NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4963-15T1
CARLOS ARIEL DETRES,
Petitioner-Respondent,
v.
WORKFORCE LOGISTICS CORP.,
Respondent-Respondent.
________________________
SAMUELS, INC., t/a BUY-WISE,
_________________________
Argued June 7, 2017 – Decided August 25, 2017
Before Judges Simonelli, Carroll and Gooden Brown.
On appeal from the Division of Workers' Compensation, Department of Labor and Workforce Development, Claim Petition Nos. 2013-30674 and 2013-32832. James Santomauro argued the cause for appellant Public Service Mutual Insurance Company (Biancamano & DiStefano, PC, attorneys; Mr. Santomauro, of counsel and on the briefs).
Christopher P. Gargano argued the cause for respondent Carlos Ariel Detres.
James P. Paoli argued the cause for respondent Workforce Logistics Corp. (Cooper Levenson, PA, attorneys; Walter J. LaCon, on the brief).
Thomas S. Novak argued the cause for respondents New Hanover Insurance Company and Samuels, Inc., t/a Buy-Wise (Sills Cummis & Gross, PC, attorneys; Mr. Novak, of counsel and on the brief; Michael J. Pisko, on the brief).
PER CURIAM
By leave granted, Public Service Mutual Insurance Company
(Public Service) appeals from the May 9, 2016 order of the Division
of Workers' Compensation denying Public Service's motion for
summary judgment regarding insurance coverage. The judge of
compensation determined that Public Service was responsible for
workers' compensation coverage to Workforce Logistics Corporation
(Workforce) for a work-related accident of Carlos Ariel Detres
(Detres), a worker provided by Workforce, and that Public Service
was required to provide Workforce with attorney representation.
For the reasons that follow, we affirm.
2 A-4963-15T1 I.
Workforce is a New York company that provides temporary labor
specializing in warehouse operations for the automotive industry.
Workforce places workers with companies in New York and New Jersey.
Buy Wise, an automotive parts distributor owned by Samuels, Inc.,
was one of the companies for which Workforce provided temporary
laborers pursuant to an oral agreement. Buy Wise operated from
New Jersey locations at 2091 Springfield Avenue in Vauxhall and
32 Bishop Street in Jersey City. Buy Wise’s Jersey City location
is the site of the accident that is central to this litigation.
On April 23, 2013, Workforce submitted an application for
workers' compensation coverage to Public Service. The application
listed two worksite locations, both in New York. The application
also indicated that no employees "travel out of state[,]" or
"perform work for other businesses or subsidiaries[,]" and that
Workforce did not "lease employees to or from other employers[.]"
On April 26, 2013, Public Service sent Workforce a workers'
compensation insurance policy quote, which included a proposed
draft of a workers' compensation insurance policy contract for
coverage from April 23, 2013 to April 23, 2014.
Thereafter, Public Service issued a Workers' Compensation and
Employer’s Liability Insurance Policy to Workforce for the policy
period May 1, 2013 to May 1, 2014, for an annual premium of $15,450
3 A-4963-15T1 for coverage up to $100,000 for each "bodily injury by accident."
The policy provided coverage for two locations in New York, one
in Jamaica and one in Glendale, and noted no other coverage
locations. Under the policy provisions, only the workplaces and
locations listed in the policy were covered and Public Service had
"no duty to defend a claim, proceeding, or suit that [was] not
covered[.]" Further, under the policy, "[b]odily injury by
accident must occur during the policy period" to be covered and
the policy specified that the Workers' Compensation Law of New
York shall apply.
On October 18, 2013, Detres, a New Jersey resident and
temporary worker provided by Workforce to Buy Wise, suffered severe
injuries when he was struck by a truck while working at Buy Wise's
Jersey City location. Detres filed a workers' compensation
employee claim petition against Workforce and against Buy Wise,
seeking workers' compensation benefits and asserting that he
suffered major head trauma, major hearing impairment, neck
injuries, damage to his eyes and vision, speech impairment, and
extreme pain. In an answer filed on December 3, 2013, and amended
on January 9, 2014, Workforce denied that Detres had a compensable
accident arising out of or in the course of employment with
Workforce and Public Service denied that it provided workers'
compensation coverage to Workforce in New Jersey.
