Case Title: Harleysville Insurance v. The Church Insurance Co.

Citation: 

Docket Number: 221, 2005

State: delaware

Court: Delaware Supreme Court

Date: 2006-03-20T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
HARLEYSVILLE INSURANCE  
 
) 
COMPANY, 
 
 
 
 
) 
 
 
 
 
 
 
 
) 
 
 
Defendant Below, Appellant, 
) 
No. 221, 2005 
 
 
Cross-Appellee, 
 
 
) 
 
 
 
 
 
 
 
) 
Court Below: Superior Court 
 
v. 
 
 
 
 
 
) 
of the State of Delaware in and 
 
 
 
 
 
 
 
) 
for New Castle County 
THE CHURCH INSURANCE COMPANY, ) 
 
 
Plaintiff Below, Appellee, 
) 
 
 
Cross-Appellant, and 
 
) 
C.A. No. 02C-06-196 
NATIONAL UNION FIRE INSURANCE ) 
COMPANY OF PITTSBURGH, PA.,  
) 
 
 
Defendant Below, Appellee and 
) 
CHARLES A. BROWN,  
 
 
) 
 
 
Plaintiff-Below, Appellee. 
) 
 
 
 
 
 
Submitted:  October 26, 2005 
Decided:  November 16, 2005 
Corrected:  March 20, 2006 
 
Before STEELE, Chief Justice, HOLLAND, and BERGER, Justices. 
 
Upon appeal from the Superior Court. AFFIRMED. 
 
Stephen P. Casarino (argued) and Thomas P. Leff (argued) of Casarino, Christman 
& Shalk, P.A., Wilmington, Delaware for appellant Harleysville Insurance 
Company. 
 
Daniel A. Griffith (argued) and Jos. Scott Shannon of Marshall Dennehey Warner 
Coleman & Goggin, Wilmington, Delaware for appellee the Church Insurance 
Company. 
 
Anthony G.Flynn and Timothy J. Houseal of Young, Conaway, Stargatt & Taylor, 
LLP, Wilmington, Delaware; John C. Sullivan (argued) of Post & Schell, P.C., 
Philadelphia, Pennsylvania for appellee National Union Fire Insurance Company. 
 
STEELE, Chief Justice 
 
2
 
A personal injury plaintiff, Charles Brown, was injured when a fire escape 
ladder attached to the property owned by Cathedral Community Services and 
managed by Capital Management Company fell on his head. Cathedral had a 
general liability policy with Church Insurance Company and an excess umbrella 
policy with National Union Fire Insurance Company. Capital had a general 
liability policy with Harleysville Insurance Company. Church defended Cathedral 
in the ensuing personal injury litigation. Harleysville defended Capital. 
Harleysville argued before the Superior Court and before this Court that Capital 
was an additional, though unnamed, insured under the policy Church issued to 
Cathedral and that Church had the primary duty to defend Capital. On cross-
motions for summary judgment, the Superior Court held, inter alia, that Church 
did have a duty to defend Capital as an additional insured, but that Harleysville, 
acting on behalf of Capital, waived Capital’s right to a defense from Church by 
failing to conduct a pre-trial inquiry into Capital’s potential coverage under the 
policy Church issued to Cathedral and by seizing the defense of Capital in Brown’s 
personal injury action. Harleysville appeals this judgment. Because the record 
clearly shows that Harleysville failed to conduct an investigation using its 
customary procedures into whether its insured, Capital, was covered under 
 
3
Church’s policy, and for the reasons articulated in the Superior Court’s opinion, we 
affirm.  
 
 Facts 
 
On June 1, 1994, Cathedral Community Services, the owner of a property 
located at 2001 N. Market Street in Wilmington, Delaware, entered into a written 
contract with Capital Management Company whereby Capital agreed to manage 
and maintain the Market Street property, as well as other properties Cathedral 
owned. The written contract expired in 1995.  
 
