Court Opinion

ID: 9912463
Source: CourtListenerOpinion
Date Created: 2023-12-22 15:06:42.044115+00
Date Added: 2024-06-11T12:59:27.449217
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NOT FOR PUBLICATION WITHOUT THE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-2079-22

DIONICIO RODRIGUEZ,

         Plaintiff,

v.

SHELBOURNE SPRING, LLC,
GREEN POWER DEVELOPERS,
LLC, UNITY CONSTRUCTION,
ROCCO A. DIMICHINO, SUNDANCE
ELECTRICAL CO., LLC, SF
JOHNSON ELECTRIC, INC.,
FACILITY SOLUTIONS GROUP,
JOHNSON CONTROLS SECURITY
SOLUTIONS, LLC, and MANAGED
BUSINESS COMMUNICATIONS, INC.,

         Defendants-Respondents,

and

SIR ELECTRIC, LLC,

         Defendant/Third-Party
         Plaintiff-Appellant,

v.

HARTFORD UNDERWRITERS
INSURANCE COMPANY,

      Third-Party Defendant
      -Respondent.
______________________________________

            Argued December 12, 2023 – Decided December 22, 2023

            Before Judges Sumners, Rose and Smith.

            On appeal from an interlocutory order of the Superior
            Court of New Jersey, Law Division, Union County,
            Docket No. L-0595-22.

            Benjamin Clarke argued the cause for appellant
            (DeCotiis, Fitzpatrick, Cole & Giblin, LLP, attorneys;
            Benjamin Clarke and Gregory J. Hazley, on the briefs).

            Katherine E. Tammaro argued the cause for respondent
            Hartford Underwriters Insurance Company (Wilson,
            Elser, Moskowitz, Edelman & Dicker LLP, attorneys;
            Katherine E. Tammaro, on the brief).

PER CURIAM

      Dionicio Rodriguez was injured at work and received benefits from his

employer SIR Electric, LLC, under the Workers' Compensation Act

(Compensation Act), N.J.S.A. 34:15-1 to -147. Rodriguez subsequently filed a

Law Division action against SIR, alleging his injuries were caused by SIR's

negligence, gross negligence, recklessness, and intentional misconduct, and

sought compensatory damages under the principles of Laidlow v. Hariton Mach.

Co., 170 N.J. 602, 614 (2002).

                                                                      A-2079-22
                                      2
      SIR sought defense coverage for Rodriguez's tort claims under its

employer's liability insurance policy with Hartford Underwriter Insurance

Company. After Hartford denied coverage under the policy's exclusion "NEW

JERSEY PART TWO EMPLOYERS LIABILITY ENDORSEMENT WC 29 03

06 (B)" (Employer's Liability EII exclusion), SIR filed a third-party complaint

against the carrier. SIR claimed Rodriguez's "[a]llegations of gross negligence

and simple negligence fall squarely within the grant of coverage found in the

Hartford [p]olicy, and trigger Hartford’s duty to defend."

      In lieu of an answer, Hartford filed a Rule 4:6-2(e) motion to dismiss the

third-party complaint with prejudice, claiming non-coverage under the policy's

Employer's Liability EII exclusion. SIR cross-moved for summary judgment,

not seeking indemnification but asserting Hartford was obligated to defend it

against Rodriguez's claims without further delay. Judge Daniel R. Lindemann

entered an order granting Hartford's motion and denying SIR's cross -motion for

summary judgment. SIR's subsequent motion for reconsideration was granted

in part, and its motion for leave to amend its complaint was denied.

      We granted SIR leave to appeal the judge's orders.        After carefully

reviewing the record and considering the governing legal principles and the

arguments of the parties, we affirm substantially for the reasons explained in

Judge Lindemann's cogent written decisions.

                                                                          A-2079-22
                                       3
                                          I.

      The facts are undisputed. SIR is an electric service provider. Before

starting a new project, SIR obtained insurance coverage with Hartford to cover

work-related injuries its employees might sustain.

