Uribe v. Maryland Automobile Insurance Fund.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MARTINA URIBE and )
CARLOTA URIBE, )
)
Appellants, ) C.A. No. N13A-09-014 CLS
)
v. )
)
MARYLAND AUTOMOBILE )
INSURANCE FUND, )
)
Appellee. )
Date Submitted: June 2, 2014
Date Decided: September 30, 2014
On Appeal of the Decision of the Court of Common Pleas. AFFIRMED.
ORDER
Andres Gutierrez de Cos, Esq., Andres de Cos, LLC, Wilmington, Delaware
19808. Attorney for Appellant.
Thomas J. Gerard, Esq. and Art C. Aranilla, Esq., Marshall Dennehey
Warner Coleman & Goggin. Wilmington, Delaware 19899. Attorneys for
Appellees.
Scott, J.
Introduction
Before the Court is Appellants/Plaintiffs-below Martina Uribe and
Carlota Uribe’s (“Appellants”) appeal from the decision of the Court of
Common Pleas granting Appellee/Defendant-below Maryland Automobile
Insurance Fund’s (“MAIF”) motion to dismiss for lack of personal
jurisdiction. The Court has reviewed the parties’ submissions and the record
below. For the following reasons, the decision of the Court of Common
Pleas is AFFIRMED.
Background
On April 12, 2013, the Appellants, two Delaware residents occupying the
same vehicle, were involved in an automobile accident in Delaware. The vehicle
was owed by Appellants’ sister, Ofelia Contreras, and insured by MAIF. MAIF is
an agency of the State of Maryland which performs a government function 1 and
was created in order to provide insurance to “to those eligible persons that are
unable to obtain it from an” 2 “insurer that is licensed to write motor vehicle
liability insurance or motor vehicle physical damage insurance in [Maryland].” 3
When Ofelia Contreras obtained insurance through MAIF, she signed a waiver
declining Personal Injury Protection (“PIP”) coverage.
1
Harrison v. Motor Vehicle Admin., 490 A.2d 694, 701 (1985).
2
Md. Code Ann., Ins. § 20-301.
3
Md. Code Ann., Ins. § 20-101.
2
On June 26, 2013, the Appellants filed suit in the Court of Common
Pleas against MAIF to recover PIP benefits under Delaware’s No-Fault
Statute, 21 Del. C. § 2118, for the injuries that they suffered as a result of the
accident. On August 7, 2013, MAIF filed a Motion to Quash and Dismiss
arguing that Appellants had failed to show that the court could exercise
personal jurisdiction over MAIF. On August 23, 2013, the Court of
Common Pleas heard oral argument. On September 23, 2013, the court
granted the motion and this appeal followed.
Issues on Appeal
Appellants argue that the Court of Common Pleas improperly held
that MAIF was not subject to personal jurisdiction in Delaware because
MAIF had sufficient minimum contacts with Delaware. According to
Appellants, the fact that the accident occurred in Delaware satisfies the
requirements of Delaware’s Long-Arm Statute, 10 Del. C. § 3104.
Appellants also assert that MAIF’s other contacts with Delaware include:
deriving revenue from Delaware because its policies do not prohibit its
insureds from driving in Delaware, previously filing actions against
Delaware residents in Delaware courts, inspecting and adjusting claims in
Delaware, submitting filings to the New Castle County Recorder of Deeds,
and the alleged imputed ownership of property in Delaware owned by the
3
State of Maryland. 4 Appellants argue that, since the policy at issue was
issued in Elkton, Maryland, MAIF could anticipate that its insureds would
operate the vehicle in Delaware. Based on these factors, Appellants contend
that it was foreseeable to MAIF that it could be haled into a Delaware court.
Appellants also assert that, by avoiding the jurisdiction of a Delaware court,
MAIF is essentially abandoning its insureds and violating Delaware’s No-
Fault Statute.5
MAIF argues that the decision of the Court of Common Pleas should
be affirmed for two reasons. First, MAIF argues that Appellants lack
standing to sue because they do not fall within the persons eligible for
benefits under § 2118. Second, MAIF argues that Appellants failed to meet
their burden to show that MAIF had sufficient contacts with Delaware or
that the court’s exercise of personal jurisdiction was foreseeable. MAIF
contends that neither the mere filing before the Recorder of Deeds or
Maryland’s ownership of property in Delaware constitutes MAIF’s
4
Appellants argue that the State of Maryland’s ownership of Delaware property should
be imputed to MAIF as a state agency.
