IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
HOWARD G. HAMPTON,
Plaintiff,

v. C.A. No. N16C-03-196 VLM

TITAN INDEMNITY COMPANY,

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§
Defendant/Third-Party )
Plaintiff, )

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v. )

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CHERYL BROWN, )
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Third-Party Defendant.

MEMORANDUM OPINION & ORDER

Submitted: June 5, 2017
Decided: June 23, 2017

Upon Considemtz`on of Defendant/T hird-Parly Plaintiff’s Motionfor Summary
Judgment, DENIED.

Upon Consideration of Plaintz'ff/T hira’-Parly Defendant’s Motionfor Summary
Judgment, GRANTED.
Patrick Gallagher, Esquire, of Curley, Dodge, Funk & Street, LLC, of Dover,
Delaware. Attorneyfor Plainti]j[& Third-Parly Defendant.
Roger K. Pearce, Esquire, of Reger, Rizzo & Darnall, L.L.P., of Wilmington,
Delaware. Attorneyfor Defendant/Third-Parly Plal`ntijj€

MEDINILLA, J.

INTRODUCTION

This case probes the confines of “no-f`ault” Personal lnjury Protection
(“PIP”) benefits under Delaware’s Financial Responsibility Law, 21 Del. C.
§2118. lt does so in two ways. First, Titan lndemnity Company (“Titan”)
contends that, “what’s good for the goose is [not] good f`or the gander.” Plaintif`f
Howard Hampton, someone with myriad convictions f`or driving under the
influence, was injured while helping his platonic living companion, Third-Party
Defendant Cheryl Brown, extricate her vehicle from a snowy ditch adjacent their
mobile home. While steering her vehicle-coaxing it forward and backwards out
of` the ditch_he was struck by a negligently-operated snow plow traveling in the
opposite direction on the two-lane country road. Were Mr. Hampton a stranger, a
friend, a foe to l\/Is. Brown, or simply a Good Samaritan-or anyone else on the
planet_he would be entitled to PIP benefits. But, Titan argues, his unique status
as a “roommate” of` the insured’s “household” retroactively voids the insurance
policy, prohibiting him from receiving PIP benefits f`or his injuries.

Titan’s conclusion begets the second issue: whether Ms. Brown is
responsible f`or failing to disclose Mr. Hampton as a “roommate” in a portion of the
insurance application that requested the presence of other “drivers” in the
household. The agent who issued her the application never asked Ms. Brown

about any roommates with whom she lived. Equally, Ms. Brown did not read the

application before signing it. Remarkably, Titan concedes that even had the agent
been told of Mr. Hampton, she would not have named him as a driver on the
application because he was unlicensed. Nevertheless, Titan contends that Ms.
Brown materially misrepresented Mr. Hampton’s status as a roommate and
potential driver of her vehicle. Titan asks to declare the policy null and void under
18 Del. C. § 2711 as a material misrepresentation

Titan and l\/Is. Brown have cross-moved for summary judgment After
considering the parties’ motions_, responses, and oral arguments, the Court finds
that the relevant portion of the insurance contract is fairly susceptible to two
different interpretations: that Mr. Hampton was at once a “roommate” within the
policy’s definition of “household members,” but not a “driver” as contemplated by
the same section of the application. In light of this ambiguity, the doctrine of
contra proferentem requires the contract be interpreted in favor of coverage.
Therefore, the Court DENIES Titan’s Motion for Summary Judgment and
GRANTS Plaintiff/Third-Party Defendant’s Motion for Summary Judgment.

FACTUAL AND PROCEDURAL BACKGROUND
F actual Background
Titan underwrites insurance policies underneath the banner of Nationwide

Insurance. lt does so through several licensed but independent insurance agencies.

A to Z lnsurance Company (“A to Z”) is one such agency. The insurance policy at
issue in this case was issued to Ms. Brown by A to Z and underwritten by Titan.

lt is undisputed that Ms. Brown and Mr. Hampton co-inhabit a double-wide
mobile home in Magnolia, Delaware. They pay separate rent to the landlord of the
trailer, a relative of l\/Is. Brown’s. They have their own private space, including
their respective bathrooms and bedrooms. They share a common kitchen, living
room, and dining room. They share utility expenses. Mr. Hampton performs yard
work and household maintenance at the residence as a credit towards his rent.
They purchase their own groceries and cook their own food. The two rarely speak
to one another.

