DocketNumber: C.A. No. K15A-02-001 WLW
Citation Numbers: 123 A.3d 150
Judges: Witham
Filed Date: 10/8/2015
Status: Precedential
Modified Date: 1/6/2022
OPINION
Before the Court is Appellant/Claimant Lisa Kelley’s (“Kelley”) appeal from a decision of the Industrial Accident Board (“IAB” or “Board”) granting Appellee/em-ployer Perdue Farm’s (“Perdue”) request for an offset representing fifty percent of short term disability payments made to the Claimant. The issue before the Court is whether an employer is entitled to an offset of workers’ compensation benefits when an employee has received benefits from a short term disability policy for which the employer and the employee have each paid fifty percent of the policy premium. For the reasons set forth below, the decision of the Board is affirmed.
BACKGROUND
Perdue acknowledged that Kelley suffered from right wrist tendonitis caused by repetitive work duties. The injury manifested on April 30, 2014. Kelley earned $422.29 per week prior to the injury, which is equal to a compensable rate of $281.54 per week. The total disability period encompassed ninety days from May 6, 2014 through August 3, 2014. At the time of the injury, Perdue and Kelley each paid one half of the premium for a short term disability insurance policy. Under this policy, Kelley was paid short term disability benefits of $2,163.71 during the period of disability.
Kelley was subsequently awarded temporary total disability benefits under Per-due’s workers’ compensation policy. In December 2014, Perdue filed a request with the IAB for an offset equal to 50 percent of the short term disability payments made under the short term disability policy. After a January 2015 hearing, the IAB issued an order granting the offset. In February 2015, Kelley filed this appeal of the Board’s order.
STANDARD OF REVIEW
We review an Industrial Accident Board decision for legal errors and to determine whether the. decision is supported by substantial evidence.
DISCUSSION
An employer is entitled to an offset of workers’ compensation benefits when the claimant has received payment from an employer provided insurance policy or benefits program.
The Delaware workers’ compensation statute provides a process to replace an employee’s lost earnings and to cover an employee’s medical expenses that result from a work related injury.
The Collateral Source Doctrine
Payments made or benefits conferred independent of the tortfeasor, and that the tortfeasor had no part in creating, are known as collateral source benefits.
In 1964, the Delaware Supreme Court recognized the collateral source rule as being “firmly embedded” in Delaware Law.
In a no-fault insurance context, the Delaware Supreme Court recognized that “the policy goals of no-fault insurance can best be served by applications of principles of contract rather than tort law.”
The IAB Properly Granted an Offset for Fifty Percent of the Short-Term Disability Proceeds.
This case presents. an. interesting issue not previously presented to this Court. At issue is whether an employer is allowed to offset workers’ compensation benefits when the employee receives additional benefits paid by an insurance policy which has been jointly purchased by the employer and employee. Established case law ' provides for the •' following general propositions: (1) an employer is allowed to offset workers’ compensation benefits when an employee receives additional benefits paid by an’ insurance policy or benefit plan purchased by the employer, (2) an employer is not allowed to an offset of workers’ compensation benefits when an employee receives additional benefits paid by an insurance policy purchased by the employee. These propositions are found in Guy J. Johnson Transportation Co. v. Dunkle
Under the first proposition, an employer is allowed to offset workers’ compensation payments by amounts paid to an employee by an insurance policy or benefits program that emanates from the, employer. In Dunkle, an employee sought total disability benefits after he suffered a work-related heart attack. The employer appealed a Board award of $26,403.80 in hospital and physician charges. The employer argued that the challenged medical éxpenses had been paid on its behalf by its medical insurance carrier, through policies which were paid for solely by the employer. The Delaware Supreme Court held that an offset of the employee’s workers’ compensation claim was allowed because the employer had paid.for the medical insurance policy, which in turn paid the employee’s medical bills. The Court found that allowing an offset of a workers’ compensation
Under the second proposition, an employer is not allowed to offset workers’ compensation payments by amounts paid to an employee pursuant to an insurance policy which exists by reason of the employee’s payment of separate consideration. In Adams, the Delaware Supreme Court considered an employer’s request for an offset when a claim was asserted against an insurance policy that had been purchased by the employee. While operating the employer’s motor vehicle and during the course of employment, an employee was injured in an automobile accident caused by another driver. The tortfeasor’s insurance company paid the employee the tortfeasor’s insurance policy limit of $25,000. The employee had independently purchased underinsured motorist coverage which paid the employee an additional $175,000.
