Defendant’s motion to dismiss granted in part and denied in part where defendant Gallagher Bassett was not an insurer.

The plaintiff was involved in a motor vehicle accident as a passenger in a vehicle owned by the defendant, New Castle County, and suffered physical injuries as a result. The plaintiff subsequently sued New Castle County and Gallagher Bassett, asserting that the vehicle was insured by New Castle County and that Gallagher Bassett was acting as New Castle County’s third party administrator in order to administer the no-fault policy. In the alternative, the plaintiff argued that the motor vehicle was owned by New Castle County and insured by Gallagher Bassett. The defendant Gallagher Bassett filed a motion to dismiss for failure to state a claim upon which relief can be granted. Specifically, Gallagher Bassett argued that, as a claims adjusting company, it cannot be held liable for claims under 21 Del. C. §§ 2118 and 2118B because these statutes apply to insurers and Gallagher Bassett was not an insurer. Gallagher Bassett also argued that the plaintiff’s bad faith claim must be dismissed because it is not an insurer. The court ruled that the plaintiff’s claims under the statute were only viable against Gallagher Bassett if it was an insurer, which means it must be a company authorized to issue insurance policies in the state of Delaware. Therefore, the plaintiff was required to allege that Gallagher Bassett was an insurer, not that it was acting as an insurer. Because the plaintiff had included an allegation, in the alternative that Gallagher Bassett insured the vehicle, the court ruled that it would not dismiss the counts related to § 2118 and 2118B or the bad faith count. However, the plaintiff’s claims for violation of 18 Del. C. § 2304(16) were dismissed since there is no private cause of action under the statute.

Case Law Alerts, 4th Quarter 2013