Defense Digest, Vol. 30, No. 1, March 2024

Lack of Insurance Coverage Does Not Defeat Workers’ Compensation Bar for New Jersey Workers’ Compensation Intentional Injury Claim

By
Robert J. Fitzgerald

Key Points:

  • The New Jersey Workers’ Compensation Act requires all employers to obtain workers’ compensation insurance coverage or be subject to both criminal and civil penalties. 
  • The New Jersey Uninsured Employer’s Fund provides injured employees both medical and disability benefits, but not permanency benefits. 
  • Claims for intentional injuries are very difficult to sustain as they require proof of that the employer’s conduct was substantially certain to result in the employee’s injuries.

In Glen and Donna Heuman, v. Wayne Heuman, et al., 2023 WL 8539709 (NJ Super. App. Div. Dec 11, 2023), the New Jersey Appellate Division addressed an intentional injury claim with a twist—lack of workers’ compensation insurance coverage. 

In December 2017, Deejon Builders LLC, a general contracting company, entered into an agreement to build a new home. Deejon retained Wayne Heuman Masonry—owned and operated by Glen Heuman’s cousin, Wayne Heuman—as a contractor to perform masonry work. Although Wayne primarily worked alone, he would occasionally hire Glen to assist with masonry jobs. Glen was paid in cash, and his employment was never “formally recorded.”

Wayne contacted Glen to work onsite on February 13 and 14, 2018. During those two days, Glen mixed mortar and grout for the foundation of the home using a mortar mixer, which Wayne modified due to a missing recoil spring. To start the mixer in its altered state, the operator had to remove the protective cover, wrap a pull cord with a handle around a pulley section of the machine, and tug, similar to a lawnmower.

Glen used the mixer without incident on February 13, 2018, and approximately 15-20 times before lunch the following day. After lunch, however, when Glen attempted to start the mixer using the modified system, the pull cord became caught in the machine’s rotating motor, and its handle struck him in the eye. Glen received emergency treatment for fractures in his right orbital lobe as well as the rupture of the globe of his right eye. He underwent two surgeries, ultimately resulting in the removal of the right eye and his permanent need for a prosthetic. 

Glen then filed both third-party negligence and intentional injury claims against Wayne. During discovery, Glen testified he had assisted Wayne at approximately five masonry jobs and most of them involved mixing mortar. He used Wayne’s modified mixer on those other occasions without incident. Glen conceded he was familiar with use of similarly modified machines from his prior experience in masonry. Additionally, Glen admitted he was not wearing safety glasses when he was operating the mixer, which was not proper protocol. 

Glen also testified Wayne indicated to him that he possessed insurance, although Glen did not request proof of insurance or inquire what specific insurance Wayne had purchased. However, Wayne testified that he was unaware of the statutory requirement to obtain workers’ compensation insurance. Specifically, Wayne explained, he “mostly worked by [himself]” and, therefore, did not understand “the sense of [him] having workman’s comp if [he was] only covering [himself].” Wayne also testified that wrapping the cord to start the machine in that manner was common practice in the industry, and he further stated he had seen this solution for similarly broken machines during his 30-year tenure in the business.

Both parties obtained contradictory expert reports disputing whether the modification of the mortar mixer and Glen’s injuries were attributable to an intentional act. Following discovery, Wayne moved for summary judgment, arguing that the actions did not give rise to an intentional injury claim. Glen opposed summary judgment, arguing that Wayne’s failure to maintain insurance coverage defeated the workers’ compensation bar. Additionally, Glen argued there was a genuine issue of fact as to whether Wayne’s modification of the mortar mixer was substantially certain to lead to Glen’s injuries. The trial court granted summary judgement to Wayne, and Glen appealed.

The Appellate Division first noted that the lack of insurance coverage does not preclude the employer from asserting the workers’ compensation bar. It specifically noted that the New Jersey Uninsured Employer’s Fund (UEF) was created to pay for the payment of awards against uninsured defaulting employers. The Appellate Division also noted there are both criminal and civil penalties for uninsured employers. In an interesting footnote, the Appellate Division noted that, whatever difficulties there were in obtaining benefits from the UEF, it can only be resolved by the legislature.

As to the intentional injury claim, the court stated Wayne’s actions did not satisfy the high bar to apply the intentional wrong exception. Specifically, the evidence did not show Wayne knew that the use of the modified mixer was substantially certain to result in injury. Wayne had not received any formal OSHA citation about the machine or any previous complaints from employees, including Glen. Further, Glen did not protest use of the modified mixer or request that it be repaired at any point. He testified to using it multiple times in the past and 15-20 times on the day of the incident. No evidence in the record demonstrated any prior injuries or “close calls” resulting from use of the mixer, or even similarly modified mixers. Finally, Wayne did not conceal the machine’s alteration from Glen or regulatory authorities.

The court also noted that Glenn failed to overcome the “high threshold” of the context prong, as there was no record evidence that the defendant’s actions were not “a simple fact of industrial life or are outside the purview of the conditions that the Legislature could have intended to immunize employers under the Workers’ Compensation bar.” The testimony of both Glen and Wayne reflected this type of modification of a mortar mixer was common practice among the industry. “At bottom, plaintiffs fail to establish defendant’s conduct qualified as an intentional wrong under the statute or the case law.”

This case illustrates once again the very high burden the petitioner has to meeting an intentional injury claim. Even in a case where the employer did not maintain the requisite workers’ compensation insurance, the court still required proof that the employer’s conduct was substantially certain to result in the employee’s injuries in order for the employee to prevail. Further, where the injury sustained is viewed as “a simple fact of industrial life,” the employee’s recovery will be limited to the benefits under the workers’ compensation scheme. 

If you have questions about your workers’ compensation insurance coverage, or whether you are protected against an unexpected intentional injury claim, contact your insurance professional immediately.

*Bob is a shareholder working in our Mount Laurel, New Jersey, office. He can be reached at (856) 414-6009 or rjfitzgerald@mdwcg.com. 

 

Defense Digest, Vol. 30, No. 1, March 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.