X v. Progressive Direct Insurance Company

SUPERIOR COURT
OF THE
STATE OF DELAWARE
VIVIAN L. MEDINILLA LEONARD L. WILLIAMS JUSTICE CENTER
JUDGE 500 NORTH KING STREET, SUITE 10400
WILMINGTON, DELAWARE 19801-3733
TELEPHONE: (302) 255-0626

Submitted: August 21, 2024
Decided: November 21, 2024

George X Matthew E. O’Byrne, Esquire
301 Bayard Street Daniella C. Spitelli-Sarnecky, Esquire
P.O. Box 46 Casarino Christman Shalk
Delaware City, DE 19706 Ransom & Doss, P.A.
1000 North West Street, Suite 1450
Wilmington, DE 19899

RE: George X v. Progressive Direct Insurance Company
C.A. No.: N23A-05-008 VLM

Dear Messrs. X and O’Byrne,

This matter is Appellant, Mr. X’s, de novo appeal against Respondent

Progressive Direct Insurance Company. Trial is scheduled for February 10, 2025

against Respondent Progressive Direct Insurance. Before the Court are cross

Motions for Summary Judgment from the parties. For the reasons stated below, Mr.

X’s Motion is DENIED, and Progressive’s Motion is GRANTED.

1
I. RELEVANT FACTS AND PROCEDURAL HISTORY1

A. THE INSURANCE POLICY
On March 22, 2022, George X (“Mr. X”) renewed his comprehensive

automobile insurance policy with Progressive Direct Insurance Company

(“Progressive”), paying a six-month premium for comprehensive and collision

coverage, which included rental reimbursement coverage (“the Policy”).2

The Policy provides: “If you pay the premium for this coverage, we will pay

for sudden, direct and accidental loss to a: (1) covered auto...; and its custom parts

or equipment, that is not caused by collision.”3 Under the comprehensive coverage,

covered losses include “malicious mischief or vandalism” and “theft or larceny.”4

If determined to be a covered loss, the Policy also provides rental coverage.5

The Policy, however, contains exclusions. It states: “Coverage under this Part

IV will not apply for loss… to any vehicle that is due and confined to. . . wear and

1
Unless otherwise noted, this Court’s recitation is drawn from the Notice of Appeal (“Appeal”)
and all documents the parties incorporated by reference. D.I. 1.
2
Progressive Direct Insurance Company’s Motion for Summary Judgment, D.I. 83 (hereinafter
“Progressive’s Mot.”), Ex. B at 19 (hereafter “Auto Policy”).
3
Id.
4
Id.
5
Id. at 20. The rental coverage provides “We will reimburse rental charges incurred when you rent
an auto from a rental agency or auto repair shop due to a loss to a covered auto for which Rental
Reimbursement Coverage has been purchased. This coverage applies only if you have purchased
both Comprehensive Coverage and Collision Coverage for that covered auto and the loss is
covered under one of those coverages.”

2
tear. . . , [or] mechanical, electrical or electronic breakdown or failure. . . .”6 But the

exclusion “does not apply if the damages results from the theft of a vehicle.”7

B. THE CLAIM AND INVESTIGATION
On June 12, 2022, around 1:00 a.m., Mr. X discovered damage to his 2015

Hyundai Accent that was parked in front of his home in Delaware City.8 Mr. X called

911, and Delaware City Police Tyler Gaul responded, documenting in an Initial

Crime Report that Mr. X was “the victim of vandalism.”9 Mr. X filed a claim with

Progressive that same day, reporting that the vehicle had been keyed, had a white

substance around the gas tank area, and would not start.10 Mr. X also discovered the

vehicle had been moved from its original parking location.11

Progressive arranged for the vehicle to be towed to Bud’s Automotive (later

renamed “Steadfast Automotive”).12 On June 14, 2022, Progressive provided Mr. X

with a rental vehicle under the Policy’s rental reimbursement provision.13 On June

16, 2022, Steadfast Automotive conducted an inspection that revealed various

6
Id. at 22.
7
Id.
8
Mr. X’s Motion for Summary Judgment ¶ 21, D.I. 66 (hereinafter “Mr. X’s Mot.”).
9
Id. ¶ 21-22.
10
Progressive’s Mot. at 4.
11
Id., Ex. E.
12
Progressive’s Mot., Ex. D.
13
Id.

