Sessoms v. Richmond ( 2017 )


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  • IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
    ERNEST D. SESSOMS, )
    )
    Plaintiff, )
    )
    v. ) C.A. N0. N17C-03-180 WCC
    )
    TASIA RICHMOND, and )
    CITIZENS UNITED RECIPROCAL )
    EXCHANGE, )
    )
    Defendants. )
    Defendant Citizens United Reciprocal Exchange’s Motion to Dismiss
    GRANTED
    Plaintiff’s Motion for Summary Judgment
    DENIED
    CORRECTED MEMORANDUM OPINION
    Michael D. Bednash, Esquire, The LaW Offlce of Michael D. Bednash, 100 Biddle
    Avenue, Suite 104, Springside Plaza, Newark, Delaware 19702. Attorney for
    Plaintiff.
    Emily K. Silverstein, Esquire, Marks, O’Neill, O’Brien, Doherty & Kelly, P.C.,
    300 Delaware Avenue, Suite 900 Wilmington, DE 19801. Attorney for Citizens
    United Reciprocal EXchange.
    CARPENTER, J.
    Citizens United Reciprocal EXchange (“CURE” or “Defendant”) moves to
    dismiss Ernest D. Sessoms’ (“Plaintiff”) Amended Complaint pursuant to
    DelaWare Superior Court Civil Rule lZ(b)(Z). For the following reasons
    Defendant’s Motion to Dismiss Count III (Declaratory Judgment) of the Amended
    Complaint Will be GRANTED. To the extent Plaintiff seeks summary judgment
    on Count ll (Negligence), the Motion is DENIED. Further, the Court notes
    that Count l of Plaintist Amended Complaint simply sets forth the jurisdictional
    basis for the litigation but lacks any cause of action.l
    I. FACTUAL & PROCEDURAL BACKGROUND
    On April 27, 2015, Plaintiff Was injured in a motor Vehicle accident (the
    “Accident”) While riding as a passenger in a car owned by Tamika Brown
    (“Brown”).2 Tasia J. Richmond, a NeW Jersey resident, (“Richmond”) Was said to
    be driving “in a negligent and careless manner, [When she] disregarded [the] red
    light”3 at the intersection of 29th Street and Jefferson Street and collided With
    BroWn’s Vehicle in Wilmington, DelaWare. Plaintiff suffered neck and back
    ' The Court must “look to the claims as they are actually pled.” Brown v. LiveOps, Inc., 
    903 A.2d 324
    ,
    329 (Del. Ch. 2006) (quoting Stengel v. Sales Onll``ne Dz'rect, Inc., Del.Ch. C.A. No. 18448 at *8 (Jan. 2,
    2002), ajj‘"d, 
    783 A.2d 124
    (Del.2002)). Plaintift``s Count I simply lists the residences of each party to this
    action and pleads no cause of action. This is a Corrected Memorandum Opinion since the Court misstated
    the Count number in its December 8, 2017 Memorandum Opinion.
    2 Am. Compl. jj 4.
    3 Ia'.
    injuries as well as “pain and suffering, and mental distress” from the collision.4 At
    the time of the Accident, Richmond was insured by an automobile policy (the
    “Policy”) issued by CURE, a New Jersey based Insurance Company.5
    Sometime after the Accident, CURE began to investigate the pending
    insurance claim. However, after many unsuccessful requests for information and
    assistance from Richmond, CURE filed an action in the New Jersey Superior Court
    seeking to enforce the contractual cooperation requirement in Richmond’s
    insurance policy.6 On October 2, 2015, Richmond was ordered by the Court to
    submit to an EXamination Under Oath in New Jersey within twenty days from the
    court order (“Order”).7 The Order also stated that failure to submit to an
    EXamination Under Oath was “a material breach of her contract...and [shall
    relieve] CURE [of the responsibility] to afford any benefits to defendant under its
    policy....”8 Richmond subsequently failed to submit for an Examination Under
    Oath, and on November l3, 2015, CURE denied coverage, holding Richmond to
    be uncooperative during the investigation of her claim.9
    4 ]d. at jj 6.
    5 Am. Compl. jj 7.
    6 Order, Cl``tizens United Reciprocal Exchange v. Richmond (N..l. Super. Oct. 2, 2015) (Exhibit
    7).
    7 Ia'.
    8 
    Id. 9 Pl.
    Ex.A.