      The insurance coverage included worker's compensation and employer's

liability insurance. The latter, which is the focus of the parties' dispute, provides

in pertinent part:

             A. How This Insurance Applies

             This employer[']s liability insurance applies to bodily
             injury by accident or bodily injury by disease. Bodily
             injury includes resulting death.

             1. The bodily injury must arise out of and in the course
             of the injured employee's employment by you.

             2. The employment must be necessary or incidental to
             your work in a state or territory listed in Item 3.a. of the
             Information Page.

             3. Bodily injury by accident must occur during the
             policy period.

             4. Bodily injury by disease must be caused or
             aggravated by the conditions of your employment. The
             employee's last day of exposure to the conditions
             causing or aggravating such bodily injury by disease
             must occur during the policy period.

             5. If you are sued, the original suit and any related legal
             actions for bodily injury by accident or by disease must

                                                                               A-2079-22
                                          4
be brought in the United States of America, its
territories or possessions, or Canada.
B. We Will Pay

We will pay all sums that you legally must pay as
damages because of bodily injury to your employees,
provided the bodily injury is covered by this Employers
Liability Insurance.

      ....

C. Exclusions

      ....

4. Any obligation imposed by a workers compensation,
occupational disease, unemployment compensation, or
disability benefits law, or any similar law;

5. Bodily injury intentionally caused or aggravated by
you;

      ....

D. We Will Defend

We have the right and duty to defend, at our expense,
any claim, proceeding or suit against you for damages
payable by this insurance. We have the right to
investigate and settle these claims, proceedings, and
suits.

We have no duty to defend a claim, proceeding or suit
that is not covered by this insurance. We have no duty
to defend or continue defending after we have paid our
applicable limit of liability under this insurance.

[Emphasis added.]

                                                          A-2079-22
                          5
        The policy's Employer's Liability EII exclusion, provides, in pertinent

part:

              With respect to Exclusion C5, this insurance does not
              cover any and all intentional wrongs within the
              exception allowed by N.J.S.A. 34:15-8[1] including but
              not limited to, bodily injury caused or aggravated by an
              intentional wrong committed by you or your
              employees, or bodily injury resulting from an act or
              omission by you or your employees, which is
              substantially certain to result in injury.

                    ....

              This insurance does not provide for the payment of any
              common law negligence damages or other damages
              when the provisions of Article 2 of the [Compensation
              Act] have been rejected by you and your employee(s)
              as provided in N.J.S.A. 34:15-9.

              [Emphasis added.]

        During the insurance coverage period, Rodriguez sustained severe burns

in a workplace accident. Hartford provided him worker compensation benefits.

        About twenty-one months after the accident, Rodriguez filed a tort claim

action in the Law Division against SIR and other companies and fictitiously

1
  N.J.S.A. 34:15-8 precludes a person "in the same employ as" the workers'
compensation claimant from being held liable "at common law or otherwise . . .
except for intentional wrong." Richter v. Oakland Bd. of Educ., 246 N.J. 507,
514-15 (2021) (quoting N.J.S.A. 34:15-8).

                                                                          A-2079-22
                                         6
named parties seeking damages for his personal injuries.2 Rodriguez alleged

against SIR specifically:

            30. [SIR] recklessly directed [him] to perform an
            abnormally dangerous activity in opening an electrical
            panel without any training or warnings in complete
            disregard for his health and safety.

            31. [SIR] was grossly negligent in requiring [him] to
            perform an abnormally dangerous activity in opening
            an electrical panel without any training or warnings in
            complete disregard for his health and safety.

                  ....

            48. At all times during [his] employment with [SIR],
            [he] performed his job diligently and satisfactorily by
            any reasonable, objective standard.

            49. [SIR] intentionally disregarded known safety
            features, required [him] to work on electrical
            equipment without safety devices, without warnings
            and knowing that there was a substantial certainty that
            [he] would be harmed, and thereby intentionally or with
            substantial certainty, exposed [him] to the risk of death
            or serious injury.

                  ....

            51. [SIR's] conduct in assigning [him] to the work that
            led him to sustain severe bodily injuries greatly
            deviated from accepted safety practices in electrical
            services.

2
  The other companies and fictitiously named parties are not discussed because
they neither are parties, nor relevant, to this appeal.

