Court Opinion

ID: 9385203
Source: CourtListenerOpinion
Date Created: 2023-04-06 14:02:47.349307+00
Date Added: 2024-06-11T17:17:59.718351
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

MEEGAN BARR,                                 )
                                             )      C.A. NO. N21C-10-046 AML
                   Plaintiff,                )
                                             )
      v.                                     )
                                             )
STATE FARM FIRE AND CASUALTY                 )      TRIAL BY JURY OF
COMPANY,                                     )      TWELVE DEMANDED
                                             )
                   Defendant.                )

                            Submitted: January 26, 2023
                              Decided: April 5, 2023

      ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY
                        JUDGMENT

      This dispute arises out of a motor vehicle accident. The plaintiff was a

passenger in a car allegedly struck by an unidentified second vehicle. At the time of

the accident, the plaintiff was covered by an automobile insurance policy issued by

the defendant. That policy included coverage for injuries caused by an uninsured or

underinsured motorist, but only up to the statutory minimum coverage amounts. The

plaintiff alleges the defendant failed to offer her the option to purchase additional

uninsured motorist coverage when she increased her liability coverage limits several

months before the accident. The plaintiff therefore seeks a declaratory judgment that

her option to increase her uninsured/underinsured coverage remains open and can be

accepted retroactively. As explained below, the undisputed facts show that the

                                         1
defendant did not make a meaningful offer of coverage to the plaintiff because the

defendant’s agent’s testimony establishes the defendant did not advise the plaintiff

of the costs of that additional coverage. The plaintiff’s motion for summary

judgment therefore is granted.

FACTUAL AND PROCEDURAL BACKGROUND

      Unless otherwise noted, the following facts are not disputed. On October 12,

2020, a motor vehicle operated by an unidentified driver struck a vehicle in which

Plaintiff Meegan Barr (“Barr”) was a passenger.1 At the time of the accident, Barr

was insured under a policy issued by Defendant State Farm Insurance (“State

Farm”).2 Barr first purchased the policy on December 28, 2018 and updated her

liability coverage on February 13, 2020.3

      When she initially purchased the policy in 2018, Barr selected liability

coverage at Delaware’s statutory minimum, which is $25,000 per person and

$50,000 per accident.4 Barr also selected uninsured/underinsured (“UM/UIM”)

coverage at that time. As a matter of law, Barr’s UM/UIM coverage could not exceed

her bodily injury coverage, and therefore her UM/UIM coverage also was $25,000

1
  Compl. ¶ 3.
2
  Id. ¶ 6.
3
    See Ex. B, Delaware Motorists’ Protection Act: Required Statement to Policyholders”
(hereinafter, a “DMPRSP) dated 12/28/19; Ex. C, DMSRP dated 2/13/2020.
4
  Pl.’s Mot. for Summ. J., Ex. B.
                                            2
per person and $50,000 per accident.5 On February 13, 2020, Plaintiff increased her

liability   limits    to   $100,000   per   person   and   $300,000   per   accident

(“100,000/300,000”).6 Barr did not, however, increase her UM/UIM coverage at that

time. Barr’s updated policy became effective on February 13, 2020. After the

accident, Barr averred she was never informed of the cost of increasing her UM/UIM

coverage limits to the limits of her liability insurance coverage.7

       On October 7, 2021, Barr filed a complaint against State Farm seeking a

declaratory judgment that the insurance policy has uninsured and underinsured

coverage in an amount equal to the liability coverage. On June 23, 2022, Barr moved

for summary judgment. The Court denied Barr’s motion for summary judgment

without prejudice because discovery was not complete and State Farm’s customer

service representative, Angela Alston Johnson (“Johnson”), had not been deposed.

Johnson’s deposition was taken on October 28, 2022. Barr then filed a second

summary judgment motion. The Court heard oral argument and took the motion

under advisement.

