IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

CHRISTINA MILLER,
Plaintiff,

V.

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)

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3
STATE FARM FIRE AND CASUALTY, ) CA. No. CPU4-13—002525
Defendant/Third- Party )
)

)

)

)

)

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Plaintiff,
v.

ANDREA MILLER,
Third~Party Defendant.

Submitted: February 12, 2014
Decided: March 24, 2015

Michael C. I-Ieyden, Esquire Robert K. Pearce, Esquire Andrea Miller

Law Ofﬁces of Michael C. Heyden 824 Market Street, Suite 1000 17510 South DuPont Highway
1201 North King Street Wilmington, DE 19899 Harrington, DE 19952
Wilmington, Delaware 19801 Attorney for Defendant/ Pro se Third—party Defendant
Altomeyfor Plaintiff T bird—party Plainriﬁ

DECISION AFTER TRIAL

This action was initiated as a breach of contract action for Defendant State Farin’s failure
to pay Plaintiff Christina Miller (“Plaintiff”) $10,000.00 allegedly owed under Plaintiff’s
insurance policy following damage from a storm. The matter evolved into a dispute between
Plaintiff and Third—party Defendant Andrea Miller (“A Miller”) regarding their respective rights
to the proceeds of the State Farm policy. Tria} in the above-captioned matter took place on
Wednesday, December 10, 2014 in the Court of Common Pleas, New Castle County, State of
Delaware. At the close of each party’s presentation, the Court reserved decision. This is the

Court’s decision and order on the relief requested by the parties.

PROCEDURAL BACKGROUND

On July 30, 2013, Plaintiff filed a complaint against State Farm Fire and Casualty
Company (“State Farm”), alleging that State Farm breached the parties insurance agreement
when it failed to pay proceeds due under Plaintiff‘s insurance policy following damage from a
storm.1 On September 1 1, 2013, Plaintiff ﬁled an affidavit for entry of default judgment against
State Farm for want of an answer. Default was entered that same day. On February 11, 2014,
State Farm filed an answer, and motion to vacate on the grounds of excusable neglect and having
a meritorious defense. The Motion to Vacate was granted on March 10, 2014.

Subsequently, the parties stipulated to an amended answer, which was filed on April 1,
2014. The amended answer included a crossuclaim for interpleader, alleging that the insurance
policy named a second individual, A. Miller, and also alleging that State Farm had tendered a
check for $9,8 80.45, made out to Plaintiff and A. Miller. The parties stipulated to a third—party
complaint for interpleader to be filed against A. Miller. The third—party complaint was ﬁled on
April 8, 2014, contending that A. Miller is a named insured under the insurance policy, and is
therefore an indispensible party to this action. On June 10, 2014, A. Miller filed a third-party
answer admitting that she has a potential insurable interest in the insurance proceeds for the
aforementioned loss, and agreeing that Plaintiff and A. Miller should be required to interplead to
determine the respective rights of the insurance proceeds,2 but denying the remaining allegations
of the third-party complaint.

On September 19, 2014, State Farm ﬁled a Motion for Interpleader and Summary

Judgment. State Farm requested leave to deposit $10,000.00 into a bank account controlled by

 

' On July 31, 2013, Plaintiff filed an amended complaint adding affirmative defenses.
2 See Third-Party Answer, 11 7(3).
2

the Court, to be divided between Plaintiff and A. Miller in a manner to be determined by the
present litigation. State Farm requested dismissal from the case upon the deposit of the funds
into a Court—controlled account, as the only remaining concern — how the proceeds are divided
up —— does not concern State Farm.3

On October 3, 2014, the Court granted State Farm’s motion. State Farm deposited the
funds, and was dismissed from the action. State Farm’s request for attorneys” fees and court

costs was denied.

A bench trial took place on Wednesday, December 10, 2014. At trial, the Court heard
testimony from Plaintiff and A. Miller, and documentary evidence was submitted by both
parties.4 5 Plaintiff contends that A. Miller has no insurable interest in the home and is therefore
not entitled to any of the funds due under the policy. A. Miller counters that because her name
remains on the mortgage note for the property, she has an insurable interest and the funds should
be split equally in order to avoid a windfall to Plaintiff. A. Miller argues in the alternative that
her name should be removed from the titling documents for the property, or an accounting

. . . 6
mechanism for how the insurance proceeds are spent should be put in place.