                                                                        A-2079-22
                                       7
            52. [SIR's] conduct was so egregious as to cause a
            reasonable person to conclude with substantial
            certainty that [he] would be injured in the very manner
            in which occurred to [him].

            53. [His] resulting injuries and the context surrounding
            them are more than a fact of life of electrical
            employment and are plainly beyond anything the
            [L]egislature could have contemplated as entitling the
            employees to recover only under the Compensation
            Act.

            54. [SIR's] acts violated the New Jersey Worker Health
            and Safety Act, N.J.S.A. 34:6A, et. seq.
            55. [SIR's] reckless indifference for [his] safety and
            well-being rise to the level of a Laidlow claim piercing
            the . . . Compensation Act bar.

      For all other allegations, Rodriguez either identified a singular defendant's

actions by specifying a defendant by name or as a group stating "Defendants" or

"Defendant[s], singly, in combination, jointly, and severally." Relevantly, he

asserted:

            32. Defendants were in control of the premises that was
            under construction and owed a duty of care to [him] to
            exercise reasonable care in ensuring that no dangerous
            and/or hazardous conditions existed on the property.

            33. Defendants were responsible for the safety of the
            property.

            34. Defendants were responsible for ensuring that
            proper safety codes were followed with respect to the
            building's electrical wiring and other electrical
            components.

                                                                             A-2079-22
                                        8
             35. Defendants were responsible for inspecting the
             building's electrical installations for any defects.

             36. Defendants were responsible for ensuring that the
             building's electrical wiring system complied with
             existing building codes.

             37. Defendants were negligent for their failure to
             properly safeguard the premises.

             38. Defendants were negligent in their actions and
             omissions, which proximately caused [his] accident.

             39.    Defendants had inadequate and insufficient
             policies and procedures for worksite safety.

             40. Defendants failed to anticipate the results of [his]
             accident, which could reasonably have been foreseen.

             41. Defendants violated their own policies and
             procedures for worksite safety.

             42. Defendants violated OSHA [3] rules and regulations
             for worksite safety.

             43. Defendants created a dangerous condition.

             44. Defendants had actual and constructive notice of
             the dangerous condition.

             45.   Defendants were negligent in permitting a
             dangerous condition to exist.

             46. Defendants were negligent in the ownership,
             operation,   maintenance,  upkeep,   monitoring,
             supervision and management of the property and
             construction         site,      and          the

3
    Occupational Safety and Health Administration.
                                                                        A-2079-22
                                        9
            contractors/subcontractors/employees working on the
            property.

            47.   Defendants were negligent in the hiring,
            employment, and/or continued employment of its
            employees/ contractors.

                   ....

            69. [His] injuries were caused solely and wholly by the
            negligence of each Defendant, singly, in combination,
            jointly, and severally, with no contributing negligence
            on the part of [him].

            70. As a result of the negligence of the Defendants,
            singly, in combination, jointly, and severally, [he] has
            been damaged in an amount that exceeds the
            jurisdictional limits of all lower Courts that would
            otherwise have jurisdiction herein, and demands
            damages, compensatory damages, pre-judgement
            interest, costs and disbursements in this action.

      Following SIR's request for defense coverage, Hartford denied coverage,

asserting it had no duty to defend based on its Employer's liability EII exclusion.

The company stated:

            Based upon the allegations and the information known,
            we must decline coverage under the policy. The policy
            applies only to the employer for claims for bodily injury
            by accident, which arise out of and in the course of an
            injured employee's employment that are not obligations
            imposed by workers' compensation and are not subject
            to other exclusions. The plaintiff claims he was an
            employee of SIR and that SIR intentionally or with
            substantial certainty exposed plaintiff to the risk of
            death or serious injury. Plaintiff's allegations are not

                                                                             A-2079-22
                                       10
               covered by the policy by virtue of the New Jersey Part
               Two Endorsement . . . .

         In response, SIR filed a third-party complaint against Hartford, claiming

the carrier had a duty to defend it against Rodriguez's negligence-based claims.