PARTIES’ CONTENTIONS

5
  18 Del. C. § 3902(b).
6
  Pl.’s Mot. for Summ. J., Ex. C.
7
  Barr Aff. ¶ 2.
                                            3
       Barr argues she is entitled to summary judgment because the undisputed facts

show State Farm did not make a meaningful offer of increased UM/UIM coverage

at the time Barr increased her liability coverage. Barr contends Johnson’s deposition

testimony establishes that State Farm failed to provide Barr with an explanation of

the costs of purchasing increased UM/UIM coverage.8 In response, State Farm

argues it made a meaningful oral offer to Barr by asking her twice whether she

wanted to increase her UM/UIM coverage when she increased her liability limits to

$100,000/300,000.9 State Farm asserts Johnson’s routine practice, supported by

documents in the record, was to affirmatively recommend that clients purchase the

additional coverage, thereby creating – at a minimum – a factual dispute for the jury

to resolve.10

ANALYSIS

       Superior Court Civil Rule 56(e) provides, in pertinent part, that summary

judgment “shall be rendered . . . if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law.”11

8
  Pl.’s Mot. for 2nd Summ. J. at 4.
9
  Def.’s Resp. Pl.’s 2nd Mot. Summ. J. at 6-7.
10
   Id. at 11-13.
11
   Super. Ct. Civ. R. 56(c).
                                                 4
       When considering a motion for summary judgment, the evidence and the

inferences drawn from the evidence must be viewed in the light most favorable to

the non-moving party.12 A party seeking summary judgment bears the initial burden

of showing that no genuine issue of material fact exists.13 If the movant makes such

a showing, the burden then shifts to the non-moving party to submit sufficient

evidence to show that a genuine factual issue, material to the outcome of the case,

precludes judgment before trial.14

       The issue in this case is relatively straightforward: do the undisputed facts in

the record show that State Farm failed to make a meaningful offer of increased

UM/UIM coverage to Barr when she increased her liability coverage in February

2020. This “meaningful offer” requirement arises from Title 18, Section 3902(b) of

the Delaware Code, which provides that:

         “Every insurer shall offer to the insured the option to purchase
         additional coverage for personal injury or death up to a limit of
         $100,000 per person and $300,000 per accident or $300,000 single
         limit, but not to exceed the limits for bodily injury liability set forth
         in the basic policy. Such additional insurance shall include
         underinsured bodily injury liability coverage.”15

12
   Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995); Judah v. Del. Trust Co., 378 A.2d 624, 632
(Del. 1977).
13
   Moore v. Sizemore, 405 A.2d 679, 680-81 (Del. 1979).
14
   Id.; see also Brzoska, 668 A.3d at 1363.
15
   Del. Code Ann. tit. 18, § 3902(b)(1).
                                               5
       In Mason v. United Services Auto Association,16 the Delaware Supreme Court

held that Section 3902(b) imposes an affirmative duty on insurance carriers to offer

the insured the additional insurance established by the statute.17 The insurer’s

obligation is to provide an insured “all of the facts reasonably necessary for a person

to be adequately informed to make a rational, knowledgeable, and meaningful

determination” regarding the limits of coverage.18 An insurer must make a

meaningful offer to the insured when coverages are increased, and the insurer bears

the burden of proving compliance with the statutory mandate.19

       An insurer makes a meaningful offer of additional uninsured motorist

coverage when the offer includes: “1) [a]n explanation of the cost of coverage, and

2) [a] communication that clearly offers the specific coverage in the same manner

and with the same emphasis as was on the insured’s other coverage.”20 If an insurer

fails to meet its duty under 18 Del. C. §3902(b), the offer of additional insurance

remains open for the insured to accept at any time, including after the accident.21

       As State Farm correctly points out, an offer of additional coverage need not

be in writing. In Delaware, oral offers or conversations regarding the availability and

