O'HANLON v. Hartford Acc. & Indem. Co.

• Decision Date: 02 October 1978
• Docket Number: Civ. A. No. 76-59.
• Parties: Patrick J. O'HANLON, Individually and as Administrator of the Estate of Brian O'Hanlon, Plaintiff, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a Connecticut Corporation, et al., Defendants.
• Court: U.S. District Court — District of Delaware

457 F. Supp. 961

Patrick J. O'HANLON, Individually and as Administrator of the Estate of Brian O'Hanlon, Plaintiff, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, a Connecticut Corporation, et al., Defendants.

Civ. A. No. 76-59.

United States District Court, D. Delaware.

October 2, 1978.

David Roeberg of Roeberg & Agostini, P.A., Wilmington, Del., for plaintiff.

F. Alton Tybout of Tybout & Redfearn, Wilmington, Del., for defendant Insurance Company of North America.

OPINION

STAPLETON, District Judge:

The sole question now before the Court is whether Section 3902 of Title 18 of the Delaware Code, pertaining to uninsured motorist insurance, applies to an excess liability insurance policy which, up to a limit of $1,000,000, insures the policy holder, inter alia, for bodily injury, death and property damage liability to a third party in excess of the $100,000/$300,000 retained limits of primary coverage. This issue was raised earlier on cross-motions for summary judgment. Although there was no dispute at that time regarding any relevant adjudicative facts, I nevertheless concluded that disposition of this issue should await a fuller development of the record.¹ An evidentiary hearing was subsequently held at which the parties were afforded the opportunity to present any evidence which might shed light on the "legislative facts" surrounding the enactment of Section 3902.

Legislative facts are "those which have relevance to legal reasoning and the lawmaking process, whether in the formulation of a legal principle or ruling by a judge . . . or in the enactment of a legislative body."² Advisory Committee Notes to Federal Rule of Evidence 201. The Federal Rules of Evidence prescribe no procedure by which courts are to go about receiving information regarding legislative facts, but the approach discussed there "leaves open the possibility of introducing evidence through regular channels in appropriate situations." Advisory Committee Notes to Federal Rule of Evidence 201.

Courts regularly and inevitably engage in findings of legislative facts. While these facts are not normally developed through the presentation of evidence,³ there are instances when access to the pertinent data is most appropriately received through live testimony presented by the parties. This is one of those cases.

When a court is attempting to ascertain information relating to the marketing practices of an industry at a point in time, and to draw inferences from those practices regarding the intent of the legislature in fashioning legislation, the relevant data is most readily available through witnesses familiar with those practices.⁴ Those witnesses not only can provide information through direct examination, but are also available for cross-examination⁵ and to answer any inquiries which the Court might have. For these reasons, I agree that "once the court decides to advise itself in order to make new law, it ought not add to the risk of a poor decision by denying itself whatever help on the facts it can with propriety obtain." 1 Weinstein and Berger, Weinstein's Evidence (1977 ed.), ¶ 200003, p. 200-16.

The hearing held in this case fulfilled its purpose. As the remainder of this Opinion will demonstrate, the evidence of legislative facts submitted at that time was of substantial assistance in understanding and resolving the issue before the Court.⁶

When originally enacted in 1967, subsections (a) and (b) of Section 3902 read as follows:

§ 3902. Uninsured vehicle coverage; insolvency of insurer

(a) No policy insuring against liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this State with respect to any such vehicle registered or principally garaged in this State unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages, from owners or operators of uninsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, resulting from the ownership, maintenance, or use of such uninsured or hit-and-run motor vehicle. Except, that no such coverage shall be required in or supplemental to a policy where rejected in writing, on a form furnished by the insurer describing the coverage being rejected, by an insured named therein; or upon any renewal of such policy unless the coverage is then requested in writing by the named insured. The coverage herein required may be referred to as "uninsured vehicle coverage."

(b) The amount of coverage to be so provided shall be not less than the minimum limits for bodily injury liability insurance provided for under the motorist financial responsibility laws of this State.

In 1971 the General Assembly amended subsection (b) to read as follows:

(b) The amount of coverage to be so provided shall not be less than the maximum⁷ limits for bodily injury, death and property damage liability insurance provided for under the motorist financial responsibility laws of this State. The coverage for property damage shall be subject to a $250 deductible for property damage arising out of any 1 accident unless the insurer and the insured agree in writing to a different deductible. Each insured shall be offered the option to purchase additional coverage for personal injury or death up to a limit of $300,000, but not to exceed the limits for personal injury set forth in the basic policy.

As used herein, the term "property damage" shall include the loss of use of a vehicle.

These subsections read in this way in February of 1974 when the excess or "umbrella", liability policy involved in this case was issued.

As this Court noted in its earlier Opinion,⁸ while this policy provides a number of coverages other than its excess automobile liability coverage, it nevertheless is a policy which also insures against "liability arising out of the ownership, maintenance or use" of a motor vehicle, which was delivered in this state, and which had the effect of insuring liability arising from vehicles registered in Delaware. Section 3902 can thus be read to cover the policy here at issue. The background, evolution and purpose of the statute, as well as industry practice at the time of its enactment, however, lead me to reject this reading.

Uninsured motorist coverage ("UM coverage") was first conceived in the mid-50's as an alternative to a proposed compulsory liability insurance statute in the State of New York. The New York legislature ultimately adopted a compulsory liability insurance approach without an uninsured motorist feature, but the casualty insurance industry thereafter began to offer UM coverage, in connection with the issuance of standard automobile policies, the limits of which corresponded to the minimum amount of liability insurance required by the financial responsibility laws of the particular state. Gradually, each of the fifty states thereafter enacted legislation in some form which required the issuance of UM coverage with automobile liability policies. In every instance, the minimum limits required corresponded with the amount of liability coverage required by the state's financial responsibility laws.

Delaware took this step in 1967. The single purpose of that original uninsured motorist statute is reflected in my earlier Opinion:

. . . the concern which prompted this statute was the plight of individuals who suffer injury or damage at the hand of one from whom compensation for that injury or damage cannot be secured. The legislature sought to encourage insurance protection for such individuals. Section 3902 . . . requires that uninsured motorist coverage in a minimum amount be included in all liability insurance policies issued with respect to Delaware vehicles unless the insured rejects the coverage in writing. . . .

The . . . function of the statute is to set a floor on the amount of coverage required in the absence of a written waiver. This floor has been established by reference to the State's financial responsibility statute . . ..

* * * * * *

. . . Reading the two statutes together, I conclude that Section 3902 creates a scheme whereby any individual who does not expressly opt out in writing will be assured of the same minimum pool of resources from which to seek compensation for injuries inflicted by an uninsured motorist as he would have in the event of injuries inflicted by a person having the minimum coverage permitted under Delaware law — that is, $10,000. . . .

O'Hanlon v. Hartford Acc. & Indem. Co., 439 F.Supp. 377, 382-3 (D.Del.1977).

Any excess liability insurance policy which includes automobile liability coverage, by definition, assumes the existence of primary, third party, automobile liability insurance. In any state which has an uninsured motorist insurance statute such as Section 3902, the existence of primary third party automobile liability insurance assumes either the existence of UM coverage equivalent in amount to the liability coverage mandated by the financial responsibility law or a written waiver of that coverage. Thus, in any situation involving the issuance of an excess liability policy, the limited objective of the 1967 statute would already have been fulfilled before...