Court Opinion

ID: 4704160
Source: CourtListenerOpinion
Date Created: 2021-07-16 14:09:14.533429+00
Date Added: 2024-06-11T08:05:09.847719
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-1529-19

NANCY L. HOLM,
individually and as
Administratrix of the
Estate of CHRISTOPHER R.
FRIEDAUER, deceased,

          Plaintiff-Appellant,

v.

DANIEL M. PURDY,

     Defendant-Respondent.
____________________________

                   Argued February 10, 2021 – Decided July 16, 2021

                   Before Judges Geiger and Mitterhoff.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Monmouth County, Docket No. L-0098-17.

                   Ryan Milun argued the cause for appellant (The Killian
                   Firm, PC, attorneys; Ryan Milun, on the briefs).

                   Michael J. Dunn argued the cause for respondent.

PER CURIAM
      Plaintiff Nancy L. Holm, individually and as Administratrix of the Estate

of Christopher R. Friedauer (Christopher), 1 deceased, brought this professional

negligence action against defendant Daniel M. Purdy, a licensed insurance

broker who procured insurance for Holmdel Nurseries, LLC (Holmdel or the

LLC), including workers' compensation coverage. Plaintiff alleged Purdy was

negligent (count one) and breached his fiduciary duty (count two) by

"negligently advising or failing to advise [Christopher] regarding insurance that

was clearly and obviously necessary to protect [Christopher], his family, and his

business in the event of [Christopher's] injury or death, and for procuring grossly

inadequate coverage." Plaintiff appeals from a May 10, 2019 order denying her

cross-motion for summary judgment and a November 20, 2019 order granting

Purdy's motions for involuntary dismissal under Rule 4:37-2(b) and judgment at

trial under Rule 4:40-1. We affirm in part, reverse in part, and remand for retrial.

      Until 2012, Christopher's father, Robert Friedauer (Robert), and uncle,

Walter Friedauer (Walter), each owned a fifty percent interest in Holmdel, a

family-run nursery and landscaping business.         Christopher and his brother

Michael Friedauer (Michael) were long-time employees of Holmdel.                  As

1
  Because the members of the LLC share the same surname, we use their first
names for ease of reading and mean no disrespect.
                                                                              A-1529-19
                                         2
employees, Christopher and Michael were covered for work-related injuries or

death under Holmdel's workers' compensation policy (the Policy).

      In 2011, Christopher and Michael began discussing a buy-out of their

uncle Walter's fifty percent ownership of Holmdel. Soon after, Robert, Walter,

Michael, and Christopher agreed that Michael and Christopher would purchase

Walter's fifty percent ownership of Holmdel, with each owning twenty-five

percent. The agreement was finalized in 2012. Following the buyout, Robert

retained a controlling fifty percent interest in Holmdel.

      Purdy served as the longtime insurance agent for Holmdel. He met with

Robert annually to review Holmdel's insurance coverage needs. Purdy secured

numerous insurance coverages for Holmdel each year, including the mandatory

workers' compensation coverage for employees.

      In contrast to employees, members of an LLC are not covered under the

Policy unless they elect to opt in for such coverage at extra cost. Every member

of the LLC must opt in for such coverage for any member to be eligible for

workers' compensation benefits. The decision to opt in must be made at the

inception or renewal of the policy. The substantial premium for opting in is

based on the salary and earnings of all the members of the LLC.

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                                        3
      Robert was charged with securing Holmdel's insurance coverage. Prior to

2012, Purdy advised Robert that members of the LLC were not eligible for

workers' compensation benefits unless every member opted in for that coverage

at additional cost. From 2002 to 2012, Robert declined to opt in for workers'

compensation coverage for Holmdel's members.

      At Holmdel's annual meeting in 2012, Purdy discussed insurance coverage

with Holmdel's members. Purdy learned that Christopher and Michael, who

were both present at the meeting, had become members. Michael told Purdy

that he wanted "to make sure that [he and Christopher] were protected now that

[they] were owners." Purdy never notified Michael or Christopher of their right

to elect worker's compensation coverage as LLC members and failed to inform

them they were no longer covered under the Policy.

      There was no evidence about what else Christopher said or asked Purdy

during the meeting.     Apparently, the brothers did not discuss workers'

compensation eligibility with each other or Robert before Christopher's death.

      In 2015, Christopher died shortly after a slip and fall accident while

working. Because the members had not opted in for coverage, Christopher was

not eligible for workers' compensation benefits relating to his accident.

Christopher was survived by his wife, Nancy L. Holm, and two young children.

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                                       4
      On January 6, 2017, plaintiff filed a professional negligence action against

Purdy. The complaint alleged:

            10. On February 15, 2015, [Christopher] was tragically
            killed at age [thirty-six] in an accident while on the job
            for Holmdel Nurseries. [Christopher] was in the
            process of entering a truck to conduct snowplowing
            operations, when he apparently slipped and hit his head
            on the pavement. Although he had no apparent signs of
            injury, [Christopher] passed away several hours later as
            a result of his fall.

In his answer, Purdy provided the following response to this allegation: "Denied

as stated. Answering defendant is without knowledge or information sufficient

to form a belief as to the truth of the averments of paragraph [ten] and denies

same and demands proof thereof at the time of trial." Purdy also asserted a

separate defense that plaintiff failed to state a claim upon which relief could be

granted. The answer did not expressly deny that Christopher's death was caused

by a work-related accident.

      Following the close of discovery, the parties cross-moved for summary

judgment. In her oral decision, the judge noted that "[w]hether a defendant owes

a legal duty is a question of law for the [c]ourt to decide." "Here, there is no

dispute that there was a duty. The issue seems to be whether that duty was

breached and whether there exists a genuine issue of material fact . . . ."

