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Crossan v. Travelers Commercial Ins. Co., 2015 WL 1378916 (Del. Super. Ct. Mar. 10, 2015) aff'd sub nom. Crossan v. Travelers Ins. Co., 2015 WL 7345752 (Del. Nov. 17, 2015)

Delaware Supreme Court affirms Superior Court’s holding that the clear and unambiguous policy language prohibits Plaintiff from obtaining coverage under homeowner’s insurance policy where he is entitled to recover under workers’ compensation laws

On May 23, 2010, Plaintiff was constructing a garage and as he walked across a plank that was used on the scaffolding, the plank failed.  He fell approximately seven feet to the ground resulting in an injury to his right ankle.  Following his fall, the Plaintiff filed a petition with the IAB against Apex Contracting (“Apex”), a sole proprietorship, to determine what compensation was due for the injuries he sustained.  At the IAB hearing, Plaintiff testified that he quit a full-time job with another company to start working for Apex.  He stated that his primary job with Apex was to construct the owner's garage, but he also completed other jobs at the owner’s direction.  Plaintiff testified that he worked six to seven days a week, and was paid $15 per hour. 

To the contrary, the owner testified at the IAB that Plaintiff and others worked on his garage for free. The owner stated that Apex had no employees, only accepted jobs he could do by himself, and that he used subcontractors on a limited basis.  The IAB ultimately concluded that Plaintiff was, in fact, an employee of Apex. Further, the IAB determined that his injury was work related, and that Plaintiff was entitled to workers' compensation benefits from Apex.  Apex, however, did not have a workers’ compensation policy of insurance.

On January 2, 2012, Plaintiff filed suit in the Superior Court against the owner alleging that his injuries were caused by negligence on his part and that he was strictly liable for his injury due to their failure to have workers' compensation insurance.  The Plaintiff also to re-litigate whether or not he was an employee of Apex at the time of his fall.   

The owner held a homeowners policy through Travelers at the time of the injury, but Travelers refused coverage for Plaintiff’s claim because the policy excluded coverage where the injured person was eligible to receive benefits under workers' compensation law.  The owner assigned his interest in the Travelers homeowners policy to Plaintiff to pursue a declaratory judgment action against Travelers to obtain coverage under the policy.  In response to the declaratory judgment action, Travelers argued that the clear and unambiguous policy language excluded personal liability coverage for bodily injury to any person eligible to receive benefits required to be provided under any workers’ compensation law.  Travelers further argued that the Plaintiff was not permitted to argue that he was not an employee of Apex because the IAB had already determined that he was an employed.

The Superior Court agreed with Travelers and dismissed the Plaintiff’s declaratory judgment complaint.  The court held that the Plaintiff was collaterally estopped from arguing whether or not he was an employee at the time of this injuries and that his injuries were compensable under the workers’ compensation laws.  The court then held that the Travelers’ policy clear and unambiguously excluded coverage because the Plaintiff injuries were compensable under the workers’ compensation laws.  On appeal, the Delaware Supreme Court affirmed the holding of the Superior Court. 

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