      IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
                  IN AND FOR NEW CASTLE COUNTY

PATRICIA BROADWAY,                    )
            Plaintiff,                )
v.                                    )
                                      )
ALLSTATE PROPERTY AND                 )
CASUALTY INSURANCE COMPANY, )
              Defendant,              )        C.A. No N14C-07-052 PRW
              Third-Party Plaintiff,  )
v.                                    )
                                      )
MARCIA CALDWELL,                      )
DIVEADRA MARIA MORRIS, and            )
INFINITY INSURANCE COMPANY, )
              Third-Party Defendants. )

                          Submitted: May 20, 2015
                          Decided: August 11, 2015

                        MEMORANDUM OPINION

  Upon Third-Party Defendant Infinity Insurance Company’s Motion to Dismiss,
                                 GRANTED.



L. Vincent Ramunno, Esquire, Ramunno & Ramunno, P.A., Attorney for Plaintiff.

Arthur D. Kuhl, Esquire, Reger Rizzo & Darnall LLP, Wilmington, Delaware,
Attorney for Defendant/Third-Party Plaintiff Allstate Property and Casualty
Insurance Company.

Norman H. Brooks, Jr., Esquire, Brett T. Norton, Esquire, (Argued), Marks,
O’Neill, O’Brien, Doherty & Kelly, P.C., Wilmington, Delaware, Attorneys for
Third-Party Defendant Infinity Insurance Company.

WALLACE, J.
   I.       INTRODUCTION

         Plaintiff, Patricia Broadway, filed this instant action seeking uninsured

motorist (“UM”) benefits from her insurer, Defendant, Allstate Property and

Casualty Insurance Company (“Allstate”). Allstate denied her UM claim and has

brought a third-party action against the alleged tortfeasors in the underlying action,

Diveara Morris and Marcia Caldwell, and Ms. Caldwell’s liability insurance

carrier, Infinity Insurance Company (“Infinity”). Infinity now moves to dismiss

the Third-Party Complaint on the grounds that Allstate has no standing to maintain

a direct action against it. For the reasons described below, Infinity’s Motion to

Dismiss is GRANTED.

   II.      FACTUAL AND PROCEDURAL BACKGROUND

         A. Underlying Action

         This case arises out of a December 29, 2013 motor vehicle accident in

Delaware. Ms. Broadway, a Delaware resident, was injured in that accident when

her vehicle collided with another vehicle driven by Diveadra Morris. At the time

of the accident, Ms. Morris’s mother, Ms. Caldwell, owned the vehicle. Ms.

Caldwell was and is a Pennsylvania resident.           She garages the vehicle in

Pennsylvania, and she entered into a contract for liability insurance with Infinity




                                          2
under Pennsylvania’s financial responsibility laws. 1 Ms. Morris was allegedly a

permissive user of Ms. Caldwell’s vehicle. 2

       Infinity declined to extend liability coverage to Ms. Morris for the accident

based on an exclusion in Ms. Caldwell’s policy. That exclusion related to Ms.

Morris’s possession of the vehicle for more than 24 hours in a policy period.

Infinity, therefore, considered Ms. Morris an uninsured driver at the time of the

accident.

       Ms. Broadway then filed a claim for uninsured motorist benefits against

Allstate. Allstate has denied that claim. 3

       B. Declaratory Judgment Action

       Allstate then brought a Third-Party Complaint against Infinity, Ms. Morris,

and Ms. Caldwell. That Complaint alleged Ms. Morris was a permissive driver and

thus Infinity was required to provide her liability coverage under 21 Del. C. § 2118

(b) (relating to minimum coverage requirements).                 Allstate averred Infinity

wrongfully denied Ms. Morris coverage and sought a declaratory judgment against

Infinity.


