Hampton v. Titan Indemnity Company
N16C-03-196 VLM
| Del. Super. Ct. | Jun 23, 2017Background
- Howard Hampton (unlicensed, multiple DUI convictions) was injured while steering Cheryl Brown's car out of a snow ditch and sought $15,000 in PIP benefits under Brown's auto policy underwritten by Titan/Nationwide.
- Brown and Hampton lived in the same double-wide mobile home: separate bedrooms/bathrooms, shared kitchen/living areas, shared utilities; they paid separate rent and interacted little.
- Brown applied for insurance through A to Z agent Kathleen Joyner on 12/23/2015; Joyner entered answers orally and printed a 3-page application for Brown to sign; Brown did not read the application before signing.
- The application’s "DRIVER INFORMATION" box instructed listing "All household members age 15 or older, including spouse, domestic partner, roommate(s), as well as those drivers outside the household..." Neither Joyner nor Brown were asked explicitly about roommates; Joyner testified she would not list unlicensed persons as drivers.
- Titan investigated after Hampton submitted PIP claims and, asserting Brown failed to disclose Hampton as a household member/roommate, sought rescission of the policy under 18 Del. C. § 2711; cross-motions for summary judgment were filed.
- The Superior Court found the application language reasonably susceptible to two interpretations (whether the driver-information prompt required listing unlicensed roommates), invoked contra proferentem, ruled Brown did not materially misrepresent, granted Brown/Hampton summary judgment and denied Titan's motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Hampton entitled to PIP benefits despite being Brown's co-tenant/roommate? | Hampton: PIP mandatory; status as non-owner/occupant who was injured while aiding Brown does not preclude coverage. | Titan: Hampton is a household member/roommate omitted from the application; omission voids policy for him. | Court: Hampton entitled to coverage; ambiguity in application interpreted for insured. |
| Did Brown materially misrepresent her application by failing to disclose Hampton as a household member/roommate? | Brown: She reasonably interpreted "household members"/"drivers" to mean dependents or actual drivers; she was not asked about roommates. | Titan: "Household members" expressly includes roommates; Brown admitted Hampton is her roommate—omission was a misrepresentation. | Court: No misrepresentation; the disputed section is ambiguous and Brown's interpretation was reasonable. |
| Is the application language ambiguous and, if so, does contra proferentem apply? | Brown: The caption "DRIVER INFORMATION" and agent practice indicate the prompt targeted drivers (not unlicensed roommates); ambiguity exists. | Titan: Text expressly includes roommates and therefore is unambiguous. | Court: The provision is fairly susceptible to two meanings; ambiguity exists and contra proferentem favors insured. |
| Does the agent's testimony affect materiality or rescission under § 2711? | Brown: Agent did not ask about roommates and would not have listed an unlicensed person; insurer cannot benefit from agent's failures. | Titan: Misrepresentation need not be intentional; omission of a roommate is material under statute. | Court: Agent's concession that unlicensed household members would not be listed supports insured's interpretation and undercuts materiality argument. |
Key Cases Cited
- O'Brien v. Progressive N. Ins. Co., 785 A.2d 281 (Del. 2001) (insurance-contract interpretation principles; ambiguities construed against insurer)
- Rhone-Poulenc Basic Chem. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192 (Del. 1992) (contract meaning and ambiguity standards)
- Ebersole v. Lowengrub, 180 A.2d 467 (Del. 1962) (summary judgment standard and inferences)
- State Farm Mut. Auto. Ins. Co. v. Wagamon, 541 A.2d 557 (Del. 1988) (Delaware public policy on mandatory PIP coverage)