Justia New Jersey Supreme Court Opinion Summaries

Dionicio Rodriguez, an employee of SIR Electric LLC (SIR), was injured while working and filed for workers' compensation benefits under SIR's policy with Hartford Underwriters Insurance Company (Hartford). After receiving benefits, Rodriguez filed a personal injury lawsuit against SIR, alleging negligence, gross negligence, recklessness, and intentional wrongdoing. SIR requested Hartford to defend against the lawsuit, but Hartford refused, citing policy exclusions. SIR then filed a third-party complaint against Hartford, claiming wrongful disclaimer of defense coverage.The trial court granted Hartford's motion to dismiss SIR's complaint, ruling that the policy excluded intent-based claims. SIR's motion for reconsideration and to amend its complaint, arguing that the policy's enhanced intentional injury exclusion (EII exclusion) violated public policy, was denied. The Appellate Division affirmed the trial court's decision.The Supreme Court of New Jersey reviewed the case and held that Hartford has no duty to defend SIR. The court determined that Rodriguez's claims of negligence, gross negligence, and recklessness are subject to the workers' compensation exclusivity bar and are not covered under Part One of the policy. These claims are also excluded from coverage under Part Two of the policy. Additionally, Rodriguez's claims of intentional wrongdoing are excluded under the policy's EII exclusion.The court concluded that the trial judge properly denied SIR's motion to amend its third-party complaint, as the EII exclusion does not violate public policy. The court affirmed the Appellate Division's judgment, upholding the dismissal of SIR's third-party complaint against Hartford. View "Rodriguez v. Shelbourne Spring, LLC" on Justia Law

In November 2021, David Goyco was struck and injured by an automobile while operating a low-speed electric scooter (LSES). Goyco filed a claim for personal injury protection (PIP) benefits under his personal automobile policy with Progressive Insurance Company. Progressive denied the claim, arguing that Goyco's LSES did not meet the definition of an "automobile" and that Goyco could not be considered a "pedestrian" under the New Jersey Automobile Reparation Reform Act, commonly known as the No-Fault Act. Goyco filed a complaint, asserting that LSES riders should be considered "pedestrians" entitled to PIP benefits under the No-Fault Act. The trial court denied relief to Goyco, and the Appellate Division affirmed.The Supreme Court of New Jersey affirmed the lower courts' decisions. The court held that an LSES rider does not fall within the definition of "pedestrian" for purposes of the No-Fault Act. The court found that Goyco's LSES was a "vehicle" that used a rechargeable electric motor and was therefore "propelled by other than muscular power" and was "designed for use on highways, rails and tracks." The court also rejected Goyco's reliance on a 2019 statute that provides that an LSES should be considered equivalent to a bicycle, stating that the statute was not intended to have any effect on the No-Fault Act. The court concluded that Goyco was not a pedestrian entitled to PIP benefits under Progressive's No-Fault insurance policy. View "Goyco v. Progressive Insurance Company" on Justia Law

Ocean Walk, LLC, a company that operates a casino and other entertainment facilities in New Jersey, sought coverage under its commercial property insurance policies for losses sustained during the COVID-19 pandemic. The company claimed that the presence of the virus in its facilities and the government-mandated temporary suspension of its operations constituted a “direct physical loss” or “direct physical damage” to its property under the terms of the insurance policies issued by several defendants. The Supreme Court of New Jersey, however, disagreed with this interpretation and held that Ocean Walk’s allegations failed to meet the policy language's requirements. The court ruled that to demonstrate a “direct physical loss” or “direct physical damage,” Ocean Walk needed to show that its property was destroyed or altered in such a way that rendered it unusable or uninhabitable. The court noted that the company’s allegations did not suggest that the property suffered a physical change; rather, the company was simply not allowed to use its property due to the executive orders. Furthermore, the court ruled that even if Ocean Walk had pled facts supporting the finding of a covered “loss” or “damage,” the losses it claimed were excluded from coverage by the policies’ contamination exclusion. The court affirmed the lower court's dismissal of Ocean Walk’s complaint. View "AC Ocean Walk, LLC v. American Guarantee and Liability Insurance Company" on Justia Law

This insurance coverage dispute between a public entity joint insurance fund (JIF) and Star Insurance Company (Star), a commercial general liability insurance company, turned on whether the JIF provided “insurance” to its members or, instead, the JIF members protect against liability through “self-insurance.” That distinction was pertinent here because Star’s insurance policy included a clause under which its coverage obligations began only after coverage available through “other insurance” has been exhausted; the clause, however, did not mention “self-insurance.” Star argued the JIF provided insurance and therefore Star’s coverage was excess to the JIF; the JIF disagreed, contending that because its members were instead “self-insured,” Star’s coverage was primary. The New Jersey Supreme Court found that under the plain language of N.J.S.A. 40A:10-48, a JIF “was not an insurance company or an insurer under New Jersey law, and its “authorized activities . . . do not constitute the transaction of insurance nor doing an insurance business.” By the statute’s plain terms, JIFs cannot provide insurance in exchange for premiums, as insurance companies typically do; instead, JIF members reduce insurance costs by pooling financial resources, distributing and retaining risk, and paying claims through member assessments. Therefore, JIFs protect members against liability through “self-insurance.” “Self-insurance” is not insurance. The Court affirmed the grant of summary judgment to the JIF and denial of summary judgment to Star. View "Statewide Insurance Fund v. Star Insurance Company" on Justia Law