1
       Def.’s Am. Ans. to Compl. With Affirmative Defenses and Third-Party Compl. for
Indemnification and Third-Party Claim for Declaratory Judgment to Determine Coverage (“Am.
Third-Party Compl.”) (D.I. 26; Trans. I.D. 56766411) ¶ 33.
2
       Id. ¶ 22.
3
       See generally id. ¶¶ 8-16. Allstate confirmed its denial of Ms. Broadway’s UM benefits
claim at oral argument on this motion.
                                              3
       Infinity moved to dismiss Allstate’s Third-Party Complaint for lack of

standing and, in the alternative, moved for a more definite statement as to the basis

for Allstate’s standing. The Court granted the motion to dismiss in part on January

26, 2015 and required any amended complaint to include a more definite statement

as to Allstate’s standing in its declaratory judgment action.4

       Allstate then filed an Amended Third-Party Complaint, in which it alleged,

inter alia: it suffered an actual, concrete, and particular injury; the injury is

causally related to Infinity’s liability coverage denial; the injury is redressable by

an order compelling liability coverage; Allstate has a subrogation right against

Infinity in the event of settlement or payment; and Allstate stands in the shoes of

Infinity’s insureds, the alleged tortfeasors. 5 Allstate now asks this Court to enter a

declaratory judgment ordering Infinity to provide liability coverage to Ms. Morris

and Ms. Caldwell for the underlying motor vehicle accident. 6

       Infinity has moved again to dismiss the Third-Party Complaint pursuant to

Superior Court Civil Rules of Procedure 12(b)(1) and 12(b)(6) on the grounds that




4
      Order on Third-Party Defendant Infinity Insurance Co.’s Motion to Dismiss or For a
More Definite Statement, Jan. 26, 2015, (D.I. 25; Trans. I.D. 56664212).
5
        Allstate further alleges that in the event Ms. Morris and Ms. Caldwell are found to be
uninsured and negligent in the underlying action, they are both liable for indemnification to
Allstate through its right of subrogation. See Am. Third-Party Compl. ¶¶ 20, 27.
6
       Am. Third-Party Compl. at 7.

                                              4
Allstate continues to lack standing in the declaratory judgment action, despite its

amendment. Plaintiff Broadway takes no position on the motion.

     III.   STANDARD OF REVIEW

        Defendants may move to dismiss under Superior Court Rule of Civil

Procedure for, inter alia “failure to state a claim upon which relief can be granted”7

or “[l]ack of jurisdiction over the subject matter.” 8               Standing is a threshold

question relating to jurisdiction.9        But, where “the issue of standing is so closely

related to the merits, a motion to dismiss based on lack of standing” is properly

evaluated for its failure to state a claim rather than a lack of jurisdiction. 10 The

Court will do so here.

        In reviewing a motion to dismiss a complaint under Rule 12(b)(6), the Court

accepts well-pleaded allegations as true and draws all reasonable inferences in the



7
        Super. Ct. Civ. R. 12(b)(6).
8
        Super. Ct. Civ. R. 12(b)(1).
9
        See Dover Historical Soc’y v. City of Dover Planning Comm’n, 838 A.2d 1103, 1110
(Del. 2003) (“The term ‘standing’ refers to the right of a party to invoke the jurisdiction of a
court to enforce a claim or to redress a grievance.”). See also, Stevenson v. Delaware Dep’t of
Natural Res. & Envtl. Control, 2014 WL 4937023, at *3 (Del. Super. Ct. Sept. 22, 2014) (ruling
on motion to dismiss under both Rule 12(b)(6) and Rule 12(b)(1)).
10
       Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275, 1286 (Del. 2007)
(“[W]here a party is not arguing that the court lacks the authority to grant the relief requested to
any plaintiff (i.e., lacks subject matter jurisdiction), but rather is arguing that the court cannot
grant relief to these particular plaintiffs, the motion is more properly decided under Rule
12(b)(6) because the plaintiff has failed to plead a necessary element of a cognizable claim, not
because the court does not have jurisdiction.”).