5
Appellants base this argument upon § 2118(b), which states, in pertinent part:
No owner of a motor vehicle being operated in this State shall operate in this
State, or authorize any other person to operate such vehicle in this State, unless
the owner has insurance on such motor vehicle equal to the minimum insurance
required by the state or jurisdiction where said vehicle is registered. If the state or
jurisdiction of registration requires no minimum insurance coverage, then such
owner must have insurance on such motor vehicle equal to the minimum
insurance coverage required for motor vehicles registered in this State.
4
sufficient contact with Delaware. Lastly, MAIF asserts that, since Ofelia
Contreras signed a PIP waiver, MAIF could not foresee being haled into a
Delaware court to pay PIP benefits.
Standard of Review
When this Court reviews a decision of the Court of Common Pleas,
“[its] role is to ‘correct errors of law and to review the factual findings of the
court below to determine if they are sufficiently supported by the record and
are the product of an orderly and logical deductive process.’” 6 Questions of
law are reviewed de novo.7
Discussion
Courts conduct a two-part analysis in order to determine whether a
nonresident may be subject to personal jurisdiction by a Delaware court.8
First, the court must consider whether the provisions of Delaware’s Long
Arm Statute, 10 Del. C. § 3104, confer jurisdiction. 9 Section 3104(c) allows
the
court [to] exercise personal jurisdiction over any nonresident, or a
personal representative, who in person or through an agent:
6
State Farm Mut. Auto. Ins. Co. v. Dann, 794 A.2d 42, 45 (Del. Super. Jan 29, 2002)
(quoting Steelman v. State, 2000 WL 972663 at *3 (Del.Super.)).
7
Id. (quoting Ensminger v. Merritt Marine Const., Inc., 597 A.2d 854, 855
(Del.Super.1988)).
8
Hercules Inc. v. Leu Trust & Banking (Bahamas) Ltd., 611 A.2d 476, 480 (Del. 1992).
9
Id.
5
(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.10
This section “is to be broadly construed to confer jurisdiction to the
maximum extent possible under the Due Process Clause.” 11 Even a single act or
transaction in this state may subject a nonresident to the jurisdiction of a Delaware
court.12 This Court has explained that
Subsections (c)(1), (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 place in Delaware. Subsection
(c)(4), however, requires a showing of general jurisdiction, where
Plaintiff’s claims are unconnected with the nonresidents’ activities.
General jurisdiction requires more than minimum contacts with the
10
§ 3104(c)(1)-(6).
11
Hercules Inc., 611 A.2d at 480.
12
Dann, 794 A.2d at 47.
6
forum state, a showing that defendant or its agent is ‘generally
present’ in the forum state is sufficient.13
When a defendant moves to dismiss for lack of personal jurisdiction,
the plaintiff bears the burden to make “a prima facie showing that
jurisdiction is conferred by statute.”14 After determining whether the Long-
Arm Statute confers jurisdiction, the second step that the court must take is
to determine whether subjecting the nonresident to its jurisdiction violates
the Due Process Clause. 15 “The Due Process Clause of the Fourteenth
Amendment requires that a nonresident defendant have such minimum
contacts with the forum state so that ‘maintenance of the suit does not offend
traditional notions of fair play and substantial justice.’” 16 The nonresident
defendant’s “conduct and connection with the forum state must be such that
[the defendant] should ‘reasonably anticipate being haled into court
there.’” 17
The Court of Common Pleas correctly found that it lacked personal
jurisdiction over MAIF because Appellants failed to make a prima facie
13
Naples v. Diocese of Trenton, 2010 WL 1731827, at *2 (Del. Super. Apr. 29, 2010); Tri-State
Motor Transit Co. v. Intermodal Trans., Inc., 1991 WL 1172907, at *6 (Del. Super. Jun. 3,
1991)(“Specific contacts are worth more than a general contact in minimum contacts analyses
with a general contact having to be one which is ‘continuous and systematic’ in order to be
significant in such analyses”).
