Thomas Mason was involved in a hit and run accident while operating his motorcycle on Route 72. Mr. Mason was severely injured and required hospitalization for approximately two months. As a result of his injuries, Mr. Mason was forced to undergo several operations involving the insertion of two rods in his spinal column and two additional operations to cure infections in his back and hip. The motorcycle Mr. Mason was operating at the time of the accident was not insured.
From 1985 through the time of the accident, Katherine Howerton, Mr. Mason's mother, was insured under an automobile policy issued by the defendant, USAA. At the time of the accident, Thomas Mason was a member of his mother's household. As a member of her household, he was insured under Ms. Howerton's policy.
The only documentation of the origin of the policy is a two page application, dated 11/20/85. This application was taken by phone, while a USAA representative filled out the application form based upon the telephone conversation. The entire application process for automobile coverage was memorialized by the form completed by the USAA representative. The only mention of uninsured motorist coverage on Ms. Howerton's application is a small box on the lower right corner, where coverage limits could be written in. The USAA representative wrote in the minimum coverage amounts of "15/30/10".
At the time of the accident, the declarations page reflected that Katherine Howerton only had the minimum uninsured motorist coverage in the amount of $15,000.00 "each person" and $30,000.00 "each accident". In contrast, the declarations page reflected that Ms. Howerton had purchased bodily injury liability coverage in the amount of $100,000.00 "each person" and $300,000.00 "each accident". The certified copy of Ms. Howerton's insurance policy with USAA was approximately 50 pages long.
Ms. Howerton sought reformation of her policy to provide underinsured motorist benefits of $100,000.00/$300,000.00, based upon USAA's failure to make a "meaningful offer" of underinsured motorist coverage as required by Delaware Law.
The Delaware Supreme Court held that USAA did not make a meaningful offer of additional underinsured motorist coverage required under 18 Del. C. §3902(b) where it could not show that such an offer was made at the time of material damages to the insurance policy. Further, because USAA buried a discussion of additional available coverage on page 41 of a 50 page packet, The Supreme Court found the language in the information packet ambiguous due to it's location and emphasis.
The Supreme Court allowed reformation of the USAA policy to increase the underinsured motorist from $15,000.00 per person and $30,000.00 per accident to $100,000.00 per person and $300,000.00 per accident, the amount of coverage equal to the insured's liability limits.
Click here to read Appellants' Opening Brief
Click here to read The Supreme Court Decision for Mason v. USAA
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