             IN THE SUPERIOR COURT OF THE STATE OF DELAWARE


    SHINEQUA GRIFFY, on behalf of                 )
    herself and all others similarly situated,    )
                                                  )
                        Plaintiff,                )
                                                  )   C.A. No.: N19C-12-223 EMD CCLD
                   v.                             )
                                                  )
    USAA CASUALTY INSURANCE                       )
    COMPANY,                                      )
                                                  )
                        Defendant.                )



                                      Submitted: May 4, 2020
                                       Decided: July 13, 2020

                               Upon Defendant’s Motion to Dismiss
                                         GRANTED

John S. Spadaro, Esquire, John Sheehan Spadaro, LCC, Smyrna, Delaware. Attorneys for
Plaintiff Shinequa Griffy.

Lisa Z. Brown, Esquire, Greenberg Traurig, LLP, Wilmington, Delaware. Attorneys for
Defendant USAA Casualty Insurance Company.

DAVIS, J.

                                     I.     INTRODUCTION

       This dispute is assigned to the Complex Commercial Litigation Division of the Court.

On September 28, 2019, Plaintiff Shinequa Griffy filed suit against Defendant USAA Casualty

Insurance Company (“USAA”). This civil action relates to USAA’s purported improper

methodology for calculating statutory interest under 21 Del. C. § 2118B. In her Complaint, Ms.

Griffy alleges that USAA incorrectly calculates interest accrual periods and contends that “[s]o
long as the required statutory interest remains unpaid, [even when the principal amount owed in

PIP benefits has been paid,] such interest continues to accrue.”1

         On or about November 25, 2019, USAA filed Defendant’s Motion to Dismiss (the

“Motion”). Ms. Griffy filed Plaintiff Shinequa Griffy’s Opposition to USAA’s Motion to

Dismiss (the “Opposition”) on January 17, 2020. USAA then filed its Defendant’s Reply in

Support of Motion to Dismiss (the “Reply”) on February 6, 2020. The Court held a hearing on

the Motion, the Opposition and the Reply on May 4, 2020. At the conclusion of the hearing, the

Court took the Motion under advisement.

         After consideration of the Motion, the Opposition, the Reply, the arguments made at the

hearing and the entire record of this civil action, the Court will GRANT the Motion for the

reasons set forth below.

                                           II.      BACKGROUND2

    A. PARTIES

         Ms. Griffy is a citizen of Delaware. Ms. Griffy is a policyholder of a Delaware

automobile insurance policy issued by USAA.3 According to the papers filed in this civil action

and representations made at the hearing, Ms. Griffy has not filed a PIP benefits claim with

USAA through her policy.

         USAA is a Texas corporation located in San Antonio. USAA is engaged in the business

of insurance and regularly sells automobile insurance within the State of Delaware.4




1
  Compl. at ¶ 14.
2
  Unless otherwise indicated, the following are the facts as alleged in the Complaint. For purposes of the Motion, the
Court must view all well-pleaded facts alleged in the Complaint as true and in a light most favorable to Ms. Griffy.
See, e.g., Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 27 A.3d 531, 536 (Del. 2011); Doe v.
Cedars Acad., LLC, 2010 WL 5825343, at *3 (Del. Super. Oct. 27, 2010).
3
  Compl. at ¶ 3.
4
  Id. at ¶ 4

                                                          2
      B. APPLICABLE STATUTES

           Delaware’s PIP statute is set out in 21 Del. C. § 2118 (“Section 2118”). Ms. Griffy relies

upon Section 2118, and related statutes, as the framework for Count I of her Complaint. Ms.

Griffy uses Section 2118 to try and show that she and those in the proposed class are owed

monetary damages by USAA. Count II is a claim for punitive damages.

           Section 2118B(c) provides that covered claims must be (i) paid within 30 days of the

insurer’s receipt of the claim, or (ii) disputed with an accompanying written explanation. If an

insurer fails to do so, Section 2118B(c) dictates that the amount of unpaid benefits owed by the

insurer to the claimant shall increase by specified rates dependent upon the amount of time that

has passed. Section 2118B(c) states as follows:

           (c) When an insurer receives a written request for payment of a claim for benefits
           pursuant to § 2118(a)(2) of this title, the insurer shall promptly process the claim
           and shall, no later than 30 days following the insurer’s receipt of said written
           request for first-party insurance benefits and documentation that the treatment or
           expense is compensable pursuant to § 2118(a) of this title, make payment of the
           amount of claimed benefits that are due to the claimant or, if said claim is wholly
           or partly denied, provide the claimant with a written explanation of the reasons for
           such denial. If an insurer fails to comply with the provisions of this subsection,
           then the amount of unpaid benefits due from the insurer to the claimant shall
           be increased at the monthly rate of:

