1

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

MICHAEL VITO, : 

: C.A. No. S21C-08-006 CAK

Plaintiff, :

:

v. :

: TRIAL BY JURY OF 

WATERSIDE PROPERTY : TWELVE DEMANDED

OWNERS ASSOCIATION, INC., :

a Delaware Corporation, and :

PHILADELPHIA INDEMNITY :

INSURANCE COMPANY, :

:

Defendants. :

_______________________________:

:

:

WATERSIDE PROPERTY :

OWNERS ASSOCIATION, INC., :

:

Crossclaim Plaintiff, :

:

v. :

:

PHILADELPHIA INDEMNITY :

INSURANCE COMPANY, :

:

Crossclaim Defendant. :

:

_______________________________:

:

WATERSIDE PROPERTY :

OWNERS ASSOCIATION, INC., :

:

Third-Party Plaintiff, :

:

v. :
2

CERTAIN UNDERWRITERS AT :

LLOYD’S, LONDON, NATIONAL :

FIRE & MARINE INSURANCE :

COMPANY and INDIAN HARBOR:

INSURANCE COMPANY, :

:

Third-Party Defendants. : :

Submitted: August 24, 2022

Decided: September 21, 2022

Motion of Third-Party Defendants for Dismissal of Third-Party Plaintiff’s 

Third-Party Complaint and Related Crossclaims

GRANTED IN PART AND DENIED IN PART

MEMORANDUM OPINION AND ORDER

Richard E. Berl, Esquire, Hudson, Jones, Jaywork & Fisher, LLC, 34382 Carpenter’s 

Way, Suite 3, Lewes, DE 19958, Attorney for Plaintiff. 

Robert J. Valihura, Jr., Esquire, Morton, Valihura & Zerbato, LLC, 3704 Kennett 

Pike, Suite 200, Greenville, DE 19807, Attorney for Defendant, Crossclaim Plaintiff 

and Third-Party Plaintiff Waterside Property Owners Association, Inc.

Bruce W. McCullough, Esquire, Boddel Bove, LLC, 1225 King Street, Suite 1000, 

Wilmington, DE 19801, Attorney for Defendant and Crossclaim Defendant 

Philadelphia Indemnity Insurance Company.

Eileen M. Ford, Esquire, and Ryan D. Kingshill, Esquire, Marks, O’Neill, O’Brien, 

Doherty & Kelly, P.C., 300 Delaware Avenue, Suite 900, Wilmington, DE 19801, 

Attorney for Third-Party Defendants.

KARSNITZ, R.J.
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I. INTRODUCTION

This case involves the respective liability of two insurance companies which 

had policies with the same insured, one policy covering general liability and 

property damage (the “General Policy”), and the other covering wind and hail 

damage (the “Wind Policy”), which was expressly excluded from the first policy.

1

 

The insured under both policies is Waterside Property Owners Association, Inc., a 

Delaware corporation (“Waterside”), the homeowners’ association for the 

Townhouses of Waterside II, Phase 3, Canal Woods at Waterside, a condominium. 

A common element (the roof) of unit 64, Stage 1 of the condominium (the “Unit”) 

was allegedly damaged, causing a loss to the owner. The nearly six-year period 

between that occurrence and this opinion demonstrates how the twists, turns and 

delays that result from disputed claims among multiple insurers can result in 

protracted and expensive litigation.

II. FACTUAL AND PROCEDURAL BACKGROUND

This Motion to Dismiss Third-Party Complaint and Related Crossclaims (the 

“Motion”) under Superior Court Civil Rule 12(b)(6) and/or Superior Court Rule 

12(c)2arises from an insurance coverage dispute surrounding an alleged roof leak 

1 As a practical matter, the Wind Policy is an excess lines policy which only provides coverage 

upon the denial of the underlying General Policy.

2 Pursuant to Super. Ct. Civ. R. 12(c), when on a motion for judgment on the pleadings, matters 
4

discovered by Plaintiff Michael Vito (“Plaintiff”) in the Unit on November 11, 

2016.3 Plaintiff is the record title owner of the Unit, with an address of 33691 Canal 

Drive, Frankford, Delaware 19945.

