DeSousa v. Station Builders, Inc.

• Court: Superior Court of Delaware
• Decided: December 3, 2021
• Docket: N17C-09-109 FWW
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

JACINTO DESOUSA, ) ) Plaintiff, ) ) v. ) C.A. No. N17C-09-109 FWW ) 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: June 15, 2020 Decided: December 3, 2021

Upon Defendant Adam McMillan Construction, LLC’s Motion in Limine DENIED.

ORDER

Arthur M. Krawitz, Esquire, and Tara E. Bustard, Esquire, Doroshow, Pasquale, Krawitz & Bhaya, 1208 Kirkwood Highway, Wilmington, DE 19805, Attorneys for Plaintiff Jacinto DeSousa.

Stephen F. Dryden, Esquire, Weber Gallagher Simpson Stapleton Fires & Newby LLP, 2 Penn’s Way, Suite 300, New Castle, DE 19720, Attorney for Defendant Adam McMillan Construction, LLC.

Danielle K. Yearick, Esquire, Tybout, Redfearn & Pell, 750 Shipyard Drive, Suite 400, P.O. Box 2092, Wilmington, DE 19899, Attorney for Defendant D.R. Horton Inc. – New Jersey.

WHARTON, J. This 3rd day of December, 2021, upon consideration of Defendant Adam

McMillan Construction, LLC’s (“AMC”) Motion in Limine,1 the Responses of

Defendant D.R. Horton, Inc. – New Jersey (“Horton”)2 and Plaintiff Jacinto

DeSousa (“DeSousa”),3 and AMC’s Supplementation of the Record,4 and the record

in this case, it appears to the Court that:

1. Before the Court is AMC’s Motion in Limine (the “Motion”) to

preclude DeSousa from introducing evidence of medical specials and/or indemnity

payments made by Liberty Mutual Insurance Company (“Liberty Mutual”) pursuant

to DeSousa’s workers’ compensation claim.5 This action originated when DeSousa

sued the Defendants for injuries sustained from a work-related construction site

accident. DeSousa sued Station Builders, Inc. (“Station Builders”), which had

engaged his employer, Wellington Nunez;6 AMC, the general contractor, which had

hired Station Builders; and the property owner, Horton, which had hired AMC.7 The

Court entered a default judgment against Station Builders on September 24, 2018.8

1 AMC’s Mot. in Lim., D.I. 98. 2 Horton’s Resp. to Mot. in Lim., D.I. 103. 3 Pl.’s Resp. to Mot. in Lim., D.I. 104. 4 AMC’s Supplementation of the Record, D.I. 107. 5 AMC’s Mot. in Lim., D.I. 98. 6 Wellington Nunez may also be known as Wellington Silva. 7 Pl.’s Third Amend. Compl., D.I. 23. 8 D.I. 45. 2 The Court then denied AMC’s motion to dismiss on October 8, 2019.9 In that Order,

the Court held that AMC was not entitled to the exclusivity provision of 19 Del. C.

§ 2304, because it did not deem AMC to be DeSousa’s employer.10

2. The Complaint alleges that the Defendants were negligent by, among

other things, failing to keep the premises in a reasonably safe condition, failing to

provide adequate fall protection for workers, failing to provide surroundings or

working conditions which were not hazardous or dangerous, and were otherwise

negligent.11 As a result, DeSousa claims injuries to his head, neck, shoulders, and

back.12 He seeks compensatory, punitive, and special damages.

3. The parties agree that AMC, the general contractor, was deemed to have

provided workers’ compensation insurance coverage for DeSousa through Liberty

Mutual.13 According to DeSousa, Liberty Mutual has paid $184,373.02 in medical

and indemnity benefits.14

9 D.I. 92. 10 DeSousa v. Station Builders, et al., 2019 WL 5394166 (Del. Super. 2019). 11 Id. 12 Id. at 18. 13 AMC’s Mot. Dismiss, D.I. 64; Pl.’s Resp. Mot. Dismiss, D.I. 69; Horton’s Resp. Mot. Dismiss, D.I. 70. In his response to the Motion to Dismiss, DeSousa explained that AMC provided workers’ compensation insurance coverage because Station Builders failed to do so, and AMC failed to obtain a certificate of workers’ compensation insurance coverage as required by 19 Del. C. § 2311(a)(5). As a result, § 2311(a)(5) required AMC to provide that coverage. D.I. 69. 14 Pl.’s Resp. to Def. AMC’s Mot. in Lim., D.I. 104. 3 4. On May 14, 2020, AMC moved in limine to prohibit DeSousa from

