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

• Decision Date: 26 July 2013
• Docket Number: No. 121,2012.,121
• Citation: 73 A.3d 926
• Parties: Matthew KELTY, Plaintiff Below, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant Below, Appellee.
• Court: Supreme Court of Delaware

73 A.3d 926

Matthew KELTY, Plaintiff Below, Appellant,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant Below, Appellee.

No. 121, 2012.

Supreme Court of Delaware.

Submitted: May 8, 2013.

Decided: July 26, 2013.

Court Below: Superior Court of the State of Delaware, in and for New Castle County, C.A. No. N10C–08–246.

Upon appeal from the Superior Court. REVERSED and REMANDED.

Gary S. Nitsche, Weik, Nitsche & Dougherty, Wilmington, Delaware for appellant.

Danielle K. Yearick (argued) and Nicholas M. Tyler, Tybout, Redfearn & Pell, Wilmington, Delaware for appellee.

Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS and RIDGELY, Justices constituting the Court en Banc.

STEELE, Chief Justice:

This case addresses the scope of insurance coverage under Delaware's personal injury protection (PIP) statute.¹ A plaintiff who was injured in an accident sought PIP benefits from an insurance carrier. To determine whether the plaintiff was entitled to PIP benefits, a Superior Court judge applied Delaware's current three-part test and analyzed: (1) “whether the vehicle was an ‘active accessory’ in causing the injury,” (2) “whether there was an act of independent significance that broke the causal link between use of the vehicle and the injuries inflicted,” and (3) “whether the vehicle was used for transportation purposes.” ² After concluding that the insured vehicle was not used for transportation purposes, a Superior Court judge granted the insurance carrier's motion for summary judgment. After reexamining the current Delaware statutory framework for PIP coverage, we conclude that the test's “transportation purposes” element must be rejected. Therefore, we must REVERSE the Superior Court judgment and REMAND.

I. FACTUAL AND PROCEDURAL BACKGROUND ³

A. Matthew Kelty Falls from a Tree While Cutting Branches

On August 3, 2008, Plaintiff–Appellant Matthew Kelty was at John and Shirley Lovegrove's residence helping the Lovegroves cut branches from the top of a tree. Kelty climbed into the tree, positioned himself among the branches, and used a chainsaw to cut branches off the tree. Because the tree stood near a power line, Kelty and the Lovegroves needed a way to ensure that the trimmed branches would fall away from the power line after being cut. Their solution was to tie one end of a rope to the targeted branch and the other end to the trailer hitch on John's truck. John sat in the truck and accelerated in order to pull the rope taut, while Kelty cut the branch. When a branch fell, the rope would pull it away from the power line. Shirley, who was standing nearby, would then drag the branch away.

As one might expect, this plan went awry. Kelty claims that while he was cutting a branch, John rapidly accelerated, causing the rope to snap.⁴ Freed of the truck's pull, the branch recoiled, broke off the tree, struck the power line, and knocked Kelty out of the tree in the process. Kelty suffered multiple injuries.

Kelty sued John, whose automobile insurer, Defendant–Appellee State Farm Mutual Automobile Insurance Company, settled the claim under the bodily injury liability coverage in the policy. Kelty also sought benefits based on John's PIP coverage under the same policy. State Farm denied Kelty's PIP claim.

B. Procedural History

After State Farm denied Kelty's PIP claim, Kelty sued State Farm in Superior Court. State Farm moved for summary judgment under Superior Court Civil Rule 56, arguing that Kelty was not entitled to PIP benefits under 21 Del. C. § 2118. The Superior Court judge applied the three-part test ⁵ that this Court had previously adopted to determine whether a person is entitled to PIP benefits.⁶ He concluded that there was no genuine issue about the material fact that Lovegrove was not using the truck for transportation purposes when Kelty fell—as the test's third prong requires—and he therefore granted State Farm's summary judgment motion.⁷ Kelty appeals from the Superior Court's grant of summary judgment.

II. STANDARD OF REVIEW

We review a Superior Court judge's decision to grant summary judgment de novo.⁸ When evaluating a grant of summary judgment, “we view all facts in the light most favorable to the nonmoving party” in order to determine whether there is a genuine issue of material fact in dispute.⁹ We also review a trial judge's interpretation of a statute de novo.¹⁰

III. ANALYSIS

A. 21 Del. C. § 2118's Structure

The proper scope of Delaware's PIP statute is a question of statutory interpretation. When interpreting a statute, we attempt to determine and give effect to the General Assembly's intent.¹¹ We give unambiguous statutory language its plain meaning “unless the result is so absurd that it cannot be reasonably attributed to the legislature.” ¹² If we determine that a statute is ambiguous, we “will resort to other sources, including relevant public policy,” to determine the statute's purpose. ¹³