SIR asserted:

               11. Although the complaint in this matter includes
               allegations of intentional wrongdoing by SIR, . . .
               allegations that SIR denies and that the evidence refutes
               – it also includes allegations of non-intentional
               wrongdoing by SIR, including allegations that SIR
               acted with gross negligence and simple negligence.

               12. Allegations of gross negligence and simple
               negligence fall squarely within the grant of coverage
               found in the Hartford Policy, and trigger Hartford’s
               duty to defend SIR.

         In lieu of an answer, Hartford filed a Rule 4:6-2(e) motion to dismiss to

dismiss the complaint with prejudice. SIR responded with a cross-motion for

summary judgement that Hartford had to assume its defense without further

delay.

         Judge Lindemann granted Hartford's motion and denied relief to SIR. In

a cogent written statement of reasons analyzing the law governing the narrow

intentional-wrong exception to the exclusive remedy provided by the

Compensation Act, the judge ruled there was "no claim where if [Rodriguez's]

allegations were sustained, [Hartford] would be required to pay the judgment."

                                                                            A-2079-22
                                         11
      SIR filed a motion for reconsideration and for leave to amend its third-

party complaint. SIR contended the judge misapplied the law, in particular

Laidlow, and erred in not finding the Employer's Liability EII exclusion is void

against public policy. SIR also sought leave to amend its third-party complaint

or for the judge to certify its order as final for purposes of appellate review. The

judge granted SIR's request to "adjust[] its findings to the applicable standard

under [Laidlow]" but denied its motion to amend as moot because its complaint

was dismissed with prejudice. In particular, the judge denied SIR's request to

amend its complaint to add "COUNT FIVE – LEGAL INVALIDITY OF

ENHANCED EXCLUSION" on the basis that its complaint was dismissed with

prejudice and the "[Employer's Liability EII exclusion] is precisely the express

exclusion of coverage which was described in Delta Plastics"4 and approved by

the Commissioner of Banking and Insurance. The judge also rejected SIR's

argument that enforcement of the Employer's Liability EII exclusion was

contrary to public policy. Finally, the judge refused to certify his order as a final

judgment dismissing the third-party complaint, finding the order "d[id] not fall

4
  N.J. Mfrs. Ins. Co. v. Delta Plastics Corp., 188 N.J. 582, aff'd, 188 N.J. 582
(2006).

                                                                               A-2079-22
                                        12
within the limited situations where certification is appropriate as describe[d] in

[Rule] 4:42-2."5

                                       II.

                                       A.

      We granted SIR leave to appeal the orders dismissing its third-party

complaint and providing that Hartford was not obligated under the policy to

defend SIR against Rodriguez's personal injury claims.          Citing case law

interpreting insurance policies, SIR argues Hartford had a duty to defend it

against Rodriguez's lawsuit even though Rodriguez received workers'

compensation benefits and Hartford did not have to indemnify SIR for his claim.

SIR contends the judge misinterpreted the Employer's Liability EII exclusion

exception by erroneously finding the exclusion applies only to intentional

wrongs and not to all non-intentional torts like negligence and gross negligence.

SIR further argues the exclusion does not "precisely" conform to the ruling in

Delta Plastics, which allows an insurer to exclude coverage from Rodriguez's

tort claims.

5
  Because we granted SIR leave to appeal, the denial of its motion to certify the
order dismissing its third-party complaint and denying its cross-motion for
summary judgment as final is not an issue before us.
                                                                            A-2079-22
                                       13
      SIR contends we should follow the reasoning set forth in our non-

precedential opinion Rodriguez-Ortiz v. Interstate Racking & Shelving, II, Inc.,

No. A-1614-19, (App. Div. Sept. 3, 2021), certif. denied, 249 N.J. 90 (2021).

SIR cites the opinion's recognition that "if an employee brings a negligence-

based claim in Superior Court –– whether it is instead of, or in addition to, filing

a petition in the Workers' Compensation Division –– the workers' compensation

policy covers the cost of defending and, presumably, securing the lawsuit 's

dismissal and transfer to the Workers' Compensation Division." Rodriguez-

Ortiz, slip op. at 16.