3
mechanical issues, including problems with the engine and electrical systems.14 On

June 20, 2022, further inspection revealed the vehicle had been keyed and a blown

head gasket causing coolant to mix with engine oil, along with various engine codes

and a hydro-locked engine.15

On June 28, 2022, Progressive issued a Reservation of Rights Letter and

discontinued rental coverage pending investigation of whether the damages were

covered under the Policy.16 Following the Letter, Progressive made repeated

attempts to obtain additional information and documentation from Mr. X. Between

July 2022 and May 2023, Progressive sent at least sixteen letters requesting Mr. X’s

cooperation with the investigation, including requests for service records and

authorization for additional testing.17

In September 2022, Armstrong Forensic Laboratory tested fluid samples from

the vehicle and concluded the engine issues were consistent with wear and tear rather

than vandalism.18 On January 6, 2023, Progressive issued payment for the

undisputed exterior damage to the vehicle.19

14
Progressive’s Mot., Ex. H.
15
Progressive’s Mot., Ex. D.
16
Progressive’s Mot., Ex. I.
17
See Progressive’s Mot., Exs. J, M, N, P, R-U, W-Z, AA.
18
Progressive’s Mot., Ex. Q.
19
Progressive’s Mot. at 12.

4
C. PROCEDURAL HISTORY
On February 27, 2023, Mr. X filed for arbitration with the Delaware

Department of Insurance.20 A hearing was held On May 10, 2023, before the

Department of Insurance Automobile Arbitration Panel which found in Progressive's

favor, holding Mr. X needed to “submit appropriate testing from his mechanic

showing the engine damage is related to the vandalism.”21

Following the Panel’s decision, Mr. X initiated this action by filing a “Notice

of Appeal” on May 23, 2023.22 He subsequently filed a two-page Amended Notice

of Appeal on June 7, 2023, alleging violations of the Motor Vehicle Owners’ Right

to Repair Act, breach of contract, and loss of potential earnings.23

Through an unopposed Motion to Amend, Mr. X sought to have the Court

accept the initial pleading as a Complaint and amend his claims to nine pages.24 This

Amended Complaint substantially broadened the scope of allegations to include: (1)

bad faith breach of duty to indemnify; (2) bad faith undermining of the police report;

(3) bad faith tactics regarding rental coverage; and (4) bad faith delay in investigation

20
Id.
21
See Appeal.
22
Id.
23
D.I. 17.
24
The Amended Complaint is included in the exhibits. See D.I. 24, Exhibits.

5
and repair.25 Adding to his claims, and without opposition, Mr. X supplemented his

Amended Complaint with a Letter of Demand, this time requesting $600,000 in lost

earnings.26

Respondent filed its Answer, and the Court issued its Trial Scheduling Order

in September 2023.27 The parties issued written discovery and Mr. X was deposed.28

On February 13, 2024, Progressive filed a Motion to Compel an Expert Report

to opine on causation related to engine failure.29 Because Mr. X argued his theory

of liability was no longer based on the engine’s failure but rather on supposed

contractual failures on the part of Progressive, this Court denied the Motion to

Compel.30

Mr. X continued to complicate the procedural path by filing multiple

amendments and supplements to his Amended Complaint,31 even after the discovery

25
Id.
26
D.I. 26. In the Letter of Demand, Mr. X requested Progressive to reimburse “for the loss of
potential income totaling six hundred thousand dollars ($600,000.00 US[D]) or fifty thousand
dollars (50,000.00 US[D]) per month beginning in June 2022. . . .” See D.I. 29.
27
D.I. 32; D.I. 38.
28
Progressive’s Response in Opposition to Mr. X’s Motion for Relief to Amend the Complaint and
Motion for Leave to Amend Complaint to Conform to the Evidence and Progressive’s Motion to
Strike Mr. X’s Amended Complaints and Affidavit of Demand at ¶ 7, D.I. 81 (hereafter
“Progressive’s Opp’n to Mot. to Amend”).
29
D.I. 57.
30
D.I. 64.
31
See D.I. 65, 77, 78.