FACTS
Plaintiff testified for her case-in—ehief. According to Plaintiff, in August 2004, she sold
her property at 41 l Aldwich Drive in Newark, Delaware in order to purchase a new home. She
received proceeds from the sale approximating $25,000.00. On August 16, 2004, Plaintiff used

the proceeds to purchase real property at 16 Morning Dew Drive in Middletown, Delaware. The

 

3 The parties stipulated that the damage in question was caused by sump pump failure, which caused more damage

than the policy’s iimits.
4 Plaintiff‘s Exhibits I through 9 and Defendant’s Exhibits 1 through 3 were admitted into evidence.
5 After taking the matter under review, the Court concluded additional documents were necessary and ordered the

parties to submit the documents for consideration.
6 Although A. Miller did not plead a counter-claim, at trial, she stated that she seeks the above relief sought.

3

deed, dated August 16, 2004, lists Plaintiff as the sole purchaser.7 Plaintiff testiﬁed that the deed
and subsequent mortgage to the Morning Dew property has always been in her name alone, and
that A. Miller did not contribute to the purchase price of the home.8 Nevertheless, Plaintiff
acknowledged that she and A. Miller resided in the home together in a domestic relationship.

After the purchase of the Morning Dew property, Plaintiff, A. Miller and A. Miller’s two
sons occupied the premises. Plaintiff testiﬁed that she alone made and continues to make the
monthly payments for the mortgage, property taxes, and insurance premium. At some point the
Morning Dew property was re—ﬁnanced, and A. Miller was added as a consigner on the note.9 A.
Miller contributed to food and miscellaneous items unrelated to mortgage, taxes, and insurance.
Miller’s income fell with the housing crisis of 2007, and she did not work for three years.
During this time, Plaintiff paid all bills. The parties ended their relationship in May of 2010 and
A. Miller moved out and took all of her belongings with her.

In August of: 201 l, the damage which is the subject to the instant litigation occurred. A

storm caused ﬂooding of six inches of water throughout the basement of the residence due to a

I}

sump pump failure.10 Plaintiff then made a claim to State Farm. Plaintiff submitted

photographical evidence of the damage sustained to the property as a consequence of the sump

 

7 Plaintiff’s Exhibit 1.
8 None of the exhibits proffered into evidence by the parties contains the mortgage note in question. After trial, the

Court requested additional brieﬁng on the matter, and submission of the mortgage in effect as of August 201%, the
period in which the property damage occurred. On February 12, 2015, Plaintiff submitted the deed, which is already
in evidence as Plaintiff‘s Ex. 1. Piaintiff stated that she does not have a copy of the mortgage documents. Defendant
Andrea Miller did not respond to the Court’s request.
9 Although Andrea Milier is not listed on the deed to the house, she testified that she was listed on the subsequent re-
finance of Morning Dew, which led to her addition to the State Farm insurance policy for Morning Dew.
w As stated supra, the parties stipulated that the damage was caused by the sump puinp’s failure.
” Plaintiff‘s Exhibits 2, 3, 6. It should be noted that neither party has submitted the operative insurance policy
provided by State Farm.

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pump's failure during the storm.‘2 The photographs document damage to seven basement doors;
flooring which needs to be reinstalled; drywall and molding; and other miscellaneous damage

State F arm attempted to tender two payments of $6,900.04 and $2,980.45 on November

I, 2011 and November 10, 20] i respectivelyd3 The checks were made payable to Plaintiff and
A. Miller.14 Plaintiff has refused to accept any checks which contain A. Miller’s name as a
payee.

A. Miller testified for her defense. A. Miller testified that both parties signed the re-
ﬁnance note because neither could afford the home alone, and as a result her name had to be
placed on the State Farm insurance policy.15 She further testiﬁed that the expenses of the home
were shared, paying some of the expenses related to the mortgage, property taxes, and insurance;
at certain times making payment directly to Plaintiff.‘6 Miller admitted that she has not lived in
the home since May of 2010.

The uneontroverted evidence establishes that 16 Morning Dew Drive is owned by
Plaintiff. The only damage sustained was to the home; Miller suffered no personal damage that
is recoverable under the policy.

LEGAL STANDARD
The Court was the trier of fact, and therefore the Court was “the sole judge of the

credibility of witnesses and responsible for resoiving conﬂicts in testimony.”17

 

‘2 Plaintiff’s Exhibit 9.

i3 Piaintiff’s Exhibits 4—5. The amounts paid represent State Farm’s estimate of damages insured against under the
policy.

M See Defendant’s Exhibits 1-3. Upon a review of the insurance policy, State Farm informed Plaintiff that Miller is
also listed on the policy, and as a result any payment must be made to both Plaintiff and Miller.

'5 As previously stated, Andrea Miller did not present evidence or produce documents in response to the Court’s
request.

’6 No documentation of the alleged payments was offered into evidence.
‘7 Knight v. State, 690 A.2d 929, 932 (Del. 1996).