Although both propositions are well established, the Delaware Supreme Court has found exceptions. In State v. Calhoun,
Additionally, in Simendinger v. National Union Fire Insurance Co.,
Kelley argues that Perdue’s short-term disability program is funded much like the Delaware State Employee Pension Plan discussed in Calhoun, and therefore Calhoun is dispositive. She argues that her separate contributions to the short term disability policy premiums are analogous to the employee’s separate contributions to the Delaware State Employee Pension plan. It is Kelley’s contention that the Dunkle “no windfall” principle does not apply when duplicate benefits arise from a contractual arrangement supported by employee-furnished consideration. She argues that Perdue’s short term disability program is funded much like the Delaware State Employee Pension Plan, .and that Calhoun therefore prohibits an offset of the type awarded in this case.
Kelley’s argument misses a key difference between the employee contribution in Calhoun and the employee contribution in the case at bar. In Calhoun, the parties were contributing to a statutorily cre7 ated instrument. Once the employee chose to participate in the pension plan, State contributions were mandatory. Although legislatively established, the plan was contractual in nature. An employee would become vested after participating in the plan for five years, and thereafter would have a constitutionally protected property right in the pension. Kelley’s
Dunkle and -Adams establish that employers are generally entitled to an offset when the employer has provided á collateral source of compensation, and that the employer is not entitled to an offset when the employee has provided the collateral source of compensation. Whether an employer is entitled to an offset when both employer and employee have contributed to the purchase of a collateral source1 of compensation is an issue of first impression in Delaware, but this issue has been addressed in other states. The Supreme Court of Alabama addressed the issue in Ex Parte City of Birmingham
Both1 employer and employee .are entitled to- reap the, rewards of their investments. In this case, both employer and employee contributed to a policy that provided benefits to Kelley after she became injured. The IAB ruled that each side would benefit in proportion to their contribution. Kelley argues that the collateral source at issue in this case would not exist without Kelley’s contribution, but neither would the collateral source exist without Perdue’s contribution. The IAB’s decision to allow the offset is proper and well grounded in existing common law.
Interpretation of Existing Common Law is not Legislating
The General Assembly is presumed to know the effect of the common law on its statutes.
Kelley contends that the IAB was improperly legislating because the offset at issue was not specifically provided for by the General Assembly. Kelley argues that it is up to the General Assembly, and not an administrative tribunal, to provide for an offset in connection with a co-funded insurance program. However, the Delaware Supreme Court has stated that they “do not accept the contention that there may be no offset' of claimed benefits in the absence of express legislative authority” and that “[n]o statutory authority is required to deny recovery for losses which did not, in fact, occur or expenses not, in fact, sustained.”
Kelley argues that the IAB is legislating in this matter and that it is up to the General Assembly to provide for an offset in connection with a co-funded short term1 disability insurance program. Kelley’s view is impractical and thwarts generally accepted rules of statutory construction. A broad application of Kelley’s argument would require the General Assembly to predict every possible scenario under which a new law might be applied, and if a specific scenario was not contemplated, the law would not apply despite the General Assembly’s intent. The IAB properly considered existing common law and applied it to the scenario presented in the current case. In considering this appeal, this Court has1- also properly considered existing common law, law which has not been abrogated by legislative fiat, and applied it to the scenario presented in this case.
