Title: Colonial Ins. Co. of Wisconsin, et al. v. Ayers Hartford Underwriters Ins. Co. et al. v. Foskey

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE
COLONIAL INSURANCE COMPANY
§  No. 121, 2000
OF WISCONSIN and GEICO INDEMNITY§  No. 134, 2000
INSURANCE COMPANY,
§
§ Court Below - Superior Court
Defendants Below,
§ of the State of Delaware,
Appellants,
§ in and for New Castle County
§ C.A. No. 99C-05-009
v.
§
§
WILLIE M. AYERS, Guardian of KANIKA §
WRIGHT, a minor,
§ CONSOLIDATED
§
Plaintiffs Below,
§
Appellees.
§
§
HARTFORD UNDERWRITERS 
§ No. 92, 2000
INSURANCE COMPANY and 
§ No. 127, 2000
NATIONWIDE MUTUAL INSURANCE 
§ No. 128, 2000
COMPANY,
§ No. 135, 2000
§
Defendants Below,
§ Court Below - Superior Court
Appellants,
§ of the State of Delaware
§ in and for New Castle County
v.
§ C.A. No. 99C-08-002
§
JERRY F. FOSKEY, Personal 
§ CONSOLIDATED
Representative of FLORENCE FOSKEY, 
§
Deceased,
§
§
Plaintiffs Below,
§
Appellees.
§
  Submitted:  January 30, 2001
      Decided:  April 27, 2001
Before VEASEY, Chief Justice, WALSH, HOLLAND, BERGER and
STEELE, Justices (constituting the Court en Banc).
2
Upon appeal from the Superior Court.  REVERSED.
Donald J. Detweiler, Esquire (argued) and Mary Anne McLane,
Esquire, of Welch & White, P.A., Ian Connor Bifferato, Esquire (argued), of
Bifferato, Bifferato & Gentilotti, Wilmington, Delaware, Wilmington, and
Robert J. Leoni, Esquire of Morgan, Shelsby & Leoni, Newark, Delaware,
for appellants.
H. Clay Davis, III, Esquire (argued), Georgetown, Delaware, and
James J. Woods, Jr., Esquire (argued), of Connolly, Bove, Lodge & Hutz,
Wilmington, Delaware, for appellees.
HOLLAND, Justice, for the majority:
3
For purposes of summary judgment only, the Superior Court
consolidated Ayers v. Colonial, C.A. No. 99C-05-009, with Foskey v.
Hartford Underwriters Insurance Company, C.A. No. 99C-08-002.  Both
cases involve similar legal issues relating to different insurance company
defendants.  The parties stipulated to the facts.  The Superior Court granted
the plaintiffs’ motions for summary judgment.  This Court accepted separate
interlocutory appeals by the insurance company defendants and consolidated
these proceedings.
The threshold issue in both cases is whether a passenger in a motor
vehicle involved in a personal injury accident may “stack” the underinsured
motorist coverage (UIM) provided by the policy insuring the vehicle onto
the passenger’s individual underinsured motorist policy(ies) to determine if
the tortfeasor’s motor vehicle is underinsured.  The unreported decisions by
the Superior Court on that issue are in conflict.1  In these consolidated cases,
                                          