A. The Accident

On January 24, 2016, Ms. Brown was traveling home in her insured
automobile. Her car became stuck in a snow ditch adjacent the road within two to
three driveways of her residence. She called Mr. Hampton to help extricate the
vehicle from the ditch. Mr. Hampton looked out of his trailer and walked over to
assist her.

At first, Mr. Hampton and his sister_a passenger in the vehicle at the time it
became stuck_pushed from behind the vehicle with Ms. Brown in the driver’s
seat. Their attempts failed. As cars in her original direction of travel began to stop

and wait to pass, Mr. Hampton replaced Ms. Brown at the wheel. While he tried in

vain to move the vehicle out of the ditch, a passing snow plow careened into the
car and injured him in the collision.

After the police arrived, Mr. Hampton was cited for driving without a
license and without proof of insurance. Mr. Hampton has not had a driver’s license
for fifteen years, primarily as a result of Driving while Under the Influence
(“DUI”) offenses. ln 2014, he was convicted of his fifth DUI, and was on
probation at the time Ms. Brown applied for insurance through A to Z.

B. The Application

One month before the accident, on December 23, 2015, Ms. Brown sought
to insure two of her vehicles and met with Kathleen Joyner, a licensed insurance
agent at A to Z. The agent began the application by asking Ms. Brown a series of
eligibility questions. She did not read the application verbatim and inputted Ms.
Brown’s verbal responses into her computer. After the interview, Ms. Joyner
printed the three-page application for signature. Without reading the application,
Ms. Brown signed the third page of the application, attesting to the veracity of her
responses.

The crucial portion of the application was a section that appeared in the
upper half of the first page, entitled “DRIVER INFORMATION.” This section
reads:

NOTE: All household members age 15 or older,
including spouse, domestic partner, roommate(s), as well

4

as those drivers outside the household to whom the
insured auto(s) is furnished or available for his or her use,
including military and children away at college, must be
identirled below.‘

Both the insured and the agent agree that, as to this section of the
application, Ms. Brown was not asked if she had a roommate. Ms. Brown testified
that she recalls being asked only about other “household members,” which she
interpreted to refer to those members of her “household” whom she considered her
dependents. To her, this meant her two adolescent sons and not Mr. Hampton.
However, at the time of the application, neither son was living in her home_they
had left the residence as late as July 2015. Nevertheless, one of her sons is listed
on the final page of the application as an excluded driver, because “he [is] no
longer in [the] household.”2

As a Titan agent, Ms. Joyner stated that she did not read the entire section to
Ms. Brown because she asks the applicant to review the information provided at
the conclusion of the interview. Also, Ms. Joyner stated in her deposition that she
did not interpret the driver ’s section of the application to mean that the applicant is

required to list unlicensed drivers, such as Mr. Hampton. As such, the record

clearly establishes that had Ms. Brown disclosed Mr. Hampton on this portion of

 

l Titan’s Motion for Summary Judgment at Ex. F.

2 Ms. Joyner explained that Ms. Brown’s one son’s information was in her file from an earlier
application. This apparently prompted Ms. Joyner to ask her about his status for purposes of the
policy.

the application, the agent would not have included him as a driver because he had
suffered a loss of license.
Procedural Background

As a result of the January 24, 2016 accident, Mr. Hampton submitted
medical bills to Titan for reimbursement under the policy’s $15,000 PIP limits.
Titan responded that it was investigating the circumstances of the accident on the
basis of Ms. Brown’s omission regarding Mr. Hampton’s occupancy of the shared
residence. Before this investigation was completed, Mr. Hampton filed the present
suit seeking a determination that Titan is obligated to pay his PIP bills.

The Complaint was filed on March 21, 2016 and amended on May 19, 2016.
Titan then filed a Third Party Complaint against Ms. Brown on May 24, 2016.
Discovery in the original action is stayed pending the resolution of the Third Party
Complaint. At the close of discovery in the latter case, the parties stipulated to
present the pending cross-motions for summary judgment.

Both parties’ motions were filed on March 31, 2017. Responses were filed
on May 8. Reply briefs were submitted on May 25. The parties presented their
oral arguments on the motions at a hearing on June 5. The motions are now ripe

for decision.

