IN THE SUPREME COURT OF THE STATE OF DELAWARE 

DONEGAL MUTUAL INSURANCE § 

COMPANY A/S/O SEAFORD § 

APARTMENT VENTURES LLC § 

T/A THE VILLAGES OF STONEY § No. 379, 2022 

BROOK APARTMENTS, § 

 § Court Below: Superior Court 

 Plaintiff Below, § of the State of Delaware 

 Appellant, § 

 § C.A. No. S21C-08-013 

v. § 

 § 

SATHIYASELVAM THANGAVEL § 

and SASIKALA MUTHUSAMY, § 

 § 

Defendants Below, § 

 Appellees. § 

 

Submitted: April 19, 2023 

Decided: July 18, 2023 

Before SEITZ, Chief Justice; VALIHURA and TRAYNOR, Justices. 

Upon appeal from the Superior Court. AFFIRMED. 

Jennifer A. Sutton, Esquire, MARGOLIS EDELSTEIN, Wilmington, Delaware, for 

Plaintiff Below, Appellant Donegal Mutual Insurance Company. 

Wade A. Adams, III, Esquire, Marissa D. White, Esquire, LAW OFFICES OF 

WADE A. ADAMS, III, Newark, Delaware, for Defendants Below, Appellees 

Sathiyaselvam Thangavel and Sasikala Muthusamy. 

 
2 

SEITZ, Chief Justice: 

Under the Sutton rule, landlords and tenants are co-insureds under the 

landlord’s fire insurance policy unless a tenant’s lease clearly expresses an intent to 

the contrary.1 If the Sutton rule applies, the landlord’s insurer cannot pursue the 

tenant for the landlord’s damages by way of subrogation. In this case, the Superior 

Court ruled in the tenants’ favor at summary judgment that the Sutton rule applied 

because the lease did not clearly express an intent to hold the tenants liable for the 

landlord’s damages. We agree and affirm. 

I. 

 Sathiyaselvam Thangavel and Sasikala Muthusamy were tenants who leased 

an apartment from Seaford Apartment Ventures, LLC. The complaint filed by 

Seaford Apartment’s insurer, Donegal Mutual Insurance Company, alleged that the 

tenants hit a sprinkler head while they flew a drone inside the apartment. Water 

sprayed from the damaged sprinkler head and caused damage to the apartment 

building. 

 Seaford Apartment filed an insurance claim with Donegal, who paid 

$77,704.06 to repair the water damage. Donegal then brought this action against the 

tenants through subrogation and alleged that the tenants were negligent and breached 

1 Sutton v. Jondahl, 532 P.2d 478, 482 (Okla. Civ. App. 1975). 
3 

the property’s rules and regulations. Donegal sought to recover the repair costs from 

the tenants. 

In relevant part, the tenants’ lease provided as follows: 

12. NO LIABILITY FOR LOSS OR DAMAGE TO TENANTS’ 

PERSONS OR PROPERTY; INDEMNITY TO LANDLORD. 

(a) Tenants agree to be solely responsible for all loss or damages to 

Tenants or their property or to any other person which may be situated 

in the Rental Unit and storage area; gross negligence of Landlord, its 

servant, agents or employees excepted[.] In addition, Tenants agree to 

indemnify and save Landlord harmless from any and all loss occasioned 

by the tenant’s breach of any of the covenants, terms and conditions of 

the Agreement, or caused by the tenant(s) family, guests, visitors, 

agents or employees . . . .2

(b) Tenant agrees to procure and maintain adequate content and liability 

insurance in an amount not less than $300,000.00 to afford protection 

against the risks herein assumed . . . .3

29. TENANT RESPONSIBLE FOR DAMAGES. 

Tenant by accepting this agreement covenants and agrees that tenant 

will be responsible for all damages accidentally, maliciously, 

intentionally, or negligently caused by the tenant, tenant’s family, 

guests or invitees to any of the property of the landlord.4

The tenants moved for summary judgment and argued that the law considers 

them co-insureds under the landlord’s fire insurance policy absent an express 

agreement to the contrary. They relied on a legal defense from the landmark case, 

Sutton v. Jondahl. In Sutton, the landlord’s insurer paid for the fire loss caused by 

the tenant’s minor son’s unsupervised chemical experiments in the rented home. 