                                                 5
light most favorable to the non-moving party. 11 Dismissal is appropriate “only

where it appears with reasonable certainty that the plaintiff could not prove any set

of facts that would entitle him to relief.” 12 “To survive a motion to dismiss, the

complaint need only give general notice of the claim asserted.” 13

     IV.     Discussion

             A. The Elements of Standing

       “The concept of ‘standing,’ in its procedural sense, refers to the right of a

party to invoke the jurisdiction of a court to enforce a claim or redress a

grievance.” 14 It is concerned with the question of who is the proper party entitled

to mount a legal challenge.15 State courts apply the concept of standing “as a

matter of self-restraint to avoid the rendering of advisory opinions at the behest of

parties who are ‘mere intermeddlers.’” 16 Ordinarily, a litigant must assert his or




11
       Doe 30’s Mother v. Bradley, 58 A.3d 429, 443 (Del. Super. Ct. 2012) (citations omitted).
12
       Ramunno v. Cawley, 705 A.2d 1029, 1034 (Del. 1998).
13
       Id.
14
       Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del. 1991) (citing 59 AM. JUR.
2D Parties § 30 (1989)).
15
       Id.
16
       Id. (citation omitted).

                                              6
her own legal rights and interests are at stake—not a claim to relief on the legal

rights or interests of third parties. 17

         The Delaware Supreme Court has recognized the United States Supreme

Court’s standing requirements set forth in Lujan v. Defenders of Wildlife as

generally the same for Delaware state courts. 18 To bring an action in Delaware, a

plaintiff 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.19

         Infinity contends Allstate has failed to set forth facts sufficient to support its

basis for standing, specifically as to an injury to a legally protected interest. 20 It

claims Allstate, as the UM carrier, cannot under Delaware law maintain a direct

action against a tortfeasor’s liability carrier. In its view, Allstate has no direct right

of action to compel Infinity to provide liability coverage to Ms. Morris. Allstate

must demonstrate it has standing by establishing it has a direct right of action



17
       Amato v. Wilentz, 952 F.2d 742, 748 (3d Cir. 1991) (citing Powers v. Ohio, 499 U.S. 400,
(1991)).
18
         Dover Historical Soc’y v. City of Dover Planning Comm’n, 838 A.2d 1103, 1111 (Del.
2003).
19
         See id. at 1110.
20
         Id.

                                              7
against Infinity either under the UM statute or as a third-party beneficiary of the

Ms. Caldwell-Infinity contract.21

             B. Delaware’s UM Statute Does Not Confer Standing to a UM
                Carrier in a Direct Action to Compel Liability Coverage.

       Delaware’s Uninsured Motorist statute, 18 Del. C. § 3902, provides for

“uninsured vehicle coverage”22—supplemental insurance to protect innocent

persons injured in motor vehicle accidents from financially irresponsible

tortfeasors. 23 Generally, UM statutes are “designed for the benefit of insureds and

not insurers.” 24 The UM statute is further not intended to afford coverage to the

uninsured motorist but rather to provide protection for the insured driver against

the negligence of an uninsured motorist.25 An “uninsured vehicle” includes “one

for which the insuring company denies coverage.” 26


21
        See Empire Fire & Marine Ins. Co. v. Miller, 2012 WL 1151031, at *4 (Del. Com. Pl.
Apr. 5, 2012).
22
       DEL. CODE ANN. tit. 18, § 3902(a)(1) (2015).
23
        See Lomax v. Nationwide Mut. Ins. Co., 964 F.2d 1343, 1346 (3d Cir. 1992) (“UM
coverage . . . is designed to compensate innocent persons injured by an automobile who are
unable to obtain recompense from unknown or impecunious negligent tortfeasors. . .”); Cropper
v. State Farm Mut. Auto. Ins. Co., 671 A.2d 423, 425 (Del. Super. Ct. 1995), aff’d, 676 A.2d 907
(Del. 1995); Travelers Indem. Co. v. Lake, 594 A.2d 38, 42 (Del. 1991).
24
       8A STEVEN PLITT, DANIEL MALDONADO, JOSHUA D. ROGERS, & JORDAN R. PLITT, COUCH
ON INSURANCE § 122:11 (3d ed. 2015).

25
       Id.
26
        § 3902(a)(3)(b); see also Taber v. Goodwin, 2012 WL 2106374, at *2 (Del. Super. Ct.
June 5, 2012).

