A Different Kind of Miracle on 34th Street — and the Del. IAB Makes Postage Law in a Coverage Case
"Miracles are a retelling in small letters the very same story which is written across the world in letters too large for some of us to see." C.S. Lewis
Okay, so the title of this post has a lot to do with the U.S. Post Office . . .which played a really big role in the movie. Not so much in this recent IAB decision in which the Board held the following:
Under Delaware law, we are going to treat a prepaid postage "meter mark" the same as a U.S. Post Office mark.
In terms of how to calculate a policy reinstatement date after a period of lapse, the controlling date is not based the carrier's receipt of the premium check, but is based on the Delaware Insurance Plan Handbook, which allows that the period of lapse is through the date of the U.S. post mark appearing on the envelope of the premium payment correcting the default, relying as well on Levan v. Independence Mall, 940 A. 2d 929 (Del. 2007), which defines the triggering event in terms of a payment being made for statute of limitations purposes as the date of mailing.
So my gift to you-- Jesus Silva Garcia v. City Window Cleaning, IAB # 1348611 (8/31/11). Probably should have been captioned City Window Cleaning v. Liberty Mutual. Some facts, briefly, to put this all in perspective — City Window fails to issue a timely renewal payment to Liberty Mutual when due on 1/1/10. According to testimony found credible by the Board members, the owner of City Window, having just taken on a substantial job after a period of relative non-activity, and also following a property loss claim that heightened his awareness that coverage had lapsed, mails a check to Liberty Mutual on 1/12/10. The claimant loses a leg in a horrific accident on 1/15/10.
So what is in dispute? Here is what makes the case pretty darn interesting, if you ask me (and feel free to do so since this was indeed my case) Liberty Mutual does not have a process by which there is any absolute verification of when the checks arrive in the lock box to which the customer is instructed to direct his payment. The lock box is "swept" several times daily by a courier service acting on behalf of its bank (located in another state) such that the "date receipt" stamp on any given payment is the second destination . . . and based on the fact that the check arrived at the bank on Monday, 1/18/10 (the Martin Luther King holiday), coverage was denied based on claimed lack of timely receipt.
So that is why a post mark versus a meter mark came into play (as a potential defense) and why the date of receipt was pivotal in this case.... Well, actually not since the Board agreed with my client that we should be looking at date of mailing as well as the DE Workers Compensation Insurance Plan Handbook rules (Section III, Renewal, Cancellation and Reinstatement).
And why is this a "miracle"?
The claimant lost his leg and without insurance coverage, his options to collect the full spectrum of what he might be entitled to under the Act would be severely limited.
The employer has paid ongoing TTD out of its own pocket for the 18 months this has been pending and an adverse result would have put it out of business.
Liberty Mutual's position that we look to the second destination as the only verified date of receipt, or its alternate that we argument that we look to the date the funds were taken out of my client's back account as the date payment was "made" would have led to an inconceivable and inequitable outcome (and keeping in mind an argument was made that we should have to prove when THEY received that check.....are you kidding me?)
One more thing. I rarely if ever have co-counsel in a case. It may never happen to me again, and should it not, there is little doubt in my mind that I am the best second chair counsel could wish for at an IAB Hearing . . .because this victory belongs to my colleague Bill Gamgort . . .a coverage expert making a cameo appearance as a work comp lawyer. And if I have my druthers, you haven't seen the last of young Bill.
Bill Gamgort's (sometimes irreverent) second chair, Cassandra Roberts
