Court Opinion

ID: 4640123
Source: CourtListenerOpinion
Date Created: 2020-12-07 16:08:27.352296+00
Date Added: 2024-06-11T08:00:11.336505
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
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     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-3838-19T2

NELSON PIERSON,

          Petitioner-Respondent,

v.

TRAVELERS INDEMNITY
COMPANY,

          Respondent-Appellant,

and

TREMARCO BROTHERS,
DONALD FORLEO and
FRUTAROM U.S.A.,

     Respondents-Respondents.
______________________________

                   Submitted November 10, 2020 – Decided December 7, 2020

                   Before Judges Fisher and Gilson.

                   On appeal from the New Jersey Department of Labor,
                   Division of Worker's Compensation, Claim Petition
                   Nos. 2016-13683 and 2016-25360.
            Leary, Bride, Mergner & Bongiovanni, attorneys for
            appellant (David J. Dering, of counsel and on the
            briefs).

            Marc J. Brenner, attorney for respondent Nelson
            Pierson.

            Heimerl Law Firm, attorneys for respondents Tremarco
            Brothers and Donald Forleo (Wolfgang Heimerl and
            Susan Curtin Gouldin, on the briefs).

            Charlotte C. Kelley, Senior Counsel, attorney for
            respondent Uninsured Employer's Fund, joins in the
            brief of respondent Nelson Pierson.

PER CURIAM

      Petitioner Nelson Pierson commenced this workers' compensation matter,

alleging he was injured on May 7, 2016, during the course of his employment

with respondent Tremarco Brothers (Tremarco).1           Respondent Travelers

Indemnity Company filed an answer denying coverage and thereafter quickly

moved to dismiss based on its allegation that the coverage it had once provided

to Tremarco was cancelled prior to Pierson's alleged work-related accident.

      The workers compensation judge determined that testimony was required

to resolve the parties' coverage dispute. After hearing testimony over the course

1
   Pierson later filed amended claim petitions, asserting that others – Donald
Forleo, Tremarco Bros. Scrap Metal Trucking, Inc., and Frutarom U.S.A. – may
also be responsible to pay workers' compensation benefits.
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of four separate hearing days, the judge entered an order on May 11, 2020, that

denied Travelers' motion to dismiss for reasons set forth in a written opinion.

Travelers filed a motion for leave to appeal that we granted to consider

Travelers' argument that the judge erred in denying its motion to dismiss.

      Travelers argues in this appeal that it provided sufficient evidence to

demonstrate that it validly cancelled the policy. To be sure, Travelers provided

evidence and called witnesses to testify that the policy had been cancelled prior

to Pierson's injury, but the judge was not obligated to credit this evidence or

testimony. The applicable standard of appellate review requires that we defer

to a workers' compensation judge's findings when those findings "reasonably

could have been reached on the basis of sufficient credible evidence in the

record, with due regard to the agency's expertise." Brock v. P.S.E.&G. Co., 149

N.J. 378, 383 (1997). We likewise defer to a compensation judge's findings that

the evidence adduced was not credible, sufficient, or persuasive.

      In this case, there was no dispute about some basic facts. In March 2014,

Tremarco applied to the New Jersey Workers' Compensation Plan for

assignment of an insurance company to provide it with coverage. Tremarco was

assisted in this regard by its agent, Brian Piccolo. Travelers was assigned and

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                                       3
provided coverage for 2014-15. As that policy ended, Travelers also issued a

policy for 2015-16.

      Travelers claimed that Tremarco failed to cooperate with an audit request

during the second policy term. Without Tremarco's input, Travelers' audit

resulted in Travelers charging Tremarco with an increased premium on both

annual policies in an amount nearly double the previously billed premium.

Travelers also alleged that it sent on July 6, 2015, a notice that declared the

policy would be cancelled on July 24, 2015, if Tremarco failed to pay the

additional premium.

      To prove this alleged cancellation, Travelers offered the testimony of

Timothy J. Lukes, a senior account manager underwriter. Lukes was offered as

a person with knowledge of how Travelers conducts premium audits and how it

would go about cancelling a policy, but his testimony also revealed he was not

the underwriter assigned to Tremarco. Lukes identified the individual who was

responsible for Tremarco's account but, as the judge emphasized in her written

opinion, this other individual was never called as a witness. The judge also

recognized that while Lukes was able to describe the insurance policies and the

audit process, he was "unable to explain specific actions or the reasons for [the]

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                                        4
actions taken by Travelers on the Tremarco account." Travelers called Piccolo

to testify as well. The judge found his testimony uninformative.

      Of importance is the fact that Travelers attempted to demonstrate that its

July 6 notice would have advised Tremarco that if the additional premium

deemed owing was not paid the policy would be cancelled on July 24. But Lukes

testified that when an additional premium after an audit is being sought, the

notice would not ordinarily state that a failure to pay would result in

cancellation, only that the failure "can affect your insurability."

      In denying Travelers' motion to dismiss for reasons thoroughly discussed

in a twenty-page written opinion, the workers' compensation judge recognized

that N.J.S.A. 34:15-81, which governs the cancellation of such a policy, 2 has

been declared by the Supreme Court as "clear and unambiguous," Sroczynski v.

Milek, 197 N.J. 36, 43 (2008), and that it was Travelers' obligation to prove that

it had complied with the statute's terms. Travelers, as the judge observed, failed

to produce any witness with personal knowledge of the mailing and receipt of

2
  N.J.S.A. 34:15-81 declares that such a contract of insurance "may be canceled
by either the employer or the insurance carrier within the time limited by such
contract for its expiration" and that "[n]o such policy shall be deemed canceled
until," among other things, (a) "[a]t least ten days' notice in writing of the
election to terminate such contract is given by registered mail by the party
seeking cancellation thereof to the other party thereto."
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the alleged cancellation notice. While recognizing facts about mailing may be

proven with evidence of an office custom, SSI Med. Servs., Inc. v. HHS, Div.

of Med. Assistance & Health Servs., 146 N.J. 614, 622 (1996), the judge found

that Travelers didn't even offer that type of evidence. Moreover, even if the

judge credited Lukes' testimony and drew inferences from it to support a finding

that a notice concerning the additional premium generated by the audit was

mailed on July 6, there was nothing to suggest that the mailed notice advised

that the policy would be cancelled on July 24. Instead, as suggested by Lukes'

testimony, the notice might have said only that the failure to pay by July 24

would simply "affect [Tremarco's] insurability," which would not be sufficient

to bring about a cancellation on July 24 under the statute.

      Clearly, the judge ruled against Travelers because Travelers' failed to call

a witness with personal knowledge about either this account or office mailing

customs. The judge viewed the testimony that was offered as insufficient to

carry Travelers' burden to show a cancellation under N.J.S.A. 34:15-81, as

viewed in light of the public policy that favors the continuation of cover age

unless the insurer strictly complied with all statutory and regulatory

requirements. See Bright v. T & W Suffolk, Inc., 268 N.J. Super. 220, 225 (App.

Div. 1993). The judge was entitled to make the findings in question without this

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                                        6
court second-guessing her evaluation of the testimony and other evidence.

Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 588-89 (1988).

      Affirmed.

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