Title: Twin City Fire Insurance Company v. Delaware Racing Association et al.
Citation: N/A
Docket Number: 373, 2003
State: Delaware
Issuer: Delaware Supreme Court
Date: December 29, 2003

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
TWIN CITY FIRE INSURANCE  
§ 
COMPANY, 
 
 
 
§ 
 
 
 
 
 
 
§ 
 
Defendant Below,  
 
§  
No. 373, 2003 
 
Appellant,  
 
 
§ 
 
 
 
 
 
 
§ 
Court Below:  Superior 
v. 
 
 
 
 
§ 
Court of the State of 
§ 
Delaware in and for  
DELAWARE RACING   
 
§ 
New Castle County 
ASSOCIATION and DELAWARE 
§ 
C.A. No. 01C-12-051 
PARK LLC, 
 
 
 
 
§ 
 
 
 
 
 
 
§ 
 
Plaintiffs Below,  
 
§ 
 
Appellees.  
 
 
§ 
 
Submitted: November 18, 2003 
Decided: 
December 29, 2003 
 
Before VEASEY, Chief Justice, BERGER AND JACOBS, Justices. 
 
 
Upon appeal from Superior Court.  AFFIRMED. 
 
 
 
Joseph S. Naylor, Esquire, of Pepper Hamilton LLP, Wilmington, 
Delaware, for the Appellant. 
 
 
James F. Burnett, Esquire, of Potter Anderson & Corroon LLP, 
Wilmington, Delaware, for the Appellees. 
 
 
 
 
 
 
 
 
JACOBS, Justice: 
 
2
 
Twin City Fire Insurance Company (“Twin City”) appeals from an 
order of the Superior Court granting summary judgment in favor of Twin 
City’s insureds, Delaware Park Racing Association and Delaware Park, 
LLC,1 and denying Twin City’s cross motion for summary judgment. In 
ruling for Delaware Park, the trial court held that the exclusion in Twin 
City’s general liability excess policy for “Athletic Activity” did not 
encompass (and, therefore, that the Twin City policy covered) claims against 
Delaware Park for personal injuries sustained by three persons who were 
riding and/or exercising racehorses at Delaware Park.2  We conclude, for the 
reasons next discussed, that the Superior Court ruling is correct in all 
respects and accordingly, we affirm. 
Facts 
 
On November 5, 1999, three “breeze riders,” Eric L. Jones, Roberto 
Montiel, and Leah Waldman were injured during a “breeze” when a stray 
horse that had gotten loose collided with them, causing all horses and riders 
to fall. A “breeze” is a training exercise in which a horse is run out of a 
starting gate, usually timed at a speed to the horse’s potential. The purpose 
of the breeze ride was to exercise the horses’ muscles and to accustom the 
                                                 
1 Delaware Park Racing Association and Delaware Park, LLC are referred to collectively 
in this Opinion as “Delaware Park.” 
2 Delaware Racing Association and Delaware Park, LLC, C.A. No. 01C-12-051 (Del 
Super., Mar. 26, 2003) (“Opinion”) 
 
3
horses to running in close proximity to one another without being frightened.  
The riders were not racing the horses, but, rather, were exercising them as 
part of a morning workout. 
Jones and Montiel had been trained and employed as both exercise 
riders and jockeys.  The third rider, Waldman, was employed only as an 
exercise rider.  As a result of the collision, each of these three riders suffered 
personal injury and filed an action for damages against Delaware Park and 
others.  The Waldman lawsuit was settled for $1.2 million, and the Jones and 
Montiel lawsuits remain pending.  Twin City refused coverage of all these 
claims based on an exclusion in the excess policy that it had issued to 
Delaware Park. 
 
By way of background, Delaware Park obtained its statutorily-
required liability insurance coverage through Lowe-Tillson, an insurance 
broker that had represented Delaware Park for several years.  Through 
Lowe-Tillson, Delaware Park renewed a two-tiered insurance plan in which 
CNA Insurance Company (“CNA”) provided the primary coverage with 
limits of $1 million per occurrence, and Twin City provided the excess 
coverage in a secondary, umbrella policy having limit of $10 million per 
occurrence.  Given those coverages, after the $1.2 million settlement was 
reached in the Waldman lawsuit, CNA contributed to that settlement its 
 
4
policy limits of $1 million, and Delaware Park then looked to Twin City to 
pay the $200,000 excess.  Twin City denied coverage, based on an exclusion 
contained in its policy. The language of the exclusion upon which Twin 
Cities relied in denying coverage reads as follows: 
Description of Designated “Athletic Activity”:   
HORSERACING. 
 
