Appellate Division confirms that the trial judge correctly applied the intentional-wrong exception to the insurer’s policy.

The Appellate Division affirmed the Law Division order granting Hartford Underwriters Ins. Co.’s motion to dismiss and denying Sir Electric, LLC’s cross-motion for summary judgment. There was no dispute that the plaintiff suffered severe burns at work and received workers’ compensation benefits from Sir Electric. The plaintiff filed a Law Division action against Sir Electric, alleging negligence, gross negligence, recklessness and intentional misconduct. Sir Electric sought coverage for these claims under the employer’s—Shelbourne Spring—liability policy with Hartford. However, Hartford denied coverage under its exclusion. Sir Electric filed a third-party complaint against Hartford, alleging that negligence and gross negligence fell within the coverage language, even if recklessness and intentional misconduct did not.

Hartford, in turn, filed a Rule 4:6-2(e) motion to dismiss the third-party complaint with prejudice, and Sir Electric cross-moved for summary judgment. The trial judge granted Hartford’s motion and denied Sir Electric’s cross-motion. Sir Electric filed a subsequent motion for reconsideration, which was granted in part. 

Sir Electric then filed for leave to appeal the orders, which were granted by the Appellate Division. Sir Electric argued: Hartford had a duty to defend; the trial judge misinterpreted the exclusion provision by finding it only applied to intentional wrongs; the exclusion did not “precisely” conform to the ruling in N.J. Mfrs. Ins. Co. v. Delta Plastics Corp., 188 N.J. 582 (2006); the Appellate Division should follow its reasoning in Rodriguez-Ortiz v. Interstate Racking & Shelving, II, Inc., No. A-1614-19 (App. Div. Sept. 3, 2021), certify. denied, 249 N.J. 90 (2021) (noting a workers’ compensation policy should cover the cost of defending and securing a lawsuit’s transfer for negligence-based claims); and the trial judge erred in refusing it to file an amended complaint.

In reviewing the orders de novo, the Appellate Division confirmed that the judge correctly applied the intentional-wrong exception to Hartford’s policy, noting there was no claim in which Hartford would be required to pay the judgment if the third-party complaint’s allegations were sustained. In addition, the Appellate Division indicated the judge was correct in finding Hartford’s exclusion provision was unambiguous, unlike in Delta Plastics. 

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