4 Plaintiff reported the leak to Waterside and to 

Waterside’s property manager and registered agent, Seascape Management 

(“Seascape”).5 Seascape claims it reported the leak that same day to its insurance 

broker, L&W Insurance, Inc. (“L&W”), who in turn reported the claim to Defendant 

Philadelphia Indemnity Insurance Company (“Philadelphia”), with whom Waterside 

has the General Policy.6 Waterside also has the Wind Policy with Certain 

Underwriters at Lloyd’s, London, National Fire & Insurance Company and Indian 

Harbor Insurance Company (“Lloyd’s”), which provides coverage for loss or 

damage directly caused by wind and hail. 

In a letter dated September 18, 2017 and addressed to Seascape, Philadelphia 

denied the claim, based on its conclusion that high winds loosened a rooftop vent 

cap, causing the leak, and therefore the claim was excluded from coverage under the 

“Windstorm or Hail Exclusion” of the General Policy.7 Waterside claims that 

outside the pleadings are presented and not excluded by me, the motion shall be treated as one for 

summary judgment and disposed of as provided in Super. Ct. Civ. R. 56.

3 D.I. 1, Tr. #66833431, at ¶ 4.

4 Plaintiff and his wife, Christy Cronin, both lived in the Unit during the period in question. While 

Ms. Cronin is not an owner of the Unit, Plaintiff’s Complaint refers to Mr. Vito and Ms. Cronin 

as “Plaintiffs.”

5 D.I. 1, Tr. #66833431, at ¶ 5.

6 D.I. 12, Tr. #67090394, at ¶¶ 4-5.

7 D.I. 1, Tr. #66833431, at Exhibit D, pg. 1.
5

Philadelphia never sent this letter; Philadelphia asserts it issued the letter to Seascape

on the listed date.8

In any event, Lloyd’s first receipt of the claim was on August 19, 2019, when 

Waterside, through L&W, reported the claim to Lloyd’s.9 On October 10, 2019, 

Lloyd’s denied Waterside’s claim because Lloyd’s investigation revealed that the 

proximate cause of the damages to the unit “was the result of a deteriorated rubber 

gasket around the roof jack, which was replaced prior to the inspection.”10 The claim 

was also denied because the “claim occurred over two (2) years before the claim 

notice was submitted.”11

Plaintiff filed his Complaint against Waterside and Philadelphia on August 9, 

2021.12 On November 12, 2021, Waterside filed its Crossclaim against Philadelphia 

and its Third-Party Complaint against Lloyd’s.13 The Counts in the Third-Party 

Complaint against Lloyd’s include: Count I, a statutory claim under the Delaware 

Unfair Claim Settlement Practices Act14 (the “Statutory Claim”), Count II, a claim 

for a declaration15 that Lloyd’s is obligated to cover the loss under the Wind Policy 

(the “Declaratory Relief Claim”), and Count III, a claim that Lloyd’s acted in bad 

8 D.I. 12, Tr. #67090394, at ¶6; D.I. 21, Tr. #67188679, at ¶6.

9 D.I. 24, Tr. #67235744, at ¶9.

10 D.I. 1, Tr. #66833431, at Exhibit E, pg. 3.

11 Id., pg. 4.

12 D.I. 1, Tr. #66833431.

13 D.I. 12, Tr. #67090394.

14 18 Del. C. §2304(16).

15 Under 10 Del. C. §6501, et seq.
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faith (the “Bad Faith Claim”). On December 22, 2021, Philadelphia filed its Answer 

to Waterside’s Crossclaim.16 On January 14, 2022, Lloyd’s filed its Answer to 

Waterside’s Third-Party Complaint.17 Lloyd’s and Philadelphia also filed 

indemnification Crossclaims against each other.

