IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

ERNEST D. SESSOMS, )
)

Plaintiff, )

)

v. ) C.A. No. N17C-03-180 WCC

)

TASIA RICHMOND, and )
CITIZENS UNITED RECIPROCAL )
EXCHANGE, )
)

Defendants. )

Submitted: August 23, 2017
Decided: December 8, 2017

Defendant Citizens United Reciprocal Exchange’s Motion to Dismiss
GRANTED

Plaintiff’s Motion for Summary Judgment
DENIED

MEMORANDUM OPINION

Michael D. Bednash, Esquire, The Law Offlce of Michael D. Bednash, 100 Biddle
Avenue, Suite 104, Springside Plaza, Newark, DelaWare 19702. Attorney for
Plaintiff.

Emily K. Silverstein, Esquire, Marks, O’Neill, O’Brien, Doherty & Kelly, P.C.,
300 Delaware Avenue, Suite 900 Wilmington, DE 19801. Attorney for Citizens
United Reciprocal Exchange.

CARPENTER, J.

Citizens United Reciprocal EXchange (“CURE” or “Defendant”) moves to
dismiss Ernest D. Sessoms’ (“Plaintift”) Amended Complaint pursuant to
Delaware Superior Court Civil Rule lZ(b)(Z). For the following reasons,
Defendant’s Motion to Dismiss Count II (Declaratory Judgment) of the Amended
Complaint Will be GRANTED. To the extent Plaintiff seeks summary judgment
on Countl (Negligence), the Motion is DENIED.

I. FACTUAL & PROCEDURAL BACKGROUND

On April 27, 2015, Plaintiff Was injured in a motor vehicle accident (the
“Accident”) While riding as a passenger in a car owned by Tamika BroWn
(“Brown”).l Tasia J. Richmond, a New Jersey resident, (“Richmond”) Was said to
be driving “in a negligent and careless manner, [When she] disregarded [the] red
light”2 at the intersection of 29th Street and Jefferson Street and collided With
Brown’s vehicle in Wilmington, Delaware. Plaintiff suffered neck and back
injuries as Well as “pain and suffering, and mental distress” from the collision.3 At
the time of the Accident, Richmond Was insured by an automobile policy (the

“Policy”) issued by CURE, a NeW Jersey based Insurance Company.4

 

l Am. Compl. jj 4.
2 Ia'.

3 Ia'. at jj 6.

4 Am. Compl. 11 7.

Sometime after the Accident, CURE began to investigate the pending
insurance claim. However, after many unsuccessful requests for information and
assistance from Richmond, CURE filed an action in the NeW Jersey Superior Court
seeking to enforce the contractual cooperation requirement in Richmond’s
insurance policy.5 On October 2, 2015, Richmond Was ordered by the Court to
submit to an Examination Under Oath in NeW Jersey Within twenty days from the
court order (“Order”).6 The Order also stated that failure to submit to an
Examination Under Oath Was “a material breach of her contract...and [shall
relieve] CURE [of the responsibility] to afford any benefits to defendant under its
policy....”7 Richmond subsequently failed to submit for an Examination Under
Oath, and on November l3, 2015, CURE denied coverage, holding Richmond to
be uncooperative during the investigation of her claim.8

Because of CURE’s refusal to provide coverage for the Accident, Plaintiff
commenced the instant litigation on March 15, 2017. On May lO, 2017, Plaintiff
filed an Amended Complaint asserting that Richmond’s negligence proximately

caused the Accident and Plaintiffs injuries.9 Additionally, the Amended

 

5 Order, Citizens Um'ted Reciprocal Exchange v. Richmond (N.J. Super. Oct. 2, 2015) (Exhibit
7).

6 Ia’.

7 Ia’.

8 Pl. EX.A.

9 Am. Compl. jj 5.

Complaint asserted that Richmond Was insured by CURE at the time of the
Accident10 and therefore CURE is obligated to indemnify Richmond and provide
minimum coverage for the Accident.ll Further, the Amended Complaint seeks
both general and special damages against Richmond, declaratory judgment against
CURE, costs, and interests, as Well as attorney’s fees.12

