State Farm Fire & Casualty Co. v. Lambert
MEMORANDUM OPINION. Signed by Judge Leonard P. Stark on 11/21/2017. (etg)
IN THE UNITED ST ATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
STATE FARM FIRE & CASUALTY CO.,
C.A. No. 16-571-LPS
Joseph J. Bellew, COZEN O'CONNOR, Wilmington, DE
Michael D. O'Donnell, COZEN O'CONNOR, Philadelphia, PA
Attorneys for Plaintiff.
Eileen M. Ford, MARKS, O'NEILL, O'BRIEN, DOHERTY & KELLY, P.C., Wilmington, DE
Attorney for Defendant.
November 21, 2017
Pending before the Court is Defendant Tanisha Lambert's ("Defendant" or "Lambert")
motion to dismiss Plaintiff State Farm Fire & Casualty Co.' s ("Plaintiff' or "State Farm")
complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Motion"). (See D.I. 13) For
the reasons set forth below, the Court will grant the Motion.
Plaintiff provided property insurance to Timothy O'Connell ("O'Connell") for his
property located at 302 Porter Street, Wilmington, DE ("Property") pursuant to insurance policy
number 98-BT-7407-8. (See D.I. 1 ,i,i 5-6) Defendant leased the Property from March 1, 2007 to
March 31, 2008, following which the lease became a month-to-month tenancy. (See D.I. 15 Ex.
A at 1) The lease agreement ("Lease") was a U.S. Department of Housing and Urban
Development ("HUD") lease made through the Wilmington Housing Authority and included a
Housing Assistance Payments Contract. (See id. at 4)
The Lease provided the following tenant's obligations:
The tenant shall keep the dwelling unit in a clean and sanitary
condition and upon termination of this lease surrender the dwelling
unit to the owner in as good condition as it is on the beginning date
of this lease, reasonable wear and tear and damage by the elements
The tenant will be responsible for damages to the unit and
premises, other than normal wear and tear, that are caused by any
member of the tenant's family, guests of the tenant, and persons
under the tenant's control. ...
The repair of tenant-caused damages must be completed by the
This recitation is based, as it must be at this stage, on taking as true all well-pleaded
factual allegations in the complaint.
owner at the expense of the tenant.
(Id. at 6 ,r 2)
On July 14, 2014, while Defendant was leasing the Property, Defendant lit a candle and
left it unattended on the Property. (See D.I. 1 ,r,r 8-9) "The candle came into contact with a
couch and/or other combustibles in the living room," causing a fire on the Property and,
subsequently, substantial damage to the Property. (See id.
Pursuant to its insurance policy, Plaintiff paid more than $100,000 to O'Connell for the
damages caused by the fire. (See id.
"In accordance with common law principles of
equitable and legal subrogation, and the terms of the [insurance policy], [Plaintiff] is subrogated
to the rights of the [insurance policy] to the extent of the payments it made for the
aforementioned property damage and lost rent." (Id.
Thereafter, on July 1, 2016, Plaintiff
filed this action against Defendant. (See D.I. 1) Plaintiffs complaint asserts negligence and
breach of contract claims against Defendant for causing the fire and failing to pay for the
subsequent property damage. (See id. at ,r,r 15-29)
On April 20, 2017, Defendant filed its motion to dismiss the entirety of Plaintiffs
complaint. (See D.I. 13) The parties completed briefing on May 11, 2017. (See D.I. 16) The
Court heard argument on July 20, 2017. (See Transcript ("Tr."))
Evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires
the Court to accept as true all material allegations of the complaint. See Spruill v. Gillis, 372
F.3d 218,223 (3d Cir. 2004). "The issue is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat
Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997) (internal quotation marks omitted).
Thus, the Court may grant such a motion to dismiss only if, after "accepting all well-pleaded
allegations in the complaint as true, and viewing them in the light most favorable to plaintiff,
plaintiff is not entitled to relief." Maio v. Aetna, Inc., 221 F.3d 472,482 (3d Cir. 2000) (internal
quotation marks omitted).
