Eileen Ford, Esquire obtained a favorable ruling from the US District Court, Delaware in a matter applying the Sutton Rule to grant a 12b6 motion to dismiss.
State Farm v. Lambert, 2017 U.S. Dist. LEXIS 192323 (D. Del. 11/21/17) involves a claim filed by the landlord’s insurer, as subrogee of the landlord.. State Farm sought damages in excess of $100,000 from the tenant (Lambert), claiming that the tenant is responsible for the damages to the rental unit, except normal wear and tear, due to a negligently caused fire. On behalf of the defendant, MOODK argued that Delaware’s adoption of the Sutton Rule prevents the insurer of the landlord from suing the tenant. In essence, the Sutton Rule holds that “residential tenants are considered co-insured under the landlord’s fire – insurance policy unless the lease “clearly expresses intent to the contrary.” Lexington Ins. Co. v. Raboin, 712 A.2d 1011 (Del. Super. Ct. 1998). The public policy behind the rule is that, since a landlord likely factors the cost of the insurance premium into the rent, the law considers the tenant as a co-insured and an insurance company is precluded from suing its own insured. Plaintiff argued that the lease expressly carved out an exception for damages, above normal wear and tear, and that since the tenant had obtained renter’s insurance it proved she was aware of her liability for “fire” damage to the rental unit. While the District Court found agreed that the lease did contain a provision concerning “normal wear and tear it failed to contain clearly stated express language that the tenant agreed to assume liability for “negligently caused fire damage.”