Toebe v. Employers Mut. of Wausau

• Decision Date: 11 March 1971
• Parties: Allen D. TOEBE, Plaintiff-Respondent Cross-Appellant, v. EMPLOYERS MUTUAL OF WAUSAU et al., Defendants-Appellants Cross-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 39

114 N.J.Super. 39

274 A.2d 820

Allen D. TOEBE, Plaintiff-Respondent Cross-Appellant, v. EMPLOYERS MUTUAL OF WAUSAU et al., Defendants-Appellants Cross-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Sept. 14, 1970.

Final Supplemental Memoranda Received Nov. 18, 1970.

Decided March 11, 1971.

Harold Friedman, Newark, for respondent-cross-appellant (Kirsten, Solomon & Friedman, Newark, substituted attorneys).

Gerald W. Conway, Newark, for appellants-cross-respondents (Schreiber & Lancaster, Newark, attorneys).

American Mutual Insurance Alliance filed a brief amicus curiae (Smith, Stratton, Wise & Heher, Trenton, attorneys; John R. Heher, Trenton, on the brief).

Before Judges GOLDMANN, LEONARD and MOUNTAIN.

The opinion of the court was delivered by

GOLDMANN, P.J.A.D.

Plaintiff, holder of a New Jersey workmen's compensation award entered against his employer, Robert Schmidt Truck Leasing, Inc., of New Brighton Minnesota (Schmidt), brought an action in the Superior Court, Law Division, to recover payment of the award against defendant Employees Mutual Liability Insurance Company of Wisconsin, which had issued a workmen's compensation insurance policy in Minnesota to Schmidt under the assigned risk law of Minnesota. On cross-motions for summary judgment the trial judge denied defendant's and granted plaintiff's motion. Plaintiff then applied for a counsel fee of $4,725.33 for services rendered by his attorney in the present action. The court awarded only 1,300. Final judgment on the entire case was thereafter entered in favor of plaintiff. Defendant appealed, and plaintiff filed a cross-appeal as to the counsel fee.

The facts are essentially uncontradicted. Plaintiff, an employee of Schmidt, suffered a work-connected injury while operating one of his employer's trucks in New Jersey. He filed a petition with the New Jersey Division of Workmen's Compensation and was awarded approximately $13,201 against Schmidt. (Defendant refused to give Schmidt a defense, claiming it had no obligation to do so under its policy.) Plaintiff docketed this award as a judgment in the Essex County Court and then in the Superior Court. Schmidt apparently never paid any part of the award; the reason for this does not appear in the record. Plaintiff eventually instituted an action against defendant insurer in the Law Division.

The 'Standard Workmen's Compensation and Employers' Liability Insurance Policy' issued to Schmidt by defendant contains the following insuring agreements:

I Coverage A--Workmen's Compensation

To pay promptly when due all compensation and other benefits required of the insured by the workmen's compensation law.

Coverage B--Employers' Liability

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease, including death at any time resulting therefrom, sustained in the United States of America, its territories or possessions, or Canada by any employee of the insured arising out of and in the course of his employment by the insured either in operations in a state designated in Item 3 of the declarations or in operations necessary or incidental thereto.

Paragraph 3 of the Declarations reads as follows:

Coverage A of this policy applies to the workmen's compensation law and any occupational disease law of each of the following states: Minnesota.

The issue on the cross-motions for summary judgment, as stated by the trial judge and briefed by the parties, is whether defendant is liable, under its contract of insurance made and issued to the employer in Minnesota, to pay the award granted by our Workmen's Compensation Division, where the policy specifically provided that coverage was limited to benefits payable under the workmen's compensation law of Minnesota. Answering this question in the affirmative, the judge held that 'since New Jersey has jurisdiction to grant the award in this case, it should also have jurisdiction to permit an injured workman all the statutory remedies to effect recovery against his employer's insurance carrier.' To deny the employee this supplemental relief when he is unable to collect the award from his employer would, in the judge's view, be against public policy.

Defendant concedes that the New Jersey Division of Workmen's Compensation had jurisdiction to entertain plaintiff's petition and to enter an award against his employer for his work-connected injury. See Boyle v. G. & K. Trucking Co., 37 N.J. 104, 179 A.2d 514 (1962). The real issue, it says, is whether the employer's liability for that award is covered by the terms of the workmen's compensation policy which the company issued to Schmidt, by whose terms coverage is said to be limited to liability arising under Minnesota's workmen's compensation law.

