*1 Disciplinary Over- respondent reimburse ORDERED actual administrative costs and sight appropriate Committee matter, provided in as prosecution this expenses incurred Rule 1:20-17. A.2d PETITIONER-RESPONDENT, SROCZYNSKI, v. JOHN
WALTER CONSTRUCTION, MILEK, RESPON- MILEK JOHN T/A DENT, INSUR- AND JERSEY MANUFACTURERS NEW COMPANY, RESPONDENT-APPELLANT, AND UNIN- ANCE RESPONDENT-RESPONDENT, FUND, EMPLOYER’S SURED HOSPITAL, JOHNSON UNIVERSITY AND ROBERT WOOD INTERVENOR-RESPONDENT.
Argued May 2008. 2008 Decided December *3 argued Michael J. appellant (McElroy, Marone the cause for Deutsch, Mulvaney Carpenter, attorneys; & Mr. Marone and Williams, Jr., briefs). Richard J. on counsel and argued respondent David the cause for Walter Sroe- Hoffman Glassner, zynski (Wysoker, Weingartner, Lockspeiser, Gonzalez & attorneys). Boyan argued
William L. respondent cause Uninsured Employer’s Fund.
Donna argued Marie Montano intervenor-respon- cause for (Celentano, dent Robert University Hospital Wood Johnson Stadt- Walentowicz, attorneys; Stadtmauer, & mauer Steven of counsel briefs). and on the Jr., Graham,
Jerome J. submitted a brief on behalf of amici Property Casualty curiae Insurers Association America and (Graham Curtin, Jersey Insurance attorneys; Council of New Mr. *4 brief). Jones, George Graham and C. on the PER CURIAM. (NJM) Jersey
New Company Manufacturers a Insurance issued Compensation standard Workers’ Employer’s Liability and Insur- (Milek) Policy ance to John Milek covering Construction the period May 6, 6,May from making 2003 to Milek 2004. ceased payments policy on the premium after the initial was satisfied. As result, 14, 2003, August on NJM sent Milek a notice of eancella- 15, 2003, the August notified New by mail. On NJM
tion certified of the cancella- Banking of and Insurance Jersey Commissioner (FTP) by tion, protocol established using an file transfer electronic Inspection Rating and Bureau Jersey Compensation New the (CRIB).1 28, 2004, Sroczynski, employ- an February petitioner, Walter
On Milek, injury. work-related On March of sustained a ee Compensa- of Sroczynski claim Division Workers’ filed a tion, seeking compensation benefits. workers’ responsibility providing of for cover-
NJM moved to be relieved properly policy Milek’s almost age, arguing that it had canceled Sroczynski and Opposing NJM’s motion was six months earlier. (UEF). signifi- Employer’s Fund Because the Uninsured Sroczynski after his caring incurred in for cant medical costs Univer- judge granted Robert Wood Johnson injury, the trial also (RWJH) sity intervenor status. Hospital 34:15- case was whether NJM satisfied N.J.S.A. At issue the specific requirements the for cancellation of which sets forth compensation policy of insuranсe: against or mutual of a stock association by contract insurance issued Any company arising the the be either or by under this canceled liability may employer chapter contract for its expiration. carrier within the time limited such by deemed, canceled, be such shall be until: No writing At notice in the election terminate such contract least ten days’ of given registered seeking mail cancellation the other by by party thereof thereto; and party banking and like notice shall be commissioner b. Until office of of filed together with a statement the notice insurance, provided for certified given; paragraph “a" this section has been and maintaining] regulations, "establishing] rules, and CRIB is responsible insur- liability rates for workmen's employer’s and premium adjusting] same, as far as to the hazard ance and practicable, equitably 34:15-89. The Commis- risks, bureau.” NJ.S.A. individual inspection by including actions, rules sioner all CRIB's supervises adoption regulations Liabili- in CRIB's Workers’ contained Compensation Employers’ (the Manual). Manual reference all incorporates by Insurancе Manual ty the relevant statutes. *5 filing paragraph e. ten have the Until after “b” days of this elapsed required by section has been made. The “b” and “c” of this section shall not where the provisions has apply employer the contract to be canceled replaced by insurance, and notice of such Banking has been filed the replacement Insurance. Commissioner given such event the notice “a” if the required by provision may, by recite carrier, as the termination date the effective date of the other insurance, the be contract shall terminated as of that date. No notice of retroactively cancellation of such contract need be filed in the office of the Commissioner of any Banking and Insurance the where is not law of this by State employer required to effect such insurance. added).]2 (emphasis [N.J.S.A. 34:15-81 plenary hearing, Compensation
At a Judge the heard testimo- ny an president from assistant vice of NJM. He testified that procedures NJM was aware of required by the N.J.S.A. 34:15-81 coverage to cancel workers’ that the nоtice of by cancellation sent to Milek certified mail satisfied the statute. complied He also claimed that NJM with the “like notice” and 34:15-81(b) requirements by “certified statement” of N.J.S.A. electronic transfer to CRIB. Judge Compensation ruled that NJM failed to cancel the
policy because, as acknowledged, NJM it did not file written way “certified when it by statement” transmitted data of the FTP. Further, judge discounted NJM’s reliance on the CRIB Manu- al because it “outlines the manner in which the notice is to be filed way certify and in no obligation relieves carrier from its Finally, information.” public policy favoring based on the provision insurance, judge found that strict necessary with the cancellation statute was 2 The CRIB Manual authorizes carriers to submit cancellation notices by means of electronic transmission. Electronic submission of cancellation infor magnetic mation can be achieved in one two in the form of ways: tape includes data in the National Workers Data prescribed Compensation Speci through using or, Manual; fications a secure internet connection CRIB’s FTP data, the transfer of not documents. The Manual permits only also Filing an Carrier, includes Form for Notice of Cancellation known Approved as Form 116-B. Form 116-B a certification the carrier incorporates N.J.S.A. 34:15-81 has been satisfied. *6 “deny responsibilities and allowing a to evade
to avoid
carrier
law.”