On August 23, 1999, Charles Brown was standing underneath an exterior 
fire escape attached to the side of 2001 N. Market Street. Brown touched the 
bottom step of the fire escape ladder, and the ladder section fell striking Brown on 
the head and severely injuring him. The ladder section fell because a heavily 
corroded supporting metal cable broke releasing the ladder and a counterweight.  
 
At the time of the injury, Cathedral had a primary liability insurance policy 
with policy limits of $1,000,000 with Church Insurance Company. Cathedral also 
had an umbrella excess policy with National Union Fire Insurance Company of 
Pittsburgh with limits of $50,000,000.1 Capital had a general liability insurance 
policy with limits of $1,000,000 issued by Harleysville Insurance Company. The 
                                                 
1  
An insurance company with an excess policy only pays after the primary policy is 
exhausted. 
 
 
4
Cathedral-Church insurance policy contained a provision that stated in “Section II 
–Liability Coverage” that “‘Insured’ means … any person or organization while 
acting as real estate manager for the named Insured.” The Harleysville-Capital 
policy had a provision that stated “with respect to your liability arising out of your 
management of property for which you are acting as real estate manager this 
insurance is excess over any other valid and collectible insurance available to you.”  
On August 23, 1999, Capital notified Church of the accident.2 After Capital 
notified Church, Cathedral, Church’s named insured, also notified Church of the 
claim and requested a defense and indemnity. Church assigned Crawford & 
Company to investigate the claim. Church also assigned defense counsel to defend 
Cathedral in any litigation. 
On October 21, 1999, Brown filed a personal injury action against Cathedral 
and Capital. He filed an amended complaint on January 11, 2000. Upon receipt of 
Brown’s amended complaint, Capital’s principal, Gary Hayman called Harleysville 
and turned the claim over to them. Hayman informed Harleysville that Cathedral 
was self-insured. Acting solely on its insured’s statement and without any other 
due diligence investigation of the statement’s accuracy, Harleysville referred the 
lawsuit to outside counsel to defend Capital in the upcoming litigation. 
Harleysville’s counsel entered an appearance on February 6, 2000.  
                                                 
2  
Brown v. Church Ins. Co, et al., Memorandum Opinion, C.A. No 02C-06-196, March 24, 
2005 at 11.  
 
5
After hearing from Hayman that Cathedral was self-insured, on March 7, 
2000, in his claims notes, one of Harleysville’s claim adjusters expressed some 
insight into what would happen if Cathedral were in fact, contrary to Hayman’s 
statement, insured by another company: “Too bad owner is self-insured, or insured 
[Capital] would be covered under their [Cathedral’s commercial insurance] 
policy.” At a later deposition testimony, one of Harleysville’s litigation specialists, 
Barbra Jorgenson, explained Harleysville’s general policy of ascertaining or at 
least attempting to ascertain whether its insured is covered under another policy:  
Q: (Church’s attorney): And once Harleysville found out that 
Cathedral was covered by a commercial carrier’s policy, Harleysville 
would have then undertaken some investigation as to whether its 
insured, Capital, was entitled to coverage under the Cathedral policy; 
correct? 
 
A: (Ms. Jorgenson): Correct. 
 
On March 16, 2000, Cathedral filed its answer to Brown’s amended 
complaint. At the same time, Cathedral filed the required answers to Form 30 
interrogatories. In response to interrogatory six, which asks for a “brief description 
of any insurance policy, including excess coverage, that is or may be applicable to 
the litigation” Cathedral answered that Church Insurance Company was its 
insurance carrier and that the policy was a liability policy with $1,000,000 limits.  
Cathedral also provided the policy number. According to Harleysville’s litigation 
specialist’s testimony, at this point, Harleysville, under its normal procedures, after 
 
6
finding out that Cathedral was covered by a commercial policy, should have 
undertaken some investigation to determine whether Capital was covered under the 
policy Church issued to Cathedral. Harleysville never undertook this investigation. 
Rather than conducting a timely investigation into whether Capital was covered 
under Cathedral’s policy, on March 17, 2000, Harleysville filed Capital’s answer 
to Brown’s complaint with a cross-claim against Cathedral. From this point on, 
Harleysville conducted Capital’s defense.   
 
