Opinion
C.A. No. 98C-01-118 (CHT).
July 24, 2006.
ORDER
This 24th day of July, 2006, upon review of the order of remand from the Delaware Supreme Court along with the submissions filed by the parties in support of their respective positions, it appears that:
1. On July 15, 1997, Mr. Saporito sustained serious injuries in a vehicle accident during the course of his employment with Bell Atlantic-Delaware, Inc. Because those injuries were so incurred, Bell Atlantic paid directly to or on behalf of Mr. Saporito the wages he was not able to otherwise earn as well as medical expenses incurred as a result. Those payments were based upon the existence of personal injury protection ("PIP") insurance purchased by Bell Atlantic along with worker's compensation benefits that Bell Atlantic was required by law to provide.
Bell Atlantic is now known as Verizon, Inc. However, for purposes of clarity, the entity will continue to be referred to as Bell Atlantic.
2. On October 4, 1999, Mr. Saporito settled all third-party claims related to the vehicle accident for $1,235,000. Bell Atlantic thereafter sought subrogation to recover the payments on Mr. Saporito's behalf. That effort was unsuccessful and the instant litigation commenced.
3. On or about December 12, 2002, in response to discussions between counsel as well as conferences with the Court, counsel for Mr. Saporito forwarded a check to Bell Atlantic in the amount of $85,135.39. That figure was comprised of the funds paid to and/or on behalf of Mr. Saporito, $83,449.54 in lien funds allegedly advanced, and $1,685.85 in interest from an unspecified point in time based upon an unknown rate. Bell Atlantic's lien was subsequently reduced to $46,299.10 following argument held before this Court on April 5, 2004.
4. On appeal, the Delaware Supreme Court reversed that decision and remanded the controversy to this Court, holding that Bell Atlantic was entitled to reimbursement of all monies paid to Mr. Saporito in excess of the $15,000 PIP coverage for the vehicle involved when Mr. Saporito was injured. The Court further confirmed that Bell Atlantic disbursed a total of $156,701.52 in wages and medical expenses. Given those parameters, this Court has determined what is now due Bell Atlantic and explains that decision in the manner set forth below.
Bell Atlantic-Delaware, Inc. v. Saporito, 875 A.2d 620, 621 623-624 (Del. 2005).
5. At the outset, it should be noted that neither side disputes the applicability of Keeler v. Hartford Mut. Ins. Co. and that the extent of Bell Atlantic's right to subrogation should be reduced by its pro rata share of the costs of recovery as a result. The value of Bell Atlantic's lien will therefore be calculated in light of the Supreme Court's opinion on remand and the Keeler decision regarding the sharing of the costs of recovery from any third-party litigation.
672 A.2d 1012 (Del. 1996). In addition, the Delaware Supreme Court upheld this Court's reliance on Keeler in determining the percentage the costs of recovery Bell Atlantic was to bear. Bell Atlantic-Delaware, 875 A.2d at 625-626.
6. Determining the current value of Bell Atlantic's lien consists of a two step process. First, the original amount of Bell Atlantic's lien must be determined. Second, the question of whether any interest is due must be addressed. If the answer is in the affirmative, the Court must determine the applicable rate and the proper accrual period.
8. Bell Atlantic claims that it is entitled to reimbursement in the amount of $141,701.52. It arrives at that figure by adding all the expenditures made to or on behalf of Mr. Saporito, $156,701.52, and reducing that figure by the $15,000. After Mr. Saporito's remittance and its Keeler share of recovery costs are subtracted, the balance due to be paid in that regard is $20,634.
8. Mr. Saporito asserts that Bell Atlantic should be bound by a letter forwarded by its counsel dated November 8, 1999, which set the amount of the lien at $125,813.60. That same correspondence requested that the aforementioned amount be placed in escrow until resolution of the matter. Mr. Saporito goes on to argue that when that amount is reduced by Bell Atlantic's Keeler share of the costs of recovery and the prior remittance, he does not owe anything else.
9. As noted above, the amount of the lien remaining to be paid is determined by subtracting the amount of the PIP coverage as well as the Keeler costs of recovery along with monies previously tendered to Bell Atlantic, from the amounts otherwise paid to or on behalf of Mr. Saporito. Since the other requisite figures are established, only the Keeler contribution needs to be determined before completing the calculations in question.