In response to Plaintiff’s Amended Complaint, Defendant CURE moved to
dismiss the Complaint pursuant to Superior Court Civil Rules l2(b)(2), for lack of
personal jurisdiction. Plaintiff opposes such motion and in its response also
requested the Court to grant summary judgment CURE’s Motion to Dismiss
Plaintiff’ s Amended Complaint Was heard in this Court on August 23, 2017. This
is the Court’s decision on the Motion to Dismiss and Plaintiffs request for
summary judgment

II. STANDARD OF REVIEW

On a defendant’s motion to dismiss pursuant to Superior Court Civil Rule

12(b)(2) for lack of personal jurisdiction, the plaintiff “bear[s] the burden to

articulate a non-frivolous basis for this court’S assertion of jurisdiction.”13 The

 

10 Am. Compl. jj 7.

ll Id. at jj 8.

12 Am. Compl. jj 9(1)~(5).

13 IM2 Merch. & Mfg., Inc. v. Tl'rex Corp., 2000 WL 1664168, at *4 (Del. Ch. 2000) (citing Hart

Holding C0. Inc. v. Drexel Bumham Lambert Inc., 593 A.2d 535, 539 (Del. Ch. 1991)). See also
111 re Asbestos Litig. (Anderson), 2015 WL 556434, at *3 (Del. Super. Ct. 2015); Boone v. Oy
PartekAb, 724 A.2d 1150, 1154 (Del. Super. Ct. 1997), ajj”’d, 707 A.2d 765 (Del. 1998);

plaintiff can satisfy this burden “by making a primafacie showing that jurisdiction
is conferred by statute.”14 Although the factual record is read in the light most
favorable to the plaintiff in ruling on the motion, “the plaintiff must plead specific
facts and cannot rely on mere conclusory assertions.”15 Additionally, the Court
must answer two legal questions. “First, it must determine whether jurisdiction is
appropriate under Delaware’s long-arm statute. And, second, it must evaluate

whether asserting such jurisdiction would offend the Due Process Clause of the

Constitution.” 16

III. DISCUSSION
lt is important to clearly set forth what is being requested in this litigation
since how it is characterized results in different outcomes. This Court has made it
very clear in State Farm v. Dann that a “single, specific contact, such as a tort

committed in Delaware, has been held sufficient to confer personal jurisdiction

n l7

over the tortfeasor and his [her] insurer in the Delaware Courts. Automobile

insurance companies like CURE cannot avoid liability by merely claiming no

 

Greenly v. Davis, 486 A.2d 669, 670 (Del. 1984); Harmon v. Eudal`ly, 407 A.2d 232, 233 (Del.

Super. Ct. 1979), ajj”’d, 420 A.2d 1175 (Del. 1980).

14 McKamey v. Vander Houten, 744 A.2d 529, 531 (Del. Super. Ct. 1999).

15 Mobile Diagnostic Grp. Holdl`ngs, LLC v. Suer, 972 A.2d 799, 802 (Del. Ch. 2009).

16 Boone, 724 A.2d at 1154-55. Sample v. Morgan, 935 A.2d 1046 (Del. Ch. 2007) (citing
AeroGlobal Capl'tal Mgmt., LLC v. Cirrus lndus., lnc., 871 A.2d 428, 438 (Del. 2005).

17 State Farm Mut. Auto. Ins. C0. v. Dann, 794 A.2d 42, 48 (Del. Super. Ct. 2002).

contacts in Delaware. They waived that right when they issued the automobile
policy with full recognition that the insurer would not limit their travel to a single
state. Having to respond to insurance claims for accidents in another state by the
insurers is not only foreseeable but is an expected outcome in this line of business.

However, the issue the parties are raising is different in that the Plaintiff
appears to be requesting the Court to determine the contractual obligation between
Richmond and CURE by finding the insurance carrier has an obligation to defend
Richmond and pay coverage under the insurance policy. As such, the declaratory
judgment count found in Count two of the Complaint raises a different issue
related to the insurance contract and not the accident itself. This places the issue of
whether the long arm statute is applicable in a totally different light. As a result of
the above, the Court will turn its attention to whether the State of Delaware has
proper jurisdiction to make a declaratory judgment regarding CURE’s obligation to
provide coverage under its policy.