The policy does not apply to “bodily injury” to any person 
while practicing or participating in any “Athletic Activity” 
shown in the above Schedule. For the purposes of this 
endorsement, “Athletic Activity” means physical fitness 
activity including gym classes or similar activities; or a sports 
or athletic contest or exhibition that you [the insured] sponsor.3 
 
Delaware Park then filed this coverage action in the Superior Court.  
After discovery, both sides filed cross motions for summary judgment.  
After finding that the Twin Cities policy covered the three underlying 
claims, the Superior Court granted Delaware Park’s motion for summary 
judgment, and denied Twin Cities’ cross motion.  Twin Cities appealed from 
the order implementing those rulings. 
 
Analysis 
 
The issue presented on the summary judgment motions in the trial 
court was one of law:  was the activity in which the breeze riders were 
engaged “horseracing” within the meaning of the above-quoted policy 
                                                 
3 “Umbrella Liability Insurance Policy” effective April 1, 1999, Endorsement 3.  
 
5
exclusion?  The trial court answered that question in the negative. Twin 
City’s appeal presents the identical issue.  This Court reviews, de novo, 
rulings that involve the interpretation of contract language, including 
policies of insurance.4  This Court also reviews de novo a decision granting 
summary judgment.5  Because in this case all parties agreed that no material 
issue of fact precluded the entry of summary judgment, this Court’s sole task 
is to determine and apply the principles of law that govern the interpretation 
of the parties’ contract.6 
In the trial court, Twin Cities claimed that coverage was excluded 
because the activity in which the breeze riders were engaged when they 
sustained their injuries (November 5, 1999) was “practicing or participating” 
in horse racing.  The Court concluded that the breeze riders were clearly not 
“participating” in horse racing, because: 
No races were scheduled or took place on that date.  At best, 
there was a conditioning or exercising, and learning to “ride in 
company.”  There was no evidence that the breeze riders ever 
rode the horses in question, in a race or otherwise, prior to that 
date.  Indeed, Ms. Waldman was not considered to be a jockey 
and presumably couldn’t participate in the formal horseracing 
presented at Delaware Park.7  
 
                                                 
4 ABB Flakt, Inc. v. Nat’l Union Fire Ins. Co., 731 A.2d 811, 816 (Del. 1999). 
5 Id. 
6 Pike Creek Chiropractic Center, P.A. v. Robinson, 637 A.2d 418, 420 (Del. 1994). 
7 Opinion, at 11 (footnotes omitted). 
 
6
 
That ruling was not dispositive, however, because there remained the 
question of whether the breeze riders were “practicing” horse racing.  On 
that issue the trial court found the policy language to be “poorly drafted” and 
ambiguous.  Because of the ambiguity, the trial court applied both the contra 
preferentem rule of construction, which requires that the ambiguity be 
resolved against the drafter (here, Twin Cities), and also the rule of 
construction requiring that exclusions in statutorily required insurance 
policies be construed narrowly.  Applying those rules of construction, the 
trial court interpreted the exclusion for “practicing” horse racing as 
encompassing “activities directly related to the presentation of a scheduled 
or ongoing race.”  Because the conditioning or general training activity in 
which the breeze riders were engaged did not fall within that category, the 
breeze riders’ personal injury claims were found to be covered under the 
Twin City policy.8 
On appeal, Twin City claims that the trial court erred in three separate 
respects.  First, Twin City argues that the court erroneously determined that 
the exclusion was ambiguous because under the exclusion’s clear language, 
the breeze riders were “participating in” or “practicing” horseracing as a 
matter of law.  Second, Twin Cities argues that even if the exclusion was 
                                                 
8 Opinion, at 13-14. 
 
7
ambiguous, the court nonetheless improperly construed the policy against 
Twin Cities under both the contra preferentem rule and the rule requiring 
narrow construction of insurance policy exclusions.  Third, Twin Cities 
argues that even under a narrow construction of the exclusion, the result 
reached by the trial court was erroneous, because the court’s interpretation 
of the policy effectively read the term “practicing” out of the exclusion. 
These claims generate three issues:  (1) Is the policy exclusion 
ambiguous?  (2) If so, was the contra preferentem rule of construction 
and/or the rule requiring a narrow construction of the exclusion properly 
applicable in these circumstances?  (3) If so, did the trial court nonetheless 
erroneously adopt an interpretation that effectively read the term 
“practicing” out of the exclusion?  We address these issues in that order. 
1. Is the Exclusion Ambiguous? 
 
