Defense Digest  

To Stack or Not To Stack?  This Is No Longer The Question In Delaware For Personal Injury Plaintiffs

By Ronald W. Hartnett, Jr., Esq.*

For many years, the Delaware Supreme Court has been struggling with the parameters of Section 3902 of Title 18 of the Delaware Code, which governs uninsured and underinsured motor vehicle coverage.   Piece by piece, the Court has attempted to give guidance to this statute and yet maintain its legislative intent.  Deptula v. Horace Mann Insurance Co., 842 A.2d 1235 (Del. 2004), the latest case to be decided by the Court, clarifies even further the strictures of Section 3902.

Deptula  involved a Delaware motorist who was rear-ended while driving a vehicle owned by his employer.  The insurance coverages at issue included:  $100,000 liability limits (the tortfeasor's liability policy), $300,000 underinsured motorist (UIM) coverage (the employer's policy), and $100,000 UIM (the plaintiff's personal policy with Horace Mann Insurance Company).  Horace Mann refused to pay the UIM coverage because the plaintiff's personal UIM limits did not exceed the policy limits of the tortfeasor's coverage.  The trial court agreed with Horace Mann and granted summary judgment in their favor.

The Delaware Supreme Court has stated on several occasions that the legislative purpose of Section 3902 is to protect individuals injured by tortfeasors who carry little or no insurance.   In an effort to further this protection, the Court in Hurst v. Nationwide Mut. Ins. Co., 652 A.2d 10 (Del. 1995), stated that Section 3902 permits stacking of policy limits of uninsured coverage in the absence of an express prohibition to the contrary.  The Court went further and applied the same logic to UIM coverage in Nationwide Mut. Auto. Inc. Co. v. Peebles, 688 A.2d 1374 (Del. 1997).  In holding true with what the Court has called "the overriding legislative intent to fully compensate innocent drivers," it has done what it can to implement such an intent.

In what could be viewed as a retreat from the pro-stacking approach and the necessity to uphold the legislative intent, the case of Colonial Insurance Co. of Wisconsin v. Ayers, 722 A.2d 177 (Del. 2001) was decided.  This case stated succinctly that stacking of multiple underinsured motorist policies was not permitted in determining if the tortfeasor's motor vehicle was underinsured.  The Court determined that none of the policies in question exceeded the limits of the tortfeasor's policy and, therefore, it was not an underinsured vehicle.  The Court did not, however, go one step further to determine if, once the tortfeasor's vehicle is deemed "underinsured," an injured party could then stack multiple UIM policies to collect for their damages.

It is this hanging question which Deptula addresses and answers.  The Court took a step-by-step look into the history, which included reviewing Hurst, Peebles, and Ayers, in its determination of what could be the final piece in this puzzle of stacking under Section 3902.  Is a plaintiff who has shown he/she is entitled to underinsured motorist coverage entitled to "stack" multiple UIM policies under which they are insured in order to fully compensate for their injuries?  It seems for now that the Delaware Supreme Court has answered this question in the affirmative.  Unless there is an express prohibition to such stacking, an injured plaintiff may stack multiple UIM policies to ensure full compensation.  Once it is determined that one (and only one) of the injured plaintiff's UIM policies exceeds the tortfeasor's liability limits, then the other policies can be stacked for full compensation of the plaintiff's injuries.  The Court feels this determination gives effect to both the legislative intent of "fully compensating innocent drivers" and is consistent with general insurance law.  The plaintiff in Deptula was, therefore, entitled to collect UIM benefits from his employer's policy, as well as his own personal policy.

Now, in Delaware, an injured plaintiff can stack multiple UIM policies under which he is entitled to be compensated.   The injured plaintiff must first show the tortfeasor's vehicle is underinsured when compared to one of the policies under which the plaintiff is entitled to collect.  Once this determination is made, absent an express policy prohibition to the contrary , the plaintiff will be entitled to UIM benefits from all policies in which he is an insured.

It may have taken the Delaware Supreme Court some time, but the feeling is they have now unscrambled one of the more pressing questions related to Section 3902.   The Court has many times stated that the easy approach was for the Legislature to change the language of the statute.  Absent such a change, the Court is left with a necessity to adhere to the legislative intent:  full compensation for innocent persons.

*Ron is an associate in our Wilmington, Delaware office.  He can be reached at (302) 552-4339 or rhartnett@mdwcg.com.