               (1) One and one-half percent from the thirty-first day through the sixtieth
               day; and

               (2) Two percent from the sixty-first day through the one hundred and
               twentieth day; and

               (3) Two and one-half percent after the one hundred and twenty-first day.5

           As such, insurers have a statutory obligation to pay an increased amount of “unpaid

benefits” for any failure to comply with the provisions of Section 2118B(c).




5
    21 Del. C. § 2118B(c) (emphasis added).

                                                    3
         In her Complaint, Ms. Griffy alleges that USAA’s methodology for calculating statutory

interest under Section 2118B is wrongful.6 Ms. Griffy asserts that USAA incorrectly terminates

the accrual of interest on a claim when it pays the principal amount owed on a bill.7 Ms. Griffy

contends that such interest continues to accrue until the full amount of the bill is paid, which

includes the amount of interest.8 Ms. Griffy states that this is true even if USAA fails to pay the

required statutory interest until a later date.9

         Ms. Griffy does not, however, set out an actual factual circumstance when she submitted

a claim to USAA and the subsequent treatment of that claim. Moreover, Ms. Griffy fails to

allege any other actual claim that has been handled by USAA. Instead, Ms. Griffy pleads a

hypothetical. Specifically, Ms. Griffy alleges:

         By way of illustration, if we suppose that:

             a. On June 1, 2018, USAA received a PIP-related medical bill that was
         covered by its policy (for purposes of section 2118B), and therefore payable no
         later than July 1, 2018; and

             b. USAA failed to pay the bill until August 1, 2018; and

              c. USAA failed to pay the required statutory interest at the time it paid the
         bill; and

            d. USAA did not in fact pay statutory interest on the bill until August 1,
         2019; then —

         under this scenario, USAA would (wrongly) pay only the statutory interest that
         accrued during the period July 1, 2018 through August 1, 2018, treating the accrual
         of statutory interest as having ended on the latter date, even though it failed to pay
         that statutory interest for another whole year.10

Ms. Griffy claims that this methodology is wrong because—


6
  Id. at ¶¶ 12-15.
7
  Id. at ¶ 12.
8
  Id. at ¶ 14.
9
  Id.
10
   Id. at ¶ 13 (emphasis added).

                                                   4
       USAA can only (lawfully) bring the accrual of such interest to an end by paying
       both the principal amount owed in PIP benefits and the required statutory interest.11
Ms. Griffy then contends that USAA has employed this methodology for calculating statutory

interest, and has done so on multiple occasions.12

                                    III.       PARTIES’ CONTENTIONS

     A. Motion13

         USAA argues that: (i)“[t]here is no legal basis for [Ms. Griffy’s] theory of interest”

because, according to the statute, only the amount of unpaid benefits increases; (ii) “[Ms. Griffy]

has not stated a claim for bad-faith breach of contract” because she does not “allege [USAA]

breached the policy by incorrectly calculating interest due [to] her” or that she is owed interest at

all; and (iii) “[Ms. Griffy’s] claim for a Declaratory Judgment is also legally invalid” because it

is “duplicative of [Ms. Griffy’s] bad-faith claim” and “there is no actual controversy that is ripe

for declaratory relief.” “[Ms. Griffy] cannot seek a declaration to resolve a nonexistent

controversy.”

     B. Opposition14

         Ms. Griffy argues that: (i) USAA’s construction of 2118B should be rejected, the

prevailing convention is that interest accrues until paid; and (ii) Ms. Griffy has standing under

Clark and other authorities.

                                     IV.       STANDARD OF REVIEW

         Upon a motion to dismiss, the Court (i) accepts all well-pleaded factual allegations as

true, (ii) accepts even vague allegations as well-pleaded if they give the opposing party notice of

the claim, (iii) draws all reasonable inferences in favor of the non-moving party, and (iv) only


11
   Id. at ¶ 14 (emphasis in original).
12
   Id.
13
   See Def.’s Mot. to Dismiss.
14
   See Pl.’s Opp. to Def.’s Mot. to Dismiss.

