State Farm Mutual Automobile Insurance v. Davis
2013 Del. LEXIS 556
| Del. | 2013Background
- Passenger in a single-vehicle accident; $15,000 PIP limit under State Farm; mother executed revocable assignment of benefits to hospital while Davis coma-bound; hospital paid $15,000 to Christiana Care and Delaware Neurological Group; Davis later sought to reserve PIP for lost wages but benefits were exhausted first-in-first-out; Superior Court ruled assignment invalid and that PIP should be reserved, but assignment validity was not challenged below; issue became moot once benefits exhausted; this appeal reverses and remands.
- Assignment authorized hospital to seek payment directly; Davis did not challenge assignment validity; State Farm’s payment exhausted PIP benefits before reservation request; Davis sought to reserve lost earnings under § 2118; the dispute centers on mootness and potential statutory interpretation.
- State Farm’s first-in, first-out policy exhausted PIP; reservation request after exhaustion could not be honored; mootness doctrine applied; the court did not resolve § 2118 construction.
- Court noted several states’ approaches to allocating PIP benefits but did not decide on Delaware policy; case discusses potential alternatives for legislative clarification.
- Judgment reversed; remanded for further proceedings consistent with opinion; court did not decide statutory construction due to mootness.
- PIP is part of Delaware’s no-fault scheme and § 2118 governs reserve of lost earnings but mootness precludes reaching the issue in this case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the § 2118 reserve requirement moot where PIP benefits were exhausted before reservation request? | Davis argues the assignment is valid and insurer must reserve lost wages; the issue remains live. | State Farm contends no remaining benefits to reserve, rendering the issue moot. | Moot; cannot grant relief; reversed and remanded. |
| Did the trial court err in deeming the assignment invalid and thereby affect the reserve requirement? | Assignment validity not challenged; error to decide moot issue. | Assignment validity can affect allocation; exercised discretion. | Issue not reached due to mootness; reversed and remanded for further proceedings. |
| Should the court interpret § 2118 to require reserving wages benefits despite exhaustion? | Statute should be read to protect lost wages. | Issue not necessary to decide given mootness. | Not decided; mootness governs. |
Key Cases Cited
- Gray v. Allstate Ins. Co., 668 A.2d 778 (Del. Super. Ct. 1995) (PIP is part of Delaware no-fault scheme.)
- Mentor Graphics Corp. v. Shapiro, 818 A.2d 959 (Del. 2003) (Mootness exceptions and doctrine principles.)
- Gen. Motors Corp. v. New Castle Cnty., 701 A.2d 819 (Del. 1997) (Mootness and public interest considerations.)
- In re Adoption of Swanson, 623 A.2d 1095 (Del. 1993) (Delaware contract/obligation principles.)
- Acro Extrusion Corp. v. Cunningham, 810 A.2d 345 (Del. 2002) (Delaware contract interpretation and related standards.)