                                               8
       The language of § 3902 says nothing about an uninsured motorist insurance

carrier’s (“UM carrier”) right of action against a tortfeasor’s liability carrier. It

does, however, provide a statutory right to subrogation. 27 Section 3902 entitles the

insurer:

              [i]n the event of payment to any person under uninsured
              vehicle coverage . . . [to] the proceeds of any settlement
              recovery from any person legally responsible for the
              bodily injury or property damage as to which such
              payment was made and to amount recoverable from the
              assets of the insolvent insurer of the other vehicle;
              provided, that this right of subrogation is limited to the
              amount of coverage required by the financial
              responsibility law. 28

       The subrogee-insurer is thereby vested with “two distinct rights”: (1) “a

legal right to the proceeds of a settlement recovery received by the insured from

his tortfeasor”; and (2) “an equitable right directly against the tortfeasor.”29 The

plain language of the statute—“any person legally responsible”—cannot be read to

confer a subrogation right against the tortfeasor’s liability carrier. 30 And this Court

27
        § 3902(a)(4); see also Home Ins. Co. v. Maldonado, 515 A.2d 690, 696 (Del. 1986);
Sinex v. Wallis, 565 A.2d 1384, 1388 (Del. Super. Ct. 1988) (recognizing § 3902(a)(4) creates a
“right of subrogation in an insurance carrier who has made payment to an insured under an
uninsured motorist clause”).
28
       DEL. CODE ANN. tit. 18, § 3902(a)(4) (2014) (emphasis added).
29
       Sinex, 565 A.2d at 1388 (emphasis added).
30
       § 3902(a)(4); Cf. Northland Ins. Co. v. Virginia Prop. & Cas. Ins. Guar. Assoc., 392
S.E.2d 682, 685 (Va. 1990) (noting earlier Virginia Supreme Court case held the UM carrier had
no subrogation right against the tortfeasor’s insurance carrier because an earlier version of
Virginia’s UM statute did not provide for it).

                                              9
has previously interpreted that language to mean the tortfeasor, not his or her

liability carrier, is the proper party to a subrogation claim. 31 Thus, the statutory

language of § 3902(a)(4) establishes no direct subrogation right against an

uninsured motorist’s liability carrier.

       Moreover, Allstate’s insistence that it may directly sue Infinity at this time

does not comport with the “bedrock” principles of subrogation. 32 A subrogee-

insurer stands in the shoes of its insured.33 And its rights are limited to those of its




31
         Kennedy v. Encompass Indem. Co., 2012 WL 4754162, at *4 (Del. Super. Ct. Sept. 28,
2012) (“The plain language of Section 3902(a)(4) contemplates that the tortfeasor, rather than the
tortfeasor’s insurance carrier, is the proper party to a subrogation claim, as the tortfeasor is the
party legally responsible for the bodily injury.”). The Court noted that to allow a UM carrier to
seek subrogation directly against the tortfeasor’s liability carrier “runs contrary to the principles
underlying uninsured motorist benefits.” Id. at *4 n.25. But see Kimball v. Penn Mut. Ins. Co.,
2007 WL 315339, at*2 (Del. Super. Ct. Jan. 31, 2007) (“Due to its subrogation right with regard
to . . . potential [UM] payments, [the UM carrier] has standing to challenge the validity of [the
tortfeasor’s liability carrier’s] denial of liability coverage and seek contribution for UM benefits
it may be required to pay on behalf of the [insureds] as a result thereof.”) Certain salient facts in
Kimball differ, however. For instance, there the UM carrier unconditionally accepted its
insured’s UM claim. Id. With such acceptance, that UM carrier’s potential subrogation right,
the Court found, arose “from the fact that it is faced with the possibility of having to pay UM
benefits to the insureds as a result of the [liability carrier’s] alleged wrongful denial of liability
coverage to the tortfeasor.” Id. Allstate has not unconditionally accepted Ms. Broadway’s claim
for UM benefits—it disputes its own liability to her under the UM contract. Thus, it cannot be
said that Allstate now faces the imminence of payment that the Kimball UM carrier did.
32
       See Sinex, 565 A.2d at 1388; Great Am. Assurance Co. v. Fisher Controls Inter’l, Inc.,
2003 WL 21901094, at *4 (Del. Super. Ct. Aug. 4, 2003) (discussing the “bedrock principle of
subrogation . . . that the ‘insurer who subrogates himself to his insured stands in the shoes of his
insured and can take nothing by subrogation but the rights of the insured.’”) (quoting Stafford
Metal Works, Inc. v. Cook Paint & Varnish Co., 418 F. Supp. 56, 58 (N.D. Tex. 1976)).
33
       Great Am. Assurance Co., 2003 WL 21901094, at *4.