6
deadline, which the Court ultimately struck following oral argument on May 14,

2024.32 Subsequently, both parties filed their respective Motions for Summary

Judgment.33 Oral arguments were presented to the Court on August 21, 2024. The

Motions are ripe for decision.

II. PARTY CONTENTIONS

A. MR. X’S CONTENTIONS

Mr. X’s initial action alleged a violation of the Motor Vehicle Owners’ Right

to Repair Act; (2) breach of contract; and (3) loss of earnings.34 Through multiple

amendments, he says summary judgment should be entered in his favor because

Progressive breached both the express terms of the insurance contract and the

implied covenant of good faith and fair dealing.35 First, Mr. X argues that because

the vandalism occurred during the theft of the vehicle, the Policy’s mechanical

breakdown exclusion does not apply by the Policy’s own terms.36

Second, Mr. X maintains that Progressive breached the contract and acted in

bad faith by discontinuing rental coverage without conducting any meaningful

32
D.I. 82.
33
Mr. X’s Mot.; Progressive’s Mot.
34
See Appeal.
35
Mr. X’s Mot. at 26-32.
36
Id.

7
investigation.37 Mr. X argues that the Steadfast Automotive Inspection Report on

June 16, 2022, on which Progressive relied, contained only “static data” that required

further professional analysis to determine its probative value.38 According to Mr. X,

Progressive’s reliance on uninterpreted “static data” to deny benefits was

unreasonable and demonstrates bad faith.39

Third, Mr. X asserts that Progressive violated Delaware insurance regulations,

specifically 18 Del. Admin. Code § 902-1.2.1.3, by failing to promptly investigate

the claim within ten working days.40 Mr. X emphasizes that Progressive waited until

September 2022 to conduct fluid testing through Armstrong Laboratory, more than

three months after the claim was filed.41

Finally, Mr. X argues that he can establish his claims without an expert

because inferences can be drawn from the ordinary facts in this case.42 Mr. X

maintains that Progressive’s insistence on expert testimony is a pretextual attempt to

avoid coverage obligations.43

37
Mr. X’s Supplemental Brief in Opposition to Progressive’s Motion for Summary Judgment at
29, D.I. 88 (hereinafter “Mr. X’s Supp. Br.”).
38
Id. at 30.
39
Id.
40
Id. at 31.
41
Mr. X’s Mot. at 29.
42
Id. at 30-31.
43
Id.

8
B. PROGRESSIVE’S CONTENTIONS
Progressive contends it is entitled to summary judgment on several grounds.

First, it argues Mr. X cannot maintain his claims without expert testimony to

establish that the engine damage resulted from vandalism rather than wear and tear.44

Progressive emphasizes that Mr. X has acknowledged he “does not expect to admit

evidence supporting causation for the engine failure.”45

Second, Progressive maintains there was no breach of contract because the

investigation revealed the engine failure resulted from wear and tear, which is

expressly excluded under the Policy.46 Progressive argues its claims handling was

reasonable and conducted in good faith, pointing to its sixteen letters requesting

information from Mr. X and Mr. X’s own acknowledgment to the Department of

Insurance that these requests were appropriate.47

Third, Progressive contends that the Armstrong Laboratory testing, which

indicated the engine damage was consistent with wear and tear, provides the only

scientific evidence of causation.48 Progressive maintains that it promptly paid for

the undisputed exterior vandalism damage while reasonably investigating the more

44
Progressive’s Mot. at 18.
45
Id. at 16.
46
Id. at 17.
47
Id. at 18.
48
Id.

9
complex engine failure claims, and therefore, Mr. X’s bad faith claims fail as a matter