      Finally, SIR argues the judge erred in refusing to allow it to file an

amended complaint challenging the legality of the Employer's Liability EII

exclusion exception, thereby preventing it from resolving whether the exception

violates public policy.

                                        B.

      With respect to this appeal, the principles governing a motion to dismiss

for failure to state a claim and a motion for summary judgment align. Our

review of the judge's orders is de novo. See Baskin v. P.C. Richard & Son, LLC,

246 N.J. 157, 171 (2021); Samolyk v. Berthe, 251 N.J. 73, 78 (2022). Because

the facts are not in dispute, we must determine, as a matter of law, whether the

insurance policy obligates Hartford to defend SIR regarding Rodriguez's tort

                                                                              A-2079-22
                                        14
claims. See Frederick v. Smith, 416 N.J. Super. 594, 597 (App. Div. 2010) ("A

complaint should be dismissed for failure to state a claim pursuant to Rule 4:6-

2(e) only if 'the factual allegations are palpably insufficient to support a claim

upon which relief can be granted.'" (quoting Rieder v. State Dep't of Transp.,

221 N.J. Super. 547, 552 (App. Div. 1987))); Branch v. Cream-O-Land Dairy,

244 N.J. 567, 582 (2021) (considering a summary judgment motion requires us

to "determine whether 'the pleadings, depositions, answers to interrogatories and

admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact challenged and that the moving party is

entitled to a judgment or order as a matter of law'" (quoting R. 4:46-2(c))). In

our review, we do not defer to the trial court's legal analysis or statutory

interpretation. RSI Bank v. Providence Mut. Fire Ins. Co., 234 N.J. 459, 472

(2018).

      Hartford's duty to defend SIR against Rodriguez's claims is purely a legal

question governed by the terms of its policy subject to de novo review. See

Abboud v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 450 N.J. Super. 400, 406

(App. Div. 2017) (Interpreting an insurance policy is a legal question that we

review de novo (citing Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt.

Osteopathic Med. & Physical Therapy, 210 N.J. 597, 605 (2012))); Danek v.

Hommer, 28 N.J. Super. 68, 77 (App. Div. 1953) ("the duty to defend comes

                                                                            A-2079-22
                                       15
into being when the complaint states a claim constituting a risk insured

against"), aff'd o.b., 15 N.J. 573 (1954).

      Under the policy's terms, Rodriguez received workers' compensation

benefits. See N.J.S.A. 34:15-9. In return for the certainty of compensation

within the Workers' Compensation system for workplace injury "without regard

to the negligence of the employer," N.J.S.A. 34:15-7, the Compensation Act

provides that an injured employee may not sue his or her employer when the

employer's negligence is responsible for the injury.       See N.J.S.A. 34:15-8

(stating "[s]uch agreement shall be a surrender . . . of . . . rights to any other

method, form or amount of compensation or determination thereof than as

provided in this article"). "N.J.S.A. 34:15-8 directs that an employer may not

be sued by an employee . . . for negligence that caused injury or death to the

employee." Est. of D'Avila v. Hugo Neu Schnitzer E., 442 N.J. Super. 80, 99

(App. Div. 2015). Therefore, "workers' compensation is the exclusive remedy,

absent proof of an intentional wrong." Ibid. Thus, Rodriguez's tort claims were,

in the words of Exclusion C4, "obligation[s] imposed by a workers

compensation . . . law."

      There is, however, an exception to the Compensation Act's exclusivity, as

set forth in N.J.S.A. 34:15-8, for an injury caused by an employer's intentional

wrong. Van Dunk v. Reckson Assocs. Realty Corp., 210 N.J. 449, 459

                                                                            A-2079-22
                                       16
(2012). The test for determining an intentional wrong under the Compensation

Act has evolved as articulated by our Supreme Court. See, e.g., id. at 469-

70; Laidlow, 170 N.J. at 611-18; Millison v. E.I. du Pont de Nemours & Co.,

101 N.J. 161, 177-79 (1985).

      In Millison, the Court recognized "if 'intentional wrong' is interpreted too

broadly, this single exception would swallow up the entire 'exclusivity'

provision of the [Compensation] Act." 101 N.J. at 177. Hence, the Court

applied an "intent" analysis to determine what constitutes an "intentional wrong"

within the meaning of the Compensation Act. Ibid. The Court explained:

            [T]he mere knowledge and appreciation of a risk—
            something short of substantial certainty—is not intent.
            The defendant who acts in the belief or consciousness
            that the act is causing an appreciable risk of harm to
            another may be negligent, and if the risk is great the
            conduct may be characterized as reckless or wanton,
            but it is not an intentional wrong.

