Corso v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 13 August 1987
• Docket Number: Civ. A. No. 86-312-JLL.
• Parties: Kim O. CORSO and Tracy S. Morgan, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Delaware

668 F. Supp. 364

Kim O. CORSO and Tracy S. Morgan, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

Civ. A. No. 86-312-JLL.

United States District Court, D. Delaware.

August 13, 1987.

Harold Schmittinger and William D. Fletcher of Schmittinger & Rodriguez, P.A., Dover, Del., for plaintiffs.

F. Alton Tybout and Sherry Ruggiero of Tybout, Redfearn, Casarino & Pell, Wilmington, Del., for defendant.

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

Once again, this Court must venture into the morass of Delaware uninsured motorist law and resolve a previously unanswered question of state law.¹ This is by no means the first time the federal court in Delaware has been called upon to make such a determination.² See, e.g., Walker v. State Farm Mut. Auto. Ins. Co., 661 F.Supp. 930 (D.Del.1987); Ritter v. Amica Mut. Ins. Co., 633 F.Supp. 362 (D.Del. 1986); O'Hanlon v. Hartford Acc. & Indem. Co., 439 F.Supp. 377 (D.Del.1977), modified, 639 F.2d 1019 (3d Cir.1981). The Court has jurisdiction in this action under the diversity provisions of 28 U.S.C. § 1332. Corso and Morgan are citizens of Delaware (Docket Item "D.I." 1 at ¶¶ 1-2), whereas State Farm is an Illinois corporation with its principal place of business in Illinois. (Id. at ¶¶ 3-4.)

This action was brought by two young women, Kim O. Corso ("Corso") and Tracy S. Morgan ("Morgan"), who were injured in an automobile accident. Both women seek to recover uninsured motorist benefits from State Farm Mutual Automobile Insurance Company ("State Farm") under a policy insuring Corso's car. Additionally, Corso seeks uninsured motorist benefits from a State Farm policy insuring her mother and stepfather's car. Corso and Morgan have made a motion for partial summary judgment on the issue of their entitlement to benefits from the two State Farm policies. (D.I. 10.) State Farm has made a motion for summary judgment on grounds that as a matter of law Corso and Morgan are precluded by provisions of the policies from recovering uninsured motorist benefits. (D.I. 12.)

This Court can grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Additionally, the Court must draw all inferences from the record in a light most favorable to the non-moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). As will be seen, the parties do not dispute the essential facts of this case. The potential rights and liabilities of the parties turn on this Court's legal interpretation of the effect and validity of certain provisions in the State Farm policies. Therefore, the Court will be able to grant one of the parties' motion for summary judgment.

Because this Court sits in diversity jurisdiction, it must apply the law of the forum state, Delaware, to the case. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Normally, the Court would rely on Delaware Supreme Court holdings applicable to the issues in the case. Given the absence of any such decisions, the Court must predict how the Delaware Supreme Court would resolve the disputed legal issues. Rabatin v. Columbus Lines, Inc., 790 F.2d 22, 24 (3d Cir. 1986); Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., 652 F.2d 1165, 1167 (3d Cir.1981); Willis v. Continental Casualty Co., 649 F.Supp. 707 (D.Del. 1986); Walsh v. State Farm Mut. Auto. Ins. Co., 624 F.Supp. 1093, 1097 (D.Del. 1985). An accurate forecast of what the Delaware Supreme Court would decide must begin with an examination of the best available evidence. Douty v. Nationwide Mut. Ins. Co., C.A. No. 85-027-CMW, slip op. at 5 (D.Del. April 10, 1986) Available on WESTLAW, DCT database. Evidence of state law can come in the form of lower state court decisions, related decisions and considered dicta of a state's highest court, scholarly works, and any other reliable data tending convincingly to show how the highest court would resolve the issue. Rabatin, 790 F.2d at 24; McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 662 (3d Cir.1980), cert. denied, 449 U.S. 976, 101 S.Ct. 387, 66 L.Ed.2d 237 (1980). State precedents must be scrutinized with an eye toward the broad policies behind those decisions, and the doctrinal trends they evince. McKenna, 622 F.2d at 662. With these considerations in mind, the Court will proceed to resolve the parties' motions.

II. BACKGROUND

The parties do not dispute the relevant facts of this case. Corso and Morgan were riding in Corso's 1980 Ford Mustang when they were involved in an accident on July 8, 1984, at the intersection of State Route 42 and U.S. Route 13 in Kent County, Delaware. (D.I. 1 at ¶ 7; D.I. 3 at ¶ 7.) The accident was caused by the negligence of Willie T. Mann ("Mann") who was driving a 1984 Chevrolet van owned by Herbert Jenkins ("Jenkins"). (D.I. 1 at ¶¶ 9-10; D.I. 3 at ¶¶ 9-10.)

