WORKERS’ COMPENSATION REPORTS
TO SET-OFF OR NOT TO SET-OFF? – THAT WAS THE FIRST IMPRESSION QUESTION IN KELLEY V. PERDUE
A first impression issue in Delaware was before the Industrial Accident Board when
the Employer, Perdue, filed a Request for a Credit of one-half of the total payments
of short term disability payments made against total disability benefits paid to
Claimant during her 90 day period of total disability.
It is well established that Delaware law does not allow for “double dipping” – more
than one recovery for a single loss. To avoid the “double dip,” compensation benefits
can be reduced, or set-off, by the receipt of unemployment insurance benefits.
Although set-off cases are not uncommon, this case presented a first-impression
issue because both the Employer and the Employee/Claimant were equally contributing
to the premium for a short term disability policy, from which the Claimant received
short term disability benefits totaling $2,163.71.
The Board found this case to be a “hybrid” of several set-off cases and relied on
the reasoning in Johnson , Bermel ,and Brown , to hold that the Employer
was entitled to a set-off because by paying one half of the premiums, the Employer
“furnished” a portion of the benefits which prevented the Claimant from experiencing
wage loss, while also preventing a “windfall” to the Claimant. The Board relied
on Calhoun  and Adams  to find that the Claimant’s contribution entitled
her to recover benefits to which she would not normally receive had she not contributed
to the short term disability premiums. Ultimately, the Board upheld fundamental
fairness doctrine to award an off-set to the Employer equal to its percent contribution,
while allowing the Claimant to recover benefits equal to her contribution.
Lisa Kelley v. Perdue, Hearing No. 1414775 (Jan. 22, 2015).
 Johnson Transportation Co. v. Dunkle, 5418 A.2d 551, 53 (Del. 1988) (an employee
cannot secure double recovery for a single loss for both sources of recovery and
make from the Employer).
 Bermel v. Liberty Mutual Fire Insurance, 56 A.3d 1062 (Del. 2012) (distinguishing
between cases where Claimants contribute to wage continuation/supplemental plans
and where wage continuation/supplemental plans are fully Employer funded).
 State v.Brown, 768 A.2d 467 (Del. 2001) (a set-off should be awarded where the
Employer provided benefits prevent the employee from suffering a wage loss, thereby
ensuring the employee does not enjoy a windfall at Employer’s expense).
 State v. Calhoun, 634 A.2d 335 (Del. 1993) (Johnson v. Dunkle is distinguishable
where an Employee receives duplicate benefits but has furnished independent consideration).
 Adams v. Delmarva Power & Light Co. 575 A.2d 1103 (Del. 1990) (a claimant who
provides independent consideration for additional coverage creates contract rights
in benefits received from the Employer).
LITIGATION CASE LAW UPDATE
PIP CLAIMS MUST BE PRESENTED IN TWO YEARS FROM THE DATE OF ACCIDENT, NOT TWO YEARS
PLUS 90 DAYS
In a recent Superior Court Opinion of Davis v. State Farm Mutual Automobile Insurance
Company, Judge Butler explained that Plaintiff is not entitled to bring a PIP claim
within two years plus 90 days absent a showing that the bills were impractical to
submit within two years. Plaintiff’s counsel had argued that plaintiffs are “routinely”
provided two years plus 90 days to bring a claim and cited the case of State Farm
Mutual Automobile Insurance Company v. Ciamaricone for the proposition that the
Court routinely allows a 90 day extension without requiring a showing of impracticability,
but the Court explained that there is no citation from the Court as to any other
case where the Court “generally” allows an additional 90 days. In the Court’s
words, there is no “other case in which this Court ‘generally’ allowed such a ‘liberal’
interpretation to clear, unambiguous statutory language, and we have been unable
to unearth one.”
Plaintiff also wanted the Court to reject any defenses alleging that the Spine Care
Delaware, LLC v. State Farm Mutual Automobile Insurance Company prohibits additional
defenses when not raised in 30 days, but Judge Butler wrote that even if State Farm
had not replied to the Plaintiff’s submission “the correct remedy would be to apply
the rate of interest provided by 21 Del. C. § 2118B(c) to the amount of unpaid benefits
due from the insurer.” The Court also pointed out that State Farm continued to
maintain the same defenses throughout litigation. The Second Affirmative Defense
in the case alleged that the Plaintiff failed to submit medical bills and expenses
within two years from the date of the accident.
“It is prudent to raise specific denials in the Affirmative Defenses and not rely
on general assertions in PIP cases,” says Patrick G. Rock, Esquire, the attorney
representing State Farm in the case. If you have any questions concerning the
“grace period” for PIP claims or questions of whether interest is owed, feel free
to call Patrick G. Rock, Esquire or one of the attorneys in the Liability Department.
SUPERIOR COURT AFFIRMS UIAB DECISION TO DENY UNEMPLOYMENT BENEFITS TO JUSTLY TERMINATED
On February 10, 2015, Superior Court Judge T. Henley Graves affirmed the opinion
of the Unemployment Insurance Appeals Board (UIAB) that an employee who is terminated
for just cause is ineligible for Unemployment Insurance Benefits.
The Claimant, a poultry processing line employee for Mountaire Farms of Delaware,
was terminated due to insubordination arising out of a reprimand for poor work performance.
The effects of Claimant’s insubordination disrupted the normal operations of the
workplace to the extent where she was suspended by her employer, pending a termination
decision. After Claimant refused to sign documents related to her suspension, she
was escorted off of the premises, and ultimately terminated.
Claimant’s unemployment insurance benefits were denied, as it was determined that
she was terminated for just cause. Claimant made two appeals; however, the UIAB
affirmed the decision of the Claims Referee that Claimant’s benefits should be denied.
Claimant’s subsequent appeal to the Superior Court, pursuant to 19 Del. C. 3323,
lead to a substantial review of her case. The Court ruled that “benefits from Delaware’s
Unemployment Compensation Act (‘The Act’) are ‘only available to those involuntarily
unemployed without just cause and those voluntarily unemployed for good cause.'”
The Court found that Claimant’s willful and wanton behavior and/or behavior against
her employer’s standards was just cause for her termination, and as such, she is
disqualified from receiving benefits.
The concern, however, was that whether or not Claimant was aware of company polices
as to employee behavior and discipline. The Court, applying Parvusa v. Tipton Trucking
Company, had to determine whether a policy existed and whether the employee knew
about the policy, and if so, how the employee knew about the policy.
Ultimately, the Court decided that Claimant was aware of the policy, as the employer
was able to produce a signed acknowledgement that the employee received the employer’s
company policy, which indicates that insubordination, among other violations of
company policy, may lead to termination.
For further discussion of this matter, please call one of our attorneys in the Liability
or Employment Law group.
Norgues v. Mountaire Farms of Delaware, Inc. (Feb. 10, 2015).
4th Annual Workers’ Compensation Law & Practice
Amy M. Taylor will be participating as a presenter in the 4th Annual Workers’ Compensation
Law and Practice CLE on Thursday, March 5, 2015 at the Crowne Plaza Wilmington North,
630 Naamans Road, Claymont, Delaware. Registration begins at 8:00 a.m. and the presentations
begin at 8:30 a.m. until 4:30 p.m. Stay ahead of emerging developments in the legislation
and practice to better serve your clients.
On February 11, 2015, Heckler & Frabizzio received a plaque for their 100% Participation
in the Combined Campaign for Justice 2014. The Combined Campaign for Justice works
to provide legal aid to low-income Delawareans.