In Windom v. Ungerer, download file, the Delaware Supreme Court a few days ago issued an opinion that addresses an issue of great practical usefulness to business litigation practitioners. The case involved a football league that was sued for an injury to a player. After suit was filed the league discovered that they had no commercial liability insurance. The player obtained a default judgment against the league and the league assigned their rights to the insurance company for the injured player, Windom. Windom then sued the insurance agents for the league. The original agent was an exclusive agent for Nationwide who had provided coverage initially but after a number of years Nationwide refused to renew the policy. At that time the original agent referred the league to a “general agent” to determine if that agent could find another insurance company that would provide coverage.
Though there was discussion among the parties of a presumption that the new insurance company, Pawtucket, would provide coverage, Pawtucket eventually returned the premium check and determined that they would not provide coverage. The dispute in this case arose because the general agent simply mailed the declination notice to the “property address” for the league, as opposed to the separate “mailing address” that was listed in the documents. The league said they never received the notice of declination of coverage. The agent had no proof of mailing or proof that the league received the mail he said that he sent.
When is a mailed letter presumed to be received, and who is an insurance broker?
The Supreme Court decided these issues and affirmed summary judgment for the Nationwide agent, finding that he was a mere “messenger” and not a “broker” tasked with finding new insurance for the league as that term is defined in the statute.
The court reversed, however, the trial court’s grant of summary judgment in favor or the “general agent”.
The Supreme Court reasoned that summary judgment in favor of the general agent was not appropriate due to a material issue of fact as to whether the presumption that a postage-paid envelope that is mailed to the proper address would be received by the addressee, should be rebutted based on the facts of the case. The determination of that factual issue impacts on the resolution of the issue of whether the manner in which the mail was sent fulfilled the admitted duty of the general agent to properly inform the league that their insurance coverage was declined (which coverage the agent assumed a duty to seek).
These “bread and butter” quotidian issues come up in many different contexts in the business world and it is helpful to have a Supreme Court decision that deals with them.