Harleysville Mutual Insurance Co. v. Grzbowski.

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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY HARLEYSVILLE MUTUAL INSURANCE COMPANY, a foreign corporation, Plaintiffs, v. CHRISTOPHER GRZBOWSKI, Defendants. ) ) ) ) ) ) C.A. No. 02C-02-113 ) ) ) ) Date Submitted: July 17, 2002 Date Decided: August 9, 2002 ORDER UPON CROSS MOTIONS FOR SUMMARY JUDGMENT PLAINTIFF S MOTION DENIED DEFENDANT S MOTION GRANTED Thomas P. L eff, Esq. of Casarino , Christman & S halk, P.A., Wilmington , Delaware 19899, Attorney for Plaintiff. Sheldon S. Saints, Esq. of Rahaim & Saints, Wilmington, Delaware 19808, Attorney for Defend ant. Harleysville Mutual Ins. Co. v. Grzybowski C.A. No. 02C-02-113 HLA August 9, 2002 Page 2 On this 9 th day of August 2002, upon consideration of the parties Cross Motions for Sum mary Judgm ent and ora l argumen t, it appears to the Court that: (1) The parties do not dispute the underlying facts in this action. On May 11, 2001, as D efendan t was drivin g a motorc ycle near Prices Corner S hopping Center on Old Capital Trail, a vehicle pulled out of the shopping center in front of Defendant. A motor vehicle accide nt occu rred w ith Def endan t sustain ing sign ificant p ersona l injuries. Subsequently, Defendant received $100,000, the full amount of liability insurance, from the other vehicle in the accident. Apparently, Defendant s motorcycle had no insurance coverage at the time of the accident. Now Defendant seeks to claim Under Insured Coverage ( UIM ) benefits under the commercial auto policy issued by Plaintiff to the Grzybowski Company. Defendant filed this declaratory judgment action to determine whether the Grzybowski Company s commercial auto policy covers Defendant as an insured under its terms. The Harleysville policy defines Who Is Insured as: 1. 2. 3. 4. You; If you are an individual, any family mem ber Anyone else occu pying a covered auto or a temporary substitute for a covered auto. The covered auto mu st be out of s ervice bec ause of its breakdown, repair, servicing, loss or destruction. Anyone f or damag es he or she is entitled to reco ver becau se of bo dily injury sustained by another insured Harleysville Mutual Ins. Co. v. Grzybowski C.A. No. 02C-02-113 HLA August 9, 2002 Page 3 The only covered auto listed is a 1993 Ford Cargo Van with Chris Grzybowski as an ope rator. (2) When an insurance policy expresses clear and unequivocal terms it binds the parties to that clear meaning.1 No ambiguity exists where a court can determine the meaning of the contract without any other guides than knowledge of simple facts.2 Thus, contracts are only ambigu ous wh en the prov isions in con troversy are reas onably or fairly susceptible to different interpretations or may have two or more different meanings.3 When an ambiguity does exist the court is to interpret the policy in favor of the insured and against the insurer. 4 If the relevant policy language is found to be ambiguous, the Court will construe the language to accord with the reasonable expectations of the insured.5 (3) Plaintiff argues that Defendant is not covered under the insurance policy at question because Defendant was not a named insured and cannot be a family member of the named insured because the named insured is a business entity. Defendant contends 1 O Brien v. Progressive Northern Ins. Co., 785 A.2d 281, 288-89 (Del. 2001). 2 Id. 3 Id. 4 Delledonne v. State Farm Mut. Auto. In. Co., 621 A.2d 350, 352 (Del. Super. 1992). 5 Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925, 927 (Del. 1982). Harleysville Mutual Ins. Co. v. Grzybowski C.A. No. 02C-02-113 HLA August 9, 2002 Page 4 that the applicable declarations identify the Grzybowski Company as an individual and that individual would be Chris Grzybowski. Further, Defendant argues that he had a reasonable expectation that he, as the individual business owner, was covered by underinsu red portion of the polic y. If Defend ant had be en occup ying a covere d auto this question would not need to be considered, as he would clearly be covered. Plaintiff combats that the company is not an individual and thus has no family members and further that De fenda nt could have n amed himself as the in sured b ut chos e not to. (4) The C ourt de termine s that the policy lan guage is ambig uous in this case . The use of family member language in a policy naming a business entity renders the insurance endorsement ambiguous. 6 Delaware courts have held that business entities cannot sustain bodily injury or have family members.7 Thus, a commercial auto insurance policy which includes language referring to family members is ambiguous because familial relation s cannot ex ist.8 Moreo ver, this court h as taken the position that th e if 6 Nationwide Mut. In. Co. v. Hockessin Const., Inc., No. 93C-03-057, 1996 WL 453325, at *3 (D el. Super. May 15, 1996 ). 7 Derric kson v. A merica n Nat l Fire In s. Co. , Nos. 214,1987 and 226,1987, 1988 WL 572 9 (Del. Jan. 13, 1998). 8 Id. Harleysville Mutual Ins. Co. v. Grzybowski C.A. No. 02C-02-113 HLA August 9, 2002 Page 5 you are an individual language in a policy insuring a business entity does not overcome the a mbiguity.9 (5) The Co urt further fin ds that De fendant h ad a reason able expe ctation to expect coverage under the commercial auto insurance policy. The Delaware cases that have found no reasonable expectation to coverage did so based on the reasoning that since the insu red had inc orporated, h e understo od the lega l distinction be tween him self and the corporation.10 Specifically in Del Co llo, the Court h eld that: a person sophisticated enough to be incorporated and to contract through a corporation cannot ex pect to exp and his co rporate insu rance cov erage to his family unless th ere is clear lang uage to tha t effect, such is not foun d in these policies.11 Here, the company is a sole proprietorship and not a corporation, thus not a distinct legal entity. [W]here a sole proprietor purchases an insurance policy under his trade name, the trade na me is eq uated w ith the pr oprieto r s nam e, mak ing the p roprieto r an insu red. 12 9 Fisher v. National Union Fire Ins. Co. of Pittsburgh, No. 95C-06-307, 1997 WL 817893 (D el. Super. Dec. 11, 199 7). 10 Hockessin Const., Inc., 1996 WL 453325, at *3. 11 Del Collo v. Houston, C.A. No. 83C-JA-121, 1986 WL 5841 (Del. Super. May 7, 12 Id.(citing O Hanlon v. Hartford Accident and Indemnity Co., 693 F.2d 1019 (3d Cir. 1986). 1981)). Harleysville Mutual Ins. Co. v. Grzybowski C.A. No. 02C-02-113 HLA August 9, 2002 Page 6 This Court adopts the reasoning in O Hanlon and holds that Defendant is an insured under the insurance policy at question. For the afo remention ed reason s, Defend ants Mo tion for Su mmary Jud gment is Hereby GRANTED and Plaintiff s Motion for Summary Judgment is Hereby \DENIED. IT IS SO ORDERED. ________________________________ ALFORD , J. Original: Prothonotary s Office - Civil Div.

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