recovery promised to him
the
the
worker the
insured
of Milek’s
its cancellation
appealed, arguing that
NJM
and, alternatively,
of sub
that
doctrine
the
the
satisfied
statute
rejecting
arguments,
the
those
compliance applies.
In
stantial
meaning of
exclusively
purpose and
the
on the
panel focused
81(b)
requirement
N.J.S.A.
“certified statement”
34:15—
“to
argument
require
ignore
it
a
would
declared that NJM’s
Legislature believed was
statutory scheme that the
portion of the
rewriting
constitute
the
important, and would
effect
248, 256,
Milek,
N.J.Super.
933 A.2d
Sroczynski v.
396
statute.”
rejected
argument that
panel also
NJM’s
(App.Div.2007).
931
Manual,
complied
complied
CRIB
it
NJM
because
statute,
key
stating
argument
ignores one of the
the
“NJM’s
931,
manual[,]”
255,
A.2d
which
the
id. at
933
provisions of
requires
all
of the workers’
compliance with
sections
Further,
сompli
rejected
panel
the
NJM’s substantial
statutes.
satisfy
concluding
the case
the
argument,
that
does
ance
doctrine,
compliance
which
to “avoid
purpose of the substantial
technically inadequate
consequences that flow from
the harsh
underlying purpose.”
meet a statute’s
actions
nonetheless
Ctr.,
167 N.J.
We Sroczynski to attorneys’ fees to ment and the award of (2007); A.2d UEF. 192 A.2d 635 N.J. (2007). Casualty granted Property also leave We (PCIA) and Insurance Coun Insurers Association of America (ICNJ) Jersey participate cil as amici curiae. of New us, they parties positions maintain advanced Before complied least argues complied, that it or at substan- below. NJM would, statute, any contrary holding tially, with the and that best, requiring purely prospective application, be a rule of law new and that counsel fees are not authorized. Amici PCIA and ICNJ side with that view.
Sroczynski and the UEF counter that the statute was not statement, satisfiеd because of the absence of “certified” specifically CRIB Manual incorporates statutory require- ments, and that this case does kind not involve the of technical slip-up that substantial was meant address. addition, they urge interpretation us conclude that their is not rule of new law and fees counsel are authorized. Amicus supports RWJH that view. *7 carefully have light
We reviewed this record in of the claims and, advanced with except respect to the of award counsel fees to UEF, the have concluded that there is no warrant for our inter- judgment vention. We Appellate therefore affirm the of the Sroezynski’s Division in substantially favor the ex- for reasons pressed Judge opinion. Baxter’s following.
We of N.J.S.A. 34:15- language add the unambiguous, allowing 81 is clear and interpretation for no filing than that a certified with a statement the Commissioner is prerequisite effectuating coverage. to cancellation light the of In clarity statute, part of the of that of the the CRIB lacked authority to the obligation comply relieve insurers of their to with requirement could, filing Although the a certifiсation. CRIB mandate, legislative consistent create an alternate mecha by statute, which comply nism insurers could it could not a adopt protocol operated that to allow the cancellation of cover age without submission the insurers of some version of the statutorily required short, Appellate certification. the Division correctly that concluded the use of the FTP to transmit cancellations, data about any accompanying without certifi cation, light cannot be effective in of unambiguous the clear and 34:15-81(b). demands of N.J.S.A.
