Determination of Facts and rule for judgment.
[67 NJSuper Page 190] Jessie Jordan, the petitioner, was severely and permanently injured on June 19, 1957 in an accident arising out of and in the course of his employment by Alexander F. Ferro, trading as Dale Iron and Metal Company. On April 27, 1959 a substantial judgment was entered in favor of the petitioner against his employer and Pennsylvania Threshermen and Farmers' Mutual Casualty Insurance Company, alleged to be the insurance carrier. On the present appeal of the insurance company, two questions are presented for determination: (1) the jurisdiction of the Workmen's Compensation Division of the Department of Labor and Industry to enter the judgment; and (2) the factual existence of insurance coverage at the time of the accident. Normally the question of jurisdiction would be determined first; but, in order that the matter
may be completely delineated, the factual situation will be explored prior to the determination of the jurisdictional question.
Alexander Ferro, the respondent employer, was engaged in business in New York under a corporate setup known as Jafco Iron and Metal Corporation. He was familiar with the general procedures involved in the issuance of insurance policies, and particularly the issuance of and the necessity for workmen's compensation insurance, at least so far as that state is concerned. He entered into business in New Jersey on May 7, 1957, individually, trading as Dale Iron and Metal Company, and in anticipation thereof he engaged Henry Pflug, a licensed insurance broker of New Jersey, to secure compensation insurance for him. The broker was unable to secure insurance on a voluntary basis through the regular channels and advised Ferro he would have to make application for assignment of an insurance carrier in accordance with the New Jersey Assigned Risk Plan -- Workmen's Compensation Insurance. On May 16, 1957 such an application was filled out, signed by Ferro, and filed with the Bureau.
At the top of the application in red ink under the heading "Important" the following words appear -- "No insurance is provided by this application. Insurance becomes effective only in accordance with the terms of the Assigned Risk Plan." Paragraph 5 of the Plan contains the language pertinent to this matter. It states, in part:
"Upon receipt of an assignment from the Bureau, the designated carrier shall make available to the employer Workmen's Compensation and Employers' Liability insurance to become effective not more than five business days after the date of the assignment, provided the premium is paid to the carrier. In the event that the premium is not paid within the five day period, the company shall be authorized to defer the effective date of the insurance until 12:01 a.m. on the day following payment." (Emphasis supplied.)
This provision of the Plan was known not only to the respondent employer's broker, a licensed broker for over 20 years, but he also testified as follows:
"Q. As an insurance broker with the client, did you convey to Mr. Ferro that he had no insurance until the premium was paid? A. I told him that originally.
Q. What did you tell him originally? A. I told him that the premium had to be paid to the company before any coverage.
Q. When did you tell him that? A. I told him the day I worked up the assignment."
Under date of May 29, 1957 the Bureau directed a letter to Ferro, with a copy to his broker, advising that the risk had been assigned to the respondent insurance company. The ...