4 A-4963-15T1 On January 28, 2014, the judge of compensation ordered Buy
Wise to "provide [Detres] with temporary disability benefits from
the date of [the accident] until further order of the court" and
"provide [Detres] with all necessary medical treatment for
injuries relating to the [October 18, 2013] incident." The order
was entered "without prejudice" to Buy Wise and "subject to the
[c]ourt's disposition on issues of joint employment and coverage."
At the time of Detres' accident, Buy Wise was insured by Hanover
Insurance Company (Hanover).
Public Service contested coverage of Detres' accident,
asserting that the policy in effect at the time of the accident
provided coverage for two New York locations only and the addition
of the New Jersey locations by endorsement occurred subsequent to
the accident. Following Detres' accident, on December 12, 2013,
Benjamin Markan of JPS Remco Agency, the agency that purportedly
placed workers' compensation coverage for Workforce, sent an email
to Ganesh Narin, an Office Manager with Workforce, informing him
that "there [was] no workers' compensation coverage for any [New
Jersey] locations" in Workforce's policy with Public Service.
Markan requested that Narin send him the address and payroll amount
for the New Jersey location so that it could be added to the policy
as soon as possible to avoid "other claims without coverage in
place." On the same date, Judy Truitt, a Commercial Underwriting
5 A-4963-15T1 Manager with the Simon Agency, sent an email to Markan requesting
that he add two New Jersey locations to Workforce's account,
namely, 2091 Springfield Avenue in Vauxhall with a payroll of
$100,000, and 32 Bishop Street in Jersey City with a payroll of
$20,000.
On January 6, 2014, Sharon Ramlochan, a Commercial
Underwriter with the Simon Agency, sent an email to Markan
inquiring whether December 23, 2013 should be the effective date
for the workers' compensation coverage for the New Jersey
locations. In response, Markan inquired whether the coverage
could be backdated any further. Ramlochan replied that since the
request to add the New Jersey locations was sent on December 16,
2013, she would request that December 16, 2013 be the effective
date, to which Markan agreed. Thereafter, Ramlochan contacted
Irina Kletsel, a Senior Technical Underwriter with Magna Carta
Companies, and requested that the Vauxhall and Jersey City
locations be added to Workforce’s workers' compensation coverage
with an effective date of December 16, 2013.
On January 8, 2014, the policy was amended to add coverage
for the Vauxhall and Jersey City locations. The annual premium
for the amended policy totaled $28,366, reflecting an increase of
$12,916 from the previously charged premium for the two New York
locations only. Ultimately, Public Service charged an additional
6 A-4963-15T1 premium of only $4,816, which it contends reflects coverage
beginning on January 8, 2014. However, the amended policy listed
the same policy period from May 1, 2013 to May 1, 2014,
encompassing the date of the accident, and listed both the Jersey
City and Vauxhall locations as covered locations along with the
two New York locations. Further, the amended policy contained no
qualifying language regarding a later effective date of coverage
for the two New Jersey locations and, like the original policy,
included a choice of law provision that New York law shall apply.1
On December 15, 2015, Hanover and Buy Wise moved for partial
summary judgment and a determination that coverage for Detres'
injuries be provided by either Public Service, or, alternatively,
the Uninsured Employer’s Fund, and directing Public Service or the
Uninsured Employer's Fund to reimburse Hanover for workers'
compensation benefits paid to Detres. On January 25, 2016, Public
Service opposed Hanover's and Buy Wise's motion and moved for
summary judgment and a determination that Public Service's
workers' compensation policy with Workforce did not cover the
Detres accident.
On May 3, 2016, following oral argument, the judge of
1 Thereafter, Workforce renewed the workers' compensation policy with Public Service for the policy term of May 1, 2014 to May 1, 2015, with an estimated annual premium of $30,000.
7 A-4963-15T1 compensation determined that Public Service was required to
provide coverage for benefits under the workers' compensation
insurance policy with Workforce, including "an obligation to
provide legal representation" for Workforce. The judge explained
that his decision was "grounded in a number of alternative"
theories. First, the judge premised his decision on "the plain
language of the policy as it existed up until its termination[.]"
According to the judge, the policy expressly "stated that the New
Jersey locations were included, the location where [Detres] was
injured, and the term of that policy by the plain and explicit
language, included the period of time during which [Detres] was
injured." The judge rejected Public Service's argument that
coverage of the New Jersey locations should be limited to the
period from January 8, 2014 to May 1, 2014, finding that such a
limitation on the policy could have been "easily achieved" by the
insertion "of a single sentence, . . . which was not inserted[.]"
