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Goldmann v. Johanna Farms Inc.

Decided: June 11, 1953.

EUGENE GOLDMANN, PETITIONER-APPELLEE,
v.
JOHANNA FARMS, INC., AND LUMBER MUTUAL CASUALTY INSURANCE COMPANY OF NEW YORK, RESPONDENTS-APPELLANTS



On appeal from Division of Workmen's Compensation, Department of Labor and Industry.

Hutchinson, J.c.c.

Hutchinson

The respondents, Johanna Farms, Inc. and Lumber Mutual Casualty Insurance Company of New York, appeal to this court from an award of total permanent disability made against them and entered in favor of the petitioner, Eugene Goldmann, by the Division of Workmen's Compensation of the Department of Labor and Industry.

The issues which are presented by this appeal are: (1) whether the award made against the respondent insurance carrier is proper; (2) whether petitioner was an employee of respondent Johanna Farms, Inc., and (3) whether the accident arose out of and in the course of the employment.

Petitioner alleges that he suffered an accident arising out of and in the course of his employment with the respondent Johanna Farms, Inc. on November 25, 1950, the date of the now-famous hurricane. Petitioner, who was a vicepresident of the corporation and also its farm manager, testified that on that date, while at his home, he received a telephone call from his son, Kurt Goldmann, the assistant farm manager, who requested him to go to a milk depot on the premises leased by the respondent corporation and check

the existing milk supply there. Petitioner did so, and as he was ascending the porch to his home he was blown off the steps and sustained a leg fracture.

The deputy director held that the petitioner was an employee of the respondent within the meaning of the Workmen's Compensation Act, that he suffered a compensable accident while in the pursuit of a special mission, and that the fracture sustained aggravated a pre-existing heart condition which resulted in total permanent disability. Accordingly, an award was made against the respondents Johanna Farms, Inc. and its insurance carrier, the Lumber Mutual Casualty Insurance Company of New York.

The first question to be considered is the propriety of the award made against the insurance carrier. The evening before the first hearing in this cause in the Bureau, the insurance carrier served upon the attorney for Johanna Farms, Inc. a notice of disclaimer under its policy and a reservation of rights on the grounds of non-coverage. It appears from the record that a motion was made to strike the carrier as a party, that the motion was consented to by the opposing counsel and apparently granted by the deputy director. Nevertheless, the insurance carrier was included in the award and judgment. It cannot be ascertained from the record whether the inclusion of the carrier was a result of inadvertence or whether it was an intentional act on the part of the deputy director. It is unnecessary to decide on what grounds the carrier was kept in, since in any event, the award made against it is invalid for want of jurisdiction in the Bureau to make such an award against the carrier.

R.S. 34:15-85 gives the petitioner the right to join both the employer and the insurance carrier in his claim petition, and when so joined an effective award may be obtained in the Bureau against the carrier. Brown v. Conover , 116 N.J.L. 184 (Sup. Ct. 1936); Miller v. National Chair Co. , 19 N.J. Misc. 275 (W.C.B. 1941), affirmed 127 N.J.L. 414 (Sup. Ct. 1941); Amend v. Amend , 12 N.J. Super. 425 (Cty. Ct. 1950). However, the power of the Bureau to make an effective award against the carrier is

limited to those cases where the insurance carrier does not raise the issue of non-coverage, which is a legal issue not cognizable by the Bureau and which a deputy director is without jurisdiction to decide. Whenever the issue of non-coverage is raised by the insurance carrier, any award which is subsequently rendered against such carrier is invalid, since it is awarded by a tribunal which lacked jurisdiction over the subject matter. American Mutual Liability Ins. Co. v. Chodosh , 123 N.J.L. 81 (Sup. Ct. 1939), affirmed 124 N.J.L. 561 (E. & A. 1940); Belanowitz v. Travelers Ins. Co. , 125 N.J.L. 301 (E. & A. 1940); Mitchell v. Taylor , 18 N.J. Misc. 255 (W.C.B. 1940); Cunningham v. Ashurst , 131 N.J.L. 260 (Sup. Ct. 1944).

An insurance carrier may be estopped, however, from denying its liability as determined by the Bureau when it has unconditionally defended the assured in the suit without obtaining from the assured an agreement of non-waiver, or without serving a notice of disclaimer or without making a reservation of its rights until after the recovery of the judgment against the assured. O'Dowd v. U.S. Fidelity & Guaranty Company , 117 N.J.L. 444 (E. & A. 1936).

There is no question of estoppel in this case, since prior to the hearing in the Bureau the carrier served a notice of disclaimer and made a reservation of its rights.

The petitioner is not without recourse against the insurance carrier, however. Upon the failure of the employer to make adequate and continuous payments, R.S. 34:15-84 provides that the employee may bring an action against the carrier to enforce the award in the County Court where his judgment is docketed. American Mutual Liability Ins. Co. v. Chodosh, supra; Cunningham v. Ashurst, supra. The ...


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