The issue this case presented for the New Jersey Supreme Court's consideration was whether claims brought under the Insurance Fraud Protection Act (IFPA) and the Workers’ Compensation Act (WCA) by plaintiffs Liberty Insurance Corp. and LM Insurance Corp. (Liberty) against defendants Techdan, LLC (Techdan), Exterior Erecting Services, Inc. (Exterior), Daniel Fisher, Robert Dunlap, and Carol Junz were subject to the apportionment procedure of the Comparative Negligence Act (CNA). Liberty issued workers’ compensation policies to Techdan from 2004 to 2007. It alleged defendants misrepresented the relationship between Techdan and Exterior and the ownership structure of the two entities and provided fraudulent payroll records to reduce the premiums for workers’ compensation insurance. Techdan was indicted for second-degree theft by deception, and Dunlap entered a guilty plea to that charge on Techdan’s behalf. The court granted partial summary judgment as to Liberty’s IFPA claim for insurance fraud against Techdan, Exterior, Dunlap, and Fisher; partial summary judgment as to Liberty’s workers’ compensation fraud claim against all defendants; and partial summary judgment as to Liberty’s breach of contract claim against Techdan and Exterior. The court denied summary judgment as to Liberty’s remaining claims. The jury found Techdan liable for $454,660 in compensatory damages and found Exterior liable for $227,330 in compensatory damages, but awarded no compensatory damages against Dunlap, Fisher, or Junz. It awarded punitive damages in the amount of $200,000 against Dunlap, $10,000 against Fisher, and $45,000 against Junz, but awarded no punitive damages against Techdan or Exterior. The trial court determined all defendants should be jointly and severally liable for the $756,990 awarded as compensatory damages. The Appellate Division held the trial court erred when it imposed joint and several liability on defendants rather than directing the jury to allocate percentages of fault to defendants in accordance with N.J.S.A. 2A:15-5.2(a)(2). The Division concluded the trial court’s cumulative errors warranted a new trial, and it remanded for further proceedings. The Supreme Court concurred with the appellate court: the trial court should have charged the jury to allocate percentages of fault and should have molded the judgment based on the jury’s findings; the trial court’s failure to apply the CNA warranted a new trial on remand. The Court did not disturb the first jury’s findings on the issues of liability under the IFPA, the WCA, or Liberty’s common-law claims, or its determination of total compensatory damages. The Court found no plain error in the trial court’s failure to give the jury an ultimate outcome charge. View "Liberty Insurance Corp. v. Techdan, LLC" on Justia Law

This action was brought by plaintiff Nancy Holm, administratrix of the estate of her husband, Christopher Friedauer, who died in 2015 after falling at his workplace, Holmdel Nurseries, LLC. As a longtime employee of the family-owned business, Christopher had been covered by workers’ compensation insurance, but he was no longer covered after he became a member of the LLC in 2012. Plaintiff claimed that defendant Daniel Purdy, who served as the insurance broker for Holmdel Nurseries from 2002 to 2015, failed to provide to the LLC the notice mandated by N.J.S.A. 34:15-36, and that Christopher was unaware that he no longer had workers’ compensation coverage in his new role as an LLC member. She alleged that as a result of defendant’s negligence and breach of fiduciary duty, Friedauer’s dependents were deprived of a workers’ compensation death benefit to which they would have been entitled under N.J.S.A. 34:15-13 had he been covered by workers’ compensation insurance at the time of his death. Defendant asserted that Friedauer’s father, Robert Friedauer, the LLC’s managing member for insurance issues, instructed defendant in 2002 that Holmdel Nurseries did not want to purchase workers’ compensation coverage for its LLC members because of the cost of that coverage. At the close of a jury trial, the trial court granted defendant’s motion for an involuntary dismissal pursuant to Rule 4:37-2(b) and his motion for judgment at trial pursuant to Rule 4:40-1. Informed by the New Jersey Legislature’s expression of public policy in N.J.S.A. 34:15-36, the New Jersey Supreme Court concurred with the Appellate Division that defendant had a duty to advise the LLC members, at the time of the workers’ compensation policy’s purchase or renewal, that an LLC member actively performing services on the LLC’s behalf was eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. Consistent with N.J.S.A. 34:15-36, however, the Supreme Court held that defendant could not be held liable for breach of that duty unless the damages alleged were caused by defendant’s willful, wanton or grossly negligent act of commission or omission. The Supreme Court disagreed with the trial court’s assessment of the evidence presented by plaintiff on the question of proximate cause. Accordingly, the Court concurred that the trial court erred when it granted defendant’s motion to dismiss and his motion for judgment at trial, and affirmed as modified the Appellate Division’s judgment. The case was thus remanded to the trial court for further proceedings. View "Holm v. Purdy" on Justia Law

