Case Title: ACW Corporation v. Maxwell

Citation: 

Docket Number: 

State: delaware

Court: Delaware Supreme Court

Date: 2020-11-18T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
ACW CORPORATION (a.k.a. 
ARBY’S) and EASTERN 
ALLIANCE INS. CO., as Subrogee of 
SHANARA DEVON WATERS, 
 
Plaintiffs Below,  
Appellants, 
 
v. 
 
CHRISTOPHER ROBERT 
MAXWELL, and DONEGAL 
MUTUAL INS. CO. (a.k.a. 
DONEGAL INS. GROUP), 
 
Defendants Below,  
Appellees. 
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No.  302, 2019 
 
Court Below:  Superior Court 
of the State of Delaware 
 
C.A. No. N18C-02-004 
 
Submitted:  September 9, 2020 
Decided:  November 18, 2020 
 
 
Before SEITZ, Chief Justice; VALIHURA, VAUGHN, TRAYNOR, and 
MONTGOMERY-REEVES, constituting the Court en Banc. 
 
Upon appeal from the Superior Court.  AFFIRMED. 
 
Scott R. Mondell, Esquire, and Andrew J. Carmine, Esquire (Argued), Elzufon 
Austin & Mondell, P.A., Wilmington, Delaware, for Appellants, ACW Corporation 
and Eastern Alliance Insurance Company. 
 
Colin M. Shalk, Esquire, Casarino Christman Shalk Ransom & Doss, P.A., 
Wilmington, Delaware, for Appellees, Christopher Robert Maxwell and Donegal 
Mutual Insurance Company. 
 
 
 
VAUGHN, Justice:
 
 
1 
I. 
INTRODUCTION 
The Appellants, ACW Corporation, a.k.a. Arby’s, (Arby’s) and Eastern 
Alliance Ins. Co. (“Eastern Alliance”), as Subrogee of Shanara Devon Waters 
(“Waters”), appeal the Superior Court’s grant of summary judgment in favor of the 
Appellees, Christopher Robert Maxwell (“Maxwell”) and Donegal Mutual Ins. Co. 
(a.k.a. Donegal Ins. Group) (“Donegal”).  Eastern Alliance is Arby’s’ workers’ 
compensation carrier.  It paid Waters, an Arby’s employee, a $12,500 commuted, 
lump-sum workers’ compensation benefit to settle her workers’ compensation 
claims for injuries she received in a work-related motor vehicle accident caused by 
Maxwell.  Arby’s and Eastern Alliance then brought this suit against Maxwell and 
his auto insurer, Donegal, under 19 Del. C. § 2363, claiming that they are entitled to 
recover the $12,500 lump-sum payment from them.  Maxwell and Donegal denied 
liability.  They acknowledged that under the Workers’ Compensation Act Arby’s 
and Eastern Alliance could assert a claim against Maxwell for damages that Waters 
would be entitled to recover against Maxwell in an action in tort.  They argued, 
however, that Maxwell is not liable for the lump-sum payment because it was a 
settlement of potential or future workers’ compensation claims and did not include 
any damages that Waters would be entitled to recover against Maxwell in an action 
in tort.  Arby’s and Eastern Alliance argued that 19 Del. C. § 2363(e) allowed them 
to recover from Maxwell “any amounts paid or payable [to Waters] under the 
 
 
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Workers’ Compensation Act” in connection with the Maxwell accident, and that the 
lump-sum benefit was an amount paid to Waters under the Act.  The Superior Court 
agreed with Maxwell, and after finding that Arby’s and Eastern Alliance failed to 
offer evidence that any of the $12,500 lump-sum benefit was for damages which 
Waters would be able to recover in a tort action against Maxwell, granted summary 
judgment in Maxwell’s and Donegal’s favor.  For the following reasons, we find no 
error in the Superior Court’s judgment and affirm. 
II. 
FACTS AND PROCEDURAL HISTORY 
On February 2, 2016, Waters, while acting in the course and scope of her 
employment as an Arby’s employee, was involved in an accident caused by non-
employee Christopher Maxwell.   
 On June 21, 2017, Waters filed a personal injury complaint against Maxwell 
for injuries she allegedly received in the accident.1  She settled her claim against 
Maxwell for $5,000.2 
After Waters settled her personal injury claim against Maxwell, her workers’ 
compensation counsel contacted counsel for Arby’s and Eastern Alliance and began 
                                                 
