Opinion ID: 2318759
Heading Depth: 1
Heading Rank: 9

Heading: Failure to File Certain Exclusions with Delaware Insurance Commissioner

Text: Before trial, Hercules filed a motion styled as a motion in limine seeking to preserve the ability to present factual evidence to the jury to prove that the North River JU policy provisions, including form NMA 1685 had not been filed [with the Delaware Insurance Commissioner]. [67] The trial court rejected this motion on several grounds. First, Hercules' motion in limine was in reality a motion for summary judgment and hence untimely under the scheduling order. [68] Second, filing of NMA 1685 is not required. Third, even if filing were required, the exclusion would be enforced under the savings provision in the statute [69] because it was not against public policy. Fourth, the insurance commissioner had not sought to contest the provision's validity and it would be inappropriate to attempt to vindicate the law through a one-sided application of the statute. The Superior Court's denial of Hercules' motion in limine regarding the NMA 1685 pollution exclusion on the ground that it was untimely under the operative case management order is reviewed for an abuse of discretion. [70] Under Super. Ct. Civ. R. 16(e), pretrial orders shall control the subsequent course of the action. [71] Pretrial orders shall not be modified except by leave of the Court upon a showing of good cause. [72] We review de novo the trial court's initial determination that the motion in limine was actually a motion for summary judgment. [73] We hold that the trial court's characterizations of Hercules' motion as a summary judgment motion was correct as a matter of law. Hercules styled the motion as a Memorandum of Law in Support of Hercules' Motion in Limine on North River's Failure to Comply with the Delaware Insurance Code. The motion states that North River has admitted, for the first time, that North River's JU policy forms, including the NMA 1685 pollution exclusion language had not been filed with the Delaware Insurance Commissioner. Hercules' motion therefore sought a ruling that nothing in the Court's [Summary Judgment Opinion] precludes the presentation of evidence of North River's violation of the Delaware Insurance Code, thereby providing the basis for excluding these exclusions from consideration by the jury. Hercules added, this Court should hold that Hercules is entitled to prove at trial that North River ... fail[ed] to file ... and therefore the exclusions are unenforceable.... (emphasis added). It will quickly be seen that this is not a motion in limine. A motion in limine typically concerns the admissibility of evidence and is a preliminary motion directed at establishing the ground rules applicable at trial. [74] In contrast, a summary judgment motion is a determination by the court concerning a case or aspect of a case made prior to trial that obviates the need for trial of the matter.  [75] In that sense it is not preliminary; it is dispositive of a substantive legal issue. With this in mind, the trial court was correct that Hercules' motion was in reality a motion for summary judgment or partial summary adjudication. There was no dispute about whether the exclusion was filed. The parties agreed that it was not. Therefore the question was an entirely legal one concerning the effect, if any, of the failure to file NMA 1685. Contrary to the language in the motion, there was no issue for the jury to decide and therefore no evidentiary issue. Hercules next argues that it should be relieved of any violation of the Case Management order because North River's admission of its failure to file, which was made in a submission to the trial court on December 24, 1997, was newly-discovered information. [76] Hercules argues that before this admission it could not show that North River had failed to file. [77] The insurers argue that Hercules has been intimately involved with litigating the validity of the NMA 1685 pollution exclusion for years and was on notice of the failure to file. Based on the record submitted to this Court by Hercules, we hold that the trial court did not abuse its discretion in ruling Hercules' motion untimely under its previous order. [78] Hercules' previous involvement as an amicus curiae in litigation over the exclusion is not disputed. Previous case law available within the relevant deadline (and concerning the case in which Hercules was involved) gave some indication that NMA 1685 was not filed in Delaware. [79] We pay particular attention to Hercules' admission that it had asked the Delaware insurance regulators about the ... exclusion but were told that the regulators were unable to ascertain whether a filing had taken place because it did not keep the relevant records. On these facts, the trial court could reasonably conclude that Hercules was not unfairly surprised by North River's admission and could not show cause for filing its motion on the eve of trial. [80] We cannot say that the trial court abused its discretion in declining to modify its case management order. As an alternative ground, we agree with the trial court's holding that under the circumstances of this case it would be improper and inequitable to void NMA 1685 in the circumstances present here. [81] Since North River has settled, voiding the exclusion could affect only the several excess following form insurers, whom Hercules does not contend were required to make a filing. Assuming this effect (which the following form insurers dispute on various grounds), Hercules would receive millions of dollars of coverage for which it had not bargained. Most important, extensive litigation over NMA 1685 has resulted in definitive interpretations of the pollution exclusion, which we have determined is unambiguous [82] and not contrary to public policy. [83] Accordingly, there is little basis for invalidating NMA 1685. [84] Under these unique circumstances, we decline to invalidate NMA 1685 notwithstanding North River's failure to file.