SELECTIVE INSURANCE COMPANY, In its own right and alternatively as a subrogee of RITA GEKHT, Plaintiff,
PHILADELPHIA INDEMNITY INSURANCE COMPANY d/b/a DELAWARE AUTOMOBILE INSURANCE PLAN, Defendants.
Submitted: February 21, 2018
B. Cole, Esquire
William D. Rimmer, Esquire
Abigail M. LeGraw, Judge
Philadelphia Indemnity Insurance Company's Motion to
case arose after Plaintiff paid Rita Gekht workers'
compensation benefits following a work-related automobile
accident in Delaware. Defendant insures the employer of
Valerie McKeever, the other driver in the accident. In a
personal injury action arising from the accident, Gekht
settled her claim against McKeever for $75, 000. The
settlement agreement provided $30, 000 to Plaintiff in full
satisfaction of its workers' compensation lien, but
expressly reserved Plaintiffs right to pursue PIP subrogation
or workers' compensation subrogation for PIP-eligible
Plaintiff now brings a workers' compensation subrogation
claim against Defendant under 19 Del. C. § 2363
for PIP-eligible benefits. Plaintiffs insurance policy with
Gekht's employer is governed by Pennsylvania's
Workers' Compensation Act and Gekht's workers'
compensation benefits were paid under the Pennsylvania Act.
Defendant moved to dismiss Plaintiffs claim, arguing
Pennsylvania law applies and governs Plaintiffs subrogation
rights. The issue raised by Defendant's motion is whether
Pennsylvania law, where the workers' compensation claim
arose, or Delaware law, where the motor vehicle accident
occurred, governs the parties' subrogation dispute. I
find, based on the facts presently alleged in the complaint,
that conflict of law principles dictate Pennsylvania law
applies to Plaintiffs subrogation claim. My reasoning
following facts, and all permissible inferences, are drawn
from the complaint and are assumed true for purposes of this
motion. On August 28, 2015, Rita Gekht was operating a
vehicle within the scope of her employment with Max & Me
Inc. While driving southbound on Route 896 in Delaware,
Gekht's vehicle was struck by Valerie McKeever's
vehicle, causing Gekht personal injury.
the time of the accident, McKeever was working within the
scope of her employment with Advoserve Group Homes
("Advoserve"). At all relevant times, Plaintiff
Selective Insurance ("Selective") insured Max &
Me Inc., while Defendant Philadelphia Indemnity Insurance
Company ("Philadelphia") insured Advoserve. As a
result of the accident in August, Selective paid Gekht
workers' compensation benefits totaling $43,
Gekht filed a separate action in Delaware against McKeever
for negligently causing the accident. On May 22, 2017, Gekht
settled her action against McKeever for $75, 000. According
to the terms of the settlement agreement, Selective agreed to
accept $30, 000 in full satisfaction of its workers'
compensation lien. The settlement did not, however, limit any
workers' compensation subrogation claim for PIP-eligible
benefits. The settlement agreement provides, in relevant
part: "[t]his settlement does not limit or prohibit any
PIP subrogation or workers['] comp subrogation claim for
any PIP[-]eligible benefits."
August 28, 2017, Selective brought this action under 19
Del. C. § 2363, seeking reimbursement for all
PIP-eligible benefits from Philadelphia as the third-party
liability insurer. On November 13, 2017, Philadelphia filed
this motion to dismiss.
Philadelphia argues Selective has no claim under 19 Del.
C. § 2363 because choice of law principles dictate
Pennsylvania's Workers' Compensation Act applies.
Selective argues the motion is premature because Selective
has pleaded factual allegations sufficient to put
Philadelphia on notice of S elective's claim. In the
alternative, Selective argues promissory estoppel should
apply to keep Philadelphia from denying its subrogation
rights provided under the settlement agreement.
8. On a
motion to dismiss, the Court must determine whether the
"plaintiff may recover under any reasonably conceivable
set of circumstances susceptible of
proof." "If [the plaintiff] may recover, the
motion must be denied." A court may grant the motion if
"it appears to a reasonable certainty that under no
state of facts which could be proved to support the claim
asserted would plaintiff be entitled to
relief." When applying this standard, the Court
will accept as true all non-conclusory, well-pleaded
allegations. In addition, "a trial court must draw
all reasonable factual inferences in favor of the party
opposing the motion."
Based on the facts alleged in the complaint, choice of law
principles dictate Pennsylvania law applies to this
single count alleged in Selective's complaint is one for
subrogation for PIP-eligible benefits under Section 2363.
Philadelphia argues Pennsylvania law governs Selective's
subrogation rights, and therefore Selective has no cognizable
claim under the Delaware statute. Philadelphia contends that
Pennsylvania law has the most significant contacts with the
dispute because Selective's workers' compensation
policy with Max & Me Inc. is governed by
Pennsylvania's Workers' Compensation Act.
Delaware's choice of law analysis follows the "most
significant relationship" test from the Restatement
(Second) of Conflict of Laws Section 6.Under this test,
the governing law is that of the state with the most
significant relationship to the parties and the occurrence
based on the principles listed in Section 6. Section 6
provides the following seven factors that the Court must
consider in conducting a choice of law inquiry:
a. The needs of the interstate and international systems;
b. The relevant policies of the forum;
c. The relevant policies of other interested states and the
relative interests of those states in the determination of a
d. The protection of justified expectations;
e. The basic policies underlying the particular ...