Opinion
No. 06A-10-004 JTV.
Submitted: April 16, 2007.
Decided: July 31, 2007.
Upon Consideration of Appellants' Appeal from a Decision of Court of Common Pleas.
Reversed and RemandedH. Garrett Baker, Esq., Elzufon, Austin, Reardon, Tarlov Mondell, Wilmington, Delaware for Defendants-Below, Appellants.
Walt F. Schmittinger, Esq., Schmittinger Rodriguez, Dover, Delaware for Plaintiff-Below, Appellee.
OPINION
Appellants, Furniture and More, Inc. and Travelers Indemnity Company, appeal a decision of the Court of Common Pleas which granted the appellee, Larry Hollinger, summary judgment against them in the amount of $21,905.05. The decision also denied appellants' motion for summary judgment. The damages awarded to appellee were Huffman damages for untimely payment of medical expenses. Under 19 Del. C. § 2357 and the Huffman case, an employer can be liable for liquidated damages if it is in default for thirty days after demand for payment of an amount due under the Workers' Compensation law. An issue in this case is how a thirty day default is calculated.
"Complaints filed under 19 Del. C. § 2357 to collect unpaid workers' compensation awards have come to be known as " Huffman" claims. Huffman v. C.C. Oliphant Son, Inc., 432 A.2d 1207 (Del. 1981); Rawley v. J.J. White, Inc., 2006 Del. Super. LEXIS 254 at *5 citing National Union Fire Ins. Co. v. McDougall, 877 A.2d 969, 971 (Del. 2005).
FACTS
On November 5, 2004, the plaintiff sustained an industrial accident while an employee of Furniture More, Inc. By letters dated December 27, 2004 and January 4, 2005, the appellants acknowledged the appellee's injury and agreed to pay all medical expenses related to the injury. The appellee's medical treatment resulted in a number of medical bills from four different health-care providers. The exact number of bills altogether is not entirely clear. In their opening brief, appellants state that there are a total of ten bills at issue. In his answering brief, appellee lists nine bills. In its opinion, the trial court appears to discuss eight bills. I find it necessary to address specifically only one bill, a bill for $14,027.05, in order to resolve the issues on appeal.
The four health care providers with bills at issue include: Kent Diagnostic Radiology ("KDR"), Kent General Hospital ("KGH"), DelMarva Emergency Physicians ("DEP"), and Dr. Wendy Newell ("Dr. Newell").
The bill for $14,027.05 was from Kent General Hospital. By letter dated April 12, 2005, appellee's counsel sent the bill to counsel for the appellants with a demand that it be paid. On June 3, 2005, the appellants paid $13,465.97 of the bill. This amount, which is 96% of the total, was paid pursuant to a Provider Agreement between appellant Travelers and Kent General Hospital. The Provider Agreement predated this appellee's case. Under the agreement, Travelers received a 4% discount on bills which it paid to Kent General. On July 5, 2005, Travelers apparently paid the 4%, or $561.08, to the hospital. Why it did so seems to be unexplained in the record. Since it is an issue in the case, I infer that the 4% reduction became a point of contention between the parties and Travelers made a business decision to pay it.
STANDARD OF REVIEW
The standard of review by this Court for an appeal from the Court of Common Pleas is the same standard applied by the Supreme Court to appeals from this Court. As such, whether the grant or denial of a motion for summary judgment by the Court of Common Pleas is proper presents a question of law that this court reviews de novo. The trial court's decision granting summary judgment will be affirmed if it appears that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. However, summary judgment should not be granted if the record indicates that a material fact is in dispute or if it seems desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances. Where the issue on appeal is a matter of law, the appellate court must determine whether the trial court erred in formulating or applying legal precepts.
Baldwin v. Starratt, 1999 Del. Super. LEXIS 398 at *5.
Newtowne Vill. Serv. Corp. v. Newtowne Rd. Dev. Co., 772 A.2d 172, 174-175 (Del. 2001); Baldwin, 1999 Del. Super. LEXIS 398 at *5.
Newtowne Vill. Serv. Corp., 772 A.2d at 175.
