Opinion
C.A. No. 01C-07-018 RRC
Submitted: July 15, 2002
Decided: October 10, 2002
UPON PLAINTIFFS' MOTION FOR DECLARATORY JUDGMENT AGAINST DEFENDANT USAA CASUALTY INSURANCE COMPANY. DECLARATORY JUDGMENT ISSUED.
ORDER
This 10th day of October, 2002, upon consideration of Plaintiffs' motion for a declaratory judgment, it appears to this Court that:1. The issue currently before the Court is the construction and interpretation of the underinsured motorist benefits provision contained in an automobile policy that defendant USAA Casualty Insurance Company ("USAA") issued to James and Karen Shumaker. That policy, administered under the laws of Virginia, covered several vehicles, each of which required payment of a separate premium. For the reasons that follow, the Court issues a declaratory judgment that, because the insurance policy did not "clearly and unambiguously" prohibit it, the laws of Virginia permit James Shumaker to "stack" the underinsured motorist benefits coverages afforded under the policy due to the multiple vehicles listed thereon and the separate premium payments made for each, the effect of which is to increase the insurance payout potentially recoverable by the plaintiffs in this action.
USAA apparently had also issued plaintiff Dessa Warren an automobile insurance policy (Compl. ¶ 56), but the present motion concerns only James Shumaker's policy.
2. This suit began with Dessa Warren and James Shumaker (collectively the "Plaintiffs") filing a six-count complaint against Christopher Warren (no apparent relation to plaintiff Dessa Warren), Ford Motor Company ("Ford"), and USAA. The suit arose out of a July 3, 1999 motor vehicle collision between plaintiff James Shumaker's Ford Explorer and a vehicle that defendant Christopher Warren was driving. Dessa Warren is the mother of Andrew Shumaker and Kenneth Shumaker, a minor for whose benefit Ms. Warren has been appointed next friend; James Shumaker, in addition to being the father of both Andrew and Kenneth Shumaker, was the spouse of Karen Shumaker. Both Andrew Shumaker and Karen Shumaker died as a result of the subject collision.
The alleged facts of the collision common to all defendants are as follows: James Shumaker was operating the Ford Explorer "in a northerly direction in the left hand lane of Interstate 95 in Newark, Delaware"; Andrew Shumaker, Kenneth Shumaker, and Karen Shumaker were passengers in the vehicle; Christopher Warren "was operating a 1985 Subaru LX . . . in a northerly direction in the left center lane of Interstate 95 to the right of and behind the Explorer"; "the right rear wheel of the Subaru separated from the rear axle"; "the left front of the Subaru struck the left rear corner of the Explorer . . ."; "the Explorer began to rotate in a clockwise direction until the tire rims on the left side of the Explorer dug into the asphalt pavement" and the vehicle "began a series of rollovers"; "Andrew [Shumaker] was ejected from the Explorer after falling out of his seatbelt . . ."; Karen Shumaker "was ejected from the Explorer through the right front window . . ."; Andrew Shumaker died as a result of "craniocerebral trauma and cervical spine fracture"; Karen Shumaker died as a result of "blunt force injuries"; James Shumaker and Karen Shumaker "were named insureds under the terms of . . . [an insurance policy provided by USAA]"; and that insurance policy "contained coverage for losses occasioned by underinsured drivers."
Compl. ¶ 17.
Compl. ¶ ¶ 18-22.
Compl. ¶ 23.
Compl. ¶ 24.
Compl. ¶ 28.
Compl. ¶ 30.
Compl. ¶ 31.
Compl. ¶ 35.
Compl. ¶ 41.
Compl. ¶ 39.
Compl. ¶ 44.
Compl. ¶ 54.
Compl. ¶ 53.
The complaint additionally charges both Christopher Warren and Ford with negligence, wrongful death, and damages for the injuries suffered by Karen Shumaker and Andrew Shumaker from the time they were injured until the times of their deaths; Ford was also individually charged with breach of warranty. USAA was listed as a defendant because Christopher Warren was alleged to have been an underinsured motorist.
Although the vehicle collision that forms the basis for Plaintiffs' present lawsuit occurred in Delaware, the insurance policy issued to James and Karen Shumaker indicates that it was a "Virginia Auto Policy." The policy also indicated that it covered four vehicles (the Explorer being one of the four), and that for each vehicle covered, USAA charged a separate premium. The policy also contains two separate purported limitations of USAA's potential monetary liability, the first in Part A ("Liability Coverage") and the second in Part C ("Uninsured/Underinsured Motorists Coverage").
