Workers' Compensation: No Duty to Defend Intentional Tort Claim

In a per curiam opinion, the NJ Appellate Division affirmed that a workers’ compensation insurance company is not required to defend an intentional tort claim following a Section 20 resolution.

FACTS

This case involves a workers' compensation claim and a related lawsuit filed by Sylvia Melania Tejada de Tapia against her employer, 74 Industries.
Tejada de Tapia was injured at work by an insect bite/sting and the residuals of infection and filed a workers' compensation claim, which was settled for $25,000 through a Section 20 settlement (NJSA 34:15-20) of $25,000.00.
She also filed a separate lawsuit in civil court alleging intentional wrongs by 74 Industries.
74 Industries sought coverage from its insurer, New Jersey Manufacturers Insurance Company (NJM), for the civil lawsuit.
NJM denied coverage, citing policy exclusions for intentional acts.
The court ruled in favor of NJM, finding they did not have a duty to defend or indemnify 74 Industries against the intentional wrong claims.

ANALYSIS

The Section 20 workers' compensation settlement did not resolve the separate civil lawsuit alleging intentional wrongs. These are distinct legal actions.
The insurance policy's C5 exclusion clearly excluded coverage for intentional wrongs, including acts "substantially certain to result in injury." This aligned with legal precedent on intentional wrong exceptions to workers' compensation.
While the C7 exclusion and endorsement provided some coverage for bodily injury claims, this did not override the C5 exclusion for intentional acts. The court rejected 74 Industries' argument that C7 created ambiguity requiring coverage.
Public policy does not support requiring insurance coverage for intentional wrongs. Courts have consistently upheld exclusions for intentional acts in insurance policies.
The court found no basis for NJM to have a duty to defend or indemnify 74 Industries against the intentional wrong claims, either from the workers' compensation settlement or other policy provisions.

NO DUTY TO DEFEND

In essence, the court upheld the insurer's denial of coverage based on clear policy language excluding intentional wrongs, consistent with established legal principles regarding workers' compensation and insurance contracts. The decision emphasizes the distinct nature of workers' compensation claims versus civil lawsuits alleging intentional wrongs by employers.

Sylvia Melania Tejada De Tapia v. 74 Industries, Inc., A-2643-21 (N.J. Super. Ct. App. Div. 2024)

Recommended Citation: Gelman, Jon L., No Duty to Defend Intentional Tort Claim, www.gelmans.com (07/13/2024) https://workers-compensation.blogspot.com/2024/07/no-duty-to-defend-intentional-tort-claim.html

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ORDER NOW

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*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 five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.