IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ESSA ABDUL-AHAD,
)
)
Plaintiff, )
)
) C.A. No. CPU4-l5-O02616
)
NATIONWIDE MUTUAL )
FIRE INSURANCE COMPANY, )
)
Defendant. )
)
)
Renée Leverette, Esq. Miranda D. Clifton, Esq.
Gary S. Nitsche Law Off1ce of Cynthia G. Beam
305 North Uni0n Street, Second Fl00r 131 Continental Drive, Suite 407
P.O. Box 2324 Newark, Delaware 19713
Wilmington, Delaware 19899 Attorneyfor Defczndant
Attorneyfor Plaintijj"
EMORANDUM OPINION__;
RENNIE, J.
PROCEDURAL HISTORY
This matter arises from a December 2, 2013, automobile accident ("Accident"). Plaintiff
alleges that as a result of the Accident he suffered various injuries and incurred medical expenses
and lost wages. On January l3, 2015, Plaintiff brought suit against the third-party tortfeasor in
Superior Court. As part of the Superior Court action, the parties elected binding arbitration to
resolve Plaintiff s request for damages for medical expenses, personal injury, and lost wages.
Thereafter, on July 29, 2015, Plaintiff commenced an action pursuant to 21 Del. C. § 2ll8,
against Nationwide Mutual Fire Insurance Company ("Nationwide") in the Court of Common
Pleas, seeking the same damages. On May l3, 20l6, after binding arbitration, the Superior Court
matter was dismissed with prejudice in Plaintiff s favor.
On June 3, 2016, following the arbitrator’s decision in Superior C0urt, Nationwide filed
the instant Motion to Dismiss Based Upon Collateral Estoppel ("Motion"). On June 7, 20l6, the
Court heard argument on the Motion and granted Plaintiff leave to file a response. On June l4,
2016, Plaintiff filed his response and the Court took this matter under advisement.
BACKGROUND
On May 2, 2016, the Superior Court arbitrator issued a decision awarding Plaintiff partial
damages. The arbitrator declined to award Plaintiff all damages sought, because she found that
some of Plaintiff s damages were not "reasonable, necessary, and related to [the] [A]ccident."
Specifically, the arbitrator did not award Plaintiff damages for the following medical expenses:
Key Health for $9,161.00; Heritage Therapeutics for $l,796.2l; prescriptions for $l,460.90; Dr.
Conrad King’s pain management services for $l,752.50; Aegis Sciences Corporation for
$l,370.00; Auto Rx for $2,230.95; and Delaware Diagnostics & Rehab Center for $978.'75.1 In
addition, the arbitrator declined to award Plaintiff’ s requested $8,118.00 in lost wages.
Plaintiff brought the present action pursuant to 21 Del C. § 2ll8, and asserts that his
damages are reasonable, necessary and causally related to the Accident. Even though previously
requested and ruled upon in the Superior Court arbitration, Plaintiff’ s Court of Common Pleas
Complaint requests compensation for lost wages totaling $4,290.00, and the following medical
expenses: Key Health for $9,161.00; Heritage Therapeutics for $l,796.2l; prescriptions for
$639.04; Dr. Conrad King’s pain management services for $968.75; Aegis Sciences Corporation
for $l,370.00; and Auto Rx for $2,661.05. The damages adjudicated at arbitration encompass all
damages pled in this Court.
In its Motion to Dismiss, Nationwide contends that Plaintiff is precluded, under the
doctrine of collateral estoppel, from again seeking as damages the expenses submitted and ruled
upon by the arbitrator in the Superior Court action.
Plaintiff argues that collateral estoppel should not apply in this instance because doing so
is against public and legislative policy. Plaintiff contends that collateral estoppel does not apply
to arbitrations. He argues that the arbitration panel’s award does not have the same preclusive
force as a trial, because there is no record upon which to determine what transpired or whether
any procedural safeguards were in place at arbitration.