CONCLUSION
Both employer and employee are entitled to reap the rewards of their investments. In this case, both employer- and employee contributed to a policy that provided benefits to Kelley after she became injured. The IAB ruled -that each side would benefit-in proportion to their contribution. Kelley argues that the collateral source at issue in this case would not exist without Kelley’s contribution, but neither would the collateral source exist without Perdue’s contribution. Thus, for the foregoing, reasons, the decision of the Board is AFFIRMED.
IT IS SO ORDERED.
. Conagra/Pilgrim’s Pride, Inc. v. Green, 954 A.2d 909 (Del.2008) (citing LeVan v. Independence Mall, Inc., 940 A.2d 929, 931-32 (Del.2007)).
. Vincent v. E. Shore Markets, 970 A.2d 160, 163 (Del.2009) (citing Baughan v. Wal-Mart Stores, 2008 WL 1930576, at *2 (Del. May 2, 2008)).
. Boone v. Syab Servs./Capitol Nursing, 2013 WL 3777153, at *1 (Del. July 16, 2013) (citing Person-Gaines v. Pepco Holdings, Inc., 981 A.2d 1159, 1161 (Del.2009)).
. Boone, 2013 WL 3777153, at *1 (citing Person-Gaines, 981 A.2d at 1161).
. Person-Gaines, 981 A.2d at 1161 (quoting Olney v. Cooch, 425 A.2d 610, 614 (Del.1981)).
. Bullock v. K-Mart Corp., 1995 WL 339025, at *2 (Del.Super. May 5, 1995) (citing Johnson v. Chrysler Corp., 213 A.2d 64, 66-67 (Del.1965)).
. Stanley v. Kraft Foods, Inc., 2008 WL 2410212, at *2 (Del.Super. Mar. 24, 2008) (quoting Willis v. Plastic Materials Co., 2003 WL 164292, *1 (Del.Super. Jan. 13, 2003)).
. Briggs v. DuPont, 1998 WL 110037, at *8 (Del.Super. Jan. 20, 1998) (citing Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d 551, 553 (Del.1988)).
. State v. Calhoun, 634 A.2d 335, 338 (Del.1993).
. Id. at 337.
. State v. Brown, 2000 WL 33225298, at *4 (Del.Super. Aug. 7, 2000) aff'd sub nom. Brown v. State, Dep’t of Corr., 768 A.2d 467 (Del.2001) (quoting Calhoun, 634 A.2d at 337).
. Adams v. Delmarva Power and Light Co., 575 A.2d 1103, 1106 (Del.1990) (citing State Farm Mut. Auto. Ins. Co. v. Nalbone, 569 A.2d 71, 75 (Del.1989)).
. Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d 551, 552 (Del.1988).
. Kofron v. Amoco Chemicals Corp., 441 A.2d 226, 231 (Del.1982).
. 19 Del. C. § 2304.
. Adams, 575 A.2d 1103, 1106 (Del.1990) (citing Nalbone, 569 A.2d at 75).
. Adams, 575 A.2d at 1106 (citing Nalbone, 569 A.2d at 75).
. 2 Stein on Personal Injury Damages Treatise § 13:5 (3d ed.) (2015); Restatement (Second) of Torts § 920A (1979).
. Restatement (Second) of Torts § 920A (1979).
. Restatement (Second) of Torts § 920A (1979).
. 77 A.L.R.3d 415 (1977) (citing Helfend v. S. Cal. Rapid Transit Dist., 2 Cal.3d 1, 84 Cal.Rptr, 173, 465 P.2d 61, 77 (1970)).
. 2 Stein on Personal Injury Damages Treatise § 13:5 (3d ed.) (2015).
. 77 A.L.R.3d 415 (1977) (citing Helfend, 84 Cal.Rptr. 184, 465 P.2d at 77).
. 77 A.L.R.3d 415 (1977).
. Yarrington v. Thornburg, 205 A.2d 1, 2 (Del.1964).
. Mitchell v. Haldar, 883 A.2d 32, 38 (Del.2005) (internal citations omitted).
. Stayton v. Delaware Health Corp., 117 A.3d 521, 526 (Del.2015).