See "Amended Declarations" (Ex. "B" to Pls.' Mot.).
In the "Liability Coverage" section of the subject insurance policy, USAA's purported liability was expressly limited "regardless of the number of . . . vehicles or premiums shown in the Declarations, or vehicles involved in the auto accident." In contrast, the "Uninsured/Underinsured Motorist Coverage" section of the subject insurance policy purportedly limited USAA's liability "regardless of the number of . . . vehicles involved in the accident." The stated limitations under both the "Liability Coverage" and "Uninsured/Underinsured Motorist Coverage" sections of the subject insurance policy were $100,000 per person and $300,000 per occurrence.
See "Part A — Liability Coverage" (Ex. "A" to Pls.' Mot.).
See "Part C — Underinsured Motorist Coverage" (Ex. "A" to Pls.' Mot.).
See "Amended Declarations" (Ex. "B" to Pls.' Mot.).
Plaintiffs now seek a declaratory judgment that the stated limits of underinsured motorist coverage afforded by the subject insurance policy "apply separately to each vehicle insured under the policy and may be [`]stacked['] so that the maximum amount of coverage for each individual is $400,000 and the maximum amount of coverage for the collision at issue is $1,200,000.00." For the reasons that follow, the Court issues a declaratory judgment in the form that Plaintiffs are now seeking.
Pls.' Mot. at 1.
3. The Court initially notes that both Plaintiffs and USAA agree (as does the Court) that Virginia law is determinative in the construction of the terms of the subject policy. Substantively, Plaintiffs argue that the "Uninsured/Underinsured Motorist Coverage" section of the policy is "at best ambiguous and must be construed against USAA." Plaintiffs arrive at this conclusion by comparing the language contained within the two purported monetary limitations contained within the policy; they argue that through such a comparison, it is apparent that "USAA did not intend to preclude stacking of underinsured motorist coverage for the multiple vehicles covered by the [p]olicy." Plaintiffs posit that "[h]ad the ["Uninsured/Underinsured Motorist Coverage" part of the] [p]olicy limited coverage regardless of the number of vehicles insured [such as was done in the "Liability Coverage" part of the policy], such language would have clearly and unambiguously precluded stacking." In support of their argument, Plaintiffs particularly rely on the Supreme Court of Virginia's decisions in Goodville Mutual Casualty Company v. Borror and Lipscombe v. Security Insurance Company of Hartford.
Pls.' Mot. ¶ 15.
Pls.' Mot. ¶ 17.
Pls.' Mot. ¶ 14.
275 S.E.2d 625 (Va. 1981) (holding that the stacking of uninsured motorist coverage will be permitted unless clear and unambiguous language exists on the face of an insurance policy to prevent such multiple coverage).
189 S.E.2d 320 (Va. 1972) (stating the "familiar principle" that when an ambiguity exists on the face of an insurance policy, it must be construed against the drafter of that policy, i.e., the insurer).
In response, USAA does not dispute that the Goodville case stands for the proposition that under Virginia law, where an insurance policy is unclear on its face (and is therefore ambiguous) and an insured has paid a separate premium for each vehicle covered under that policy, then the insured should be permitted to "stack" or accumulate the multiple coverages potentially afforded under the policy. Rather, USAA argues that the Goodville court "did not analyze the fundamental difference in the nature of . . . [underinsured motorist] coverage from other types of coverage normally carried in an auto policy." According to USAA, the "fundamental difference" between the two is "that liability coverage is vehicle specific whereas . . . [underinsured motorist] coverage is person specific"; accordingly, USAA argues that in order to avoid ambiguity in the "Part A — Liability" portion of the subject policy, "the extra term concerning the [`]number of vehicles or premiums shown in the declarations['] was necessary." USAA further contends that "because . . . [underinsured motorist] coverage is person specific . . . [Plaintiffs] should reasonably expect that . . . [the insureds were] entitled to claim . . . [underinsured motorist] benefits only once, and not stack . . . benefits for each vehicle listed[,]" i.e., there was no ambiguity within the "Uninsured/Underinsured Motorist Coverage" section of the policy.
Def.'s Resp. ¶ 9.
Def.'s Resp. ¶ 19.
Id.
At oral argument on this motion, counsel for USAA acknowledged that the argument it now advances was not squarely decided by the Supreme Court of Virginia in Goodville, and that subsequent decisions by that court appear not to have overruled or modified that decision.