At the time of the accident, Jenkins' van was insured by Pacific American Insurance Company ("Pacific American"). Subsequent to the accident, Pacific American became insolvent and never paid Corso or Morgan's claims for liability benefits. (D.I. 1 at ¶ 14; D.I. 3 at ¶ 14.) Mann was insured by Royal Insurance Company ("Royal"), when the accident occurred. The Royal policy had a liability coverage limit of $100,000 per occurrence which was paid equally to Corso and Morgan. (D.I. 1 at ¶ 15; D.I. 3 at ¶ 15.)

In the present action, Corso and Morgan seek to recover their damages in excess of the $50,000 each was paid by Royal. They contend they are entitled to uninsured/underinsured motorist ("UM/XIM") coverage up to the limits of $50,000 per person and $100,000 per occurrence set forth in the State Farm policy insuring Corso's Mustang ("Corso policy").³ Additionally, Corso claims she is entitled to UM/XIM benefits from a State Farm policy issued to her mother and stepfather, Mr. and Mrs. Robert E. Carey ("Carey policy"). (D.I. 1 at ¶ 22.) State Farm has denied coverage under both policies on grounds that provisions in the insurance policies preclude recovery in this particular case.

The Corso and Carey policies contain the same policy language. The policies provide for uninsured motorist coverage as follows:

We will pay damages for bodily injury and property damage an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury or property damage must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle.

THERE IS NO COVERAGE UNTIL THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY BONDS AND POLICIES THAT APPLY HAVE BEEN USED UP BY PAYMENTS OF JUDGMENTS OR SETTLEMENTS.

(D.I. 12A at A-9, A-17) (emphasis in original). The policy defines an uninsured motor vehicle as:

1. a land motor vehicle which does not have, at the time of the accident:

a. cash or securities on file with the Delaware State Treasurer, or

b. a bodily injury and property damage liability bond or insurance policy in at least the amount specified by the Delaware Motor Vehicle Safety Responsibility Law; or

2. a land motor vehicle insured or bonded for bodily injury and property damage liability at the time of the accident, but the insurer or surety:

a. legally denies coverage; or

b. is or becomes insolvent; or

c. has been placed in receivership; or

3. a land motor vehicle:

a. the ownership, maintenance or use of which may be insured or bonded for bodily injury liability are less than the limits you carry for uninsured motor vehicle coverage under this policy; or

4. a "hit-and-run" land motor vehicle whose owner or driver remains unknown and which strikes:

a. the insured; or

b. the vehicle the insured is occupying and causes bodily injury to the insured or property damage to the property of an insured; or

5. a "non-contact" land motor vehicle whose owner or driver remains unknown and which causes bodily injury to the insured or property damage to the property of the insured.

(Id. at A-17-18) (emphasis in original).

If the coverage is found to apply due to an accident involving an uninsured motorist, as defined in the policy, the coverage is subject to the following limits of liability:

6. The following applies if the vehicle in the accident is an uninsured motor vehicle as defined in items 1., 2., or 4. under the heading, "Uninsured Motor Vehicle—means":

Any amount payable under this coverage shall be reduced by any amount paid or payable to or for the insured by or for any person or organization who is or may be held legally liable for the bodily injury or property damage sustained by the insured.

7. The following applies if the vehicle in the accident is an uninsured motor vehicle as defined in item 3. under the heading, "Uninsured Motor Vehicle— means":

The most we pay will be the lesser of

a. the difference between the amount of the insured's damages for bodily injury, and the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury; or

b. the limits of liability of this coverage.

(Id. at A-18) (emphasis in original).

Additionally, the terms of the policy expressly exclude UM coverage under the following circumstances:

THERE IS NO COVERAGE:

....

2. FOR BODILY INJURY TO AN INSURED:

a. WHILE OCCUPYING, OR

b. THROUGH BEING STRUCK BY A MOTOR VEHICLE OWNED BY YOU, YOUR SPOUSE OR ANY RELATIVE IF IT IS NOT INSURED FOR COVERAGE UNDER THIS POLICY.

(Id. at A-10) (emphasis in orginal).⁴ The policy defines a "relative" as "a person related to you or your spouse by blood, marriage or adoption who lives with you." (Id. at A-2.) The parties do not...