                                                      5
dismisses a case where the plaintiff would not be entitled to recover under any reasonably

conceivable set of circumstances.15 However, the court must “ignore conclusory allegations that

lack specific supporting factual allegations.”16

                                             V.       DISCUSSION

         Ms. Griffy is a natural Delaware resident and policyholder of a Delaware automobile

insurance policy issued by USAA. Ms. Griffy, through the Complaint, seeks a declaration as to

her rights under her policy and for bad-faith breach of contract. However, neither the Complaint

nor the briefing include facts, which show that an actual controversy exists between Ms. Griffy

and USAA. Ms. Griffy does not allege that she has made a claim, or that she submitted a claim

that has been denied or untimely paid. Moreover, Ms. Griffy has not plead that USAA has sent a

letter saying that it will not pay on a PIP benefits claim if one were made.

         Rather, it appears as if Ms. Griffy seeks a declaration on rights that may, or may not, be

at issue if she were to assert a claim for PIP benefits and the claim were not paid on time. Ms.

Griffy, therefore, makes her argument based on a hypothetical and future injury that may occur

under USAA’s purported pattern of calculating the amount owed on a PIP benefits claim.

However, without an injury, or risk of injury, there is no justiciable controversy.17 As such, the

Court finds that Ms. Giffy lacks standing. Ms. Griffy, and the yet to be determined class, cannot




15
   See Central Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 227 A.3d 531, 536 (Del. 2011); Doe v.
Cedars Academy, No. 09C-09-136, 2010 WL 5825343, at *3 (Del. Super. Oct. 27, 2010).
16
   Ramunno v. Crawley, 705 A.2d 1029, 1034 (Del. 1998).
17
   See Clark v. State Farm Mut. Automobile Ins. Co., 2015 WL 1518662, at *3-4 (Del. Super. March 30, 2015), aff’d
on other grounds, 131 A.2d 806 (Del. 2016); Myers v. Travelers Commercial Ins. Co., 2015 WL 351953, at *1 (Del.
Super. Jan. 26, 2015), appeal voluntarily dismissed, No. 48, 2015 (Del. 2015). See also Spine Care Del., LLC v.
State Farm Mut. Auto. Ins. Co., 2018 WL 1462226, at *1 (D. Del. Mar. 23, 2018). (“Our limited jurisdiction does
not include resolving hypothetical disputes against insurance companies as a matter of public policy. We resolve
claims of concrete injury filed by persons allegedly suffering an injury caused by the insurer… But the person filing
the claim must still plead how the opposing party caused the injury. It cannot be a public policy hypothetical seeking
to correct a pattern of conduct without an injured party.”).

                                                          6
seek to correct an alleged pattern of conduct without an injured party.18 Further, without an

actual injury, the Court is at unsure how Ms. Griffy can demonstrate the class certification

requirements of class representative and commonality on the basis of a hypothetical injury.

         This Court has held that the lack of an actual controversy will act as a bar to a party

proceeding with a case requesting only declaratory relief.19 The Court must be satisfied that the

following four requirements are met in order for there to be an actual controversy:

         (1) It must be a controversy involving the rights or other legal relations of the party
         seeking declaratory relief; (2) it must be a controversy in which the claim of right
         or other legal interest is asserted against one who has an interest in contesting the
         claim; (3) the controversy must be between the parties whose interests are real and
         adverse; and (4) the issue involved in the controversy must be ripe for judicial
         determination.20

         As stated by the Supreme Court, “Delaware courts [will] decline to exercise jurisdiction

over a case unless the underlying controversy is ripe....”21 An action for declaratory relief is not

ripe if the party seeks an advisory or hypothetical opinion.22 Delaware courts do not issue

advisory or hypothetical opinions. 23 “The underlying purpose of [the ripeness] principle is to

conserve judicial resources and to avoid rendering a legally binding decision that could result in

premature and possibly unsound lawmaking.”24

         In addressing ripeness, the Court will undertake “a common sense assessment of whether

the interests of the party seeking immediate relief outweigh the concerns of the court in

postponing review until the question arises in some more concrete and final form.”25 The Court



18
   See Spine Care Del., LLC v. State Farm, 2018 WL 1462226 at *1.
19
   See e.g., Clark, 2015 WL 1518662, at *3; see also XI Specialty Ins. Co. v. WMI Liquidating Trust, 93 A.3d 1208,
1216 (Del. 2014).
20
   XI Specialty Ins. Co, 93 A.3d at 1217 (citing to Stroud v. Milliken Enters., Inc., 552 A.2d 476, 479-80 (Del. 1989).
21
   Id.
22
   Id.
23
   Id.
24
   Id. See also Clark, 2015 WL 1518662, at *3 n.34.
25
   XI Specialty Ins. Co., 93 A.2d at 1217.

