Bermel v. Liberty Mut. Fire Ins. Co.

• Decision Date: 12 December 2012
• Docket Number: 2012.,No. 224,224
• Parties: Bruce BERMEL and Pamela Jurga, husband and wife, Plaintiffs Below, Appellants, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant Below, Appellee.
• Court: United States State Supreme Court of Delaware

56 A.3d 1062

Bruce BERMEL and Pamela Jurga, husband and wife, Plaintiffs Below, Appellants,

v.LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant Below, Appellee.

No. 224, 2012.

Supreme Court of Delaware.

Submitted: Oct. 24, 2012.

Decided: Dec. 12, 2012.

Court Below—Superior Court of the State of Delaware, in and for Kent County, C.A. No. K10C–06–011.

Upon appeal from the Superior Court. Affirmed.

Keith E. Donovan, Esquire (argued) and Allyson Britton DiRocco, Esquire, Morris, James, LLP, Dover, Delaware, for appellants.

Nancy Chrissinger Cobb, Esquire, Chrissinger & Baumberger, Wilmington, Delaware, for appellee.

Before HOLLAND, BERGER, JACOBS and RIDGELY, Justices, and GLASSCOCK, Vice Chancellor,¹ constituting the Court en Banc.

HOLLAND, Justice:

The plaintiff-appellants, Bruce Bermel (“Bermel”) and Pamela Jurga (“Jurga”), as husband and wife,² appeal from the final judgment of the Superior Court granting the motion for summary judgment of the defendant-appellee, Liberty Mutual Fire Insurance Company (“Liberty”). The appellants contend that the Superior Court erred by granting summary judgment in favor of Liberty. Bermel was injured in an automobile accident when his personally-owned and insured motorcycle was struck head-on by another driver. Bermel, then an employee of the Siemens Corporation (“Siemens”), contends that the business policy issued to Siemens by Liberty (the “Liberty Policy”), on a company car that was assigned for his business and personal use, provided him with $100,000 in underinsured motorist coverage even when he was operating a non-work vehicle in circumstances unrelated to his employment.

Bermel brought this action for underinsured benefits (“UIM”) against Liberty. First, Bermel argues that the Liberty Policy covering the company car he used was personal to him, even though Siemens was the named insured. According to Bermel, excluding coverage based on the vehicle being occupied at the time of the accident is tantamount to an impermissible “other motor vehicle” exclusion. Second, Bermel argues that he is entitled to personally access the Liberty Policy because Siemens automatically deducted a nominal fee from his paycheck for his personal use of the vehicle assigned to him that was insured by the Liberty Policy. Finally, Bermel argues that the Liberty Policy is ambiguously drafted and should be construed in his favor.

We have concluded that the Superior Court correctly found Siemens, and not Bermel, to be the named insured on the Liberty Policy. We have also concluded the Superior Court properly ruled that the nominal fee charged to Bermel by Siemens for the use of the car did not make Bermel a named insured under the Liberty Policy. Finally, we have concluded that the Liberty Policy is unambiguous. Therefore, the judgments of the Superior Court must be affirmed.

Facts

On June 8, 2008, Bermel, a resident of Delaware, was injured when his personally-owned and insured 2001 Harley Davidson motorcycle was struck by another vehicle in the Town of Deerpark in Orange County, New York. There is no dispute that for purposes of this appeal, the other driver (“the tortfeasor”) was at fault. As a result of his injuries, Bermel remained an in-patient at the Westchester Medical Center until July 14, 2008,³ and his medical expenses exceeded $800,000.

The tortfeasor was insured by Progressive Preferred Insurance Company (“Progressive”) with bodily injury liability limits of $25,000. Progressive paid Bermel the $25,000 liability policy limits. Three other vehicles were identified as potentially having underinsured motorist coverage to further compensate Bermel for his injuries: a Chrysler 300 (insured under the Liberty Policy), Bermel's motorcycle (insured by Foremost Insurance Company (“Foremost”)), and Jurga's Honda Accord (insured by Amica Mutual Insurance Company (“Amica”)).

Amica paid its UIM policy limits of $300,000. Foremost paid its UIM policy limits of $15,000. Liberty denied coverage to Bermel on the ground that Bermel was not a covered insured under the Liberty Policy when he was operating a personally-owned motorcycle unrelated to the course or scope of his employment with Siemens.

