Essick v. Barksdale, Civ. A. No. 93-359 MMS.
Decision Date | 28 March 1995 |
Docket Number | Civ. A. No. 93-359 MMS. |
Citation | 882 F. Supp. 365 |
Parties | Beverly ESSICK, individually and as Executrix of the Estate of Eva Smith, Deceased, and Mancill Smith, Plaintiffs, v. Nelson BARKSDALE and The Corporation of the Presiding Bishop of the Church of Jesus Christ of the Latter Day Saints, Defendants. |
Court | U.S. District Court — District of Delaware |
COPYRIGHT MATERIAL OMITTED
Edward B. Carter, Jr. of Kimmel, Weiss & Carter, P.A., Wilmington, DE, for plaintiffs.
Michael A. Pedicone of Dennis D. Ferri, P.A., Wilmington, DE, for defendant Nelson Barksdale.
B. Wilson Redfearn of Tybout, Redfearn & Pell, Wilmington, DE, for defendant Presiding Bishop of Church of Jesus Christ of Latter Day Saints.
Mason E. Turner, Jr. of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, DE, for defendant Nationwide Ins. Co.
This is a civil diversity suit stemming from an automobile accident in which plaintiffs' decedent, Eva Smith, a citizen of Delaware, was killed when the car she was driving collided head-on with another car. Plaintiffs Beverly Essick and Mancill Smith, also citizens of Delaware, filed this action under 10 Del.C. § 3724, Delaware's wrongful death statute. Plaintiffs initially sought recovery from the driver of the other vehicle, defendant Nelson Barksdale, a citizen of Texas, and his employer, defendant The Corporation of the Presiding Bishop of the Church of the Latter Day Saints ("LDS"), a Utah corporation. Plaintiffs later amended their complaint and joined as a defendant Nationwide Mutual Insurance Company ("Nationwide"), the decedent's own uninsured and underinsured motorist coverage carrier, an Ohio corporation. Docket Item ("D.I.") 30 at ¶¶ 13-15; D.I. 49. Plaintiffs invoke this Court's jurisdiction under 28 U.S.C. § 1332.1
Nationwide has denied liability under the decedent's underinsured motorist policy. It argues that plaintiffs have not exhausted other sources of insurance available to them through Barksdale's and LDS's automobile liability policies. In addition, Nationwide points to an excess liability insurance policy carried by LDS as precluding that defendant as qualifying under the law as an underinsured motorist. Plaintiffs have moved for summary judgment on the issue of their entitlement to recovery under their decedents' Nationwide underinsured motorist policy. For the reasons set forth in this opinion, the Court will grant plaintiffs' motion for summary judgment.
The relevant facts may be summarized briefly. On June 15, 1992, at approximately one o'clock in the afternoon, plaintiffs' decedent (Smith) was motoring south on Interstate Route 13 in Odessa, Delaware. D.I. 10 at ¶ 7. As Smith was traveling on the southbound side of this divided highway, defendant Barksdale proceeded north in his vehicle on the wrong side of the road. D.I. 46 at ¶ 3.2 The two vehicles collided head-on, injuring Smith so severely as to ultimately result in her death. D.I. 10 at ¶ 7.
At the time of the collision, Barksdale was employed by defendant LDS and admits to operating his vehicle within the scope of that employment relationship and with its consent. Id. Barksdale was insured by the Allstate Insurance Company under an automobile liability policy with limits of $50,000 per person and $100,000 per accident. D.I. 51. LDS was insured for automobile liability insurance by Lumberman's Mutual Insurance Company for $100,000 per accident. D.I. 46, Exhibit ("Exh.") Deposition of Liddell (Dep. Liddell) at 12. It is undisputed that defendant LDS has offered to tender its insurance policy limit of $100,000 to plaintiffs and that defendant Barksdale has offered $50,000 under his Allstate policy. D.I. 50; D.I. 32 at ¶ 14.
Additionally, plaintiffs' decedent carried her own automobile insurance at the time of the accident. Defendant Nationwide insured the decedent with uninsured and underinsured motorist coverage in the amount of $250,000. D.I. 34 at ¶ 13. After receiving Barksdale's and LDS's insurance offers totaling $150,000, plaintiffs added Nationwide to this action, alleging Nationwide was contractually bound to pay "underinsured coverage in the amount of a remaining $100,000" to them. D.I. 30 at ¶ 15. In its answer, Nationwide denied liability for these underinsured motorist benefits. D.I. 34 at ¶ 15. Nationwide also cross-claimed against defendant LDS, alleging that LDS had other available liability insurance protecting against "the loss referred to in the complaint, which coverage is primary to any of that provided by Nationwide and which plaintiff has an obligation to pursue, before pursuing Nationwide's coverage." Id. at ¶ 16. LDS denied this allegation. D.I. 35.
