Auto carrier must compensate man who slippe don ice and struck head on jack

In Penn National v. Costa, decided April 29, 2008, the Appellate Division reversed the Law Division’s denial of the motion for summary judgment by the defendant/third-party plaintiff homeowner’s insurer and remanded for the entry of judgment for the homeowner’s insurer and against the plaintiff automobile insurer in a coverage action for injuries sustained by the third-party defendant when he slipped on ice and hit his head on the vertical post of the jack being used to replace a tire on his employer’s pickup truck in the employer’s driveway. Because the injuries arose out of the maintenance of an automobile, which fell under an exclusion in the homeowner’s insurance policy, the court held that the auto carrier was required to defend and indemnify the vehicle owner.
This is a published opinion and will constitute binding precedent going forward. It is noteworthy, insofar as the court uncharacteristically enforced a policy exclusion. However, this was most likely due to the fact that alternate coverage was in place.

Joinder of Broker malpractice in coverage claim

In an important decision for E&O carriers for insurance brokers, the Appellate Division has held that even where an insured knows it has a potential malpractice action against its broker, that claim will not be barred by the Entire Controversy Doctrine if it is not brought in connection with a declaratory judgment action to deny coverage procured by the negligent broker. In Media Sciences International v. Beckerman & Co., the court, in keeping with New Jersey’s continuing line of cases which limit the Entire Controversy Doctrine, held that the broker is required to establish by specific facts that it was “substantially prejudiced” by the failure of the insured to join it in the underlying coverage action. Prejudice, the court noted, is primarily demonstrated by showing lack of access to relevant information. Delay alone is not sufficient, nor are “faded witness memories.” Therefore, E&O carriers should beware that the the resolution of a coverage action does not necessarily indicate preclusion of a suit against a broker for malpractice.

Tompkins McGuire, regularly represents numerous industries as well as their insurers in professional malpractice claims. For more information on this case as well as other developments in this area, please contact us.

'Going-and-Coming' rule examined

The Appellate Court reversed the decision of the workers’ compensation judge, finding the “travel-time” exception to the going-and-coming rule does not apply where a salaried employee is reimbursed for gas, tolls, and wear and tear on his vehicle, but was not paid wages for the time of his commute to and from work.

In Scott v. Foodarama, 398 N.J. Super. 441 (App. Div. 2008), the Appellate Division found that the claimant was merely driving to work when the accident happened, and was barred from receiving compensation for injuries sustained on his commute. In other words, the claimant was engaged in his normal commute. The fact that his commuting expenses were paid by the employer did not make the claim fall “within the course of” his employment.

What makes this case notable is that the claimant was actually reimbursed for his commuting expenses by the employer. (Decided February 27, 2008, link to full decision: http://lawlibrary.rutgers.edu/courts/appellate/a3936-06.opn.html)

Failure to monitor drunken patron

A tavern may be liable for negligence if it makes no effort to keep a visibly drunk patron safe, even though his drinking may have been done elsewhere. In a case of first impression, the Appellate Division held in Bauer v. Nesbitt, decided March 20, 2008, that a bar owner can be sued for failing to prevent a patron from getting into a car with another patron who was visibly intoxicated and later caused the passenger’s death. The court held that if the bar’s employees should have recognized that the passenger was drunk, even if he was not served alcohol there (the passenger only drank a Coke at the bar), there was a duty to protect him from foreseeable injury as the result of an automobile accident by insuring he did not drive and that he did not ride as a passenger with a patron who was similarly impaired. This is the first decision holding that if a patron becomes visibly intoxicated and the bar’s employees know or should have known, the patron should not be permitted to leave without trying to find safe transportation.

Workers Comp system subject of investigative reporting

The New Jersey Workers’ Compensation system was the focus of an investigation conducted by the Star-Ledger Newspaper , one of the most widely-read newspapers in New Jersey. The articles (which ran consecutively in April) concluded that “bureaucratic delays, politics and poor state oversight have left thousands of injured workers waiting years for the relief promised by the compensation system.” The three-part article has led to a New Jersey Senate Labor Committee hearings scheduled to begin May 5th in Trenton to examine ways to “reform” the workers’ comp system in New Jersey.

To summarize, the Star-Ledger articles were highly critical of the Department of Labor and the Division of Workers’ Compensation – calling our adversarial benefits-litigation process “slow,” “inefficient,” and “harmful.” The stories in the three-part series focused on claimants who waited long periods of time for benefits (including one claimant who died while awaiting medical treatment). Statistics from the Division of Workers’ Compensation show that the average claim scheduled for a pre-trial conference is adjourned 15 times before final settlement!

The Star-Ledger examined the legal education and professional experience of the current Judges of compensation and noted that very few had actually practiced workers’ compensation law before they became workers’ comp judges. Most had political connections and appointments before they were nominated for the bench; the article called the appointment of comp judges a purely “political” process.

In a related article (“Secretive Board of Insiders Steers Workers’ Comp”, date: May 4, 2008) the Star-Ledger investigated the New Jersey Compensation Rating and Inspection Bureau (NJCRIB), finding that the Board of Directors is dominated by insurance executives and that rate hikes had occurred in the last seven years while the national average premium had actually declined (link).

One possibility that insiders have speculated about has been the creation of a “Workers’ Comp Ombudsman” to assist injured workers as they navigate the system and the institution of an “alternate dispute resolution” process (without attorneys representing the employer or employee). Stay tuned.

Defending Employers