Opinion
No. 02A-06-003
Date Submitted: October 28, 2002
Date Decided: December 9, 2002
David A. Boswell, Esquire Schmittinger Rodriguez, P.A.
John W. Morgan, Esquire Heckler Frabizzio
Dear Counsel:
This is my decision on Jaimey Showell's ("Claimant") appeal of the Industrial Accident Board's ("Board") decision denying his Petition to Determine Compensation Due. The Board's decision is reversed for the reasons set forth herein.
STATEMENT OF FACTS
Claimant was employed by Mountaire Farms, Inc. ("Employer") as a chicken catcher. Claimant was picked up in a truck driven by Rodney D. Briddell ("Briddell") and owned by Joseph E. Langston ("Langston") on the morning of July 18, 2000. Briddell and Langston were also employees of Employer. They drove around for a while in an attempt to procure additional workers, since only three of the required seven man crew had reported for work. Finally, Briddell picked up the additional workers at Employer's plant in Selbyville. Thereafter, the crew left the plant for their first assignment in the truck Briddell was driving. Claimant was seated in the rear body cab of the truck with five other workers. While Employer did not generally pay Claimant for travel, it paid Langston for gas. All of the chicken catching crews typically drove together to the various farms.
Briddell first drove the truck to meet Langston at the Selbyville Shell ("Shell"). At the Shell, Langston gave Briddell an empty propane tank that an employee of Shell filled. Briddell opened the rear cab of the truck and the employee placed the filled propane tank in a crate next to where Claimant was seated. At that time, a propane heating unit was operating in the rear cab of the truck.
After filling the propane tank, Briddell and the occupants of the truck drove toward their first assignment. En route, there was a propane gas explosion in the rear of the truck, causing Claimant to catch on fire. In order to escape, Claimant jumped out of the back of the moving truck and landed on the roadway. Claimant sustained substantial injuries as a result of this incident. After promptly notifying Employer of the incident, Claimant underwent a number of treatments for these injuries. Due to his injuries, Claimant is unable to return to his job as a chicken catcher.
During this period of time, Claimant did not receive any benefits from Employer. Employer notified Claimant on February 3, 2000, July 14, 2000 and July 25, 2000 that benefits were being denied on the grounds that Claimant was not within the course and scope of his employment at the time of the incident. Claimant remained unemployed and was unable to pay his medical bills. As a result, Claimant was forced to discontinue the recommended course of physical therapy since he could not afford to pay for the visits. By the time Claimant was able to resume treatments in July of 2000, the condition of his foot had worsened, so that he was unable to benefit from further physical therapy.
Subsequently, Claimant filed a Petition for Compensation Due with the Board on January 14, 2002. Claimant amended his Petition with the Board the next day and sought payment of certain medical bills and expenses. Claimant also advised the Board that Employer denied benefits on the grounds that Claimant was not within the course and scope of his employment at the time of the incident. Claimant requested a hearing on this issue.
Thereafter, on January 16, 2002, Claimant filed a complaint with this Court seeking tort recovery at common law for his injuries arising out of the same incident. By notice dated February 14, 2002, the Board scheduled a hearing on the course and scope of employment defense for April 10, 2002. Employer filed a pre-trial memorandum with the Board on March 7, 2002, which again stated that the accident was outside the course and scope of employment. On March 19, 2002, Employer filed an answer to Claimant's complaint in the Superior Court and raised the defense that the exclusivity provision of the Worker's Compensation Act barred Claimant's personal injury claims.
By letter dated April 4, 2002, Employer advised the Board that it was withdrawing the course and scope of employment defense. The Board cancelled the April 10 hearing and scheduled a hearing on the merits for May 31, 2002. Prior to the hearing, the parties stipulated to the degree of Claimant's permanent impairment without prejudice to any other issue or dispute among the parties. The parties also stipulated to the derivative claims for medical witness fees and attorneys' fees. The parties agreed that there is a 35.5% impairment to the lower left extremity and half of the attorneys' fees incurred to date. The parties also agreed that Claimant would absorb the cost of his own medical witness fees in exchange for the Employer giving up its request to limit the Claimant's attorneys' fees for any remaining issues. The parties further agreed that the medical treatment to date has been reasonable, necessary, and related to the incident.
At the hearing, Claimant sought recovery of the medical expenses incurred. Employer defended on the grounds that a collateral source had paid. Employer did not present any evidence as to what bills had been paid. By decision dated June 12, 2002, the Board held that Employer was relieved of any obligation regarding Claimant's medical expenses, since the bills had been paid by the PIP insurer. Claimant appeals this decision.