                                                 10
insured. 34 Even its insured—the injured party—cannot maintain a direct action

against a tortfeasor’s liability carrier under Delaware law. 35

       Yet, Allstate argues, because it stands in the shoes of the tortfeasor, it has

standing to compel Infinity (the tortfeasor’s insurer) to provide coverage.36 Indeed,

the UM carrier stands in the shoes of the absent tortfeasor for the purpose of

providing coverage to its own insured. 37 But the focus of this case is whether

Allstate can stand in the tortfeasor’s shoes to maintain a direct action against the

tortfeasor’s liability carrier, essentially interjecting itself into the contractual

relationship between the tortfeasor and his or her liability carrier.                     Neither

§ 3902(a)(4) nor the principles of subrogation permit that on these facts. Allstate



34
       Id.; see also Reserves Devel. LLC v. Severn Sav. Bank, FSB, 2007 WL 4054231, at *17
(Del. Ch. Nov. 9, 2007) (discussing principles of equitable subrogation).
35
         Walden v. Allstate Ins. Co., 2006 WL 3041848, at *1 (Del. Oct. 27, 2006) (“under
Delaware law, an injured third party may not prosecute a direct action against a liability insurer
on the basis of the alleged negligence of an insured before a determination of the insured’s
liability”); Delmar News, Inc. v. Jacobs Oil Co., 584 A.2d 531, 534 (Del. Super. Ct. 1990)
(applying principle from Kaufmann v. McKeown, 193 A.2d 81 (Del. 1963)).
36
       Def./Third-Party Pl.’s Resp. Br. at 3.
37
        Withrow v. Spears, 2013 WL 5615573, at *4 (D. Del. Oct. 15, 2013) (“The insurance
carrier providing the UM coverage stands in the shoes of the absent tortfeasor as a source of
payment to the injured person”); Price v. State Farm Mut. Auto. Ins. Co., 2013 WL 1213292, at
*6 (Del. Super. Ct. Mar. 15, 2013) aff’d, 2013 WL 5178520 (Del. Sept. 13, 2013) (noting insurer
stands in shoes of uninsured tortfeasor, which “necessarily involves a somewhat adverse
relationship between the insured and the insurer”); Evans v. Stuard, 1989 WL 167406, at *2
(Del. Super. Ct. Oct. 6, 1989) (UM carrier placed in position of absent tortfeasor “as a source of
payment to the victim”). Cf. Sinex, 565 A.2d at 1389 (the “subrogee-insurer’s equitable right
against the tortfeasor was derivative of the subrogee-insurer’s legal right against the insured.”).

                                                11
has made no payments to its insured 38—in fact it disputes the UM claim. Nor has

there been an adjudication of liability or judgment against the tortfeasor. 39 Thus,

Allstate has no standing here to maintain a direct action against Infinity, the

liability carrier for the alleged uninsured tortfeasors Ms. Morris and Ms. Caldwell.

           C. Allstate Has No Third-Party Right to Compel Coverage.

       Contract law governs the aspects of uninsured motorist claims not controlled

by the facts from the underlying accident. 40 Thus, the Court may look to principles

of contract law to determine whether Allstate has standing to compel Infinity’s

performance of Infinity’s liability insurance contract with Ms. Caldwell.

       A third-party who is not a named insured may still be able to recover on an

insurance policy made for his or her benefit. 41 The third-party seeking recovery

must, however, be an intended beneficiary. 42                 In order to be an intended

beneficiary, the contracting parties must have intended to confer a benefit on the


