Moore v. State Farm Fire and Casualty Company

SUPERIOR COURT
OF THE
STATE OF DELAWARE
Sussex County Courthouse
MARK H. CONNER 1 The Circle, Suite 2
JUDGE Georgetown, DE 19947
March 25, 2024
Donald M. Ransom, Esq. D. Miika Roggio, Esq.
CASARINO CHRISTMAN SHALK SILVERMAN McDONALD
RANSOM & DOSS, P.A. & FRIEDMAN
1000 North West Street, Suite 1450 1523 Concord Pike, Suite 400
Brandywine Building Wilmington, DE 199803 South
P.O. Box 1276 Attorney for Plaintiffs Elyse
Wilmington, DE 19899-1276 and Robert Moore.
Attorney for Defendant State Farm
Fire and Casualty Company
RE: Elyse and Robert Moore v. State Farm Fire and Casualty Company
C.A. No. S22C-08-018 MHC
Dear Counsel,
On October 18, 2023, I denied State Farm’s motion for summary judgment on
Plaintiff’s breach of contract claim because genuine issues of material fact existed
that require determination by a jury. In doing so, I failed to specifically address the
claims of bad faith and punitive damages. State Farm moved this Court for
reargument limited to those claims pursuant to Rule 59(e). Oral argument was held
on February 16, 2024, and I asked the parties to provide supplemental briefs.
Motions for reargument will be denied unless the court has overlooked
controlling precedent or legal principles or has misapprehended the law or facts such
as would have changed the outcome of the underlying decision.1 In failing to address
the summary judgment motion as it pertained to the limited claims of bad faith and
punitive damages, I overlooked controlling precedent that, if considered, would have
changed the outcome of my underlying decision to deny summary judgment with
regards to Plaintiffs’ claims of bad faith and punitive damages. Therefore,
reargument is appropriate as it pertains to the claims of bad faith and punitive
damages.
Substantively, a genuine factual dispute exists with regards to the source of
the leak. Likewise, a genuine factual dispute exists as to whether water leaking
above ground, but ultimately entering the Plaintiffs’ basement below ground, is
subsurface water not covered by Plaintiffs’ policy. Based on these factual disputes,
I determined on October 18, 2022, summary judgment is not appropriate as to
Plaintiffs’ breach of contract claim.
1
Beatty v. Smedly, 2003 Del. Super. Lexis 437 (Del. Super. Ct. March 12, 2003).
2
For Plaintiffs to prevail on a claim of bad faith State Farm must have acted
“clearly without any reasonable justification” in failing to honor their obligations
under the policy.2 Similarly, Delaware law “permit[s] punitive damages in the
insurance ‘bad faith’ context.”3 “[P]unitive damages may be available in the context
of a contract action if the denial of coverage is willful or malicious.” 4 Punitive
damages are also justified when an insurers bad faith denial of coverage is done with
reckless indifference to the plight of the insured.5 Similarly, “an insured may be
entitled to the recovery of punitive damages in a bad faith action if the insurer's
breach is particularly egregious.”6 “When judging reasonableness [of coverage
denial] in this context, ‘[t]he ultimate question is whether at the time the insurer
denied liability, there existed a set of facts or circumstances known to the insurer
which created a bona fide dispute and therefore a meritorious defense to the insurer's
liability.’”7
In sum, for a plaintiff to recover punitive damages on bad faith claims in a
breach of insurance contract case, the plaintiff must show egregious behavior on the
2
Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254, 264 (Del. 1995) (citing Casson v.
Nationwide Ins. Co., 455 A.2d 361, 369 (Del. Super. Ct. 1982)).
3
E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 446 (Del. 1996).
4
Pierce v. Int'l Ins. Co. of Illinois, 671 A.2d 1361, 1367 (Del. 1996).
5
Id.6
Tackett, 653 A.2d 254, 265 (Del. 1995).
7
RSUI Indemnity Company v. Murdock, 248 A.3d 887, 910 (Del. 2021) (citing Casson v.
Nationwide Ins. Co., 455 A.2d 361, 369 (Del. Super. Ct. 1982)).
3
part of the insurer without reasonable justification. In the present matter, a factual
dispute exists as to whether Plaintiffs are covered by State Farm’s policy, preserving
the breach of contract claim for trial. Logically, the existence of such a bona fide
dispute as to coverage means that State Farm’s denial of coverage was not egregious
or unreasonable, entitling State Farm to summary judgment to those claims as a
matter of law. Therefore, Defendant’s motion for summary judgment as to the claims
of bad faith and punitive damages is hereby GRANTED.
Sincerely,
/s/ Mark H. Conner
Mark H. Conner
Judge
cc: Prothonotary
Daniel Ballard, Esquire, Pro Hac Vice Attorney for Plaintiffs
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