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                                        5
      The parties disputed "the nature of the relationship" and the

communications between Purdy and Christopher. In addition, the judge found

there were material facts in dispute regarding the discussions between Purdy and

Robert concerning workers' compensation coverage for members.

      After considering the opposing expert reports, the judge further found

there was a genuine issue of material fact as to whether Purdy met industry

standards and satisfied the duties he owed. The judge denied both motions,

concluding these genuine issues of material fact required credibility

determinations by a jury, as did whether Purdy's actions rose to the level of

negligence or gross negligence.

      After Christopher's death, the remaining members of the LLC opted in for

workers' compensation coverage. A decision was subsequently made to opt out

of the coverage and replace it with disability policies.

      The trial commenced in November 2019. Plaintiff testified on her own

behalf and called Robert, Michael, Paul Amoruso, an insurance brokerage

expert, and June Toth, a damages expert, as witnesses. Purdy testified on his

own behalf and James Klagholz testified without objection as an expert in the

field of insurance agency and brokerage relating to commercial insurance

policies, including workers' compensation coverage.

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                                        6
      On the third day of trial, plaintiff sought to introduce the autopsy report

as evidence that Christopher suffered a work-related injury. The preliminary

autopsy report contained the following pertinent findings:

            EVIDENCE OF RECENT TRAUMATIC INJURY: No
            body surface or internal traumatic injuries are
            identified. It should be noted, there is no subgaleal
            hemorrhage. There is no cranial fracture. There is no
            epidural, subdural or subarachnoid hemorrhage. The
            brain parenchyma is intact throughout showing no
            contusion or laceration.

            There are no intrathoracic or intra-abdominal injuries.

            GENERAL DESCRIPTION: No significant findings
            are noted externally except bluish purple cyanotic
            facial skin.

            The head is unremarkable. The scalp is intact . . . . The
            ear canals, nostrils and oral cavity are free of
            hemorrhage. The gums reveal natural dentition.

                  ....

            HEAD AND CENTRAL NERVOUS SYSTEM:
            Reflection of the scalp reveals intact subgaleal soft
            tissue with no hemorrhage. The cranial bones are
            intact, showing no fracture. . . . Sectioning of the brain
            parenchyma reveals mild diffuse congestion and
            edema. There is no parenchymal hemorrhage, infarct,
            tumor or any other focal lesion. The cerebellum, pons
            and medulla are free of hemorrhage. The ventricles
            contain clear [cerebral spinal fluid].

            NECK: No traumatic injuries are identified.

                                                                           A-1529-19
                                        7
            CHEST: No traumatic injuries are identified.

      The preliminary report stated there was an "[a]lleged history of fall during

snow removal" and diagnosis of "post-concussion head injury due to fall on ice."

The cause and manner of death were "[p]ending additional studies."            The

medical examiner's final report stated: "Based upon the history/circumstances,

investigation reports, autopsy findings, and toxicology findings, the report was

amended" to reflect the cause of death as "[h]ead injury with concussion due to

fall" and the manner of death as an "accident."

      Plaintiff attempted to introduce the autopsy report after Purdy requested

an offer of the proof plaintiff would rely upon to establish that a compensable

work-related injury caused Christopher's death.       The court engaged in the

following analysis:

            In a malpractice action, a plaintiff must prove that the
            damages suffered were suffered as a result of the
            malpractice. Hence, the plaintiff must not only prove
            the breach of the standard of care to establish liability,
            but also the alleged resulting harm was caused by that
            breach.

                  Given that the resulting harm centers on the
            compensability of the alleged injury, the plaintiff has
            the burden to establish that compensability.

                  To establish that compensability, the parties
            agree that the alleged injury must be work related
            injury. And that the work[-]related injury ultimately

                                                                            A-1529-19
                                        8
            led to the death that forms the basis of the alleged
            damages, the loss, death and/or survivor benefits.

The judge noted Purdy argued that "plaintiff had not disclosed or provided any

medical evidence" to establish: (a) "the injury, or injuries, or conditions suffered

by [Christopher]"; (b) "that these injuries and/or conditions were the cause of

death"; and (c) "that the cause of the death was the work-related injury."

      In response, plaintiff contended that Purdy should have raised the defense

that Christopher's injuries were not a compensable injury under the Act as an

affirmative defense. She argued that Purdy's answer "did not include anything

about the injury to [Christopher] not being work related."         Purdy claimed,

however, that his position—that plaintiff failed to meet her burden of proof—

did "not fall within the ambit of an affirmative defense, but rather [fell] squarely

within the obligations of the plaintiff to prove each and every element of [her]

claim."

      The judge noted that Purdy asserted an affirmative defense that the

complaint failed to state a cause of action upon which relief could be granted.

She found defendant's position was not an affirmative defense but simply a

demand of the proofs upon which plaintiff would rely.

      The judge further found that "plaintiff ha[d] not provided exceptional

circumstances by which the autopsy report should be provided at this late hour."

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                                         9
She concluded that aside from the discovery violation, the autopsy report did

not "overcome the evidentiary hurdles." First, as to authentication, the autopsy

report was not a certified copy signed by the custodian of the report.

      Second, for the autopsy report "to be admissible, the opinions of the

medical examiner would have to be excised." If that were done, it "would then

simply leave some findings on examination, which . . . would be beyond the ken

of an average juror to interpret."

      Third, even if the autopsy report were admitted, it "would not provide the

jury with any probative evidence absent medical testimony to explain the

findings in that report that would be helpful to the juror." The assistant medical

examiner who performed the autopsy was not named as an expert or called as a

witness.   Plaintiff offered no witnesses with the qualifications, skill, and

knowledge to explain or interpret the findings in the autopsy report even if the

court admitted the report after redacting the medical examiner's opinions.