Regarding compliance, although might substantial we not parsed the of exactly Appellate have elements the doctrine as the did, a case that this not that too have concluded Division we compliance the doc- that inform substantial policies satisfies Here, require Legislature simply not notice to the did trine. provide the insurer a also commanded that but Commissioner attesting to the truthfulness employee an certification Although the the insured. notice was afforded proper fact it that the history sparse, of the Act is seems obvious legislative responsibility place personal to on purpose provision of that was notice, proper to employee of the insurer assure an employee certify require that given and to cancellation was fact, a implications false certification. recognizing legal Commissioner, provision of information The electronic certification, personal completely notion without defeats provision was intended responsibility that certification such, thus, was, simply misstep. As It not technical secure. compliance a substantial no comfort from insurer could derive consequences harsh analysis meant to ameliorate the which is technically fall short. spirit actions that meet the law but sure, approach to industry good acted in faith in its To be CRIB’s, best, confusing on advice. Never- the issue reliance out, theless, remains, Appellate pointed the fact as the Division requirements of 84:15-81 were satis- that the clear N.J.S.A. fied, was nor substantial effectuated. *8 argue a and the amici that such decision constitutes
NJM prospectively. applied rule law which should be We a new merely meaning we of a disagree. ruling, have confirmed the Thus, retroactivity is no warrant for a statute. there clear (1981) Burstein, 394, 403, .2d525 analysis. v. 85 N.J. 427 A State retroactivity analysis only involving in (holding relevant eases law). existing ruling is not a break from departure from Where a always applied.” it that State v. past, we construe as “one has the (2007). Colbert, 918A.2d Nevertheless, argument we concerned over amici’s are prior practical invalidating effect all cancellations that the electronically would be to respect to which notice was afforded create chaos in the industry. Although magnetic option tape permit allowed CRIB does requires, many transmission of as certifications the statute insur- relying system have FTP ers been on and therefore have not part complied with that all.3 of the statute at The decision that the FTP has been ineffective to achieve cancellation thus spite will east doubt on thousands cancellations in they fact that challenged. were never Had those cаncellations fashion, challenged in timely might been insurer have been provide able reconstruct the and an employee’s records certifi- possible that problematic. cation. Whether would be now seems Thus, That is an untenable state of affairs. we have concluded Sroczynski party previously who raised the granted notice issue should be improper relief from the cancella- but tions those were challenged cancellations that never policyholders should stand because the right waived their do so. That perfect, pursued outcome is not but it rewards those who legal options; challenge their those leaves who waived waiver; results of their an industry and does throw into chaos adopted plan good a mistaken of action in faith reliance on official misinformation. fees, respect regarding to counsel
With we affirm the award to Sroczynski. find on We no basis which to conclude that Appellate grant Division abused its discretion of fees to 2:ll-4(a) Sroczynski R. quantum or in the See (incorpo- thereof. 4:42-9(a) level, R. rating statutory basеs for award trial thus 34:15-64). encompassing N.J.S.A. filing litigation likely We note that on October after the of this it, Advisory because of CRIB Bulletin # which issued alerted carriers that "a question regarding by magnetic exists" whether cancellation notices submitted 81(b). tape satisfy requirements Advisory FTP of N.J.S.A. Bulletin 34:15— filing accompanied #16 recommended that electronic of cancellation notices be certification, containing prescribed language, a transmittal letter which required by previously includes the “like notice" statement statute and included Form 116-B. *9 respect Appellate in conclusion reach a different
We analysis of R. to the UEF. Our Division’s award of counsel fees 4(b) to such an award on ground on which sustain reveals no 2:11— description compen in of workers’ Although an broad appeal. suggests of fees intended award is appeals, sation the rule ground injured provides no of worker thus for the benefit 2:ll-4(b). R. for in favor of UEF. See an award subpart of authority general in the Nor do find more we an award counsel to “actions in which the Rule which refers Rule, 4:42-9(a).” 2:ll-4(a). R. by R. That permitted fees is in actions an to a successful claimant which allows award fees liаbility policies, R. 4:42— indemnity or insurance see based on 9(a)(6), qualify as application no because the Fund does has Co., v. G claimant. See Messec USF & Ins. such a successful (“Fees not be (App.Div.2004) A.2d 36 should N.J.Super. 4:42-9(a)(6) dispute when an insurer loses a ] Rule [under awarded insurer____”). with another only to potentially applicable rule refers statutes
The 9(a)(8). fees, However, specifically R. there allow counsel see 4:42— (N.J.S.A. an in the is a basis for such award UEF statute neither -120.30) nor in the workers’ statute 34:15-120.1 (N.J.S.A. 34:15-64). law, Lacking in reverse award a basis we counsel fees the UEF. Appellate Sroczynski is judgment Division in favor reversed, and the of counsel fees to the UEF affirmed award have the reasons to which we adverted. RIVERA-SOTO, concurring part dissenting
Justice part. February 28, Sroczynski injured Walter was while
On (Milek). Milek, employ of John John Milek Construction t/a later, Sroczynski compen- Two and one-half weeks filed workers’ Sroczynski, against employer. claim his Then unknown sation had can- employer’s his been Jersey by New almost six months earlier Manufacturers celled *10 (NJM), Company Insurance employer’s compеnsation his workers’ carrier, so, non-payment premiums. doing insurance In the compensation timely workers’ insurance carrier sent a certified mail Sroczynski’s employer— notice of cancellation to its insured— and, in then-obtaining protocols, accordance with the also sent an electronic Jersey notice of cancellation to the New Commissioner Banking and Insurance. Sroczynski appeal, stranger this was a to the transac- —who employer tions compensation between his and its workers’ insur- ance earner as as the well transactions between that insurance carrier regulators acknowledges and its State that the electronic — notice of by compensation cancellation issued the insur- ance requirements pro- carrier satisfied the notice transmission mulgated by Jersey Compensation Rating Inspection the New (CRIB). contends, however, Sroczynski Bureau that the electron- ic notice of cancellation issued the insurance carrier did not satisfy and, hence, statutory requirements Thus, was ineffective. he сlaims that is he entitled to workers’ benefits greater that are than what he has received as an uninsured (Fund). Employer’s worker from State’s the Uninsured Fund that, governing requires The statute clear: N.J.S.A. 34:15-81 to a policy, order cancel workers’ (1) carrier provide employer must its insured —the covered “[a]t— days’ least ten in writing notice of the election to terminate such (2) by registered contract ... mail” a file “like notice” with Insurance, Banking “together Commissioner with a [statutorily required certified statement that the registered mail] given[.]” majority [to notice its has insured] been The concludes language unambigu- “[t]he N.J.S.A. 34:15-81 is clear and ous, allowing interpretation filing for no other than that a certified prerequisite effectuating statement with the Commissioner is to coverage.” the cancellation of 701. Ante 961 A.2d at That and, holds, majority conclusion is extent unassailable so I concur. light clarity of that majority holds that of the “[i]n likewise
The
statute,
authority
part
CRIB lacked
relieve
requirement for
obligation
comply with the
of their
insurers
conclusion,
agree.