The Liberty Policy

At the time of the accident, Bermel was employed by Siemens. Bermel's employment with Siemens began in 1978. In 1978, Bermel was employed by DuPont's medical diagnostics division. In 1996, that division was sold by DuPont to Dade International. A year later, Dade International merged with Behring Diagnostics, resulting in a company called Dade Behring. In 2007, Dade Behring was purchased by Siemens. Because the transactions were a series of corporate acquisitions, Bermel can be considered an employee of Siemens for the entire period.

Beginning in the mid–1980s, Bermel's compensation package provided for a company car. Those cars included the Chrysler 300 Bermel had access to at the time of the accident. Bermel was permitted to use the Chrysler 300 for business and personal use. The record reflects that until his retirement from Siemens, Bermel never owned a separate personal car. Siemens deducted a minimal amount of money from Bermel's paycheck to cover the personal use of the Chrysler 300.

The Chrysler 300 was part of a Siemens fleet of cars and was insured on a Business Auto Policy issued by Liberty. The named insured on that Business Auto Policy was “Siemens Corporation, Advanced Burner Technologies, Bridges Electric, and Siemens IT Solutions & Services.” Bermel was not personally named on the Liberty Policy issued to Siemens, nor did he pay any portion of the insurance premiums.

The parties agree that at the time of the accident, Bermel was not acting in the course or scope of his employment. It is also undisputed that Bermel's 2001 Harley Davidson motorcycle was not a replacement vehicle for the Chrysler 300, which was operational at the time of the accident.

The Superior Court Action

In a letter dated October 15, 2009, Liberty denied UIM coverage to Bermel. On June 8, 2010, the plaintiffs filed a complaint against Liberty in the Superior Court, alleging that they were entitled to $100,000 in UIM benefits under the Liberty Policy. In response, Liberty simultaneously filed an answer and a motion for summary judgment, on July 27, 2011. The plaintiffs filed their opposition to that motion on October 3, 2011. The Superior Court heard oral argument on October 7, 2011, and requested supplemental submissions from the parties on December 15, 2011.

On March 29, 2012, the Superior Court granted Liberty's motion for summary judgment. The Superior Court determined that the exclusionary language of the policy was consistent with our decision in Frank v. Horizon Assurance Co.⁴ The Superior Court further determined that Bermel was not a named insured under the terms of the Liberty Policy, that the nominal fee deduction did not convert Bermel into a named insured, and that the policy was unambiguously drafted. Therefore, the Superior Court held that the plaintiffs could not access the UIM coverage under the Liberty Policy and granted summary judgment in favor of Liberty. Bermel and Jurga filed a timely direct appeal with this Court.

Standard of Review

We review a trial court's decision to grant summary judgment, and questions of law, de novo.⁵ To the extent that this Court reviews the judicial construction of a statute, our review is also de novo to determine whether the Superior Court “erred in formulating or applying legal precepts.” ⁶

Underinsured Motorist Statute

Underinsured motorist vehicle coverage is treated the same as uninsured (“UM”) coverage under title 18, section 3902(a) of the Delaware Code (“Section 3902”),⁷ which provides as follows:

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 vehicles for bodily injury, sickness, disease, including death, or personal property damage resulting from the ownership, maintenance or use of such uninsured or hit-and-run motor vehicle. (emphasis added).

Section 3902 requires UM/UIM coverage to be provided to a named insured unless it is affirmatively waived.⁸ However, a claimant may recover under the statute only if they fall within the class of persons protected by the statute.⁹

Frank v. Horizon Assurance Co.

This Court has held previously that other motor vehicle (“OMV”) exclusions, which bar uninsured or underinsured motorist benefits to named insureds for claims involving owned vehicles not insured under that policy, are void under the Delaware Underinsured Motorist Statute.¹⁰

In Frank v. Horizon Assurance Co., Julie Frank (“Frank”) sought recovery from Horizon Assurance Company (“Horizon”) for uninsured motorist benefits arising from an accident that occurred while she was in a family-owned 1978 Toyota, which was insured by the Hartford Insurance Company.¹¹ At the time of the accident, Frank and her husband jointly owned two other automobiles: a 1970 Ford and a 1979 Chevrolet. These vehicles were insured under a Horizon policy that contained an OMV exclusion—that is, the exclusion explicitly disclaimed UM/UIM coverage arising from an accident occurring in a vehicle that was owned by Frank, but was not listed under that Horizon policy. ¹²

In Frank, we held that OMV exclusions were incompatible with statutorily created uninsured motorist insurance, because uninsured motorist coverage was personal to the insured and public policy prohibited the limiting of coverage based on the manner the insured was injured.¹³ In support of our holding, we stated that “Frank seeks only coverage for which she, or her husband with whom she shares co-insured identity,...