Krutz v. Harleysville Mut. Ins. Co.
| Decision Date | 26 June 1991 |
| Docket Number | Civ. A. No. 87-405-JJF. |
| Citation | 766 F. Supp. 219 |
| Court | U.S. District Court — District of Delaware |
| Parties | Earl KRUTZ, Marion Krutz and Sharon Krutz, Plaintiffs, v. HARLEYSVILLE MUTUAL INSURANCE COMPANY and Aetna Casualty & Surety Company, Defendants. |
Louis B. Ferrara of Aerenson Ferrara & Lyons, Wilmington, Del., for plaintiffs.
B. Wilson Redfearn of Tybout Redfearn & Pell, Wilmington, Del., for defendant Harleysville Mut. Ins. Co.
Gary W. Aber of Heiman Aber & Goldlust, Wilmington, Del., for defendant Aetna Cas. & Sur. Co.
On June 25, 1985, a Pontiac Fiero collided with a 1983 Chevrolet Camaro driven by Sharon Krutz ("Krutz"). Krutz allegedly suffered injuries in the accident that require compensation greater than the $25,000 insurance proceeds available from the combined limits of the insurance policies held by the driver and owner of the Pontiac Fiero. Krutz, with her parents Earl and Marion Krutz as co-plaintiffs, filed this lawsuit to recover Krutz's losses in excess of the available $25,000 from two of their insurers by way of the Delaware statutes regulating uninsured/underinsured motorist benefits. Del.Code Ann. tit. 18, §§ 3902-3915 (1989). In their original Complaint, the plaintiffs seek recovery against Harleysville Mutual Insurance Company ("Harleysville"). Harleysville issued a policy insuring the use and operation of the 1983 Camaro Krutz was driving at the time of the accident. The policy listed Earl and Marion Krutz as "named insureds" and provided coverage for Ms. Krutz while operating the Camaro through the policy's protection for "covered persons". The Complaint seeks $300,000 damages, the limit of the Harleysville policy's uninsured/underinsured motorist coverage.
By way of their Amended Complaint, plaintiffs brought suit against Aetna Casualty & Surety Company ("Aetna") seeking the policy limits of an Aetna policy. Aetna had issued a policy with $300,000 of uninsured/underinsured motorist benefits insuring Ms. Krutz as the owner of a 1978 Oldsmobile Cutlass ("Cutlass" which was not involved in the June 25th accident). The Aetna policy listed Ms. Krutz as "named insured" and provided uninsured/underinsured motorist coverage to Ms. Krutz while occupying an automobile not owned by her.
The Amended Complaint did not allege any facts or theories concerning which insurer is primarily or principally responsible to the plaintiffs on their claims. In this regard, Harleysville and Aetna have stepped into the vacuum created by the absence of allegations concerning primary insurance by filing cross-claims and motions for summary judgment on these cross-claims against each other with each insurer contending that the other should be deemed the primary insurer.1
Summary judgment may be granted when there is a showing "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). "Since this is a case involving no more than legal interpretation of an insurance policy, and most of the questions raised are legal, rather than factual in nature, ... summary judgment is particularly appropriate." Continental Insurance Co. v. Bodie, 682 F.2d 436, 439 (3d Cir.1982). Therefore, the Court must decide as a matter of law whether Harleysville's policy for the Camaro or Aetna's policy for the Cutlass should be deemed primary insurance for the damages suffered by Ms. Krutz in excess of the $25,000 available from the tortfeasor.
"Once again, this Court must venture into the morass of Delaware uninsured motorist law and resolve a previously unanswered question of state law." Corso v. State Farm Mutual Automobile Insurance Co., 668 F.Supp. 364, 365 (D.Del. 1987), aff'd without op., 838 F.2d 1205 (3d Cir.1988). The absence of a decision on this matter from the Delaware Supreme Court requires this Court under Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), to predict how the Delaware Supreme Court would rule. Rabatin v. Columbus Lines, Inc., 790 F.2d 22, 24 (3d Cir.1986). In making such a prediction this court must examine "lower state court decisions, related decisions and considered dicta of the state's highest court, scholarly works, and any other reliable data tending convincingly to show how the highest court would resolve the issue." Corso, 668 F.Supp. at 366. Each insurer has relied on many of these sources of law and on the language of the insurance policies in making arguments in support of their respective summary judgment motion.