2

 Corrected App. to Opening Br. at A-017 [hereinafter “A__”] (Compl.). 

3

Id. 

4

 A-020. 
4 

The Oklahoma Court of Appeals held that the insurer did not have a right to 

subrogation because “when fire insurance is provided for a dwelling[,] it protects . . . 

the possessory interests of a tenant absent an express agreement by the latter to the 

contrary.”5 

The Superior Court granted the tenants’ summary judgment motion. It 

concluded that the lease in this case was substantially similar to the leases in three 

other Delaware cases – Lexington Insurance Co. v. Raboin,

6 Deloach v. Houser,7

and State Farm Fire & Casualty Co. v. Lambert8 – all of which found that the Sutton 

rule applied and that the leases did not clearly express an intent to the contrary.9 

On appeal, Donegal claims that the Superior Court erred because the lease 

here is materially different from the leases in the cases noted above. The Seaford 

Apartment lease provisions, according to Donegal, show a clear agreement that the 

tenants are liable for the water damage they caused. Even if the lease is unclear, 

Donegal argues that the case should proceed to discovery if there is any ambiguity 

about the parties’ intent about the tenants’ liability. 

Our standard of review is de novo.

10 “Summary judgment may be granted if 

there are no material issues of fact in dispute and the moving party is entitled to 

5 Sutton, 532 P.2d at 482. 

6

 712 A.2d at 1016. 

7

 2018 WL 5899080, at *2. 

8

 2017 WL 5593784, at *3 (D. Del. Nov. 21, 2017). 

9 Donegal Ins. Grp. v. Thangavel, 2022 WL 4284787, at *2 (Del. Super. Sept. 15, 2022). 

10 Lyondell Chem. Co. v. Ryan, 970 A.2d 235, 241 n.14 (Del. 2009). 
5 

judgment as a matter of law. The facts and all reasonable inferences must be 

considered in the light most favorable to the non-moving party.”11

II. 

A. 

In Lexington, apartment tenants allegedly caused a fire by installing a ceiling 

fan in violation of the landlord’s rules and regulations.12 The landlord’s insurer 

attempted to recover against the tenant for the landlord’s damages through 

subrogation. The Superior Court granted summary judgment to the tenants, which 

was affirmed on appeal. The Superior Court held that “fire insurance secured by the 

landlord [is] obtained for the mutual benefit of landlord and lessee.”13 Therefore, 

“in the absence of an express agreement or provision in the lease that would place 

liability on the tenant for the tenant’s negligence in causing the fire, the landlord’s 

carrier cannot obtain subrogation against the tenant.”14 The court pointed out that, 

practically speaking, tenants contribute to the cost of the landlord’s fire insurance 

premiums through their rental payments: 

The landlords of course could have held out for an agreement that the 

tenant would furnish fire insurance on the premises. But they did not. 

They elected to purchase the coverage. To suggest the fire insurance 

does not extend to the insurable interest of an occupying tenant is to 

ignore the realities of urban apartment . . . renting. Prospective tenants 

11 Id. at 241. 

12 Lexington, 712 A.2d at 1013. 

13 Id. at 1015. 

14 Id. at 1016. 
6 

ordinarily rely upon the owner of the dwelling to provide fire protection 

for the realty (as distinguished from personal property) absent an 

express agreement otherwise. Certainly it would not likely occur to a 

reasonably prudent tenant that the premises were without fire insurance 

protection or if there were such protection it did not inure to his benefit 

and that he would need to take out another fire policy to protect himself 

. . . .

15

Continuing, the court also held that “for purposes of preventing subrogation, 

residential tenants are co-insureds, absent some clearly expressed intent in the lease 

to the contrary.”16 According to the court: 

Such a position more equitably squares with the reality of the landlord’s 

generally dominant relationship over the residential tenant, the typical 

expectations of the parties with regard to the assignment of risk of loss 

for fire, the practical effect that rental payments contribute to the cost 

of the landlord’s fire insurance premiums, the mutual benefits derived 

by the parties from dividing respective liabilities, and the efficiency of 

not carrying duplicative insurance coverage on the same property.17

The Lexington court found that the lease “clearly contemplates a division of 

risks between landlord and tenant.”18 On the tenant side, they had to secure 

insurance coverage against loss to the tenant’s person or property located within the 

rental unit or common areas and agreed to indemnify the landlord against any loss 

by the tenant. The tenant could not impair the landlord’s fire or hazard insurance. 