The PIP policy was taken out by Langston for his carpentry business and covered the truck driven by Briddell.
ISSUES PRESENTED
The first issue is whether Claimant is entitled to medical expenses pursuant to 19 Del. C. § 2322(b). Claimant argues that the Board erred in considering payments from collateral sources in reaching its determination that Claimant was not entitled to the payment of medical expenses. Claimant asserts that the Board erred in allowing Employer to avoid liability for the payments, thereby incurring a windfall. Claimant also argues that this result is contrary to one of
Section 2322(b) provides: "If the employer, upon application made to the employer, refuses to furnish the services, medicines and supplies mentioned in subsection (a) of this section, the employee may procure the same and shall receive from the employer the reasonable cost thereof within the above limitations." 19 Del. C. § 2322(b).
the fundamental purposes of the statute, of ensuring prompt and certain payments of medical expenses. The second issue is whether the Board exceeded its jurisdiction in considering the relative rights of the employee, employer and the PIP insurer. Finally, Claimant argues that the Board erred in characterizing the parties as in agreement that Claimant was injured in a compensable industrial accident.
DISCUSSION A. Standard of Review
The Supreme Court and this Court repeatedly have emphasized the limited appellate review of the factual findings of an administrative agency. The function of the reviewing Court is to determine whether the agency's decision is supported by substantial evidence, Johnson v. Chrysler Corp., 312 A.2d 64, 66-67 (Del. 1965); General Motors v. Freeman, 164 A.2d 686, 688 (Del. 1960), and to review questions of law de novo, In re Beattie, 180 A.2d 741, 744 (Del.Super. 1962). Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Oceanport Ind. v. Wilmington Stevedores, 636 A.2d 892, 899 (Del. 1994); Battista v. Chrysler Corp., 517 A.2d 295, 297 (Del.), app. dism., 515 A.2d 397 (Del. 1986). The appellate court does not weigh the evidence, determine questions of credibility, or make its own factual findings. Johnson v. Chrysler Corp., 312 A.2d at 66. It merely determines if the evidence is legally adequate to support the agency's factual findings. 29 Del. C. § 10142(d). B. Application of 19 Del. C. § 2322(b)
1. Remedies under the Workers' Compensation Act
The Board erred in denying Claimant's petition for medical expenses. Claimant's petition seeking medical expenses from Employer is governed by Section 2322 of Title 19 of the Delaware Code. Under the exclusivity provision of Section 2304 of Title 19 of the Delaware Code, an employee's remedies for injuries arising out of the course of employment are limited to those provided in the Workers' Compensation Act. 19 Del. C. § 2304. However, under Section 2363, an employee's remedies are not confined to those provided under the Workers' Compensation Act where recovery is sought against a third-party tortfeasor. 19 Del. C. § 2363. Thus, the Workers' Compensation Act governs "the rights and remedies only of the employer and his employees." Ianire v. Univ. of Delaware, 255 A.2d 687, 695 (Del.Super. 1969). The statute also serves to prevent a windfall to culpable tortfeasors. Id.
Section 2304 provides: "Every employer and employee, adult and minor, except as expressly excluded in this chapter, shall be bound by this chapter respectively to pay and to accept compensation for personal injury or death by accident arising out of and in the course of employment, regardless of the question of negligence and to the exclusion of all other rights and remedies." 19 Del. C. § 2304.
Section 2363(a) provides in part: "Where the injury for which compensation is payable under this chapter was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of compensation benefits or the taking of proceedings to enforce compensation payments shall not act as an election of remedies, but such injured employee or the employee's dependents or their personal representative may also proceed to enforce the liability of such third party for damages in accordance with this section." 19 Del. C. § 2363(a).
In this case, Employer has waived the course and scope of employment defense. By waiving this defense, Employer essentially concedes that the accident occurred within the course and scope of employment. Thus, under the exclusivity provision, Claimant's remedies against Employer are restricted to those provided in the Workers' Compensation Act.
Under the Workers' Compensation Act, Claimant is entitled to the prompt provision of medical services. Section 2322 requires employers to furnish reasonable medical services during the period of disability. 19 Del. C. § 2322(a). If the employer refuses to furnish such services, the employee may procure the services and recover the reasonable cost thereof from the employer. 19 Del. C. § 2322(b). In order to recover under this section, the employee must show that medical expenses have been incurred, these expenses are attributable to the work-related injury and the employer has not paid such expenses. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d 551, 553 (Del. 1988). The employee must also show that medical services were requested from employer and that employer denied these services. Collins Ryan v. Hudson, 75 A.2d 261, 265 (Del.Super. 1950).