      Fourth, the preliminary report listed certain findings and opinions, but the

opinions were not conclusive and were subject to "additional studies." The final

report simply indicated that the cause of death was a head injury with concussion

due to fall and the manner of death was an accident based upon the history,

circumstances, investigation reports, autopsy, and toxicology findings. The

                                                                             A-1529-19
                                       10
judge found that the final report failed to provide "the whys and wherefores" for

its conclusions.

      Lastly, the judge addressed the prejudice Purdy would suffer if the autopsy

report, which was not provided in discovery despite plaintiff receiving it in

2015, were admitted in evidence. She found that Purdy had no opportunity to

rebut its findings by having it reviewed by his own expert.

      Once plaintiff rested, Purdy moved for involuntary dismissal pursuant to

Rule 4:37-2(b). The court reserved judgment. After the defense rested, Purdy

moved for judgment at trial under Rule 4:40-1. The court granted both defense

motions on November 12, 2019, at trial, and issued a November 20, 2019 order.

      Purdy, who served as the insurance agent for Holmdel since 2002,

procured several policies for Holmdel, including the workers' compensation

coverage required by statute. He also procured coverage for Robert, Walter,

Christopher, and Michael on their homes and autos. This was usually done by

telephone. Purdy spoke with Christopher five or six times over the course of his

thirteen-year relationship with Holmdel, and these conversations typically

occurred "while Purdy was meeting with the LLC owners regarding the

insurance" and business needs.     Purdy's interactions with Christopher were

                                                                           A-1529-19
                                      11
"limited" and related primarily to the procurement of "personal coverage to

Christopher."

      Robert "was the person in charge of the insurance."        Purdy had a

longstanding relationship with Robert and met with him at least annually to

review Holmdel's insurance coverage, including its workers' compensation

policy. Robert was responsible for providing information to Purdy regarding

the LLC's employees and "received the annual audits and reviewed the insurance

policy renewals" for the LLC. Christopher and Michael were not involved in

the audits. When Michael became an owner, he began participating in the

insurance renewal meetings in a limited capacity.

      Prior to becoming members of Holmdel, Christopher and Michael were

covered by workers' compensation insurance as employees of the company.

When Robert and Walter were the sole owners of Holmdel, they had at one point

opted in for workers' compensation coverage but later opted out of such

coverage because Robert was dissatisfied with the process. Robert knew that

owners of LLCs needed to opt in for coverage if they wished to be covered.

However, Robert was unaware that each LLC member needed to opt in for there

to be coverage. Robert assumed that Christopher and Michael still had workers'

compensation coverage when they became LLC members because they had

                                                                        A-1529-19
                                     12
coverage as employees of the LLC. Although Robert, Michael, and Christopher

never asked Purdy about workers' compensation insurance coverage, all three

told Purdy that they wanted "to be protected."

      No one witnessed Christopher fall. Michael testified that when he saw his

brother on the day of the accident, "his whole back was completely covered in

snow, his hat, his back, and he just didn't look like himself. He was just

completely out of it."     When Michael asked his brother what happened,

Christopher responded, "I can't get [my truck] running. I don't know what's

wrong with it. I was working on it. I slipped. I fell down. I hit my head. I hit

my head so hard I saw stars." Robert also testified that Christopher told them

that he had fallen while working on a truck and hit his head so hard he saw stars.

      Later that same day, Michael went to look for Christopher once he realized

his brother was taking longer than usual to return. Michael found his brother

seemingly "dead in the truck." He was later pronounced dead at the hospital.

      In support of his motion, Purdy argued that he only owed a legal duty to

Holmdel to provide workers' compensation coverage for its employees, not to

Christopher once he became a member. He also argued that plaintiff presented

no medical evidence to establish the cause of Christopher's death and whether it

                                                                            A-1529-19
                                       13
was work-related, and thereby failed to prove a compensable injury under the

Workers' Compensation Act, (the Act), N.J.S.A. 34:15-1 to -128.

      The judge found that Purdy met his duty to inform the LLC about workers'

compensation coverage and noted that Robert, who "managed insurance

coverage for the LLC," was aware that "members of an LLC are not covered

unless they opt in." Christopher, as an individual, could not procure workers'

compensation insurance for the LLC because the Act requires the employer to

procure such coverage for its employees.

      The judge concluded that the LLC was charged with knowledge through

Robert, who consciously opted out of workers' compensation as a member and

owner of the LLC. Robert decided to opt out in 2002 and continued to opt out

for over ten years.

      The judge rejected plaintiff's claim that an insurance broker duty extended

beyond the LLC to its individual members, even if the harm is foreseeable. She

concluded that extending the duty to individual members was inappropriate

because "[a]n individual member may have a different interest [than] another

member and both may have different interests [than the] LLC itself." For

example, an insurance policy with a lower premium may be beneficial to the

LLC but not provide coverage for its members.

                                                                           A-1529-19
                                      14
      The judge further explained that even if a special relationship existed to

justify the extension of Purdy's duty to Christopher as a member of the LLC,

plaintiff still needed to prove that the breach of the duty proximately caused the

loss. The judge found there was no evidence that Christopher would have opted

in for workers' compensation coverage.

      The judge also found the record lacked evidence of who possessed the

power to make decisions concerning workers' compensation insurance for LLC

members—whether such decisions required a majority vote or unanimity. Also

lacking was evidence concerning the LLC's operating agreement to determine

whether each member could bind the company and make decisions on its behalf.

The judge concluded that, even if Michael and Robert would have opted in for

coverage had they been given the option by Purdy, plaintiff presented no

evidence that such action would have been sufficient to bind the LLC.

      The judge rejected plaintiff's claim that a special relationship existed

between Christopher and Purdy, even though Purdy procured homeowner's and

auto insurance coverage for Christopher, noting their interactions were limited

and usually occurred by telephone. The judge further noted that the LLC and

Robert are not plaintiffs.

