After the police arrived, Mr. Hampton was cited for driving without a license and without proof of insurance. Mr. Hampton has not had a driver's license for 15 years, primarily as a result of driving while under the influence offenses.

A short time before the accident, Ms. Brown had obtained an auto insurance policy from Titan Indemnity Company. To do so, she met with Kathleen Joyner, a licensed insurance agent at A to Z Insurance Company, an agency that issued policies underwritten by Titan. The agent began the application by asking Ms. Brown a series of eligibility questions. She did not read the application verbatim and inputted Ms. Brown's verbal responses into her computer.

After the interview, Ms. Joyner printed the three page application for signature. Without reading the application, Ms. Brown signed the third page of the application, attesting to the veracity of her responses.

A section of the application entitled “DRIVER INFORMATION” provided:

NOTE: All household members age 15 or older, including spouse, domestic partner, roommate(s), as well as those drivers outside the household to whom the insured auto(s) is furnished or available for his or her use, including military and children away at college, must be identified below. 

Both Ms. Joyner and Ms. Brown agreed that Ms. Brown had not been asked if she had a roommate. Ms. Brown testified that she recalled being asked only about other “household members,” which she interpreted to refer to those members of her “household” whom she considered her dependents. To her, this meant her two adolescent sons and not Mr. Hampton. However, at the time of the application, neither son was living in her home – they had left the residence as late as July 2015. Nevertheless, one of her sons was listed on the final page of the application as an excluded driver, because he was “no longer in [the] household.”

As a Titan agent, Ms. Joyner stated that she did not read the entire “DRIVER INFORMATION” section of the application to Ms. Brown because she asked her to review the information provided at the conclusion of the interview. Also, Ms. Joyner stated in a deposition that she had not interpreted the driver's section of the application to mean that the applicant was required to list unlicensed drivers, such as Mr. Hampton. Therefore, if Ms. Brown had disclosed Mr. Hampton on this portion of the application, the agent would not have included him as a driver because he had suffered a loss of license.

After the accident, Mr. Hampton submitted medical bills to Titan for reimbursement under the policy's $15,000 “no-fault” personal injury protection (“PIP”) benefits provision. Titan responded that it was investigating the circumstances of the accident on the basis of Ms. Brown's omission regarding Mr. Hampton's occupancy of the shared residence.

Before this investigation was completed, Mr. Hampton filed suit, seeking a determination that Titan was obligated to pay his PIP bills.

Titan then filed a third party complaint against Ms. Brown, arguing that Mr. Hampton's unique status as a “roommate” of Ms. Brown's “household” had retroactively voided the insurance policy, prohibiting him from receiving PIP benefits for his injuries.

Titan and Ms. Brown cross-moved for summary judgment.

The Court's Decision

The court granted Ms. Brown's motion for summary judgment, finding that she had not made any misrepresentation in connection with her insurance application.

In its decision, the court found that Titan's definition of the term “household members” as including “roommate(s)” was reasonable.

The court added, however, that it was not the only reasonable interpretation of this section.

It noted that Ms. Brown had interpreted “household members” as persons she considered her dependents: her sons. Moreover, she did not consider Mr. Hampton a driver.

Ms. Joyner, the court pointed out, had not asked Ms. Brown if she had a roommate. It also observed that Ms. Joyner had conceded that she would not have asked about unlicensed individuals in the household because they were not “drivers” within the meaning of the section. The court rejected Titan's view that the application was clear on its face that it included “roommates,” whether licensed or unlicensed, declaring that it was Titan's agent “that established this record.”

The court also pointed out that the second clause, which modified the first clause of the “note,” required the applicant list all “household members … as well as those drivers outside the household to whom the Insured auto(s) is furnished or available for his or her use, including military and children away at college….” Ms. Brown, the court noted, had stated that one of her two sons did not drive. Accordingly, one was excluded under the policy.

The court ruled that the application was susceptible to two different interpretations, and that Ms. Brown had not made a misrepresentation regarding Mr. Hampton's living status in their shared residence. It observed that Ms. Joyner had never asked Ms. Brown about “roommates” in her residence. In the court's view, to Ms. Brown, it was reasonable to consider Ms. Joyner's failure to ask about roommates as indicative that Mr. Hampton, whom she considered a co-tenant and nothing more, was not material to this section of the application. In other words, the court concluded, Ms. Brown's answer to the “DRIVER INFORMATION” section had been reasonable and she had not misrepresented Mr. Hampton's status as a co-tenant of her home.

The case is Hampton v. Titan Indemnity Co., No. N16C-03-196 VLM (Del. Super.Ct. June 23, 2017). Attorneys involved include: Patrick Gallagher, Esquire, of Curley, Dodge, Funk & Street, LLC, of Dover, Delaware. Attorney for Plaintiff & Third-Party Defendant. Roger K. Pearce, Esquire, of Reger, Rizzo & Darnall, L.L.P., of Wilmington, Delaware. Attorney for Defendant/Third-Party Plaintiff.