I
also
filing
certification.” Ibid. With
could,
majority
“[althоugh CRIB
consis-
further reasons that
mandate,
legislative
create an alternate
mechanism
tent with
statute,
adopt
comply
it could not
could
which insurers
coverage
protocol
operated
allow
cancellation
*11
by
of some
of
the insurers
version
the statuto-
without submission
Finally,
rily
Again,
agree.
I
the
required certification.” Ibid.
“the
the
to transmit
majority
that
use of
FTP
concludes
cancellations,
any accompanying
policy
without
certifi-
data about
cation,
light
unambiguous
of the
and
cannot be effective
clear
34:15-81(b).”
again,
Ibid. Once
I concur.1
demands of N.J.S.A.
majority
I
but
part company
must
the
two fundamental
rejection
respects:
application
of the
of the doctrine
related
circumstances,
compliance
in its
in these
as well as
substantial
that
unexplained
of the
of waiver to conclude
embrace
doctrine
previously
“Sroezynski
party
who
raised the notice
granted
improper
relief
but
be
from
cancellations
issue should
challenged
that those cancellations that were never
should stand
right
policyholders
their
to do so.” Id. at
because the
waived
Sroezynski
majority
that
award of
fees to
was
also concludes
counsel
45-46,
proper,
was
at
but that the award of counsel fees
the Fund
not. Ante
policy
compensation
under
I. majority’s analysis Much of the is driven the abbreviated statement facts on which it relies. Because more robust exposition of the facts leads to a better informed view of the issues joined, present disputed I those facts —which greater are not —in detail.
A. At appeal, Sroczynski all times relevant to the issues in this was NJM, by employed subsidiaries, through Milek. one of issued Compensation Employers Liability Workers’ and Insurance policy 6, to Milek policy period May with an effective of 2003 to 6,May paid premium 2004. Milek the initial for coverage, the but making premium failed to continue the payments when due. On 14, 2003, August NJM Milek a of of sent notice cancellation the policy by day, certified mail. The next NJM used CRIB’s elec- system protocol tronic transmission file FTP transmit —to —the cancellation, electronic notice of that an effective date of September to the Commissioner. later, 28, February 2004, Sroczynski
Almost six months on injury by sustained a work-related A employed while Milek. few later, petition in the of Workers’ filed a claim Division weeks he responded petition Compensation, seeking NJM to benefits. moving covering of for the claim. responsibility to relieved be policy the had been cancelled well before NJM asserted that statutory injury complied with the Sroczynski’s it had notify by using system the requirements the FTP notice Sroczynski op- Fund cancellation. and the Commissioner of the motion, posed NJM’s as did intervenor Robert Wood Johnson (the University Hospital), Sroczynski under- Hospital where had Hospital un- gone significant for the rеmained treatment which paid. hearing to Judge Compensation plenary
The convened being only the The witness was an arguments consider advanced. reason for president vice of NJM who testified about the assistant policy, in which Milek explained the cancellation of the manner notified, system through which NJM was and described the FTP The filed its notice of the cancellation Commissioner. Judge of that the use of FTP Compensation concluded did not to meet the policy to transmit the cancellation data suffice command that the submit “certified statement” statute’s carrier given employer prerequisite that notice had as a been therefore concluded that NJM had not cancelled cancellation. He and, thus, motion to denied NJM’s be relieved obligations on the claim. granted Appellate Division NJM’s for leave motion Milek, and, opinion, Sroczynski v.
appeal
published
in a
affirmed.
248,
rejected
N.J.Super.
(App.Div.2007).
933 A.2d
It
both
argument
actual
to Milek met
NJM’s
notice
cancellation
purposes,
at
the statute’s essential
id.
933 A.2d
NJM’s alternate contention that it should have the benefit
257-59,
compliance,
A.2d
doctrine
substantial
id.
931.