38
        See Reserves Devel. LLC, 2007 WL 4054231, at *17 (subrogation right arises provided
that “payment must have been made by the subrogee to protect his or her own interest”).
39
       See Kennedy v. Encompass Indem. Co., 2012 WL 4754162, at *4 (Del. Super. Ct. Sept.
28, 2012).
40
       Rapposelli v. State Farm Mut. Auto. Ins. Co., 988 A.2d 425, 428-29 (Del. 2010).
41
       Willis v. City of Rehoboth Beach, 2004 WL 2419143, at *1 (Del. Super. Ct. Oct. 14,
2004) (recognizing exception to rule); Delmar News, Inc. v. Jacobs Oil Co., 584 A.2d 531, 534
(Del. Super. Ct. 1990) (“It is settled law in Delaware that a third-party may recover on a contract
made for his benefit.”); Empire Fire & Marine Ins. Co. v. Miller, 2012 WL 1151031, at *5 (Del.
Com. Pl. Apr. 5, 2012).
42
       Willis, 2004 WL 2419143, at *2.

                                                12
third-party. 43 But if the third-party “happens to benefit from the performance of

the contract either indirectly or coincidentally, such third person has no rights

under the contract.”44

       The Court must look to the language of the liability insurance policy to

determine the intent of the parties and whether an injured party is a third-party

beneficiary. 45 If a liability insurance policy explicitly permits direct suits against

the insurer prior to obtaining a judgment against the tortfeasor, that direct action is

permitted. 46 But if a policy prohibits such direct actions by third parties, “the

intent would be clear on the face of the policy . . . [and] a direct action would not

be allowed.47 “Without language to the contrary in the policy, 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.” 48

       Allstate here has not established that it is an intended third-party beneficiary

to the Ms. Caldwell-Infinity insurance contract such that it has standing to pursue


43
       Delmar News, 584 A.2d at 534.
44
       Id.
45
       Greater New York Mut. Ins. Co. v. Travelers Ins. Co., 2011 WL 4501207, at *3 (D. Del.
Sept. 28, 2011); Willis, 2004 WL 2419143, at *2.
46
       Willis, 2004 WL 2419143, at *2.
47
       Id.
48
       Id.

                                            13
this declaratory judgment action. The language of the Infinity policy is clear. It

states:

                 SUITS AGAINST US
                 We may not be sued unless there is full compliance with
                 all terms of this policy. We may not be sued under Part
                 A of this policy until the obligation of an insured to pay
                 is finally determined either by judgment against the
                 insured or by written agreement of the insured, the
                 claimant, and us. No one shall have any right to make us
                 a party to a suit to determine the liability of an insured. 49

As there has been no final judgment in the underlying action, the policy language

permitting suit against Infinity has not yet been triggered. Allstate cannot show on

the record before the Court that it was an intended third-party beneficiary to the

liability insurance policy between Ms. Caldwell and Infinity. Nor can it show that

Ms. Caldwell assigned her rights under the policy to Allstate. 50 Thus, Allstate does

not have standing as a third-party beneficiary to compel Infinity’s performance on

its liability insurance contract here.

     V.      CONCLUSION

          Because Allstate has not demonstrated it may maintain a direct action

against Infinity—either as a subrogee-insurer or as a third-party beneficiary to the

49
          Def’s Mot. Dismiss, Ex. 7 at 22.
50
        Greater New York Mut. Ins. Co. v. Travelers Ins. Co., 2011 WL 4501207, at *3 (D. Del.
Sept. 28, 2011) (“If the injured party is neither a named insured nor a third party beneficiary, it
cannot recover from the liability insurer unless there has been an assignment of rights. . .”); see
also 46A C.J.S. Insurance § 1994 (2015) (in an assignment, the insured passes legal title to a
claim to his or her insurer and the exclusive right to pursue the tortfeasor).

                                                14
liability insurance contract—Allstate is unable to demonstrate an injury to a

protected legal interest. Consequently, it cannot meet all of the requisite elements

of standing to mount its declaratory judgment action here. Infinity’s Motion to

Dismiss the Third-Party Complaint is therefore GRANTED and Allstate’s Third-

Party Complaint against Infinity is DISMISSED, without prejudice.51

      IT IS SO ORDERED.


                                          /s/ Paul R. Wallace
                                          PAUL R. WALLACE, JUDGE



Original to Prothonotary
cc: All counsel via File & Serve




51
      See Walden v. Allstate Ins. Co., 2006 WL 3041848, at *1 (Del. Oct. 27, 2006).

                                             15
