A Significant Bench Ruling On Delaware’s Section 2311 Contractor Statute….As It Happily Collides With The Doctrine Of Exclusivity

Today's post comes to us courtesy of Mike Sensor.  Mike contacted me last week with some background information in a case of first impression for which he was awaiting a bench ruling transcript from Sussex County Superior Court.  I am always excited to hear from Mike, as he is someone I consider to have mastered the intricate and the esoteric when it comes to Delaware law.

So says Mike about our case under scrutiny:

"Basically, the facts are this-- Claimant is working for a sub-sub contractor on a house site. Sub-sub shows its sub (which is actually a sub for the general) a certificate of WC insurance, which shows that the employer is only insured in Pennsylvania under SWIF (assigned risk pool). Nevertheless, sub accepts this as sufficient proof of W/C coverage for claimant's employer.

Claimant is injured on the job. Not surprisingly, SWIF denies the claim.

So, I then go to the Board twice on two motion days. Orders attached. First the Board rules the employer is uninsured and orders it to post a bond (not surprisingly, it never happened). Then I go for an order forcing the sub to cover my client's comp claim under 2311(a)(5) as the insurer. Board grants the order and the sub has to pick up the claim.

I later file a tort action against the employer (because it was uninsured, but it's now defunct), sub, and general.

Sub asserts a defense of the exclusivity provision. I file a motion for summary judgment on the basis that 2311(a)(5) and the Board's order only deem the sub the insurer, not the employer and nothing in 2311 or elsewhere in the Workers' Compensation Act forces a choice of remedies, which is what sub was essentially saying. Sub argued that this was tantamount to double-dipping and that the Act must be read as a whole."

So that was last week. Mike was kind enough to get back to me this week with the sequel:

"I previously emailed you the basic facts of the case. The general raised an affirmative defense of the exclusivity provision of the Workers' Compensation Act. I filed a motion for partial summary judgment on that affirmative defense, and the Court agreed with my analysis. Judge Bradley made it clear that under the plain language of 2311(a)(5), the general is only deemed the insurer of the sub and its employees for the purposes of the Worker's Compensation Act, and it is not deemed the employer. This distinction was discussed in a case decided by Judge Stokes called McKirby v. A&J Builders (Del. Super. 2009) (attached).

In sum, the Court rejected the general's argument that the claimant was double-dipping by collecting WC benefits from the general's insurer and then proceeding with a tort action, and agreed with my argument that 2311(a)(5) preserves the claimant's right to pursue a tort action against the general notwithstanding the general's payment of WC benefits under 2311(a)(5)."

So the takeaway is this:

The general (or in this case, the sub) can be sued in tort even though they have provided workers' comp benefits as the insurer under 2311(a)(5) for failure to ensure that the sub had Delaware comp coverage.

A big shout out to Mike for keeping us in the loop.  Section 2311 is new enough, relatively speaking, that whatever emanates from the Court as a point of clarification or interpretation is to be cherished.   In terms of serendipity, this rivals my earlier post where our Delaware Supreme Court held that the carrier's Section 2363 lien does not apply to UIM proceeds.  Its' a great week to be a plaintiffs' lawyer in The First State.

And speaking of things to be cherished, above is a picture of Mike's daughter, Ketevan Sophia.....which I stole from his wife Patricia on Facebook.  Not only is this child beautiful, she is sharp as a whip like her Daddy.... And thankfully gets her sparling good looks from Mama Trish.

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

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