Super.

10

could be determined that there was another tortfeasor, Liberty Mutual is intended to
stand in the shoes of that absent tortfeasor for the purpose for providing coverage to
its insured, Schmelz_not Martone.

For the reasons outlined, this Court is guided by the Lankford decision and
the Broadway rationale in finding that Martone does not have standing to bring a
claim for contribution and/or indemnification against Liberty Mutual.

CONCLUSION

Martone does not have a right to contribution or indemnification because she
is neither the insured nor an intended third-party beneficiary to Schmelz’s contract
with Liberty Mutual. She is unable to prove an injury to a legally protected interest;
a required element to establish standing. ln drawing all reasonable inferences in
favor of the non-moving party, Martone has failed to state a claim under Rule
12(b)(6). Therefore, Liberty Mutual’s Motion to Dismiss the Third-Party Complaint

for lack of standing is GRANTED.

 
   
 

J ge Vivian L.

oc: Prothonotary
cc: All Counsel of Record (via e-filing)

 

Mar. 15, 2013) ajj”’d, 2013 WL 5178520 (Del. Sept. 13, 2013); Evans, 1989 WL 167406, at *2)
(emphasis in original).

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