                                                                            A-1529-19
                                       15
      The judge further found that plaintiff failed to prove damages because

plaintiff failed to prove that Christopher suffered a compensable injury, a

requirement to receive death benefits. The court noted the lack of any medical

evidence concerning the injury. Plaintiff did not present any expert medical

testimony to interpret the medical examiner's report, any EMT records, or any

hospital records. Without expert testimony or medical evidence of an injury,

the judge concluded she could not reach the issue of whether the injury was a

work-related, compensable injury.

      Lastly, the judge found Purdy acted within the scope of his duties and

obtained the requested coverage. Purdy regularly met with Robert, the LLC's

controlling member, to discuss workers' compensation coverage, and he

preferred lower premiums.

      On appeal, plaintiff argues:

            I. IN HOLDING THAT PURDY HAD NO DUTY TO
            CHRISTOPHER,     THE     TRIAL   COURT
            INEXPLICABLY IGNORED THE FACT THAT
            PURDY WAS CHRISTOPHER'S PERSONAL
            INSURANCE BROKER, AND THE POTENTIAL
            BENEFICIARY OF NURSERIES' WORKERS'
            COMPENSATION COVERAGE.

            II. PURDY[] VIOLATED THE WORKERS'
            COMPENSATION STATUTE BY FAILING (A) TO
            PROVIDE NOTICE OF THE ELECTION OF
            COVERAGE     IN    EACH      WORKERS'

                                                                        A-1529-19
                                     16
            COMPENSATION APPLICATION AND (B) TO
            PROVIDE THE WORKERS' COMPENSATION
            ELECTION FORM

            III. THE TRIAL EVIDENCE WAS MORE THAN
            ENOUGH TO ESTABLISH A COMPENSABLE
            INJURY UNDER THE NEW JERSEY WORKERS'
            COMPENSATION STATUTE.

            IV. THE TRIAL COURT ERRED IN PERMITTING
            "TRIAL BY AMBUSH," BY ALLOWING PURDY TO
            CONTEST CAUSATION DESPITE HAVING
            CONCEDED THE ISSUE BEFORE TRIAL.

            V. AFTER ALLOWING PURDY TO ENGAGE IN
            TRIAL BY AMBUSH, THE TRIAL COURT
            COMMITTED    REVERSIBLE    ERROR   BY
            REFUSING TO ALLOW CHRISTOPHER TO
            INTRODUCE RELEVANT EVIDENCE TO REBUT
            THE     BELATEDLY[]ARGUED      CAUSAL
            CONNECTION    ISSUE,  INCLUDING   THE
            ADMISSION OF CHRISTOPHER'S AUTOPSY
            REPORT.

      Plaintiff contends the court erred in denying her cross-motion for

summary judgment by concluding Purdy owed no duty to Christopher, thereby

ignoring the fact that Purdy was Christopher's personal insurance broker, and

Christopher asked Purdy to advise him on the insurance implications of

becoming a member of the LLC. We disagree.

      We review a ruling on summary judgment de novo, applying the same

standard as the trial court. Davis v. Brickman Landscaping, Ltd., 219 N.J. 395,

                                                                         A-1529-19
                                     17
405 (2014). "The trial court's conclusions of law and application of the law to

the facts warrant no deference from a reviewing court." W.J.A. v. D.A., 210

N.J. 229, 238 (2012) (citing Manalaplan Realty, L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995)).

      "Our court rules require summary judgment to be granted when the record

demonstrates that 'there is no genuine issue as to any material fact challenged

and that the moving party is entitled to a judgment as a matter of law.'" Davis,

219 N.J. at 405-06 (quoting R. 4:46-2(c)). The court considers "whether the

competent evidential materials presented, when viewed in the light most

favorable to the non-moving party, are sufficient to permit a rational factfinder

to resolve the alleged disputed issue in favor of the non-moving party." Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). "In applying that

standard, a court properly grants summary judgment 'when the evidence is so

one-sided that one party must prevail as a matter of law.'" Davis, 219 N.J. at

406 (quoting Brill, 142 N.J. at 540). Thus, both the trial and appellate court

must "review the motion record against not only the elements of the cau se of

action but also the evidential standard governing that cause of action." Bhagat

v. Bhagat, 217 N.J. 22, 40 (2014).

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                                      18
      "To sustain a cause of action for negligence, a plaintiff must establish four

elements: '(1) a duty of care, (2) a breach of that duty, (3) proximate cause, and

(4) actual damages.'" Townsend v. Pierre, 221 N.J. 36, 51 (2015) (quoting Polzo

v. Cnty. of Essex, 196 N.J. 569, 584 (2008)). "[W]hether a defendant owes a

legal duty is generally a question of law for the court to decide." Clohesy v.

Food Circus Supermarkets, Inc., 149 N.J. 496, 502 (1997) (citing Carvalho v.

Toll Bros. & Devs., 143 N.J. 565, 572 (1996)).

      "[A]n insurance broker owes a duty to the insured to act with reasonable

skill and diligence in performing the services of a broker." Carter Lincoln-

Mercury, Inc. v. EMAR Group, Inc., 135 N.J. 182, 189 (1994). See also Rider

v. Lynch, 42 N.J. 465, 476 (1964) ("When engaged by a member of the public

to obtain insurance, the law holds him to the exercise of good faith and

reasonable skill, care and diligence in the execution of the commission."). An

insured can establish a prima facie case of negligence against an insurance

broker if: (1) the broker neglects to procure the insurance; (2) the broker secures

a policy that is either void or materially deficient; or (3) the policy does not

provide the coverage the broker undertook to supply. President v. Jenkins, 180

N.J. 550, 569 (2004). See also Aden v. Fortsh, 169 N.J. 64, 79 (2001) (if a

broker "neglects to procure the insurance or if the policy is void or materially

                                                                             A-1529-19
                                       19
deficient or does not provide the coverage he undertook to supply, because of

his failure to exercise the requisite skill or diligence, he becomes liable to his

principal for the loss sustained thereby") (quoting Rider, 42 N.J. at 476);

Restatement (Second) of Agency, § 401 (Am. Law Inst. 1957) ("An agent is

subject to liability for loss caused to the principal by any breach of duty.").