The issue this appeal presented for the New Jersey Supreme Court’s review centered on an exclusionary clause in a commercial general liability insurance policy issued by Admiral Insurance Company (Admiral) to Richfield Window Coverings, LLC (Richfield). Richfield sold window coverage products, including blinds, to national retailers like Home Depot and provided retailers with machines to cut the blinds to meet the specifications of the retailers’ customers. Colleen Lorito, an employee of a Home Depot located in Nassau County, was injured while operating the blind cutting machine. She and her husband filed a civil action against Richfield, asserting claims for product liability, breach of warranty, and loss of spousal services. Admiral denied any obligation to defend or indemnify, asserting the claims were not covered under the policy based on the Designated New York Counties Exclusion of the insurance policy. Richfield filed a declaratory judgment action seeking to compel Admiral to defend it in the Lorito case and, if necessary, indemnify it against any monetary damages awarded to the plaintiffs. The Law Division granted summary judgment in favor of Admiral. The Appellate Division reversed, finding that “Richfield’s limited activities and operations have no causal relationship to the causes of action or allegations.” The Supreme Court found that the policy’s broad and unambiguous language made clear that a causal relationship was not required in order for the exclusionary clause to apply; rather, any claim “in any way connected with” the insured’s operations or activities in a county identified in the exclusionary clause was not covered under the policy. Richfield’s operations in an excluded county were alleged to be connected with the injuries for which recovery was sought, so the exclusion applied. Admiral had no duty to defend a claim that it is not contractually obligated to indemnify. View "Norman International, Inc. v. Admiral Insurance Company " on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

The issue this case presented for the New Jersey Supreme Court's review in this appeal was who bore the primary responsibility for the payment of Dale Mecouch’s medical bills arising from an automobile accident that took place before December 5, 1980: the issuer of an automobile insurance policy or Medicare. In 2016, Mecouch was hospitalized for approximately two months at Cooper Hospital University Medical Center (Cooper) due to complications arising from a 1977 automobile accident that left him paralyzed from the waist down. At the time of his accident, Mecouch had a no-fault automobile insurance policy with Selective Insurance Company of America (Selective), which provided Mecouch with unlimited personal-injury-protection (PIP) benefits. Sometime after 1979 but before 2016, Mecouch was enrolled in Medicare. Selective continued to pay Mecouch’s medical expenses related to the 1977 accident until December 11, 2015, when it notified Mecouch by letter that, going forward, “Medicare is the appropriate primary payer for any treatment related to” the 1977 accident. After Mecouch’s 2016 hospital stay, Cooper forwarded to Selective a bill for over $850,000 for medical services rendered to Mecouch. Instead of paying that bill, Selective directed Cooper to seek reimbursement from Medicare. Cooper was a participating Medicare provider, and, at that time, Mecouch was a Medicare enrollee. Cooper then billed Medicare, which issued a payment of under $85,000. Selective eventually agreed to reimburse Cooper for Mecouch’s co-payments and deductibles. Cooper filed a complaint against Selective, seeking the total cost of Mecouch’s care. The trial court granted summary judgment in favor of Cooper, awarding Cooper the cost of Mecouch’s care minus the amount covered by Medicare. The Appellate Division reversed, concluding Medicare was the “primary payer” for Mecouch's medical bills at Cooper. The Supreme Court concluded that because Mecouch was a Medicare enrollee in 2016, Cooper was required to bill and accept payment from Medicare, which promptly covered Mecouch’s medical expenses in accordance with its fee schedule. Cooper could not seek payment from Selective other than for reimbursement of the Medicare co-payments and deductibles. View "Cooper Hospital University Medical Center v. Selective Insurance Company of America" on Justia Law

In September 2016, defendant Trend Motors, Ltd. (Trend), provided defendant Mary Aquilar with a loaner vehicle for her personal use while her vehicle was being serviced. Aquilar’s negligent operation of the loaner vehicle caused it to strike plaintiff Tyrone Huggins’s car. Huggins sustained serious injuries as a result. GEICO insured Aquilar through an automobile policy. Trend held a garage policy with Federal Insurance Company (Federal) that insured Trend’s vehicles for up to $1,000,000 in liability coverage. The definition of an “insured” in the Federal policy purported to extend liability coverage to Trend’s customers using Trend’s vehicles only if the customer lacked the minimum insurance required by law. Huggins filed a complaint seeking compensation for the injuries and loss of income he suffered as a result of the accident. Federal disclaimed liability, arguing that Aquilar did not fit the policy’s definition of an insured because she held $15,000 in bodily injury coverage through GEICO. The trial court held that the Federal policy’s definition of an insured constituted an illegal escape clause and held Federal to the full policy limit of $1,000,000 in liability coverage. The Appellate Division declined to review the trial court’s ruling. The New Jersey Supreme Court concurred with the trial court’s ruling that the provision in the garage policy at issue constituted an illegal escape clause which could not be used to evade the minimum liability requirements for dealership vehicles set by the Chief Administrator of the Motor Vehicle Commission (MVC). The Court ordered the reformation of Federal’s policy to the $100,000/$250,000 dealer-licensure minimum liability coverage required by N.J.A.C. 13:21-15.2(l). View "Huggins v. Aquilar" on Justia Law