Summary
interpreting 19 Del. C. § 2374(b), which was re-ordered to read as § 2374(e) in the 2007 amendments to the Act
Summary of this case from Maravilla-Diego v. MBM Constr. II, LLCOpinion
C.A. No. 04C-12-175 RRC.
Submitted: July 28, 2006.
Decided: October 4, 2006.
On Defendant's Motion for Judgment on the Pleadings. GRANTED.
On Plaintiffs' Motion in Limine. DENIED as MOOT.
Michael I. Silverman, Esquire, Silverman, McDonald Friedman, Wilmington, Delaware, Attorney for Plaintiffs.
Charles M. Oberly, III, Esquire, Karen V. Sullivan, Esquire, Oberly, Jennings, Rhodunda, P.A., Wilmington, Delaware, Attorney for Defendant.
Dear Counsel:
Before this Court is Defendant's Motion for Judgment on the Pleadings. The issue is whether 19 Del. C. § 2374 provides a remedy of strict liability to an employee who is injured in the course of his employment where the employer failed to maintain workers' compensation insurance at the time of the injury. For the reasons set forth below this Court finds that the statute does not create strict liability. Therefore, because Plaintiffs only alleged a cause of action based on strict liability against Defendant in the complaint, Defendant's Motion for Judgment on the Pleadings is GRANTED. Consequently, Plaintiffs' related Motion in Limine seeking to exclude evidence "negating liability of Defendant or imputing liability to Plaintiff" is DENIED as MOOT.
I. FACTS AND PROCEDURAL HISTORY
The operative facts are not in dispute. Plaintiff Gonzalez ("Employee") was an employee of Defendant. He filed a complaint on December 2, 2004 seeking damages for two injuries that occurred while working for Defendant. His wife, Plaintiff Feliciano, also filed a claim for loss of consortium.
Although injured workers are ordinarily precluded from maintaining an action at law against an employer for work-related injuries under 19 Del. C. § 2304, Employee filed an original action at law in this Court pursuant to 19 Del. C. § 2374 because Defendant did not have workers' compensation insurance at the time Employee's injuries occurred. The complaint relies solely on a strict liability theory; no allegations of negligence have been made.
II. STANDARD OF REVIEW
Superior Court Civil Rule 12(c) permits a party to move for judgment on the pleadings "[a]fter the pleadings are closed but within such time as not to delay the trial." When deciding a Rule 12(c) motion, the nonmoving party is entitled to the benefit of any inferences that may fairly be drawn from its pleading. The motion should be granted when no material issues of fact exist and the movant is entitled to judgment as a matter of law.
Harman v. Masoneilan Intern., Inc., 442 A.2d 487 (Del. 1982); Du Pont v. Du Pont, 90 A.2d 467 (Del. 1952).
Warner Comm., Inc. v. Chris-Craft Industries, 583 A.2d 962, 965 (Del.Ch. 1989).
III. DISCUSSION
A. The Issue: Where an Employee is Injured While Working for an Uninsured Employer, Does 19 Del. C. § 2374(b) Create a Remedy of Strict Liability, or Must the Injured Employee Assert a Claim of Negligence against the Employer?
The issue in this case centers on the interpretation of 19 Del. C. § 2374(b). That statute states:
Whoever, being an employer, refuses or neglects to comply with [the sections requiring an employer to maintain insurance] . . . shall also be liable to the employer's injured employees during continuance of such neglect or refusal, either for compensation under this chapter or in an action at law for damages. In such action, upon proof that the employer has not complied with this section, it shall not be a defense that the:
(1) Employee was negligent; or
(2) Employee had assumed the risk of the injury; or
(3) Injury was caused by the negligence of a fellow employee.
In its motion, Defendant readily concedes that under § 2374(b) an injured employee of an uninsured employer can proceed with an action at law, but Defendant contends that the employee must prove that the employer's negligence caused his injuries. Therefore, because Employee did not allege that Defendant was negligent in his complaint, Defendant argues that it is entitled to judgment as a matter of law.
In response, Employee argues that § 2374(b) implicitly provides a remedy of strict liability where an employer has failed to maintain workers' compensation insurance as statutorily required. Consequently, Employee maintains that the complaint is sufficient.
The traditional rule of statutory interpretation is to ascertain and give effect to the legislative intent. Here, neither party contends that § 2374(b) is ambiguous, and the Court agrees. Accordingly, this Court's role is "limited to an application of the literal meaning of the words." B. Nineteen Del. C. § 2374(b) Does Not Create Strict Liability for the Employer.
Coastal Barge Corp. v. Coastal Zone Indus. Control Bd., 492 A.2d 1242, 1246 (Del. 1985).
Id.
In support of its interpretation of the statute, Employee relies on the words "shall also be liable" to suggest that the statutory language mandates liability regardless of fault. Employee argues that this phrase suggests that Employee only needs to show that Defendant failed to maintain workers' compensation insurance at the time of the accidents in order to prove liability. Defendant therefore concludes that a showing of negligence is unnecessary. However, when read in context with the entire statute, this argument fails.
The additional provisions of § 2374(b) preclude an employer from raising certain defenses to negligence claims like comparative negligence or assumption of the risk. If this statute was a strict liability statute, defenses to negligence claims would be irrelevant to the action at law. Although Employee asserts that this part of the statute relates to the "apportionment of liability" against the employer, this argument is not convincing. This Court finds that the more logical construction of this section is that an employer's failure to maintain workers' compensation insurance results in losing certain defenses to negligence claims. This is a common penalty in many states for an employer's non-insurance. Moreover, if the General Assembly had wanted to prevent an employer from potentially arguing that it was not negligent, it could have easily added that to the list of unavailable defenses to an uninsured employer.
