On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-318-02.
The opinion of the court was delivered by: Wecker, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Coburn, Wecker and S.L. Reisner.
This appeal raises a question recently addressed in Charles Beseler Co. v. N.J. Mfrs. Ins. Co., ___ N.J. Super. ___ (App. Div. 2005). The question is whether the C-5 exclusion in an employer's liability policy, applicable to certain employee "intentional wrong" claims, excludes coverage here. In Charles Beseler, on facts almost identical to those before us, we recently held that the C-5 exclusion for claims of "bodily injury intentionally caused" did not exclude coverage for claims alleging bodily injury that resulted from employer conduct that was "substantially certain" to result in injury, and ordered the insurer to provide coverage. We adhere to that decision.
In this declaratory judgment action brought by New Jersey Manufacturers Insurance Co. (NJM) with respect to a policy issued to defendants Delta Plastics Corporation and Flexsol Packaging Corp.*fn1 (hereinafter jointly referred to as "Delta Plastics"), the Law Division judge granted NJM's motion for summary judgment, holding that the C-5 exclusion applied and NJM was not required to provide Delta with a defense to its employee's complaint. We now reverse.
These are the background facts as they appear in the record. Alexis Attune, an employee of Delta Plastics, suffered bodily injury on the job while working on certain film winding equipment. NJM assumed Delta's defense on Attune's workers' compensation claim and paid workers' compensation benefits as a result of his injury.
Attune then filed a complaint against various entities allegedly involved in the design, manufacture, sale, distribution, installation, repair, maintenance, or modification of the machinery. As to those defendants, Attune alleged defective design, lack of "adequate safety mechanisms" to prevent the machine from catching "clothing or limb," lack of sufficient guards, lack of "an emergency shut-off . . . adjacent to its moving parts," and a design that permitted use "without proper safety mechanism."
Attune also named Delta and Flexsol, alleging as to those defendants:
4. Defendant Delta acted in an intentional or otherwise grossly negligent*fn2 manner by providing the defective machine and rendered the machine unsafe by altering the machine and rendering it unsafe [sic], and requiring plaintiff to work under conditions that produced a substantial certainty that plaintiff would sustain injury, which conduct of defendant Delta was a proximate cause of the above mentioned injuries to plaintiff.
5. On information and belief defendant Flexsol Packaging Corp. is the successor to defendant Delta and is liable for the conduct of that defendant which caused injury to plaintiff. [Emphasis added.]
Thus Attune initially sought to avoid the workers' compensation bar, N.J.S.A. 34:15-8, by alleging "intentional" conduct and a "substantial certainty" of injury. It is undisputed that Attune never alleged that Delta or its employees subjectively intended to cause him injury, but only that Delta's conduct in "altering the machine" and requiring him to work on the altered machine created circumstances that were "substantially certain" ...