{"id":4607,"date":"2026-05-15T11:21:46","date_gmt":"2026-05-15T11:21:46","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/delaware-court-affirms-common-law-subrogation-rights-for-out-of-state-insurers-weber-gallagher-simpson-stapleton-fires-newby-llp\/"},"modified":"2026-05-15T11:21:46","modified_gmt":"2026-05-15T11:21:46","slug":"delaware-court-affirms-common-law-subrogation-rights-for-out-of-state-insurers-weber-gallagher-simpson-stapleton-fires-newby-llp","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/delaware-court-affirms-common-law-subrogation-rights-for-out-of-state-insurers-weber-gallagher-simpson-stapleton-fires-newby-llp\/","title":{"rendered":"Delaware Court Affirms Common Law Subrogation Rights for Out-of-State Insurers | Weber Gallagher Simpson Stapleton Fires &#038; Newby LLP"},"content":{"rendered":"<div id=\"html-view-content\">\n<p>In a significant ruling for insurance practitioners, the Court of Common Pleas for the State of Delaware recently clarified the boundaries of the state\u2019s Personal Injury Protection (PIP) statute. On March 12, 2026, in <em>USAA Casualty Insurance Company v. John Eric Ohnstad<\/em>, the Court denied a motion to dismiss, confirming that out-of-state insurers are not barred by Delaware\u2019s \u201cno-fault\u201d statutory restrictions when pursuing common law subrogation against individual tortfeasors.<\/p>\n<p>The dispute arose from a 2023 motor vehicle accident in Newark, Delaware. The plaintiff\u2019s insured, operating a vehicle registered and insured in New Jersey, was struck by the defendant, who drove through a flashing red light. USAA paid PIP benefits to its insured and subsequently filed a subrogation action against the defendant personally to recover those costs.<\/p>\n<p>The defendant moved to dismiss, arguing that under Delaware\u2019s PIP Statute (21 Del. C. \u00a7 2118), subrogation actions must be brought against the tortfeasor\u2019s insurer rather than the individual, and that out-of-state insurers lack standing to recover under this statutory scheme.<\/p>\n<p>Judge Mayer rejected the defendant\u2019s arguments, identifying a critical distinction between statutory PIP claims and common law subrogation:<\/p>\n<ul>\n<li>Non-Applicability of \u00a7 2118: The Court noted that because the plaintiff\u2019s insured was operating an out-of-state vehicle not registered in Delaware, they did not fall within the class of persons governed by Delaware\u2019s PIP statute.<\/li>\n<li>Survival of Common Law Rights: The Court reaffirmed that 21 Del. C. \u00a7 2118 did not abrogate common law subrogation. Instead, the statute merely created a specific framework for Delaware-insured parties. For those outside that framework, the common law right to \u201cstand in the shoes of the insured\u201d remains a viable cause of action.<\/li>\n<li>Proper Parties: Addressing the defendant\u2019s claim that he was the \u201cwrong\u201d party to be sued, the Court held that Delaware is not a \u201cdirect action\u201d state. Outside the specific mandates of the PIP statute, an injured party (or their subrogated insurer) must sue the individual tortfeasor, not the liability carrier.<\/li>\n<\/ul>\n<p>\u201cThe Delaware legislature\u2026 neither through its express language or in failing to provide a specific remedy\u2026 intended to divest a no-fault insurer of its common law right to subrogation against a tortfeasor under the facts presented in this case.\u201d<\/p>\n<p>This decision is a victory for insurers handling multi-jurisdictional claims in Delaware. It reinforces several essential principles:<\/p>\n<ol>\n<li>Jurisdictional Nuance: Delaware\u2019s restrictive subrogation rules (which often mandate intercompany arbitration) apply strictly to vehicles registered or insured in Delaware.<\/li>\n<li>Litigation Strategy: For out-of-state clients, the proper defendant remains the individual tortfeasor. Attempts by defense counsel to force these claims into arbitration or against insurers directly under \u00a7 2118 should be resisted based on the Ohnstad precedent.<\/li>\n<li>Contractual Rights Matter: The Court emphasized that if an insurance contract grants subrogation rights, the insurer possesses the same right to initiate an action that the insured would have had.<\/li>\n<\/ol>\n<p>This ruling ensures that out-of-state carriers are not \u201cboxed out\u201d of recovery simply because they do not fit the specific definitions of the Delaware no-fault system.<\/p>\n<p>[View source.]<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In a significant ruling for insurance practitioners, the Court of Common Pleas for the State of Delaware recently clarified the boundaries of the state\u2019s Personal Injury Protection (PIP) statute. On March 12, 2026, in USAA Casualty Insurance Company v. John Eric Ohnstad, the Court denied a motion to dismiss, confirming that out-of-state insurers are not [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4608,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1897,3446,852,1563,445,286,374,2011,2132,2553,3448,3447,2551,2552,1852,2550],"class_list":["post-4607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-affirms","tag-common","tag-court","tag-delaware","tag-fires","tag-gallagher","tag-insurers","tag-law","tag-llp","tag-newby","tag-outofstate","tag-rights","tag-simpson","tag-stapleton","tag-subrogation","tag-weber"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/4607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=4607"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/4607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/4608"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=4607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=4607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=4607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}