On or about August 21, 2001 all the parties, and their insurance carriers, 
attended mediation. As a result of the mediation, Church and Brown reached a 
settlement agreement whereby Church paid $525,000 to settle Brown’s claims 
against Cathedral and the parties signed a joint tortfeasors release. At this point, 
Harleysville offered $25,000 to resolve Brown’s claim against Capital.  
 
With trial scheduled to begin on Monday, September 10, 2001, on Thursday, 
September 6, Harleysville’s attorney sent a letter to Church’s attorney inquiring 
into potential coverage for Capital under the Church policy. Church’s attorney 
responded that Capital was “not named as an additional insured on any policy 
covering the subject property at the time of Mr. Brown’s accident.”  
 
On September 7, 2001, one business day before trial, Harleysville purported 
to tender Capital’s defense to Church. Church declined the tender.  
 
7
 
After a four day trial in the Superior Court, at which Cathedral, who had 
already settled, did not appear, the jury awarded Brown $2,250,000 in damages, 
with liability apportioned between the defendants at 60% ($1,350,000) against 
Capital, and 40% ($900,000) against Cathedral. 
 
Capital appealed several of the trial judge’s rulings to this Court.3 On 
December 18, 2002, we held that the trial judge did not err by allowing the jury to 
determine the terms of an implied in fact contract between Capital and Cathedral 
after the expiration of the 1994 written agreement. We also noted that a “rational 
jury could easily conclude that Capital knew Cathedral intended and expected that 
Capital would maintain the exterior features of the property according to the 
[Wilmington] Code.”4  
 
On June 25, 2002, Brown brought suit to enforce the judgment. This appeal 
arises out of the Superior Court’s March 24, 2005 opinion ruling on several 
motions for summary judgment resolving the insurance companies’ obligations 
against each other and to Brown. 
 
 
 
                                                 
3  
Capital Mgmt. Co. v. Brown, 813 A.2d 1094 (Del. 2002). 
 
4  
Id. at 1098.  
 
 
8
The Superior Court Opinion 
 
 
 
In Brown’s suit to enforce the judgment, which was essentially a declaratory 
judgment action to determine liability insurance coverage, all of the insurance 
companies involved moved for summary judgment on different issues.  
1)  
a. Harleysville moved for summary judgment against National Union on 
the grounds that Harleysville’s insurance policy issued to Capital was 
excess to the National Union policy issued to Church. 
b. National Union moved for summary judgment against Harleysville on 
the grounds that the policy National Union issued to Church was an 
umbrella policy and was excess to any primary insurance policy – 
Church’s or Harleysville’s. 
2) Harleysville sought summary judgment that Capital was an additional 
insured under the Church policy issued to Cathedral. 
3) Church sought summary judgment that Capital was not entitled to coverage 
under the Church policy because Capital failed to comply with the notice 
provisions in the Church policy. 
4) Harleysville sought summary judgment that the Church policy was the 
primary coverage and the Harleysville policy was excess to Church’s policy.  
5) Harleysville sought summary judgment that Church had the duty to defend 
Capital as an additional insured under the Church policy.5  
 
On the first issue the trial judge held that the Harleysville policy issued to 
Capital was not an excess coverage policy in relation to the National Union 
umbrella policy issued to Church.6 The trial judge found that the National Union 
policy was not a primary policy but an umbrella or excess policy.7  
                                                 