Next, while the judge acknowledged "that the activities of
the parties and the action to amend the policy taken in January,
may arguably create an ambiguity[,]" the judge resolved that
ambiguity against Public Service under "the law of both New York
and New Jersey" by considering the following two principles:
Number one, it is resolved when there is a choice of interpretation to the detriment of the party drafting the contract, the
8 A-4963-15T1 contract of adhesion, . . . to the detriment of the insurance carrier in this instance, but that’s a general principle applying to all contracts of adhesion. In addition to that, there is a general principle also in agreement with both New York and New Jersey, that contracts of insurance are interpreted to favor coverage rather than non-coverage.
So both of those principles would militate towards a finding of coverage in this instance, and I so find.
Finally, the judge addressed "the choice of law argument[,]"
and concluded that, under that analysis, Public Service was
required to provide coverage. The judge reasoned:
[T]he choice of law determinations made by [c]ourts in New Jersey are based upon the governmental interest. Clearly, [the] interest of the State of New Jersey and its public policy, would afford coverage to workers in the situation of [Detres]. The fact that this is a tragic and profoundly damaging incident, put aside for a moment, New Jersey has chosen by its law to address the issue of giving coverage by specifically providing when you write an insurance policy, when you give insurance for [w]orkers' [c]ompensation in New Jersey, you are covering all of the employees of that employer. I believe it's [N.J.S.A. 34:15-87]. If that law is applied, clearly when Public Service wrote the contract that contemplated the possibility of locations outside of the State of New York, they were covering by operation of New Jersey law, all employees of that employer, and Public Service itself makes the point, and the exact nature of the business conducted by Workforce makes [that] subject to further definition, but clearly Public Service's argument, is that they provide employees in the auto retail and wholesale business to
9 A-4963-15T1 operate, and that is the very business that Workforce was conducting in the State of New Jersey.
So clearly, under application of New Jersey law, that coverage would be extended to [Detres], and to his circumstances, and the governmental interest of the State of New Jersey and choice of law, overwhelming[ly] militates that New Jersey's interest is superior in this particular instance.
On May 9, 2016, the judge entered a memorializing order. On May
27, 2016, pursuant to Rule 2:2-4, Public Service moved for leave
to file an interlocutory appeal, which we granted on July 14,
2016.2 This appeal followed.
On appeal, Public Service argues that: (1) there is
insufficient credible evidence in the record to support the ruling;
(2) the court should have applied New York law pursuant to the
contracted-for choice of law provision in the policy; (3) under
either New York or New Jersey law, Workforce's policy did not
cover Detres' injury because the amendment to the policy did not
apply retroactively; (4) N.J.S.A. 34:15-87 is inapplicable because
Hanover insured the New Jersey locations; and (5) Workforce is not
entitled to workers' compensation coverage for this accident
because it made material misrepresentations in the application.
2 On May 27, 2016, Public Service also moved before the judge of compensation for a stay pending appeal, which application was denied on June 17, 2016.
10 A-4963-15T1 II.
The standard governing appellate intervention in workers'
compensation cases is
'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record,' considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility . . . and, . . . with due regard also to the agency's expertise where such expertise is a pertinent factor.
[Close v. Kordulak Bros., 44 N.J. 589, 599 (1965) (quoting State v. Johnson, 42 N.J. 142, 162 (1964)).]
Judges of compensation "are regarded as experts, and their
findings are entitled to deference," so long as they are "supported
by articulated reasons grounded in the evidence." Lewicki v. N.J.
Art Foundry, 88 N.J. 75, 89-90 (1981) (citations omitted). Only
where the court’s decision is erroneous in light of the credible
evidence on the record so as to create an unjust result may this
court disturb the trial court’s judgment. See Perez v. Monmouth
Cablevision, 278 N.J. Super. 275, 282 (App. Div. 1994), certif.
denied, 140 N.J. 277 (1995).
"However, where the focus of the dispute is not on credibility
but, rather, alleged error in the trial judge's evaluation of the
underlying facts and the implications to be drawn therefrom," the
scope of appellate review is somewhat broader. Manzo v.
