DeSousa v. Station Builders, Inc. ( 2021 )

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.
12Id. 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.
20AMC’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.
24Bounds v. Delmarva Power & Light Co., 2004 WL 343982 (Del. Super. Ct. Jan.
29, 2004)
25
Id.
26Id., 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.
29Horton’s Resp. to Mot. in Lim., D.I. 103.
30
Id.
31Id.
32Id.
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