        Here, in denying the summary judgment motions, the judge found there

were genuine issues of material fact for a jury to determine, including disputed

communications and credibility. The facts regarding whether the duty to inform

and advise as to workers' compensation coverage flowed to Christopher

remained in dispute. The parties disputed the following issues: (1) "the nature

of the relationship [between Christopher and Purdy] and to what extent that

relationship bears upon the obligations of" Purdy; (2) the actual discussions

between Christopher and Purdy; (3) "whether . . . the level of communication

with [Christopher] in this matter was sufficient"; and (4) Purdy's

communications with the LLC through Robert or during other meetings in 2012.

These genuine issues of material fact precluded granting summary judgment to

plaintiff because the court was unable to determine whether Purdy's duty of care

extended to Christopher. Clohesy, 149 N.J. at 502 (citing Carvalho, 143 N.J. at

572).

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                                       20
      We next address plaintiff's argument that the court erred in granting

Purdy's motions for involuntary dismissal and judgment at trial because the

testimony was more than sufficient to establish Purdy's duty and demonstrated

that he "was the longtime insurance broker for [the LLC] and its members,

including Christopher." Relying on Carter Lincoln-Mercury, plaintiff contends

that Purdy "owed a duty to Christopher both individually and as a member of

[the LLC]." She alleges that Purdy "violated the workers' compensation statute

by failing (A) to provide notice of the election of coverage in each workers'

compensation application and (B) to provide the workers' compensation election

form." Plaintiff argues this alleged violation of the workers' compensation

statute was evidence of negligence.

      After plaintiff rests, the defendant "may move for a dismissal of the action

or of any claim on the ground that upon the facts and upon the law the plaintiff

has shown no right to relief." R. 4:37-2(b). The "motion shall be denied if the

evidence, together with the legitimate inferences therefrom, could sustain a

judgment in plaintiff's favor." Ibid. The defendant does not waive the right to

offer evidence if the motion is denied. Ibid. The defendant may also move for

judgment at the close of all the evidence or after plaintiff rests. R. 4:40-1. The

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                                       21
same evidential standard governs motions for judgment. Verdicchio v. Ricca,

179 N.J. 1, 30 (2004).

      In Smith v. Millville Rescue Squad, the Court summarized the standard of

review of motions for involuntary dismissal and for judgment at trial:

                   In reviewing a motion for involuntary dismissal
            under Rule 4:37-2(b) or a motion for judgment under
            Rule 4:40-1, we apply the same standard that governs
            the trial courts. ADS Assocs. Grp. v. Oritani Sav.
            Bank, 219 N.J. 496, 511 (2014); Frugis v. Bracigliano,
            177 N.J. 250, 269 (2003). Both motions are governed
            by "the same evidential standard: 'if, accepting as true
            all the evidence which supports the position of the party
            defending against the motion and according him the
            benefit of all inferences which can reasonably and
            legitimately be deduced therefrom, reasonable minds
            could differ, the motion must be denied[.]'"
            Verdicchio, 179 N.J. at 30 (quoting Estate of Roach v.
            TRW, Inc., 164 N.J. 598, 612 (2000)). The motion
            should only "be granted where no rational juror could
            conclude that the plaintiff marshaled sufficient
            evidence to satisfy each prima facie element of a cause
            of action."      Godfrey v. Princeton Theological
            Seminary, 196 N.J. 178, 197 (2008).

            [225 N.J. 373, 397 (2016) (alteration in original).]

      As with summary judgment motions, the court must determine whether

the evidence is "so one-sided that one party must prevail as a matter of law."

Frugis, 177 N.J. at 269 (quoting Brill, 142 N.J. at 536). Like the trial court, an

                                                                            A-1529-19
                                       22
appellate court is not concerned with the weight, worth, nature, or extent of the

evidence. Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969).

      "A limited liability company is an entity distinct from its members."

N.J.S.A. 42:2C-4(a). See also Touch of Class Leasing v. Mercedes-Benz Credit

of Canada, Inc., 248 N.J. Super. 426, 441 (App. Div. 1991) ("[A] corporation is

an entity separate and distinct from its principals."). Here, no claim was brought

by the LLC since workers' compensation benefits are paid to the injured

employee or member that opted in for the coverage.

      Applying these principles to the evidence adduced at trial, we reverse the

trial court's decision to grant defendant's motions for involuntary dismissal

under Rule 4:37-2(b) and for judgment under Rule 4:40-1.

      The Act was amended to allow members of an LLC, "who actively

perform services on behalf of the" LLC, to be "deemed an 'employee' of the"

LLC "for purposes of receipt of benefits and payment of premiums pursuant to

this chapter, if the" LLC "elects, when the [LLC's] workers' compensation

policy" "is purchased or renewed, to obtain coverage for the" LLC's members.

N.J.S.A. 34:15-36. "[T]he election may only be made at purchase or at renewal

and may not be withdrawn during the policy term." Ibid. For any member of

an LLC to opt in for workers' compensation coverage, all members must do so.

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38 N.J. Practice, Workers' Compensation Law § 3.4 at 35 (Jon L. Gelman) (3d

ed. 2000, 2020 Supplement).

      Plaintiff contends that the trial court erred in concluding that Purdy only

owed a duty to the LLC, which suffered no damages because of the lack of

coverage. We agree.

