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Superior Court of Delaware, Kent CountyMay 31, 2001
C.A. No. 99C-05-028 (Del. Super. Ct. May. 31, 2001)

C.A. No. 99C-05-028

Submitted: March 27, 2001

Decided: May 31, 2001 Revised: August 21, 2001

Upon Defendant's Motion in Limine Regarding the Admissibility of a Workers' Compensation Lien. Denied.

Steven Schwartz, Attorney at Law, P.A., Dover, Delaware, Attorney for the plaintiffs.

Charles P. Coates, III, Bouchelle Palmer, Newark, Delaware, Attorneys for the Defendant.


This 21st day of August, 2001, upon consideration of the letter memoranda submitted by the parties, it appears to the Court that:

By agreement with counsel, this Court revises its earlier Order dated May 31, 2001 by referring to 5 U.S.C. § 8132 of Federal Workers' Compensation law never specifically addressed by the parties nor considered by this Court.

James J. Moore ("Plaintiff" or "Moore") brought this personal injury action for injuries sustained from a motor vehicle accident which occurred on May 15, 1997, at the intersection of Dexter Corner Road (Co. Rd. #36) and Blackbird Station Road (Co. Rd. #463) in New Castle County, Delaware. Plaintiff alleges that his injuries were caused by the negligence of David B. McBride ("Defendant" or "McBride"). When the accident occurred, Moore, a Federal employee, was operating a truck owned by the U.S. Government. Because the injury occurred in the course of his employment, Moore received workers' compensation benefits from his employer, the U.S. Department of Labor. The truck involved in the accident is owned by the United States government and is not a Delaware registered vehicle, and therefore, is not insured under Delaware Personal Injury Protection ("PIP").

Delaware's PIP statute did not apply to the U.S. government vehicle:

21 Del. C. § 2118. Requirement of insurance for all motor vehicles required to be registered in this State; penalty.
(a) No owner of a motor vehicle required to be registered in this State, other than a selfinsurer pursuant to § 2904 of this title, shall operate or authorize any other person to operate such vehicle unless the owner has insurance on such motor vehicle providing the following minimum insurance coverage.
21 Del. C. § 316. Exceptions from application of certain provisions of this title. Every motor vehicle, trailer, semitrailer and pole trailer when driven or moved upon a highway shall be subject to this title and inspection except:
(3) Any vehicle owned by the government of the United States and plainly marked to indicate such ownership and identify the particular vehicle, unless said vehicle is under lease with a right of purchase in the lessee.

Moore alleges that he sustained injury to his low back and a 40% impairment of the lumbar spine. Benefits for Moore's medical expenses and lost federal wages were paid by his employer, the U.S. Department of Labor, as workers' compensation benefits. These workers' compensation benefits totaled $14,227.23. At the time of the accident, Moore also had a second, part-time job with Lowes in Dover. The workers' compensation benefits paid by the U.S. Department of Labor did not pay for plaintiff's lost wages from his part-time job. However, Moore did receive $7,531.68 for the wages he lost from his Lowes' employment through his wife's State Farm Delaware auto insurance policy. The dispute at this time concerns the admissibility of the medical expenses and lost wages which were recovered through workers' compensation. Plaintiff claims that the medical expenses and lost wages paid pursuant to his employer's workers' compensation plan may be admitted into evidence in this case. Defendant argues that Moore's expenses and lost wages are not admissible because the Plaintiff had access to PIP benefits through his wife's auto insurance policy.

Mrs. Moore's Delaware automobile insurance policy was for her personal car which was not involved in the subject accident.

Plaintiff concedes that evidence of his lost wages from Lowes is not admissible because they were recovered through his wife's no-fault insurance policy.

