Comfort and Joy: Glad Tidings from Delaware Appeals Court on Contractor Issue

Comfort and Joy: Glad Tidings from Delaware Appeals Court on Contractor Issue

In my post of 2/25/11,  I reported on  Reuben Cordero v. Gulfstream Development Corp. and Delaware Siding Company, IAB# 1357959 & 1357671 (2/10/11) (Order). The issue was whether the Delaware contractors statute (19 Del. Code Section 2311) imposed a continuing obligation on contracting entities to insure that their subcontractors' insurance remains in effect throughout the term of the contract.  The Board decision opines that it is sufficient to accept tender of a valid certificate of workers comp insurance, commenting that there is no affirmative duty on an ongoing basis to verify that the certificate continues to be valid.

Cat in Christmas Stocking

My dear friend Bob Richter, of Ezufon, Austin, Tarlov and Mondell,  brought this case to my attention initially.  Bob is back again with tidings of great joy, especially appropriate this holiday season, in heralding the outcome of an appeal of this case.  Attached you will find a little tidbit worthy of placement in a Christmas stocking-- the Delaware Superior Court ruling in Reuben Cordero v. Gulfstream Development Corp. and DE Siding Co.CA No. 11A-03-003WCC (Del. Super. 11/30/11).  The Court, in affirming the IAB, takes it a step further, however.  As Section 2311 liability is still in its relative infancy (thus having much in common with Baby New Year), every decision of the Board or the Court on appeal, and every comment that offers insight into how this statute is to be applied, is to be coveted.  I would therefore highlight the following concerns voiced by the Court.

"....a general contractor cannot turn a blind eye to its subcontractor's lack of insurance and expect the Court to protect it from nonfeasance.  A similar liability result could be imposed if the general continues to use a subcontractor that it knows from past practices and experience consistently cancels its policy a few months after executing a project contract......Simply put, the Court believes the obligation that the statute imposes is greater than simply getting a piece of paper during the initial contracting with the subcontractor."

As such, the Court affirmed "with caution".  The claimant was left without an insurance remedy and no doubt the Court was troubled by that circumstance.  Sincere thanks to Bob Richter for providing this update.  For my part, I am off to complete my Christmas shopping.

At my festive best,
Cassandra Roberts

Delaware Detour & Frolic   Visit Delaware Detour & Frolic, a law blog by Cassandra Roberts

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