5  
Memorandum Opinion at 2.  
 
6  
Id. at 7.  
 
7  
Id. at 9.  
 
 
9
On the second issue, the trial judge held that Capital was an additional 
insured under the clear language of the Church policy.8 On the third issue, the trial 
judge held, that as to notice of loss, Capital was not required to give additional 
notice to Church because the notice requirement was fulfilled when Cathedral 
notified Church of Brown’s claim and requested indemnity.9 On the fourth issue, 
the trial judge held that the Harleysville policy was excess to the Church policy.10 
On the fifth issue, the trial judge held that, although Capital did not formally 
tender its defense to Church until right before the trial was to begin in the 
underlying case, the notice of loss to Church triggered a potential duty to defend 
Capital. As an insurer under the policy Church issued to Cathedral, Church had a 
duty to defend Capital. Capital had a right to be defended or to knowingly waive 
that defense.11  
The trial judge also held that after Harleysville became aware of Church’s 
involvement in the action it was incumbent upon Harleysville to determine what 
rights Capital may have had under the Church policy. By not determining Capital’s 
                                                 
8  
Id. at 19.  
 
9  
Id. at 20.  
 
10  
Id. at 21.  
 
11  
Id. at 23-25 
 
 
10
rights under the Church policy and by conducting the pre-trial defense of Capital, 
Harleysville waived Capital’s right to a defense by Church.12  
Accordingly, the trial judge settled the responsibilities of the insurance 
companies as follows: 
Church, as the primary insurer for Cathedral and Capital, is 
responsible for the amount of the judgment up to Church’s policy 
limits as well as the resulting post-judgment interest on that amount. 
Because Harleysville waived Church’s duty to defend Capital, Church 
is responsible only for the defense costs associated with its defense of 
Cathedral (including the post-trial costs associated with the case at 
bar) and does not have to reimburse Harleysville for its defense of 
Capital. Harleysville as the excess insurer is responsible for the 
amount of the judgment that exceeds the policy limits of the Church 
policy and the resulting post-judgment interest on that amount. 
Having waived Capital’s right to a defense from Church, Harleysville 
is responsible for the defense cost associated with its defense of 
Capital (including the post-trial costs associated with the case at bar) 
and does not have a right to be reimbursed for defense costs from 
Church.13  
 
 
                                                 
12  
Id. at 25-26. 
 
13  
Id. at 27. Under the facts as the parties presented them to us, we note that neither Capital 
nor Cathedral is “out of pocket” anything. The jury found Brown’s damages to be $2,250,000 
with Capital liable for 60% or $1,350,000 and Cathedral liable for 40% or $900,000. Cathedral’s 
settlement and joint tortfeasor release limited its liability to $525,000. Church, Cathedral’s 
insurer, presumably paid this amount. Accordingly, only the $1,350,000 remains unsatisfied. 
Under the trial court’s judgment, Church is also liable for $475,000 of the $1,350,000 as well as 
post-judgment interest on that amount. Harleysville, Capital’s insurer, is liable for $875,000 as 
well as post-judgment interest thereon. These liabilities are well within both Capital and 
Cathedral’s $1,000,000 limits on their respective insurance policies with Harleysville and 
Church.  
 
 
 
11
Discussion 
We agree with the reasoning in the trial judge’s opinion. Accordingly, we 
affirm on the basis thereof. We write separately to clarify why Harleysville waived 
its right to recoup its defense costs in this case.14 The trial judge correctly noted 
that “Capital was not required to give additional notice to Church because the 
notice requirement was fulfilled when Cathedral notified Church of Brown’s claim 
and requested indemnity.” 15 The trial judge also correctly noted that “Church knew 
or should have known from the investigation it performed that Capital was the real 
estate manager and was potentially an additional insured under the Cathedral 
policy.” 16  Church, therefore, had the initial duty to notify Capital that it was 
potentially an additional insured under the Church’s policy. Finally, the trial judge 
correctly noted that “as an insurer under the Church policy issued to Cathedral, 
Church had a duty to defend Capital. Capital had a right to be defended or to 
                                                 
14  
Harleysville frames the issue as whether Harleysville could and did waive Capital’s right 
to a defense. The underlying personal injury litigation that gave rise to this appeal has been over 
for several years. We think the issue is more appropriately whether Church is obligated to 
reimburse Harleysville for the costs Harleysville incurred in defending Capital. Capital received 
a complete and competent defense in this lawsuit. It does not matter now whether Capital 
received the defense from Harleysville or from Church. Moreover, Capital itself is not obligated 
to pay any of the judgment against it.  
 
