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Sentinel Insurance Company, Ltd., A Member of the Hartford Financial v. Earthworks Landscape Construction

August 16, 2011

SENTINEL INSURANCE COMPANY, LTD., A MEMBER OF THE HARTFORD FINANCIAL GROUP, PLAINTIFF-APPELLANT,
v.
EARTHWORKS LANDSCAPE CONSTRUCTION, L.L.C. AND ROBERT TUTELA, A MEMBER THEREOF, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE; DAYSTAR-USM EXTERIOR SERVICES; THE UNINSURED EMPLOYER'S FUND, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3104-08, and New Jersey Department of Labor & Workforce Development, Division of Workers' Compensation, CP 2008-23277.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued April 12, 2011

Before Judges Carchman, Waugh, and St. John.

The opinion of the court was delivered by WAUGH, J.A.D.

This appeal requires us to determine whether the Law Division of the Superior Court or the Division of Workers' Compensation (Compensation Division) in the Department of Labor and Workforce Development is the appropriate forum for determination of a workers' compensation insurer's declaratory judgment action seeking rescission of a workers' compensation policy. We conclude that the Compensation Division is an appropriate forum and affirm the Law Division's order of transfer. We remand the matter to the Compensation Division for further proceedings consistent with this opinion.

I.

We discern the following facts and procedural history from the record on appeal.

Defendant Earthworks Landscape Construction, LLC (Earthworks), is a limited liability company engaging in the business of landscape construction. Defendant Robert J. Tutela is a member of the Earthworks limited liability company and also one of its employees. In 2008, Earthworks, acting through Tutela, filed an application with Sentinel Insurance Company, Ltd.*fn1 (Sentinel), for workers' compensation insurance coverage. Included in the application were representations that Earthworks hired independent contractors to perform all "concrete, mason, and tree work" and that all of Earthworks employees performed their work at ground level. Pursuant to a subsequent written request by Sentinel, Tutela confirmed "that all tree work, masonry work, and concrete work is subcontract[ed] out to other companies." Based on the information provided in the application, as well as Tutela's verification, Sentinel issued the policy to Earthworks. The policy period was March 10, 2008, through March 10, 2009.

In June 2008, Earthworks entered into a contract with Daystar-USM Exterior Services (Daystar), in which Earthworks agreed to "remov[e] and dispos[e] of (6) 50' dead oak trees" from a building site in Toms River. On June 27, 2008, Tutela was injured while working on the tree removal. At the time, he was "situated approximately thirty-five feet (35') above the ground in a lift vehicle or bucket truck" while pruning tree branches. Tutela fell from the "lift vehicle or bucket truck" and suffered significant bodily injury.

Earthworks notified Sentinel of the accident on June 29, 2008. Tutela filed an employee claim petition for temporary disability and medical benefits with the Compensation Division on August 27, 2008. See N.J.S.A. 34:15-7. In a letter dated the same day, Sentinel informed Earthworks that it disclaimed coverage "due to material misrepresentations made by the claimant himself as a member of the insured entity." Sentinel filed an answer to Tutela's claim petition on September 29, 2010.

On September 8, 2008, Sentinel filed a complaint for declaratory judgment against Earthworks and Tutela in the Law Division. It alleged that Tutela had made material misrepresentations in the procurement of the policy, and that Sentinel would not have issued the policy had it not been for those misrepresentations. Sentinel sought rescission of the policy and a declaration that the policy was "null and void as it pertains to the claim of Robert Tutela." Sentinel subsequently amended the complaint to add Daystar and The Uninsured Employers' Fund (UEF) as defendants.*fn2

On November 13, 2008, the Compensation Division granted Tutela's motion for temporary disability and medical benefits. The order stated that "[Sentinel's] payments are without prejudice to all parties' rights to pursue [the] companion action in [the Law Division]," and that "[Sentinel] reserve[d] ...


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