introducing evidence of the medical specials and indemnity payments made by

Liberty Mutual.15 AMC notes that this Court previously determined that it was not

entitled to the exclusivity provision of 19 Del. C. § 2304 because it was not deemed

to be DeSousa’s employer under 19 Del. C. § 2311(a)(5), and thus, may be sued in

tort by DeSousa.16 Also pursuant to § 2311(a)(5), AMC is deemed to have insured

DeSousa’s workers’ compensation claim, for which it alleges it paid premiums to

Liberty Mutual.17 Citing Stayton v. Delaware Health Corp.,18 AMC argues that

those facts make him a tortfeasor entitled to claim the advantage of the insurance

fund it created with Liberty Mutual.19 AMC reasons that since it paid for the

insurance coverage provided by Liberty Mutual, the payments made by Liberty

Mutual were not from a collateral source, but rather from AMC.20 As a result,

DeSousa should not be able to present evidence of medical specials and indemnity

payments for which he has been compensated AMC through Liberty Mutual.21

15 AMC’s Mot. in Lim., D.I. 98. 16 Id. 17 Id. 18 117 A.3d 521 (Del. 2017). 19 Id. 20 AMC’s Mot. in Lim., D.I. 98. 21 Id. 4 5. DeSousa opposes the Motion. He notes that Liberty Mutual has a

statutory right to reimbursement from any recovery DeSousa might be awarded

which right AMC does not address in the Motion.22 Thus, he argues AMC is asking

the Court to “adjudicate the rights of a non-party and completely disregard a

statutory right without any notice given to Liberty Mutual or to obtain its

position…”23 DeSousa relies on Bounds v. Delmarva Power & Light,24 where the

court denied the defendant’s motion in limine to preclude the plaintiff from

introducing the amount of workers’ compensation benefits he had received. 25 In

Bounds, the court held that barring the plaintiff from introducing the medical

specials would subject him to “the unfair prejudice of being obligated to pay the lien

from his recovery but of having been wrongfully denied the opportunity to present

those elements of his damages to the jury.”26 Further, DeSousa argues that any

concern that the collateral source rule would create a windfall for him is misplaced

because he is required by statute to reimburse the workers’ compensation carrier,

Liberty Mutual.27 Finally, DeSousa contends that the Delaware General Assembly

sanctioned the result he advocates here when it determined that AMC should be

22 Pl.’s Resp. to Mot. in Lim., D.I. 104. 23 Id. 24 Bounds v. Delmarva Power & Light Co., 2004 WL 343982 (Del. Super. Ct. Jan. 29, 2004) 25 Id. 26 Id., quoting Bounds at *12. 27 Id. 5 responsible for workers’ compensation payments, while also being denied the

protection of exclusivity of remedies.28

6. Horton takes no position to the extent AMC’s motion “seeks to

preclude the admissibility at trial against all defendants any special damages or

losses paid under the Delaware Workers’ Compensation Act.”29 But, Horton

opposes AMC’s motion to the extent it

would result in the admissibility of workers’ compensation payments or special damages solely against [Horton] at trial and not AMC, or to the extent the motion results in Plaintiff’s right to board or admit into evidence the medical bills and lost wages, rather than the adjusted lien- eligible payments for those losses paid under workers’ compensation.30

Horton asserts that the real party in interest with respect to the right of subrogation

or lien is Liberty Mutual, AMC’s workers’ compensation carrier which paid

DeSousa’s benefits.31 Horton states that AMC has no right to claim or waive Liberty

Mutual’s statutory lien. Further, barring admissibility of the lien would keep the

jury unaware of the amount, but still force DeSousa to repay the lien, causing an

inequitable result.32 Horton contends that Stayton is inapplicable here because

Stayton did not preclude the admissibility of medical expense damages, it simply

limited those damages to the adjusted amount Medicare actually paid rather than the

28 Id. 29 Horton’s Resp. to Mot. in Lim., D.I. 103. 30 Id. 31 Id. 32 Id. 6 amount billed by providers.33 Finally, Horton argues that AMC is neither DeSousa’s

employer, nor the workers’ compensation insurance carrier entitled to a lien under §

