Delaware Top Court Sends UIM Case Back for Henry II Application

Case File

Determining whether a workers' compensation carrier had subrogation rights to a claimant's subsequent UIM award required a determination of whether the award was "boardable" under Delaware Supreme Court caselaw from the so-called Henry II case. Simply Research subscribers have access to the full text of the decision.

Case

ProAssurance Grp. v. Manz, No. 55, 2025 (Del. 11/07/25)

What Happened?

While acting in the scope of her employment, the claimant was involved in a motor vehicle accident. Following the accident, the claimant filed a workers' compensation claim against her employer's carrier. The carrier paid the claimant $374,070.72 for medical expenses and lost wages as well as a lump sum of $80,000 for all future workers' compensation entitlements.

The carrier and the claimant executed a settlement agreement in which the parties stipulated that the carrier reserved lien rights against recovery by the carrier from any entity, including any insurance carrier, as a result of the work accident.

For the same accident, the claimant separately recovered $8,571 from the driver who caused her injuries. Due to the insufficiency of that recovery, the claimant filed another claim with the employer underinsured motorist policy carried by another insurer.

The UIM policy contained a non-duplication clause that detailed no payment would be made for any element of "loss" for which payment had been made or if a person was entitled to receive payment for the same element of "loss" under "any workers' compensation ... law."

Follow an arbitration proceeding, the arbitrator awarded the claimant $215,000 for her UIM claim. The workers' compensation carrier subsequently asserted a lien on the UIM award, alleging a right to subrogate under Delaware law.

In response, the claimant filed a declaratory judgment action, seeking to exempt her proceeds from the UIM claim from the lien. She alleged that she was only awarded monies not previously paid by her workers' compensation claim due to the non-duplication clause in the UIM policy.

The trial court denied the carrier's motion for summary judgment, ruling that Horizon Servs. v. Henry, 304 A.3d 552 (Del. 2023) (referred to as Henry II), did not apply to the case.

The carrier appealed to the Delaware Supreme Court.

Rule of Law

In Henry II, the Delaware Supreme Court distinguished "boardable" and "non-boardable" damages suffered by an injured employee and held that a workers' compensation carrier's right to subrogation is limited to boardable damages. Non-boardable damages included but are not limited to those covered by personal injury protection policies and are not subject to subrogation.

What the Court Said

Henry II applied to the case because it was decided in September 2023 and the claimant finalized her settlement with the carrier and made her UIM demand with the insurer in November 2023.

Because Henry II was already the "law of the land" when the claimant did her negotiations, the Delaware Supreme Court directed the trial court to apply Henry II and make factual determinations as to the amount, if any, of the claimant's UIM award that was "boardable" and, therefore, subject to subrogation.

Verdict: The Delaware Supreme Court reversed and remanded the case to the Superior Court.

Takeaway

In Delaware, Henry II does not entitle workers' compensation carriers to a guaranteed subrogation right on an injured employee's subsequent UIM awards. Instead, the right is limited to boardable damages.

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