    Because of CURE’s refusal to provide coverage for the Accident, Plaintiff
    commenced the instant litigation on March 15, 2017. On May 10, 2017, Plaintiff
    filed an Amended Complaint asserting that Richmond’s negligence proximately
    caused the Accident and Plaintiff s injuries.lo Additionally, the Amended
    Complaint asserted that Richmond was insured by CURE at the time of the
    Accident11 and therefore CURE is obligated to indemnify Richmond and provide
    minimum coverage for the Accident.12 Further, the Amended Complaint seeks
    both general and special damages against Richmond, declaratory judgment against
    CURE, costs, and interests, as well as attorney’s fees.13
    In response to Plaintiffs Amended Complaint, Defendant CURE moved to
    dismiss the Complaint pursuant to Superior Court Civil Rules lZ(b)(Z), for lack of
    personal jurisdiction Plaintiff opposes such motion and in its response also
    requested the Court to grant summary judgment. CURE’s Motion to Dismiss
    Plaintiff’ s Amended Complaint was heard in this Court on August 23, 2017. This
    is the Court’s decision on the Motion to Dismiss and Plaintiffs request for
    summary judgment.
    10 Am. Compl. jj 5.
    " Am. Compl. jj 7.
    12 
    Id. at j
    8.
    13 Am. Compl. jj 9(1)-(5).
    II. STANDARD OF REVIEW
    On a defendant’s motion to dismiss pursuant to Superior Court Civil Rule
    12(b)(2) for lack of personal jurisdiction, the plaintiff “bear[sj the burden to
    articulate a non-frivolous basis for this court’s assertion of jurisdiction.”14 The
    plaintiff can satisfy this burden “by making a prima facie showing that jurisdiction
    is conferred by statute.”15 Although the factual record is read in the light most
    favorable to the plaintiff in ruling on the motion, “the plaintiff must plead specific
    facts and cannot rely on mere conclusory assertions.”16 Additionally, the Court
    must answer two legal questions. “First, it must determine whether jurisdiction is
    appropriate under Delaware’s long-arm statute. And, second, it must evaluate
    whether asserting such jurisdiction would offend the Due Process Clause of the
    Constitution.” 17
    14 IM2 Merch. & Mfg., Inc. v. Tirex Corp., 
    2000 WL 1664168
    , at *4 (Del. Ch. 2000) (citing Hart
    Hola’ing C0. Inc. v. Drexel Bumham Lambert Inc., 
    593 A.2d 535
    , 539 (Del. Ch. 1991)). See also
    In re Asbestos Ll``tl``g. (Ana’erson), 
    2015 WL 556434
    , at *3 (Del. Super. Ct. 2015); Boone v. Oy
    PartekAb, 
    724 A.2d 1150
    , 1154 (Del. Super. Ct. 1997), a]j"a’, 
    707 A.2d 765
    (Del. 1998);
    Greenly v. Davis, 
    486 A.2d 669
    , 670 (Del. 1984); Harmon v. Eua’aily, 
    407 A.2d 232
    , 233 (Del.
    Super. Ct. 1979), ajjnd, 
    420 A.2d 1175
    (D€l. 1980).
    15 McKamey v. Vana'er Houten, 
    744 A.2d 529
    , 531 (Del. Super. Ct. 1999).
    16 Mobile Diagnostic Grp. Hola’ings, LLC v. Suer, 
    972 A.2d 799
    , 802 (Del. Ch. 2009).
    17 
    Boone, 724 A.2d at 1154-55
    . Sample v. Morgan, 
    935 A.2d 1046
    (Del. Ch. 2007) (citing
    AeroGlobal Capital Mgmt., LLC v. Cl``rrus lna’us., Inc., 
    871 A.2d 428
    , 438 (Del. 2005).
    III. DISCUSSION
    lt is important to clearly set forth what is being requested in this litigation
    since how it is characterized results in different outcomes. This Court has made it
    very clear in State Farm v. Dann that a “single, specific contact, such as a tort
    committed in Delaware, has been held sufficient to confer personal jurisdiction
    v 18
    over the tortfeasor and his [herj insurer in the Delaware Courts. Automobile
    insurance companies like CURE cannot avoid liability by merely claiming no
    contacts in Delaware. They waived that right when they issued the automobile
    policy with full recognition that the insurer would not limit their travel to a single
    state. Having to respond to insurance claims for accidents in another state by the
    insurers is not only foreseeable but is an expected outcome in this line of business.