10. In order to determine the Keeler costs, the Court must calculate the percentage the amount of the lien ($141,701.52) comprises of the total recovery ($1,235,000.00). That figure, eleven and one-half percent (11.5%) must in turn be multiplied by the costs of litigating the third party action ($431,701.63), or $49,645.69. Subtracting the monies previously paid by Mr. Saporito ($85,135.39) along with the Keller costs ($49,645.69), from the totals paid by Bell Atlantic, the amount remaining to due Bell Atlantic, absent any award of interest, is $6,920.44, without interest.
11. Bell Atlantic suggests that the Keeler percentage is 8.72 percent (8.72%). How Bell Atlantic arrived at that figure is unknown. However, it is clear that percentage of the total third party recovery ($1,235,000) equals $107,693, which is not the amount of the lien claimed by Bell Atlantic ($141,701.52), and 8.72 is the number of times that the total recovery is divisible by the lien Bell Atlantic seeks to enforce. The correct fraction should be $141,731.52/$1,235,000.00, which, again, works out to be 11.5 percent (11.5%). Further, while Mr. Saporito's estoppel argument is appealing, this Court's authority on remand has already been defined by the Delaware Supreme Court. In short, the arguments and calculations presented by the parties to the contrary are not persuasive.
12. Bell Atlantic has identified January 1, 2000 (3 months after the settlement of Mr. Saporito's personal injury claim, as the date that interest should have begun accruing and asks the Court to award interest at the rate of ten percent (10%) interest of that amount per annun thru September 16, 2005, the date it formally petitioned this Court for an award of interest. The total amount of interest due on the $20,634 that Bell Atlantic claims is due, is therefore $11,780.39.
Although Bell Atlantic does not expressly say so, that rate appears to be based upon 6 Del. C. § 2301, which applies to interest on judgments, at the federal reserve rate in effect at the time the obligation became due plus five percent (5%).
13. Mr. Saporito argues in response that his obligations were satisfied with the initial remittance of $85,135.39 and no interest is due. In the alternative, he asserts that Moskowitz v. Mayor and Council of Wilmington established that this Court has discretion regarding interest where the party seeking interests has caused delay in payment. Since Bell Atlantic, according to Mr. Saporito, brought about the delay, it is not entitled to any interest on any amount that is determined to be due.
391 A.2d 209 (Del. 1978).
14. The Court finds Mr. Saporito's alternative view more persuasive. It notes the roles that Bell Atlantic played or didn't play in the personal injury litigation, the confusion Bell Atlantic generated through its record keeping or the lack thereof and the changes in the positions taken relative to what was owed as a lien as well as how the obligation arose. Given these circumstances, Bell Atlantic is not entitled to anything over that it paid Mr. Saporito minus the deductions referenced above until the date of this order. From that point forward, any interest shall be calculated according to the legal rate applicable to any judgment under Delaware law.
For example, the record reveals that Mr. Saporito tendered a check for $83,449.54 to Bell Atlantic on August 16, 2000. That tender was based upon the lien figure provided by Bell Atlantic and reduced by its Keeler contribution to the recovery costs. Bell Atlantic returned the check some five months later on January 24, 2001, and chose to litigate. Further and as noted above, on December 12, 2002, Mr. Saporito forwarded a second check in the amount of $85,135.39 which Bell Atlantic accepted according to it without prejudice to its position that the lien was greater.
In light of the foregoing, the Court concludes that Bell Atlantic is entitled to, and Mr. Saporito must remit, $6,920.44, plus any interest due according to paragraph 14 above from this date until payment is made. That figure is based upon the total lien amount ($156,701) minus Bell Atlantic's share of the recovery costs ($49,645.69), the $15,000 PIP coverage and the amount originally tendered, ($85,135.39).
Given the Delaware Supreme Court's definition of the lien in question, the division between the "lien" and applicable "interest" drawn by Mr. Saporito in his December 12, 2002 tender of $85,135.39, is of no consequence, legally or factually.