16
   Mason v. United Servs. Auto Ass’n, 697 A.2d 388 (Del. 1997).
17
   Mason, 697 A.2d at 393.
18
   Id.
19
   Id.
20
   Id.
21
   Arms v. State Farm Mut. Auto. Ins. Co., Del. Super., 465 A.2d 360, 361 (1983), aff’d, 477 A.2d
1060 (Del. 1984).
                                               6
cost of UM/UIM coverage fulfill an insurer’s obligations.22 Here, the record shows

that the Delaware Motorists’ Protection Act form Barr signed gave her the option to

purchase UM/UIM coverage up to her bodily injury limits.23 That form satisfies

Mason’s second step. The form does not, however, provide any information on the

cost of that additional coverage.

       Johnson’s deposition also does not establish that State Farm advised Barr of

the cost of coverage. To the contrary, her deposition confirms that no such discussion

occurred. Johnson does not recall her conversation with Barr regarding the policy

change in this case. Johnson, however, confirmed that she follows a step-by-step

process any time a client changes their existing insurance policy.24 State Farm urged

the Court to accept Johnson’s “routine practice” as evidence of what likely happened

in this case.25 Johnson’s process includes her providing an explanation of liability,

bodily injury, and UM/UIM coverages to the customer.26 In the event the customer

decides to increase their liability limits, Johnson recommends that the customer

increase their UM/UIM limits, and if the customer is not interested in increasing

their UM coverage, Johnson makes the offer a second time.27 The multi-step process,

22
   See Morris v. Allstate Ins. Co., 1984 WL 3641, at *2 (Del. Supr. Ct. July 10, 1984).
23
   Def.’s Resp. Pl.’s 2nd Mot. Summ. J. Ex. B-C.
24
   Johnson Dep., Pl.’s Mot. for Summ. J, Ex. D at 10-13.
25
   Def.’s Resp. Pl.’s 2nd Mot. Summ. J. at 7-8.
26
   Johnson Dep., Pl.’s Mot. for Summ. J, Ex. D at 11.
27
   Id. at 11-13.
                                                7
however, does not include a discussion on the cost of additional UM/UIM coverage.

Johnson confirmed during her deposition that she only discusses the cost of

increased UM/UIM coverage if the insured first accepts the additional coverage.28

       In Mason, the Delaware Supreme Court found that the insurance company

failed to meet its burden in showing that it made a meaningful offer of additional

UM/UIM coverage to the insured.29 The insurance company conceded it had no

evidence that it made an offer of additional coverage during the phone conversations

with the insured.30

       Similarly, in this case, State Farm has not provided any evidence that Johnson

made a meaningful offer of additional coverage to Barr. Specifically, there is no

evidence that Johnson disclosed the cost of the additional UM/UIM coverage, and

her usual practice was not to do so unless the customer first requested the increased

coverage. Barr’s Motorists’ Protection Act form indicates she elected not to increase

her UM/UIM coverage when she increased her liability coverage.31 Barr averred she

was never informed of the cost of purchasing UM/UIM coverage in an amount equal

to her liability insurance coverage.32 Accordingly, the undisputed facts are that Barr

28
   Id. at 13.
29
   Mason, 697 A.2d at 393-94.
30
   Id.
31
   Def.’s Resp. Pl.’s 2nd Mot. Summ. J. Ex. C.
32
   Barr Aff. ¶ 2.
                                                 8
refused the offer of increased coverage, and Johnson’s practice was not to disclose

the costs of additional coverage when such a refusal is made.

         By failing to provide Barr “with an explanation of the cost of coverage,” State

Farm has not met its burden of proving that an “informed” offer of additional

coverage was made to Barr.33 The offer of additional UM coverage, therefore,

remains open and Barr can now accept it.

CONCLUSION

         For the foregoing reasons, Plaintiff’s motion for summary judgment is

GRANTED.

         IT IS SO ORDERED.

                                                /s/ Abigail M. LeGrow
                                                Abigail M. LeGrow, Judge

33
     Mason, 697 A.2d at 393-94.

                                            9