1 Compare Hubbs v. Liberty Mut. Ins. Co., Del. Super., C.A. No. 98C-090162, Herlihy, J.
(Dec. 11, 1998) (Mem. Op.) with Justice v. Colonial Ins. Co., Del. Super., C.A. No. 97C-
05-028, Ridgely, J. (June 30, 1998).  In Hubbs, the Superior Court concluded the UIM
coverage may not be stacked for purposes of determining underinsured status, because to
do so would contravene the clear language and intent of the underinsurance statute.
Conversely, in Justice, the Superior Court held that a claimant may stack coverages from
separate policies (which when viewed independently did not exceed the tortfeasor’s
liability coverage and therefore were not triggered) in order to establish the tortfeasor’s
status as an underinsured motorist.
4
the Superior Court determined that stacking of UIM coverage, for purposes
of establishing the tortfeasor’s status as underinsured motorist, is allowable.
We hold that the Delaware statute precludes the stacking of UIM
coverages for purposes of the threshold inquiry into whether the UIM
coverage is triggered.  Accordingly, the judgments of the Superior Court
must be reversed.
Ayers’ Stipulated Facts
The plaintiff in the first cause of action is Willie M. Ayers, guardian
of Kanika Wright (“Kanika”), a minor.  On June 20, 1998, Kanika was a
passenger in a car involved in a one-car accident.  Lynette Ayers was driving
the car and is the alleged tortfeasor.  The tortfeasor’s car was covered by
insurance issued by GEICO.  The liability policy limits of $15,000 have
been paid to Kanika by GEICO.  The plaintiff contends that GEICO also
provided $15,000 of underinsurance coverage to Kanika as a passenger in
the car.  
Colonial insured Kanika as a member of the household of her
mother by a policy with UIM coverage of $15,000.  Colonial also insured
Kanika as a member of her stepfather’s household by a policy with UIM
5
coverage of $15,000.  Willie Ayers acknowledges that Kanika can look to
only one of the Colonial policies for UIM coverage.2  
William Ayers argues that, since GEICO provided $15,000 of UIM
coverage to Kanika, she is entitled to add or stack that UIM coverage to the
UIM coverage provided by Colonial.  The stacked UIM coverage totals
$30,000.  Since the tortfeasor’s GEICO liability coverage was $15,000, the
plaintiff 
maintains 
that 
the 
tortfeasor’s 
vehicle 
is 
underinsured.
Accordingly, Willie Ayers seeks a declaratory judgment that Kanika is
entitled to underinsured coverage.
Foskey’s Stipulated Facts
The plaintiff in the second cause of action is Jerry F. Foskey, the duly
appointed Administrator of the Estate of Florence Foskey.  On March 21,
1999, Florence Foskey was a passenger in a vehicle owned and operated by
Dorothy Riggin when a collision between Riggin’s vehicle and a vehicle
driven by Kimberly Elliott occurred.  Florence Foskey died as a result of the
accident.
Nationwide insured Riggin’s vehicle.  The Riggin’s policy provided
for UIM coverage of $100,000 per person.  Florence Foskey carried
                                          
2 See 18 Del. C. § 3902(c); Johnson v. Colonial Ins. Co. of California, Del. Super., C.A.
No. 95C-05-189, Herlihy, J. (Jan. 7, 1997).
6
insurance coverage issued by Hartford Underwriters Insurance Company.
The UIM coverage in the Hartford policy had a limit of $100,000.
Jerry Foskey maintains that he can stack the Hartford UIM coverage
of $100,000 with the UIM coverage of $100,000 on the Riggins’ vehicle in
which Florence Foskey was a passenger for a total of $200,000.  When he
does so, the vehicle in which Florence Foskey was a passenger is
underinsured.  Jerry Foskey contends that he is entitled to the UIM coverage
of both policies.
Standard of Review
In these consolidated proceedings, the Superior Court was required to
construe the Delaware underinsured motorist statute.  Judicial construction
of a statute is a determination of law, and the appropriate standard of
appellate review is de novo. 3  Therefore, this Court must determine whether
the Superior Court “erred in formulating or applying legal precepts.”4
                                          
3 State Farm Mut. Auto. Ins. Co. v. Clarendon Nat. Ins. Co., Del. Supr., 604 A.2d 384,
387 (1992).
4 Id. (quoting Hudson v. State Farm Mut. Ins. Co., Del. Supr., 569 A.2d 1168, 1170
(1990)).
7
Triggering UIM Coverage
The determination of whether UIM coverage is triggered is made in
accordance with the statutory definition of an underinsurance motor vehicle,
18 Del. C. § 3902(b)(2)5:
An underinsured motor vehicle is one for which there may be
bodily injury liability coverage in effect, but the limits of bodily
injury liability coverage under all bonds and insurance policies
applicable at the time of the accident total less than the limits
provided by the uninsured motorist coverage.  These limits
shall be stated in the declaration sheet of the policy.
The language of Section 3902(b)(2) is unambiguous.6  A motorist is
underinsured if “the limits of bodily injury liability coverage under all bonds
and insurance policies applicable at the time of the accident total less than
the limits provided by the uninsured motorist coverage . . . [as] stated in the
declaration sheet of the policy.” (emphasis added).
This Court has held that the calculation of the total amount of UIM
coverage available is separate and distinct from the determination of whether
the UIM coverage of a specific individual policy is triggered.7  In Peebles,
we stated, “that presentation of record evidence which comports with the
unambiguous definition in Section 3902(b)(2) is a condition precedent to
                                          
