Title: Bell Atlantic-Delaware v. Saporito
Citation: N/A
Docket Number: 329, 2004
State: Delaware
Issuer: Delaware Supreme Court
Date: May 17, 2005

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
 
BELL ATLANTIC-DELAWARE, 
) 
INC.  
 
 
 
 
)  No. 329,2004 
 
 
 
 
 
 
) 
 
 
Co-Plaintiff Below, 
)  Court Below: Superior Court 
 
 
Appellant,  
 
)  of the State of Delaware in 
 
 
 
 
 
 
)  and for New Castle County 
v. 
 
 
 
 
 
) 
 
 
 
 
 
 
)  C.A. No. 98C-01-118 
DOMENIC A. SAPORITO, 
 
) 
 
 
 
 
 
 
) 
 
 
Plaintiff Below, 
 
) 
 
 
Appellee. 
 
 
) 
Submitted:  January 19, 2005 
Decided:  May 17, 2005 
 
Before STEELE, Chief Justice, JACOBS, and RIDGELY, Justices. 
 
Upon appeal from the Superior Court.  REVERSED and REMANDED. 
 
J.R. Julian, P.A., Wilmington, Delaware for Co-Plaintiff Below/Appellant. 
 
Joseph J. Rhoades, Wilmington, Delaware for Plantiff/Below-Appellee. 
 
 
 
 
 
 
 
 
 
 
STEELE, Chief Justice: 
 
2
 
 
Bell Atlantic-Delaware Inc., now Verizon-Delaware Inc., appeals a 
judgment of the Superior Court ordering it to repay an employee, Appellee 
Domenic A. Saporito, the excess of an amount Saporito paid to satisfy a workers’ 
compensation lien held by the company.  Verizon contends that the trial judge 
undervalued the lien by characterizing certain payments as personal-injury 
protection (PIP) benefits instead of workers’ compensation.  In this opinion, we 
conclude that the subrogation rights of employers and self-insurers under 
Delaware’s no-fault insurance and employment statutes establish a reimbursement 
policy that covers all payments Verizon made to Saporito, whether characterized as 
PIP or workers’ compensation.  We find that the record evidence contradicts the 
trial judge’s conclusion that Verizon’s erroneous characterization of some 
payments made to Saporito resulted in a waiver of Verizon’s workers’ 
compensation lien.  The evidence instead compels a finding that the payments 
Verizon made in excess of its PIP coverage limits were in fact payments made as 
workers’ compensation benefits.  Accordingly, we reverse. 
I. 
In 1997, a Lankford-Sysco Food Services Inc. vehicle collided with a 
workvan operated by Saporito, Verizon’s employee.  As employer and self-insurer, 
Verizon paid Saporito a combination of workers’ compensation and PIP benefits.  
Saporito and his wife also filed a claim against Lankford in the Superior Court.  
 
3
Verizon joined in the lawsuit to protect its compensation lien and filed a separate 
action against Lankford to protect its PIP subrogation interest. 
 
After Saporito settled his third-party tortfeasor claim against Lankford in 
1999, Verizon sought reimbursement of the workers’ compensation benefits it paid 
to Saporito from those settlement funds.  Verizon claimed Saporito owed it 
approximately $150,000.  Because Saporito disputed this amount, Verizon sought 
to reopen the case.  The trial judge agreed, ordered discovery, and held an 
evidentiary hearing to determine the amount Saporito owed Verizon.  The trial 
judge also authorized Saporito to tender, pending final valuation of any lien, an 
initial payment to Verizon.  Shortly thereafter, Saporito sent a check to Verizon for 
approximately $85,000. 
At the hearing, Verizon’s payroll-services manager testified that the 
company considered all payments in excess of its PIP coverage, although variously 
recorded as PIP and workers’ compensation, to be payments made to comply with 
workers’ compensation benefits owed.1  An assistant manager in risk management 
testified that Verizon, as a self-insurer, only provides $15,000 in PIP coverage, the 
statutorily required minimum.2  The record also reflects that Saporito agreed to pay 
                                                 
1  
Test. Sharon Marshall-O’Neill, Tr. at 54.   
2  
Test. David F. Salvucci, Tr. at 95 (“We provide other benefits such as workers’ 
compensation.  So we purchase PIP at a minimum, or reject it entirely depending on the state 
because we view it as extraneous.”).   
 