15  
Id. at 19-20. (Citing 13 Couch on Insurance 3D § 187:12 (1999) (“Where an insurer 
receives proper and timely notice of accident from the named insured, including particulars 
sufficient to identify the additional insured, it is not necessary that another notice be given by the 
additional insured.”)). 
 
16  
Id.  at 20.  
 
 
12
‘knowingly’ waive that defense.”17  The trial judge's opinion, however, does not 
sufficiently explain how Capital, through Harleysville, knowingly waived its right 
to a defense from Church when Church was under an initial obligation to know 
that Capital was an additional insured and to notify Capital of the available 
coverage.   
In its opening brief, Harleysville contends that it “did not know that Capital 
was insured under the Church policy. For its part, Church did everything it could to 
keep that information from Harleysville.” Harleysville continues “because the 
record clearly shows that Harleysville was unaware that Capital was insured under 
the Church policy until long after the underlying litigation ended, the court erred as 
matter of law in concluding that Harleysville waived Capital’s rights to a 
defense….” Harleysville’s contentions are without merit. The record clearly shows 
that Harleysville, had it followed its customary procedures and conducted an 
investigation into potential coverage after its own insured notified Church of the 
occurrence and after being put on notice by Church’s answer to the Form 30 
interrogatories, would have discovered Church’s obligation to defend and 
indemnify Capital under the policy Church issued to Cathedral 
 
Harleysville and Capital claim that they initially had no knowledge of the 
Church policy covering Cathedral. For some reason, on January 31, 2000, Hayman 
                                                 
17  
Id. at 25. 
 
13
informed Harleysville that Cathedral was self-insured.18 Remarkably enough, it 
appears that on “August 23, 1999, Capital notified Church [Insurance Company] 
of the accident.”19 Neither Harleysville nor Capital explained how or why Capital 
apparently knew that Church insured Cathedral in August 1999, but only five 
months later somehow thought that Cathedral was self-insured. In any event, after 
March, 16, 2000, the date Cathedral filed its answer to Brown’s amended 
complaint and the answers to Form 30 interrogatories, Harleysville, on 
constructive notice of such a policy, could no longer plead ignorance to the 
existence of another source of coverage for Capital. As of that filing, neither 
Capital nor Harleysville could reasonably continue to assume that no other carrier 
might be responsible for Capital’s defense.  According to Harleysville’s litigation 
specialist’s testimony, at this point, Harleysville, under its normal procedures, after 
finding out that Cathedral was covered by a commercial policy, should have 
undertaken some investigation to determine whether Capital was covered under the 
policy Church issued to Cathedral. Harleysville never undertook this investigation 
                                                 
18  
Harleysville’s claim adjuster, in his notes dated January 31, 2000, states: “Called and 
discussed this claim with Gary Hayman at Capital Management Co…. He says the building 
owner is self-insured….” 
 
19  
Memorandum Opinion at 11 (emphasis added). The trial judge cited to the deposition 
testimony of Michael Lindgren, Church’s claims handler, as support for this statement. At the 
deposition, plaintiff’s counsel examined Lindgren about a “Notice of Loss” form that stated: 
“8/23/99, building management, first call received approximately 11:35; incident happened 
earlier on fire escape.” 
 
 
14
nor did Harleysville’s counsel acting for Capital file pretrial discovery exploring 
the details of the policy Church had issued to Cathedral.  
From the record it appears that Harleysville never sent interrogatories or 
requests for production to Cathedral. Indeed, as noted in its brief, Harleysville took 
no action until, “[a]fter Church settled Brown’s claim against Cathedral [on August 
20, 2001] but [two business days] before trial, [on September 6, 2001] Capital 
requested a copy of the Church policy, which had never been produced, and asked 
Church for a defense.” Harleysville continued: “Church refused to take over the 
defense and refused to produce a copy of its insurance policy.  The policy was 
finally produced pursuant to a motion to compel.”  Superficially, this statement 
makes Church look culpable and indeed lends support to Harleysville’s argument 
that Church did everything it could to keep coverage information from Capital.  
Nevertheless, a closer look at Harleysville’s citations supporting its statement of 
facts and the dates is instructive and undercuts Harleysville’s position. In support 
of the statement in the brief that Church only produced the policy pursuant to a 
motion to compel, Harleysville cited to the record of the hearing on a motion to 
compel20 that the Superior Court commissioner heard on May 10, 2004 and to the 
                                                 