2363.34 Because AMC has made no payments to DeSousa or demonstrated how the

premium payments it made to Liberty Mutual for the benefit of its own employees

constitutes a fund it created for DeSousa’s benefit, it is not entitled to the advantage

of credit for the benefits DeSousa received.35

7. The collateral source rule is “firmly embedded” in Delaware law.36 The

rule is designed to strike a balance between two competing principles of tort law:

“(1) a plaintiff is entitled to compensation sufficient to make him whole, but no

more; and (2) a defendant is liable for all damages that proximately result from his

wrong.”37 The rule provides that “a person deemed legally responsible to another

cannot claim the benefit of the ability to recover [ ] from [ ] third party expenses

related to [the] injury.”38 When the rule applies, a tortfeasor cannot reduce its

damages because of payments or compensation received by the injured person from

33 Id. 34 Id. 35 Id. at 3-4. 36 Miller v. State Farm Mut. Auto. Ins. Co., 992 A2d 1049, 1053 (Del. 2010) (quoting Yarrington v. Thornburg, 205 A.2d 1, 2 (Del. 1964)). 37 Stayton v. Delaware Health Corp., 117 A.3d 521, 526 (Del. 2015) (quoting Mitchell v. Haldar, 883 A.2d 32, 37 (Del. 2006)). 38 Miller, 992 A.2d at 1053 (quoting Guy J. Johnson Transp. Co. v. Dunkle, 541 A.2d 551, 553 (Del. 1988)). 7 an independent source.39 This reasoning is “‘predicated on the theory that a

tortfeasor has no interest in, and therefore no right to benefit from, monies received

by the injured person from sources unconnected with the defendant.’”40

8. As noted above by both DeSousa and Horton, Liberty Mutual is the real

party in interest, with respect to the lien.41 Under 19 Del. C. § 2363(e), Liberty

Mutual has a statutory right to reimbursement for any recovery made by DeSousa.42

However, Liberty Mutual is not, and has never been, a party in this proceeding.

Thus, AMC is asking the Court to adjudicate the rights of Liberty Mutual, a non-

party, in its absence and on an incomplete record.43 The Court declines that request.

AMC has no right to impair Liberty Mutual’s right to reimbursement, which could

occur if DeSousa were barred from introducing evidence of medical specials and/or

indemnity payments made by Liberty Mutual. DeSousa unfairly would be subjected

to paying the lien to Liberty Mutual from his recovery to the extent his recovery

exceeded the lien, without having had the opportunity to present those elements of

39 Stayton, 117 A.3d at 527 (citing Restatement (Second) of Torts § 920A.) 40 Stayton, 117 A.2d at 527 (citing Mitchell, 883 A.2d at 38). 41 See 19 Del. C. § 2363(e). 42 Id. (“Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or its workers' compensation insurance carrier for any amounts paid or payable under the Workers' Compensation Act to date of recovery…”). 43 See Bounds, at *6. 8 his damages to the jury. If the recovery did not exceed the lien, Liberty Mutual

would be harmed.

9. The real problem for AMC in claiming credit for the benefits paid by

Liberty Mutual is that the benefits come with strings. DeSousa did not receive the

benefits free and clear. They are subject to Liberty Mutual’s lien. There is no logical

reason that AMC should receive the advantage of benefits that DeSousa must repay.

10. Moreover, the premium payments AMC made to Liberty Mutual were

not made for DeSousa’s benefit. Rather, AMC was statutorily “deemed to insure

any workers’ compensation claims” because it defaulted on its obligation under §

2311(a)(5) to ensure that its subcontractors had workers’ compensation insurance.

The insurance premiums were paid in lieu of DeSousa’s employer making those

payments. AMC paid Liberty Mutual premium payments to insure its own

employees, not DeSousa. Whether those payments would have constituted a fund

created for DeSousa’s benefit had DeSousa been an employee of AMC is not before

the Court. But it is certainly not a fund created for his benefit as a worker not

employed by AMC. Allowing evidence of medical specials and indemnity payments

exposes AMC to substantially less unfairness than the unfairness to which DeSousa

would be exposed if the Court were to preclude such evidence. AMC is placed in

9 no different position than any other tortfeasor in an action where a plaintiff’s

recovery is subject to a workers’ compensation lien.44

THEREFORE, Defendant Adam McMillan Construction, LLC’s Motion in

Limine is DENIED.

IT IS SO ORDERED.

/s/ Ferris W. Wharton Ferris W. Wharton, J.

44 Id. 10