Allstate Ins. Co. v. NJ Manuf. Ins. Co., Delaware Court of Chancery 2023-0847 FJJ (Oct. 1, 2024)

Statute:
The Delaware no-fault statute provides for the right of subrogation by the no-fault carrier against the insurer for the at-fault tortfeasor.

Case:
A New Jersey carrier paying New Jersey no-fault benefits to their insureds as a result of an accident in Delaware, filed a claim in Intercompany Arbitration to recover no-fault benefits against the at-fault tort carrier, citing to the Delaware No-Fault Statute 21 Del. C. §2118.

Arbitration Award:
The NJ no-fault carrier prevailed against the tort carrier at Intercompany Arbitration.

Chancery Ruling:
The tort carrier filed an action in the Delaware Chancery Court to vacate the award, arguing that an out-of-state no-fault carrier is not eligible under the Delaware statute to seek subrogation for no-fault benefits paid, and thus, the arbitration decision was in conflict with the Delaware statute.

The Delaware Chancery Court held that only an insurer paying Delaware no-fault benefits can seek subrogation against the tort carrier under 21 Del. C. § 2118(g) and vacated the award.

The Delaware Chancery Court noted that because the tort carrier initially objected to the jurisdiction of the arbitrator, there was no authority to issue a subrogation award in favor of a Non-Delaware no-fault insurer. The Court found the arbitrator disregarded the legal principles and was wrong in accepting the jurisdiction of the non-Delaware no-fault policy subrogation claim. The holding confirmed that the arbitrator exceeded his authority in making an award in favor of the no-fault carrier. The Chancery Court granted the tort carrier’s Summary Judgment Motion and vacated the arbitration award.

If you have any questions or would like additional information, please contact Arthur D. Kuhl, Esquire at akuhl@regerlaw.com or 302-477-7100.