20  
The only language from this citation possibly supporting the “fact” in Harleysville’s brief 
comes from two statements plaintiff’s counsel made during the motion to compel: “Once 
plaintiff obtained the judgment and sought payment of the judgment, Capital Management 
Company sought production of the Church Insurance Company policy. Church Insurance 
Company objected to that at first. There was a motion to compel filed, heard by Judge Carpenter. 
That was granted. Church Insurance Company discloses its policy, and in the language under 
 
15
deposition testimony21 of Michael Lindgren, a Church claims adjuster, taken on 
March 12, 2004.  
In an earlier portion of the transcript of the hearing on the motion to compel, 
not included in Harleysville’s appendix, while Ms. Aronson, an attorney 
representing Brown, was giving the Commissioner background facts, the following 
interchange occurred: 
Ms. Aronson: In the answers to Form 30 interrogatories, Cathedral, 
the owner, never disclosed that Church insured both 
the owner and the real estate manager. So we went 
through a trial, not knowing that the Church Insurance 
Company actually insured the real estate manager as 
well…. 
 
The Court: 
Now you said they didn’t disclose. Was there 
discovery propounded that would have required them 
to disclose that? 
 
                                                                                                                                                             
additional insured, is listed the real estate manager, or Capital Management Company.” And 
“[w]e have taken the deposition of the claims adjuster, Michael Lindgren. This motion to compel 
is – or seeks production of the documents considered privileged by the Church Insurance 
Company.”  
 
21  
The relevant interchange was:  
 
Q (Plaintiff’s counsel): And after the verdict in this case, [Harleysville’s attorney] filed a motion 
with the Superior Court to produce the insurance company policy. And your 
understanding is that the request was resisted?  (emphasis supplied) 
 
A:  
That I don’t remember. 
 
Q:  
You don’t remember that the lawyer went to court and opposed production of the policy? 
Don’t remember that? 
 
A:  
I don’t know.  
 
16
Ms. Aronson: There was [sic] the answers to the Form 30 
interrogatories which require the disclosure of 
insurance covering the risk and the limits on that. But I 
do not recall there being additional discovery 
propounded.22 
 
Rather than conducting a timely investigation into whether Capital was covered 
under Cathedral’s policy, on March 17, 2000 Harleysville’s designated counsel 
filed Capital’s answer to Brown’s complaint and Cathedral’s cross-claim. From 
this point on, Harleysville conducted Capital’s defense.  It was not until September 
6, 2001, almost a year and a half after receiving Cathedral’s Form 30 
interrogatory answers, that Harleysville’s defense attorney, in a letter to Church’s 
attorney, informally inquired into potential coverage under Cathedral’s policy.  He 
specifically asked whether “Capital Management was a named insured under the 
policy in effect at the time of the original contract, 1994, and at the time of the 
accident….”  He also asked for a copy of the portions of the policies that identified 
the “named insureds.”  More importantly, Harleysville’s attorney noted “[a]though 
Capital…may not be specifically named, it may be named in general, i.e., general 
manager.” The Harleysville attorney’s letter to Church’s counsel designated for 
Cathedral clearly shows that he, like Harleysville’s litigation specialist, knew that 
it was possible for Capital to be insured under Cathedral’s commercial policy, even 
                                                 
22  
It is interesting to note that the Superior Court Commissioner, though understandably 
unfamiliar with the facts of the case, nevertheless, intuitively thought to ask whether there was 
discovery propounded that would have required Church either to admit that it insured both 
Cathedral and its real estate manager, Capital, or to produce the policy itself.  
 