STANDARD OF REVIEW

On cross-motions for summary judgment under Delaware Superior Court
Civil Rule 56, the court must determine whether any genuine issues of material
fact exist.3 Summary judgment will not be granted if there is a material fact in
dispute or if “it seems desirable to inquire thoroughly into [the facts] in order to
clarify the application of the law to the circumstances.”4 “All facts and reasonable
inferences must be considered in a light most favorable to the non-moving party.”5
l\/Ioreover, cross-motions for summary judgment “are not per se” concessions that
no material factual disputes exist.6 “Rather, a party [cross-]moving for summary
judgment concedes the absence of a factual issue and the truth of the nonmoving
party’s allegations only for the purposes of its motion, and does not waive its right
to assert that there are disputed facts that preclude summary judgment in favor of

the other party.”7

 

3 See DEL. SUPER. CT. CIV. R. 56(c); Capano v. Lockwood, 2013 WL 2724634, at *2 (Del. Super.
May 31, 2013) (citing Rule 56(€)); Wilmington Trust C0. v. Aetna, 690 A.2d 914, 916 (Del.
1996).

4 Ebersole v. Lowengrub, 180 A.2d 467, 469-70 (Del. 1962).

5 Nutt v. A.C. & S. Co., Inc., 517 A.2d 690, 692 (Del. Super. 1986) (citing Mechell v. Palmer,
343 A.2d 620, 621 (Del. 1975); Allstate Auto Leasl'ng C0. v. Caldwell, 394 A.2d 748, 752 (Del.
Super. 1978)).

6 Um'tea' Vanguara’ Fund, Inc. v. TakeCare, lnc., 693 A.2d 1076, 1079 (Del. 1997). See also
Wilmington Trust C0. v. Aetna, 690 A.2d at 916; Capano, 2013 WL 2724634, at *2; Total Care
Physicians, P.A. v. O’Hara, 798 A.2d 1043, 1050 (Del. Super. 2001).

7 Umred V¢mguard Fund, 1nc.,693 A.2d at 1079.
7

DISCUSSION
“Under Delaware law, the interpretation of contractual language, including
that of insurance policies, is a question of law.”8 This interpretation should look to
the whole contract without reliance “on any single passage in isolation.”9 The
interpretation should not render any provisions “illusory or meaningless.”lo Where
an ambiguity in an insurance contract exists, “the doctrine of contra proferentem
requires the language” be interpreted against the insurer and in favor of coverage.ll
An ambiguity in an insurance contract exists when the term or provision at
issue is “reasonably or fairly susceptible to different interpretations or may have

”]2 In the absence of an ambiguity, however, the

two or more different meanings
parties are bound to the plain meaning of the term; that is, the term’s “ordinary and

usual meaning.”'3 An ambiguity does not exist when the court “can determine the

 

8 O ’Brz'en v. Progressive N. Ins. Co., 785 A.2d 281, 286 (Del. 2001) (citations omitted).
9 Id. at 287 (citation omitted).

10 Id. (quoting Sonitrol Holding C0. v. Marceau Investissements, 607 A.2d 1177, 1183 (Del.
1992); Seabreak Homeowners Ass ’n v. Gresser, 517 A.2d 263, 269 (Del. Ch. 1986)).

ll Ia’. at 288 (citing Rhone-Poulenc Basic Chem. C0. v. American Motorists Ins. Co., 616 A.2d
1192, 1196 (Del. 1992); Steigler v. lnsurance Co. ofN. Am., 384 A.2d 398, 400 (Del. 1978)).

12 Id. (citing Rhone-Poulenc, 616 A.2d at 1196).

'3 Id. (citations omitted).

meaning of a contract ‘without any other guide than a knowledge of the simple

facts on which, from the nature of language in general, its meaning depends.”’14
Misrepresentation

Under Delaware law, an insurer of a motor vehicle registered in Delaware

15 Subject to certain

must provide minimum insurance coverage for PlP claims.
notice provisions, however, those same insurers may exclude certain designated
individuals from coverage under the policy.16 These exclusions are subject to
public policy limitations because Delaware’s Financial Responsibility Law
“mandates a system of insurance intended to protect and compensate persons
injured in automobile accidents.”]7

An applicant seeking insurance for her Delaware-registered automobile is
required to provide accurate information to the insurer.18 Titan argues that Ms.
Brown’s failure to disclose Mr. Hampton as a household member was so

inaccurate that it rises to the level of a material misrepresentation Under 18 Del.