18

With answers and crossclaims filed, the case proceeded to the discovery 

phase, and on March 14, 2022, this Court entered a Pretrial Scheduling Order with 

a trial date of June 5, 2023.19 Also on March 14, 2022, Waterside propounded 

discovery against Lloyd’s.20 No response to discovery has been forthcoming from 

Lloyd’s. 

Instead, on March 30, 2022, Lloyd’s filed the Motion.

21

 On June 6, 2022, 

Waterside filed its Answering Brief to the Motion (the “Answer”).

22 On June 22, 

2022, Lloyd’s filed its Reply Brief in Support of the Motion (the “Reply”).

23 I held 

oral argument on the Motion on August 24, 2022. This is my ruling on the Motion.

16 D.I. 21, Tr. #67188679.

17 D.I. 24, Tr. #67235744.

18 D.I. 25, Tr. #67268960; D.I. 27, Tr. #67321226.

19 D.I. 28, Tr. #67392171.

20 D.I. 29, Tr. #67393053.

21 D.I. 31, Tr. #67439259.

22 D.I. 39, Tr. #67696250.

23 D.I. 40, Tr. #67749525.
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III. STANDARDS OF REVIEW

Rule 12(b)(6)

In evaluating a motion to dismiss for failure to state a claim upon which relief 

can be granted under Superior Court Civil Rule 12(b)(6):

[T]he court accepts all factual allegations in the complaint and will deny 

the motion unless the plaintiff could not recover under any reasonably 

conceivable circumstances.24

Although the Court “must accept all ‘well-pleaded’ allegations as true for purposes 

of a Rule 12(b)(6) motion to dismiss, it will also ‘ignore conclusory allegations that 

lack specific supporting factual allegations.””

25 The Court:

must determine whether the claimant may recover under any 

reasonably conceivable set of circumstances susceptible of proof. [The 

Court] must also accept all well-pleaded allegations as true and draw 

every reasonable factual inference in favor of the non-moving party. 

This reasonable “conceivability” standard asks whether there is a 

“possibility” of recovery.26

Rule 12(c)

In evaluating a motion for a judgment on the pleadings under Superior Court 

Civil Rule 12(c): 

The Court must accept all well-pleaded facts in the complaint as true 

and draw inferences from those facts in the light most favorable to the 

non-moving party. A moving party is entitled to judgment on the 

24 Doe v. Colonial Sch. Dist., 2011 WL 7063682, at *2-3 (Del. Super. Dec. 27, 2011).

25 Prather v. Doroshow, Pasquale, Krawitz & Bhaya, 2011 WL 1465520, at *17 (Del. Super. Apr. 

14, 2011) (internal citations omitted).

26 Biomeme, Inc. v. McAnallen, 2021 WL 5411094, at *7 (Del. Super. Nov. 10, 2021).
8

pleadings only when there are no material issues of fact and the movant 

is entitled to judgment as a matter of law.27

It has been said that the standard for a motion for judgment on the pleadings under 

Rule 12(c) is “almost identical” to the standard for a motion to dismiss under Rule 

12(b)(6).28 Pursuant to Rule 12(c), when on a motion for judgment on the pleadings, 

matters outside the pleadings are presented and not excluded by the Court, the 

motion shall be treated as a motion for summary judgment and disposed of under 

Superior Court Civil Rule 56, and all parties shall be given a reasonable opportunity 

to present all material made pertinent to such a motion by Rule 56. 

IV. ANALYSIS

Count II -- Declaratory Relief

I address this claim first because it is a claim made pursuant to the Wind 

Policy between Waterside and Lloyd’s. The claim is subject to contractual defenses, 

including notice and contract limitations. Lloyd’s asserts that Waterside did not 

timely (1) notify Lloyd’s of the loss, damage, or occurrence giving rise to a potential 

claim under the Wind Policy, as required by Article XV of the Wind Policy, or (2) 

file suit for recovery of any claim under the Wind Policy, as required by Article XIX. 

Thus, argues Lloyd’s, it is not obligated to cover any loss under the Wind Policy.