a. Declaratory Judgment

The Court must conduct a two-part analysis in order to determine if a non-
resident may be subject to personal jurisdiction by a Delaware court. First, the
Court must determine if any of the Delaware Long-Arm Statute provisions are

applicable and second, it must determine if imposing Delaware jurisdiction on the

non-resident violates the Due Process Clause. Delaware’s Long-Arm Statute

allows the Court to exercise personal jurisdiction over a non-resident when that

person:

1. Transacts any business or performs any character of work or
service in the State;

2. Contracts to supply services or things in this State;

Causes tortious injury in the State by an act or omission in this

State;

4. Causes tortious injury in the State or outside of the State by an
act or omission outside the State if the person regularly does or
solicits business, engages in any other persistent course of
conduct in the State or derives substantial revenue from
services, or things used or consumed in the State;

5. Has an interest in, uses or possesses real property in the State;
or

6. Contracts to insure or act as surety for, or on, any person,
property, risk, contract, obligation or agreement located,
executed or to be performed within the State at the time
the contract is made, unless the parties otherwise provide in

writing.18

L).)

The Long-Arm statute has broad scope and can be imposed on a non-resident “who
engages in a single act in the state of Delaware.”19 However, the Long-Arm

statute, as mentioned above, does have Constitutional limits.20 For personal

 

18 10 Del. C. § 3104(0)(1) _ (6). See also Url'be v. Ma'. Auto. ]ns. Fund, 2014 WL 4942340, at *2
(Del. Super. Ct. 2014) (“Subsections (c)(l), (c)(2), (c)(3), (c)(5), and (c)(6) of the statute require
a showing of specific jurisdiction, where the cause of action arises from acts or omissions taking
place in Delaware. Subsection (c)(4), however, requires a showing of general jurisdiction, where
Plaintiff’s claims are unconnected with the nonresidents’ activities.”).

19 State Farm Mut. Auto Ins. C0. v. Dann, 794 A.2d 42,47 (Del. Super. Ct. 2002) (citing
Transportes Aereos de Angola v. Ronair, Inc., 544 F.Supp. 858, 864 (D. Del 1982).

20 Daz'ly Underwriters ofAmerica v. Ma’. Aul‘o. Ins. Fund, 2008 WL 3485807 *4 (Del. Super. Ct.

2008)

jurisdiction to exist, the non-resident must have sufficient purposeful minimum
contacts with Delaware such tha “maintenance of the suit does not offend
traditional notions of fair play and substantial justice.”21

Defendant CURE seeks to dismiss Count ll of Plaintiff’ s Amended
Complaint contending that Delaware courts cannot exercise jurisdiction over
Defendant because none of the provisions of Delaware’s Long~Arm statute apply
and because Defendant does not have the “minimum contacts” necessary such that
this Court can exercise jurisdiction over it. Specifically, Defendant argues
Delaware Long~Arm Statute Sections 3104(c)(1)~(2) do not apply as CURE does
not contract, transact, or perform business in Delaware.22 Delaware Long~Arm
Statute Sections 3104(0)(5)-(6) are not applicable because CURE does not own
any real estate in Delaware nor does it have any automobile insurance contracts in
Delaware.23 Finally, Delaware Long-Arm Statute Sections 3104(c)(3)_(4) do not
apply because CURE derives no revenue from services in Delaware,24 and

Richmond’S tortious conduct can only be used to exercise personal jurisdiction

over claims arising directly from that conduct.

 

2111/zl"lShOe Co. v. State of Washington, 326 U.S 310, 316 (1945).

22 Def.’s Mot. to Dismiss jj 5, at 4.

23 See ia'.

24 See ia'. at jj 7, at 5-6. “Delaware Courts have broadly construed the term ‘substantial revenue’
to mean that two or three percent of total revenue is sufficient to confer jurisdiction.” M&M
Techs., lnc. v. Gurtler Chems., Inc., 2005 U.S. Dist. LEXIS 1726, at *14 (D. Del. 2005).