The dispute in this matter stems from the interaction of two statutes, 21 Del. C. § 2118(h) and 5 U.S.C. § 8132. 21 Del. C. § 2118(h) precludes evidence of those damages for which compensation is available under the no-fault statute (medical expenses, lost earnings and/or property damage) from being pled or introduced into evidence at trial. On the other hand, under 5 U.S.C. § 8132, the United States has a lien for monies received in pursuit of a third party claim. Two cases dealt with the interaction of 21 Del. C. § 2118(h) and Delaware's workers' compensation law, 19 Del. C. § 2363(e) in a context similar to the situation currently before the Court, Duphily v. Delaware Electric Cooperative, Inc. and Rice v. DeSantis. Both of these cases did not consider the 1993 amendment to Section 2363 as their cause of actions arose before the amendment was enacted. The 1993 amendment imposed a ceiling on the workers' compensation lien equal to the amount of liability insurance carried by the tortfeasor, however, the ceiling will not affect the outcome of the case at bar. In Duphily v. Delaware Electric Cooperative, Inc., the Supreme Court stated that they did "not believe that 21 Del. C. § 2118(h) was intended to foreclose the carrier's rights under 19 Del. C. § 2363(d) for reimbursement of medical expenses simply because a motor vehicle was involved in the employees's accident, especially when there has been no claim asserted for PIP benefits." In Duphily, no PIP claim was ever made because the injury occurred as Duphily was standing on top of a double-wide trailer holding electrical wires out of the way so the trailer could be moved. Duphily was neither the operator of a vehicle nor technically a passenger on the double-wide and presumably that is why he did not make a PIP claim. In the immediate case, Defendant argues that the Duphily court limited its decision to their facts and that the facts in the matter sub judice are distinguishable. While the lack of a PIP claim in Duphily distinguishes it from the immediate case, the principles the Court used in formulating its decision are helpful. The workers' compensation insurance carrier paid Duphily's medical expenses and claimed that the jury should be informed of the amount of payments. Because of the workers' compensation insurance carrier's statutory right of subrogation, the Court held that evidence of Duphily's medical expenses should have been admitted at trial. The Supreme Court noted that this result was proper "as a matter of fairness" and because it still prevents an employee from obtaining a double recovery, i.e. the workers' compensation claim and the PIP claim.

21 Del. C. § 2118(h) states,
Any person eligible for benefits described in paragraph (2) or (3) of subsection (a) of this section, other than an insurer in an action brought pursuant to subsection (g) of this section, is precluded from pleading or introducing into evidence in an action for damages against a tortfeasor those damages for which compensation is available under paragraph (2) or (3) of subsection (a) of this section without regard to any elective reductions in such coverage and whether or not such benefits are actually recoverable.

Rice v. DeSantis also examined the interaction of Section 2118, Section 2363 and Duphily. In Rice, the State of Delaware was both the workers' compensation insurance carrier and the PIP benefits carrier. The State paid $45,592.51 in workers' compensation benefits which, pursuant to 19 Del. C. § 2363, gave the State a lien against any recovery the plaintiff may have received against the defendants in that amount. The Defendant wanted to limit the introduction of the workers' compensation benefits paid by $25,000, the amount of PIP coverage available. In rejecting this proposed limit, the Court noted that the State could potentially suffer a $25,000 loss if it were to accept the defendant's position. The Court further stated that "[b]ecause the lien exists, fairness dictates that the State be able to introduce evidence sufficient to protect the lien." Defendant argues that extending the Duphily and Rice decisions to the immediate case is to continue the process of carving out exceptions to a statute. This Court agrees that setting up a patchwork of exceptions is disfavored; however, one of the Court's functions is to interpret statutes harmoniously, particularly those that seem to conflict.

One of the underlying purposes for both the Workers' Compensation Act and the Delaware PIP statute is the timely payment of benefits for injuries by either the employer or the no-fault insurer. Another goal of these statutes is to provide a means by which to make the injured person whole. In light of these goals, the availability of PIP benefits will not be case dispositive in circumstances such as those presently before the Court. Similar to the Rice case, the existence of the lien by the workers' compensation carrier is a dominant factor in determining the admissibility of the damages paid by such carrier. Since any amount, even pain and suffering damages, is subject to the U.S. Department of Labor lien, fairness requires the admission of these damages. Moore should not be penalized because his employer paid benefits through their workers' compensation insurance carrier.

See International Underwriters, Inc. v. Blue Cross Blue Shield of Del., Inc., Del. Supr., 449 A.2d 197 (1982) (stating one of primary objectives of no-fault insurance law is prompt payment of medical expense, lost wages and property damage); Kofron v. Amoco Chems. Corp, Del. Supr., 441 A.2d 226, 231 (1982) (explaining purpose of Workers' Compensation Act).

Another of the Court's primary concerns is the prevention of double recovery. The parties have agreed that the benefits paid pursuant to Moore's wife's no-fault insurer is inadmissible under 21 Del. C. § 2118. Therefore, the only damages that will be presented to the jury are those paid pursuant to the workers' compensation claim. Any award for these damages is subject to the lien held by the U.S. Department of Labor which prevents Moore from obtaining a double recovery. Lastly, the Court is concerned with fairness to the U.S. Department of Labor's, the lien holder's, interests created by 5 U.S.C. § 8132. Under Federal Workers' Compensation law, there is no exception for the lien created against third-party tortfeasors based on the availability of PIP benefits.

Therefore, the jury will be informed of the amount of payments made by the U.S. Department of Labor for Moore's medical expenses and lost wages, as well as the fact that any recovery for these expenses will be awarded to the U.S. Department of Labor rather than Moore. Defendant's motion to keep these expenses from being admitted to the jury is DENIED.