The General Assembly requires owners of Delaware-registered motor vehicles to obtain certain “minimum insurance coverage” before using their vehicles. The relevant statute, 21 Del. C. § 2118, recognizes four types of insurance coverage: (1) indemnification for damages arising from legal liability, (2) no-fault “special damages” compensation for injured persons (PIP coverage), compensation for property damage, and (4) compensation for damage to the insured vehicle.¹⁴

Section 2118(a)(1) requires insurance providing “[i]ndemnity from legal liability for bodily injury, death or property damage arising out of ownership, maintenance or use of the vehicle.” ¹⁵Section 2118(a)(2) contains the PIP mandate, which requires insurance providing for “[c]ompensation to injured persons for reasonable and necessary expenses” and provides, in relevant part, that “[t]he coverage required by this paragraph shall be applicable ... to any other personinjured in an accident involving [ the insured ] motor vehicle, other than an occupant of another motor vehicle.” ¹⁶

B. The Klug Test's Development and Extension to Section 2118(a)(2)

Another statute, 18 Del. C. § 3902, requires liability insurance policies to provide uninsured and underinsured motorist (UIM) coverage for injuries and property damage “resulting from the ownership, maintenance or use of [an] uninsured or hit-and-run motor vehicle.” ¹⁷ In Nationwide General Insurance Co. v. Royal, we analyzed whether an injury “ar[o]se out of the use of a motor vehicle” under Delaware's UIM statute, using the Supreme Court of Minnesota's Continental Western Insurance Co. v. Klug test.¹⁸ Klug requires a court to analyze (1) “whether the vehicle was an ‘active accessory’ in causing the injury,” (2) “whether there was an act of independent significance that broke the causal link between use of the vehicle and the injuries inflicted,” and (3) “whether the vehicle was used for transportation purposes.” ¹⁹

We extended Klug to PIP claims in Sanchez v. American Independent Insurance Co.²⁰ The Sanchez policy provided PIP coverage for injuries that “[a]rise out of the ownership, maintenance or use of a motor vehicle as a motor vehicle.” ²¹ In extending the Klug test to PIP claims, we noted that “[b]oth the [ PIP ] statute and the UIM statute provide coverage for injuries ‘arising out of’ automobile accidents.” ²²

When interpreting the PIP statute, Section 2118(a)(2), Sanchez incorrectly cited Section 2118(a)(1), the indemnity from legal liability statute. The PIP statute does not contain the words “arising out of ownership, maintenance or use of the vehicle.” ²³ Instead, Section 2118(a)(2)(c) determines the scope of PIP coverage. That statute provides that “[t]he coverage required by this paragraph shall be applicable to ... any other person injured in an accident involving such motor vehicle, otherthan an occupant of another motor vehicle.” ²⁴ State Farm argues that the words “required by this paragraph” incorporate Section 2118(a)(1)'s “arising out of ownership, maintenance or use of the vehicle” language. In our view, the statute does not permit this construction. Other provisions of Section 2118 refer to “paragraphs (1) through (4) of subsection (a) of this section.” ²⁵ This statutory language indicates that “paragraph” in Section 2118(a)(2)(c) refers only to paragraph (2), not to the entirety of “subsection” (a).

Even though Sanchez relied on an inapplicable statutory provision applied to policy language to extend Klug to the PIP statute, we need not discard the entire Klug test. That test provides a useful framework for analyzing PIP claims to the extent that the test is consistent with Section 2118(a)(2). Therefore, we now analyze whether the Klug test is consistent with Section 2118(a)(2)'s requirement that a person be “injured in an accident involving [the insured] motor vehicle.” ²⁶

The first Klug prong—“whether the vehicle was an ‘active accessory’ in causing the injury” ²⁷—is a useful framework for analyzing whether a person was injured in an accident “involving” a motor vehicle. We have defined “active accessory” to require “something less than proximate cause in the tort sense and something more than the vehicle being the mere situs of the injury.” ²⁸ A vehicle is not “involved” in the accident causing the injuries if it is merely an injury's situs.²⁹

Klug's second prong—“whether there was an act of independent significance that broke the causal link between use of the vehicle and the injuries inflicted” ³⁰—is also consistent with the PIP statute. An accident cannot be said to “involve” a vehicle where an independent act breaks the casual link between the vehicle and the injuries inflicted, such as (for example) when an individual leaves a vehicle and assaults a person.³¹ Construing the statute to require insurers to provide PIP benefits for intentional, criminal conduct such as an assault would create an absurd result. ³²

Although Klug's first and second prongs are consistent with Section 2118(a)(2), the test's third prong—“whether the vehicle was used for...