11 A-4963-15T1 Amalgamated Indus. Union Local 76B, 241 N.J. Super. 604, 609 (App.
Div.), certif. denied, 122 N.J. 372 (1990). "Where our review of
the record 'leaves us with the definite conviction that the judge
went so wide of the mark that a mistake must have been made,' we
may 'appraise the record as if we were deciding the matter at
inception and make our own findings and conclusions.'" Ibid.
(quoting Snyder Realty, Inc. v. BMW of N. Am., Inc., 233 N.J.
Super. 65, 69 (App. Div. 1989)). We will afford no deference to
a judge of compensation's interpretation of the law and review
legal questions de novo. Renner v. AT&T, 218 N.J. 435, 448 (2014).
Here, applying an expanded scope of review, we are satisfied
that the judge's evaluation of the underlying facts and the legal
implications to be drawn therefrom were correct. Public Service
argues that the compensation judge erroneously determined that the
insurance contract afforded coverage to Workforce for Detres'
accident. Public Service asserts that the judge was mistaken in
finding that the contract was one of adhesion and in interpreting
the contract to favor coverage. Public Service also argues that
the emails between the parties reveal their intention to make
coverage effective beginning in December 2013, some two months
after the date of the accident.
In assessing the meaning of provisions in an insurance
contract, courts first look to the plain meaning of the language
12 A-4963-15T1 at issue. Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am.,
195 N.J. 231, 238 (2008). "If the language is clear, that is the
end of the inquiry." Ibid. Thus, "[w]hen the terms of an insurance
contract are clear, it is the function of a court to enforce it
as written and not to make a better contract for either of the
parties." Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960).
Rather, when "the language of a contract is plain and capable of
legal construction, the language alone must determine the
agreement's force and effect." Manahawkin Convalescent v.
O'Neill, 217 N.J. 99, 118 (2014) (citations omitted).
However, "[w]hen the provision at issue is subject to more
than one reasonable interpretation, it is ambiguous, and the 'court
may look to extrinsic evidence as an aid to interpretation.'"
Templo Fuente de Vida Corp. v. Nat'l Union Fire Ins. Co. of
Pittsburgh, 224 N.J. 189, 200 (2016) (quoting Chubb Custom, supra,
195 N.J. at 238). Whether an ambiguity exists in a contract is a
question of law. Nester v. O'Donnell, 301 N.J. Super. 198, 210
(App. Div. 1997).
In the case of insurance contracts specifically, "the general
rule of construction [is] that if the controlling language of a
policy will support two meanings, one favorable to the insurer and
the other to the insured, the interpretation favoring coverage
should be applied[.]" Butler v. Bonner & Barnewell, Inc., 56 N.J.
13 A-4963-15T1 567, 576 (1970) (citing Mazzilli v. Accident & Cas. Ins. Co., 35
N.J. 1, 7 (1961)); see also Doto v. Russo, 140 N.J. 544, 556 (1995)
(noting that "New Jersey courts often have construed ambiguous
language in insurance policies in favor of the insured and against
the insurer"); Simonetti v. Selective Ins. Co., 372 N.J. Super.
421, 429 (App. Div. 2004) (holding that insurance "coverage clauses
should be interpreted liberally, whereas those of exclusion should
be strictly construed").
Further, insurance "contracts are to be [construed] in a
manner that recognizes the reasonable expectation of the insured."
Zuckerman v. Nat. Union Fire Ins. Co., 100 N.J. 304, 320-21 (1985).
"Moreover, [w]hile specific words may not be ambiguous, the context
in which they are used may create an ambiguity. The court's
responsibility is to give effect to the whole policy, not just one
part of it." Cypress Point Condo. Ass'n v. Adria Towers, LLC, 226
N.J. 403, 416 (2016) (citations omitted).
Governed by these principles, we agree with the judge that
Detres' accident was covered under Public Service's insurance
contract. The contract term was unambiguous. Although Workforce's
two New Jersey locations were not covered in the initial insurance
policy, the amendment to the policy issued on January 8, 2014
clearly indicated that the Jersey City and Vauxhall locations were
covered under the policy for the period May 1, 2013 to May 1,
14 A-4963-15T1 2014. Public Service argues that the intention of the parties as
evident in the emails between them was that coverage of the two
New Jersey locations was not to begin until December 16, 2013, at
the earliest. We are satisfied that the judge properly declined
to consider these communications as extrinsic evidence as the
contract was unambiguous on its face.