Shahin v. Del. Fed. Credit Union, 2006 Del. Super. LEXIS 329 at *6.
Newtowne Vill. Serv. Corp. 772 A.2d at 175.
DISCUSSION
Title 19, Section 2357 of the Delaware Code provides as follows:
If default is made by the employer for 30 days after demand in the payment of any amount due under this chapter, the amount may be recovered in the same manner as claims for wages are collectible.
In this case, the $14,027.05 bill was sent by appellee's counsel to appellants' counsel with a cover letter demanding payment dated April 12, 2005. The trial court held that the thirty day period mentioned in the above-quoted statute began to run on the date the bill was received by the appellants. It found that the date of receipt was April 13, 2005. The trial court then held that since the bill was not paid within thirty days of that date, or by May 13, 2005, appellants failed to comply with § 2357, thus giving appellee remedies under that statute. One of those remedies is liquidated damages of 10% per day, up to a maximum of the amount due. Since the number of days between May 13, 2005 and the date of substantial payment, June 3, 2005, was more than ten days, the trial court awarded the appellee $14,027.50 in liquidated damages. The $14,027.50 in liquidated damages is part of the above-mentioned $21,905.05.
For the reasons which follow, I believe that the trial court's determination of when the thirty days mentioned in § 2357 begins and ends is in error and must be reversed.
Under 19 Del. C. § 2362(b), an employer must pay medical bills within thirty days after the bills and documentation for the bills are received by the employer or its insurance company, unless the carrier or a self-insured employer notifies the employee or the employee's attorney in writing that the bills are contested or that further verification is required. The employer is given this thirty day period to inspect the bill and its documentation before payment. Since the statute gives the employer thirty days to pay a medical bill from the date it is received, payment on the 30th day after receipt is timely. The remedies under 19 Del. C. § 2357 are not available unless there is a thirty day default in payment. When, as here, the demand for payment is made when the bill is initially presented to the employer, a thirty day default does not begin to run on the date of the demand. It begins to run when a default in payment occurs, which under 19 Del. C. § 2362(b) is 31 days after receipt. Here the bill was substantially paid off 21 days after default, or June 3. Thus a thirty day default did not occur and no remedies arise under 19 Del. C. § 2357.
Under IAB Rule 4(B), medical bills shall be paid by the carrier within 30 days after bills are sent to the carrier for payment, unless the carrier notifies the claimant or his/her attorney in writing that said bills are contested or that further verification is necessary. Where the difference between the date of sending the bill and the date of receipt of the bill is material, the rule must give way to the statute for purposes of calculating a default in payment under 19 Del. Code § 2357.
The trial court also held that the Provider Agreement under which Travelers took a 4% reduction from bills due Kent General Hospital violates 19 Del. C. § 2305, which reads as follows:
No agreement, rule, regulation or other device shall in any manner operate to relieve any employer or employee in whole or in part from any liability created by this chapter, except as specified in this chapter.
The trial court held that the Provider Agreement was an attempt to relieve the employer, in part, from liability under the Workers' Compensation law. I do not agree with this conclusion. Under the Provider Agreement, Kent General Hospital agreed to receive 96% of the bill as payment in full. I do not know of any public policy or other reason why such an agreement is improper and I do not think that an agreement which simply regulates the amount which Kent General Hospital agrees to receive as payment in full runs afoul of the just quoted statute. The statute is for the protection of the employee, and the result to the employee is the same, i.e., payment in full of his medical bills.
The trial court awarded liquidated damages for six medical bills. I have concluded that the award of liquidated damages for the $14,027.05 bill is error and must be reversed. On remand, the trial court should determine the date upon which the appellants received each of the other five bills, and then determine whether the bill was paid, if it was paid, and the date of payment. If payment of the bill, or discounted payment under the Provider Agreement, occurred within 60 days of appellants' receipt of the bill, damages under 19 Del. Code § 2357 cannot be awarded and judgment should be for the appellants.
The case is reversed and remanded for further proceedings consistent with this opinion.
IT IS SO ORDERED.