Thereafter,
Sroczyn-
granted
motions
panel
separate
filed
seeking attorneys’
fees.
ski
the Fund
from
granted
appeal
This Court
NJM’s motion for leave to
*13
judgment
attorneys’
Sroczynski,
award of
fees to
192 N.J.
591,
(2007),
granted
Property
A.2d 635
and we
leave to the
Casualty Insurers Association of America and the Insurance
Jersey
participate
Council of New
as amici curiae.
thereaf
We
granted
ter
appeal
NJM’s second motion for leave to
the award of
attorneys’
Fund,
272,
(2007),
to the
fees
B. 1917, Jersey adopted Compensation New its Act. L. Workers’ 1917, legislative c. 178. That enactment included a mechanism to policy: cancel a required it the workers’ carrier file notice of cancellation employer by it Commissioner Insurance and serve on the I, 1937, hand-delivery registered § or mail. Id. Art. 7. In Act Compensation option Workers’ was amended to eliminate dеlivery employer requiring only by written notice —thus registered requirement mail—and add the at issue in this appeal: seeking the insurance carrier cancel workers’ compensation coverage compli- also certified file a statement statutory provision regulating provid- ance with the the manner 134, ing employer. 1937, § notice of the cancellation to L. 1. e. provisions Two other Act to our the 1917 are relevant analysis. First, CRIB, the 1917 Act included section that created general it role CRIB play, defined the was to and set forth the subjects on which CRIB was to focus efforts. N.J.S.A. 34:15- 1). II, Second, § (codifying required L. c. Art. it all insurers to CRIB become members order to remain authorized (codi- compensation coverage. to issue workers’ N.J.S.A. 34:15-90 2). fying II, § L. c. Art.
C. publishes Jersey Compensation CRIB the New Workers’ (the Employers’ Liability Manual), Insurance Manual which de- *14 every com- workers’ regulations with which rules and scribes the Jersey comply. The Manual must carrier in New pensation provisions that with its general concept expresses the of their obli- compensation carriers does not relieve Part Section particular, In comply with the statute. gations to Approval of the Manu- Manual, “Promulgation and titled 1 of the In.” That section al,” Read a section called “Statutes includes statutes, by all of the relevant incorporate to reference purports Manual itself. requirements part a making their thus Approved Form for However, also includes an the Manual Carrier, “Form 116-B.” by known as Filing of Cancellation Notice by carriers when approved 116-B for use of Form The version during statutory the time notice of cancellation providing the by the incorporates a certification to this matter period relevant contract the stated notice of election terminate carrier that “like employer in accordance with given [the] been of insurance has requirement[s] of 34:15-81.”2 [N.J.S.A.] 116-B, appeal, to this Form at all times relevant
In addition to notices means carriers to submit cancellation CRIB authorized of cancellation Electronic submission of electronic transmission. First, ways. in either of two information could be made submitting cаncella- comply requirement with its insurer could long tape magnetic tape, as as notices in the form of tion Compensa- National Workers prescribed the data included Second, provides the Manual Specifications Data Manual. tion cancellation notices via permissible to submit is also “[i]t system Protocol[,]” system.3 That or CRIB’s FTP Electronic File statutory requirement seemingly plain language inverts the rather That State, given to the and not to notice” was is addressed the certification that "like order, duty proper primary employer/insured. the carrier’s of notice is In State, given only employer; to be then is a "like notice” then along with a certification of service. CRIB, proprietary was devised but instead The FTP is organization many jurisdictions. for use in national workers’ it, organization, essentially adopting that national followed the lead of In CRIB permit only data, structured to the transfer of allowing the insurer to submit information that specific policy identifies the it cancel, sent, intends to the date when a cancellation notice was and the reason for system, the cancellation. CRIB’s FTP howev- er, accomplish documents, cannot including transmission of completed either Form separate 116-B or a certification. however, *15 Report, its 2005 Annual expressed prefer- CRIB having ence for magnetic insurers use electronic and tape trans- missions, explaining: encouraged magnetic Carriers are also to use and statistical electronic and policy filing methods. The flow of
tape hard submissions increases copy costs for expense magnetic reporting, the sender and the Electronic and recipient. on the other tape hand, timeliness of data submission improves and, the same enhances time, being of the data submitted. credibility quality Standard national WCIO Organizations] [Workers reporting Insurance data Compensation specifications (WCPOLS Reporting [Workers Compensation Policy and WCSTAT Specifications] Reporting Specifications]) [Workers Statistical Compensation are and we place are filings. committed to assist carrier to reduce and eliminatе hard copy On October filing complaint after the in this litigation challenging adequacy of the FTP to effectu- ate a policy, cancellation of a Advisory CRIB issued Bulletin # 16. That Bulletin compensation alerted the workers’ carriers that “a question regarding exists” whether cancellation notices submitted by magnetic tape satisfy and FTP requirements of N.J.S.A. 81(b). Advisory # Bulletin that recommended electronic 34:15— filing of accompanied cancellation notices be a transmittal letter electing join filing in a national effort to streamline and reduce the processes flow of However, New added paperwork. certification is Jersey’s requirement states, unusual. In other workers' carriers are able to a effectuate filing cancellation without a certification of the that our statute type requires. 54(5) (no e.g., See, § N.Y. requirement); Workers’ Law certification Comp. Mass. (same); 676.8(c) (same); 152, § Gen. § Laws ch. Cal. Ins.Code Fla. Stat. 440.185(7) (same). § jurisdictions, result, As a in those the need to a create cancellation mechanism that would accommodate a filеd certification separately jurisdictions, transmitting did not arise. Rather, in those other the data that being identifies the cancelled, the date of policy cancellation and provides the reason for cancellation, is explains sufficient to effect that cancellation. That being the case, the FTP which is a data system, transmission merely protocol, jurisdictions, would suffice in those other but is deficient here. certification,
containing prescribed language, included which presum- required the statute and the “like notice” statement ably in Form previously included 116-B.
