Vaughn v. Stillwater Property & Casualty Insurance Co., N15C-05-035 AML

John Vaughn and Samantha Brocklesby jointly purchased a home; Brocklesby alone applied for and was named on the homeowners policy.
Vaughn and Brocklesby married after the policy inception but later separated and divorced before a fire damaged the property on August 3, 2014 (Date of Loss).
The insurer (Stillwater) paid for damage to the residence but denied Vaughn’s claims for personal property and loss-of-use because he was not an insured on the Date of Loss.
Three weeks after the fire, an amended declaration added Vaughn as a named insured effective August 29, 2014 (post–Date of Loss).
Vaughn sued for breach of contract and bad faith; cross-motions for summary judgment were filed. The court considered (1) which date governs coverage (policy inception vs. date of loss) and (2) whether the post-loss amendment operated retroactively.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Which date determines who is an insured under the policy?	Vaughn: the policy inception date (Dec. 17, 2013) controls because he met insured definition then.	Stillwater: coverage is determined by facts as of the date of loss.	Date of loss governs coverage determinations.
Does the amended declaration adding Vaughn as a named insured operate retroactively to the Date of Loss?	Vaughn: the amendment corrected an oversight and should be retroactive; at worst, ambiguity favors the insured.	Stillwater: the amended declaration expressly shows an effective date of Aug. 29, 2014, so it is prospective only.	The amended declaration is unambiguous and prospective; it does not confer retroactive coverage.
Can equitable/fairness principles alter clear policy terms to confer coverage?	Vaughn: inequitable for insurer to accept premiums but deny him coverage given he paid mortgage/premiums and was on deed/mortgage.	Stillwater: contract terms control; no evidence insurer knew of an omission or acted inequitably pre-loss.	Equity cannot rewrite unambiguous contract terms; no basis to vary the policy.
Is contra proferentem applied to interpret the amendment in favor of Vaughn?	Vaughn: any ambiguity should be construed against insurer.	Stillwater: the amendment is clear on its face.	No ambiguity found; contra proferentem does not apply.

State Farm Mut. Auto. Ins. Co. v. Quinn, [citation="62 F. App'x 425"] (3d Cir.) (establishing that coverage is determined by circumstances at time of loss)
Hudson v. State Farm Mut. Ins. Co., 569 A.2d 1168 (Del. 1990) (rules on contract interpretation and insurance policy construction)
Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192 (Del. 1992) (ambiguity standard for contracts: language must be reasonably susceptible to multiple meanings)
ConAgra Foods, Inc. v. Lexington Ins. Co., 21 A.3d 62 (Del. 2011) (parties are bound by unambiguous contract terms)
Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925 (Del. 1982) (plain meaning rule for insurance policy language)