However, "[t]o survive a motion to dismiss, a civil plaintiff must allege facts that 'raise a
right to relief above the speculative level on the assumption that the allegations in the complaint
are true (even if doubtful in fact)."' Victaulic Co. v. Tieman, 499 F.3d 227,234 (3d Cir. 2007)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is facially plausible
"when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation
that discovery will reveal evidence of [each] necessary element" of a plaintiffs claim. Wilkerson
v. New Media Tech. Charter Sch. Inc., 522 F.3d 315,321 (3d Cir. 2008) (internal quotation
The Court is not obligated to accept as true "bald assertions," Morse v. Lower Merion
Sch. Dist., 132 F .3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), "unsupported
conclusions and unwarranted inferences," Schuylkill Energy Res., Inc. v. Pa. Power & Light Co.,
113 F.3d 405,417 (3d Cir. 1997), or allegations that are "self-evidently false," Nami v. Fauver,
82 F.3d 63, 69 (3d Cir. 1996).
Defendant seeks to dismiss Plaintiffs complaint, arguing that Plaintiff cannot bring a
subrogation claim against Defendant. (See D.I. 14 at 5-6) "An insurer who pays a loss suffered
by the insured is entitled to be subrogated pro tanto to any right of action which the insured may
have against a third person whose tort caused the loss." Lexington Ins. Co. v. Raboin, 712 A.2d
1011, 1015 (Del. Super. Ct. 1998). An insurer, however, cannot subrogate against its own
insured or co-insured. See id.
Courts in Delaware have adopted the "Sutton rule," which holds that residential tenants
are considered co-insured under the landlord's fire insurance policy unless the lease "clearly
express[es] intent ... to the contrary." Id. at 1016; see also Sutton v. Jondahl, 532 P.2d 478,482
(Okla. Civ. App. 1975) ("[S]ubrogation should not be available to the insurance carrier because
the law considers the tenant as a co-insured of the landlord absent an express agreement between
them to the contrary.").
Here, Defendant contends that she is a co-insured under the insurance policy, so Plaintiff
cannot subrogate its rights against Defendant. (See D.I. 14 at 9-10) Defendant bases her
contention on the facts that: (i) the Lease does not hold her expressly liable for fires caused by
her negligence and (ii) fires were expressly carved out in the Lease as an exception to tenant
liability. (See id. at 1-2) Additionally, Defendant asserts that public policy dictates that
Defendant should not be liable for the damages to the Property. (See id. at 2)
In response, Plaintiff first argues that Defendant's arguments should not be addressed on
a Rule 12(b)(6) motion. (See D.I. 15 at 5) Alternatively, Plaintiff argues that Defendant is not
co-insured because the Lease expressly holds Defendant liable for all damages, including fire
damage. (See id. at 9-10) Finally, Plaintiff argues that even if Defendant could not be liable
under the Lease, she is liable for her negligence under the Delaware Residential Landlord-Tenant
Code, which imposes a duty on a tenant to comply with her obligations to the landlord. (See id.
A Rule 12(b)(6) Motion is Proper
Plaintiff contends that Defendant has "raised a substantive defense on the merits" that
cannot be the basis for dismissal for failure to state a claim. (D.I. 15 at 5) Issues of subrogation
have been addressed on Rule 12(b)( 6) motions by other courts. See, e.g., Travelers Cas. & Sur.
Co. ofAm. v. A.G. Cullen Constr., Inc., 2008 WL 4816477, at *5 (W.D. Pa. Nov. 4, 2008). The
Court agrees with Defendant that whether Plaintiff can bring its subrogation claim against
Defendant is relevant to whether Plaintiff has stated a claim upon which relief can be granted.
Thus, the Defendant's Rule 12(b)(6) motion is a proper vehicle for presenting this defense.