27 Horizon Servs. v. Henry, 2022 WL 1316236, at *1 (Del. Super. May 2, 2022). 

28 Tibco Software Inc. v, Mediamath, Inc., 2019 WL 3034781, at *4 (Del. Super. Jul. 10, 2019).
9

The Wind Policy requires Waterside to report “as soon as possible ... every 

loss, damage or occurrence which may give rise to a claim under” the Wind Policy.29

Under Delaware law, “[w]hen a casualty insurance policy requires notice be given 

‘as soon as practicable,’ an insurer must demonstrate: (1) that the insured did not 

provide notice as soon as practicable, and (2) that the insurer suffered prejudice as a 

result of the delay.”30 Courts adjudicate the notice requirement using the reasonable 

person standard, considering the facts surrounding the claim and reasons for delayed 

notification.31 As to prejudice, courts weigh whether “Defendant is in a less 

favorable position to defend Plaintiff’s claim than it would have been had the 

notification been ‘as soon as practicable.’”32 

The Wind Policy also contains a provision which states that: 

No suit . . . for the recovery of any claim under this Policy shall by 

sustainable in any court of law or equity unless . . . you are in full 

compliance with all the terms of this policy ... and the same be 

commenced within 12 months after the occurrence which gives rise to 

the claim provided . . . if by the laws of the state within with this Policy 

is issued such limitation is invalid . . . any such claims shall be void 

unless such . . . suit . . . be commenced within the shortest limit of time 

permitted by the laws of such state.33

29 Article XV of Wind Policy.

30 Northrop Grumman Innovation Sys. v. Zurich Am. Ins. Co., 2021 WL 347015, at *33 (Del. 

Super. Feb. 2, 2021) (internal citations omitted).

31 Wilhelm v. Nationwide Gen. Ins. Co., 2011WL 4448061, *12 (Del. Super. May 11, 2011).

32 Id. at *16. Lloyd’s argues that it was prejudiced by the time delay, in that it can no longer 

examine the defect, which has since been repaired. Waterside argues that prejudice to Lloyd’s is 

a question of fact. I need not address the prejudice issue given my partial granting of Lloyd’s 

Motion.

33 Article XIX of the Wind Policy.
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Under Delaware law, “contractual limitation of action periods are valid if they are 

reasonable.”34 Delaware Courts have regularly found one-year limitations 

reasonable.35 The Delaware Supreme Court has ruled that one-year periods of 

limitations are reasonable and binding upon the insured.36 Under the terms of the 

Wind Policy, Waterside was required to initiate a suit for the recovery of any claim 

under the Wind Policy within one year of the “occurrence” giving rise to a potential 

claims under the Wind Policy. The term “occurrence” is defined in the Wind Policy 

as “any one disaster, accident or loss or series of disasters, accidents or losses which 

are covered Causes of Loss ... .” Under this definition, the “occurrence” was 

November 11, 2016 (the date Plaintiff alleges the leak occurred). However, even if 

the “occurrence” were deemed to be August 19, 2019 (the date Plaintiff notified 

Waterside of the claim) or October 10, 2019 (the date Lloyd’s denied the claim), 

Waterside did not file its Third-Party Complaint against Lloyd’s within the one-year 

period, but rather over two years later, on November 12, 2021. 

Waterside makes three contentions to rebut Lloyd’s arguments.

37 First, 

Waterside contends that, under Rule 12(b)(6), its well-pled facts, which I must 

34 Rob-Win, Inc. v. Lydia Sec. Monitoring, Inc., 2007 WL 3360036, at *11-12 (Del. Super. Apr. 30, 2007).

35 Id. at *12.

36 Woodward v. Farm Family Cas. Ins. Co., 796 A.2d 638, 642-43 (Del. 2002) (citation omitted).

37 On January 14, 2022, Lloyd’s filed its Answer to Waterside’s Third-Party Complaint. On March 

30, 2022, Lloyd’s filed the Motion. Super. Ct. Civ. R. 12(b) states that “[a] motion ... shall be 

made before pleading if a further pleading is permitted.” As a threshold matter, Waterside argues 

that the Motion was thereby waived as having been filed after the Answer. In my judicial 

discretion, I am going to allow the Motion.
11

accept as true, require me to deny the Motion because there is a “reasonably 

conceivable” set of circumstances under which Waterside will recover against 

Lloyd’s. Waterside also argues that, under Rule 12(c), it states non-conclusory facts 

which provide a legal basis upon which Lloyd’s could be held liable to Waterside, 

and thus I must deny the Motion to the extent it is deemed to be a motion for 

judgment on the pleadings.

