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Workers' Compensation

Comfort & Joy, Part II: DE Supreme Court Delivers Gift in Section 2311 Contractor Case

Christmas Kitty

I heard from Bob Richter, as well as John Ellis, on Thanksgiving Eve, and you have them to thank for today's post.  As Bob succinctly offers:
The Supreme Court affirmed.
I am delighted.
Happy Thanksgiving.

The issue:

For this to make sense, you might want to revisit my posts of 2/25/11 and 12/2/11, the latter aptly titled "Comfort & Joy: Glad Tidings from DE Appeals Court"-discussing the case of Reuben Cordero v. Gulfstream Development Corp. and Delaware Siding Company,  CA No. 11A-03-003 (Del. Super., Nov. 30, 2011)Cordero held, in a case of first impression, that there was no ongoing obligation on the part of a general contractor under 19 Del. Code Section 2311 to verify workers compensation coverage on the part of its subcontractor beyond the initial tender by the sub of proof of workers comp insurance.

The facts in a Christmas stocking:

Gulfstream was the general contractor.  Claimant was an employee of its sub-contractor, Rodriguez Contracting.  Gulfstream had subbed roofing and siding work out to Delaware Siding which in turn subbed out the work to Rodriguez.  Delaware Siding had furnished a certificate of insurance to Gulfstream. Rodriguez tendered a valid certificate of workers comp insurance to Delaware Siding at the commencement of the project.  That policy was then cancelled, as was a subsequent policy.  Twenty one days after the cancellation of policy #2, the claimant was injured and Rodriguez was uninsured.  The claimant then sought to invoke coverage under the Gulfstream or Delaware Siding policies.

What are the tidings of great joy from the DE Supreme Court?

   Section 2311(a)(5) does not require a contractor unconditionally to provide workers compensation insurance coverage to the employees of its subcontractor at all times.

   Section 2311(a)(5) does not impose an implied obligation on a contractor to monitor its subcontractors workers comp coverage during the entire coverage period disclosed in the certification.

   While no such "duty to monitor" exists, the DE Supreme Court agreed with the Superior Court that an exception might be argued where a contractor knows that its sub has a history of allowing its comp coverage to lapse.

   Given the non-availability of a workers' comp remedy to the injured worker, he was encouraged to pursue his remedy in tort.

What a delightful way to kick off the holiday season.  I have to think a tort remedy that includes pain and suffering will buy Mr. Cordero a lot more Christmas gifts than a remedy limited to Title 19, Chapter 23.  Now that's what I call a win/win.....:>)

Irreverently yours,
Cassandra Roberts

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

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