4
the full amount of Verizon’s compensation lien out of third-party settlement 
funds.3   
 
Following the hearing, the trial judge found that, despite the company’s 
stated policy to provide no more PIP than the minimum $15,000 required by 
statute, Verizon paid Saporito $74,963.97 in PIP wage benefits, $35,438.45 in PIP 
medical reimbursements, and $46,299.10 in workers’ compensation benefits.   
Based on the evidence presented and the testimony presented, the PIP 
lien was resolved.  And at least by December of 1999, given your 
[Verizon’s] letter, it was paid by Lankford-Sysco totaling . . . the 
$9,548.30 [in National Guard PIP].  And that was settled.  It’s not an 
issue based upon your correspondence.  It is also clear to me based 
upon records subsequently produced that the amount claimed or noted 
in Bell Atlantic-Verizon’s records is $46,299.10, and that the balance, 
well, I’ll consider PIP payments.4   
 
The trial judge concluded that Saporito was only obligated to reimburse the 
Verizon’s workers’ compensation payments that the trial judge found remained 
unreimbursed after the Lankford settlement.  The trial judge then ordered Verizon 
to repay Saporito $38,836.29, the amount Saporito prepaid Verizon in excess of the 
workers’ compensation lien calculated by the trial judge.   The trial judge also 
directed Verizon to pay 3.74 percent of Saporito’s attorneys’ fees and out-of-
                                                 
3  
See Tr. at 165, 167. 
4  
Tr. at 184.  The trial judge failed to note that the direct settlement with Lankford was in 
the exact amount of Verizon’s claimed PIP coverage maximum – $15,000.  He then proceeded to 
find, without factual support, that the entire balance of payments made, erroneously denominated 
PIP payments on some Verizon payment records, were somehow discharged by the settlement.  
We can find no factual support for this conclusion. 
 
5
pocket expenses, which totaled $16,134.28.  Verizon appeals, claiming that the 
trial judge erroneously calculated the lien amount and the company’s contribution 
to Saporito’s fees and costs. 
II. 
 
An employee who is injured by a third party in the course of his employment 
is permitted to recover workers' compensation benefits from his employer and to 
pursue a personal-injury action against the tortfeasor.5  “Any recovery against [a] 
third party for damages resulting from personal injuries . . . shall first reimburse the 
employer . . . for any amounts paid or payable under the Workers’ Compensation 
Act. . . .”6  This provision “prevent[s] the employee from receiving compensation 
for wage losses from a third-party tortfeasor when the losses have already been 
compensated through workers' compensation.”7  
Beyond the workers’ compensation laws, Delaware’s no-fault automobile 
insurance regime directs that insurers providing PIP benefits are “subrogated to the 
rights, including claims under any workers’ compensation law, of the person for 
whom benefits are provided, to the extent of the benefits so provided.”8  Although 
                                                 
5  
Duphily v. Delaware Elec. Coop. Inc., 662 A.2d 821, 834 (Del. 1995).   
6  
19 Del. C. § 2363(e).   
7  
State v. Calhoun, 634 A.2d 335, 337 (Del. 1993).   
8  
21 Del. C. § 2118(g).   
 
6
left undefined by statute, the term subrogation retains its common-law meaning, 
subject to statutory exceptions.9  By enacting a no-fault compensation scheme, the 
General Assembly sought, among other goals, to hold tortfeasors liable by granting 
the insurer a subrogation right.10  Self-insurers possess equal subrogation rights.11  
On appeal from a judgment in a nonjury case, the Court accepts the trial judge’s 
factual findings so long as they are supported by the record.12 
III. 
Despite the testimony presented at the hearing, the parties dispute the scope 
of reimbursement due Verizon, premising their arguments on conflicting 
statements made in correspondence between the two.  Verizon claims that, based 
on its company policy to provide no more than the statutory minimum PIP 
coverage, it could only directly recoup $15,000 in PIP reimbursement from 
Lankford, and that any additional payments must be considered workers’ 
compensation.  That explains why Verizon admittedly settled with Lankford, the 
third-party tortfeasor, for $15,000, the maximum recoverable reimbursement for 
                                                 