Second, Waterside argues that its well-pled allegations in the Third-Party 

Complaint preclude a dismissal at this stage of the litigation based on the issue of its 

notice to Lloyd’s of the occurrence “as soon as practicable.” Waterside contends that 

this is a question of fact, which can only be decided after trial of the matter, and that 

I must deny the Motion because there is a “reasonably conceivable” set of 

circumstances under which Waterside will recover against Lloyds because those 

facts, as pled, demonstrate, at least at the pleading stage, that Waterside acted not 

only “as soon as practicable” but as soon as it was able to do so. Even if I were to 

apply the standard of review for judgment on the pleadings, Waterside argues that I 

must still deny the Motion, because the issue of whether Waterside acted “as soon 

as practicable” is a question of fact, which can only be decided after trial of the 

matter. Waterside cites our Supreme Court:
12

[A] mere lapse of time is not necessarily the determining factor; the ... 

question is whether notice is given within a reasonable time in view of 

the facts and circumstances of the particular case.38

Waterside argues that this “reasonable time” standard requires discovery, and that 

the final determination of whether the notice was given within a reasonable time can 

only be made after a trial of the matter, and after my consideration by as to whether 

the actions of Waterside were within a reasonable time, given all that transpired 

during the period of delay. Thus, asserts Waterside, because there is a question of 

fact as to whether notice was given within a reasonable time in view of the 

circumstances here, a request for judgment on the pleadings, which requires the 

existence of no material dispute of fact, must be denied.

I disagree with Waterside’s first two arguments. This case involves more than 

a “mere lapse of time.” The time delays are substantial. Given Delaware law on 

notice of an occurrence to the insurer “as soon as practicable,” and the enforceability 

of time limitations on the filing of a suit on a claim under the policy after an 

occurrence, and given the lengthy delays here, I find no set of circumstances under 

either Rule 12(b)(6) or Rule 12(c) under which Waterside could recover against 

Lloyd’s for a claim of a loss, damage or occurrence under the Wind Policy given the 

provisions of Article XV or Article XIX of the Wind Policy.

38 State Farm Mut. Auto. Ins. Co. v. Johnson, 315 A.2d 585, 587 (Del. 1973) (citing Home Indem. 

Co. v. Ware, 183 F. Supp. 367, 368 (D. Del. 1960)).
13

With respect to the requirement of notice of an occurrence “as soon as 

practicable,” and applying a “reasonable time” standard, even assuming arguendo

that Philadelphia never sent its denial letter, a reasonable entity in Waterside’s 

position would have discovered Philadelphia’s denial and notified Lloyd’s of its 

claim sooner. There is a nearly three-year gap between Waterside’s first report to 

Philadelphia and Waterside’s discovery of Philadelphia’s denial. At no point did 

Waterside receive any payments from Philadelphia or receive word from Plaintiff 

that Philadelphia covered his repairs. Nevertheless, in nearly three years, Waterside 

took no action to follow-up on its claim nor check to see if it needed to file with any 

of its other insurers. If Waterside had done so, it would have obtained information 

that would have allowed it to provide timely notice of a loss to, and file a timely suit 

for a claim against, Lloyd’s under the Wind Policy. 