14
Daily Underwriters of America v. Maryland Auto. Ins. Fund, 2008 WL 3485807, at *2
(Del. Super. Jul. 31, 2008).
15
Hercules Inc., 611 A.2d at 480.
16
Naples, 2010 WL 1731827 at *3 (quoting Int’l Shoe Co. v. State of Washington, 326
U.S 310, 316 (1945)).
17
Id. (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
7
showing that the provisions of the Long-Arm Statute apply to MAIF.
MAIF’s filings with the Recorder of Deeds, actions against Delaware
residents in Delaware courts, or adjusting and inspecting claims in Delaware
do not amount to the specific jurisdiction required to constitute the
transaction of business under § 3104(c)(1). In other words, Appellants did
not show that those acts gave rise to this cause of action. Likewise,
Appellants did not show that the State of Maryland’s ownership of property
in Delaware gave rise to this action pursuant to subsection (c)(5) nor did
they present authority supporting their contention that Maryland’s ownership
of property should be imputed to MAIF. Furthermore, Appellants failed to
allege that MAIF or its agents caused any tortious injuries through its acts or
omissions under subsection (c)(3) or subsection (c)(4).
Appellants argue that, because the collision occurred in Delaware, that
alone constitutes the single act which subjected MAIF to personal
jurisdiction under the Long-Arm Statute. Appellants support this argument
with this Court’s holdings in State Farm Auto. Ins. Co. v. Dann 18 and Tri-
State Motor Transit Co. v. Intermodal Transportation, Inc. 19 In Tri-State
Motor Transit Co., a truck owned by Intermodal Transportation, Inc.
(“Intermodal”) and insured by Allied Fidelity Insurance Company (“Allied”)
18
794 A.2d 42.
19
1991 WL 1172907.
8
was involved in a multi-vehicle accident in Delaware. 20 When Allied
became insolvent, a nonprofit, unincorporated association created under the
Ohio Guaranty Association Act assumed Allied’s insurance coverage as
required by an Ohio statute. In a declaratory judgment action, the Ohio
association argued that it did not meet the requirements of Delaware’s Long-
Arm Statute. 21 The Court found that “[b]y stepping into the shoes of Allied
Fidelity Insurance Company, [the Ohio association], although not an
insurance company, was responsible for Allied’s obligation.”22 Based on
that relationship, the Court held that “the single, direct, specific contact
which is enough to allow jurisdiction in the Delaware courts is clear; the tort
occurred in Delaware.” 23 The Court also held that “it was foreseeable that
Intermodal, a transportation corporation, engaged in interstate transportation,
could be involved in an accident in… Delaware… [and] that Intermodal
would be haled into Court as a result of its tortious conduct on the roads of
Delaware…” 24
In Dann, a Delaware resident was operating a vehicle insured under
Delaware law by State Farm when she was struck in the rear by a Maryland
resident operating a vehicle registered in Maryland and insured by State
20
Id. at 1.
21
Id.
22
Id. at *5.
23
Id. at *6.
24
Id.
9
Auto Insurance Company (“State Auto”) under Maryland law. 25 State Auto
was not licensed to do to business in Delaware. After paying PIP benefits to
the Delaware resident, State Farm filed a suit against the Maryland resident
to recover the PIP benefits. When the Maryland resident moved to dismiss
the complaint, arguing that State Farm could only recover through her
insurer under a subrogation claim, State Farm moved to add State Auto to
the complaint and to strike the Maryland resident from the action. Although
the Court of Common Pleas found that State Farm was required to seek a
subrogation claim against MAIF, it held that State Farm failed to show that
the court could exercise personal jurisdiction over State Auto. 26
Upon appeal, this Court, relying on its decision in Tri-State Motor
Transit Co., disagreed with the lower court’s refusal to exercise personal
jurisdiction and held that “the single act which rendered State Auto subject
to jurisdiction in Delaware occurred…when State Auto’s insured [], while
driving in Delaware, collided with [the Delaware resident’s] vehicle.” 27 The
Court also found that State Auto had sufficient minimum contacts with
Delaware, despite “not writ[ing], attempt[ing] to write, or transact[ing]
business in Delaware.” 28 The Court stated that it was reasonably foreseeable
25
Dann, 794 A.2d at 44.
