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Henry v. Cincinnati Insurance Co.

Supreme Court of Delaware

June 11, 2019

JOHN HENRY and DARLENE HENRY, Plaintiffs Below, Appellants,
v.
CINCINNATI INSURANCE COMPANY, Defendant Below, Appellee. CHARLES FRITZ, Plaintiff Below, Appellant,
v.
CINCINNATI INSURANCE COMPANY, Defendant Below, Appellee.

          Submitted: April 10, 2019

          Court Below: Superior Court of the State of Delaware

         Upon appeal from the Superior Court. REVERSED AND REMANDED.

          Jonathan B. O'Neill, Esquire, and Jennifer D. Donnelly, Esquire, Kimmel, Carter, Roman, Peltz & O'Neill, P.A., Christiana, Delaware, for Appellants, John Henry and Darlene Henry.

          Francis J. Jones, Jr., Esquire (Argued), and Wilson A. Gualpa, Esquire, Morris James LLP, Georgetown, Delaware, for Appellant, Charles Fritz.

          Krista E. Shevlin, Esquire, and William A. Crawford, Esquire (Argued), Franklin & Prokopik, Newark, Delaware, for Appellee, Cincinnati Insurance Company.

          Before VALIHURA, VAUGHN, and TRAYNOR, Justices.

          VAUGHN, JUSTICE

         I. INTRODUCTION

         This opinion is being issued in two cases that were consolidated for purposes of oral argument, Henry v. Cincinnati Insurance Co., No. 437, 2018, and Fritz v. Cincinnati Insurance Co., No. 565, 2018. In Henry, John and Darlene Henry appeal from a Superior Court order granting Cincinnati Insurance Co.'s motion to dismiss.[1]In Fritz, Charles Fritz appeals from a Superior Court order granting summary judgment in favor of Cincinnati Insurance Co. (Cincinnati).[2] Both cases involve employees, John Henry and Charles Fritz, who sustained injuries in automobile accidents while operating an employer-owned vehicle during the course of their employment. In both cases, the accidents were each allegedly caused by a third-party tortfeasor. Both employees received workers' compensation from their respective employers' workers' compensation insurance companies pursuant to Delaware's Workers' Compensation Act (the Act).[3] In each case, the vehicle operated by the employee was covered by an automobile liability insurance policy issued to the employer by Cincinnati. In addition to their workers' compensation benefits, both Henry and Fritz sought to recover underinsured-motorist benefits under the terms of the Cincinnati automobile liability policies. The Superior Court issued its order in Henry first; it found that the exclusive-remedy (or "exclusivity") provision in the Act, 19 Del. C. § 2304, in effect at the time of the accident, precluded Henry from receiving underinsured-motorist benefits under the Cincinnati policy.[4]Following that decision, the Superior Court in Fritz granted Cincinnati's motion for summary judgment on the same ground, explaining that "[t]he Superior Court follows its prior decisions except for urgent reasons and upon clear manifestation of error."[5]

         Henry and Fritz contend that the Superior Court erred in finding that the Act's exclusivity provision precludes them from receiving underinsured-motorist benefits through the automobile liability policy their respective employers each purchased from Cincinnati. For the reasons that follow, we agree that the Superior Court erred in both cases. The Act's exclusivity provision does not prevent an employee from receiving underinsured-motorist benefits provided by an automobile liability policy that his or her employer has purchased from a third-party insurance company.

         II. FACTS AND PROCEDURAL HISTORY

         The facts in both cases are straightforward and generally not subject to dispute. On September 29, 2015, Henry was injured in an automobile accident allegedly caused by Cynthia Sassa. Henry settled his liability claim with Sassa's insurance company for her policy limits. He then filed a claim with Cincinnati for underinsured-motorist benefits provided by the automobile liability policy covering the vehicle he was driving. Cincinnati denied coverage on the ground that Henry was not entitled to underinsured-motorist benefits because he accepted workers' compensation benefits, which Cincinnati contended were, under the Act's exclusivity provision, to the exclusion of all other rights and remedies.

         On October 20, 2015, Fritz was injured in an automobile accident allegedly caused by Alex Lopez. Fritz settled his liability claim with Lopez's insurer for his policy limits. He then filed a claim with Cincinnati for underinsured-motorist benefits provided by the automobile liability policy covering the vehicle he was driving. Cincinnati denied coverage on the same ground that it relied upon in denying Henry coverage. Henry and Fritz then brought their respective suits seeking underinsured-motorist benefits from Cincinnati.

         The Superior Court's decision in Henry, which the court in Fritz followed, relied on two prior Superior Court cases. One was Simpson v. State, in which the court held that the Act's then-effective exclusivity provision prevented a state employee from recovering underinsured-motorist benefits through the State's self-insured automobile liability insurance plan.[6] The other was Robinson v. State.[7] In Robinson, which also involved a state employee, the Superior Court judge agreed with Simpson and further held that a September 2016 amendment to the exclusivity provision was not retroactive.[8] This Court affirmed Robinson on appeal.[9]

         III. DISCUSSION

         We review a grant or denial of summary judgment de novo "to determine whether, viewing the facts in the light most favorable to the nonmoving party, the moving party has demonstrated that there are no material issues of fact in dispute and that the moving party is entitled to judgment as a matter of law."[10] "Questions of law, including the interpretation of statutes, are also reviewed de novo."[11]

         At the time of the accidents involved in Simpson and Robinson, as well as at the time of Henry's and Fritz's accidents, the exclusivity provision in the Act provided as follows:

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 ...

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