    However, the issue the parties are raising is different in that the Plaintiff
    appears to be requesting the Court to determine the contractual obligation between
    Richmond and CURE by finding the insurance carrier has an obligation to defend
    Richmond and pay coverage under the insurance policy. As such, the declaratory
    judgment Count found in Count III of the Complaint raises a different issue related
    to the insurance contract and not the accident itself. This places the issue of
    whether the long arm statute is applicable in a totally different light. As a result of
    the above, the Court will turn its attention to whether the State of Delaware has
    18 State Farm Mul'. Auto. lns. Co. v. Dann, 
    794 A.2d 42
    , 48 (Del. Super. Ct. 2002).
    proper jurisdiction to make a declaratory judgment regarding CURE’s obligation to
    provide coverage under its policy.
    a. Declaratory Judgment
    The Court must conduct a two-part analysis in order to determine if a non-
    resident may be subject to personal jurisdiction by a Delaware court. First, the
    Court must determine if any of the Delaware Long-Arm Statute provisions are
    applicable and second, it must determine if imposing Delaware jurisdiction on the
    non-resident violates the Due Process Clause. Delaware’s Long-Arm Statute
    allows the Court to exercise personal jurisdiction over a non-resident when that
    person:
    1. Transacts any business or performs any character of work or
    service in the State;
    2. Contracts to supply services or things in this State;
    3. Causes tortious injury in the State by an act or omission in this
    State;
    4. Causes tortious injury in the State or outside of the State by an
    act or omission outside the State if the person regularly does or
    solicits business, engages in any other persistent course of
    conduct in the State or derives substantial revenue from
    services, or things used or consumed in the State;
    5. Has an interest in, uses or possesses real property in the State;
    or
    6. Contracts to insure or act as surety for, or on, any person,
    property, risk, contract, obligation or agreement located,
    executed or to be performed within the State at the time
    the contract is made, unless the parties otherwise provide in
    writing.19
    19 
    10 Del. C
    . § 3104(c)(1)-(6). See also Url``be v. Ma’. Aul'o. lns. Fana’, 
    2014 WL 4942340
    , at *2
    (Del. Super. Ct. 2014) (“Subsections (c)(l), (c)(2), (c)(3), (c)(5), and (c)(6) of the statute require
    a showing of specific jurisdiction, where the cause of action arises from acts or omissions taking
    The Long-Arm statute has broad scope and can be imposed on a non-resident “who
    engages in a single act in the state of Delaware.”20 However, the Long-Arm
    statute, as mentioned above, does have Constitutional limits.21 For personal
    jurisdiction to exist, the non-resident must have sufficient purposeful minimum
    contacts with Delaware such that “maintenance of the suit does not offend
    traditional notions of fair play and substantial justice.”22
    Defendant CURE seeks to dismiss Count lll of Plaintiff’ s Amended
    Complaint contending that Delaware courts cannot exercise jurisdiction over
    Defendant because none of the provisions of Delaware’s Long-Arm statute apply
    and because Defendant does not have the “minimum contacts” necessary such that
    this Court can exercise jurisdiction over it. Specifically, Defendant argues
    Delaware Long-Arm Statute Sections 3104(0)(1)~(2) do not apply as CURE does
    not contract, transact, or perform business in Delaware.23 Delaware Long-Arm
    Statute Sections 3104(0)(5)-(6) are not applicable because CURE does not own
    any real estate in Delaware nor does it have any automobile insurance contracts in
    place in Delaware. Subsection (c)(4), however, requires a showing of general jurisdiction, where
    Plaintiff s claims are unconnected with the nonresidents’ activities.”).
    20 State Farm Mul‘. Auto Ins. C0. v. Dann, 
    794 A.2d 42
    ,47 (Del. Super. Ct. 2002) (citing
    Transportes Aereos de Angola v. Ronair, lnc., 544 F.Supp, 858, 864 (D. Del 1982).
    21 Daz'ly Underwrl``ters ofAmerica v. Ma’. Auto. Ins. Funa’, 
    2008 WL 3485807
    *4 (Del. Super. Ct.
    2008).
    22 Int’l Shoe Co. v. State of Washz'ngton, 326 U.S 310, 316 (1945).
    23 Def.’s Mot. to Dismiss jj 5, at 4.
    Delaware.24 Finally, Delaware Long-Arm Statute Sections 3104(c)(3)-(4) do not
    apply because CURE derives no revenue from services in Delaware,25 and
    Richmond’s tortious conduct can only be used to exercise personal jurisdiction
    over claims arising directly from that conduct.
    Defendant also asserts that CURE is'not at home in Delaware. Defendant
    contends that its contacts with Delaware are very minimal and CURE has not
    “purposefully availed” itself the jurisdiction of Delaware. Specifically, CURE
    states it is “organized under the laws of New Jersey, with its principal place of
    business... [in] Princeton, New Jersey...CURE does not, nor has it ever, had any
    offices in Delaware. . . [Andj CURE is not licensed to operate in Delaware.”26
    Plaintiff does not attempt to argue that CURE is at home in Delaware nor
    does he assert that CURE transacts or contracts business in Delaware. Instead,
    Plaintiff argues that CURE is subject to Delaware’s jurisdiction because of the
    Accident and Richmond’s tortious conduct which occurred in Delaware. Plaintiff
    cites State Farm Auto. Ins. C0. v. Dann, as support for finding the collision to be a
    sufficient single act and minimum contact required to confer jurisdiction
    Unfortunately for Plaintiff, this simply misses the issue.
