Ferrari v. Helmsman Management Services, LLC ( 2020 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ANDREW M. FERRARI,
Plaintiff,
V.
C.A. No. N17C-04-270 MMJ
HELMSMAN MANAGEMENT
SERVICES, LLC,
Defendant.
New Nee Nee Nee Ne Nee ee Nee” ee” “ee” ee” ee”
Submitted: August 5, 2020
Decided: August 19, 2020
ORDER DENYING LEAVE TO APPEAL
FROM INTERLOCUTORY ORDER
John S. Spadaro, Esq., John Sheehan Spadaro, LLC, Smyrna, Delaware, Attorneys
for Plaintiff
Timothy J. O’Driscoll, Esq., Frederick P. Marczyk, Esq., Faegre, Drinker, Biddle
& Reathe, LLP, Philadelphia, Pennsylvania, Joseph C. Schoell, Esq., Faegre,
Drinker, Biddle & Reathe, LLP, Wilmington, Delaware, Attorneys for Defendant
JOHNSTON, J.
(1) Defendant Helmsman Management Services, LLC has moved for an
order certifying an interlocutory appeal to the Delaware Supreme Court. The
determination of whether to certify an interlocutory appeal lies within the
discretion of the Court and is analyzed under the criteria set forth in Supreme
Court Rule 42(b).! An interlocutory appeal will not be certified unless the Court
finds that its decision: (1) determines a substantial issue; (2) establishes a legal
right; and (3) satisfies one of the five criteria set forth in Rule 42(b)(i)-(v). Under
Rule 42(b)(i), the Court may look to the criteria established by Rule 41.
(2) In this action Plaintiff raises claims for bad faith delay and denial of
workers’ compensation benefits and intentional infliction of emotional distress
(“IIED”). Defendant moved for summary judgment.
(3) By Opinion dated June 23, 2020 (the “June 23 Opinion”), this Court
held:
On the narrow issue of whether a plaintiff may sue a TPA for breach of
the duty of good faith and fair dealing arising from a workers’
compensation contract, there is no contradictory authority. The cases
Defendant relies upon are distinguishable. Plaintiffs bad faith claim
against Helmsman does not fail as a matter of law on the basis that a
TPA is not a party to the insurance contract.
The Court also finds The Court also finds that there are genuine issues
of material fact regarding whether Helmsman acted reasonably as a
TPA in investigating and initially denying Plaintiff's claim. The Court
finds that plaintiff has established a prima facie case sufficient to
survive summary judgment on the issues of bad faith and punitive
damages. THEREFORE, Defendant’s Motion for Summary Judgment
is hereby DENIED.”
! See, e.g., Tortuga Cas. Co. v. Nat'l Fire Ins. Co. of Pittsburgh, 1991 WL 247813, at *2 (Del.);
State v. Superior Court, 141 A.2d 468, 471 (Del. 1968).
2 Ferrari v. Helmsman Management Services, LLC, 2020 WL 3444106 at *8 (Del. Super.).
2
(4) Defendant timely filed a motion for reargument on the Motion for
Summary Judgment, which this Court denied in an Order dated July 21, 2020.
(5) Defendant’s Application for Certification of an Interlocutory Appeal
argues that certification is appropriate because the June 23 Opinion decided a
substantial issue of material importance regarding the merits of the case, not
collateral matters. Defendant argues that the decisions of the trial court are
conflicting upon a question of law: whether a third-party claims administrator
(“TPA”) may be held liable for bad-faith breach of an insurance contract to which
it is not a party. Defendant further argues that review of the June 23 Opinion
would terminate litigation and may serve considerations of justice.
(6) Plaintiff opposes certification of the interlocutory appeal. Plaintiff
does not argue that the June 23 Opinion did not decide a substantial issue of
material importance. Plaintiff contends that the June 23 Opinion does not conflict
with other decisions of this Court. Plaintiff further argues that review of the June
23 Opinion would not terminate litigation nor serve considerations of justice.
(7) The Court finds that there is no conflicting law regarding whether a
TPA may be held liable for bad-faith breach of an insurance contract to which it is
not a party. Defendant’s Application for Certification of an Interlocutory Appeal
relies on two cases: Colbert v. Goodville Mutual Casualty Company,? and
32010 WL 2636860 (Del. Super.).
Lipchock v. New Castle County.’ This Court distinguished those cases in its June
23 Opinion, explaining:
Colbert and Lipchock are distinguishable from the instant case. Both
Colbert and Lipchock specifically addressed PIP benefits, not workers’
compensation. There are different public policy considerations for each
of these types of cases. Plaintiff asserts that, “while an injured motorist
may recover from the at-fault driver whatever she cannot recover
through PIP, workers' compensation is an injured worker's sole remedy.
It is thus crucial that the injured worker be able to hold to account any
entity that voluntarily takes control of the worker's financial and
medical fate...”
The Court need not engage in further analysis on this issue. The Court
finds that Thomas controls. On this narrow issue of whether a plaintiff
may sue a TPA for breach of the duty of good faith and fair dealing
arising from a workers’ compensation contract, there is no
contradictory Delaware authority. The cases Defendant relies upon are
distinguishable.°
(8) The Court further finds that interlocutory review would not terminate
the litigation. In its June 23 Opinion, the Court refrained from addressing several
of Plaintiffs alternative arguments obviated by the Court’s decision to follow
Thomas v. Harford Mutual Insurance Company.® Plaintiff had argued in the
alternative that Defendant: (1) was liable based on failure to disclose the principal
for whom it acted; (2) was liable because it repeatedly identified the wrong
principal; (3) waived the right to assert its “TPA Liability” defense; (4) was liable
42013 WL 4674855 (Del. Super.).
> Ferrari v. Helmsman Management Services, LLC, 2020 WL 3444106 at *12 (citing Thomas v.
Harford Mut. Ins. Co., 2003 WL 21742143 (Del. Super.) (footnotes omitted)).
® 2003 WL 21742143.
4
for aiding and abetting bad faith; and (5) was liable as a joint venturer.’ Thus, even
if interlocutory review were granted, and Defendant prevailed, the likely result
would be a remand to this Court for decision on the remaining alternative
arguments.
(9) The Court also finds that interlocutory review would not serve
considerations of justice. The Court’s holding that Defendant can be liable for
breach of a contract as a TPA is not, as Defendant characterizes it, a “significant
departure” from the principle of contract law that “only a party to a contract may
be sued for breach of that contract.”® Further, this Court imposed TPA liability
nearly two decades ago in Thomas.’ Thus, any ramifications of such a legal
imposition would have already impacted the field of workers’ compensation.
7 Transaction I.D. 65633628 at 9-14.
8 Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817 A.2d 160, 172 (Del. 2002).
92003 WL 21742143, at *2.
THEREFORE, Defendant has failed to demonstrate that Delaware Supreme
Court Rule 42(b) requires that the Court exercise its discretion to certify
interlocutory appeal. The Application for Certification of Interlocutory Appeal is
hereby DENIED.
IT IS SO ORDERED.
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The Hon. Mary M. Johnston