Opinion
C.A. No. 07C-02-289 FSS.
Submitted: March 17, 2009.
Decided: April 2, 2009.
Upon Defendant's Motion in Limine. — DENIED .
Benjamin Wetzel, III, Esquire, Wetzel Associates, Wilmington, DE.
Sherry Fallon, Esquire, Tybout, Redfearn Pell, Wilmington, DE.
Dear Counsel:
This a breach of contract case between Plaintiff and her no-fault carrier, State Farm, stemming from Defendant's alleged failure to cover accident-related expenses. This decides Defendant's motion in limine to exclude accident-related medical bills that Plaintiff, Angela Schulze's, health insurer, Meridian, has paid, reduced or written-off. Specifically, the court must determine the collateral source rule's applicability and whether Plaintiff may "board" the full value of her medical bills, even though Meridian paid a reduced amount and the bills are no longer outstanding.
Meridian paid some PIP-eligible expenses and now holds a lien against Plaintiff. At trial, Plaintiff seeks to enter her medical expenses, despite the payments Meridian made and zero balances owed.
Defendant argues that the collateral source rule does not translate into the same entitlements in a first-party contractual context, and Plaintiff is not entitled to enter the medical bills' full value. Defendant relies on State Farm Mut. Auto. Ins. Co. v. Nalbone and a bench ruling in Mills v. State Farm Auto. Ins. Co. for the proposition that Plaintiff "lost nothing" and should "get nothing" because the medical bills have been satisfied. Mills is not helpful, however, and Defendant's argument is not supported by Nalbone.
569 A.2d 71 (Del. 1989).
C.A. No. 02C-11-026 WCC (BENCH RULING) (Nov. 17, 2004).
The collateral source rule, first recognized in Delaware by Yarrington v. Thornburg, prevents a tortfeasor from reaping the benefits of "monies received by the injured person from sources unconnected with the [tortfeasor]." The principle behind the collateral source rule is that a tortfeasor should not "bear less than the full cost of his negligent conduct," even if the victim has otherwise been made whole. To ensure no benefit is conferred, any expense that has been reduced to accommodate the victim will be consigned to the tortfeasor at the original, full price.
205 A.2d 1 (Del. 1964).
Id at 2.
Nalbone, 569 A.2d at 73.
Estate of Farrell ex rel. v. Gordon, 770 A.2d 517, 520 (Del. 2001); Onusko v. Kerr, 880 A.2d 1022, 1024 (Del. 2005).
Despite its being a tort law principle, the collateral source rule has been applied to our no-fault statute. Nalbone holds that to properly adhere to the policy behind the statute, the collateral source rule should be analyzed under contract law. Therefore, Nalbone specifically limits double recovery in PIP to instances where the injured party has paid consideration to the collateral source, in effect, contracting for a double recovery.
Nalbone, 569 A.2d at 75.
Id. (holding that "the policy goals of no-fault insurance can best be served by application of principles of contract rather than tort law").
Id. ("If a person pays both auto and health insurance premiums, he has paid the expected value of loss due to injury in an automobile accident twice. Accordingly, if an injury occurs he should be permitted, as a matter of contract law, to receive a double recovery. . . .").
The fact that a plaintiff and a PIP carrier have a first-party contractual relationship has limited effect on the outcome. Aside from the requirement that the injured party pay consideration to a collateral source under the collateral source rule, the rule is otherwise unchanged and the PIP carrier is treated as the tortfeasor. Here, that is a logical result because our "precisely drawn" no-fault statute specifically limits an injured party from obtaining medical expenses against the tortfeasor. Given that, under our no-fault statute, the PIP carrier is the ultimate party to obtain subrogation from the actual tortfeasor.
See, e.g., Id.; Ameer-Bey v. Liberty Mut. Fire Ins. Co., 2003 WL 1847291 (Del.Super. Apr. 7, 2003); In re Nationwide Mut. Ins. Co. v. Wooters, 1996 WL 280778, *6 (Del.Super. Jan. 31, 1996), aff'd, 682 A.2d 628 (Del. 1996).
21 Del. C. § 2118(g)-(h); Wooters, 1996 WL 280778 at *6.
Wooters, 1996 WL 280778 at *7 (collected cases).
Considering the above case law, Defendant's "lost nothing — get nothing" argument is unpersuasive. Moreover, Mills is not helpful because a collateral source rule argument was not made in Mills. Here, regardless of whether a balance is owed or a reduced rate satisfied the bill, a double recovery is permissible because Plaintiff paid separate consideration for her healthcare benefits. In that regard, Plaintiff satisfies the collateral source rule's application in the no-fault context.
Moreover, because Defendant is the ultimate party to pursue the tortfeasor here, Plaintiff should not be otherwise limited in her collateral source rights and should receive its full benefit. Under this case's facts, Plaintiff may board the full value of her medical expenses. Therefore, Defendant's motion in limine is DENIED.
IT IS SO ORDERED.