    24 See 
    id. 25 See
    ial at jj 7, at 5~6. “Delaware Courts have broadly construed the term ‘substantial revenue’
    to mean that two or three percent of total revenue is sufficient to confer jurisdiction.” M&M
    Techs., lnc. v. Gurtler Chems., Inc., 
    2005 U.S. Dist. LEXIS 1726
    , at *14 (D. Del. 2005).
    26 Def.’s Mot. to Dismiss jj 5, at 4.
    ln the instant case, the sole “contact” Plaintiff has alleged is Richmond’s
    unilateral act of driving into Delaware and allegedly committing a tort here. As
    stated above, the Court agrees with the holding of State Farm v. Dann, in that
    Delaware has specific personal jurisdiction for claims arising directly from the
    Accident. This can include any tort claims against the drivers or potential
    subrogation claims against insurers. Absent a contractual default, CURE would be
    obligated to investigate the claim and provide coverage to its policyholder. The
    Court, however, refuses to expand the holding of State Farm v. Dann, and find that
    Delaware has specific personal jurisdiction for matters that only related to the
    contract obligations between CURE and Richmond. lt would be unforeseeable and
    unfair to require a non-resident like CURE to be hailed to court in Delaware for
    legal matters only tangentially related to the tortious conduct. In fact, such a
    finding would violate due process and “offend traditional notions of fair play and
    substantial justice.”27
    CURE has minimal contacts with the State of Delaware. CURE does not
    offer insurance to Delaware residents; it has no Delaware offices; and it is not
    registered to do business in Delaware. CURE’s only contact is Richmond’s
    alleged negligence during the Accident. As such, the Court finds that CURE
    27 State Farm Mul'. Auto. lns. Co. v. Dann, 
    794 A.2d 42
    , 48 (Del. Super. Ct. 2002).
    would not reasonably foresee being hailed into court in Delaware to interpret
    Richmond’s Policy provisions The Court finds CURE’s denial of coverage is
    contractually related and only indirectly arises from Richmond’s alleged
    negligence. The Policy was drafted to include a New Jersey choice of law clause
    as well as a failure to cooperate provision which is enforceable in New Jersey.
    CURE denied coverage only due to Richmond’s failure to cooperate and after
    seeking a judicial order to enforce the contract in the New Jersey Superior Court.
    Because Plaintiff’s request for declaratory judgment stems directly from the denial
    of coverage under the insurance contract, the Court finds CURE’s contacts with the
    state of Delaware are not sufficient to satisfy the due process considerations
    Plaintiff’ s request to analyze and interpret the insurance policy between two New
    Jersey parties would exceed the holding of State Farm Auto. lns. C0. v. Dann and
    scope of this Court’s jurisdiction,
    The outcome of this decision is clear. By CURE denying coverage due to
    their insured being uncooperative, Richmond became an uninsured tortfeasor and
    thus Plaintiff is required to look to the uninsured coverage portion of his policy for
    coverage. Once that occurs, Plaintiff s insurer can seek recovery from CURE
    through a subrogation claim or other litigation While the Court appreciates the
    desire of Plaintiff to have CURE provide their policy limits and then seek
    10
    additional coverage under the under-insured portion of his policy, that avenue of
    recovery is simply unavailable
    IV. CONCLUSION
    For the reasons set forth in this Opinion, Defendant’s Motion to Dismiss
    Count III, declaratory judgment, is GRANTED. This issue is a contract
    interpretation matter between CURE and its policyholder. Because both Richmond
    and CURE are domiciled in New Jersey and the policy is a New Jersey policy, this
    question must be resolved in the proper jurisdiction of New Jersey. Otherwise, the
    assertions set forth in the Complaint may proceed. At the end of his response to
    Defendant’s Motion to Dismiss, Plaintiff did request that the Court grant his
    Motion For Summary Judgment. While not briefed or responded to, the Court can
    only assume Plaintiff believed a denial of the Motion to Dismiss would logically
    lead to summary judgment for him. The Court having dismissed the declaratory
    judgment Count now finds the Motion for Summary Judgment moot and it is
    DENIED.
    IT IS SO ORDERED.
    ZJQM
    Jildge William C. Carpe'nt@/.lr.
    Dated: December 26, 2017
    ll