Holt v. Mitchell, C.A. No. K15C-04-032 (Del. Super. Ct. May 25, 2016)

The Superior Court holds that in a municipal tort claim action, the municipality’s liability is limited to the statutory cap of $300,000.00, notwithstanding higher liability limits.

Plaintiff, the personal representative of the Estate of Nicole Smith-Santee, filed an action in Superior Court alleging that Smith-Santee died of injuries as a result of a high speed chase involving a Seaford, Delaware police vehicle on May 20, 2013, in which Smith-Santee was a passenger on a motorcycle being chased and was ejected when the driver collided with a pickup truck. At the time of the accident, the City of Seaford (“City”) was insured by a commercial auto insurance policy with limits of $1 million.

Defendants – the City and the police officer involved in the chase – filed a Motion for Partial Summary Judgment shortly after the filing of the Complaint seeking to limit their liability to the $300,000.00 cap on damages contained in the County and Municipal Tort Claims Act, 10 Del. C. § 4013 (“Act”).  Plaintiff opposed Defendants’ motion, arguing that the Act did not abrogate their ability to collect up to the liability insurance policy limits, as the Act caps recoveries at $300,000.00 or the insurance policy limits, whichever is higher.

The Court disagreed with Plaintiff. The Court observed that the City’s liability policy contained an endorsement which modified liability coverage for claims subject to the Act.  Noting prior precedent that insurance policies must be interpreted in a common-sense manner and that unambiguous language in an insurance contract must be given its plain and ordinary meaning, the Court held that the plain language of the endorsement reduced the City’s available policy limits to $300,000.00.