Under standard rules of contract interpretation, a court must determine 
the intent of the parties from the language of the contract.9  A determination 
of that kind will sometimes require the court to decide whether or not the 
disputed contract language is ambiguous.  Contract language is ambiguous if 
it is “reasonably susceptible of two or more interpretations or may have two 
                                                 
9 Kaiser Alum. Corp. v.  Matheson,  681 A.2d 392, 395 (Del. 1996). 
 
8
or more different meanings.”10  Where no ambiguity exists, the contract will 
be interpreted according to the “ordinary and usual meaning” of its terms.11 
The analysis starts with the language of the policy exclusion, which 
relevantly states that “[t]his policy does not apply to ‘bodily injury’ to any 
person while practicing or participating in any “Athletic Activity” shown in 
the above Schedule.”12  The only “Athletic Activity” shown in the schedule 
is ‘HORSERACING.”  In fine print, “Athletic Activity” is also defined, 
inter alia, as a “sports or athletic contest or exhibition that you [the insured] 
sponsor.”  Because the policy excludes coverage both for “participating in” 
and for “practicing” horseracing, the question of whether or not the 
exclusion is ambiguous must be answered separately for each excluded 
activity.   
The trial court first held as a matter of law that the breeze riders were 
not participating in horseracing.  That holding amounted to an implicit ruling 
that the term “participating in” horseracing was not ambiguous. We agree 
with both rulings.  The Delaware Thoroughbred Racing Commision’s Rules 
of Racing for Delaware define “racing” as a “running contest between 
horses, ridden by Jockeys, over a prescribed course, at a recognized meeting, 
                                                 
10 Id. (citing Rhone-Poulenc Basic Chem. Corp. v. American. Motorists Ins. Co., 616 A.2d 
1192, 1196 (Del. 1992)). 
11 Rhone-Poulenc, 616 A.2d at 1195. 
12 A-41 (italics added). 
 
9
during regular racing hours, for a prize.”13  It is undisputed that the “breeze” 
in which the breeze riders were engaged was not a contest, was not 
conducted during regular racing hours, and did not involve a prize.  Nor was 
any ongoing race scheduled by Delaware Park taking place during the time 
that the breeze was occurring. The uncontroverted testimony of the breeze 
riders was that the activity in which they were engaged was not a race but a 
“morning workout” or “exercise.”14  The testimony also confirms that when 
a horse is breezed or exercised in company with other horses, the object is 
not to pull away from other horses and get to the finish line first, but instead 
to try to keep the horses close together.15   
For these reasons, the trial court was correct in determining, as a 
matter of law, that the “breeze activity” in which the breeze riders were 
engaged at the time of their injury did not constitute “participating” in 
horseracing. That leads us to the second threshold issue, which is whether 
the exclusion term “practicing” to participate in horse racing was 
ambiguous.  
                                                 
13 Delaware  Thoroughbred Racing Commission, Rules of Racing for Delaware (“Rules of 
Racing”), Rule 1.42. 
14 A-66 (Waldman Dep. at 28); B-32 (Jones Dep. at 8); B-7 (Montiel Dep. at 7).  Rule 
1.63 of the Rules of Racing defines “workout” as a “training exercise of a horse on the 
training or main track of a [racetrack] during which such horse is timed for speed over a 
specified distance. 
15 A-76-A77 (Waldman Dep. at 60-62); A-93 (Jones Dep. at 69). 
 