Under the terms of the Wind Policy, Waterside was required to initiate suit 

within one year of the “occurrence,” which was November 11, 2016, the date 

Plaintiff alleges the leak occurred. However, even if the “occurrence” is deemed to 

be August 19, 2019 (the date Waterside notified Lloyd’s of the claim) or October 

10, 2019 (the date Lloyd’s denied the claim), Waterside failed to timely file its ThirdParty Complaint against Lloyd’s within the one (1) year contractual suit limitation 

period. Instead, Waterside filed its Third-Party Complaint against Lloyd’s over two 

(2) years later, on November 12, 2021.
14

Therefore, Lloyd’s Motion to Dismiss is GRANTED as to Waterside’s 

Declaratory Relief Claim, with respect to the issues of notice to the insurer “as soon 

as practicable” and timely filing of a suit for a claim under the Wind Policy.

Inasmuch as Waterside’s Third-Party Complaint against Lloyd’s fails as a matter of 

law with respect to the Declaratory Relief Claim, so too do the Crossclaims asserted 

by Philadelphia against Waterside as to that claim, because the sole reason for 

Lloyd’s presence in this matter derives from the Wind Policy with Waterside and no 

other party. Consequently, crossclaims asserted by Philadelphia against Lloyd’s for 

contribution and/or indemnification with respect to the Declaratory Relief Claim are 

moot with respect to those two issues.

Counts I and III -- Statutory Claim and Bad Faith Claim

Third, Waterside argues that, even if I grant the Motion in part, its Third-Party 

Complaint contains no contractual claims against Lloyd’s for loss, damage, or 

occurrences under the Wind Policy. Rather, there remain two claims: the Statutory 

Claim and the Bad Faith Claim. These two Claims are not claims for a recovery of 

any claim under the Wind Policy, but rather standalone claims related to Waterside’s 

recovery from Lloyd’s because of its alleged illegal, wrongful, and tortious behavior.

These two claims, both directed at Lloyd’s actions and inactions, and its alleged 

unlawful and wrongful conduct, are therefore not covered claims under the one-year 

limitation period provision under the Wind Policy because neither seeksthe recovery 
15

of any claim under the Wind Policy. Waterside argues that the Wind Policy must be 

read as excluding from the litigation limitation such claims as are related to 

standalone wrongful, tortious, or illegal conduct, given the plain and unambiguous 

meaning of the language used in the Wind Policy. If that language is ambiguous, 

since it was drafted by Lloyd’s it must be strictly construed against Lloyd’s under 

accepted rules of contractual interpretation. The narrow limitation that the one-year 

lawsuit limitation imposes on the types of claims subject thereto does not, argues 

Waterside, include every cause of action that may arise against Lloyd’s, and 

certainly not the Bad Faith Claim and the Statutory Claim that are alleged in 

Waterside’s Third-Party Complaint.

In its Reply, Lloyd’s argues that the Statutory Claim and the Bad Faith Claim 

are not standalone claims. Since they originate solely from Lloyd’s actions in 

responding to and investigating Waterside’s claim under the Wind Policy, they are 

barred by the Wind Policy’s notice of loss and one-year suit limitation provisions as 

a matter of law. 

Lloyd’s further argues that this is the unambiguous, plain, ordinary meaning 

of the Wind Policy language and gives effect to the parties' mutual intent at the time 

of contracting.

39

 I am, of course, bound to apply such plain meaning to this insurance 

39 Northrop Grumman Innovation Sys. v. Zurich Am. Ins. Co., 2021 WL 347015 (Del. Super. Feb. 

2, 2021). 
16

policy: “[T]he language in insurance contracts is interpreted according to its plain 

meaning.”40 Thus, argues Lloyd’s, the Statutory Claim and the Bad Faith Claim 

should be dismissed as a matter of law.

Here the language is:

[N]o suit, action or proceeding for the recovery of any claim under this 

policy shall be sustained ... unless ... commenced within twelve 

months after the occurrence ... [emphasis suppled]

This language is plain and only covers claims under the Wind Policy. The claims in 

Counts I and III are not, in my view, “under the policy,” but pursuant to statutory 

provisions. Even were I to find this language ambiguous, I would construe it against 

the drafter (Lloyd’s) and in favor of Waterside.