And if the landlord had to pay more for its coverage, the tenant was liable for the 

additional expense. The lease did not provide that the tenant had to obtain fire 

15 Id. (omissions in original) (quoting Sutton, 532 P.2d at 482). 

16 Id.

17 Id.

18 Id. at 1014.
7 

insurance to cover the landlord’s property or that the tenant was liable if they were 

negligent in causing a fire.19

In Deloach, the Superior Court found that the lease was indistinguishable 

from the lease in Lexington.

20 The lease contained provisions that the tenants should 

“return the property in good condition, [] pay for damages in excess of normal wear 

and tear, and [] pay for any damages to the landlord’s property caused by the tenant 

or his relatives or guests.”21 The court found these did not “satisfy Lexington’s

mandate that a risk-shifting provision placing the risk of loss by fire to the rental unit 

or the whole property caused by the tenant’s negligence be stated clearly and 

unequivocally in the lease.”22

Similarly, in Lambert, the lease provided that the tenant was liable for all 

damages to the property caused by the tenant.23 The United States District Court in 

District of Delaware found that “[t]he broad language the Lease utilizes does not 

show that the parties specifically considered and intended to hold Defendant liable 

for negligent fires.”24 

19 Id. 

20 2018 WL 5899080, at *1. 

21 Id. 

22 Id.

23 2017 WL 5593784, at *3. 

24 Id. 
8 

B. 

The Superior Court correctly found that paragraphs 12(a), 12(b), and 29 of the 

Seaford Apartment lease did not clearly express an intent that the tenants were 

responsible for the water damage in this case.25 The lease provisions in this case are 

identical or substantially similar to the lease provision in the three earlier cases: 

Seaford Apartment Lease Lexington, Deloach, and Lambert 

Leases

“Tenants agree to be solely 

responsible for all loss or damages to 

Tenants or their property or to any 

other person which may be situated in 

the Rental Unit and storage area; 

gross negligence of Landlord, its 

servant, agents or employees 

excepted . . . .”26

“Resident agrees to be solely responsible 

for all loss [or] damage to Resident’s 

person or property or to the property of 

any other person which may be situate in 

the rental unit during the term of this 

rental agreement or any renewal or 

extension thereof, including any loss of 

fire or theft in and about the rental unit 

and storage area, negligence of Owner, 

its servants, agents, or employees 

excepted . . . .”27

“. . . Tenants agree to indemnify and 

save Landlord harmless from any and 

all loss occasioned by the tenant’s 

breach of any of the covenants, terms 

and conditions of the Agreement, or 

caused by the tenant(s) family, guests, 

visitors, agents or employees.”

28

“. . . Resident agrees to indemnify and 

save Owner harmless from any and all 

loss occasioned by Resident’s breach of 

the covenants, terms and conditions of 

this general agreement or caused by his 

family, guests, visitors, agents or 

employees.”

29

25 Donegal does not dispute that the Sutton rule applies to the water damage claims in this case. 

Reply Br. at 4 (“Appellant agrees with Appellee that the reasoning and ruling of Lexington applies 

in this case even though the damage was caused by water.”). 

26 A-017 (Paragraph 12(a) of the lease). 

27 Lexington, 712 A.2d at 1013. 

28 A-017 (Paragraph 12(a) of the lease).

29 Lexington, 712 A.2d at 1013. 
9 

“Tenant agrees to procure and 

maintain adequate content and 

liability insurance in an amount not 

less than $300,000.00 to afford 

protection against the risks herein 

assumed . . . .”30

“. . . [R]esident agrees to procure content 

and liability insurance to afford 

protection to himself against risks herein 

assumed.”31

“Tenant by accepting this agreement 

covenants and agrees that tenant will 

be responsible for all damages 

accidentally, maliciously, 

intentionally, or negligently caused 

by the tenant, tenant’s family, guests 

or invitees to any of the property of 

the landlord.”32

“The tenant will be responsible for 

damages to the unit and premises, other 

than normal wear and tear, that are 

caused by any member of the tenant’s 

family, guests of the tenant, and persons 

under the tenant’s control . . . .”33

As the Lexington court pointed out, these general provisions do not support a 

specific intent to require the tenant to obtain fire insurance to cover the landlord’s 

property or that the tenant would be liable if they were negligent in causing a fire.34 