Equally unavailing are Public Service's arguments that the
additional premium charged in the amount of $4,816 reflected a
pro-rated start date of January 8, 2014, and the schedule of policy
changes contained in the amended policy, stating "1/8/2014 – [a]dd
two locations," created ambiguities that require us to look to
extrinsic evidence. All four locations were clearly specified in
the amended policy as covered for the period May 1, 2013 to May
1, 2014, and there was no qualifying language indicating that
coverage of the two New Jersey locations was partial or did not
run for the entire policy period May 1, 2013 to May 1, 2014. We
will not manufacture an ambiguity where none exists. Chubb, supra,
195 N.J. at 238.
Public Service also argues that the judge's application of
N.J.S.A. 34:15-87 to this case was "misguided" as it is
"undisputed" that Hanover provided insurance coverage for Buy Wise
at the Jersey City location. Accordingly, Public Service argues
that N.J.S.A. 34:15-87 "does not apply to this case because the
15 A-4963-15T1 location that was excluded from the policy was 'concurrently
separately insured' by Hanover."
N.J.S.A. 34:15-87 states in pertinent part:
No policy of insurance against liability arising under [the Workers' Compensation Law] shall contain any limitation of the liability of the insurer to an amount less than that payable by the assured on account of his entire liability under this chapter, and no provision of such policy shall be construed to restrict the liability of the insurer to any stated business, plant, location, or employment carried on by an assured unless the business, plant, location, or employment excluded by such restriction shall be concurrently separately insured or exempted as provided for in this article.
In Lohmeyer v. Frontier Ins. Co., 294 N.J. Super. 547 (App
Div. 1996), certif. denied, 148 N.J. 461 (1997), we interpreted
N.J.S.A. 34:15-87 to mandate workers' compensation coverage "for
all business related activities [of a covered employee], even if
the policy does not cover the particular location at which the
injuries occurred." Id. at 549. In Lohmeyer, we reversed the
trial court's dismissal of a claim petition of a trainer who was
thrown from a horse and injured while employed by a stable at a
facility that was not specified in the stable's workers'
compensation insurance policy. We determined that "[a] policy
which purports to provide workers' compensation coverage is
governed by the workers' compensation laws and must conform with
16 A-4963-15T1 its regulatory policy" and held that in the absence of evidence
that other insurance existed or that the stable was self-insured,
"the policy, as written, provided workers' compensation coverage
for [the trainer.]" Id. at 556-57.
Here, Hanover stipulated only to the fact that it insured Buy
Wise. Contrary to Public Service's contention, Buy Wise has
disputed being Detres' employer. However, it is undisputed that,
at the very least, Public Service provided workers' compensation
coverage to Workforce's New York locations. Thus, under N.J.S.A.
34:15-87, Public Service was required to provide workers'
compensation coverage to Workforce's New Jersey locations as well.
Public Service argues further that it did not intentionally
exclude the Jersey City location from coverage in the first
insurance policy, but omitted such coverage only because Workforce
misrepresented that it did business in New York only. Given
Workforce's purposeful and material misrepresentations, Public
Service asserts that N.J.S.A. 34:15-87 does not apply and
Workforce's workers' compensation insurance policy with Public
Service is void based on the "willful misrepresentation that it
had no New Jersey locations."
An insurer may void a policy due to post-loss
misrepresentation if the misrepresentation was knowing and
material. Longobardi v. Chubb Ins. Co., 121 N.J. 530, 540 (1990).
17 A-4963-15T1 However, fraudulent statements made in an application for a
workers' compensation insurance policy cannot be the basis for
voiding the policy. Am. Millennium Ins. Co. v. Berganza, 386 N.J.
Super. 485, 490-91 (App. Div. 2006). Citing N.J.S.A. 34:15-83 and
-84, which creates a direct relationship between the insurer and
the insured's employees, we noted that
[w]hatever the rights may be between the carrier and the insured employer, so long as the policy, once it is issued, is outstanding, the carrier's liability to the injured employee remains. No question of warranties or of false representations made by the employer in securing the policy and no stipulations of the policy as between the employer and carrier have force or effect as between the carrier and such an employee who was injured while the policy is outstanding.
. . . .
[A]s between the insurance carrier and the employee[,] the fact that a policy is issued upon untrue statements made by the employer [to the insurance carrier] is no defense [to liability].
