While the Workers’ Compensation Act is to be construed liberally, coverage cannot be found if there is a clear disregard of the statutory requirement.
The Appellate Division reversed the workers’ compensation court’s orders denying E.W. Millwork’s motion to dismiss and for reconsideration. On August 27, 2003, the petitioner was injured while working for E.W. Millwork. The petitioner had formed a limited liability company earlier that year with his equal owner, Edward Brigante. In March 2005, the petitioner filed a workers’ compensation claim and E.W. Millwork filed a motion to dismiss, arguing lack of coverage for Zurich.
After hearings, the Workers’ Compensation Judge issued a bench decision on January 14, 2008, denying the motion and finding that Richard E. Pawlak, the insurance producer, made a mistake on the insurance application and should have elected coverage for the petitioner and Brigante. The court also indicated that Zurich was negligent for failing to ensure coverage was provided for them. E.W. Millwork filed a motion for reconsideration, arguing there was no coverage nor endorsement and, as the members’ coverage was declined twice on the application, the petitioner was not an employee. Because the judge who issued the bench decision retired, another judge entered an order denying the motion on June 23, 2008, noting he was “taking the coward’s way out” by not deciding the merits so he would not have to re-try the case.
The petitioner was injured again on April 24, 2009, and filed another claim. Both claims were consolidated, and in May 2017, a third judge presided over the trial. On December 23, 2020, an order of judgment was entered for the 2003 accident, awarding 46.5% partial-total permanent disability. E.W. Millwork appealed, arguing the workers’ compensation court erred in not granting its motion to dismiss for lack of coverage.
The Appellate Division agreed with E.W. Millwork, noting that it did not obtain coverage for the petitioner. Although both the petitioner and Brigante testified they were supposed to be covered, it was undisputed that E.W. Millwork’s application did not request such coverage. Pawlack testified that he advised Brigante of the consequences of not electing coverage for the members. Despite same, Brigante chose not to select coverage for the members. There was also a document—Notice of Election – Proprietors and Partners—that specifically was marked “x” for rejecting coverage. In addition, if coverage was elected, there was a separate section for members to list their wages and duties, which was blank.
Furthermore, the Appellate Division noted that even if Pawlack erred, there was still no legal basis to impute liability onto Zurich, and if anything, Pawlack should have been responsible. In addition, the petitioner’s argument and testimony that the total wages listed in the application included his wages was in opposition to the plain language of the insurance application. The Appellate Division noted that, while the Workers’ Compensation Act is to be construed liberally, coverage cannot be found if there is clear disregard of the statutory requirement. Finally, the Appellate Division admonished the Workers’ Compensation Judge who entered the June 23, 2008, order for failing to fulfill his obligations to address the merits of the motion.
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