STANDARD OF REVIEW
Court of Common Pleas Cz`vil Rule l2(b)(6) governs motions to dismiss for failure to
state a claim upon which relief can be granted. When considering a motion to dismiss under
Rule l2(b)(6), the Court "‘must determine whether it appears with reasonable certainty that,
1 The arbitrator declined to award damages for medical treatment provided after May 7, 2014. However, the
arbitrator did grant damages for an MRI administered on June 18, 2014; these damages are not at issue in this
l'!l\':ll.`t€l'.
under any set of facts which could be proven to support the claim, the plaintiff[ ] would not be
6
entitled to relief."’z The Court is required to accept only those "reasonable inferences that
logically flow from the face of the complaint,’ [it] ‘is not required to accept every strained
interpretation of the allegations proposed by the p1aintiff."’3
DISCUSSION
A. Issue Preclusion Applies to Binding Arbitration
Delaware’s public policy "supports giving finality to the decision of [an] arbitration
l,"4 and "[a] written agreement to submit to arbitration . . . is valid, enforceable and
pane
irrevocable."5 The Superior Court requires parties to engage in "compulsory alternative dispute
resolution ("ADR"), the format of which is determined by the parties.é If agreed to by the
parties, Superior Court ADR may include binding arbitration.7 Pursuant to the Uniform
Arbitration Act ("Arbitration Act") "parties are entitled to be heard . . . , present evidence
material to the controversy[,] and to cross-examine witnesses appearing at the hearing."g
Plaintiff contends that Delaware legislative policy weighs against applying collateral
estoppel when "arbitration is optional and [is] an alternative means to resolve disputes outside of
litigation."g Plaintiff s argument relies upon Halkiotis v. Lista, a case brought on a personal
injury protection ("PIP") claim.lo 1n Halkiotis, the plaintiff requested optional legislature-
2 Vanderbilt Income & Growth Associates, L.L.C. v. Arvida/JMB Managers, Inc., 691 A.2d 609, 612 (Del. 1996)
(citing In re Tri-Star Pictures, Inc., Litig., 634 A.2d 319, 326 (De1. 1993)).
3 In re Gen. Motors (Hughes) S'holder Litig., 897 A.2d 162, 168 (Del. 2006) (quoting Malpiede v. Townson, 780
A.2d 1075, 1083 (Del. 2003)).
4 Cooper v. Celente, 1992 WL 240419, at *7 (Del Super. Sep. 3, 1992).
5 10 Del. C. § 5701. Importantly, Delaware courts have applied res judicata to final arbitration awards, giving these
awards the "same effect as a court’s final judgment." Mehiel v. S0l0 Cup C0., 2007 WL 901637, at *5 (Del. Super.
Mar. 26, 2007); see Cooper, 1992 WL 240419, at *7 (Del. Super. Sep. 3, 1992) (ho1ding res judicata applicable, in
part, due to parties agreeing that arbitration decision would be final).
‘ Super. cr. civ. R. 16(1>)(4).
7 Id. (emphasis added).
8 10 Del. C. § 5708.
9 Pl.’s Supp. Mot.1l 2.
‘° ld.
lln
imposed insurance arbitration, was denied relief, and then filed a civil action in this Court.l
that action, the defendant sought summary judgment based on the defenses of issue and/or claim
preclusion. The Court denied the defendant’s motion for summary judgment, holding that
although an arbitration panel ruled in defendant’s favor, it was "settled law" that plaintiff did not
"waive any . . . rights by any act relating to arbitration."lz The Halkiotis court reasoned that
because the optional arbitration was brought pursuant to section 21 18(j), which section explicitly
preserves a litigant’s rights without regard to the outcome of arbitration, the plaintiff could still
. . . 1
maintain the action. 3
Unlike the optional arbitration addressed by the Halkiotis Court, Plaintiff commenced
arbitration pursuant to Superior Court Cz`vil Rule 16 ("Rule 16"), which was a prerequisite to
bringing his claim before the Superior Court.m Notably, though ADR is mandatory, Rule 16
allows the parties discretion to select the type of ADR. Thus, even though Plaintiff had the
opportunity to select non-binding arbitration, and in so doing preserve his rights to further
litigate without exposure to an issue or claim preclusion defense, he voluntarily selected binding
arbitration and consequently subjected the instant matter to a collateral estoppel defense. Hence,
the Halkiotis opinion does not advance Plaintiff s argument. lndeed, the Halkiotis holding’s
tenor is not one of broad legislative policy import, as Plaintiff suggests, but is confined to section
" 1996 WL 1581141 (ci. c@m. Pi, N<>v. i2, 1996).