of law.49

III. STANDARD OF REVIEW

The burden of proof on a motion for summary judgment under Superior Court

Civil Rule 56 falls on the moving party to demonstrate that “there is no genuine issue

as to any material fact and that the moving party is entitled to judgment as a matter

of law.”50 If the moving party satisfies its initial burden, the non-moving party must

sufficiently establish the “existence of one or more genuine issues of material

fact.”51 Summary judgment will not be granted if there is a material fact in dispute

or if “it seems desirable to inquire thoroughly into [the facts] in order to clarify the

application of the law to the circumstances.”52 “All facts and reasonable inferences

must be considered in a light most favorable to the non-moving party.”53

49
Id. at 22.
50
Super. Ct. Civ. R. 56(c).
51
Quality Elec. Co., Inc. v. E. States Const. Serv., Inc., 663 A.2d 488, 1995 WL 379125, at *3–4
(Del. 1995); see also Moore v. Sizemore, 405 A.2d 679, 681 (Del. 1979).
52
Ebersole v. Lowengrub, 180 A.2d 467, 469–70 (Del. 1962). See also CNH Indus. Am. LLC v.
Am. Cas. Co. of Reading, 2015 WL 3863225, at *1 (Del. Super. June 8, 2015).
53
Nutt v. A.C. & S. Co., Inc., 517 A.2d 690, 692 (Del. Super. 1986) (citing Mechell v. Plamer, 343
A.2d 620, 621 (Del. 1975); Allstate Auto Leasing Co. v. Caldwell, 394 A.2d 748, 752 (Del. Super.
1978)).

10
IV. DISCUSSION

At its core, this is a contract dispute. The elements of a breach-of-contract

claim are “(1) the existence of a contractual obligation; (2) a breach of that

obligation; and (3) damages resulting from the breach.”54

Progressive maintains adherence to its Policy where the engine damage falls

within policy exclusions and the record is void of a genuine issue of material fact to

suggest otherwise. Mr. X argues breaches of Progressive’s obligations and bad faith

investigation entitle him to damages well beyond engine failure, including loss of

earnings.

Mr. X is self-represented. Since a court should not exalt the “formal defects”

in pro se filings over their “underlying substance,”55 the Court has looked past

multiple—sometimes improper—filings to ensure his case is “fully and fairly

heard.”56 This has led this Court and Progressive to follow Mr. X down various

procedurally improper and factually distorted rabbit holes. As recently as August 9,

54
Buck v. Viking Holding Mgmt. Co. LLC, 2021 WL 673459, at *3 (Del. Super. Feb. 22, 2021)
(citing VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)).
55
Sloan v. Segal, 2008 WL 81513, at *7 (Del. Ch. Jan. 3, 2008); see New Castle Cty. v. Kostyshyn,
2014 WL 1347745, at *5 (Del. Super. Apr. 4, 2014) (“Given the liberal standard for construing pro
se pleadings,” the Court may entertain claims fairly raised but not explicitly named in a pro se
complaint. (citations omitted)).
Durham v. Grapetree, LLC, 2014 WL 1980335, at *5 (Del. Ch. May 16, 2014) (internal quotation
56

marks omitted).

11
2024, Mr. X filed another Motion to Amend,57 and a 273-page “amended brief” in

opposition to Progressive’s Motion for Summary Judgment,58 which failed to

respond to the arguments for summary judgment, instead inserting new arguments

and claims.

While Mr. X’s pleadings are to be “liberally construed” and “held to less

stringent standards” because of his status as a pro se litigant,59 “there is no different

set of rules[.]”60 A litigant’s insufficiency of legal knowledge is not a valid defense

or grounds for leniency in meeting the requirements of a claim.61 Returning to Rule

56’s clear path, the question is, therefore, whether a genuine issue of material of fact

exists for the fact finder. With the journey now ended, no such disputable issue

exists.