D. requires about statute for effective There is no doubt what the Similarly, no policy. there is doubt about cancellation of sufficiency At this purpose. 116-B for the heart of of Form this preferred dispute complying method whether with CRIB’s data, through system, the FTP without transmission of the use of writing, jointly submitting 116-B or similar separately or Form substantially complies or the statute’s command that satisfies be filed with the Commissioner. It is to a certified statement question I now turn.
II. N.J.S.A. statute, 34:15-81, specific governing sets forth the requirements for canсellation of a workers’ full, provides, insurance. It *16 against issued or mutual by contract of insurance a stock association [a]ny company arising this canceled either or the under be the
liability chapter may by employer insurance within the time such contract earner limited for its by expiration. be No such shall be deemed to canceled until: writing At a. least ten notice of the election terminate such contract days’ given seeking registered mail the cancellation thereof to the other by by party and thereto; party banking filed the b. Until like notice shall be in the office of commissioner of together with a that the and statement notice insurance, provided by certified paragraph given; this section has been and "a” of filing paragraph this c. Until ten have after the “b” of elapsed required by days section has made. been where has “b” and “c” this section shall not the apply provisions employer insurance, to be of such the contract canceled other and notice replaced by Banking In been filed with Commissioner of and Insurаnce. has replacement given “a” if the insurance such event the notice required by provision may, the termination date the effective date of and carrier, insurance, recite as be terminated as of that date. No notice of contract shall retroactively need in the office of cancellation of such contract be filed the Commissioner Banking this State where the is not law of by any and Insurance employer required to effect such insurance. (emphasis supplied).] [N.J.S.A. 34:15-81 validly requires steps statute two order plainly, Stated this effectively policy: cancel a workers’ and proposed notice of the give employer must written the carrier means, and the carrier also must file prescribed cancellation “like notice” and a certified statement with the Commissioner both employer required. has been notified as Ibid. that the
A.
designated by
Legislature
promulgate
CRIB has been
requirements.
regulations that will fulfill the statute’s
rules and
main
(providing that CRIB “shall establish and
N.J.S.A. 34:15-89
rules,
compen
regulations
premium
and
rates for workmen’s
tain
insurancе”);
liability
(pro
employer’s
N.J.S.A. 34:15-90
sation
adopt
regulations
such
for its
viding that CRIB “shall
rules
may
necessary
provide such income as
be
for its
procedure and
generally
operation”).
great deference is
maintenance and
While
exercising
agencies
of administrative
afforded to the actions
see,
functions,
rulemaking
e.g.,
re Freshwater Wetlands
their
(2004);
Rules,
In re
180 N.J.
instead are set Judge Administrative Law (requiring that Director Chief publish compile, index and the Office of Administrative Law “shall Jеrsey Administrative publication to be known as the ‘New Code,’ agency”). containing adopted all effective rules each Moreover, supervision although generally falls under the CRIB Commissioner, chairman, through appointed CRIB member selecting organiza- companies responsible are for officers, members, employees. tion’s committee N.J.S.A. 34:15-90. performance
There exists an inherent tension between CRIB’s agency protect of its functions as an administrative and its role in result, ing the interests of its members. As a a review that is searching usually employed than more the deferential one time, agency appeals At appropriate. administrative is the same dispute questions because the facts are not in and because the nature, presented purely legal are no deference is owed to the reasoning Judge Compensation; or conclusions of the review of Manalapan Realty, Twp. that decision is de novo. L.P. v. Comm. (1995). 366, 378, Manalapan, 140 A.2d N.J. With guide, presented. these standards as our I consider the issues
B.
majority’s
I concur with the
determination that
the statute’s
language
unambiguous, allowing
interpretation
is clear and
for no
prerequisite
other than that a
certified statement
filed
to an
coverage.
effective cancellation of
Next,
statute,
light
clarity
part
of the
of that
of the
CRIB
authority
lacked
relieve wholesale the insurers of their
obligation
comply
requirement
filing
certification.
because, although
place great weight
This is so
we
on “the
act,”
interpretation
agency charged
enforcing
an
In re
State,
Tpk.
County,
N.J.
Am.
Employ
Auth. v.
Fed’n
& Mun.
(1997)
ees,
(quoting
Council
150 N.J.
A.2d
430, 436-37,
(1992)),
Maglaki,
Marin v.