'zld. (citing Scott v. Bey, 1986 WL 5865 (Apr. 28, 1986) (ORDER)). In its decision, the Halkiotis Court expressly
relied upon the rationale set forth in Bey. The Bey Court did not apply collateral estoppel because section 21 18(j)
expressly reserved the parties’ rights to litigate despite the outcome of arbitration, and it could not determine which
issues were litigated at arbitration, Thus, the Court had an expressly finite basis for its decision not to apply
collateral estoppel. ln the instant matter, the inverse holds true: there is no question surrounding the issues litigated
at binding arbitration, and Plaintiff failed to provide this Court with any similar statute reserving the parties’ rights
to litigate regardless of the arbitrator’s findings
'3 This type of arbitration is not presently at issue before the Court. Pursuant to section 21 l8(j), "arbitration shall be
purely optional and neither party shall be held to have waived any of its rights by any act relating to arbitration." 21
Del. C. §2118@).
'4 Super. Ct. Civ. R. 16(b)(4); Super. Ct. Civ. R. l6(b)(4)(f)(i) provides that arbitration "is a process by which a
neutral arbitrator hears both sides of a controversy and renders a fair decision based on the facts and the law. If the
parties stipulate in writing the decision shall be binding, in which instance the case is removed from the Court’s
docket."
2118@) optional arbitration. Thus, it is inapplicable to the binding arbitration at issue before this
Court.
Plaintiff also argues that public policy precludes application of collateral estoppel where
"the desire to end litigation and avoid conflicting decisions is overshadowed by statutory public
policy and principles of fairness and justice."l§ Plaintiff predicates this public policy argument
on the Delaware Supreme Court’s Messick v. Star Enterprises decision. Notably, in Messick, the
Delaware Supreme Court "strictly limited [the holding] to [the] narrow set of circumstances
where a statute mandates that there be no election of remedies and the application of collateral
’16 The Messick plaintiff brought a workers
estoppel would result in such an election.’
compensation claim before an administrative board in an attempt to receive benefits pursuant to
the Workers Compensation Statute ("Statute"). The Statute specifically reserved the rights of a
workers compensation plaintiff "[to] proceed to enforce the liability of . . . [a] third party for
damages" regardless of the outcome of the workers compensation claim.w The Court declined to
apply collateral estoppel because of the Statute’s express prohibition of the election of remedies
and its reservation of rights to proceed regardless of the outcome of the prior action.ls
Plaintiff argues that his plight is similar to that of the Messick plaintiff, in that application
of collateral estoppel would result in an injustice by "forc[ing] [Plaintiff] to litigate his PlP suit
19 or else risk precluding future
before . . . [engaging] in arbitration for the third-party case,"
claims based upon the same factual issues. This comparison is inapposite. In Messick, the
Statute implicitly barred the imposition of collateral estoppel where the plaintiff was forced into
an election of remedies. In the instant matter, Plaintiff has failed to identify any similarly
'5 Pl.’s Mot. 1[ 5 (citing Messick v. Start Enterprl'ses, 655 A.2d l209, 1212 (Del. 1995)).
'° 655 A.zd ar 1213 (Dal. 1995).
" Maaszak, 655 A_zd ar 1212.
"‘ Id. ar 1213.
‘9 Pl.’s Mar. 115
operative statutory protections. l\/loreover, Plaintiff failed to demonstrate why this Court should
rely on Messick when the Delaware Supreme Court limited its holding to the facts before that
Court. Applying collateral estoppel in this instance would not run afoul of the narrow precedent
set and policy concerns expressed by the Halkiotz`s or Messick Courts.
Plaintiff also contends that the arbitration should not have the same binding force as a
judgment because it was not adjudicated before a court and there is "no record with which to
determine what sort of procedural opportunities Plaintiff received [at arbitration]."zo ln his
Response, Plaintiff failed to provide any compelling examples of such procedural deprivations
beyond bare assertions that the Delaware Rules of Evidence do not apply and a record of the
arbitration proceeding is not available.zl Indeed, the Arbitration Act expressly affords parties
several procedural safeguards such as the right to be heard, present the material aspects of the
controversy, and to cross-examine witnesses. The Court is not persuaded that in arbitration
Plaintiff was robbed of procedural safeguards afforded litigants in a civil trial nor deprived a full
and fair opportunity to litigate. There exists no evidence in the record to support this argument.
