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State Farm Mutual Automobile Insurance Co. v. Daprato12/17/2003
Submitted: November 4, 2003
Upon appeal from the Superior Court. REVERSED and REMANDED.
In this case of first impression we are asked to decide whether a "household" exclusion found in a personal liability umbrella policy that includes excess automobile liability coverage is repugnant to Delaware's Financial Responsibility Laws. Further, we examine whether the trial judge, by granting the claimant summary judgment, misapplied our decision in Nationwide v. Seeman.
We hold that the public policy embraced by Delaware's Financial Responsibility Laws does not invalidate the unambiguous household exclusion found in this claimant's State Farm personal liability umbrella policy. We also hold that the trial judge interpreted the scope of our decision in Seeman too broadly and misapplied it to the facts of this case. We therefore REVERSE the decision of the trial judge and direct the entry of summary judgment in favor of State Farm.
I.
On November 7, 2001, Peter Daprato drove his State Farm insured vehicle in an accident in which his wife Lois was injured. Peter Daprato admitted that he caused the accident. Peter and Lois Daprato were the named insureds on two State Farm Mutual Insurance Company policies. The first provided "motor vehicle liability coverage" of $100,000 per person and $300,000 per accident for the vehicle involved in the collision. The second policy, designated as a "personal liability umbrella policy," provided excess liability coverage, up to a limit of $1,000,000, for the risks insured by the primary "motor vehicle liability policy" in addition to coverage for risks such as false arrest, malicious prosecution, defamation, invasion of privacy, assault and battery.
State Farm paid Lois Daprato $100,000 under the provisions of the primary "motor vehicle liability policy." She then demanded additional compensation for her bodily injuries and medical expenses under the personal liability umbrella policy. State Farm denied the claim on the basis of an exclusion in the personal liability umbrella policy coverage "for personal injury to the named insured, spouse, or anyone within the meaning of part a. or b. of the definition of insured,..." ("the household exclusion"). Lois Daprato filed a declaratory judgment action against State Farm in Superior Court, arguing that the household exclusion in the personal liability umbrella policy as applied to her automobile accident claim, was contrary to the broad scope of the public policy embraced by Delaware's Financial Responsibility Laws. She argued that the trial judge should follow Seeman and that if he did, he must invalidate the umbrella policy exclusion "as against public policy." The parties filed cross-motions for summary judgment. The trial judge concluded that the household exclusion set forth in the State Farm personal liability umbrella policy was void and unenforceable as applied to Lois Daprato's claim for damages from the automobile accident. He entered an Order granting Lois Daprato summary judgment. State Farm appealed.
II.
We review questions of law and construction of contracts decided by the Superior Court de novo.
III.
Delaware's Financial Responsibility Laws
Delaware's Financial Responsibility Laws are designed to protect citizens by requiring each driver to carry minimum insurance coverage through a duly certified "motor vehicle liability policy" issued by an authorized insurance carrier as proof of the financial responsibility of the named insured. The clear purpose of the Financial Responsibility Laws is to provide primary insurance coverage for all personal injury claims arising out of an automo
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