Here, the parties stipulated that the medical expenses incurred were reasonable, necessary and related to the incident. The record also reflects that Employer promptly was notified of the incident and repeatedly denied Claimant's request for workers' compensation benefits. It is undisputed that Employer had not paid the medical bills. Thus, Claimant has established that medical expenses were incurred, that those expenses are attributable to an industrial accident and that despite Claimant's requests, Employer has not paid the bills. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d at 553. Accordingly, Claimant is entitled to reimbursement for medical expenses pursuant to Section 2322(b). 19 Del. C. § 2322(b).
Moreover, the denial of benefits violates the policy behind the Act. The Worker's Compensation Act operates as a tradeoff between the interests of employers and employees; "employers are guaranteed a certain and predictable liability for insurance purposes, and employees are guaranteed a certain amount of immediate compensation." Ianire v. Univ. of Delaware, 255 A.2d at 695. This immediate compensation is important to ensure that the employee does not have to shoulder the burden of payment of medical expenses. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d at 552. In return for prompt compensation, the worker gives up the right to sue the employer at common law. Price v. All Amn. Eng'g Co., 320 A.2d 336, 341 (Del. 1974). This prompt compensation scheme developed in response to the long delays in procuring recovery in tort litigation. Rafferty v. Hartman Walsh Painting Co., 760 A.2d 157, 159 (Del. 2000).
In the present matter, Claimant has been denied the benefit of prompt compensation. Claimant was injured in January of 2000. Over the course of the six months following the incident, Employer repeatedly denied Claimant's request for benefits on the grounds that the incident was outside the course and scope of employment. It was not until after Claimant filed an action in Superior Court seeking tort recovery that Employer withdrew that defense and acknowledged that an industrial accident had occurred. As a result of these denials, coupled with Claimant's inadequate financial means, Claimant was forced to discontinue the recommended course of physical therapy. Employer has still not paid the medical bills. These are exactly the types of delays that the Act sought to prevent. Under the plain language of section 2322(b), Claimant is entitled to recovery of his medical expenses from employer. 19 Del. C. § 2322(b). Thus, the Board erred in declining to award medical expenses.
2. Collateral source rule
The Board misconstrued the application of the collateral source rule in the context of a workers' compensation case. The collateral source rule provides that "a tortfeasor has no right to any mitigation of damages because of payments or compensation received by the injured person from an independent source." Yarrington v. Thornburg, 205 A.2d 1, 2 (Del. 1964). The rule operates to prevent a tortfeasor from benefitting from payments made by an independent source.
Id. One of the rationales of the collateral source doctrine is that it is preferable for an innocent party to receive a windfall than for a culpable party to bear less than the full expense resulting from the negligent conduct. State Farm Mutual Auto. Ins. Co. v. Nalbone, 569 A.2d 71, 73 (Del. 1989). However, a tortfeasor may benefit from "payments made by himself or from a fund created by him;" in such a case the payments are not from a collateral source. Yarrington v. Thornburg, 205 A.2d at 2.
Section 2363(e) addresses when an offset is permissible where payments derive from more than one source. The question of a right to subrogation arises only after the expenses have in fact been paid. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d at 553. Since subrogation is an equitable remedy, one who seeks it must act equitably. Baio v. Commercial Union Ins. Co., 410 A.2d 502, 506 (Del. 1979). This principle also applies to a claim for a right of offset under the Workers' Compensation Act. Baio v. Commercial Union Ins. Co., 410 A.2d at 506 (denying a claim for an offset where the compensation carrier's conduct toward the employee was inequitable).
Section 2363(e) provides in part: ". . . Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or its workers' compensation insurance carrier for any amounts paid or payable under the Workers' Compensation Act to date of recovery, and the balance shall forthwith be paid to the employee or the employee's dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payment of compensation benefits, except that for items of expense which are precluded from being introduced into evidence at trial by § 2118 of Title 21, reimbursement shall be had only from the third party liability insurer and shall be limited to the maximum amounts of the third party's liability insurance coverage available for the injured party, after the injured party's claim has been settled or otherwise resolved." 19 Del. C. § 2363(e).