That CRIB’s and reasonable throughout filings inadvertently impression an electronic created methodology effective industry that use of the FTP would be separate, policy without simultaneous submission of a to cancel Jersey’s statutory New re- written certified statement.4 Under quirements, preferred system of what is de- CRIB’s fell short However, clearly light impression CRIB creat- manded. protocols FTP ed—that transmission would impression compliance by protocol The conclusion that the use of the FTP Manual, created CRIB was inadvertent derives from three sources: its #16, Advisory from which Bulletin and a critical examination of the source adopted system. CRIB created and the FTP that, Although cautionary the Manual contains a statement to the effect notwithstanding any indepen- provisions, of its insurers are not relieved of their statute, obligations comply requirements of the it dent with all of the permissible plainly notices "[i]t states that to submit cancellation nevertheless litiga- protocol].” Advisory Bulletin # which issued after this [the via FTP initiated, system, suggests without the tion was also that the use of the FTP certification, Finally, separate filing comply the statute. as of a would earlier, agencies system regulatory the FTP was created out-of-state noted Jersey's requirement New additional that the carrier make that do not share electronically separate In the to CRIB of the transmitted data. certification aggregate, produce impression but incorrect these combine to the indelible policy CRIB via the FTP a carrier’s communication of its cancellations to statutory compliance purposes. sufficed for can- statutory requirements equal compliance with the NJM, relying on in- turn to whether CRIB’s cellation —I must structions, substantially requirements. complied with the statute’s
C. *19 analysis, on, discussing, Appellate Division’s Relying but not that, presented, “sub- majority concludes in the circumstances 44, Ante at 961A.2d at compliance stantial effectuated.” [was not] disagree. 709. I history compliance of lengthy
The of the doctrine substantial recently explored yet again; we described it as need not be English concepts. v. grounded in ancient Common Law See Galik (2001). Ctr., 341, 351, A.2d 1141 Maass Med. 167 N.J. 771 Clara Rather, purpose our focus remains on the essential the doctrine: technically consequences harsh that flow from inade “to avoid the underlying pur quate a statute’s actions nonetheless meet pose.” general, A.2d 1141. In resort to this Id. 771 permit in from technical doctrine has been had order relief 352-53, requirements array “in a of contexts.” Id. at 771 wide (citing examples). Although A.2d 1141. the doctrine most often permit putative plaintiffs in to avoid the has been invoked order to consequence filing requirements, or of statutes of limitation purpose preclude this does not its the fundamental doctrine in application favor NJM. application compliance employs doctrine a of the substantial Galik, 354-55,
two-part approach.
supra,
tion
there
not a
was
strict
with the statute.
why
compliance
vacuum,
performed
That evaluation is not
in a
as the five criteria
light
must be
recognition
played by
considered
of our
of the role
compliance
preventing
the substantial
doctrine
“technical de
defeat[ing]
fects
[from]
valid claim.” Ferreira v. Rancocas
Assocs.,
144, 151,
(2003)
Orthopedic
N.J.
(citing
can be effective. preclude application Legislature further intended compliance appropriate in an ease. doctrine of substantial analysis, in fact respect part In of the second of the Galik NJM Rejecting traditional elements of the doctrine. has satisfied the argument, Appellate Division compliance substantial NJM’s traditionally recognized five focused on two of the doctrine’s according satisfy criteria panel, to the NJM could criteria: (the prejudicе defending party first that there was a lack of to the criterion) explanation that it had a reasonable its failure to or for (the criterion). comply Sroczynski, supra, N.J.Super. fifth 258-59, Again, disagree. I 933A.2d 931. setting
The awkward factual
of this case renders whether there
admittedly
prejudice
defending party
a lack
an
close
question. Typically,
compliance
the doctrine of substantial
has
plaintiffs seeking
relief from a statute of
been invoked
favor of
See, e.g.,
Thompson,
v.
N.J.
limitations or similar rule.