1 Waters’ complaint was filed against Maxwell and another individual named Evodio Colin.  
According to the complaint, on March 13, 2016, Waters was involved in a second non-work-
related accident caused by Colin.  The complaint sought to hold Maxwell and Colin jointly and 
severally liable for Waters’ injuries.  For purposes of this appeal, Colin, and Waters’ claims 
against Colin, are of no relevance. 
2 Under 19 Del. C. § 2363(c), Waters’ settlement of her claim does not bar the employer or the 
compensation carrier from proceeding against the third party for any claim it may have. 
 
 
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discussing Waters’ potential entitlement to workers’ compensation benefits, 
including, but not limited to, benefits for permanent impairment, future total and/or 
partial disability, and future medical treatment.  The discussions led to an 
agreement to commute all workers’ compensation benefits which might be claimed 
by Waters from the Maxwell accident for the lump-sum of $12,500.3  The parties 
filed a stipulation and order for commutation with the Industrial Accident Board 
(“IAB”), which stated in relevant part: 
3. 
The parties have agreed to commute any and all 
workers’ compensation benefits including, but not limited 
to, temporary total disability benefits, temporary partial 
disability benefits, permanent impairment benefits, 
disfigurement benefits, death benefits and past, present 
and future medical benefits, to which [Waters] may now 
be or in the future become entitled, pursuant to the 
provisions of 19 Del. C. §§ 2322, 2324, 2325, 2326 and 
2330. 
5. 
Employer has also agreed to waive its lien against 
Claimant in connection with her third party recovery.  
However, this agreement is being made based on 
Employer’s understanding that Claimant only recovered 
$5,000.00 from the third party carrier.  The parties agree 
that Employer/Carrier retains full recovery/subrogation 
rights against the third party liability carrier (to the extent 
                                                 
3 Commutation of compensation is permitted under § 2358 of the Act.  Commutations must be 
approved by the Industrial Accident Board.  19 Del. Admin. C. § 1331-22.1. 
 
 
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there are leftover policy limits), pursuant to 19 Del. C. § 
2363.4 
On January 5, 2018, the IAB approved the stipulation and order. 
On February 1, 2018, Arby’s and Eastern Alliance brought this suit against 
Maxwell and Donegal to recover the $12,500 commutation payment. 5  They 
claimed that they were entitled to recover the $12,500 lump sum benefit paid to 
Waters under 19 Del. C. § 2363(e).  Maxwell and Donegal moved for summary 
judgment, supported by an affidavit, with exhibits, from Waters’ workers’ 
compensation attorney.  In his affidavit, Waters’ workers’ compensation attorney 
stated,  
At the time of the agreement and the filing of the Petition 
[before the IAB] Waters had no outstanding medical 
expenses and nor did she have any present claims for lost 
wages.  [She] did not have any expert medical reports 
identifying permanent or partial impairments . . . [or] 
                                                 
4 App. to Appellant’s Opening Br. at A028-29 [hereinafter A__].  The provisions of § 2363 will 
be discussed further below in Section IV. 
5 The total amount claimed by Arby’s and Eastern Alliance was actually $13,133.25, consisting 
of the $12,500 lump-sum payment and $633.25 for two medical bills.  The complaint recites that 
Donegal is named as a party under a provision of 19 Del. C. § 2363(e) which provides that “for 
items of expense which are precluded from being introduced into evidence at trial by § 2118 of 
Title 21, reimbursement shall be had only from the third-party liability insurer.”  In its order 
granting summary judgment to Maxwell and Donegal, the Superior Court found that Maxwell and 
Donegal were liable for the two medical bills.  That finding is not challenged and has no bearing 
on this appeal.  
 