9  
Waters v. United States, 787 A.2d 71, 73 (Del. 2001).  See also DAN B. DOBBS, LAW OF 
REMEDIES § 4.3 (2d ed. 1993) (“Subrogation simply means substitution of one person for 
another. . . . Factually, the case arises because, for some justifiable reason, the subrogation 
plaintiff has paid a debt owed by the defendant.”). 
10  
Nationwide Mut. Ins. Co. v. Wooters, 1996 Del. Super. LEXIS 113, aff’d 682 A.2d 628 
(Del. 1996). 
11  
21 Del. C. § 2118(g)(6). 
12  
Ingram v. Heiman, Aber & Goldlust, 748 A.2d 913 (Del. 2000). 
 
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PIP benefits Verizon paid Saporito.  Verizon also contends that, regardless of the 
label assigned, Saporito knew that Verizon’s settlement with Lankford did not 
include the additional payments Verizon claimed to be workers’ compensation.  
Saporito counters that Verizon made clear in its correspondence that the payments 
Verizon paid Saporito above $15,000 were PIP benefits.   
A.  The No-Fault Insurance and Employment Statutes 
Although he found no evidence to support the proposition that Verizon 
“voluntarily and actually assumed greater liability for PIP coverage than the 
minimum required and mandated by statute,”13 the trial judge ultimately concluded 
that Saporito was not responsible for Verizon’s ambiguous recordkeeping because 
by settling with Lankford directly for PIP payments made, Verizon waived its 
entitlement to pursue additional PIP reimbursement from Saporito.  In essence, 
because the company failed to expressly identify the additional payments as 
workers’ compensation but instead erroneously referred to them as PIP despite the 
company’s clear policy to the contrary, the trial judge rejected Verizon’s claim that 
any payments beyond the PIP $15,000 statutory minimum were made as workers’ 
compensation benefits. 
Delaware law, however, belies this conclusion.  When read together, 
Delaware’s no-fault insurance and workers’ compensation schemes cover the lien 
                                                 
13  
Tr. at 142. 
 
8
universe: they establish a policy of employer and insurer reimbursement for 
accident-related payments when the employee-policyholder recovers from a third- 
party tortfeasor.  To allow a recording error – characterizing excess payments as 
PIP instead of workers’ compensation – to trump this policy would prevent 
reimbursement to the employer-insurer contrary to the subrogation rights secured 
by the respective statutes.  The trial judge’s reluctance to enforce Verizon’s 
subrogation rights gives Saporito a windfall by allowing him to keep the full 
amount recovered from the third-party tortfeasor and by denying Verizon the right 
to reimbursement for the compensation benefits it paid to Saporito.  Saporito’s 
double recovery is not only an inequitable result, it contravenes both the text of and 
policy behind Delaware’s insurance and labor statutes.  Regardless of how these 
payments are characterized, disallowing reimbursement is a statutorily untenable 
outcome on this record. 
B.  The Excess Payments 
 
Under our no-fault insurance system, Verizon’s PIP subrogation right 
extends only to the third-party tortfeasor, Lankford, and not to Saporito himself.  
Verizon settled with Lankford for $15,000, its maximum PIP coverage.  As a 
result, the balance of the payments Verizon made to Saporito were workers’ 
compensation benefits that constituted a lien against Saporito’s recovery from 
 
9
Lankford.  The evidence presented supports the company’s claim that its excess 
payments were workers’ compensation benefits. 
 
Verizon’s witnesses testified about both the company’s PIP coverage policy 
and its PIP and workers’ compensation payment practices.  Verizon’s risk-
management specialist stated that because it “provide[s] other benefits such as 
workers’ compensation,” the company purchases PIP “at a minimum.”14  Verizon’s 
payroll manager stated: 
The payments were made as workers’ comp[ensation], but they were made 
in PIP payment.  But the supplemental register has workers’ comp[ensation] 
stated on there. . . . There’s no programming or no identifying in the system 
to say this is a PIP payment.  So it was paid under workers’ 
comp[ensation].15   
 
Where the company’s records equivocate, the manager is clear.  She expressly 
characterized the payments as workers’ compensation benefits. 
 