10
Regarding that issue, the trial court held -- this time explicitly -- that 
the term “practicing” was ambiguous.  That conclusion was correct, because 
the disputed term is reasonably susceptible to two or more interpretations.  
One interpretation, advocated by Twin City, is that “practicing” refers to an 
exercise designed to acclimate horses to actual racing conditions. That 
interpretation is reasonable, because it can be argued that is what (inter alia) 
the “breeze” workout is intended to accomplish. 
A second, but also reasonable, interpretation, advocated by Delaware 
Park, is that for the injury to be excluded from coverage, the injured person 
must be either (i) actually participating in a specific horse race sponsored by 
the insured (Delaware Park) or (ii) more pertinent to the issue here, 
practicing to participate in a horse race sponsored by Delaware Park.  That 
interpretation flows from Delaware Park’s premise that the activity must be 
viewed from the perspective of the “injured person,” i.e., the rider, and not 
the horse, because the exclusion refers to bodily injury to a “person while 
practicing or participating in” horse racing. It also is based on the fine print 
definition of “Athletic Activity” as a “sports…contest or exhibition that you 
[the insured] sponsor.” 
Although the issue is one of first impression in Delaware, the trial 
court’s conclusion that the exclusion language (“practicing” horse racing) is 
 
11
ambiguous, is supported by case law from other jurisdictions.  In Mountain 
States Mutual Casualty Co.v. Northwestern New Mexico Fair Ass’n,16 a 
jockey was injured by being thrown while galloping his horse around the 
track, when dogs that had strayed onto the track attacked the horse.  Based 
on a policy exclusion that was virtually identical to the exclusion at issue 
here, the racetrack’s liability insurer refused to defend or indemnify the 
racetrack owners against liability arising out of an underlying personal 
injury action filed by the jockey.   The New Mexico Supreme Court found 
the exclusion ambiguous, and held that the jockey had not been “practicing” 
for the race merely by galloping the horse around the track, because trainers 
who were not jockeys often performed the same activity to exercise horses. 
Similarly, in Tropical Park, Inc. v. United States Fidelity and 
Guaranty Co.,17 a freelance jockey was injured while galloping a horse 
around the track.  The insurer refused to indemnify or defend the racetrack 
owners in a resulting personal injury action by the jockey against the 
racetrack, again relying on a policy exclusion almost identical to the clause 
at issue here.  Holding for the track owners, the court found that the horse 
was only being exercised, because it had not been run, nor was it scheduled 
to run, in any race at the time of the accident.  Reasoning that the exclusion 
                                                 
16 508  P.2d 588 (N.M. 1973). 
17 357 So. 2d 253 (Fla. Dist. Ct. App. 1978). 
 
12
had to be interpreted from the perspective of the rider rather than the horse, 
the court found the jockey’s activity comparable to that of a groomer whose 
job was to brush the horses. 
The ambiguity of the exclusion in the present policy is perhaps best 
underscored by comparing its language to the exclusion language interpreted 
by the Louisiana Court of Appeal in Colson v. Louisiana State Racing 
Commission.18  There, the court held that the policy endorsement excluded 
from coverage a claim by a jockey who had been injured in a practice race 
for horses that had never raced on a track.  The disputed policy language in 
Colson, like the disputed language here, excluded “practicing for or 
participating in” horseracing; but the exclusion then went on to say: 
For the purposes of this endorsement any person ‘practicing for 
or participating in’ shall include any person riding or driving a 
horse for the purpose of warm-up, exercise, practice or race.19 
 
Had the Twin City exclusion contained that language, that exclusion would 
have unambiguously covered the activities of the injured breeze riders in this 
case.  The absence of that language underscores the correctness of the trial 
court’s determination that the policy language excluding coverage for 
“practicing” horseracing, is ambiguous. 
                                                 
18 726 So. 2d 432 (La. Ct. App. 1999). 
19 Id. at 433-434. 
 
