Submitted: May 6, 2019
Appeal from the Industrial Accident Board.
Nicholas E. Bittner, Esquire, and William D. Rinner, Esquire,
Heckler & Fabrizio, Wilmington, Delaware, Attorneys for
Appellant The Rock Pile.
F. Schmittinger, Esquire, Schmittinger & Rodriquez, P.A.,
Dover, Delaware, Attorney for Appellee Renee Rischitelli.
RICHARD R. COOCH, R.J.
The Rock Pile's ("Employer") appeal from a
September 27, 2018, decision of the Industrial Accident Board
("Board") which held that Employer was not entitled
to apply the amount of John Rischitelli's Underinsured
Motorist ("UIM") recovery as a credit against
future workers' compensation benefits paid to Mr.
Rischitelli's surviving spouse Renee Rischitelli. Mr.
Rischitelli was killed in a motor vehicle accident with a
third-party tortfeasor. The UTM coverage became available
once Renee Rischitelli had exhausted the third-party
tortfeasor's policy limits. Employer argues that the
Board erred as a matter of law by denying Employer a credit
for UTM benefits, that New Jersey law should apply, and that
the Board's decision is not supported by substantial
review of the parties' contentions and the record, the
Court concludes that the Board's decision was supported
by substantial evidence and that the Board otherwise
committed no error of law. Accordingly, the decision of the
Board is affirmed.
FACTS AND PROCEDURAL HISTORY
Rischitelli, the Claimant-Below/Appellee, died in an
automobile accident in New Jersey on August 7, 2014, while
driving a tractor trailer owned and insured by Employer. In
prior proceedings before the IAB, the parties litigated the
compensability of a claim brought by Mr. Rischitelli's
surviving spouse, Renee Rischitelli, for workers'
compensation death benefits pursuant to 19 Del. C.
§ 2330. The Industrial Accident Board issued a decision
dated June 12, 2017, holding that Mr. Rischitelli was an
employee at the time of the accident, and Mrs. Rischitelli
was owed death benefits. Mrs. Rischitelli has been receiving
ongoing death benefits at the rate of $333.35 per week since
that time. Mrs. Rischitelli also filed a lawsuit in New
Jersey against the third-party tortfeasor in relation to the
motor vehicle accident that killed Mr. Rischitelli. That
litigation settled in October 2017 with a policy limits
recovery from the tortfeasor's insurance coverage in the
amount of $15, 000.00.
time of the settlement of the New Jersey tort claim, the
Employer had paid Mrs. Rischitelli $55, 382.77 in benefits
and was continuing to pay the ongoing death benefits. Mrs.
Rischitelli pursued an underinsured motorist
("UTM") claim against the carrier insuring the
vehicle Mr. Rischitelli was operating at the time of his
death. The UIM policy had been paid for by Employer. Mrs.
Rischitelli recovered the UIM policy limit of $300, 000. Mrs.
Rischitelli conceded that Employer was entitled to
proportionate reimbursement of death benefits from the
third-party recovery of $15, 000.00 in the amount of $9,
474.74 pursuant to 19 Del. C. § 2363(e).
Employer later sought a credit against Mrs. Rischitelli's
UTM recovery of $300, 000.00 to apply to future death
benefits, the issue now before this Court.
argued to the Board that when an employer has paid for a UIM
policy the employer is entitled to a credit/setoff in the
amount of the UIM recovery against any future worker's
compensation payouts. Claimant contended that 19 Del.
C. § 2363(e) states that there can be no
workers' compensation lien against UIM policies, and the
statute had been specifically amended in 1993 to exclude UIM
recoveries from the lien provisions of § 2363. Claimant
also contended that the Employer's insurance carrier and
counsel waived any interest in the UIM policy, on the basis
that the Employer's counsel permitted counsel for
Claimant to escrow the $15, 000.00 liability insurance payout
Board issued its written decision on September 27, 2018, in
which it agreed with Claimant and thus denied Employer any
credit or lien in connection with the UTM recovery. The Board
found that the General Assembly made it clear through
amendments to Title 19, Chapter 23 that UTM benefits are to
be treated differently from other types of non-workers'
compensation recoveries by injured workers. The Board noted
that "the Supreme Court has recognized [that] the
'General Assembly has eliminated the ability of a
worker's compensation insurer to assert a lien against
the UTM payments made pursuant to the employer's UTM
policy.'" The Board further rejected Employer's
attempt at distinguishing a reimbursement from a credit under
19 Del. C. § 2363(e), stating that "the
difference is only one of timing[, ]" and that
Employer's interpretation "conflicts with the clear
intent of the General Assembly, as shown by its statutory
amendments specifically designed to permit an injured worker
to recover UTM benefits from an employer's
policy." This appeal followed.