      N.J.S.A. 34:15-36 imposes a non-waivable duty on an insurance broker to

advise new members of an LLC of the availability of workers' compensation

coverage and the right to elect to opt in for such coverage. Indeed, the statute

requires every workers' compensation insurance application to "include notice,

as approved by the Commissioner of Banking and Insurance, concerning the

availability of workers' compensation coverage for . . . [LLC] members or

partners." N.J.S.A. 34:15-36. The application must also "contain a notice of

election of coverage and shall clearly state that coverage for . . . [LLC] members

and partners shall not be provided under the policy unless the application

containing the notice of election is executed and filed with the insurer or

insurance producer." Ibid.

      Here, Purdy failed to provide Michael and Christopher, the new LLC

members, with notice as required under N.J.S.A. 34:15-36 and failed to inform

them that they were no longer covered. Robert's prior experience of opting in

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and out of workers' compensation coverage as a member did not serve to advise,

constructively or otherwise, Christopher and Michael about the change in

coverage and their right to elect to opt in for such coverage. Without providing

Michael and Christopher with notice, the new members—who presumably were

not knowledgeable regarding the change in coverage upon becoming members

of the LLC—would not have been able to make an informed decision.

      In addition, after Michael and Christopher became members of the LLC,

they both met with Purdy in a 2012 to discuss insurance renewal and to "make

sure that [they] were protected . . . ." 2 During the 2012 meeting, the parties did

not specifically discuss workers' compensation coverage, but Michael testified

that he and Christopher informed Purdy they wanted protection. During his

testimony, Michael specifically stated that he "tried to give [Purdy] as much

information as possible just to make sure [they] were protected."

      Giving plaintiff "the benefit of all inferences which can reasonably and

legitimately be deduced" from the evidence presented, a rational juror could

conclude that Michael and Christopher sought protection during the 2012

2
  Although Purdy testified that Christopher did not attend the 2012 meeting, we
"accept[] as true all the evidence which supports [plaintiff's] position" and
accord plaintiff "the benefit of all inferences which can reasonably and
legitimately be deducted therefrom . . . ." Smith, 225 N.J. at 397 (quoting
Verdicchio, 179 N.J. at 30).
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renewal meeting and Purdy negligently failed to inform them about the change

in workers' compensation coverage. Smith, 225 N.J. at 397 (citations omitted).

We conclude that there was sufficient evidence presented to require submission

of this issue to the jury.

      We next address plaintiff's argument that the evidence presented

established that Christopher's death was a compensable injury under the Act.

Plaintiff argues that the burden of proof is construed liberally in favor of a

workers' compensation claimant and medical evidence of causation is not

required, especially where the cause of death is obvious.

      The Act provides a benefit to the dependents of an employee whose death

resulted from a work-related injury, illness, or medical condition. N.J.S.A.

34:15-13(a), (h). "Dependent" is defined by the Act to include the deceased

employee's wife and children under eighteen. N.J.S.A. 34:15-13(f).

      "To succeed in an action against an insurance broker, the plaintiff must

prove that in addition to being negligent, the broker's negligence was a

proximate cause of the loss." Harbor Commuter Serv., Inc. v. Frenkel & Co.,

401 N.J. Super. 354, 368 (App. Div. 2008) (citing Regino v. Aetna Cas. & Sur.

Co., 200 N.J. Super. 94, 99 (App. Div. 1985)). New Jersey has adopted the

substantial factor test, which holds a tortfeasor liable if his "negligent conduct

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                                       26
was a substantial factor in bringing about the injuries . . . ." Conklin v. Hannoch

Weisman, 145 N.J. 395, 419 (1996) (quoting Brown v. United States Stove Co.,

98 N.J. 155, 171 (1984)). In cases involving an alleged failure to procure

insurance coverage, the measure of damages is "the amount that would have

been due under the policy provided it had been obtained." Robinson v. Janay,

105 N.J. Super. 585, 591 (App. Div. 1969) (quoting 43 Am. Jur. 2d Insurance §

174 (1982)).

      Generally, proximate cause is an issue for the jury. Miller v. Est. of

Sperling, 166 N.J. 370, 386 (2001) (citing Perez v. Wyeth Labs, Inc., 161 N.J.

1, 27 (1999)). However, a court may decide the issue where "no reasonable jury

could find that the injuries were proximately caused by the [defendant's

conduct]." Vega by Muniz v. Piedilato, 154 N.J. 496, 509 (1998).

      An injury is compensable under the Act when it "is caused to an employee

by accident arising out of and in the course of his employment . . . ." N.J.S.A.

34:15-1.   The right to compensation under the Act is not affected by the

negligence of the employee unless the employee was "willfully negligent," ibid.,

or "the injury or death is intentionally self-inflicted," N.J.S.A. 34:15-7.

      A workers' compensation petitioner for has "the burden of proof to

establish all elements of his case." Bird v. Somerset Hills Country Club, 309

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                                       27
N.J. Super. 517, 521 (App. Div. 1998). A successful petitioner "generally must

prove both legal and medical causation when those issues are contested."

Lindquist v. City of Jersey City Fire Dep't, 175 N.J. 244, 259 (2003). "[P]roof

of medical causation means proof that the disability was actually caused by the

work-related event. Ibid. (citing Hone v. J.F. Shea Co., 728 P.2d 1008, 1011

(Utah 1986)). Proof of legal causation means proof that the injury is work

connected." Ibid. (citing Kasper v. Bd. of Trs. of Tchrs.' Pension and Annuity

Fund, 164 N.J. 564, 591 (2000) (Coleman, J., concurring); In re Lockheed

Martin Corp., 786 A.2d 872, 874-75 (N.H. 2001)). "It is the petitioner's burden

to establish a causal link between the employment and the [injury]." Kiczula v.

Am. Nat'l Can Co., 310 N.J. Super. 293, 303 (App. Div. 1998) (citing Laffey v.

Jersey City, 289 N.J. Super. 292, 303 (App. Div. 1996)).

