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Henry v. The Cincinnati Insurance Co.

Superior Court of Delaware

July 31, 2018


          Submitted: May 10, 2018

         Upon Defendant Cincinnati Insurance Company's Motion to Dismiss GRANTED

          Jonathan B. O'Neill, Esq., Jennifer D. Donnelly, Esq., Kimmel, Carter, Roman, Peltz & O'Neill, P.A., Attorneys for Plaintiffs.

          Krista E. Shevlin, Esq., William A. Crawford, Esq., Franklin & Prokopik, Attorneys for Defendant.


          Honorable Andrea L. Rocanelli, Judge.


         On September 29, 2015, Plaintiff John Henry ("Employee") was operating a motor vehicle in the course of his employment with Horizon Services ("Employer") when he was rear-ended by a third-party tortfeasor. Employee sustained injuries to his neck, back, and right shoulder. The tortfeasor was insured by Liberty Mutual with a policy limit of $50, 000.00 per occurrence. The Employer's vehicle was insured under a policy with Cincinnati Insurance Company ("CIC") that included underinsured motorist ("UIM") coverage with limits of $1, 000, 000.00 per accident.

         Following the accident, Employee accepted workers' compensation for his injuries. In addition, on or about January 11, 2018, Employee settled his liability claim with the tortfeasor and received the tortfeasor's $50, 000.00 policy limit. Employee then made a claim with CIC for UIM coverage under Employer's policy, which CIC denied. Accordingly, on March 12, 2018, Employee and his wife, Darlene Henry, (collectively, "Plaintiffs") filed this lawsuit seeking underinsured motorist benefits from CIC. Plaintiff Darlene Henry also raises a loss of consortium claim.

         CIC filed a motion to dismiss in lieu of an answer on April 23, 2018. CIC argues that the workers' compensation benefits Employee received under the Delaware Workers' Compensation Act ("WCA")[1] constitute Employee's exclusive remedy against Employer. Accordingly, CIC argues that Employee is not entitled to recover UIM benefits under Employer's insurance policy as a matter of law. In response, Plaintiffs argue that the WCA was amended to allow an employee to recover both workers' compensation benefits and UIM benefits under an employer's insurance policy. Plaintiffs argue that Employee's claim to UIM benefits is subject to the post-amendment version of the WCA, such that Employee is entitled to UIM benefits under Employer's policy with CIC. This is the Court's decision on CIC's motion to dismiss.


         As a preliminary matter, the Court needs to determine whether CIC's motion shall be treated as a motion to dismiss under Superior Court Rule of Civil Procedure 16(b)(6), or a motion for summary judgment under Superior Court Rule of Civil Procedure 56. If a party attaches matters outside of the pleadings to a motion to dismiss brought under Rule 12(b)(6), the motion "shall be treated as one for summary judgment and disposed of as provided in Rule 56."[2] To determine whether the presentation of matters outside of the pleadings will convert a motion to dismiss into a motion for summary judgment, the Court analyzes "whether the extraneous matters are integral to and have been incorporated within the complaint and whether they have been offered to the court to establish the truth of their contents."[3] "If the extraneous matters have been offered to establish their truth, the court must convert the motion to dismiss to a motion for summary judgment."[4]

         Here, CIC attached multiple exhibits to the motion to dismiss, including a copy of the complaint sent to the Delaware Insurance Commissioner's office, Employee's workers' compensation records, the Employer's insurance policy with CIC, and a copy of the bill amending the WCA.[5] However, none of these documents are offered for their truth, as the parties do not dispute that Plaintiffs filed suit against CIC, that Employee accepted workers' compensation, that Employer was insured with CIC, or that the WCA was amended. Therefore, the documents attached by CIC meet the "narrow exception to the prohibition against extraneous matter, "[6] such that the CIC's motion shall still be treated as a motion to dismiss under Rule 12(b)(6).

         Delaware is a notice pleading jurisdiction.[7] Therefore, to survive a motion to dismiss, a complaint only needs to give general notice of the claim asserted.[8] In deciding a motion to dismiss under Rule 12(b)(6), the Court shall accept all well- pleaded allegations as true and make all reasonable inferences in favor of the non-moving party.[9] Factual allegations, even if vague, are well-pleaded if they provide notice of the claim to the other party.[10] The Court should deny the motion if the claimant "may recover under any reasonably conceivable set of circumstances susceptible of proof."[11]


         The central question in this litigation is whether Employee's claim for UIM benefits is subject to the pre-amendment or post-amendment version of the WCA. CIC argues that the pre-amendment version of the WCA applies, such that Employee cannot receive UIM benefits because his workers' compensation benefits constitute his exclusive remedy. By contrast, Plaintiffs argue that the post-amendment version of the WCA applies because Employee's claim for UIM did not arise until Employee settled with the tortfeasor for the full policy limits, which was after the amendment went into effect. Accordingly, Plaintiffs argue that Employee can recover UIM benefits in addition to workers' compensation benefits.

         I. The Evolution of the WCA

         In Simpson v. State, this Court considered, as an issue of first impression, whether an employee who accepts workers' compensation may also accept UIM benefits under the employer's insurance policy.[12] The case arose after the plaintiff sustained injuries in a car accident that occurred in the course and scope of her employment.[13] The plaintiff accepted workers' compensation for her injuries, and also received the policy limits of the tortfeasor's insurance policy.[14] The plaintiff then sought UIM benefits under her employer's insurance policy, but was denied.[15]As a result, the plaintiff brought suit to recover the UIM benefits. The plaintiff's self-insured employer moved for summary judgment, arguing that the workers' compensation benefits that the plaintiff received constituted her exclusive remedy under the WCA.[16]

         The question before the Court in Simpson was "whether [the plaintiff] may pursue a UIM claim against her [employer] … for essentially the same injuries [for which] she received workers' compensation in light of the WCA's exclusivity clause."[17] At the time, the exclusivity clause of the WCA provided:

Every employer and employee, adult and minor, except as expressly excluded in this chapter, 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.[18]

         The Court held that the purpose of UIM coverage is to "insure that individuals have the ability to be compensated for their injuries beyond what may be available from a negligent tortfeasor's policy."[19] However, the Court reasoned that this underlying purpose of UIM benefits is fulfilled when an individual receives workers' compensation benefits.[20] In other words, the Court held that permitting an injured employee to recover UIM benefits in addition to workers' compensation benefits would allow "the injured party [to] be compensated twice for the same injury."[21]Therefore, the Court held that the WCA's exclusivity clause, as it was written at the time, precluded an injured employee who accepts workers' compensation benefits from also receiving UIM benefits.

         However, the Court also acknowledged that the issue "requires clarification from the legislature" to determine which injuries are covered by the WCA and which are covered under personal injury policies.[22] The Court suggested that "recovery under both is not fully aligned, meaning the exclusivity provision could operate to unfairly deprive an employee of much-needed benefits."[23] Therefore, the Court suggested that there be a "clear legislative mandate" to explain any inconsistencies in coverage.[24]

         In response to Simpson, the legislature amended the exclusivity clause of the WCA. The post-amendment version of ...

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