The Seaford Apartment lease also has a provision suggesting that it is the landlord’s 

30 A-017 (Paragraph 12(b) of the lease). 

31 Lexington, 712 A.2d at 1013. 

32 A-020 (Paragraph 29 of the lease). 

33 Lambert, 2017 WL 5593784, at *1 (omission in original). See also Deloach, 2018 WL 5899080, 

at *1 (lease provisions included “the tenant’s obligation to . . . pay for any damages to the 

landlord’s property caused by the tenant or his relatives or guests.”). 

34 See also Middlesex Mut. Assur. Co. v. Vaszil, 900 A.2d 513, 518 (Conn. 2006) (holding that the 

insurer was not entitled to subrogation for the fire loss against the tenant because the lease “does 

not remotely inform the defendants that they would be liable to their landlord’s insurer for any 

casualty fire damages to the landlord’s building.”); Uren v. Dakota Dust-Tex, Inc., 643 N.W.2d 

678, 680–81 (N.D. 2002) (holding that an indemnification provision and a provision requiring 

liability insurance in the lease did not constitute “express agreement indicating [the tenant] should 

not be considered an implied co-insured under [the landlord’s] property insurance policy”). See 

also 46A C.J.S. Insurance § 2040 (2023). 
10 

responsibility to maintain insurance for fire and other hazards, and the tenant cannot 

engage in an activity that would raise the insurance premium.35 

For the first time in its reply brief, Donegal cites Deardorff Associates, Inc. v. 

Brown.

36 There, the Superior Court found that the Sutton rule did not apply to shield 

the tenant from a subrogation action for negligently causing a fire.37 It found a 

specific intent to hold the tenant liable for fire damage in a subrogation action 

through two lease provisions – a maintenance provision providing that the “Landlord 

shall not be responsible or liable for damage . . . caused by any act or negligence of 

tenant;”38 and a termination clause which provided that the tenant shall return the 

premises in good condition except for ordinary wear and tear and “accidental fire 

not occurring through tenant’s negligence.”39 

Deardorff does not apply here. The court in Deardorff distinguished the 

Lexington decision by noting that, in the Deardorff lease, “there are two statements 

in the lease that the tenant is liable for fires it negligently causes.”40 The Seaford 

35 A-022 (“Tenant . . . shall . . . [n]ot bring anything to or keep anything in the rental unit . . . , or 

commit or allow to be committed any act objectionable to the fire or other hazard insurance 

companies for the landlord whereby the fire or other hazard insurance on the rental unit or any part 

thereof or on the building of which the rental unit is a part shall become void, suspend or rated as 

more hazardous substance or other obnoxious substances.”). 

36 1999 WL 458777 (Del. Super. May 6, 1999), aff’d, 781 A.2d 692 (Del. 2001). 

37 Deardorff, 1999 WL 458777, at *4. 

38 Id. at *3 (omissions in original).

39 Id. (emphasis in original).

40 Id.
11 

Apartment lease did not specifically address liability for fire or water damage caused 

by the tenant’s negligence.41 

 Finally, the Superior Court correctly observed that the policy considerations 

influencing the Lexington decision – recognizing the one-sided nature of residential 

leasing and protecting the parties’ typical expectations regarding the assignment of 

risk of loss – are served by applying the Sutton rule in this case. Residential 

landlords control the lease terms. If they want, they can clearly express a 

requirement that the tenants obtain fire insurance or notify them that they would not 

benefit from the landlord’s fire insurance policy. 

III. 

 We affirm the Superior Court’s judgment. 

41 Donegal argues that Paragraph 29 of the lease explicitly provides for the tenant’s liability for 

damages negligently caused by the tenant. But Paragraph 29 reads that the tenant is liable for 

damages caused “accidentally, maliciously, intentionally, or negligently.” A-020. This is not 

materially different from the provisions in Deloach and Lambert, which held the tenant responsible 

for property damage caused regardless of his mental state. Deloach, 2018 WL 5899080, at *1; 

Lambert, 2017 WL 5593784, at *1. To the extent that the lease here specifically mentions water 

damage in other provisions, Donegal failed to raise the argument below, and such arguments are 

waived.