Workers’ Comp is Always an Exclusive Remedy

UM/UIM Coverage Purchased by Employer Doesn’t Work When Workers’ Comp is Available

The State of Delaware Insurance Coverage Office moved the court for Summary Judgment against a claim by an injured employee for UM benefits in addition to his workers’ compensation benefits.

In Clay Echevarria v. State of Delaware Insurance Coverage Office and Liberty Mutual General Insurance Company, C.A. No.: N18C-07-116 VLM, Superior Court of the State of Delaware (March 7, 2019) the court was faced with multiple statutory and insurance claims where the injured employee argued he was entitled to collect both workers’ compensation benefits and Uninsured Motorist coverage from a policy maintained by his employer for injuries in a state car.

FACTUAL BACKGROUND

On March 9, 2013, Plaintiff Clay Echevarria (“Plaintiff”) was involved in a motor vehicle accident with an underinsured motorist who negligently caused the collision. Plaintiff claims to have suffered physical injury, mental anguish, and that he has incurred special damages.

At the time of the accident, Plaintiff was a State of Delaware employee. Plaintiff and the vehicle he was operating were insured under a policy issued by Defendant State of Delaware Insurance Coverage Office (“Defendant State”). Plaintiff and his personal vehicle were insured under a policy issued by Defendant Liberty Mutual General Insurance Company (“Liberty Mutual”). Both policies provided underinsured motorist (“UIM”) benefits.

On July 13, 2018, Plaintiff filed a Complaint alleging both Defendants breached their respective insurance policies for failing to reimburse him for his losses and damages. On October 12, 2018, Defendant State filed a Motion for Summary Judgment.

DISCUSSION

Summary Judgment

The burden of proof on a motion for summary judgment falls on the moving party to demonstrate that “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” If the moving party satisfies its initial burden, the non-moving party must sufficiently establish the “existence of one or more genuine issues of material fact.” All facts and reasonable inferences must be considered in a light most favorable to the non-moving party.

Exclusivity Provision Under the Workers’ Compensation Act

At the time of Plaintiff’s accident in 2013, the applicable provision of 19 Del C. § 2304 stated: “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.” (emphasis added)

The Court found that the phrase “to the exclusion of all other rights and remedies” prohibited the plaintiff from recovering under the State’s underinsured motorist and uninsured motorist policy. This provision was amended on September 6, 2016 and the exclusivity provision now provides an exception for the recovery of uninsured motorist benefits, underinsured motorist benefits, and personal injury protection benefits.

Plaintiff acknowledges that he has received workers’ compensation benefits and the statute prevents his recovery of UIM benefits under the State’s self-insurance policy. Thus, this Court found that § 2304 bars Plaintiff’s claim for underinsured motorist benefits against Defendant State.

There is no genuine issue of any material fact regarding Plaintiff’s inability to recover underinsured motorist coverage from Defendant State and it is entitled to judgment as a matter of law.

Request to Amend Complaint

Plaintiff alleges in his proposed amended complaint that Defendant State offered underinsured motorist coverage in July 2015 that was below the limits of coverage “which both parties were under the impression existed at that time.” He states Defendant Liberty Mutual “would not consider any claim for underinsured motorist benefits until Plaintiff exhausted his benefits under the State’s coverage or otherwise provided proof that there was no such coverage available.” Plaintiff claims he changed his position as a result of the State’s offer of underinsured motorist coverage “because the offer made Liberty Mutual’s participation conditional upon the State’s coverage being exhausted or withdrawn.” He claims he relied on Defendant State’s offer to his detriment because Defendant Liberty Mutual is now asserting in its Answer that his claim under the policy is untimely.

The State argued that the proposed amendment should be denied as futile. This is so where § 2304 bars recovery “to the exclusion of all other rights and remedies.”

Since Plaintiff is seeking to proceed with a proposed amendment that will ultimately suffer dismissal it is futile. Under 19 Del. C. § 2304, Plaintiff’s remedies are exclusive to those provided by the Workers’ Compensation Act.

Therefore, under Superior Court Civil Rule 15(a) and (c), Plaintiff’s Motion to Amend the Complaint to Seek Relief Pursuant to the Doctrine of Promissory Estoppel was denied.

ZALMA OPINION

Statutes must be read as written. Insurance policies must be read as written as long as they are not ambiguous. In this case the fact that the plaintiff was entitled to, and received, workers’ compensation benefits, he could not recover UM/UIM benefits as a result of the prohibition by statute and the policy.


© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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