LDS did, however, carry excess liability insurance with the American Excess Insurance Association covering losses occurring between 25 million and 100 million dollars, a numerical span of 75 million dollars. D.I. 47 Exh. C. Because this insurance policy only covered claims brought against LDS for amounts in excess of 25 million dollars, however, LDS had no insurance coverage available to plaintiffs for amounts between $100,000 and $25,000,000. D.I. 46, Dep. Liddell at 12. In other words, LDS had a $24,900,000 gap in its insurance coverage. Nevertheless, Nationwide asserts that LDS did have other liability insurance in effect, the total amount "well in excess of $75 million dollars, far in excess of the limits of the Nationwide policy, $250,000." D.I. 47 at ¶ 2. With LDS covered by such insurance, Nationwide argues that LDS could not be an underinsured motorist within the meaning of the policy.
Plaintiffs, who bear the burden of proof at trial, have moved for summary judgment against Nationwide seeking payment of the underinsurance benefits under the decedent's automobile policy. The Federal Rules of Civil Procedure provide that summary judgment shall be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986), and "material facts" are those which, under applicable substantive law, might affect the outcome of the case, Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir.1994). The Court must view the facts in the light most favorable to the non-moving party, here, the Nationwide defendant, and draw all inference's in that party's favor. Id.
Nationwide does not dispute the facts as recited above. See Brief for Nationwide, D.I. 47. Instead, Nationwide challenges the legal ramifications which flow from the facts, particularly, interpretation of various clauses in two of the insurance policies at issue. Thus, the issues presented are legal, rather than factual, and suitable for resolution by summary judgment. Fed.R.Civ.P. 56(c); Associated Hardware Supply Co. v. Big Wheel Distrib. Co., 355 F.2d 114, 119 (3d Cir.1966).
As a threshold matter, a federal court sitting in diversity must address the issue of what law governs the rights and liabilities of the parties before it. In so doing, the Court looks to the substantive law of the forum state in which it sits, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); the forum state's choice of law doctrine is included within its substantive law, Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Kruzits v. Okuma Machine Tool, Inc., 40 F.3d 52, 55 (3d Cir.1994).
Because the issues at summary judgment turn on the construction of the Nationwide insurance policy, the Court must examine Delaware's choice of law provisions for matters sounding in contract, where, as here, the Court has no record of an effective choice of law by the parties. Delaware has adopted the "most significant relationship test" under section 188 of the Restatement (Second) of Conflict of Laws as the choice of law rule relevant to the instant issues. Oliver B. Cannon and Son, Inc. v. Dorr-Oliver, Inc., 394 A.2d 1160, 1166 (Del.1978). Under section 188, the rights and duties of the parties with respect to an issue in contract are determined by the local law of the state with the most significant relationship to the transaction and the parties under the following principles: a) the place of contracting, b) the place of negotiation of the contract, c) the place of performance, d) the location of the subject matter of the contract, and e) the domicile, residence, or place of incorporation and place of business of the parties. Restatement (Second) of Conflicts § 188 (1971). Because factors a, b, c, d and part of e of the Restatement (Second) factors point to Delaware, the Court holds that Delaware has the most significant relationship to the occurrence and the parties in the case sub judice. Thus, Delaware law shall control.
Once again, this Court must venture into the morass of Delaware underinsured motorist law and resolve questions of state law not yet addressed by the state's highest court. See Connell v. Liberty Mut. Ins. Co., 841 F.Supp. 578 (D.Del.), aff'd mem., 37 F.3d 1486 (3d Cir.1994); Krutz v. Harleysville Mut. Ins. Co., 766 F.Supp. 219 (D.Del.1991); cf. Corso v. State Farm Mut. Auto. Ins. Co., 668 F.Supp. 364, 365 (D.Del.1987), aff'd mem., 838 F.2d 1205 (3d Cir.1988). Because there is no ruling from the Supreme Court of Delaware on the issues presented in this action, this Court must predict how that court would resolve them were it called upon to do so. Wiley v. State Farm Fire and Cas. Co., 995 F.2d 457, 459 (3d Cir.1993). Although this assignment may be...
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