      Nevertheless, the Act is social legislation that is liberally construed "to

implement the legislative policy of affording coverage to as many workers as

possible." Lindquist, 175 N.J. at 258 (quoting Brower v. ICT Group, 164 N.J.

367, 373 (2000)). To that end, the workers' compensation judge "conducting the

hearing shall not be bound by the rules of evidence." N.J.S.A. 34:15-56. "The

purpose of this section was to simplify the nature of proof that can be offered

without regard to technical exclusionary rules of evidence.       Thus, hearsay

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evidence need not be excluded but the ultimate award must be based on legally

competent evidence." Gunter v. Fischer Sci. Am., 193 N.J. Super. 688, 691

(App. Div. 1984) (citing Gilligan v. Int'l Paper Co., 24 N.J. 230, 236 (1957)).

"Nonetheless, the doctrine of liberal construction does not extend to 'the

evaluation of credibility, or of weight or sufficiency of evidence.'" Lindquist,

175 N.J. at 258 (quoting Oszmanski v. Bergen Point Brass Foundry, Inc., 95 N.J.

Super. 92, 95 (App. Div. 1967)).

      The trial court found that plaintiff offered no admissible evidence to

establish the elements of proximate cause and damages. However, plaintiff's

cause of action is based, in part, on whether the death was compensable under

the Act. Because this professional liability action results in the proverbial "trial

within a trial," Gautam v. De Luca, 215 N.J. Super. 388, 397 (App. Div. 1987),

the relaxation of the evidence rules applies to that aspect of this case. Plaintiff

is not held to the technical rules of evidence on the issue of compensability under

the Act. Gunter, 193 N.J. Super. at 691 (citing Gilligan, 24 N.J. at 236).

      In addition, whether medical evidence is required to establish a

compensable injury depends upon the complexity of the medical issues. 12 Lex

K. Larson, Larson's Workers' Compensation Law, § 128 (rev. ed. 2020).

                 In line with the general tendency of
            administrative law to recognize the expertise of

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                                        29
     specialized tribunals, compensation boards may rely to
     a considerable extent on their own knowledge and
     experience in uncomplicated medical matters, and in
     such cases, awards may be upheld without medical
     testimony or even in defiance of the only medical
     testimony.      Nevertheless, medical testimony is
     indispensable when the medical question is no longer
     an uncomplicated one, carrying the factfinders into
     realms that are properly within the province of medical
     experts.

     [Ibid.]

As explained by this distinguished commentator:

            To appraise the true degree of indispensability
     which should be accorded medical testimony, it is first
     necessary to dispel the misconception that valid awards
     can stand only if accompanied by a definite medical
     diagnosis.     True, in many instances it may be
     impossible to form a judgment on the relation of the
     employment to the injury, or relation of the injury to
     the disability, without analyzing in medical terms what
     the injury or disease is. But this is not invariably so. In
     appropriate circumstances, awards may be made when
     medical evidence on these matters is inconclusive,
     indecisive, fragmentary, inconsistent, or even
     nonexistent.

           ....

           This view—that in appropriate circumstances
     medical testimony need not necessarily establish
     specifically and positively the pathological diagnosis
     and etiology of a disease or condition—has been
     accepted by most courts.

     [Id. at § 128.02 (footnotes omitted).]

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                                30
      "Similarly, when the issue is causal connection between an injury and

death, medical testimony may be dispensed with" when the injury "occur[s]

suddenly as a result of an obvious accident . . . ." Ibid. One reason for this rule

is that "lay testimony, including that of the claimant, is of probative value in

establishing such simple matters as the existence and location of pain, and

sequence of events leading to the compensable condition . . . ." Id. at § 128.04.

However, "as the degree of complexity of the medical issue increases, so does

the degree of requisite thoroughness and definiteness of diagnosis." Id. at §

128.05.

      Another circumstance warranting relaxation of the need for medical

testimony is "where there has been an unwitnessed fatal mishap occurring within

the time and space limits of the employment, the claimant's standard of proof

will be considerably relaxed." Williams v. Corby's Enter. Laundry, 64 N.J.

Super. 561, 568 (App. Div. 1960).        "[O]ne cannot be expected, in such a

situation, to do more than present the more believable of the competing

hypotheses." Ibid. In such cases, petitioners are permitted to use circumstantial

evidence to satisfy the burden of proof because "[p]robability, and not the

ultimate degree of certainty is the test." Verge v. Cnty. of Morris, 272 N.J.

Super. 118, 125 (App. Div. 1994) (citing Jochim v. Montrose Chem. Co., 3 N.J.

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                                       31
5 (1949)). See also Crotty v. Driver Harris Co., 49 N.J. Super. 60, 71 (App. Div.

1958) (holding where there are no witnesses to an employee's death, courts are

satisfied with "scant circumstantial evidence that the accident arose out of and

in the course of the employment" (citing Macko v. Herbert Hinchman & Son, 24

N.J. Super. 304, 307-308 (App. Div. 1953))).

      In Aladits v. Simmons Co., 47 N.J. 115 (1966), the employee was

performing heavy work when he collapsed and died from a heart attack. The

Court addressed the evidence of causation required when an unwitnessed death

occurs:

                   This was an unwitnessed death. No one knows
            what Aladits was doing or what signs or symptoms he
            manifested when stricken. It is known that he was in
            the course of his work, that it was heavy work and that
            he had been doing it for about four and one-half hours
            before he collapsed. In such cases causal connection
            between the work effort and the death must depend
            upon circumstantial evidence. It is a matter of common
            knowledge also, that in such cases justice requires a
            more tolerant appraisal of the evidence supporting the
            thesis of causation. Although the standard to be met for
            compensability remains the same, where the 'collapse
            is unwitnessed and the employee's lips are sealed by
            death, the courts throughout the country show an
            understandable readiness' to find the necessary
            reasonably probable connection on a less formidable
            quantum of testimony.

            [Id. 121-22.]