THE PARTIES' CONTENTIONS
Employer contends that the Board erred as a matter of law in
denying Employer a credit/offset from Mrs. Rischitelli's
recovery under the UIM policy. Employer argues that the
Board's decision relied upon an allegedly erroneous
conclusion that 19 Del. C § 2363 does not allow
employers to derive any benefit from UIM policies purchased
by employers themselves. Employer argues that a credit/offset
is applicable when the source of the secondary benefits-the
UIM Policy-is solely funded by the Employer, allegedly
resulting in the Employer funding a double recovery which
Employer contends is improper. Employer maintains that a
credit is permissible even when a reimbursement is not
Employer contends that the Board erred in failing to address
the alternative arguments/grounds for relief set forth by
Employer. Specifically, Employer argues that New Jersey law
should apply, and that New Jersey law allows a credit/setoff
from the Claimant's UIM recovery. Employer alleged that
Claimant opened the door to the application of New Jersey law
by referencing same in settlement discussions in connection
with the lien calculation on the recovery from the
tortfeasor. Employer contended that this justified the
Employer's reliance upon New Jersey law as to the UIM
recovery. Employer maintains that the Board's failure to
address this additional ground for relief requires a remand
to allow the Board to address the issue directly, assuming
that this Court does not find the credit to be available
under Delaware law. Lastly, Employer contends that the
Board's decision is not supported by substantial
contends that the Board's decision is properly grounded
in the statute and case law, in particular Delaware Supreme
Court's 2013 decision in Simendinger v. National
Union Fire Ins. Co Claimant argues that
Simendinger establishes that a workers'
compensation carrier's entitlement to a credit or a
reimbursement is limited to recovery against the third-party
tortfeasor's liability insurer, and that a carrier may
not assert a lien of any kind against UIM benefits. Claimant
contends that there is no distinction between a reimbursement
under 19 Del. C. § 2363(e) and a credit.
Claimant contends that both a reimbursement and a credit
emanate from the same statutory language and both constitute
a lien, the only difference being one of timing. Claimant
asserts that a reimbursement is for benefits previously paid
by the compensation carrier, and a credit is for benefits not
yet paid by the compensation carrier. Claimant further
contends that Delaware law controls this Delaware
workers' compensation claim between Delaware parties,
brought by the carrier in Delaware pursuant to a Delaware
insurance policy that was formed under Delaware law, and
where the claimants reside in Delaware.
STANDARD OF REVIEW
reviewing a decision of the Board, "[t]he function [of
this] Court is limited to determining whether substantial
evidence supports the Board's decision regarding findings
of fact and conclusions of law and is free from legal
error." Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion. This Court does not sit as trier of
fact, nor should this Court replace its judgment for that of
the Board. "The Court, when factual
determinations are at issue, shall take due account of the
experience and specialized competence of the agency and of
the purposes of the basic law under which the agency has
acted."Further, where the issues raised involve
only questions of law, the Court's review is de
novo If the Board's decision is free from
legal error and supported by substantial evidence, this Court
must sustain the Board's decision even if this Court
might have decided the case differently if it had come before
it in the first instance. "The burden of persuasion
is on the party seeking to overturn a decision of the Board
to show that the decision was arbitrary and
unreasonable." In this process, "the Court will
consider the record in the light most favorable to the
prevailing party below."
Delaware law applies.
balance of factors here weighs heavily in favor of the
application of Delaware law. The balance is so skewed that it
would be a purely academic exercise to remand this case for
the Board to restate the analysis. When undertaking a choice
of law analysis, Delaware courts follow the "most
significant relationship" test as articulated in the
Restatement (Second) of Conflict of Laws. Section 145(1) of
the Restatement provides that the law of the state with the
most significant relationship to the occurrence and the
parties under the principles stated in Restatement ...