January 20, 2026

James E. Berry v. State Farm Mutual Automobile Insurance Company (December 18, 2025)

Background

The plaintiff, a Maryland resident, was injured in a motor vehicle accident that occurred in Delaware on December 6, 2021. At the time of the accident, the plaintiff’s vehicle was insured under a Maryland automobile insurance policy issued by State Farm.

After plaintiff agreed to a settlement for the liability policy limits with the tortfeasor, State Farm consented to the settlement, and acknowledged that the plaintiff intended to pursue underinsured motorist (“UIM”) benefits under his State Farm policy. The plaintiff subsequently filed suit against State Farm in Delaware Superior Court, seeking UIM benefits.

State Farm moved to dismiss the action for lack of personal jurisdiction. The Superior Court granted the motion, holding that the plaintiff’s claim arose from an out-of-state insurance contract and that State Farm had not engaged in any tortious conduct in Delaware.

Supreme Court Ruling

On appeal, the plaintiff argued that Delaware’s long-arm statute, 10 Del. C. § 3104(c), conferred personal jurisdiction over State Farm. The Delaware Supreme Court affirmed the Superior Court’s dismissal.

The Supreme Court explained that claims for UIM benefits against an insured’s own carrier are first-party contract disputes, not tort claims. As a result, 10 Del. C. § 3104(c)(3), which addresses tortious injury, does not apply to first-party UIM or PIP claims so as to confer jurisdiction over the out-of-state insurer.

The Court also rejected the plaintiff’s argument that § 3104(c) conferred “dual jurisdiction” over State Farm. The “dual jurisdiction” theory can be applied to parties who have manufactured a product with the intent of serving the Delaware market and whose product causes injury within Delaware. The Supreme Court clarified that Delaware recognizes dual jurisdiction under the statute only in cases involving manufactured products and declined to treat insurance policies as manufactured products for jurisdictional purposes.

Finally, plaintiff argued that § 3104(c)(6), which addresses contracts to insure risks to be performed within Delaware, should confer jurisdiction. The Court declined to consider the plaintiff’s argument under § 3104(c)(6) because it was not raised before the trial court. Because no subsection of § 3104(c) provided a statutory basis for exercising personal jurisdiction over State Farm, the Supreme Court held that the Superior Court had correctly dismissed the complaint for lack of personal jurisdiction.

Takeaway

This Supreme Court’s decision highlights the importance of recognizing the nature of UM/UIM claims as essentially contract claims. Even though UM/UIM claims arise from tortious conduct and involve claims of personal injury, the contractual nature of the dispute implicates important threshold jurisdictional issues. Generally, these first-party contract claims should be filed in the jurisdiction where the insurance policy was written.  As the forum where such claims are resolved can significantly impact outcomes, insurers should be sure to consider potential jurisdictional objections as part of an initial defense strategy. Policies should also be checked for language agreeing to jurisdiction where a loss occurs.

To read the decision, view the full court decision.

If you have any questions or would like additional information, please contact Reger Rizzo & Darnall Partner Scott L. Silar office at ssilar@regerlaw.com or 302-477-7100