Opinion
C.A. No. 06C-11-243 WCC.
Submitted: April 3, 2007.
Decided: July 31, 2007.
On Defendant Bradford E. Laramore's Motion to Dismiss. GRANTED.
Beverly L. Bove, Esquire; Beverly L. Bove, Attorney at Law; 1020 West 18th Street; P.O. Box 1607; Wilmington, Delaware 19899. Attorney for Defendant.
J.R. Julian, Esquire; J.R. Julian, P.A.; 824 Market Street, Suite 1001; P.O. Box 2171; Wilmington, Delaware 19899-2171. Attorney for Plaintiff.
MEMORANDUM OPINION
Introduction
Before this Court is Bradford E. Laramore's (the "Defendant") Motion to Dismiss Plaintiff Verizon Delaware, Inc.'s Complaint (the "Motion"). Upon review of the record and briefs filed in this matter, and for the reasons set forth below, this Court hereby grants the Motion.
Facts
On December 21, 1998, during the course of his employment with Verizon Delaware, Inc. ("Verizon"), the Defendant was in an automobile accident. The accident caused Verizon to pay Mr. Laramore $19,359.48 for workers' compensation total disability and medical benefits. Thereafter, a lawsuit was filed on behalf of Mr. Laramore against the driver of the other car, Patrick Phelan, (the "third-party case"), and on June 9, 2003 the third-party case was settled for $110,000. Ms. Bove, counsel for the Defendant, escrowed from the settlement funds the amount of the potential workers' compensation claim but on July 26, 2006 distributed those funds to the Defendant.
Compl. Ex. 4.
Compl. ¶ 17.
On November 27, 2006, Verizon filed a complaint seeking a declaratory judgment against Mr. Laramore. Verizon asserts it has a right to reimbursement of the $19,359.48 it paid to Mr. Laramore, which the Defendant disputes. The Defendant has filed a motion to dismiss asserting that the Plaintiff is precluded from recovering the workers' compensation payment as they failed to take action to enforce their statutory rights within the statutory period of limitations. This is the Court's decision on this motion.
Standard of Review
A motion to dismiss must be decided solely upon the allegations set forth in the complaint, and if a plaintiff may recover under any reasonably conceivable set of circumstances, a motion to dismiss must be denied. In determining the merits of a motion to dismiss pursuant to Superior Court Civil Rule 12(b), the court must accept all allegations within the complaint as true, and only if the plaintiff could prevail under no set of facts inferred from the pleadings may the court dismiss the complaint for lack of merit, as a matter of law or fact.
See Growbow v. Perot, 539 A.2d 180, 187 (Del. 1988); see also Kofron v. Amoco Chems. Corp., 441 A.2d 226, 227 (Del. 1982).
State Use of Certain-Teed Products Corp. v. United Pacific Ins. Co., 389 A.2d 777, 778 (Del.Super.Ct. 1983); Diamond State Tel. Co. v. Univ. of Del., 269 A.2d 52, 58 (Del.Super.Ct. 1970).
Discussion
The central issue before the Court is whether Verizon filed its complaint prior to the expiration of the applicable statute of limitations and the Court concludes it did not. Because the right of Verizon to be reimbursed for the money paid for a workers' compensation claim arises from Section 2363 of the Workers' Compensation Statute, it follows that Verizon is seeking recovery based on a statute. Pursuant to 10 Del. C. § 8106, actions to recover damages based on a statute must be commenced within "3 years from the accruing of the cause of such action."In a workers' compensation claim, the employer does not have the right to seek reimbursement directly from an employee, but has the right to seek reimbursement if the employee recovers damages from a third-party. Thus, here Verizon could not seek recovery directly from Mr. Laramore, but once Mr. Laramore's third-party case was resolved in his favor, Verizon was entitled to reimbursement from the third-party's payment of damages to Mr. Laramore. The Court finds that there is no dispute that Verizon was aware of the settlement in June of 2003 and thus finds their right to reimbursement began on July 11, 2003 when Mr. Laramore received his portion of the settlement from Mr. Phelan. As a result, Verizon's right to enforce the recovery of the workers' compensation payment it made to Mr. Laramore expired on July 11, 2006, three years from the day Verizon had a statutory right to recovery. This case was commenced on November 27, 2006, nearly five months too late. As such, this action is barred pursuant to 10 Del. C. § 8106 and must be dismissed.
19 Del. C. § 2363(e) states as follows:
(e) 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 recovery against the third p arty for dam ages resulting from personal injuries or death only, after deducting expenses of recovery, 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, except that for items of expense which are precluded from being introduced into evidence at trial by § 2118 of Title 21, reimbursement shall be had only from the third party's liability insurance coverage available for the injured party, after the insured party's claim has been settled or otherwise resolved.See also, Duphily v. Delaware Electric Coop., Inc., 662 A.2d 821, 834 (Del. 1995).
In addition, the Court notes that Verizon was also made aware of the third-party settlement on June 9, 2003 and at no time during the third-party case did Verizon intervene in the action. Aff. Bove, Ex. A.
"[R]eimbursement shall be had only from the third party liability insurer and shall be limited to the maximum amounts of the third party's liability insurance coverage available for the injured party, after the injured party's claim has been settled or otherwise resolved." 19 Del. C. 2363(e).
The Court notes that the majority of the Plaintiff's arguments regarding this motion relates to the ethical obligations of Ms. Bove in the handling of this claim. While the Court agrees that the circumstances surrounding the distribution of the escrow funds on July 26, 2006 are strange and it is unclear why experienced counsel did not resolve th is matter years a go, such co nduct doe s not excu se Verizon's lack of action to protect its rights and to aggressively assert its claims. While the Defendant acknowledged that workers' compensation benefits had been paid, it appears that there was a dispute as to the appropriate amount of the lien when the third-party case was settled. Instead of resolving the dispute it was left in limbo without additional correspondence between Ms. Bove and Verizon. Once Verizon `s right to obtain reimbursement expired, Ms. Bove was ethically required to pay the escrowed balance to her client. It is illogical to assert that Ms. Bove was obligated to protect the interest of Verizon or had some ethical obligation to file an action to resolve this dispute. Verizon is a sophisticated business represented by experienced counsel which was quite capable of protecting their own interest. Verizon has made a mistake and is now looking to the Court to provide an avenue to excuse their negligence. Unfortunately for Verizon they have let the statute of limitations run out and regardless of the merit of the underlying workers' compensation claim, has eliminated the Court's ability to correct the course of this ship.
Because of the assertions made by Mr. Julian, the Court will forward to Disciplinary Counsel the pleadings that have been filed in this matter for whatever action they believe is appropriate.
Counsel for the Plaintiff has advised the Court that at the time of the settlement of the third-party complaint Verizon was self-administering their workers' compensation matters as they were self-insured and self-administered. Verizon had outsourced their administration of workers' compensation claims to a third-party administrator and in the process of outsourcing the assignment of adjusters there was no decision made regarding filing a lawsuit against Mr. Laramore until the case was in default sometime in November of 2006 and Mr. Julian was authorized to proceed with this litigation. (Tr. 3-4, Feb. 28, 2007).
Conclusion
For the foregoing reasons, the Defendant's Motion to Dismiss is hereby GRANTED.
IT IS SO ORDERED.