 
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medical reports identifying the future medical expenses or 
lost wages.6 
Maxwell and Donegal argued that by agreeing to the $12,500 lump-sum 
settlement, Arby’s and Eastern Alliance had “paid the claimant/plaintiff (Waters) 
into the future a benefit that may never occur in order to end any ongoing relationship 
with the claimant/plaintiff[.]”7  They also argued that under § 2363(e) the employer 
or workers’ compensation carrier could recover only those amounts that Waters 
could recover against Maxwell in an action in tort.  The commutation agreement, 
they continued, did not set forth any actual damages which Waters could recover 
from Maxwell in a tort action, and Arby’s and Eastern Alliance had no evidence of 
any such damages.  As mentioned, Arby’s and Eastern Alliance argued in response 
that under 19 Del. C. § 2363(e), they were entitled to recover any amount they paid 
to Waters under the Workers’ Compensation Act. 
In granting Maxwell’s and Donegal’s motion for summary judgment, the 
Superior Court reasoned that “Plaintiffs cannot offer evidence that any of the 
$12,500 commutation are damages resulting from the personal injuries Ms. Waters 
                                                 
6 A054. 
7 A047 ¶ 9, A049. 
 
 
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suffered from the motor vehicle collision . . . [and] any damages related to the 
commutation would be speculative and not proved with reasonable probability.”8 
III. 
STANDARD OF REVIEW 
“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.’”9  “Questions 
of law, including the interpretation of statutes, are also reviewed de novo.”10 
IV. 
DISCUSSION 
19 Del. C. § 2363(a) explains the rights of an injured worker, an employer, 
and a compensation insurer to enforce the liability of a third party who is legally 
liable for an injured worker’s injuries.  Under that section, an injured worker’s 
acceptance of workers’ compensation benefits is not an election of remedies and the 
injured worker “may also proceed to enforce the liability of such third party for 
damages.”  For the first 260 days after the accident, the injured worker has the 
exclusive right to commence an action against a third party.  If the injured worker 
does not commence an action within that 260 day period, the employer or the 
                                                 
8 ACW Corp. v. Maxwell, 2019 WL 3024049, at *3 (Del. Super. Ct. July 10, 2019). 
9 Henry v. Cincinnati Ins. Co., 212 A.3d 285, 288 (Del. 2019) (quoting GMG Capital Invs., LLC 
v. Athenian Venture P'rs I, L.P., 36 A.3d 776, 779 (Del. 2012)). 
10 City of Wilm. v. Nationwide Ins. Co., 154 A.3d 1124, 1127 (Del. 2017). 
 
 
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compensation carrier may commence an action to enforce the third party’s liability 
in the name of the injured worker.  Since Waters did not commence her action 
against Maxwell until after 260 days from the accident, Arby’s and Eastern Alliance 
have properly exercised their right to file this suit against Maxwell.11   
Section 2363(e) explains what may be recovered in an action against a third 
party and how such a recovery is to be applied.  The pivotal language reads as 
follows: 
In an action to enforce the liability of a third party, the 
plaintiff may recover any amount which the employee . . . 
would be entitled to recover in an action in tort.  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, and the balance shall forthwith be paid 
to the employee . . . and shall be treated as an advance 
payment by the employer on account of any future 
payment of compensation benefits[.] 
Arby’s and Eastern Alliance focus on the second sentence of § 2363(e) and 
contend that the section should be construed to mean that the employer or 
compensation carrier can recover from the third party “any amounts paid or payable 
under the Workers’ Compensation Act[.]”12 Arby’s and Eastern Alliance, however, 
                                                 
11 As stated in Section II, supra, Waters’ motor vehicle accident with Maxwell occurred on 
February 2, 2016, and Waters filed the third-party complaint against Maxwell and Colin on June 
21, 2017. 
12 Appellant’s Opening Br. at 15. 
 
 
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misconstrue § 2363(e).  The amount which may be recovered from the third party 
is set forth in the first sentence of § 2363(e).  It provides that the amount which 
“the plaintiff” may recover in an action to enforce the liability of a third party is “any 
amount which the employee . . . would be entitled to recover in an action in tort.”  
The “plaintiff” in the action to enforce the liability of a third party may be the injured 
worker, or it may be, as here, the employer and/or the compensation carrier.  The 
measure of damages which may be recovered against a third party by an injured 
worker, an employer, or a compensation carrier under § 2363(e) is the same, and is 
plainly stated to be the “amount the employee would be entitled to recover in an 
action in tort.”  
The phrase, “amounts paid or payable to the [injured worker]” in the second 
sentence of § 2363(e), refers to the amounts against which a successful recovery 
from a third party should first be applied, not the amount which may be recovered 
from the third party. 
Arby’s and Eastern Alliance have relied heavily upon this Court’s decision in 
Harris v. New Castle County.13  In Harris, a New Castle County police officer was 
injured in a work-related auto accident.  He received workers’ compensation 
benefits.  He also brought suit for his injuries against the operator of the vehicle 
that caused the accident.  The third-party operator was found to be uninsured.  The 
                                                 
