Alea North America Ins. Co. v. Salem Masonry Co., Inc., 120408 FED3, 07-1681

Docket Nº:07-1681
Party Name:ALEA NORTH AMERICA INSURANCE COMPANY, Appellant v. SALEM MASONRY CO., INC. d/b/a Salem Masonry; PADOVANO FRANKEL VOUGA AGENCY; NUNO ALEXANDRE; GRANITE STATE INSURANCE COMPANY
Case Date:December 04, 2008
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

ALEA NORTH AMERICA INSURANCE COMPANY, Appellant

v.

SALEM MASONRY CO., INC. d/b/a Salem Masonry; PADOVANO FRANKEL VOUGA AGENCY; NUNO ALEXANDRE; GRANITE STATE INSURANCE COMPANY

No. 07-1681

United States Court of Appeals, Third Circuit

December 4, 2008

NOT PRECEDENTIAL

Argued: September 9, 2008.

On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 03-cv-02927) District Judge: The Honorable Peter G. Sheridan.

Marie A. Hoenings, Esq. (Argued), L’Abbate, Balkan, Colavita & Contini, Counsel for Appellant

Christopher H. Westrick, Esq. (Argued) Golden, Rothschild, Spagnola, Lundell, Levitt, & Boylan, Counsel for Appellee, Granite State Ins. Co.

Before: SLOVITER, FUENTES, and NYGAARD, Circuit Judges.

OPINION

NYGAARD, Circuit Judge.

The factual background of this appeal is well known to the parties, only tangentially germane to our decision, and calls for only this brief summary. Joseph Percario is a general contractor who hired Salem Masonry Inc., as a sub-contractor. Granite State Insurance provided workers compensation insurance to Percario. Appellant Alea North American Insurance provided workers compensation insurance to Salem. Salem Masonry lied on its insurance application, claiming that none of its employees worked at heights greater than fifteen feet. Nuno Alexandre, an employee of Salem Masonry, was severely injured when he fell down an elevator shaft that was approximately five or six stories high.

Alea Insurance quickly realized that Alexandre was working at a height greater than fifteen feet and filed an action, first, to rescind its policy because of the fraudulent statement in the application, and second, to declare the general contractor's carrier, Granite State, responsible for paying workers compensation benefits to the injured employee. Alea also sought reimbursement from Granite State for the benefits it had paid to Alexandre.

The District Court granted partial summary judgment in favor of Alea on its equitable fraud claim.1 This judgment voided and rescinded Alea's policy with Salem. Litigation continued on various claims brought against the brokers, Salem Masonry and the claim by Alea against Granite State for reimbursement of payments to the injured employee.

Subsequent to the partial summary judgment, the Superior Court of New Jersey issued an opinion holding that fraudulent statements made in an application for a workers compensation policy could not...

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