In support of its motion, Harleysville makes two arguments. First, it argues that the Delaware Supreme Court's decision in Frank v. Horizon Assurance Co., 553 A.2d 1199 (Del.1989) suggests that Delaware public policy requires uninsured/underinsured motorist coverage to be deemed "person-specific" rather than "vehicle-specific." Accordingly, Harleysville contends that Aetna's policy, which insured Ms. Krutz, the person in the accident, would be the primary policy.
Secondly, Harleysville relies on the language of its insurance policy which, after defining "you" as Earl and Marion Krutz, provides the following in its "other insurance" provision:
If there is other applicable similar insurance, we will only pay our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance. (Emphasis Added).
Appendix to Harleysville's Brief in Support of Its Motion for Summary Judgment (D.I. 47) at A-21 (hereinafter "Harleysville's Appendix"). Harleysville reasons that its policy and Aetna's policy are "applicable similar insurance" warranting the division of liability pro rata.
For its part Aetna, relying on lower court decisions, argues that Frank does not mandate the conclusion that Delaware public policy requires it to be deemed the primary insurer. Second, it asserts that the language of the "other insurance" provision in its policy makes its policy excess insurance. After defining "you" as Ms. Krutz, the Aetna policy provides:
If there is other applicable insurance for bodily injury, we will pay only our share. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for bodily injury with respect to a vehicle you do not own shall be excess over any other collectible insurance. (Emphasis Added).
Appendix to Aetna's Brief in Support of Its Motion for Summary Judgment (D.I. 52), Exhibit B (hereinafter "Aetna's Appendix"). Aetna focuses upon the highlighted language and argues that it makes Aetna's insurance excess because at the time of the accident Ms. Krutz was driving the Camaro, a vehicle registered in her parents' names and therefore not owned by her.
The Court will first address the contentions of Harleysville and Aetna regarding the "other insurance" provisions in their respective policies.
Other insurance provisions typically state that the policy in which the provision is contained will provide only limited coverage for the insured's loss if other insurance is available. Such limitations come in three varieties: (1) pro rata, (2) excess, and (3) escape. See generally Putnam v. New Amsterdam Casualty Co., 48 Ill.2d 71, 269 N.E.2d 97, 99-100 (1970).
A pro rata clause usually states that, if other insurance exists, the policy with the pro rata clause will pay only its pro rated share of the loss. An excess clause provides that if other insurance is available, the policy with the excess clause will provide coverage for an insured's loss only after the limits of coverage found in the other insurance policy are exhausted. An escape clause allows the policy with the escape clause to avoid coverage altogether if there is other insurance available.
These three types of limitations are often found joined together in an "other insurance" provision, each limitation applying when a different event occurs. In this case, both Harleysville's and Aetna's policies contain "other insurance" provisions with pro rata and excess clauses, but not an escape clause. The division of responsibility flowing from the "other insurance" provisions of each policy depends on whether the undisputed facts of this case trigger Harleysville's pro rata clause or whether the facts dictate that Aetna's excess clause apply. The interaction of the Harleysville pro rata clause and the Aetna excess clause turns on whether Ms. Krutz was driving an automobile at the time of the accident which she owned within the meaning of the Aetna policy.2
Harleysville contends that Ms. Krutz must be considered an owner of the Camaro in view of her uncontradicted deposition testimony:
Harleysville Appendix at A-1 through A-2.
After indicating that she owned the Cutlass, Ms. Krutz's deposition establishes that she "preferred to drive the Camaro more than the Olds" and "the Camaro, I drove that 90 percent, and the Olds, I would say about 10." Appendix at A-3. Her deposition continues:
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