A. MR. X FAILS TO ESTABLISH BREACH OF CONTRACT

For Mr. X to present his case to a jury, he must establish that Progressive

breached its contractual obligation and damages resulted from that breach. Thus, he

57
D.I. 89.
58
See Mr. X’s Supp. Br
59
Estelle v. Gamble, 429 U.S. 97, 106 (1976); Erickson v. Pardis. 551 U.S. 89, 94 (2007).
60
Draper v. Med. Ctr. of Del., 767 A.2d 796, 799 (Del. 2001).
61
Damiani v. Gill, 116 A.3d 1243, 1243 (Del. 2015) (citing Draper v. Med. Ctr., 767 A.2d 796,
799 (Del. 2001)); see also Price v. State Farm Mut. Auto. Ins. Co., 2013 WL 1213292, at *7 (Del.
Super. Mar. 15, 2013) (citing Nemec v. Shrader, 991 A.2d 1120, 1126 (Del. 2010).

12
must establish a causal nexus of the alleged vandalism and theft to the engine

damage—a covered loss under the Policy.

At the outset, one issue is whether Mr. X can prove causation absent expert

testimony. The complex mechanical issues here—including a blown head gasket,

coolant mixing with engine oil, and multiple diagnostic codes—do require technical

expertise to determine causation. Mr. X suggests causation can be inferred merely

from the timing of the theft and vandalism to conclude those acts caused engine

damage. This is insufficient.

Notably, at oral argument on March 19, 2024, on Progressive’s Motion to

Compel an Expert Report, Mr. X acknowledged he “does not expect to admit

evidence supporting causation for the engine failure” but maintains his breach of

contract claims.62 This gap is fatal to his claim.

While the Policy covers vandalism and theft, it expressly excludes losses “due

and confined to . . . wear and tear.”63 Though Mr. X correctly notes this exclusion

does not apply “if the damage results from the theft of a vehicle,”64 he still must

show that vandalism or theft caused the damage.65 He fails to do so. Without expert

62
D.I. 64.
63
See Auto Policy.
64
Id.
65
Auto Policy (“A persons seeking coverage must…cooperate with us in any matter concerning a
claim or lawsuit [and] provide any written proof of loss we may reasonably require.”).

13
testimony opining vandalism or theft caused engine failure (rather than normal wear

and tear), Mr. X cannot establish that his claim falls under the Policy as a covered

loss.

In fact, the only scientific evidence in the record—the Armstrong Laboratory

Analysis—indicates elevated wear consistent with mechanical failure rather than

vandalism. The police report, while documenting exterior vandalism, cannot

establish the internal technical cause of engine failure. Similarly, evidence that the

vehicle was moved does not, without more, prove the engine damage resulted from

theft rather than mechanical breakdown. Where Mr. X cannot establish causation or

damages, his breach-of-contract claims fail.

B. THE “BAD FAITH” CLAIMS FAIL AS A MATTER OF LAW

Giving Mr. X the benefit of his filings, this Court further considers his four

separate claims of “bad faith” that Progressive breached the implied covenant of

good faith and fair dealing.66 Here, he claims Progressive conducted its investigation

in bad faith, violating both contractual and statutory obligations.67 These claims fail.

Under Delaware law, an insurer acts in bad faith only when it lacks reasonable

justification for its coverage position.68 Title 18 Del. Admin. Code §902-1.2.1.3

66
See D.I. 24, Exhibits.
67
See Mr. X’s Mot. at 30-34.
68
Geico Gen. Ins. Co. v. Green, 308 A.3d 132, 144 (Del. 2022).

14
requires insurers to “implement prompt investigation” within ten working days.69

Progressive did just that. Within days of the claim, it arranged towing, provided

rental coverage, and initiated inspections.70

Conversely, Mr. X failed to respond to requests for information. The record

shows sixteen documented attempts by Progressive to obtain additional information

from him between July 2022 and May 2023.71 Notably, Mr. X himself acknowledged

in a letter to the Department of Insurance that these investigative requests were

appropriate and “part of the process to learn the extent of the vandalism.”72

Nevertheless, Mr. X takes issue with Progressive’s investigative efforts. He

cries bad faith because Progressive relied on “static data” from the Steadfast

Automotive Inspection Report, which he suggests was not sufficiently probative and

required further analysis.73 Counter to his claims, this report’s “static data” supports

the reasonableness of Progressive’s investigation. If initial diagnostic data required

professional interpretation, then Progressive was justified in seeking additional

testing and documentation. It is not reasonable to require insurers to make coverage

determinations based on inconclusive technical data.