5 In Peebles and Williams, this Court construed (b)(2).  Nationwide Mut. Auto. Ins. Co. v.
Peebles, Del. Supr., 688 A.2d 1374, 1377-78 (1997); Nationwide Mut. Ins. Co. v.
Williams, Del. Supr., 695 A.2d 1124 (1997).   In Hurst, this Court construed subsections
(b)(1) and (b)(3).  Hurst v. Nationwide Mut. Ins. Co., Del. Supr., 652 A.2d 10 (1995).
8
pursuing an underinsurance claim.”8  “This determination affects the right of
the UIM insured to any payments under those coverages, as opposed to the
more common stacking issue which determines the amount of recovery
under UM or UIM provisions.”9  Accordingly, this Court held that UIM
coverage is triggered or available only after a claimant establishes the status
of the tortfeasor as underinsured pursuant to subsection (b)(2).10
In Williams, we held that “[t]he focus of the unambiguous definition
of underinsurance in Section 3902(b) is on the symmetry between the limits
of the claimant’s [UIM] coverage and the limits of the tortfeasor’s
coverage.”11  In Williams, the limits of the tortfeasor’s liability coverage
were identical to the limits of the claimants underinsured motorist
coverage.12  Accordingly, in Williams, we held that the tortfeasor was not an
“underinsured” motorist within the meaning of Section 3902(b)(2).13  In
Williams, only a single underinsurance policy was at issue.
                                                                                                                             
6 Nationwide Mut. Auto. Ins. Co. v. Peebles, 688 A.2d at 1378 n.2.
7 Id. at 1378.
8 Id. at 1378 n.2 (citing Allstate Ins. Co. v. Gillaspie, Del. Super., 668 A.2d 757, 762-63
(1995), aff’d, Del. Supr., No. 327, 1995, Hartnett, J. (ORDER), 676 A.2d 903 (Jan. 10,
1996)).
9 Couch on Insurance 3d, § 169:20 at 169-46.
10 Nationwide Mut. Auto. Ins. Co. v. Peebles, 688 A.2d at 1378; Nationwide Mut. Ins. Co.
v. Williams, 695 A.2d at 1126 (“[T]he definition of underinsurance in Section 3902(b)(2)
operates as a prerequisite to a right of recovery from the claimant’s underinsurance
motorist policy.”).
11 Nationwide Mut. Ins. Co. v. Williams, Del. Supr., 695 A.2d 1124, 1127 (1997).
12 Id. at 1125.
13 Id. at 1127.
9
Predicate UIM Stacking Prohibited
The issue of first impression presented to this Court is whether it is
permissible to stack multiple UIM coverages for the threshold purpose of
establishing whether the tortfeasor is an underinsured motorist.  Section
3902(b)(2) authorizes the stacking of total liability coverage “under all
bonds and insurance policies.”14  The amount of that combined liability
coverage is then compared to the amount of UIM coverage “stated in the
declaration sheet of the policy.”15  Thus, in order to determine whether a
tortfeasor is “underinsured” the statute requires that a comparison be made
between the total of all liability insurance policies available on behalf of the
tortfeasor and the limits of each particular underinsured motorist policy that
the policyholder is attempting to access.
The plaintiffs argue that the term “the declaration sheet of the policy”
refers to all underinsured policies that are potentially applicable.16  The
General Assembly, however, used the plural term “policies” to describe the
                                          
14 18 Del. C. § 3902(b)(2).
15 18 Del. C. § 3902(b)(2).
16 The appellees assert that the Maine UIM statute is “sufficiently close to Delaware’s
laws” that Maine’s interpretation of its statute constitutes persuasive authority for
Delaware’s courts.  We disagree.  The Maine underinsurance statute interpreted in
Connolly v. Royal Globe Ins. Co., Me. Supr., 455 A.2d 922 (1983), is substantially
different from the Delaware UIM statute at issue.  Consequently, Connolly provides no
guidance to this Court with respect to interpretation of the Delaware definition of
underinsurance.
10
liability coverage that is to be considered but simultaneously used the
singular term “policy” to characterize the underinsurance coverage to which
the liability coverage was to be compared.  Moreover, with regard to “bodily
injury liability coverage,” the statute uses not only the plural “policies,” but
also employs the words “all” and “total” to indicate that liability coverage
must be considered in the aggregate.  The omission of the terms “all” and
“total” in reference to UIM coverage, in conjunction with the use of the
singular word “policy”, reflects a concerted decision by the legislature to
have each underinsured motorist policy considered separately vis-à-vis all
liability policies.
It is a well-established principle of statutory construction that the
General Assembly “is presumed to have inserted every provision into a
legislative enactment for some useful purpose and construction, and when
different terms are used in various parts of a statute, it is reasonable to
assume that a distinction between the terms was intended.”17  The
unambiguous language of the statute demonstrates that term “the declaration
sheet of the policy” in Section 3902(b)(2) refers to each single UIM policy
under consideration.  Accordingly, we hold that the Delaware statute
                                                                                                                             
