NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4034-14T4
KEYKO GIL, Individually and
as Guardian ad Litem for the APPROVED FOR PUBLICATION
infant KENNETH GIL,
June 19, 2017
Plaintiffs-Appellants,
APPELLATE DIVISION
v.
CLARA MAASS MEDICAL CENTER,
Defendant-Respondent,
and
HUSEYIN COPUR, M.D., and FIRSTCHOICE
OB-GYN LLC,
Defendants,
and
EXECUTIVE RISK SPECIALTY INSURANCE
COMPANY; LEXINGTON INSURANCE
COMPANY; ENDURANCE SPECIALTY
INSURANCE COMPANY, LTD; FIRST
SPECIALTY INSURANCE COMPANY; and
STEADFAST INSURANCE COMPANY,
Defendants-Respondents.
______________________________________________________
Argued December 6, 2016 – Decided June 19, 2017
Before Judges Fisher, Ostrer and Vernoia
(Judge Ostrer concurring).
On appeal from the Superior Court of New
Jersey, Law Division, Essex County, Docket No.
L-8434-11.
David A. Mazie argued the cause for appellants
(Mazie Slater Katz & Freeman, LLC, attorneys;
Mr. Mazie and David M. Estes, on the brief).
Lauren M. Strollo argued the cause for
respondent, Clara Maass Medical Center
(Vasios, Kelly & Strollo, P.A., attorneys; Ms.
Strollo, of counsel; Douglas M. Singleterry,
on the brief).
Katherine E. Tammaro argued the cause for
respondent Executive Risk Specialty Insurance
Company (Tressler LLP, attorneys; Ms. Tammaro,
of counsel; Ms. Tammaro and Kevin Sullivan,
on the brief).
Michael J. Rossignol argued the cause for
respondents Lexington Insurance Company,
Endurance Specialty Insurance, LTD., First
Specialty Insurance Company and Steadfast
Insurance Company (Riker Danzig Scherer Hyland
& Perretti LLP, attorneys; Mr. Rossignol, of
counsel and on the brief; Brooks H. Leonard,
on the brief).1
John T. Coyne argued the cause for respondents
Endurance Specialty Insurance, Ltd., and First
Specialty Insurance Corporation (McElroy,
Deutsch, Mulvaney & Carpenter, LLP, attorneys;
Mr. Coyne, of counsel and on the brief).
Kevin T. Coughlin argued the cause for
respondent Steadfast Insurance Company
(Coughlin Duffy, LLP, attorneys; Julia C.
Talarick, of counsel and on the brief).
The opinion of the court was delivered by
1
These respondents, and those respondents whose appearances follow
above, filed a joint brief. The brief's authors from each law firm
are noted in their firm's separate appearances.
2 A-4034-14T4
FISHER, P.J.A.D.
In this appeal, we examine clauses contained in insurance
policies covering a hospital to determine, among other things,
whether the trial judge erred in rejecting plaintiffs' arguments
that an allegedly negligent physician was also covered because he
was the hospital's "employee" or a "leased worker," or because his
limited liability company was "affiliated or associated" with the
hospital. We conclude the policy language could not be plausibly
interpreted to provide coverage to the physician or his limited
liability company, and affirm.
I
In 2011, plaintiff Keyko Gil, on her own behalf and for her
infant child, Kenneth, commenced this medical malpractice action
against Huseyin Copur, M.D., FirstChoice OB/GYN LLC, and Clara
Maass Medical Center, alleging that Kenneth's birth defects were
caused by an emergency Caesarian section performed by Dr. Copur
at Clara Maass in 2004. At the time of the procedure, Dr. Copur
was purportedly acting in accordance with a services agreement
between Clara Maass and FirstChoice; the latter was an entity
formed by Dr. Copur and another physician.
By motion, the trial judge capped Clara Maass's exposure at
$250,000, pursuant to the Charitable Immunities Act, N.J.S.A.
3 A-4034-14T4
2A:53A-1 to -11, and denied without prejudice plaintiffs' motion
to declare Dr. Copur an employee of Clara Maass. The judge,
however, granted plaintiffs leave to file an amended complaint and
later permitted another amendment by which plaintiffs sought
relief on their own behalf, and as assignees of Dr. Copur and
FirstChoice,2 against defendant Executive Risk Specialty Insurance
Company, which issued a policy to Saint Barnabas Health Care
System3 covering its "employees," and against defendants Lexington
Insurance Company, Endurance Specialty Insurance, Ltd., First
Specialty Insurance Company, and Steadfast Insurance Company,
which provided excess insurance.4 The trial judge later severed
2
Dr. Copur and FirstChoice's insurer paid plaintiff its $1,000,000
policy limit "in exchange for any alleged rights under the subject
policies and the agreement that plaintiff [would] not seek to
execute on the assets" of Dr. Copur or FirstChoice beyond that
policy limit.
3
Clara Maass is part of the St. Barnabas system.
4
Specifically, the primary coverage consisted of Clara Maass's
self-insured retention of $1,000,000, followed by Executive Risk's
policy, which provided $7,000,000 in coverage, and Lexington's
policy, which provided $25,000,000 in coverage. Excess coverage,
which followed the form of Lexington's policy, consisted of:
$25,000,000 provided by Endurance Specialty; $15,000,000 provided
by First Specialty; $20,000,000 provided by Steadfast; and
$15,000,000 provided by Executive Risk.