Therefore, the Court can only conclude that Plaintiff had a full and fair opportunity to litigate
whether his damages were reasonably and causally related to the Accident. This Court will now
address the issue of collateral estoppel.
B. Collateral Estoppel Bars Re'" '
jon of Plaintiff’s Request for Damages
Collateral estoppel will apply where the estopped party had a full and fair opportunity to
litigate the issue and application would not cause injustice to that party.zz Collateral estoppel
will bar relitigation of an issue where:
2° Pl.’s Mor. 113.
2' Notably, Plaintiff was in the best possible position to obtain this information, as he retained the same law firm to
handle both the Superior Court arbitration and the present matter.
HSee City of Newark v. Unemployment Insurance Appeal Board, 802 A.Zd 318, 324 (Del. Super. 2002).
7
(l) the issue previously decided is identical to the issue at bar; (2) the prior issue
was finally adjudicated on the merits; (3) the party against whom the doctrine is
invoked was a party . . . to the prior adjudication; and (4) the party against whom
the doctrine is raised had a full and fair opportunity to litigate the issue in the
~ - 23
prior act1on.
Pursuant to 2l Del. C. § 2118, insurance carriers must compensate an insured for
"reasonable and necessary" medical expenses and lost wages that relate to a motor vehicle
accident covered by the insured’s PIP policy.24 "The statutory standard [oi] reasonable and
"25 A plaintiff seeking reimbursement
necessary . . . includes reasonable medical probability.
from an insurance carrier under the PIP statute "bears the burden of proof to establish by a
preponderance of the evidence that the medical services received were necessary and that the
bills or charges for such services were reasonable."%
Collateral estoppel precludes Plaintiff from relitigating the issue of whether the damages
sought were reasonable, necessary, and causally related to the Accident, because that issue was
already decided in binding arbitration. Every element of collateral estoppel is satisfied: the issue
decided in arbitration is identical to the issue at bar-that the damages sought by Plaintiff in the
Superior Court action were not reasonable, necessary, and causally related to the Accident. F or
the reasons set forth above, the arbitration is considered an adjudication on the merits and is
given the same force as a final judgment. Nationwide invokes collateral estoppel against
Plaintiff, who was a party to the arbitration hearing. Additionally, nothing on the record
_ -='»_'-
23 1a ar 324 wiring Bens v. T@wnsends, 1na,765 A.zd 531, 535 (Del. 2000)).
24 Slale Farm Mut. Auto. Ins. C0. v. State Dep't ofNatural Res. & Envtl. Control, 201 l WL 2178676, at *2 (Del.
super. May 31,2011);211)@1. C. § 21 is(a).
25 Id. (quoting Denm`s v. State Farm Mut. Auto. Ins. Co., 2008 WL 4409436, at *2 (Del. Super. Feb. 13,
2008)).
26 Mangene v. State Farm Ins., 2015 WL 4603052, at *3 (Del. Com. Pl. May 28, 20l5) (quoting Watson v.
Metropolitan Property and Cas. Ins. Co., 2003 WL 22290906, at *5 (Del. Super. Ct. Oct. 2, 2003 (citing l7 Lee R.
Russ & Thomas F. Segalla, Couch On Insurance § 254:59 (3d ed. 200l)) (internal brackets omitted)(emphasis
added).
indicates that Plaintiff was materially limited from fully arguing the merits of Plaintiff s claim
for damageS.
CONCLUSION
The doctrine of collateral estoppel bars Plaintiff from relitigating the issue of whether the
damages sought are reasonable and necessary as required by 21 Del. C. § 2118. Therefore,
Plaintiff is bound to the conclusions made at the Superior Court arbitration hearing. The
arbitrator found that much of Plaintiff’s medical expenses and lost wages were deemed not to be
reasonable, necessary, and related to the Accident. Accordingly, Nationwide Mutual Fire
Insurance Company’s Motion to Dismiss Plaintiff’s claim for medical expenses and lost wages is
granted.
IT IS SO ORDERED this 10th day of August 2016.
Sheldo . ennie,
Judge