I

Plaintiff argues that the compensation award he recovered comes within the provisions of Coverage B of the policy, quoted above. That coverage is patently different from what is provided by Coverage A, which expressly deals with workmen's compensation. Coverage B affords protection in the case of a common law action for damages by an employee, where such action is still permitted by a state law for injuries not covered by a workmen's compensation law. See Danek v. Hommer, 28 N.J.Super. 68, 74, 100 A.2d 198 (App.Div. 1953), aff'd p.c. 15 N.J. 573, 105 A.2d 677 (1954), dealing with a similar provision. Indeed, under Exclusion (f), defendant's policy expressly provided that it did not apply, under Coverage B, 'to any obligation for which the insured or any carrier as his insurer may be held liable under the workmen's compensation or occupational disease law of a state designated in Item 3 of the declarations, any other workmen's compensation or occupational disease law, any unemployment compensation or disability benefits law, or under any similar law.' Coverage B clearly has no application here, for plaintiff's injuries were compensable under Minnesota's workmen's compensation law, Minn.Stat.Ann., Workmen's Compensation, § 176.041, subds. 2 and 3, as well as under the law of New Jersey.

II

Defendant contends that by reason of Item 3 of the Declarations in its policy, it provided coverage only for such benefits as its insured, Schmidt, was required to pay under the workmen's compensation law of Minnesota, and not for benefits awarded under the New Jersey act or the law of any other state. It considers that question as having been decided and now controlled by Pennsylvania Mfrs.' Cas. Ins. Co. v. Schmerbeck, 128 N.J.L. 180, 24 A.2d 573 (Sup.Ct.1942), aff'd 131 N.J.L. 159, 35 A.2d 719 (E. & A. 1944). In that case the employee a New Jersey resident, filed a workmen's compensation petition in this State under N.J.S.A. 34:15--84 for workconnected injuries suffered in Morrisville, Pa., while in the employ of a Pennsylvania sand and gravel company. After a preliminary hearing in the Workmen's Compensation Bureau on the limited issue of whether the employment contract under which petitioner was hired was made in New Jersey or Pennsylvania, the deputy commissioner found that the hiring had been in this State (a conclusion concurred in by our former Supreme Court on appeal). The employee then filed an amended claim petition adding the insurance carrier as a party. The carrier's answer alleged that under the terms of its policy its obligation to indemnify the employer, its insured, was only 'in accordance with the provisions of the Workmen's Compensation Act of Pennsylvania,' and therefore the Bureau had no jurisdiction as far as it was concerned. Its motion for dismissal was denied and eventually a compensation award was entered against both the employer and the carrier. The Supreme Court reversed as to the carrier, holding that the quoted limiting provision of the policy confined its liability to awards handed down in accordance with the compensation law of Pennsylvania. Accordingly, the court held that the carrier's motion to dismiss should have been granted, while at the same time it affirmed as to the employer.

We have examined the briefs filed in both the Supreme Court and our former Court of Errors and Appeals and find that never in that case was it suggested that the New Jersey court might apply Pennsylvania law. Since the parties did not raise that issue, nor was it discussed by either court, Schmerbeck cannot be considered as binding with respect thereto.

In accord with Schmerbeck, see Anderson v. St. Paul Mercury Indemnity Co., 84 So.2d 878 (La.Ct.App.1956); Calcote v. Century Indemnity Co., 93 So.2d 271 (La.Ct.App.1957); Jones v. Hennessy, 232 La. 786, 95 So.2d 312 (Sup.Ct.1957); Mandle v. Kelly, 229 Miss. 327, 90 So.2d 645, 92 So.2d 246 (Sup.Ct.1957); Foster Wheeler Corp. v. Bennett, 354 P.2d 764 (Okla.Sup.Ct. 1960); Consolidated Underwriters v. King, 160 Tex. 18, 325 S.W.2d 127 (Sup.Ct.1959), app. dism. 361 U.S. 198, 80 S.Ct. 295, 4 L.Ed.2d 238 (1959).

The most recent case supporting defendant's position is Travelers Ins. Co. v. Industrial Accident Comm., 240 Cal.App.2d 804, 50 Cal.Rptr. 114 (D.Ct.App.1966), where the employee was hired in California, injured in Alaska and applied for benefits under the California law. The policy was like the one here involved with respect to Coverages A and B and Item 3 of the Declarations, Item 3 reading: 'Coverage A of this policy applies to the workmen's compensation law and any occupational disease law of each of the following states: Alaska.' The court annulled an order of the California Industrial Accident Commission holding the insurer liable for workmen's compensation benefits under the California statute, stating that

* * * Where the workmen's compensation law provides for administrative determination of claims by a special tribunal created by a particular state, rights created by the compensation act of that state cannot ordinarily be enforced in another state. (2 Larson, Workmen's...