The Lease Does Not Expressly Hold Defendant Liable for Fire Damage
Defendant argues that the Lease does not expressly establish that she is liable for fire
damage caused by negligence. (See D.I. 14 at 9) Plaintiff responds that there is clear intent in
the Lease to hold Defendant liable for negligent fires because the Lease states that Defendant is
responsible and will pay for all damages she caused to the Property.2 (See D.I. 15 at 9)
While no particular words are required in the Lease in order for Plaintiff to withstand
Defendant's motion, the Lease as a whole must clearly express the intent to hold the tenant liable
for negligent fires to the leased property. See Lexington Ins. Co., 712 A.2d at 1014. Such intent
should be shown in the lease agreement by a clear contemplation of the "division ofrisks
Plaintiff also contends that it was clear that Defendant was aware of her liability as she
likely purchased renter's insurance, which Plaintiff intends to prove through discovery. (See D.I.
15 at 19) However, Plaintiff does not allege this in its complaint, so the Court need not take
Plaintiffs assertion as true in evaluating the pending motion.
between landlord and tenant." Id. at 1014-17 (finding tenant was co-insured, and not liable for
damages, when lease provided that tenant would pay for increases in fire insurance premium and
tenant would vacate premises in good order, reasonable wear and tear and damage by fire
excepted); see also Deardorff Assocs., Inc. v. Brown, 1999 WL 458777, at *3-4 (Del. Super. Ct.
May 6, 1999) (finding tenant was not co-insured, and was liable for damages, when lease
provided that landlord would not be liable for damages caused by tenant's negligence and tenant
would vacate premises in good order, reasonable wear and tear and casualties by fire not caused
by tenant's negligence excepted).
Here, the Lease provides that Defendant is liable for all damages to the Property caused
by Defendant: "[t]he tenant will be responsible for damages to the unit and premises, other than
normal wear and tear;" "repair of tenant-caused damages must be completed by the owner at the
expense of the tenant." (D.I. 15 Ex. A at 612) However, the Lease is silent in regard to liability
for negligent fires as well as the parties' responsibilities for maintaining fire insurance. Hence,
the Lease does not clearly express any contemplation of the division of fire risks between the
landlord and tenant, nor does it express any intent by the landlord to hold the tenant liable for
negligent fires. See, e.g., GNS P 'ship v. Fullmer, 873 P.2d 1157, 1159, 1164 (Utah Ct. App.
1994) (finding that lease that did not mention fire or fire insurance did not expressly hold tenant
liable for fire damage); Cascade Trailer Court v. Beeson, 749 P.2d 761, 687-88 (Wash. Ct. App.
1988) (concluding that lease holding tenant liable for negligent destruction of property, but not
mentioning fires, did not expressly hold tenant liable for fire damages). The broad language the
Lease utilizes does not show that the parties specifically considered and intended to hold
Defendant liable for negligent fires.
Defendant also argues that the Lease expressly excepts fire from her liability. (See D.I.
14 at 10-11) Defendant points to the provision requiring her to return the Property in good
condition, "reasonable wear and tear and damage by the elements excepted," asserting that the
word "elements" includes fire. (See D.I. 14 at 10; D.I. 15 Ex. A at 6 ,i 2) Plaintiff responds that
"elements" unambiguously refers to the weather. (See D.I. 15 at 11-13) As the parties agreed at
oral argument, a conclusion that the Lease does not evince an express intent to make Defendant
liable for fire damage (a conclusion the Court has now reached) makes it unnecessary to resolve
the parties' dispute over "elements." (See Tr. at 9, 12, 20-21)
Accordingly, Defendant is co-insured under the insurance policy and Plaintiff cannot be
granted relief on its subrogation action. 3
For the foregoing reasons, the Court will grant Defendant's motion to dismiss Plaintiffs
complaint. An appropriate Order follows.
Nor is invocation of the Delaware Residential Landlord-Tenant Code helpful to Plaintiff
in determining whether Plaintiff, as the insurance company, can subrogate its claim against
Defendant. If Defendant is co-insured under the policy, Plaintiff cannot bring this suit, and it
would not matter whether the Delaware Residential Landlord-Tenant Code may hold Defendant
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?