See 6 Arthur Larson Lex K. Larson, Larson's Workers' Compensation Law § 102.02[6] (2004) ("As in the case of failure to elect compensation coverage, so in the case of a covered employer's failure to insure, the employer is typically deprived of the common-law defenses of fellow servant, assumption of the risk, and contributory negligence, when sued in tort.").
Employee also claims that Defendant's interpretation essentially "reward[s]" an employer who has wrongfully failed to maintain workers' compensation insurance. But this argument is unavailing. Section 2374(b) merely provides an employee the option to proceed against an uninsured employer in the Superior Court, instead of before the Industrial Accident Board. Furthermore, § 2374(b) limits the defenses available to an employer. Alternatively, an employee can choose to proceed under the workers' compensation framework where an employee is of course relieved of the burden of proving negligence.
Thus, even though Employee's claim will not proceed in this Court, Employee can potentially still recover compensation for his injuries through his claim before the Industrial Accident Board (which has been stayed pending the resolution of the claim in this Court).
The Court further observes that when the General Assembly has intended to create strict liability, it has done so explicitly. The "exclusivity" provision within the purview of the Delaware Workers' Compensation Act, § 2304 states:
Every employer and employee . . . 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.
19 Del. C. § 2304 (emphasis added).
Because § 2374(b) does not contain language such as "regardless of the question of negligence," the General Assembly presumably intended that omission. Therefore, under § 2374(b), if an employee chooses to proceed with an action at law, rather than under the workers' compensation administrative framework, the employee must prove that the employer was negligent.
See Giuricich v. Emtrol Corp., 449 A.2d 232, 238 (Del. 1982) ("where a provision is expressly included in one section of a statute, but is omitted from another, it is reasonable to assume that the Legislature was aware of the omission and intended it").
In addition, the Court's conclusion that § 2374(b) does not impose strict liability on an uninsured employer has support from other jurisdictions that have construed similar statutes. Other courts, interpreting their own particular statutes, have often held that employees must prove negligence when proceeding in an action at law against an uninsured employer. For example, a Michigan statute, with somewhat similar wording to § 2374(b), provides
See, e.g., Bath Mills v. Odom, 168 F.2d 38 (4th Cir. 1948) (holding that the purpose of a South Carolina Workmen's Compensation law that penalized non-insurance was "to make the negligence of the employer the sole test of his liability"); Hossack v. Metzger, 156 F.2d 501 (8th Cir. 1946) (noting that because of the employer's non-compliance with the South Dakota's Workmen's Compensation Act requiring insurance, "appellee is subject to an action for damages for the injury of death of an employee resulting from negligence attributable to appellee"); Robles v. Preciado, 79 P.2d 504 (Ariz. 1938) (holding that an injured employee's action at law against and uninsured employer "still remains in its essence an action in which liability is based upon the negligence of the employer, and, unless such negligence exists, there can be no recovery"); Conway v. Park, 31 N.E.2d 79 (Ind.Ct.App. 1941) (stating that where an employer did not carry compensation insurance, "[t]he Workmen's Compensation Act does not relieve the injured employee from the responsibility of alleging and proving facts sufficient to constitute an action at law in negligence if he elects to pursue his remedy at law); Tonioli v. Hilbert, 781 N.Y.S.2d 628 (N.Y.Sup.Ct. 2004) (stating that an injured employee who exercises the right to sue an uninsured employer for damages under the Workers' Compensation Law "must demonstrate negligence on the part of the employer"). See also J.T.W., Annotation, Workmen's compensation: civil and criminal consequences of failure to insure, or otherwise secure compensation, 21 A.L.R. 1428 (1922).
The employee of an employer who violates the provisions of section 171 or 611 [duty to insure] shall be entitled to recover damages from the employer in a civil action because of an injury that arose out of and in the course of employment notwithstanding the provisions of section 131 [exclusivity provision].
This Michigan statute further provides:
In an action to recover damages for personal injury sustained by an employee in the course of his employment or for death resulting from personal injuries so sustained it shall not be a defense:
(a) That the employee was negligent, unless it shall appear that such negligence was wilful.
(b) That the injury was caused by the negligence of a fellow employee.
(c) That the employee had assumed the risks inherent in or incidental to, or arising out of his employment, or arising from the failure of the employer to provide and maintain safe premises and suitable appliances.
Id. at § 418.141.
A Michigan court held that an injured employee who brings an action at law against an uninsured employer pursuant to this statute must prove negligence.
Smeester v. Pub-N-Grub, Inc., 527 N.W.2d 5 (Mich.Ct.App. 1995), appeal denied, 539 N.W.2d 514 (Mich. 1995) ("because [the statute permitting an employee to sue an uninsured employer at law] appears to restore the employee's common-law right to sue the employer, a cause of action otherwise eliminated by [the exclusivity provision of Michigan's Workers Disability Compensation Act], limitations on that common-law action will not be presumed lightly, and statutes will not be extended by implication to abrogate established rules of the common law").
After consideration of the probable intent of the General Assembly, the language of the statute, and how other states have treated similar statutes, this Court agrees with Defendant that § 2374(b) is not a strict liability statute. Any determination that an uninsured employer should be subject to strict liability to an injured employee should come from the General Assembly and not from this Court. Therefore, because Employee failed to state a cause of action against Defendant, Defendant is entitled to judgment on the pleadings.
V. CONCLUSION
For the above reasons, Defendant's Motion for Judgment on the Pleadings is GRANTED. Accordingly, Plaintiffs' Motion in Limine is DENIED as MOOT. The October 10th pretrial conference and the October 16th trial are cancelled.