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A Delaware trial court has denied an insurer's motion to dismiss an insured's lawsuit on the basis of a forum selection clause that the insurer added to the insured's policy after she was involved in the accident that was the subject of her suit.

The Case

After Courtney M. Zern was injured in an August 7, 2016 motor vehicle collision in Delaware, the tortfeasor's liability insurance carrier tendered the limit of its liability coverage. Ms. Zern then sued Allstate Fire and Casualty Insurance Company in a Delaware state court to recover underinsured motorist benefits (“UIM”) under her Allstate policy.

Allstate moved to dismiss Ms. Zern's UIM claim, asserting that she had improperly filed her action in Delaware because an endorsement to the policy required that she sue in her home county in Pennsylvania.

Ms. Zern opposed the motion to dismiss. She asserted that Delaware was an appropriate jurisdiction for her lawsuit and that the endorsement cited by Allstate containing the forum selection provision upon which the insurer relied did not apply to the policy at the time of the collision.

The Allstate Policy

The Allstate policy provided:

If the insured person and we do not agree on that person's right to receive damages or on the amount . . . then the disagreement will be resolved in a court of competent jurisdiction. Any and all lawsuits related in any way to this coverage shall be brought . . . in the county in which your address shown on the Policy Declarations is located.

The Court's Decision

The court denied Allstate's motion.

In its decision, the court explained that the policy went into effect on July 23, 2016 but that the endorsement was not incorporated into the policy until August 7, 2016, the day of the accident, due to a “change” in the policy.

The court added that the “change” in the policy was noted to be the deletion of a vehicle – the vehicle totaled as a result of Ms. Zern's accident.

In other words, the court found, the forum selection provision relied on by Allstate “was generated as a result of the accident and was not in effect at the time of the accident.”

The court concluded that because the August 7th endorsement was not in effect at the time of the accident, Allstate had not established that Ms. Zern's complaint had been improperly filed in Delaware.

The case is Zern v. Allstate Fire and Casualty Ins. Co., No. N18C-11-036 FWW (Del. Super. Ct. April 26, 2019). Attorneys involved include: Joel H. Fredricks, Esquire, Weik, Nitsche & Dougherty, LLC, Wilmington, Delaware, Attorney for Plaintiff. Arthur D. Kuhl, Esquire, Reger Rizzo & Darnall LLP, Wilmington, Delaware, Attorney for Defendant.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He can be contacted at [email protected].