The purpose of Section 2363 "is to prevent the employee from receiving compensation for wage losses from a third-party tortfeasor when the losses have already been compensated through workers' compensation." State v. Calhoun, 634 A.2d 335, 337 (Del. 1993). However, this section does not prevent a double recovery where the second source of payment stems from "a contractual arrangement supported by employee furnished consideration." State v. Calhoun, 634 A.2d at 338. In addition, the party seeking an offset has the burden of proving that it is entitled to that offset. Beckhorn v. Guardian Constr. Co., Del. Super., C.A. No. 97A-08-001, Graves, J. (Sept. 2, 1998) (ORDER) (holding that the Board properly determined that there was not enough evidence before it to determine the claimed PIP offset).
In this case, the workers' compensation carrier has not paid the medical expenses. The workers' compensation carrier is not entitled to seek reimbursement for an expense it has not incurred. State v. Calhoun, 634 A.2d at 337. Thus, the question of the right to subrogation under Section 2363(e) does not arise. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d at 553. Even assuming Section 2363(e) applies, Employer has not met its burden of proof. Employer had the burden to establish that it was entitled to an offset. Beckhorn v. Guardian Constr. Co., Del. Super., C.A. No. 97A-08-001, Graves, J. (Sept. 2, 1998) (ORDER). At the hearing, Employer did not offer any evidence that the medical bills had been paid or that it had paid any of the bills. Accordingly, Employer is not entitled to an offset under Section 2363(e). 19 Del. C. § 2363(e).
Moreover, it is questionable whether the Employer would be entitled to the equitable relief of subrogation. Baio v. Commercial Union Ins. Co., 410 A.2d at 506. Employer repeatedly denied Claimant's requests for medical services on the grounds that the accident occurred outside the course and scope of employment. Employer later raised the defense in Claimant's tort action that the exclusivity provision of the Workers' Compensation Act barred the claim. Although Employer later withdrew the course and scope of employment defense,
Employer still has not paid the medical expenses. Under the facts of this case, Employer might not be entitled to equitable relief. C. The Board's jurisdiction
The Board has jurisdiction over matters covered under the Workers' Compensation Act. 19 Del. C. § 2301A(i). Section 2118 of Title 21 of the Delaware Code governs PIP insurance coverage. 21 Del. C. § 2118. The purpose behind the PIP statute is to ensure that basic insurance coverage is provided "for all personal injuries arising out of automobile accidents without regard to culpability." Cicchini v. State, 640 A.2d 650, 652 (Del.Super. 1993). In construing this provision with the Workers' Compensation Act, the Court has noted:
Section 2301A(i) provides in part: "The Board shall have jurisdiction over cases arising under Part II of this title and shall hear disputes as to compensation to be paid under Part II of this title." 19 Del. C. § 2301A.
"[Coverage] must be managed in such a fashion that the injured employee receives the maximum benefits available under both. The object is to provide for and protect the interests of such individuals. It is not to penalize them by reducing the compensation to which they have otherwise been determined entitled." Cicchini v. State, 640 A.2d at 653.
Here, the petition before the Board sought recovery of medical expenses under Title 19, Section 2322(b) of the Delaware Code. The Board's jurisdiction is limited to disputes arising under the Workers' Compensation Act. 19 Del. C. § 2301A. The Workers' Compensation Act governs the rights and remedies of employers and their employees. Ianire v. Univ. of Delaware, 255 A.2d at 695. The Board's focus should have been on whether Claimant was entitled to medical expenses under Section 2322, not on whether the PIP carrier may have a future subrogation claim against the workers' compensation carrier. The proper application of Section 2118 of Title 21 was not an issue before the Board. Moreover, the Board's consideration of subrogation rights was premature in this case, since the workers' compensation carrier had not paid the medical expenses, nor had the PIP carrier sought reimbursement for the bills it had paid. Accordingly, the Board exceeded its jurisdiction in considering the relative subrogation rights of the parties in reaching its determination that Claimant was not entitled to reimbursement for medical expenses.
C. The Board's characterization of the agreement
The Board's characterization of the agreement between the parties is not material. Statements in opinions made in dicta are not controlling. Waters v. US, 787 A.2d 71, 74 (Del. 2001). The Board's statement that the parties were in agreement that a compensable industrial accident had occurred is nothing more than dicta and does not control the outcome of the case.
CONCLUSION
The Board misconstrued Sections 2322(b) and 2363(e) of Title 19 of the Delaware Code. Pursuant to the plain language of Section 2322(b), Claimant is entitled to reimbursement from Employer for medical expenses incurred as a result of the incident. The Board also erred in considering the potential future subrogation rights of the parties in making its determination that Claimant is not entitled to relief. Accordingly, the decision of the Board is reversed and remanded with instructions to award Claimant medical expenses.
IT IS SO ORDERED.