            [Ibid. (quoting W. Prosser & W. Keeton, The Law of
            Torts § 8, at 36 (5th ed. 1984)).]

      In Laidlow, the Court refined the concept, reasoning "an intentional

wrong is not limited to actions taken with a subjective desire to harm, but also

includes instances where an employer knows that the consequences of those acts

are substantially certain to result in such harm." 170 N.J. at 613 (citing The Law

of Torts § 8, at 596). The Court reasoned:

                                                                            A-2079-22
                                       17
             [I]n order for an employer's act to lose the cloak of
             immunity of N.J.S.A. 34:15-8, two conditions must be
             satisfied: (1) the employer must know that [its] actions
             are substantially certain to result in injury or death to
             the employee, and (2) the resulting injury and the
             circumstances of its infliction on the worker must be (a)
             more than a fact of life of industrial employment and
             (b) plainly beyond anything the Legislature
             intended the . . . Compensation Act to immunize.

             [Id. at 617.]

Consequently, an employee seeking to prove an employer committed an

intentional wrong must demonstrate either (1) that the employer had a subjective

desire to injure, or (2) that "based on all the facts and circumstances of the case

. . . the employer knew an injury was substantially certain to result ." Id. at 614.

      Substantial certainty is an extraordinarily high bar. In Van Dunk, the

Court concluded "probability, or knowledge that such injury or death 'could'

result, is insufficient." 210 N.J. at 470. Moreover, "[e]ven an injury 'caused by

either gross negligence or an abysmal lack of concern for the safety of

employees'     is    insufficient    to        satisfy   the   'intentional   wrong'

exception." Kaczorowska v. Nat'l Envelope Corp., 342 N.J. Super. 580, 587

(App. Div. 2001) (quoting Marinelli v. Mitts & Merrill, 303 N.J. Super. 61, 72

(App. Div. 1997)).

                                          C.

                                                                               A-2079-22
                                          18
      Judge Lindemann correctly analyzed the well-established law governing

the intentional-wrong exception to the Compensation Act's exclusive remedy

and applied it to the Hartford policy. As the parties contended, the judge

compared the policy with Rodriguez's allegations. See Abouzaid v. Mansard

Gardens Assocs., 207 N.J. 67, 79-80 (2011) (quoting Danek, 28 N.J. Super. at

77) ("The complaint should be laid alongside the policy and a determination

made as to whether, if the allegations are sustained, the insurer will be required

to pay the resulting judgment, and in reaching a conclusion, doubts resolved in

the insured's favor."). The judge reasoned:

            [H]ere, there is no claim where if the [third-party]
            complaint's allegations were sustained, an insurer
            would be required to pay the judgment.              The
            [c]omplaint explicitly references Laidlow, and in seven
            different paragraphs unequivocally pleads a cause of
            action for intentional tort barred by coverage.
            Accordingly, the complaint states no basis for relief,
            and likewise, completion of discovery would not
            provide a basis for relief. Thus, dismissal of SIR's
            [t]hird-[p]arty [c]omplaint is appropriate.

            [Camden Cnty. Energy Recovery Assocs., L.P. v. N.J.
            Dep't Env't Prot., 320 N.J. Super. 59, 64 (App. Div.
            1999), aff'd, 170 N.J. 246 (2001).]