 
17
though Capital was not specifically named as an additional insured. Church’s 
response to Harleysville’s attorney’s letter, that Capital was “not named as an 
additional insured on any policy covering the subject property at the time of Mr. 
Brown’s accident,” was, as the trial judge found, “technically correct.”23 The 
response, as Church’s attorney conceded at oral argument, probably did not 
comport with the spirit of Harleysville’s inquiry. Nevertheless, even assuming the 
trial judge was mistaken in looking only to the “letter” of Church’s response 
instead of its “spirit”, Church’s response has no bearing on the waiver issue in this 
case. 
 The critical time period with respect to the waiver issue is the one beginning 
after Harleysville received the Form 30 interrogatories and ending before trial.  At 
the hearing on the motion to compel, Brown’s attorney corroborated what was 
already clear from the docket entries of the personal injury litigation: no party filed 
discovery trying to determine whether Capital was an insured under the Church 
policy before Brown’s personal injury trial.24  The motion to compel that 
                                                 
23  
Memorandum Opinion at 12. 
 
24  
Indeed, Church notes in its brief that “neither Harleysville nor Capital undertook to 
discover the insurance policy in the Brown personal injury litigation,” and, “Harleysville[,] 
acting on behalf of Capital, made no inquiry of either Church or its insured[,] Cathedral[,] as to 
any other applicable insurance coverage until two business days before trial….” The trial judge, 
too, noted “[i]t does not appear that Harleysville inquired of Church as to Capital’s potential 
status as an insured under the Church policy prior to September 6, 2001.” Memorandum Opinion 
at 12.  
 
 
18
Harleysville emphasizes so heavily in its brief came only after the jury verdict and 
as part of the second lawsuit (at issue here) attempting to enforce the judgment in 
the first lawsuit.  The motion to compel, and Church’s course of conduct after the 
verdict, are thus, entirely irrelevant, to the waiver issue.  Once a right is waived, it 
is gone forever.25 Accordingly, Harleysville’s focus in its brief and at oral 
argument on Church’s resistance to discovery after Brown’s personal injury trial is 
a red herring.  While Church’s conduct was less than ideal insofar as Church failed 
to correctly determine its legal obligation, failed to determine that Capital was an 
additional insured, failed to notify Capital, and failed to answer Harleysville’s last 
minute desperate September 6, 2001 letter according to the spirit of its inquiries, 
Church’s conduct does not obligate it to indemnify Harleysville for the costs 
Harleysville incurred in defending Capital. Harleysville simply failed, for whatever 
reason, to use the available informal investigative and formal discovery process to 
resolve the issue of which carrier owed Capital a defense before the discovery 
period closed, motion practice ended, and trial began.26 Accordingly, the record 
supports the trial judge’s finding that: 
                                                 
25  
Hanson v. Fidelity Mut. Ben. Corp., 13 A.2d 456, 460 (Del.  Super. 1940) (citing 67 
C.J.S. WAIVER § 14, at 313 (1934)).  
 
26  
We wish to reemphasize, as the trial judge did, that “neither insurance company, Church 
nor Harleysville, handled the claim or their respective insureds in an ideal manner. The post-
judgment litigation in the instance case could have been avoided by better communication 
between the parties and their insureds, and with each other.” Memorandum Opinion at 17.  
 
 
19
[e]ven though silence by an insured is not a waiver of the right to a 
defense, by not determining Capital’s rights under the Church policy 
and by conducting the pre-trial defense of Capital, Harleysville 
waived Capital’s right to a defense by Church. Church was arguably 
entitled to interpret Harleysville’s actions as a waiver of the right to a 
defense.27 
Conclusion 
Based on the foregoing and the trial court’s well-reasoned opinion, the 
March 24, 2005 Order of the Superior Court deciding the summary 
judgment motions is AFFIRMED.  
                                                 
27  
Id. at 26.