Uninsured Motorist Coverage – Limited Class of Drivers
Stoms v. Federated Service Ins. Co., __ A.3d __, 2015 WL 6153403 (2015)
On November 3, 2012, David Stoms (hereinafter “Decedent”) was returning from a family outing driving a vehicle owned by his employer, Diamond Motor. Decedent was struck by an uninsured driver and killed. At the time of the accident, Decedent was employed as a finance manager for Diamond Motor. Diamond Motor held a policy with Federated Service Insurance Company (hereinafter “Defendant”) which covered the company car operated by Decedent. The policy provided $30,000.00 personal injury protection coverage for all qualified insureds as well as $300,000.00 uninsured motorist coverage for directors, officers, partners or owners. Decedent’s wife (hereinafter “Plaintiff”), filed suit against Defendant asserting that the policy was contrary to public policy as it only provided uninsured motorist coverage to a limited class of drivers. She also asserted that the terms directors, officers, partners or owners were ambiguous and should be construed to included Decedent. The Superior Court granted Defendants’ Motion for Summary Judgment finding that the policy did not contravene public policy as it provided Decedent the minimum coverage required under Delaware law. The Superior Court also held that the terms directors, officers, partners or owners were not ambiguous and must be given their traditional meanings under corporate law. Plaintiff appealed.
The Court first considered whether the policy at question was contrary to public policy. The Court held that once an insured has purchased the statutory minimum coverage, the insured is free to contract as much or as little additional optional insurance as it desires and allocate the optional insurance as it sees fit. As to Plaintiff’s second issue regarding whether the terms directors, officers, partners or owners are ambiguous, the Court held that it is was clear that those terms were used in a corporate law context. Analyzing the terms in the corporate context, the Court held that there is no way the terms could be constructed so broadly as to encompass a finance manager. The judgment of the Superior Court was affirmed.