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(c) 2020 Jon L Gelman, All Rights Reserved.

Thursday, December 26, 2019

Public Policy and Multi-Jurisdictional Claims

A NJ appellate court has ruled that public policy favors litigation in the State of New Jersey were there exists a dispute over multi-jurisdictional choice of law issues governing workers’ compensation insurance coverage in NJ.

The case involved Travelers Property Casualty Company of America [TRAVELERS] who had been assigned by the NJ Compensation Rating and Insurance Bureau [NJCRIB] to provide NJ workers’ compensation insurance to the drivers of a transit company, HES Trans. Inc. [HES}. HES allegedly underreported it’s employee-drivers defining them as independent contractors. TRAVELERS conducted a retro-active audit and asserted that the drivers were employees and that HES paid only 1% of the premium due. TRAVELERS sought payment of an additional $532,198. HES contested the payment and sought joinder of a third-party-defendant, Distribution Cooperative Network of New York and Trucking Support Services LLC [DCN/TTS].

Litigation was instituted both in NJ and NY. TRAVELERS sued HES in NJ and DCN/TES was joined as a third-party defendant. Meanwhile, HES and DCN/TES pursued litigation in NY.

The NJ appellate was faced with balancing contractual law and public policy issues. The contact among the parties provided for NY in the “choice of law” and “forum selection” clauses. The reviewing NJ court ruled that a NJ court could litigated the issues. The NJ Appellate Division ruled, in a Per Curiam opinion, that the NJ courts had jurisdiction to litigate the claims.

The Court reasoned, “The trial court properly concluded these facets of our State's workers' compensation laws embody a strong public policy preference to litigate disputes over workers compensation coverage and premiums in this jurisdiction. As we were advised by counsel at oral argument on appeal, the terminal of HES is located in Passaic County. In addition, a number of the truck drivers engaged by HES are apparently residents of this State. There is a significant nexus to this State that justifies keeping the lawsuit here, including the third-party complaint.”

“We therefore affirm the court's decision on public policy grounds. Having done so, we need not rely on entire controversy principles to achieve the same result, although we note in passing that the trial court rightly expressed concerns about duplicative litigation in New Jersey and New York and the possibility of inconsistent factual or legal determinations respecting these parties.”

THE TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA v. HES TRANS INC., DOCKET NO. A-5284-18T2, 2019 WL 7116153, Decided December 23, 2019.

UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING. 
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.

….

Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters). For over 4 decades the Law Offices of Jon L Gelman  1.973.696.7900  jon@gelmans.com  has been representing injured workers and their families who have suffered occupational accidents and illnesses.

Twitter: jongelman
LinkedIn: JonGelman

Author: "Workers' Compensation Law" West-Thomson-Reuters
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