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                                      32
The Court concluded that "[h]eavy reliance must be placed on the surrounding

circumstances, and they must be carefully explored and appraised for the

existence of every fact or element which points the way toward or away from

work connection." Id. at 122.

      In Coleman v. Cycle Transformer Corp., an employee suffered acute

trauma when her hair caught fire when she lit a cigarette during an unpaid lunch

break in the company's lunchroom. 105 N.J. 285, 286-87 (1986). The Court

noted the simply worded phrase "arose out of" the employment "has given rise

to 'a mass of decisions turning upon nice distinctions and supported by

refinements so subtle as to leave the mind of the reader in a maze of confusion.'"

Id. at 290 (quoting Note, "Arising 'out of' and 'in the Course of' the Employment

Under the New Jersey Workmen's Compensation Act," 20 Rutgers L. Rev. 599

(1966)). The Court considered the case to be "relatively straightforward, not

encumbered by such distinctions, refinements, or confusion." Ibid. We reach

the same conclusion in this case.

      "The requirement that a compensable accident arise out of the

employment looks to a causal connection between the employment and the

injury. It must be established that the work was at least a contributing cause of

the injury and that the risk of the occurrence was reasonably incident to the

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                                       33
employment." Ibid. (citing Note, 20 Rutgers L. Rev. at 601).        The test is

"whether it is more probably true than not that the injury would have occurred

during the time and place of employment rather than elsewhere." Ibid. (quoting

Howard v. Harwood's Restaurant Co., 25 N.J. 72, 83 (1957)).

      This Case does not involve an underlying heart condition or

environmental exposure to carcinogens or toxins. Cf. Aladits, 47 N.J. at 125

(heart attack after engaging in prolonged, strenuous manual labor); Szumski v.

Dale Boat Yards, Inc., 48 N.J. 401, 405 (1967) (acute myocardial infarction

following manual labor on a hot, humid day); Lindquist, 175 N.J. at 249

(firefighter, who was regularly exposed to heavy smoke conditions, developed

pulmonary emphysema). Claims based on environmental exposure or heart

attacks while performing strenuous physical labor present far more complicated

medical causation issues than claims based on trauma. The better view is that

workers' compensation claims based on environmental exposure or labor-

induced heart attacks require greater medical evidence of a causal connection

between the employment and the illness or injury than a claim based on an injury

caused by a discrete traumatic event unrelated to any underlying medical

condition.

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                                      34
      Christopher was injured during a slip and fall on a snowy surface while

performing snow removal work for the LLC. The fall occurred during regular

business hours on the client's property while trying to start the LLC's truck.

Entirely absent is any evidence that his death was related to environmental

exposure, an underlying medical condition, or non-work-related trauma.

      Plaintiff presented strong circumstantial evidence that the accident caused

Christopher's death.    This included Michael's testimony that when he saw

Christopher on the day of the accident, "his whole back was completely covered

in snow, his hat, his back, and he just didn't look like himself. He was just

completely out of it." In addition, Michael testified that Christopher told him:

"I slipped. I fell down. I hit my head. I hit my head so hard I saw stars."

      As we have noted, a "considerably relaxed" burden of proof is applied

where "an unwitnessed fatal mishap occurring within the time and space limits

of the employment" occurs. Williams, 64 N.J. Super. at 568. Applying this

"more tolerant appraisal of the evidence supporting the thesis of causation ,"

Aladits, 47 N.J. at 122, we find that plaintiff presented sufficient circumstantial

evidence for a reasonable jury to find by a preponderance of the evidence that

the fatal injury "occurred during the time and place of employment rather than

elsewhere," Coleman, 105 N.J. at 290 (quoting Howard, 25 N.J. at 83). Because

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                                       35
Christopher's fall was "unwitnessed and [his] lips [were] sealed by death," we

conclude plaintiff presented sufficient circumstantial evidence for a reasonable

jury "to find the necessary reasonably probable connection on a less formidable

quantum of testimony." Aladits, 47 N.J. at 122.

      Since plaintiff presented sufficient evidence that Christopher suffered a

work-related injury that led to his death, the burden of proof shifted to employer.

Kolakowski v. Thomas Mfg. Corp., 88 N.J. Super. 478, 488 (App. Div. 1965).

            It is well settled that where the employer disputes the
            connection of the disability and the work injury after
            petitioner has, by a preponderance of the credible
            proofs, shown such relation, the burden shifts to the
            employer to come forward with proof that the disability
            might be the result of another cause.

            [Ibid.]

See also Bird, 309 N.J. Super. at 521 (stating that once the petitioner has

established the elements of his case, "the burden to defeat [the] claim and

establish contrary facts and legal conclusions exonerating the employer or

mitigating liability shifted to the employer" (citations omitted)).

      Here, the trial court granted the motions for involuntary dismissal and

judgment at trial after Purdy rested. Purdy did not come forward with any

evidence that Christopher's injury or death resulted from another cause.

Considering the evidential burden imposed on Purdy, which he clearly did not

                                                                             A-1529-19
                                       36
meet, "accepting as true all the evidence which supports [plaintiff's] position,"

and according plaintiff the benefit of all reasonable inferences, we find that a

rational juror could conclude that plaintiff presented "sufficient evidence to

satisfy each prima facie element of [the] cause of action." Smith, 225 N.J. at

397 (citations omitted). Consequently, the motions should have been denied.

Ibid. (quoting Verdicchio, 179 N.J. at 30).

      The trial court erred in granting Purdy's motions for involuntary dismissal

and judgment at trial. Ibid. We express no opinion on plaintiff's right to

recovery against Purdy. The jury must make that decision. We reverse the order

granting the involuntary dismissal and judgment at trial and remand for retrial.

      Affirmed in part, reversed in part, and remanded for retrial. We do not

retain jurisdiction.

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                                      37