Count III -- Bad Faith Claim

In Count III of its November 12, 2021 Third-Party Complaint against Lloyd’s, 

Waterside asserts a Bad Faith Claim against Lloyd’s. It claims that Lloyd’s: 

• refused to pay its wind claim without first conducting a 

reasonable investigation based upon all available 

information.

40 Shook & Fletcher Asbestos Settlement Tr. v. Safety Nat’l Cas. Corp., 2005 WL 2436193, at *13 

(Del. Super. Sept. 29, 2005).
17

• did not attempt in good faith to effectuate a prompt, fair and 

equitable settlement of a covered loss.

• ignored Philadelphia’s September 18, 2017 finding that the 

occurrence was caused by wind, and instead based its denial 

of the wind claim on the replacement of a single roof 

component.

• failed to promptly provide a reasonable explanation of the 

applicable policy language in relation to the facts or 

applicable law for denial of the wind claim.

• compelled Waterside to institute litigation in the form of the 

Crossclaim and the Third-Party Complaint to recover 

amounts due under an insurance policy.

There has been no briefing or discovery with respect to the Bad Faith Claim. There 

remains an existing contract between Waterside and Lloyd’s – the Wind Policy --

which may or may not give rise to a Bad Faith Claim. In any event, it is premature 

for me to consider a motion for dismissal of the Bad Faith Claim. At the appropriate 

time, I would certainly entertain arguments from both parties regarding the Bad Faith 

Claim.
18

Count I -- Statutory Claim

In Count I of its November 12, 2021 Third-Party Complaint against Lloyd’s, 

Waterside asserts a claim against Lloyd’s under the Delaware Unfair Claim

Settlement Practices Act.41 It claims that Lloyd’s:

• was a party to a valid insurance contract with Waterside.

• refused to pay the wind claim without first conducting a 

reasonable investigation based upon all available 

information.

• did not attempt in good faith to effectuate a prompt, fair and 

equitable settlement of a covered loss.

• Ignored Philadelphia’s September 18, 2017 finding that the 

occurrence was caused by wind, and instead based its denial 

of the wind claim on the replacement of a single roof 

component.

• failed to promptly provide a reasonable explanation of the 

applicable policy language in relation to the facts or 

applicable law for denial of the wind claim.

41 18 Del. C. §2304 (16).
19

• compelled Waterside to institute litigation in the form of the 

Crossclaim and the Third-Party Complaint to recover 

amounts due under an insurance policy.

There has been no briefing or discovery with respect to the Statutory Claim. Lloyd’s 

raised the issue of whether such a claim is cognizable under Delaware law in its 

Reply Brief. At a minimum, due process requires that all parties have an opportunity 

to address the Statutory Claim in a more fulsome manner. For this reason alone, the 

Statutory Claim in not now susceptible to a motion to dismiss.

In its Reply, Lloyd’s argues that a line of Delaware cases holds that the 

Delaware Unfair Claim Settlement Practices Act does not provide for a private cause 

of action, nor does the Act support an implied breach of duty claim.42 Therefore, 

Lloyd’s asks me to dismiss the Statutory Claim as a matter of law.

However, in my view it is premature for me to consider a motion for dismissal 

of the Statutory Claim. At the appropriate time, I would certainly entertain 

arguments from both parties regarding the Statutory Claim.

V. CONCLUSION

For the reasons discussed above, the Motion of Third-Party Defendants for 

42 See, e.g., Peterson v. 21st Century Centennial Ins. Co., 2015 WL 4154070, at *9 (Del. Super. 

July 9, 2015) (“this Court has repeatedly held that 18 Del. C. § 2301, et seq., and specifically § 

2304(16) does not provide for a private cause of action.”)
20

Dismissal of Third-Party Plaintiff’s Third-Party Complaint and All Related 

Crossclaims is GRANTED as to the Declaratory Relief Claim and DENIED as to 

the Statutory Claim and the Bad Faith Claim.

IT IS SO ORDERED.

/s/ Craig A. Karsnitz

cc: Prothonotary