C. § 2711, if the applicant made a misrepresentation in the application, the three

 

14 161 (quoting Rhone_Pouzenc, 616 A.2d ar 1196).

15 see 21 Del. C. § 2118 (2013 & supp. 2016); Progressive N. lns. Co. v. Mohr, 47 A.3d 492,
493 (D61.2012).

'6 See 18 Dez. C. § 3909 (2015 & supp. 2016).
‘7 stare Farm Mu¢. Amo. Ins. Co. v. Wagam@n, 541 A.zd 557, 560 (Del. 1988).

18 See 18 Del. C. § 2711 (2013 & Supp. 2016); Dickson-Witmer v. Um'on chkers Ins. Co., 1994
WL 164554, at *2-4 (Del. Super. Apr. 27, 1994).

prongs of §2711 are assessed to determine the materiality of the

9 A threshold question is, thus, whether the applicant made a

misrepresentationl
misrepresentation in the first place.20

A misrepresentation is defined as “an assertion that is contrary to the
facts.”21 lt is material “if it would be likely to induce a reasonable [insurer] to
manifest [its] assent” to insure the individual.22 “To find a misrepresentation under
the statute, it is enough that the plaintiff knew [her] statements were false or had

”23 Therefore, here, the Court must

reason to believe them to be incorrect.
determine whether the section “DRIVER INFORMATION” in the application is
susceptible to only one interpretation24

A. Titan’s Interpretation

Titan argues that the term “household members” is plainly defined in the

application to include “roommate(s).” Titan is correct. While “household” has

 

19 Dickson-Wil‘mer, 1994 WL 164552, at *3. See § 2711. The three prongs of§ 2711 assess
whether the misrepresentation: (l) was made fraudulently; (2) was “material either to the
acceptance of the risk or to the hazard assumed by the insurer;” or (3) if the insurer knew the true
nature of the facts, whether this knowledge would have caused the insurer “in good faith” not to
have issued the policy, change the premium rate, or impact the scope of the policy. Id.

20 See Dickson-szmer, 1994 wL 164552, at *3.

2' Windsor-Mount Joy Mut. Ins. C0. v. Jones, 2009 WL 3069695, at *3 (Del. Super. July 17,
2009) (citing Smith v. Keystone Ins. Co., 2005 WL 791387, at *2 (Del. Super. Mar. 22, 2005)).

22 161 (quoting smirh, 2005 WL 791387, at *2).
23 ()glesby v. Penn Mul'. Ll`fe Ins. Co., 877 F.Supp. 872, 891 (D. Del. 1994) (citations omitted).

24 Windsor_MounrJoy, 2009 wL 3069695, at *3.
10

been defined in related contexts to require a familial relationship,25 where a

contract sets forth a particular definition of a term, that meaning controls.26

Further,

Ms. Brown admitted that she considers Mr.

Hampton a

“roommate.” The following passage from her deposition is unequivocal on this

point:

A.

[Ms. Joyner] just said who’s in the household, and
the only name she brought up was my oldest son
living there, and l said no, but she didn’t ask me
was [sic] anybody else in my household.

That’s what the question is, note all household
members.

Well, l felt as though he wasn’t in my household.
l don’t take care of him. l take care of myself and
my [sons]. . . . [l\/lr. Hampton] pays his own, I pay
my own, l didn’t feel though he’s in my
household. . . .

>l<>l<>l<

But it also says roommate. You didn’t consider
him to be a roommate?

She didn’t say roommate.

 

25 See Engerbretsen v. Engerbretsen, 675 A.2d 13, 19-20 (Del. Super. 1995), a]j”’d, Engebretsen
[sic] v. United Serv. Auto. Ass’n, 676 A.2d 902, 1996 WL 69827 (Del. 1996) (TABLE). The
Superior Court in Engerbretsen held that “resident of the household” in a homeowner’s
insurance policy meant “one who dwells or has an abode under the same roof as the named
insured for a duration of sufficient length so that the occupiers can be said to compose a family.”
Id. at 19 (quoting Amco Ins. Co. v. Norton, 500 N.W.2d 542, 546 (Neb. 1993)). This definition
has been cited favorably in the intervening years. See, e.g., Allstate Ins. Co. v. Laurenzi, 2003
WL 22853529, at *2 & n.18 (Del. Super. Nov. 28, 2003).

