Court Opinion

ID: 9704724
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:44:14.65626+00
Date Added: 2024-06-11T18:22:04.708798
License: Public Domain

HOLLAND, Justice,
dissenting, with whom MOORE, Justice joins:
The certified question in this case raises two issues. First, who is primarily responsible for paying Nalbone’s lost wages? Second, is Mrs. Nalbone entitled to double recovery?
The following legal principles are not in dispute: (1) State Farm, like all insurers operating in this State, is required to issue policies that extend PIP benefits coexten-sively with the requirements of 21 Del.C. § 2118; (2) the language of section 2118(a)(2)a.2. mandates compensation for the net amount of lost earnings; and (3) a policy provision or coverage interpretation that does not meet the minimum requirements of the statute will not receive judicial recognition.4
Nalbone contends that 21 Del.C. § 2118 mandates payment by her no-fault insurance carrier (State Farm), for her lost earnings, irrespective of whether those losses have been compensated by a third party, her employer. State Farm concedes that *77Nalbone is entitled to no-fault PIP benefits under its policy. However, State Farm argues that since Nalbone has received “sick pay” from her employer, the benefits of her no-fault policy are “available” but not “actually recoverable” unless her employer’s plan fails to pay her lost wages in full. The majority concludes that “[t]he absence of a legislative history or prior judicial construction renders [State Farm’s] argument inconclusive but the reasoning seems at least plausible.” I find that State Farm’s argument is inconsistent with the plain language and the purpose of 21 Del. C. § 2118 and prior judicial construction of its terms. See Bass v. Horizon Assur. Co., Del.Supr., 562 A.2d 1194 (1989); International Underwriters v. Blue Cross & Blue Shield of Del., Inc., Del.Supr., 449 A.2d 197 (1982).
In International Underwriters, Edward J. Stahl, Jr., incurred substantial medical expenses from injuries sustained in a motor vehicle collision attributed to the negligence of a third party. International Underwriters v. Blue Cross & Blue Shield of Del., Inc., 449 A.2d at 198. Mr. Stahl’s employer carried Blue Cross health insurance for Mr. Stahl’s benefit. Id. Blue Cross paid Mr. Stahl’s medical expenses. Blue Cross argued that, under Delaware’s no-fault statute, as a matter of contract or common law, it was subrogated to Mr. Stahl’s right to recover the medical expenses from his no-fault PIP carrier. Id.5 This Court agreed. In International Underwriters, this Court held that the “obvious purpose of Delaware’s no-fault statute § 2118 [is] to impose on the no-fault carrier ... not only primary but ultimate liability for the payment of [the insureds] covered medical bills to the extent of ... unextend-ed PIP benefits.” International Underwriters v. Blue Cross & Blue Shield of Del., Inc., 449 A.2d at 200.
There is no basis to reach an opposite conclusion when the issue is the ultimate responsibility to pay lost wages rather than medical expenses, since both duties are imposed by the same statute, i.e., 21 Del.C. § 2118. In fact, within the last few months, this Court has held that “21 Del. C. § 2118(a)(2) mandates coverage for the expenses of medical treatment and for lost earnings sustained by persons injured as a result of an automobile accident.” Bass v. Horizon Assur. Co., 562 A.2d at 1195 (emphasis added). Unless International Underwriters and Bass are overruled, it follows that Delaware’s no-fault statute, section 2118, imposes on the no-fault carrier, not only primary but ultimate liability for the insured’s lost wages. If the no-fault insurance carrier is ultimately liable for Nalbone’s lost wages, State Farm has no right to avoid that responsibility by setting off the amount paid by Nalbone’s employer against Nalbone’s claim.
State Farm argues that without a right of set off its payments would result in recovery by Nalbone pursuant to her no-fault policy and her employer's sick pay plan. The collateral source doctrine is recognized in Delaware and expressly allows for double recovery. To permit double recovery by Nalbone is simply an extension of the collateral source doctrine. See Willis v. Continental Cas. Co., 649 F.Supp. 707, 715 (D.Del.1986).
The focus of the collateral source rule is upon the transaction between the plaintiff and defendant. Any receipt of a collateral payment before or after the tortious act is irrelevant.6 In Nalbone’s case, the focus must be on the statutory duty of the no-fault carrier. The statute imposes ultimate liability upon the no-fault carrier to pay for Nalbone’s lost wages. There is no provision in the statute to set off collateral payments and no statutory prohibition against double recovery by Nalbone.