[Id. at 490-91 (citations and quotations omitted).]
Public Service's argument is the same argument we rejected in
Berganza and the same result applies here.
Public Service argues that New York law should apply to the
contract dispute because "the weight of the evidence clearly shows
that New York . . . has a superior interest in this matter." As
18 A-4963-15T1 a result, Public Service asserts that the compensation judge erred
in its legal analysis and application of the choice-of-law test
to the facts. To support its argument, Public Service stresses
that a New York insurance company provided insurance to a New York
company for two New York locations based on a policy specifying
that New York law shall apply, and an application stating that
employees did not travel out of state and did not perform work for
other businesses, and that the company did not lease employees to
other companies.
As we have held,
In general, our Supreme Court has rejected the traditional choice-of-law rule of lex loci delicti (for torts) and lex loci contractus (for insurance contracts) in favor of a more flexible 'governmental-interest' standard, which requires application of the law of the state with the greatest interest in, or most significant connections with, the issues raised or the parties and the transaction.
[Lonza, Inc. v. The Hartford Accident & Indem. Co., 359 N.J. Super. 333, 342 (App. Div. 2003) (citing Veazey v. Doremus, 103 N.J. 244, 247- 49 (1986)).]
"The first step in this choice-of-law analysis is an inquiry
into whether there is 'an actual conflict' between the laws of
this state and another." Lonza, supra, 359 N.J. Super. at 342
(citations omitted). "'Any such conflict is to be determined on
an issue-by-issue basis.'" Ibid. (quoting Veazey, supra, 103 N.J.
19 A-4963-15T1 at 248). The second step in the analysis is for the court to
"'determine the interest that each state has in resolving the
specific issue in dispute.'" Id. at 345 (quoting Gantes v. Kason
Corp., 145 N.J. 478, 485 (1996)). For the third step, the court
is required to determine "how strongly the contacts involved relate
to each state's policy and whether application of one law will
further or frustrate the policies of the other state." Walsh v.
Mattera, 379 N.J. Super. 548, 555 (App. Div. 2005).
In applying the governmental interest test, New Jersey courts
consider the following factors set forth in Section 6 of the
Restatement:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability, and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
20 A-4963-15T1 [Restatement (Second) of Conflict of Laws, § 6 (1971).]
See also Gilbert Spruance Co. v. Pa. Mfrs. Ass'n Ins. Co., 134
N.J. 96, 103 (1993).
Specifically with respect to casualty-insurance contracts,
our Supreme Court held that the choice-of-law analysis must first
look to Restatement § 193 which "provides that the law of the
state that 'the parties understood was to be the principal location
of the insured risk . . . [governs unless] some other state has a
more significant relationship under the principles stated in §6
to the transaction and the parties[.]'" Gilbert Spruance, supra,
134 N.J. at 112 (quoting Restatement (Second) of Conflict of Laws,
§ 193 (1971)). Such a determination necessarily requires a fact
specific case-by-case analysis. Pfizer, Inc. v. Emplrs Ins., 154
N.J. 187, 190 (1998).
Notably, in N. Bergen Rex Transp. v. Trailer Leasing Co., 158
N.J. 561 (1999), our Supreme Court held that "'[o]rdinarily, when
parties to a contract have agreed to be governed by the laws of a
particular state, New Jersey courts will uphold the contractual
choice if it does not violate New Jersey's public policy.'" Id.
at 568 (quoting Instructional Sys., Inc. v. Computer Curriculum
Corp., 130 N.J. 324, 341 (1992)).
However, New Jersey law will govern if:
21 A-4963-15T1 (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which . . . would be the state of the applicable law in the absence of an effective choice of law by the parties.
[Id. at 568-69 (quoting Instructional Sys., supra, 130 N.J. at 342).]
Given the choice of law provision in the contract at issue
here, the test established in N. Bergen Rex Transp. will guide our
analysis. To that end, we must first determine whether there is
an actual conflict between the laws of New Jersey and New York.
New York law allows a workers' compensation carrier to exclude
specific locations from an insured's policy, NY CLS Work Comp
§54(4), whereas New Jersey law expressly precludes such exclusion,
N.J.S.A. 34:15-87. Accordingly, there is an actual conflict
between the laws of New York and New Jersey.
Next, we must determine which state has the greater interest
in resolving the specific dispute. It is undisputed that Detres
was a New Jersey resident at the time of the accident, and that
the site of the injury was his workplace in Jersey City.