                                                          7
of Chancery, in Schick Inc. v. Amalgamated Clothing & Textile Workers Union,26 identified five

factors to help guide Delaware courts in determining whether a matter is ripe for adjudication: (i)

a practical evaluation of the legitimate interests of the plaintiff in a prompt resolution of the

question presented; (ii) the hardship that further delay may threaten; (iii) the prospect of future

factual development that might affect the determination made; (iv) the need to conserve scarce

resources; and (v) a due respect for identifiable policies of law touching upon the subject matter

in dispute. Put more simply—a dispute will be deemed ripe if litigation appears to be

unavoidable and where the material facts are fixed, whereas a dispute will be deemed not ripe

when the dispute is based on uncertain and contingent events that may not occur, or where future

events may forestall the need for judicial intervention.27

         In order to assert a proper claim for declaratory relief, a party must allege facts that show

the existence of a situation that gives rise to immediate or imminent controversy between the

parties.28 The party seeking declaratory relief must show that the failure to resolve the

controversy will have an immediate and practical impact upon the complaining party.29 Even

though a party has not yet suffered actual harm, “an actual controversy must exist so that judicial

resources are not wasted on hypothetical disputes or on situations in which a judicial declaration

will not end the dispute between the parties.”30

        The Court finds that Ms. Griffy has not asserted a claim that is ripe for judicial review.

The Court makes this determination because Ms. Griffy has not plead facts showing an

immediate or imminent controversy between her and USAA.




26
   533 A.2d 1239, 1239 (Del. Ch.1987).
27
   See Clark, 2015 WL 1518662, at *4.
28
   Id. See also Hoechst Celanese Corp. v. Nat’l Union First Ins. Co., 623 A.2d 1133, 1137 (Del. Super. 1992).
29
   See Clark, 2015 WL 1518662, at *4.
30
   Hoechst Celanese Corp., 623 A.2d at 1137.

                                                        8
           While Ms. Griffy contends that USAA may wrongfully calculate statutory interest under

Section 2118B, Ms. Griffy has not submitted a claim for PIP benefits to USAA for payment.

Ms. Griffy alleges a hypothetical, or illustration, of a situation but that hypothetical has too many

unfixed facts. First, the hypothetical assumes that Ms. Griffy submits a claim for PIP benefits.

Second, the claim must be one that has is undisputable. Third, USAA must pay the claim outside

of thirty days. Fourth, USAA must fail to pay the Section 2118B(c) interest at the time it pays

the claim. Finally, USAA must pay the Section 2118B(c) interest as some later date.

           This hypothetical proves faulty if even one of the facts differs. For example, Ms. Griffy

may never make a claim for PIP benefits. Mr. Griffy may submit a PIP benefits claims that is

invalid in part or in full. USAA may pay the claim within the first thirty days and, therefore, no

interest will be due under Section 2118B(c). USAA might pay the entire claim plus Section

2118B(c) interest at one time. The reality is that the Complaint alleges a dispute that is based on

uncertain and contingent events that may not occur or future events that may forestall the need

for judicial intervention. As such, Ms. Griffy’s claims are not ripe for adjudication.

            Ms. Griffy also raises arguments (redudiation and alike) that were addressed and rejected

by the Court in Clark v. State Farm Mutual Automobile Insurance Co. and Myers v. Travelers

Commercial Insurance Company.31 In Clark and Myers, the plaintiffs argued that their claims

were ripe due to repudiation and/or diminution of the policy due because the insurer could

possibly use a calculation method in violation of Section 2118B. The Court noted that “[u]nder

Delaware law, repudiation is an outright refusal by a party to perform a contract or its conditions

entitling the other contracting party to treat the contract as rescinded.”32 The Complaint does not

allege facts that constitute repudiation.


31
     See Clark, 2015 WL 1518662, at *4-5; Myers, 2015 WL 351953, at *1-2.
32
     Myers, 2015 WL 351953, at *2; see also Clark, 2015 WL 1518662, at *5.

                                                        9
10
                                VI.    CONCLUSION

      For the reasons stated above, the Motion to Dismiss is GRANTED.

      IT IS SO ORDERED.

Dated: July 13, 2020
Wilmington, Delaware
                                                /s/ Eric M. Davis
                                                Eric M. Davis, Judge

cc: File&ServeXpress




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