The Verizon-Lankford settlement circumstances independently support the 
manager’s testimony.  Verizon followed its self-insurance scheme by immediately 
settling its PIP subrogation claim against Lankford for $15,000, a figure that 
matches the statutory minimum, the company’s avowed coverage maximum for 
PIP.  That the settlement amount mirrors the PIP coverage maximum the 
company’s representatives testified to indicates that Verizon never intended any 
                                                 
14  
Tr. at 95.   
15  
Tr. at 54. 
 
10
payments in excess of $15,000 to be PIP payments.  If so, they would be payments 
to discharge benefit obligations not extended to Saporito.  Saporito, however, 
nonetheless remain entitled, after exhaustion of PIP limits, to workers’ 
compensation benefits.   
Absent a different settlement figure, or other indicia that a larger PIP 
subrogation claim had been reduced through negotiation to $15,000, recordkeeping 
error or confusion alone cannot justify the trial judge’s finding that Verizon paid 
Saporito PIP benefits exceeding its declared coverage maximum.  Indeed, the trial 
judge himself virtually admitted that neither the record supported nor did logic 
confirm his ultimate, speculative conclusion to award Saporito a double recovery: 
For the Court to uphold [Saporito’s] position, the Court would have to 
find that Bell Atlantic-Delaware . . . voluntarily and actually assumed 
greater liability for PIP coverage than the minimum required and 
mandated by statute.  And there’s no evidence in this case that that 
happened.16 
 
The stated PIP coverage, the maximum settlement for $15,000 with Lankford, and 
the testimonial evidence all demand a finding that the payments Verizon made to 
Saporito in excess of its $15,000 PIP policy were workers’ compensation benefits.  
On this record, Saporito’s windfall – allowing him to insulate his recovery from 
Lankford from the payments in excess of $15,000 erroneously documented as PIP 
                                                 
16  
Tr. at 142.  
 
11
thus resulting in a double recovery – is not supported by the record and is contrary 
to statutory public policy.17  
IV. 
Verizon next argues that the trial judge, irrespective of the base amount of 
the workers’ compensation lien, abused his discretion by ordering it to pay 3.74 
percent of Saporito’s attorneys’ fees and out-of-pocket expenses.  Under our 
holding in Keeler v. Harford Mutual Insurance Company, “not requiring workers' 
compensation carriers to bear part of the cost of third party tort litigation where 
recovery results in reimbursement of benefits is inequitable and contrary to the 
language of the [apportionment] statute.”18  We review the assessment of 
attorneys’ fees and costs for abuse of discretion.19   
Verizon contends that the trial judge erred in applying Keeler when he failed 
to examine or review the amount of time and effort that Verizon’s counsel 
contributed to the third-party action.  The present record, however, establishes 
otherwise.  The record shows that the trial judge specifically addressed Verizon’s 
assistance in the third-party action, and properly concluded that Verizon’s counsel 
                                                 
17  
Although the present record may raise equitable issues inferentially, the parties did not 
frame their arguments in that manner, either before the trial judge or this Court.  See SUPR. CT. 
R. 8.  Because our conclusions here are shaped by the legal principles set forth by statute, we 
decline to address sua sponte any equitable theory of relief.   
18  
Keeler v. Harford Mut. Ins. Co., 672 A.2d 1012, 1014 (Del. 1996), citing 19 Del. C. § 
2363(f). 
19  
Roadway Express v. Folk, 817 A.2d 772, 776 (Del. 2003). 
 
12
was involved to a limited extent before the Lankford settlement.  Our reversal of 
the lien calculation does not implicate the trial judge’s analysis on this issue.  
Accordingly, we find no abuse of discretion in the trial judge’s determining of the 
percentage of fees to be paid by Verizon. 
 
V. 
 
Because the evidence presented demonstrates that Verizon intended all 
payments to Saporito recovered from Lankford in excess of its maximum PIP 
coverage to be workers’ compensation payments, and because Delaware 
employment and labor law favors the policy of reimbursing employer and insurer 
accident-related payments from third-party settlement proceeds, the trial judge’s 
finding that Verizon paid Saporito only $46,299.10 in workers’ compensation 
benefits is unsupported by the record.  Accordingly, that judgment of the Superior 
Court is REVERSED and REMANDED.  The judgment awarding fees and costs 
to Saporito is AFFIRMED with instructions to enter final judgment consistent 
with this Opinion.