26
Id.27
Id. at 48.
28
Id.10
to State Auto that it could be haled into a Delaware court because “[t]he very
nature of liability insurance contemplates that an insured will leave the
confines of the state in which it was purchased and venture onto out-of-state
roads on which motor vehicle accidents can and do occur.”29
MAIF argues that this Court’s decision in Daily Underwriters v.
Maryland Auto. Ins. Fund 30 is controlling. However, Appellants argue that
the holding in Daily Underwriters was limited to the subrogation context.
The Court does not find this argument to be persuasive since the
jurisdictional holding in Dann was based on whether the nonresident insurer
could be added to the action under a claim for subrogation. In Daily
Underwriters, a tortfeasor who was insured by MAIF, collided with the
occupant of a vehicle insured by Daily Underwriters after failing to remain
stopped at a stop sign in Delaware.31 Daily Underwriters paid PIP benefits
to its insured for the injuries suffered from the accident and sought
subrogation against MAIF. 32 When MAIF moved to dismiss for lack of
personal jurisdiction, the Court held that Daily Underwriters failed to show
that any of the provisions long-arm statute subjected MAIF to personal
jurisdiction since “neither Defendant nor any agent or representative caused
29
Id.30
2008 WL 3485807.
31
Id. at *1.
32
Id.
11
tortious injury in Delaware.” 33 The Court compared the facts before it to the
facts in Tri-State Motor Transit, Co., Dann, and two cases from other
jurisdictions to reach its conclusion that MAIF lacked sufficient minimum
contacts with Delaware. 34 For example, the Court distinguished the MAIF
from the Ohio association in Tri-State Motor Transit, Co. because MAIF
was not statutorily obligated to step into the shoes of an insurer which was
subject to Delaware’s jurisdiction.35 The Court also found that MAIF could
not foresee that it could be haled into court in Delaware for the subrogation
suit because Maryland statutory law prohibited subrogation claims against
MAIF. 36
While this case is not an action for subrogation, the Court finds its
decision in Daily Underwriters to be instructive here. As the Court
explained in Daily Underwriters, MAIF is unlike the Ohio association in
Tri-State Motor Transit Co. because MAIF was not statutorily created to
step into the shoes of an insurer whose insured was involved in tortious
conduct in Delaware. Appellants did not assert that MAIF or its agents
committed any acts or omissions resulting in tortious injury in Delaware or
33
Id. at *3.
34
New York Central Mut.Ins. Co. v. Johnson, 260 A.2d 638 (N.Y.A.D. 2 Dept.1999);
Colmon v. Maryland Auto. Ins. Fund, 574 A.2d 628 (Pa.Super.1990)(holding that MAIF
lacked sufficient contacts with Pennsylvania in a claim by a Pennsylvania resident against
MAIF for first-party benefits).
35
Daily Underwriters, 2008 WL 3485807 at * 5.
36
Id. at *5-6.
12
that a tort occurred in this case. MAIF is not licensed to do business in
Delaware and does not write insurance in Delaware. As for Appellants
argument that MAIF has sufficient contacts with Delaware because it
receives substantial revenue from Delaware based on its failure to exclude
driving in Delaware from its policies, the Court agrees with the court’s
finding in New York Central Mutual Ins. Co. v. Johnson,37 a New York
cased considered by this Court in Daily Underwriters, that “[t]he fact that
MAIF derived a collateral economic benefit from [this forum state] from the
collection of premiums calculated upon nationwide risks is also insufficient
to confer personal jurisdiction over MAIF under [the] long-arm statute.”38
Appellants failed to meet their burden to show that the provisions of the
Long-Arm Statute applied to MAIF in this case. Moreover, MAIF could not
reasonably foresee being haled into a Delaware court to pay PIP coverage,
especially since its insured signed a PIP waiver. Thus, the Court of
Common Pleas correctly determined that it lacked personal jurisdiction over
MAIF.
Conclusion
For the aforementioned reasons, the decision of the Court of
37
260 A.2d 638.
38
Id. at 639.
13
Common Pleas is AFFIRMED.
IT IS SO ORDERED.
/s/Calvin L. Scott
Judge Calvin L. Scott, Jr.
14