Maxum Indem. Co v. N.J. Iron Inc
| Decision Date | 22 November 2010 |
| Docket Number | Civ. No. 09-6397 |
| Parties | MAXUM INDEMNITY CO., Plaintiff, v. NEW JERSEY IRON, INC., et. al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
OPINION & ORDER (AET)
This matter comes before the Court on Plaintiff's Motion for Summary Judgment [42]. The Court has decided the motion upon consideration of the parties' written submissions, without oral argument, pursuant to Fed. R. Civ. P. 78(b). For the reasons given below, the motion is GRANTED.
Plaintiff is an insurance company with whom Defendant New Jersey Iron ("NJI") maintains a policy for "Commercial General Liability Coverage." (Compl. ¶ 17, Ex. D.) On April 14, 2009, Lawrence Neve and his wife—nonparties in this action—filed a suit in New Jersey Superior Court against All Jersey Electrical Contractors, Inc. and Andre Concrete, Inc. concerning injuries Neve allegedly sustained while working as an ironworker for New Jersey Iron, Inc. (Id. 11-12.) All Jersey Electrical Contractors and Andre Concrete then filed Third Party Complaints against NJI on May 26, 2009 and July 16, 2009, respectively. (Id. ¶ 15.) The Superior Court dismissed NJI from that suit on September 10, 2010, but that decision could still be reversed. (Opp'n Br. 1-2.)
Plaintiff filed this action in federal court on December 18, 2009, seeking a declaratory judgment that it does not owe any duty to defend or indemnify NJI in the state court lawsuit regarding Neve's injuries. (Compl.} 9.) Plaintiff has now moved for Summary Judgment under Fed. R. Civ. P. 56.
Summary judgment is proper when "the pleadings, the discovery and disclosure materials, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In resolving a motion for summary judgment, the Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, 477 U.S. 242, 251-52 (1986). More specifically, summary judgment should be granted if the evidence available would not support a jury verdict in favor of the nonmoving party. Id. at 248-49. The Court will "view the inferences to be drawn from the underlying facts in the light most favorable to the party opposing the motion." Fed. R. Civ. P. 56(c); Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002) (internal quotations omitted).
The Declaratory Judgment Act provides a remedy whereby a federal court "may declare the rights and other legal relations of any interested party seeking such declaration" when there exists a 28 U.S.C. § 2201(a). The party seeking a declaratory judgment must allege facts showing a substantial likelihood of future injury. Lattaker v. Rendell, 269 F.App'x 230, 233 (3d Cir. 2008) (citing Bauer v. Texas, 341 F.3d 352, 358 (5th Cir. 2003)). NJI argues that, because of its dismissal from the state court action, there is no longer any "issue of controversy that needs to be decided by the Court." (Opp'n Br. 2.) However, NJI wishes to "reserve[ ] the right to seek coverage in the event that the Order dismissing NJI" is reversed. (Id.) In other words, NJI admits that Plaintiff still faces the threat of liability. As a result, Plaintiff's request for declaratory judgment is not improper. See Occidental Life Ins. Co. of Cal. v. Nichols, 216 F.2d 839, 842 (5th Cir. 1954) ().
Nor is declaratory judgment improper because of the ongoing state court case. True, federal district courts should decline to exercise jurisdiction over a claim for declaratory judgment when "the controversy may better be settled in state court." Atl. Mut. Ins. Co. v. Gula, 84 F.App'x 173, 174 (3d Cir. 2003) (internal quotations and citations omitted). When an insurer seeks a declaration of "no coverage," the courts must consider the following: 1) a general policy of restraint when the same issues are pending in state court; 2) the inherent conflict of interest between an insurer's duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of a policy exclusion; and 3) avoidance of duplicative litigation." State Auto Ins. Cos. v. Summy, 234 F.3d 131, 134 (3d Cir. 2000). None of these considerations counsel against a declaratory judgment in this case. Plaintiff is not a party in the state case, it is not defending NJI, and its liability to NJI is not before the state court. Therefore, a declaratory judgment is not inappropriate here.
The insurance policy in this case excludes coverage for (Compl. Ex. D, at 8.) The contract defines "employee" to include a "leased worker," which is in turn defined to mean "a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business." (Id. at 20, 21.) This Court previously stated: "In light of these definitions, it seems clear that if Lawrence Neve is either New Jersey Iron's employee or its leased worker, then the policy exclusion quoted above applies, and Plaintiff has no duty to indemnify or defend New Jersey Iron." [31]. In its opposition to the summary judgment motion, NJI "concede[s] that Mr. Neve was an employee of NJI at the time of the alleged incident." (Opp'n Br. 1.) Therefore, we conclude that the policy exclusion applies to the Neve lawsuit.
Despite conceding that Neve is an employee under the policy, NJI argues that—insofar as its definitions go beyond state law—the policy is void as against public policy. (Opp'n Br. 3.) New Jersey's Workmen's Compensation statute is the exclusive remedy for an employee's work-related injury caused by his employer's negligence. N.J.S.A. 34:15-1, 34:15-8. NJI claims that "[b]ased upon the applicable case law, the language set forth in the insurance agreement regarding 'leased worker[s]' is inconsistent with the law," (Opp'n Br. 3), but NJI fails to explain the inconsistency or cite case-law on point. We presume NJI is arguing that the definition of "employee" under the policy (which includes leased workers) is broader than the definition of "employee" in the Worker's Compensation statute (which may not), and that as a result, workers who fall outside of the statute's ambit but within the policy's...
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