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Desousa v. Station Builders, Inc.

Superior Court of Delaware

October 8, 2019

STATION BUILDERS, INC., a foreign Corporation, ADAM MCMILLAN CONSTRUCTION, LLC, a limited liability domestic company, and D.R. HORTON, INC. - NEW JERSEY, a foreign corporation, Defendants,

          Submitted: September 20, 2019

         Upon Defendant Adam McMillan Construction, LLC's Motion to Dismiss DENIED.

          Arthur Krawitz, Esquire (argued), Tara E. Bustard, Esquire, Doroshow, Pasquale, Krawitz & Bhaya, 1208 Kirkwood Highway, Wilmington, DE 19805, Attorneys for Plaintiff.

          Stephen F. Dryden, Esquire (argued), Weber Gallagher Simpson Stapleton Fires & Newby LLP, 92 Read's Way, Suite 104, New Castle DE 19720, Attorney for Defendant Adam McMillan Construction, LLC.

          Danielle K. Yearick, Esquire (argued), Tybout, Redfern & Pell, 750 Shipyard Drive, Suite 400 Wilmington, DE 19899, Attorney for Defendant D.R. Horton, Inc. - New Jersey.


          Ferris W. Wharton, J.

         This 8th day of October, 2019, upon consideration of the Motion to Dismiss of Defendant Adam McMillan Construction, LLC, ("AMC"), the Responses of Plaintiff Jactinto DeSousa ("DeSousa") and Defendant D.R. Horton, Inc. - New Jersey ("Horton"), oral argument, and the record in this case, it appears to the Court that:

         1. DeSousa brought this personal injury action for a work related construction site injury against Station Builders, Inc. ("Station Builders"), which had engaged his employer Wellington Nunez;[1] AMC, the general contractor, which had hired Station Builders; and the property owner Horton, which had hired AMC.[2] The Court entered a default judgment against Station Builders on September 24, 2018.[3]

         2. The parties agree that AMC, the general contractor, provided workers' compensation insurance coverage for DeSousa.[4] Citing a Pennsylvania Superior Court case construing Delaware's workers' compensation law - Sheard v. J. J. Deluca, Co.[5] - AMC moves to dismiss this tort action under Superior Court Civil Rules 12(b)(1) and/or 12(b)(6).[6] It argues that Delaware law deems AMC to be DeSousa's employer, and, as a result, workers' compensation is the exclusive remedy available to DeSousa for personal injury by accident arising out of or in the course of employment, and, thus, this tort action is barred.[7] It also argues that the failure to treat AMC as any other employer who provides workers' compensation insurance by permitting it to be sued in tort would result in an equal protection violation.[8]

         3. DeSousa opposes the Motion to Dismiss.[9] Horton joins in DeSousa's opposition.[10] Together they argue that AMC's motion ignores relevant statutory and case law authority. Specifically, citing 19 Del. C. § 2311 (a)(5), they argue that AMC is not deemed DeSousa's employer despite being required to provide workers' compensation coverage.[11] Further, they cite McKirby v. A&J Builders, Inc.[12] for the proposition that an injured worker who received workers' compensation benefits, despite the lack of an employer-employee relationship with the entity required to insure the claim, is permitted to proceed in tort and is not barred by the exclusivity provisions of the Workers' Compensation Act (the "Act").[13] They also dispute that allowing AMC to be sued in tort would result in an equal protection violation because the statute upon which DeSousa relies applies to all contractors.[14]Additionally, Horton points out that it maintains crossclaims against AMC for breaches of various duties and obligations under contractual and common law.[15]

         4. Delaware's Workers' Compensation Act provides:

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.[16]

         It is by this exclusivity provision that AMC seeks dismissal of the Third Amended Complaint. But, DeSousa points out that under 19 Del. C. § 2311 (a)(5), a contracting party deemed to have insured workers' compensation claims because it failed to obtain a certificate of insurance from an independent or subcontractor is not deemed the employer of an independent contractor or subcontractor or their employees.[17]Thus, according to DeSousa, because he was not deemed to be in an employer -employee relationship with AMC, the § 2304 exclusivity provision is inapplicable and he may sue AMC in tort. As a result, if DeSousa is correct, AMC was not only required to insure DeSousa's workers' compensation claim, but also, it is liable to him in tort. DeSousa believes McKirby sanctions this result, as, at least implicitly, the court did in Estevam v. Silva. 18 But, a close reading of McKirby reveals that it does not explicitly green-light tort suits against those contractors who have been deemed to have provided workers' compensation insurance.

         5. In McKirby, McKirby, who was employed as a carpenter by A & J Builders, Inc. "(A & J"), was injured while working on a home being constructed in North Bethany Beach, Delaware.[19] The general contractor on the job was R. A. Bunting & Company, Inc. (Bunting"). It was alleged that A & J did not have workers' compensation insurance, but that Bunting did.[20] In analyzing the then-recent changes to 19 Del. C. § 2311(a)(5), the court noted that the change in section (a)(5) clarified the lack of an employer-employee relationship with the contracting entity in order to preserve tort liability claims by injured workers against third parties in the position of A & J. Aligning the parties in McKirby with the parties here, A & J (which the court ruled could be sued in tort) corresponds to DeSousa's employer Station Builders. Bunting corresponds to AMC. McKirby does not address Bunting's, and thus AMC's, liability in tort directly.[21]

         6. The Act removed workplace injuries from traditional personal injury law.[22] The philosophy of the Act is "to obviate the need for litigation and to give an injured employee, irrespective of fault, prompt compensation."[23] More broadly stated the Act is intended "to eliminate questions of negligence and fault in industrial accidents, and to substitute a reasonable scale of compensation for common-law remedies, which experience has shown to be, generally speaking, inadequate to the interest of those who had become casualties of industry."[24] In order to effectuate that purpose, workers' compensation was designated the exclusive remedy for such injuries.

         7. Here, AMC provided the worker's compensation insurance by which DeSousa apparently was compensated. Thus, it would appear that the purpose of the Act has been fulfilled. Nonetheless, DeSousa seeks further compensation in tort. He points to two statutes. One, § 2304, limits the exclusivity provision of the Act to employers, and the other, § 2311(a)(5), specifically deems contractors in AMC's position not to be employers. In the Court's view, there is a tension, at least under the facts here, between the purpose of the Act and § 2311(a)(5). Nonetheless, the language of §§ 2304 and 2311 (a)(5) is clear - AMC is not deemed an employer, and only employers are afforded the exclusivity of § 2304. Since it is not in the Court's purview to ...

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