Fink
(2001)
551, 564,
(finding
compliance
This circumstances unlike traditional ones, insurer, seeking responsibility for here the to avoid under its policy spite strictly comply of its failure to with the statute’s demands, then, question, invokes the benefit of the doctrine. The interpret is how to prejudice the doctrine’s first criterion —lack of defending party Certainly, to the that if context. the “defend- —in ing Milek, party” prejudice: to be considered is there is no clearly record reflects that Milek received notice the cancella- just tion and certainly, did not effect a cure. But as if the worker, appropriate “defending party” injured is the there will be prejudice recovery because he can achieve from the Fund is not enjoy co-extensive with the benefits he would under the NJM policy. (providing only pays See N.J.S.A 34:15-120.2 that Fund benefits, expenses temporary permanent for medical but benefits). disability
Although practical obvious, effect this conclusion is direct and, unfortunate, regrettably, injured an worker who most is a third-party beneficiary policy of insurance cannot under consti- “defending party” purposes analyzing applica- tute the doctrine; designation tion of the substantial be- longs employer whose insurance was cancelled and who, therefore, solely employees’ stands liable for his so, If prejudice claims. that is then there is no “defending party,” requiring the balance be struck in NJM’s favor. criterion, respect of the fifth NJM also had reasonable
explanation strictly comply requirements for its failure to 81(b). Notwithstanding of N.J.S.A the clear directive in 34:15— statute, it cannot be said that it was unreasonable for NJM to rely system adopted by on the FTP purpose CRIB fоr the and, streamlining submission of cancellation data the same token, for it to believe use of the FTP alone would Although hindsight may suffice. reveal that decision as ill-ad- *22 62 it not so unreason
vised, presented was circumstances under the of the doctrine reject application action as to able a course of its expression of particular, In CRIB’s compliance. of substantial statutory system, light of CRIB’s of the FTP preference for use compliance conclusion that role, reasonable gave rise to NJM’s statutory com methodology suffice for requested would circumstances, an enti analogous pliance purposes. In somewhat agency’s or determination governmental advice ty’s on a reliance equitable estoppel. See Skulski purposes for of can be reasonable (1975) Nolan, 179, 198, (remanding for A.2d 721 v. light equitable estoppel applicability of determination about reliance); relating Aqua Beach Con unique considerations cf. Community Affairs, N.J. 890 A.2d Dep’t do. Assn. v. (2006) estoppel operate (recognizing potential equitable on ab agency, rejecting application based against public but reliance). injustice or reasonable of either manifest sence successfully may invoke large part, the conclusion that NJM compliance in these circumstances rests of substantial the doctrine mispercep- proofs that NJM’s persuasive and unrebutted on the on unique, widespread but was was based tion not instead was FTP would suggestion that use CRIB’s inadvertent However, it must be statutory compliance purposes. suffice for beyond that, litigation, it is doubt emphasized as a result of this that, may rely simply on electronic data prospectively, insurers policies, but methods to effect the cancellation transmission necessary certification under N.J.S.A. instead must insure 81(b) a valid cancellation is submitted in order to effect also 34:15— policy. of a workers’
IV.
to cloak
suffices
Although the doctrine
substantial
statutory
I
must
protection,
nevertheless
NJM’s actions
reasoning.
inconsistency
majority’s
glaring logical
address
I
majority’s
one to which
subscribe —the
In the
view—and
clear,
crystal
simple
direct:
arе
provisions of N.J.S.A 34:15-81
in order to effect a valid
cancellation of a workers’
insurance,
(1)
policy of
ten-day
carrier must
send a minimum
(2)
mail,
by registered
written notice to the
provide
insured
“like notice”
Banking
Commissioner of
and Insurance
*23
together
separate
with a
required
certification that the
to
notice
sure,
given.
the insured has been
To
satisfy
be
NJM failed to
is,
last requirement,
certify
that
that
that it
to the Commissioner
statutory
that
given.
notice to the
insured
fact was
I
conclude that
penalized by
NJM should not be
its failure because
reasonable,
its actions were
regula-
excusable and consistent with
direction,
tory
albeit a
direction that was
error. That conclu-
any recovery
sion bars
against
any
or
NJM
other workers’
compensation
did,
why
carrier
acted as and
NJM
by Sroezynski
situated,
anyone
similarly
either
or
else
puts
and
matter
to rest.
Seeking
parade
presented
to avoid the
of
horribles
amici—
practical
invalidating
prior
that “the
effect of
all
cancellations with
respect
electronically
which notice was
afforded would
be
create chaos in the
industry[,]”
ante at 44-
45,
concludes,
majority
It
repeating
voluntary
needs
is the
relinquishment
Smeal,
right.”
intentional
aof
known
Knorr v.
169, 177,
(2003)
178 N.J.
(citing
Jersey
be
provided
expressly,
stated
intent to waive need
be
“The
clearly
party
right
that the
knew the
show
circumstances
Ibid,
it,
(citing
design
either
or indifference.”
then abandoned
235, 254,
N.J.Super.
Corp.
Eggleston,
v.
68
Indem.
Merchs.
of N.Y.
114,
A.2d
(App.Div.1961), aff'd, 37 N.J.
179
505
A.2d
Knorr,
89,
(quoting
supra).
Specifically, “waiver
To
in
a valid
gation
comply
with N.J.S.A. 34:15-81
order
effect
unambiguous.
If
carrier fails to
cancellation is clear and
abide
dictates,
only
by that
two
two alternatives remain:
statute’s
and
substantially complied
the carrier is
to have
either
deemed
none;
and, hence,
did
is liable to
or
carrier
the statute
substantially comply
and, thus,
with the statute
is liable to all.
hybrid
relief
together
cobbled
majority whereby
—
“Sroezynski
party
previously
who
raised
notice
granted
issue should be
relief
improper
from the
cancellations but
that those
challenged
cancellations
were never
should stand
policyholders
so[,]”
because
right
waived their
to do
ante at
44-45,
V. substantially I complied Because conclude that NJM requirements 34:15-81, similarly I N.J.S.A. that all conclude and, hence, were cancellations effective it bears no liability Thus, view, my thereunder. in the correct result here is judgment that the Appellate Division should be reversed and the Compensation cause remanded to the Division of Workers’ entry judgment for the dismissing favor of NJM Sroe- zynski’s petition. majority Because the reaches different result basis, on an unsustainable I respectfully dissent. joins opinion.
Justice HOENS in this part/reversal part For Justice affirmance —Chief LONG, ALBIN, RABNER and Justices and WALLACE —4. part; part For concurrence in dissent in RTVERA- —Justices
SOTO, and HOENS —2.