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18 Del. C. § 2706 provides, in pertinent part:

(a) No contract of insurance of property or of any interest in property or arising
from property shall be enforceable as to the insurance except for the benefit of
persons having an insurable interest in the things insured as at the time of the loss.
(b) “lnsurable interest” as used in this section means any actual, lawful and
substantial economic interest in the safety or preservation of the subject of the
insurance free from loss, destruction or pecuniary damage or impairment.

(c) The measure of an insurable interest in property is the extent to which the
insured might be directly or indirectly indemniﬁed by loss, injury or impairment
thereof.

However, “public policy has framed law to prevent one from insuring the property of

another for his or her own benefit.”18

DISCUSS!ON
a. ANDREA MILLER’S OWNERSHIP INTEREST

A. Miller contends that she has an ownership interest in the property because she was a
co~signer on two subsequent refinances of the property, and was accordingly placed on the State
Farm policy as a result. Plaintiff counters that although A. Miller’s name appears on the
reﬁnancing documents and the State Farm policy, the fact that she moved frorn the property
ﬁfteen months before the damage occurred, and has not made any contributions toward payments
of the mortgage, insurance policy, or property taxes show that she has no insurable interest in the
property.

As the Delaware Superior Court stated in Draper v. Delaware State Grange Mutual Fire
Insurance Company:

A contract of insurance is essentially a personal contract. It is not
a contract to insure property against ﬁre, but is one to insure the
owner of property against loss by ﬁre. Destruction by fire of the
property described in the centract of insurance is not the

'3 Mal/031v. Fidelity & Gum: C0,, 2992 WL 179511, at *3 (Del. Super. Ct. Jun. 16, 1992).
6

contingency upon which the insurer promises to indemnify the
insured. It is only when by‘fire the insured has sustained a loss that
the insurer may be called upon to perform its contract of
indemnity. 19

The exhibits, coupled with the testimony of the parties, fail to illustrate that A. Miller has
sustained a loss, because she failed to demonstrate an insurable interest in the property. A.
Miller’s name does not appear on the deed to the property.20 Moreover, at trial, A. Miller did not
submit documentary evidence of the reﬁnancing documents. The Court provided an opportunity
for Miller to correct this error via its request for additional documentation; however, A. Miller
did not respond. As a party asserting a counter—claim that the mortgage and reﬁnancing
documents grant her an. insurable interest in the property, and thus one—half of the proceeds under
the policy, A. Miller bears the burden to produce the documents allegedly proving her interest.
She did not meet her burden of proof.

Additionally, uncontroverted evidence indicates that A. Miller moved from the property
more than a year before the storm, taking all of her personal property with her. T his would mean
that, absent evidence of homeownership or a mortgage reﬁnance in effect at the time of the
storm, A. Miller did not have an insurable interest in the property, and thus did not sustain a loss
that is covered by the insurance policy.

Finally, Plaintiff‘s testimony revealed that she was and is the sole ﬁnanciai contributor to
the Morning Dew property. Plaintiff testiﬁed that while she has made out—of—pocket expenses to

repair the damage caused by the storm, A. Miller has not contributed to the repairs either

ﬁnancially or labor—wise.” Therefore, based on A. Miller’s failure to claim any loss from the

'9 91 A. 206, 207 (Del. Super. lQMXInternai citations omitted)(emphasis added).
2" See Plaintist Ex. 1.
2tree Plaintiff’s 13x. 8.

storm, along with her departure from the property ﬁfteen months before the storm and failure to

contribute ﬁnancially to the property’s repair after the storm, the Court ﬁnds that A. Miller does

not have an insurable interest in the property.

Accordingly, the Court awards the proceeds of the State Farm Insurance policy to the
Plaintiff and will not grant half of the proceeds to A. Miller. To do otherwise would result in a

windfall to A. Miller.

Regarding A. Miller’s alternative requests for relief, it is not within the Court’s
jurisdiction to create and administer a trust.
ORDER

After consideration of the arguments presented at trial, in addition to the ﬁlings of the

parties, IT IS HEREBY ORDERED that judgment is entered in favor of Plaintiff Christina

Miller in the amount of $10,000.00, to be paid from the proceeds of the State Farm insurance

policy for 16 Morning Dew Drive, Middletown, DE 19709.
IT IS FURTHER ORDERED that Defendant Andrea Miller’s name is to be removed

from any existing mortgage or titling documents for 16 Morning Dew Drive, Middletown, DE

19709.

IT IS so ORDERED this 24‘“ day of March, 2015.

 

cc: Tarnu White, Judicial Case Management Supervisor

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