"Traditionally, an injury in New Jersey will trigger jurisdiction
22 A-4963-15T1 in the New Jersey compensation court." Connolly v. Port Auth. of
N.Y. and N.J., 317 N.J. Super. 315, 320 (App. Div. 1998) (citing
Boyle v. G. & K. Trucking Co., 37 N.J. 104, 108 (1962)). Likewise,
"[t]he employee's New Jersey residency appears, as well, to be
sufficient at least where there are also some employment contacts
in New Jersey[.]" Ibid. (citations omitted). Even "where there
exists neither location of the injury, location of the employment
contract or hiring, or residency of the employee in New Jersey,
jurisdiction may still arise where the 'composite employment
incidents present [a]n . . . identification of the employment
relationship with this State." Id. at 320-21 (quoting Phillips
v. Oneida Motor Freight, Inc., 163 N.J. Super. 297, 303 (App. Div.
1978)) (alterations in original).
While we acknowledge that two New York corporations entered
into a contract for workers' compensation insurance coverage, and
the original policy applied only to the New York locations, we are
satisfied that application of New York law would be contrary to
the fundamental policies and protections of New Jersey's Workers'
Compensation law. Moreover, given New Jersey's materially greater
interest in the determination of this dispute, New Jersey's law
would undoubtedly apply in the absence of a contrary choice of law
provision in the insurance contract.
Pursuant to N.J.S.A. 34:15-87, New Jersey has a strong
23 A-4963-15T1 interest in ensuring that employers and insurance carriers do not
exclude certain employment locations from coverage. Consistent
with this worker-friendly philosophy, New Jersey courts have
interpreted the Workers' Compensation statute to achieve such
results. See Sroczynski v. Milek, 396 N.J. Super. 248, 256 (App.
Div. 2007), aff’d, 197 N.J. 36 (2008) (holding that there is a
strong public policy presumption favoring determining workers'
compensation coverage); Daniello v. Machise Express Co., 119 N.J.
Super. 20, 23-24 (Law Div. 1972), aff’d, 122 N.J. Super. 144 (App.
Div. 1973) (holding that "[t]o accomplish the purposes for which
[N.J.S.A. 34:15] was enacted, the court will give its provisions
the most liberal construction that it will reasonably bear in
favor of the injured employee in order to avoid harsh results to
the worker and his [or her] family.")
Further, applying New Jersey law would not frustrate
principles of New York's Workers' Compensation law. Rather, the
same conclusion would likely be reached under New York law where
NY CLS Work Comp § 54(4) was afforded a "liberal construction" to
find coverage in a workers' compensation insurance policy as long
as the court did not "extend the coverage of the policy to an
accident occurring at a location clearly outside of its terms[.]"
Scammell v. Deleece Pastries, Inc., 212 N.Y.S.2d 546, 547 (N.Y.
App. Div. 1961). See also Thomson v. Brute Spring & Equip., Inc.,
24 A-4963-15T1 789 N.Y.S.2d 753, 754 (N.Y. App. Div. 2005) (finding no coverage
where "nothing in the carrier's policy in effect at the time of
[the worker's] injury addresse[d] the nature of the work which
[the worker] was performing or purport[ed] to cover the location
at which he performed it[.]"). Here, since the amended insurance
policy in effect on the October 18, 2013 accident date explicitly
provided coverage to Detres' work location, the same conclusion
would obtain had New York law applied.
In addition, it cannot be said that the justified expectations
of the parties would be frustrated by application of New Jersey
law. Detres is a New Jersey resident working at a New Jersey work
site when he was injured. It is not outside the realm of
possibility that New Jersey's Workers' Compensation law would
determine coverage. Finally, as to ease in the determination and
application of the law to be applied, both factors weigh in favor
of applying New Jersey law for the same reason. Although both
Workforce and Public Service are New York corporations, they
purposefully availed themselves of New Jersey law by doing business
in New Jersey and contracting for workers' compensation coverage
of a New Jersey location. Indeed, in these circumstances,
application of New Jersey law provides fairness and certainty to
the parties involved. In sum, a choice of law analysis weighs
heavily in favor of applying New Jersey law in this instance.
25 A-4963-15T1 Accordingly, we affirm the decision of the judge of compensation.
Affirmed.
26 A-4963-15T1