13 513 A.2d 1307 (Del. 1986). 
 
 
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officer then filed an uninsured motorist claim with the insurance company that 
insured the police car he was operating when the accident occurred and was paid 
uninsured motorist policy limits of $25,000.  He then filed a declaratory action 
against the county seeking a decree prohibiting the county from imposing a workers’ 
compensation lien against the $25,000 recovered under the county’s uninsured 
motorist coverage.  The Superior Court ruled that § 2363 conferred upon the county 
a right of subrogation against the uninsured motorist benefits for the workers’ 
compensation benefits received by the officer.  
On appeal, this Court affirmed the Superior Court’s judgment.  The officer 
argued that the first sentence of § 2363(e) defined the scope and extent of an 
employer’s subrogation rights against sums recovered in a third-party tort claim.  
He reasoned that since uninsured motorist benefits represented a contractual 
obligation of the employer or its insurer, they were not a tort recovery, and, therefore, 
under the first sentence of § 2363(e), were not subject to the employer’s subrogation 
rights.  In rejecting the officer’s argument, this Court reasoned that “the first 
sentence exists to define the measure of damages recoverable by a recipient of 
workers’ compensation benefits in a suit at law against a third-party tortfeasor.”14  
It found that the breadth of the employer’s subrogation right is defined in the second 
sentence of § 2363 and extended to “include indirect as well as direct recovery of 
                                                 
14 Id. at 1309. 
 
 
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damages from a third party.” 15  The Court agreed with the Superior Court’s 
characterization that “though received from the County’s uninsured motorist carrier, 
the sum involved ‘represent[s] the damages the [third-party tortfeasor] would be 
required to pay upon adjudication of guilt in a tort action but for his lack of 
insurance[.]’”16  In other words, the uninsured motorist benefits represented the 
damages a third party would be required to pay if found liable in an action in tort.  
Harris defines the breadth of the employer’s or compensation carrier’s right 
of subrogation against sums recovered from a third party for damages resulting from 
the worker’s personal injuries once a recovery is obtained.  The question in this 
case is different from the question presented in Harris.  The question we address 
here is what amount may be recovered from the third-party.  That amount is plainly 
set forth in the first sentence of § 2363(e), which, as previously stated, is “any 
amount the employee . . . would be entitled to recover in an action in tort.”  The 
third-party’s liability does not change when the action is brought by the employer or 
compensation carrier rather than the employee.  Where the employer or 
compensation carrier is the plaintiff, the third-party’s liability corresponds exactly 
in extent to his liability to the injured worker for any amount recoverable in an action 
in tort. 
                                                 
15 Id. 
16 Id. (alterations in original) (citing State v. Donahue, 472 A.2d 824, 829 (Del. Super. 1983)). 
 
 
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Returning to the facts of this case, the question becomes whether Arby’s and 
Eastern Alliance can offer any evidence of damages that Waters would be able to 
recover from Maxwell in an action in tort.  The commutation agreement itself does 
not contain any such evidence.  It refers in a general sense to various types of 
workers’ compensation benefits for which Waters might at some point have 
qualified, but it contains nothing that could be placed before a jury as evidence from 
which a jury could assess damages for personal injuries suffered by Waters in the 
accident.  It does not appear from the record that Arby’s and Eastern Alliance 
offered the Superior Court any other evidence of injuries suffered by Waters which 
could be presented in a trial against Maxwell.  We, therefore, find no error in the 
Superior Court’s grant of summary judgment in favor of Maxwell and Donegal. 
V. 
CONCLUSION 
For the foregoing reasons, the judgment of the Superior Court is affirmed.