IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
NYIA DELOACH, PATRICIA
TROWERY AND CINCINNATI
INSURANCE COMPANY,
Plaintiffs,
V. C.A. NO. Nl7C-04-045 CEB
CONSOLIDATED MATTERS
MEGHAN BUTTERS HOUSER,
ESQUIRE,` as Administratix of the
ESTATE OF CHERYL
SIGVARDSON,
Defendant.
Submitted: September 19 2018
Decided: November 9, 2018
ORDER
This 9th day of November, 2018, upon consideration of Defendant’s, Meghan
Butters Houser, as Administrator of the Estate of Cheryl Sigvardson, Motion for
Partial Summary Judgment, it appears that:
l. This is a consolidated action resulting from a fire at an apartment compleX.
Two of the actions Were filed by tenants against the tenant said to be responsible for
the fire. A third action Was a subrogation case filed by Cincinnati Insurance
Company (“Cincinnati”), Which seeks to recover payments it made on behalf of its
insured, the apartment complex. The fire Was allegedly caused by the negligence of
l
one of the tenants, Cheryl Sigvardson. Ms. Sigvardson perished in the fire and suit
Was brought against the administrator of her estate.
2. The defendant has moved to dismiss the Cincinnati case. She argues that
it is settled Delaware law that a tenant is a “co-insured” under a landlord’s fire
insurance policy and that the insurer may not obtain subrogation against a co-
insured.
3. In order for Cincinnati to prevail, it must distinguish this case from the case
of Lexington Ins. Co. v. Raboin.1 This is so because of the remarkable factual
similarities between Lexington and this dispute.
4. In Lexington, the defendant Raboin Was a tenant of an apartment complex
insured by Lexington When, it Was alleged, he caused a fire resulting in over
$700,000 in damages to the apartment complex. Lexington paid on the claims and
sought subrogation against Raboin, With Raboin defending on the grounds that
Lexington could not seek subrogation against a co-insured.
5 . The issue in Lexington, as it is here, Was Whether the negligent, fire-starting
tenant of an apartment complex is a co-insured of the landlord on a landlord’s fire
insurance policy, absent some express provisions to the contrary.
6. In Judge Del Pesco’s ruling in Lexington, she surveyed the law of multiple
jurisdictions in holding that the “trend of modern jurisprudence holds that fire
1 712 A.2d 1011 (Del. Super. 1998) ajj"d, 723 A.2d 397 (Del. Super. 1998).
2
insurance secured by the landlord has been obtained for the mutual benefit of
landlord and lessee.”2 There are many sound policy considerations supporting this
rule: each tenant cannot reasonably be expected to purchase their own insurance for
damage to a multi-million dollar apartment complex, the tenant’s only insurable
interest being in his own apartment, and landlords are better able to insure the whole
premises and pass the cost of such insurance on to all tenants in rent.
7. The Lexington Court expressed its holding thus: “in the absence of an
express agreement or provision in the lease that would place liability on the tenant
for the tenant’s negligence in causing the fire, the landlord’s carrier cannot obtain
”3 This remains the law of Delaware.
subrogation against the tenant.
8. To distinguish the Lexington holding, Cincinnati directs the Court to
various lease provisions concerning the tenant’s obligation to return the property in
good condition, to pay for damages in excess of normal wear and tear, and to pay
for any damages to the landlord’s property caused by the tenant or his relatives or
guests. Each of these provisions, however, deal with subjects far afield of loss
caused by fire due to the negligence of the tenant. They hardly qualify as an “express
agreement” shifting the risk of f1re loss to the tenant. Indeed, the only language that
even deals with fire loss merely sets forth the tenant’s available remedies to abrogate
2 Id. at 1015.
3Id. at 1016.
the lease under the landlord-tenant code in the event of a fire. None of the provisions
to which the Court was directed satisfy Lexington’s mandate that a risk-shifting
provision placing the risk of loss by fire to the rental unit or the whole property
caused by the tenant’s negligence be stated clearly and unequivocally in the lease.
9. The rule adopted in Lexington is referred to as the “Sutton Rule,” from its
namesake decision, Sutton v. Johdahl.“ And the Court would be remiss if we did not
acknowledge that there are differences of opinion in the decisions of the various
states whether the Sutton rule is good policy,5 At the risk of irrelevancy, the Court
here reaffirms its belief that Sutton and Lexington express the better rule that
residential tenants should be considered co-insureds under a landlord’s policy,
absent specific and explicit language shifting the risk of fire loss to the tenant. The
Court finding no such specific and explicit language in the lease in question here,
must dismiss Cincinnati’s subrogation action.
Defendant’s Motion for Partial Summary Judgment is therefore GRANTED.
IT IS SO ORDERED.
Charles E. Butler,
4 532 P.2d 478, 482 (ok. Ct. App. 1978).
5 See generally, American Family Mut. InS. Co. v. Auto-Owners Ins. Co. 757 N.W. 2d 584, 5 89,
nn. 3-4 (S. D. 2008) (collecting state law cases that have adopted or repudiated the Su`t`ton Ru`le).
4