. Fisher v. Beckles, 2014 WL 703755, at *2 (Del.Super. Feb. 10, 2014).
. State Farm Mut. Auto. Ins. Co. v. Nalbone, 569 A.2d 71, 75 (Del.1989).
. Nalbone, 569 A.2d at 73.
. Ameer-Bey v. Liberty Mut. Fire Ins., 2003 WL 1847291, at *1 (Del.Super. Apr. 7, 2003).
. Ameer-Bey, 2003 WL 1847291, at *4 (citing Nalbone, 569 A.2d at 76) (internal quotations omitted).
. Guy J. Johnson Transportation Co. v. Dunkle, 541 A.2d 551, 553 (Del.1988).
. Adams v. Delmarva Power and Light Co., 575 A.2d 1103 (Del.1990).
. State v. Brown, 2000 WL 33225298, at *5 (Del.Super. Aug. 7, 2000).
. The employee’s underinsured motorist policy expressly prohibited the benefits paid under the policy from applying for the benefit of a claim by any workers; compensation carrier. Adams, 575 A.2d at 1104-05.
. 19 Del. C. § 2363(e) states;
In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or the employee's dependents or personal representative would be entitled to recover in an action in tort. Any recoveiy against the third party for damages resulting from personal injuries or death only, after deducting expenses of recoveiy, 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 ....
. State v. Calhoun, 634 A.2d 335 (Del.1993).
. 29 Del. C. § 5524 (1993) stated:
(a) An employee who has 5 years of credited service, exclusive of service credited under § 5501(b)(4), (5) and (12) of this title, and becomes disabled shall become eligible to receive a disability pension beginning with the fourth month following the inception of his or her disability provided that such pension shall not be calculated under § 5527(a)(l)(i) of this title, unless a pension would have been payable under this chapter in effect immediately prior to the effective date of the 1976 Pension Act. Such individual shall cease to be eligible at the end of the month in which he or she recovers from disability and is again offered employment as an employee, if such recovery and offer of employment occurs before his or her attainment of age 60.
*157 (b) Such an employee shall be kept on the active payroll and receive credited service from the inception of his disability to the end of the third month following and shall receive payments at the same rate of compensation he received before he became disabled.
(c) An employee shall be deemed disabled for the purposes of this section if he has a physical or mental disability which prevents him from performing the duties of his position.
. Calhoun, 634 A.2d at 338.
. Id.
. Id.
. Simendinger v. National Union Fire Ins. Co., 74 A.3d 609 (Del.2013) (holding that the ability of a workers’ compensation insurer to assert a lien against the UIM payments made pursuant to the employer's UIM policy had been eliminated by the 1993 revisions to 19 Del. C. § 2363(e), and noting that reimbursement had been expressly limited by a provision providing that "reimbursement shall be had only from the third party liability insur-er_”).
. Ex Parte City of Birmingham, 988 So.2d 1035 (Ala.2008).
. The Alabama Supreme Court interpreted a section of the Alabama Workers’ Copipensation Act as requiring a proportional offset.
. Frank v. W.C.A.B (Marathon Physical Therapy, Inc.), 2013 WL 3960970, at *4 (Pa.Commw.Ct. Mar. 4, 2013).
. Progressive N. Ins. Co. v. Mohr, 47 A.3d 492, 512 (Del.2012) (citing Makin v. Mack, 336 A.2d 230 (Del.Ch.1975)).
. Associated Transp. v. Pusey, 118 A.2d 362, 364 (Del.Super.1955).
. CML V, LLC v. Bax, 28 A.3d 1037, 1045 (Del.2011).
. Id.
. Leatherbury v. Greenspun, 939 A.2d 1284, 1292 (Del.2007) (citing Ewing v. Beck, 520 A.2d 653, 658 (Del.1987)).
. Id.
. Id.
. State v. Fletcher, 974 A.2d 188, 194 (Del.2009).
. Dunkle, 541 A.2d at 553.-
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