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Hornet Express v. Zurich American Insurance Group

January 26, 2006

HORNET EXPRESS, A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT,
v.
ZURICH AMERICAN INSURANCE GROUP, A STOCK INSURANCE COMPANY, DEFENDANT-APPELLANT,
v.
GARDEN STATE BROKERS, INC., AND HARRY DELBOSCO, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-2725-02.

The opinion of the court was delivered by: Skillman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued November 15, 2005

Before Judges Skillman, Payne and Miniman.

The issue presented by this appeal is whether an insurance policy that provides coverage for New Jersey workers' compensation benefits should be construed to require the insurer to pay the portion of a workers' compensation judgment entered in another state that would have been awarded if the claim petition had been filed in New Jersey. We conclude that the plain and unambiguous language of the insurance policy limits coverage to compensation benefits awarded under the New Jersey Workers' Compensation Act.

Plaintiff Hornet Express, a trucking company with a base of operations in New Jersey, applied for workers' compensation coverage through the New Jersey Workers Compensation Insurance Plan (NJWCIP). The NJWCIP provides involuntary assigned risk coverage to New Jersey employers that cannot obtain coverage in the voluntary market. The risk covered by policies issued through the NJWCIP is defined as "the entire insured operations within the State of New Jersey or to which the New Jersey Compensation Law is applicable."

The application form for workers' compensation coverage that Hornet submitted to the NJWCIP asked: "Do you have operations in states other than New Jersey?" Hornet answered: "no." The application form also included a "Trucker Supplemental Application" page, which stated: "If you or your employees spend a majority of driving time in a certain state, name that State for yourself and each employee." In the blank following this inquiry, Hornet identified "NJ" as the only state where its employees spend a majority of driving time. Contrary to the representations set forth in its application to the NJWCIP, Hornet employed drivers who operated trucks solely in Pennsylvania.

The application containing these misrepresentations was prepared on Hornet's behalf by its insurance broker, defendant Garden State Brokers, Inc. Defendant Harry DelBosco is the principal of this brokerage company.

The NJWCIP assigned responsibility to defendant Zurich American Insurance Group to provide coverage to Hornet under the New Jersey Assigned Risk Program. Under this program, the policy Zurich issued to Hornet was required to contain the specific policy provisions set forth in the New Jersey Workers Compensation Insurance Manual.

In conformity with this manual and the application Hornet submitted to the NJWCIP, Zurich issued a policy to Hornet, which stated:

3A. WORKERS COMPENSATION INSURANCE: Part One of the policy applies to the Workers Compensation Law of the state(s) listed here: NJ The policy also stated:

3C. OTHER STATES INSURANCE: Part Three of the policy applies to the states, if any, listed here: COVERAGE EXCLUDED Hornet did not obtain any workers' compensation coverage other than the policy issued by Zurich.

On June 7, 2001, one of Hornet's Pennsylvania drivers, Bret Kegarise, was involved in a fatal accident while operating a Hornet truck in the course of his employment in Pennsylvania. Kegarise's work for Hornet consisted exclusively of driving a daily route between King of Prussia, Pennsylvania and Allentown, Pennsylvania. Kegarise also lived in ...


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