Waters v. United States

In Waters v. United States, 787 A.2d 71 (Del. 2001), the Delaware Supreme Court was asked via certified question whether a no-fault carrier who paid no-fault benefits to its insured could subrogate against the United States. The Court held that the no-fault insurer had a legal right to subrogate against the United States to recover the no-fault benefits paid to its insured. In addressing whether the federal government was subject to subrogation, the Court discussed the State of Delaware's status as a self-insured entity and applied that analysis to the federal government to conclude that the federal government was likewise effectively self-insured. The Waters Court reasoned that the State is in essence a "self-insured" entity, insofar as it provides financial security for its employees, at least equivalent to the insurance requirements contemplated by state law. The Court explained that the statutory limitations on subrogation rights prescribed by Section 2118 do not apply to "self insured" tortfeasors. As the United States is most closely aligned with a "self insured" entity, the no-fault carrier was entitled to subrogation under the Delaware Financial Responsibility Law. Of particular note is the Court's discussion in dicta regarding the policy goals of the no-fault statute, "one of which was to hold the tortfeasor liable by granting the insurer a subrogation right." (Id.)