4. Delaware's Declaratory Judgment Act provides a means for securing judicial relief in an expeditious and comprehensive manner. The Act is entitled to a liberal application. Title 10, section 6502 of the Delaware Code provides in pertinent part:
DEL CODE ANN. tit. 10, Ch. 65 (1999).
Hoechst Celanese Corp. v. National Union Fire Ins. Co., 623 A.2d 1133 (Del.Super.Ct. 1992).
Stabler v. Ramsay, 89 A.2d 544 (Del. 1952).
Any person interested under a . . . written contract . . . may have determined any question of construction or validity arising under the . . . contract . . . and obtain a declaration of rights, status or other legal relations thereunder.
DEL CODE ANN. tit. 10, § 6502 (1999).
Additionally, four elements are required to consider a controversy suitable for declaratory judgment: 1) the controversy must involve a claim of right or other legal interest of the party seeking declaratory relief; 2) the claim of right or other legal interest must be asserted against one who has an interest in contesting the claim; 3) the conflicting interests must be real and adverse; and 4) the issue must be ripe for judicial determination.
Rollins Int'l Inc. v. International Hydronics Corp., 303 A.2d 660, 662 (Del. 1973).
5. In Goodville, the Supreme Court of Virginia, after announcing that "stacking" of uninsured motorist coverage would be permitted unless "clear and unambiguous" language existed on the face of the policy to prevent multiple coverage, held that the language contained in the policy at issue there was unambiguous, and that the insured could therefore not receive multiple coverages under the policy. Specifically, that court concluded that the policy language under the heading "PROTECTION AGAINST UNINSURED MOTORISTS INSURANCE" which limited the insurer's monetary liability "regardless of the number of . . . motor vehicle to which this insurance applies" unambiguously limited the insurer's liability in a way that prevented "stacking." The fact that the policy covered two separate vehicles and the insured paid two separate premiums did not change that court's analysis "in light of the express language of the policy."
Goodville, 275 S.E.2d at 628.
Id.
Id.
The distinction between "liability coverage" and "uninsured/underinsured motorist coverage" that USAA advances here was in fact considered by the Supreme Court of Virginia in its earlierLipscombe decision. After noting the "special nature" of uninsured motorist coverage, i.e., that "[u]ninsured motorist coverage is designed to protect not vehicles but persons," the Lipscombe court held that a policy exclusion contained within the uninsured motorist provision of the policy at issue there was not sufficiently unambiguous to prevent "stacking." In rendering its Goodville decision, however, the Supreme Court of Virginia made no reference to this part of theLipscombe decision, but stated only that "it is now the rule in Virginia that the stacking of . . . [uninsured/underinsured] coverage will be permitted unless clear and unambiguous language exists on the face of the policy to prevent such multiple coverage."
Lipscombe, 189 S.E.2d at 322.
Goodville, 275 S.E.2d at 627.
In contrast to the language included in the policy at issue in the Goodville decision and which the Supreme Court of Virginia determined to unambiguously prevent "stacking" of coverage, the policy language at issue here does not clearly and unambiguously limit USAA's potential monetary liability "regardless of the number of vehicles covered" under the policy, at least not in the "Uninsured/Underinsured Motorist Coverage" section. Rather, the language in that section seems to limit availability of those benefits only insofar as the number of "vehicles involved in the accident." Goodville indicates that a reviewing court look need no further than the uninsured/underinsured portion of a policy to construe such a policy against its drafter. Because there is no clear limitation on the insurer's uninsured/underinsured liability such as there was in Goodville, and because James and Karen Shumaker maintained more than one vehicle on the subject policy while paying separate premiums for each, Goodville dictates that under Virginia law, the policy be construed against USAA. As Plaintiffs argued in their motion, "if USAA intended to prevent such stacking, the language used in the effort does not rise to the level required under the law of Virginia, and at best is ambiguous . . . ."
See "Part C — Underinsured Motorist Coverage" (Ex. "A" to Pls.' Mot.).
Pls.' Mot. ¶ 17.
The parties and the Court agree that this issue is ripe for a declaratory judgment. Given that the other requirements of Delaware's Declaratory Judgment Act have been met (the present controversy involves a claim of right of the party seeking declaratory relief asserted against one who has an interest in contesting the claim and the conflicting interests are real and adverse), Plaintiffs are entitled to the declaratory judgment that they now seek.
6. For the reasons stated above, a declaratory judgment now issues that the maximum available policy limits under the underinsured policy limits contained in the insurance policy that James and Karen Shumaker maintained with USAA Casualty Insurance Company are $400,000 for each individual and $1,200,000 for the collision at issue.
IT IS SO ORDERED.