Delaware Worker's Tort Suit Against TPA May Continue
A civil action filed by an injured worker against a third-party claims administrator for alleged improper claims handling may proceed, held a Delaware court recently [see Ferrari v. Helmsman Mgmt. Servs., LLC, 2020 Del. Super. LEXIS 2740 (Aug. 19, 2020)]. Finding that the Court’s earlier denial of the TPA’s summary judgment motion did not conflict with other decisions of the Court, the Court denied the defendant’s Application for Certification of an Interlocutory Appeal to the state Supreme Court.
Background
Plaintiff sued a third-party claims administrator (TPA) for bad faith delay and denial of workers’ compensation benefits and intentional infliction of emotional distress. The TPA moved for summary judgment, arguing that in as much as it was not a party to the underlying insurance contract, the civil action failed as a matter of law. On June 23, 2020, the Superior Court of Delaware, New Castle (“the Court”) denied the TPA’s motion, finding that there were genuine issues of material fact regarding whether Defendant acted reasonably as a TPA in investigating and initially denying Plaintiff’s claim. The Court found that Plaintiff had established a prima facie case sufficient to survive summary judgment on the issues of bad faith and punitive damages.
Defendant filed an Application for Certification of an Interlocutory Appeal, arguing that such an appeal was authorized since the Court had decided a substantial issue of material importance regarding the merits of the case — not merely collateral matters — and that the decisions of the trial court were conflicting upon a question of law: whether a TPA may be held liable for bad-faith breach of an insurance contract to which it is not a party.
The Court’s Decision
The Court noted that Plaintiff did not argue that the June 23 Opinion did not decide a substantial issue of material importance. Rather, Plaintiff contended (a) that the June 23 Opinion did not conflict with other decisions of the Court, and (b) that review of the June 23 Opinion would not terminate litigation nor serve considerations of justice.
The Court agreed with Plaintiff’s arguments. It noted that the TPA had relied upon two cases which it contended conflicted with the Court’s decision: Colbert v. Goodville Mutual Casualty Company, 2010 Del. Super. LEXIS 270 and Lipchock v. New Castle County, 2013 Del. Super. LEXIS 384. The Court stressed that it had already distinguished both cases in its June 23 Opinion, in which it had held both cases specifically addressed PIP benefits, not workers’ compensation [emphasis added]. The Court also stressed that there were different public policy considerations for each of these types of cases.
The Court concluded that another decision, Thomas v. Harford Mut. Ins. Co., 2003 Del. Super. LEXIS 268, controlled. On the narrow issue of whether a plaintiff may sue a TPA for breach of the duty of good faith and fair dealing arising from a workers’ compensation contract, there was no contradictory Delaware authority. Finding the TPA had failed to demonstrate that Delaware Supreme Court Rule 42(b) requires that the Court exercise its discretion to certify interlocutory appeal, Defendant’s Application was denied.