Defendant also asserts that CURE is not at home in Delaware. Defendant
contends that its contacts with Delaware are very minimal and CURE has not
“purposefully availed” itself the jurisdiction of Delaware. Specifically, CURE
states it is “organized under the laws of New Jersey, with its principal place of
business... [in] Princeton, New Jersey...CURE does not, nor has it ever, had any
offices in Delaware. . . [And] CURE is not licensed to operate in Delaware.”25

Plaintiff does not attempt to argue that CURE is at home in Delaware nor
does he assert that CURE transacts or contracts business in Delaware. Instead,
Plaintiff argues that CURE is subject to Delaware’s jurisdiction because of the
Accident and Richmond’s tortious conduct which occurred in Delaware. Plaintiff
cites State Farm Auto. Ins. C0. v. Dann, as support for finding the collision to be a
sufficient single act and minimum contact required to confer jurisdiction.
Unfortunately for Plaintiff, this simply misses the issue.

In the instant case, the sole “contact” Plaintiff has alleged is Richmond’s
unilateral act of driving into Delaware and allegedly committing a tort here. As
stated above, the Court agrees with the holding of State Farm v. Dann, in that

Delaware has specific personal jurisdiction for claims arising directly from the

Accident. This can include any tort claims against the drivers or potential

 

25 Def.’s Mot. to Dismiss jj 5, at 4.

subrogation claims against insurers. Absent a contractual default, CURE would be
obligated to investigate the claim and provide coverage to its policyholder. The
Court, however, refuses to expand the holding of State Farm v. Dann, and find that
Delaware has specific personal jurisdiction for matters that only related to the
contract obligations between CURE and Richmond. lt would be unforeseeable and
unfair to require a non-resident like CURE to be hailed to court in Delaware for
legal matters only tangentially related to the tortious conduct. In fact, such a

finding would violate due process and “offend traditional notions of fair play and

substantial justice.”26

CURE has minimal contacts with the State of Delaware. CURE does not
offer insurance to Delaware residents; it has no Delaware offices; and it is not
registered to do business in Delaware. CURE’s only contact is Richmond’s
alleged negligence during the Accident. As such, the Court finds that CURE
would not reasonably foresee being hailed into court in Delaware to interpret
Richmond’s Policy provisions. The Court finds CURE’s denial of coverage is
contractually related and only indirectly arises from Richmond’s alleged
negligence. The Policy was drafted to include a New Jersey choice of law clause

as well as a failure to cooperate provision which is enforceable in New Jersey.

 

26 State Farm Mut. Auto. Ins. C0. v. Dann, 794 A.2d 42, 48 (Del. Super. Ct. 2002).

CURE denied coverage only due to Richmond’s failure to cooperate and after
seeking a judicial order to enforce the contract in the New Jersey Superior Court.
Because Plaintiff’s request for declaratory judgment stems directly from the denial
of coverage under the insurance contract, the Court finds CURE’s contacts with the
state of Delaware are not sufficient to satisfy the due process considerations
Plaintist request to analyze and interpret the insurance policy between two New
Jersey parties would exceed the holding of State Farm Auto. lns. Co. v. Dann and
scope of this Court’s jurisdiction.

The outcome of this decision is clear. By CURE denying coverage due to
their insured being uncooperative, Richmond became an uninsured tortfeasor and
thus Plaintiff is required to look to the uninsured coverage portion of his policy for
coverage. Once that occurs, Plaintiff s insurer can seek recovery from CURE
through a subrogation claim or other litigation. While the Court appreciates the
desire of Plaintiff to have CURE provide their policy limits and then seek
additional coverage under the under-insured portion of his policy, that avenue of
recovery is simply unavailable

IV. CONCLUSION
For the reasons set forth in this Opinion, Defendant’s Motion to Dismiss

Count II, declaratory judgment shall be GRANTED. This issue is a contract

10

interpretation matter between CURE and its policyholder. Because both Richmond
and CURE are domiciled in New Jersey and the policy is a New Jersey policy, this
question must be resolved in the proper jurisdiction of New Jersey. Otherwise, the
assertions set forth in the Complaint may proceed. At the end of his response to
Defendant’s Motion to Dismiss, Plaintiff did request that the Court grant his
Motion For Summary Judgment. While not briefed or responded to, the Court can
only assume Plaintiff believed a denial of the Motion to Dismiss would logically
lead to summary judgment for him. The Court having dismissed the declaratory
judgment count now finds the Motion for Summary Judgrnent moot and it is
DENIED.

IT IS SO ORDERED.

/jf¢§

ridge WilliamC. Carpenter, Jr. //
g

11