      Acknowledging both parties relied upon the unpublished Rodriguez-Ortiz

opinion which is non-precedential per Rule 1:36, the judge determined its

reasoning did not support SIR's cross-motion for summary judgment seeking

                                                                            A-2079-22
                                       19
Hartford's duty to defend because Rodriguez's claim "is one of gross negligence,

asserting a claim to go above the workers['] comp[ensation] claim, pursuant to

[Laidlow]." The judge's categorization of Rodriguez's claims as Laidlow claims

correctly determined there are no "alternative causes of actions" entitling SIR to

defense or indemnification of the Laidlow claims under Hartford's worker's

compensation policy. See Voorhees v. Preferred Mut. Ins. Co., 128 N.J. 164,

174 (1992) ("When multiple alternative causes of action are stated, the duty to

defend will continue until every covered claim is eliminated.").

      In addressing SIR's cross-motion for summary judgment, Judge

Lindemann rejected its reliance on Charles Beseler Co. v. O'Gorman & Young,

Inc. (Beseler I), 380 N.J. Super. 193 (App. Div. 2005), aff'd, Charles Beseler

Co. v. O'Gorman & Young, Inc. (Beseler II), 188 N.J. 542 (2006), and Delta

Plastics.   The judge found these cases determined that insurance policy

provisions excluding coverage for intentional tort claims were unenforceable;

thus, the insureds were covered under the policies.

      In Delta Plastics, Judge Lindemann noted, this court concluded the

policy's exclusion provision was ambiguous and unenforceable because it failed

to "exclude[] coverage for 'all intentional wrongs allowed by N.J.S.A. [34:15-

8].'" 380 N.J. Super. at 542. In contrast, the judge determined that Hartford's

exclusion provision was unambiguous, stating "this insurance does not cover

                                                                            A-2079-22
                                       20
any and all intentional wrongs within the exception allowed by N.J.S.A. 34:15-

8" (emphasis omitted) (citation omitted); thus, Hartford's policy excluded

coverage for Rodriguez's claims.

      As for Beseler II, Judge Lindemann noted unlike the present policy "the

policy [there], which excluded insurance coverage for bodily injuries

'intentionally caused or aggravated by the employer' was ambiguous.'" The

Court, affirming our decision in Beseler I, held "due to its lack of express

language excluding conduct substantially certain to result in injury, we find [the

policy's] exclusion to be ambiguous and construe it, as we must, in favor of the

insured." 188 N.J. at 547-48.

      In a footnote, the judge further recognized that the Employer's Liability

EII exclusion received regulatory approval by citing George J. Kenny & Frank

A. Lattal, New Jersey Insurance Law, § 19-4:2, at 676 n.20 (2022.) which stated:

            As a result of the Supreme Court['s] decision[s] in . . .
            Beseler [II] and Delta Plastics, to restore the original
            intent of the policy exclusion for intentional injury,
            insurers must explicitly state in their policies that the
            policy does not cover intentional wrongs of the
            employer but also acts or omissions that are
            substantially certain to cause injury.               The
            Commissioner of Banking and Insurance has approved
            policy language achieving that result.

      In sum, the judge properly found Hartford's Employer's Liability EII

exclusion was distinguishable from the exclusionary language in Delta Plastics

                                                                            A-2079-22
                                       21
and Beseler II because the present policy expressly provided "no insurance

coverage for any and all intentional wrongs within the exception allowed under

the [Compensation Act]" and, as such, was unambiguous. (Emphasis omitted).

                                      III.

      Turning to SIR's reconsideration motion, Judge Lindemann granted it to

the extent that he "adjust[ed] his findings as to the applicable standard under

[Laidlow]," yet his initial order did not change. In his written statement of

reasons, the judge correctly explained that Rodriguez pled a Laidlow claim to

escape the bar of the Compensation Act, but that Hartford is not obligated to

defend SIR from the claim because the Employer's Liability EII exclusion

expressly precludes coverage. The judge––again noting SIR's reliance on the

non-precedential Rodriguez-Ortiz opinion––maintained that SIR failed to cite

binding caselaw that demonstrates the exclusion provision "does not relieve

Hartford of a duty to defend" SIR. We agree. Rodriguez's claims against SIR

are Laidlow claims which Hartford has no duty to defend.

      In addition, we discern no reason to upset the judge's refusal to consider

SIR's contention that the Employer's Liability EII exclusion is unenforceable as

violative of public policy because this argument was not properly raised in SIR's

cross-motion for summary judgment. Yet, even considering the argument, it has

no merit.