In fact, the majority acknowledges that Mrs. Nalbone would be entitled to double recovery if she had paid independent con*78sideration for duplicative coverage. However, the majority concludes that Mrs. Nal-bone’s employer has gratuitously provided her with sick pay. Conversely, I find that the sick pay plan was provided to Nalbone by her employer in consideration for her services as an employee. This Court has acknowledged that the terms and conditions of an employer’s fringe benefit plan plays an “ ‘important role in inducing a [person] to enter or continue in the service of that employer. In other words, it is a part of the consideration for the contract of hire.’” Gow v. Director of Revenue, Del. Supr., 556 A.2d 190, 193 (1989) (quoting Dorsey v. State of Delaware ex rel. Mulrine, Del.Supr., 301 A.2d 516, 518 (1972)). See In re State Employee’s Pension Plan, Del.Supr., 364 A.2d 1228, 1234 (1976).
If a tortfeasor were involved in this case, State Farm would be obligated to pay Nal-bone’s lost wages and would be expressly subrogated to Nalbone’s right of recovery from the tortfeasor. 21 Del. C. § 2118(f). In such a situation, Nalbone would receive double recovery. The absence of a tort-feasor does not change Nalbone’s right to recover from State Farm. It simply eliminates State Farm’s right of subrogation. If the General Assembly desires to give a no-fault carrier a right to set off payments made by a collateral source, in the absence of a right of subrogation against a tort-feasor, it can do so expressly by amending the statute. See, e.g., Fla.Stat. § 627.7372 (1984). However, the purpose and language of the existing statute are directed toward maximizing prompt payment to the insured not minimizing payments by the insurer.
The majority states that “the question of the amount of detriment or consideration needed to permit collateral recovery may, at times, prove troublesome in other fact situations.”7 The problems created by reading a right of set off for collateral payments into the statute can be illustrated by a hypothetical situation. If Mrs. Nal-bone has a co-worker who is injured in a similar automobile accident in the future, what will happen if the employer has not paid the lost wages before a PIP claim is filed? Can State Farm make partial payment and tell the second employee to collect the balance from the employer or is State Farm obligated to make payment in full since no collateral payments have been made? State Farm’s obligation to make primary and ultimate payment for lost wages is set forth in the statute. The statutory obligation of the no-fault carrier exists independent of the insured's right to collect from a collateral source and it certainly cannot depend on the happenstance of who pays first. If the timing of the payment were determinative of the amount of State Farm’s obligation, no collateral source would ever pay first.
The purpose of the no-fault statute is to provide for the prompt payment of lost wages by the insurance carrier. If the PIP carrier is permitted to inquire into the nature of a collateral source of payment, promptness is eliminated. If State Farm’s position in this case prevails, litigation with one’s own no-fault carrier will replace prompt payment. If the no-fault carrier can set any collateral payment off against its own obligation, the purpose of the statute, to make it ultimately responsible, is defeated. State Farm’s argument is contrary to the public policy which is articulated in the no-fault statute and should be rejected. See State Farm Mut. Auto. Ins. Co. v. Wagamon, Del.Supr., 541 A.2d 557 (1988).
I respectfully dissent.

. Bass v. Horizon Assur. Co., Del.Supr., 562 A.2d 1194 (1989); Frank v. Horizon Assur. Co., Del. Supr., 553 A.2d 1199 (1989).

. In this case, the parties have stipulated that Nalbone’s employer has no right of subrogation against State Farm.

. Yarrington v. Thornburg, Del.Supr., 205 A.2d 1, 2 (1964) held, "[t]he collateral source doctrine is predicated upon 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.” Whether collateral source payments or services received by the victim are gratuitous or result from a prior contractual relationship, such as insurance, their source is immaterial in calculating the damages owed by the tortfeasor.

. The presence or absence of consideration should not be determinative. In Campbell v. Brandenburger, Del.Super., 162 A. 354, 356 (1932), cited in Yarrington, the Superior Court stated:
[T]he mere fact that the [Sewer Department], by which the plaintiff was employed when he was injured, as a mere gratuity and without the performance of any services whatever by the plaintiff, or any understanding with him that such sums should be repaid, continued to give him an amount equivalent to his previous weekly wages during the whole period that he was unable to work, would not relieve the defendant of his liability to reimburse plaintiff for such actual loss of time and wages as were caused by the defendant's negligent act. (citations omitted).