69
Title 18 Del. Admin. Code §902-1.2.1.3.
70
See Progressive’s Mot., Ex. H.
71
Progressive’s Mot., Exs. J, M, N, P, R, S, T, U, W, X, Y, Z, AA.
72
Progressive’s Mot., Ex. O.
73
Mr. X’s Supp. Br. at 30-31.

15
Lastly, while it is true that the implied covenant of good faith does “inhere[]

in all contracts. . . ,”74 it cannot be used “to vary a contract’s express terms. . . .”75

And, to be clear, the covenant exists to deter arbitrary or unreasonable conduct that

would spoil the fruits of a bargain.76 Here, Mr. X fails to establish that Progressive’s

conduct was arbitrary or unreasonable, or that there was a gap in the Policy that

would be filled with the implied covenant.77 That he did not agree with the handling

of the investigation is insufficient to invoke the covenant.78

C. PROGRESSIVE’S DECISION TO SUSPEND RENTAL COVERAGE WAS
REASONABLE
Finally, Mr. X’s challenge to the rental coverage termination fails. Under the

Policy, the language is clear that rental coverage applies only when the underlying

74
Dieckman v. Regency GP LP, 155 A.3d 358, 367 (Del. 2017).
75
Buck, 2021 WL 673459, at *5.
76
Dieckman, 155 A.3d at 367.
77
See Oxbow Carbon & Mins. Holdings, Inc. v. Crestview-Oxbow Acquisition, LLC, 202 A.3d 482,
507 (Del. 2019) (“Delaware’s implied duty of good faith and fair dealing is not an equitable remedy
for rebalancing economic interests after events that could have been anticipated, but were not, that
later adversely affected one party to the contract. Rather, the implied covenant is an extraordinary
legal remedy.” (internal quotation marks and citations omitted)); see also Allen v. El Paso Pipeline
GP Co., 113 A.3d 167, 183 (Del. Ch.) (“If a contractual gap exists, then the court must determine
whether the implied covenant should be used to supply a term to fill the gap. Not all gaps should
be filled.”).
78
See Kuroda v. SPJS Holdings, Inc., 971 A.2d 872, 888 (Del. Ch. 2009) (“The implied covenant
cannot be invoked to override the express terms of the contract. . . . General allegations of bad
faith conduct are not sufficient. Rather, the plaintiff must allege a specific implied contractual
obligation and allege how the violation of that obligation denied the plaintiff the fruits of the
contract. Consistent with its narrow purpose, the implied covenant is only rarely invoked
successfully.” (emphasis added) (citations omitted)).

16
loss is covered by comprehensive or collision coverage.79 No genuine issue of

material fact exists to dispute the reasonableness of Progressive’s decision to

suspend rental coverage pending investigation of whether the vehicle’s damage was

a covered loss. Moreover, Progressive clearly communicated to Mr. X its basis for

suspending rental coverage through the Reservation of Rights Letter.80 Its conduct

was reasonable when it promptly paid for the undisputed exterior damage while

maintaining openness to reinstating rental coverage upon proof that the engine

damage resulted from a covered cause.

V. CONCLUSION

For the foregoing reasons, Progressive’s Motion for Summary Judgment is

GRANTED, and Mr. X’s Motion for Summary Judgment is DENIED.

IT IS SO ORDERED.

/s/ Vivian L. Medinilla
Vivian L. Medinilla
Judge

79
Auto Policy.
80
See Progressive’s Mot., Ex. E.

17