13
 
2. Did The Trial Court Correctly Apply The 
Contra Preferentem Rule of Construction? 
Having found as a threshold matter an ambiguity in the policy 
exclusion, the trial court then applied the well-accepted contra preferentem 
principle of construction, which is that ambiguities in a contract should be 
construed against the drafter.20  The second issue presented to us, which is 
one of law, is whether the trial court erred in applying that rule of 
construction to the Twin City policy exclusion. We conclude that the trial 
court did not err by interpreting the exclusion in accordance with that 
principle. 
It is undisputed that neither Delaware Park nor its broker had any role 
in drafting the exclusion.  Twin City was “the entity in control of the process 
of articulating the terms,” 21 and it was therefore the “obligation of the 
insurer to state clearly the terms of the policy.”22  This Court has held that “if 
the contract in such a setting is ambiguous, the principle of contra 
preferentem dictates that the contract must be construed against the drafter,” 
                                                 
20 Kaiser Alum. Corp. v. Matheson, 681 A.2d at 398 (citing RESTATEMENT (SECOND) OF 
CONTRACTS § 206 (1981); Arthur L. Corbin, et al., Corbin on Contracts, § 559, supp. at 
337 (1960 & Supp. 1996). 
21 Penn Mutual Life Ins. Co. v. Oglesby, 695 A.2d 1146, 1150 (Del. 1997) 
22 Id. at 1149. 
 
14
and that “[c]onvoluted or confusing terms are the problem of the 
insurer…not the insured.”23 
Twin Cities rests its contrary argument upon our statement in Kaiser 
Alum. Corp. v. Matheson that the rule of contra preferentem should be a tool 
of last resort where the disputed language is “hopelessly ambiguous,”24 i.e., 
cannot be resolved by resort to extrinsic evidence.  This argument, based 
upon supposed evidence that was never placed before the trial court, is 
fatally inconsistent with Twin Cities’ concession at the trial court level, that 
there were no material facts in dispute.  
In addition, the argument ignores our statement in Kaiser Aluminum 
that application of the contra preferentem rule is particularly appropriate in 
cases where “alternative formulations indicate that these provisions could 
easily have been made clear.”25  As indicated in our discussion of Colson 
above, this is such a case.  Indeed, in its Opinion, the trial court noted that 
Twin City, a member of the insurance industry, was presumably aware of 
the case law relating to athletic activity exclusions and could have chosen to 
use language that would have defined the phrase “any person while 
                                                 
23 Id. at 1150. 
24 681 A.2d at 698-699. 
25 Id. at 399. 
 
15
practicing or participating” to include “any person riding or driving a 
horse.”26 
We conclude, for these reasons, that the trial court’s application of the 
contra preferentem rule to the exclusionary clause, resulting in the rejection 
of Twin City’s interpretation and the acceptance of Delaware Park’s, was 
legally correct.27 
3. Did the Trial Court’s Interpretation  
Of The Exclusion Language Render  
The Term “Practicing” Nugatory? 
 
Twin City’s third, and final claim of error is that even if the exclusion 
is construed against the drafter, the interpretation adopted by the trial court 
was incorrect because it effectively reads the term “practicing” out of the 
contract.  The trial court held that the term “practicing” referred to practice 
activities that were “directly related” to a scheduled race. That construction, 
Twin City argues, conflates the terms “participating in” and “practicing,” 
and makes them redundant, in violation of the principle that where possible, 
a court should give effect to all contract terms. 
 
We disagree.  The trial court’s interpretation of the term “practicing 
[for] horseracing” was a reasonable construction of the policy language, 
                                                 
26 Opinion at 13 and n. 20. 
27 Given that disposition, we do not reach Twin City’s alternative argument that the trial 
court erred in applying the rule requiring a narrow construction of exclusions from 
statutorily-mandated policy coverage.  
 
16
which included in the definition of “Athletic Activity” a “sports or athletic 
contest or exhibition that you [the insured] sponsor.” That definition 
envisions a horserace officially scheduled by Delaware Park, consistent with 
the definition of “racing” in the Rules of Racing.  It therefore was reasonable 
for the trial court (1) to interpret the exclusion term “participating in” 
horseracing as covering cases where the rider is injured while actually 
participating (as a rider) in a race officially scheduled and sponsored by 
Delaware Park, and (2) to interpret the term “practicing” to encompass 
situations where a rider is injured while practicing to participate in an 
officially sponsored, scheduled horse race -- in advance of that race.  
Twin City has not attempted to explain in any reasoned way how or 
why that interpretation collapses the distinction between “participating” and 
“practicing,” or otherwise renders those two terms redundant.  We find Twin 
City’s challenge on this ground lacking in merit. 
Conclusion 
For the foregoing reasons, the judgment of the Superior Court is 
affirmed.