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      As noted, the Court addressed insurance policy provisions excluding

employers' liability coverage for intentional tort claims in Beseler II and Delta

Plastics. In a two-page per curiam opinion affirming our Delta Plastics ruling

"for the reasons set forth in . . . Beseler [II]," the Court held that the EII exclusion

only applied to bar coverage for intentional injury as commonly understood, not

coverage for allegations of conduct "substantially certain" to cause injury. Delta

Plastics, 188 N.J. at 582.

      Hartford's Employer's Liability EII exclusion provision mirrors the advice

the Court pronounced in those decisions, by stating: "this insurance does not

cover any and all intentional wrongs within the exception allowed by N.J.S.A.

34:15-8 including but not limited to, bodily injury caused or aggravated by an

intentional wrong committed by you or your employees, or bodily injury

resulting from an act or omission by you or your employees, which is

substantially certain to result in injury." (Emphasis added). SIR's assertion that

the average policyholder or layman could not possibly keep up with the intended

meaning of the phrase "allowed by N.J.S.A. 34:15-8" is misguided. Not only is

the language clear, considering the Department of Banking and Insurance

approved the language, we can only surmise that the exclusion conforms with

public policy. See Gov't Emps.' Ins. Co. v. Daniels, 180 N.J. Super. 227, 232

(App. Div. 1981) ("We perceive that the public policy of this State is satisfied

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by the coverage provision of the insurance contract approved by the

Commissioner [of Banking and Insurance] which is as broad as the registration

requirements in Title 39 for automobiles and motorcycles."). SIR provides no

indication to the contrary.

                                       IV.

      Finally, we address SIR's contention that the motion judge erred in

denying its request to file an amended complaint. Citing Robey v. SPARC

Group, 474 N.J. Super. 593, 599 (App. Div. 2023), SIR asserts its amended

complaint contending the Employer's Liability EII exclusion violates public

policy should have been permitted because it raises an unsettled novel legal

question.   SIR claims permitting the amendment allows the issue to "be

addressed on a fully developed record," as recognized by this court in

Seidenberg v. Summit Bank, 348 N.J. Super. 243, 250 (App. Div. 2002). Thus,

it would not be futile to allow the amendment, as the judge incorrectly found.

      Rule 4:9-1 provides trial judges with discretion when ruling on motions

for leave to file amended pleadings, Kernan v. One Washington Park Urban

Renewal Associates, 154 N.J. 437, 457 (1998), specifically declaring that leave

to file an amended pleading "shall be freely given in the interest of justice," R.

4:9-1. Despite the liberality of this standard, courts have recognized that judges

may deny leave when the granting of relief would be "futile," such as when the

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new claim lacks merit and would ultimately be dismissed for failure to state a

claim upon which relief may be granted, Notte v. Merchant Mutual Insurance

Co., 185 N.J. 490, 501 (2006), or if the new claim, even possessing marginal

merit, would unduly protract the litigation or cause undue prejudice, Building

Materials Corp. of America v. Allstate Insurance Co., 424 N.J. Super. 448, 484-

85 (App. Div. 2012).

      Judge Lindemann did not abuse his discretion in denying SIR's motion for

leave to amend its complaint to contend the Employer's Liability EII exclusion

was contrary to public policy. See Kernan, 154 N.J. at 457. Although leave to

file an amended pleading "shall be freely given in the interest of justice," R. 4:9-

1, denial was appropriate here because the amendment lacked merit and would

ultimately be dismissed for failure to state a claim upon which relief may be

granted. See Notte, 185 N.J. at 501.

      The legality of the Employer's Liability EII exclusion is not a novel legal

question as SIR contends. As we mentioned, the exclusion language was in

conformity with the Supreme Court's directives in Beseler II and Delta Plastics,

where it struck down intentional tort claim exclusionary provisions it concluded

were ambiguous. Hence, SIR's motion to amend its complaint was futile because

it would have been dismissed for failure to state a claim.

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      To the extent that we have not addressed any of SIR's remaining

arguments, we conclude that they lack sufficient merit to warrant discussion in

a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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