17 General Motors Corp. v. Burgess, Del. Supr., 545 A.2d 1187, 1191 (1988) (quoting C
& T Assocs., Inc. v. New Castle County, Del. Ch., 408 A.2d 27, 29 (1979)).
11
precludes the stacking of UIM coverages for purposes of the threshold
inquiry into whether the underinsured motorist coverage provided by any
one UIM policy is triggered.
Conclusion
The judgments of the Superior Court are reversed.  This matter is
remanded for further proceedings in accordance with this opinion.
12
BERGER, J. Dissenting:
This Court has repeatedly held that the purpose of § 3902 is to
“[protect] innocent persons from the negligence of unknown or impecunious
tortfeasors.”18  Protection means compensation, and the goal of fully
compensating innocent persons “has been applied by our courts in
construing the uninsured motorist laws.”19  The majority does not mention,
and apparently does not consider, this overriding legislative policy in
analyzing the meaning of § 3902.  Instead, it says that the statute is
unambiguous and that it plainly precludes stacking of UIM coverage for
purposes of determining whether the underinsured motorist coverage
provided by any one policy is triggered.
The majority’s premise – that the statute is unambiguous – does not
bear scrutiny.  It ignores the precedents from this Court, which demonstrate
by their lack of unanimity that this statute is susceptible of more than one
reasonable interpretation.  Indeed, in one of the more recent realignments of
the majority and dissenters, two justices noted:
                                          
18 Frank v. Horizon Assur. Co, Del. Supr., 553 A.2d 1199, 1201 (1989).  See also State
Farm Mut. Auto. Ins. Co. v. Arms, Del. Supr., 477 A.2d 1060 (1984); Hurst v. Nationwide
Mut. Ins. Co., Del. Supr., 652 A.2d 10 (1995); Nationwide Mut. Auto. Ins. Co. v. Peebles.
Del. Supr.,  688 A.2d 1374 (1997).
13
This Court has struggled for many years with the language of Section
3902(b) and our shifting consensus has provided little guidance to the
bar or the trial courts.  Our differences have resulted from
disagreements, honestly held, over the meaning of a statute that is
arguably ambiguous.20
In deciding whether § 3902(b)(2) is ambiguous, it is not enough to
parse the language of that subsection.  The entire statute must be
considered.21  This Court has held, focusing on § 3902(c), “that Section 3902
permits stacking the policy limits of uninsured coverage in the absence of an
express prohibition....”22 There is no express prohibition in § 3902(b)(2), yet
the majority interprets that subsection as prohibiting stacking.  An equally
plausible interpretation, and one that is consistent with the overall purpose of
the statute, is that § 3902(b)(2) does not address stacking at all. Under this
view, the general rule allowing stacking absent an express prohibition would
control.
Section 3902(b)(2) defines “underinsured motor vehicle” as one for
which the limits of all liability coverage total less than the limits of “the
uninsured motorist coverage.” In a separate sentence, the statute then
                                                                                                                             
19State Farm Mut. Auto. Ins. Co. v. Arms, 477 A.2d at 1064.
20 Nationwide Mut. Auto. Ins. Co. v. Peebles, 688 A.2d at 1380.
21 Spielberg v. State, Del. Supr., 558 A.2d 291 (1989).
22Hurst v. Nationwide Mut. Ins. Co., 652 A.2d at 14.
14
requires insurers to state the limits of the underinsured coverage in the
declaration sheet for the insurance policy.  The question is whether, by using
the term “the uninsured motorist coverage” instead of, for example, “all the
uninsured motorist coverage,” the legislature intended to prohibit stacking.
The answer to that question cannot be gleaned from the plain meaning of the
language itself, which is why there are rules of statutory construction.  The
primary rule is that statutes should be interpreted to give effect to the intent
of the legislature.23  Applying that rule, § 3902(b)(2) should be construed as
permitting stacking.
I would affirm the Superior Court and, accordingly, I dissent.
                                          
23Ingram v. Thorpe, Del. Supr., 747 A.2d 545, 547 (2000).