26 See Lorizlard TObacco Co. v. American Legacy Found., 903 A.2d 728, 738-39 (Del. 2006).

11

.>

.>@?>.C

43

That’s what the form says.

l didn’t_only thing she told me to do was sign
where it needed to be signed.

Didn’t she ask you the questions?
She asked me this one right here (indicating).
This one right here, l’m not sure what that means.

The driver’s information where she just says
household members.

Are you saying that she never said that this section
wants you to note all household members age 15
or older including spouse, domestic partner,
roommates? She didn’t ask you that?

No. She didn’t read all of that. No.

>l<>l<>l<

[. . .] You’re saying today you can remember back
[on] December 23, 2015, that she didn’t ask you
whether or not there was a roommate?

l don’t recall her asking me a roommate. If she
would have asked me something about roommate,
yeah, l would have put his name on here,

>l<=l<>l<

Let me ask you this: lf she did ask you whether
you had a roommate, did you consider Mr.
Hampton to be your roommate?

[Objections and question re-read]

12

A. Yes. He’s my roommate.

Q. Are you saying you didn’t read this section, driver
information?

A. 1\16,1<11<111’1;.27

Therefore, Titan’s interpretation of “roommate” in the policy is reasonable.
Were it the only reasonable interpretation, the Court would be bound to find a
misrepresentation occurred, requiring the Court to engage in an analysis of the
parties’ arguments under the three prongs of § 2711. However, this is not the only
reasonable interpretation of this section.

B. Ms. Brown’s Interpretation

Ms. Brown interpreted “household members” as persons she considered her
dependents: her sons. Ironically, Ms. Brown’s interpretation comports more
closely with the common law definition of “household members” than Titan’s
broader definition in the application.28

More importantly, there is a notable dissonance between the caption of this
section_“DRIVER INFORMA TION”-and the “note” adjacent this caption. First,
from a textual perspective, the caption asks the applicant to list “drivers.” Ms.
Brown did not consider Mr. Hampton a driver. Surprisingly, nor did the agent. As

to this section, Ms. Joyner did not ask Mr. Brown if she had a roommate. Further,

 

27 Transcript of Deposition of Cheryl Brown at 22:24-28:15 (Sept. 1, 2016).

28 See supra, note 25.

13

Ms. Joyner concedes she would not have asked about unlicensed individuals in the
household because they are not “drivers” within the meaning of the section.
Although Titan disavows this comment, arguing the application is clear on its face
that it includes “roommates,” whether licensed or unlicensed, it is their agent that
established this record.

Next, the second clause, which modifies the first clause of the “note,”
requires the applicant list all “household members . . . as well as those drivers
outside the household to whom the lnsured auto(s) is furnished or available for his
or her use, including military and children away at college. . . .” Ms. Brown stated
that one of her two sons did not drive. Accordingly, one was excluded under the
policy.

On this record, this Court finds that the application section at issue is
susceptible to two different interpretations, and Ms. Brown did not make a
misrepresentation regarding Mr. Hampton’s living status in their shared residence.
l\/Ioreover, Ms. Joyner never asked her about “roommates” in her residence. To
Ms. Brown, it was reasonable to consider Ms. Joyner’s failure to ask about
roommates as indicative that Mr. Hampton, whom she considered a co-tenant and
nothing more, was not material to this section of the application. In other words,

Ms. Brown’s answer to the “DRIVER INFORMATIUN” section was reasonable.

14

Both she and the agent interpreted the term consistent with Delaware precedent
interpreting the same term.
CONCLUSION

The Court finds that the insurance contract language at issue in this case is
fairly susceptible to two different interpretations Hence, an ambiguity exists in
this section of the contract. Where such an ambiguity in an insurance contract
exists, the doctrine of contra proferentem requires the Court interpret the contract
in favor of coverage. The Court finds that Ms. Brown did not misrepresent Mr.
Hampton’s status as a co-tenant of her mobile home and hereby GRANTS
Plaintiff/Third-Party Defendant’s Motion for Summary Judgment, and DENIES

Defendant/Third-Party Plaintiff` s Motion for Summary Judgment.

 

   

IT IS SO ORDERED.
// Judge ‘Vlvla.PFE. l\/l::§lmllla
.///
oc: Prothonotary f
cc: All Counsel of Record (via e-filing) (

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