4 A-4034-14T4
the coverage claims from the medical negligence claim, pending
disposition of the former.5
Following the entry of summary judgment on the coverage issues
in the insurers' favor, plaintiffs filed this appeal, posing issues
about the interpretation of the relevant policies. Because summary
judgment was entered, we employ the familiar Brill6 standard which
the trial judge was also required to apply. See Townsend v. Pierre,
221 N.J. 36, 59 (2015).
II
In ascertaining whether the policies provided coverage for
either Dr. Copur or FirstChoice or both, we first consider that
the policies expressly covered "named insured[s]." FirstChoice and
5
Because there has been no final disposition of the malpractice
claims, plaintiffs' appeal concerns only interlocutory orders and
required our leave to appeal. Grow Co. v. Chokshi, 403 N.J. Super.
443, 457-61 (App. Div. 2008). We would have, however, likely
granted leave to appeal in this situation had it been requested;
consequently, we choose to exercise our discretion in favor of
reviewing these interlocutory orders now rather than await final
disposition of all issues in the trial court. See General Motors
Corp. v. City of Linden, 279 N.J. Super. 449, 455-56 (App. Div.
1995), rev’d on other grounds, 143 N.J. 336, cert. denied, 519
U.S. 816, 117 S. Ct. 66, 136 L. Ed. 2d 27 (1996).
6
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
5 A-4034-14T4
Dr. Copur, however, were not specifically listed in any of the
policies as "named insureds."7
The Executive Risk policy, however, also defined "insured"
as including not only those expressly "named" but also "any
[e]mployee or [v]olunteer." Since it has not been argued that Dr.
Copur was a volunteer, we turn to that part of the policy that
defined an "employee" as
any person who has an assigned work schedule
for and is on the regular payroll of the Named
Insured, with federal and state taxes
withheld. Independent contractors are not
Employees. An Employee's status as an Insured
shall be determined as of the date of the
Occurrence or Wrongful Act upon which a Claim
involving the Employee is based.
The Lexington policy – which was followed, as to its form,
by the other excess insurers – also included coverage for Clara
Maass's "employees" "but only for acts within the scope of their
employment . . . or while performing duties related to the conduct
of [Clara Maass's] business." The word "employee" is defined in
that policy as "a person paid by [Clara Maass] in connection with
[its] business." The word "employee" does not include "a temporary
7
The list of named insureds also includes a "catch-all" provision
that encompasses "any owned or controlled subsidiary, associated
or affiliated company, corporation, partnership OR entity as now
exists of may hereafter be constituted, acquired or formed."
6 A-4034-14T4
worker[8] or independent contractor,[9]" but does include "a leased
worker," which was described as "a person leased to [the named
insured] by a labor leasing firm, under an agreement between [the
named insured] and the labor leasing firm, to perform duties
related to the operations as described in the Declarations and
which are at [the named insured's] direction."
III
In granting summary judgment in favor of the insurers through
his reading of the policy provisions quoted above, the trial judge
rejected plaintiffs' arguments: (a) that Dr. Copur was an
"employee," (b) that either Dr. Copur or FirstChoice fell within
the terms of the "catch-all" provisions, or (c) that Dr. Copur was
a "leased worker." We separately consider these arguments. But,
before that, we observe that although, as summary-judgment
movants, the insurers were required to demonstrate the absence of
a genuine dispute of all material facts, Brill, supra, 142 N.J.
at 540, the ultimate burden of persuasion rested with plaintiffs,
who stood in the shoes of Dr. Copur and FirstChoice on these
8
"[T]emporary worker" was defined as "a person who is furnished
to [the named insured] to substitute for a permanent employee on
leave or to meet seasonable or short-term work load requirements."
9
"[I]ndependent contractor" was not defined.
7 A-4034-14T4
issues,10 to show the policies provided coverage. See Wakefern Food
Corp. v. Liberty Mut. Fire Ins. Co., 406 N.J. Super. 524, 538
(App. Div.), certif. denied, 200 N.J. 209 (2009); Polarome Int'l,
Inc. v. Greenwich Ins. Co., 404 N.J. Super. 241, 258 (App. Div.
2008), certif. denied, 199 N.J. 133 (2009).
A
The parties' debate goes so far as to question how we should
determine whether Dr. Copur was an employee for purposes of the
insurance policies in question. Plaintiffs invite us to look to
common-law principles regarding what it means to be an employee
or independent contractor. The insurers urge that we stick to the
plain meaning of the words and phrases employed without straying
into other areas where societal policies require an alternate
view. In this circumstance, we agree with the insurers but will
nevertheless discuss both approaches.
(1)
The policies expressly defined an "employee" as a person who
is paid by the named insured, here Clara Maass. The Executive Risk
policy is very explicit in this regard, defining an employee within
the meaning of that policy as "any person who has an assigned work
10
Elat, Inc. v. Aetna Cas. & Sur. Co., 280 N.J. Super. 62, 67
(App. Div. 1995).
8 A-4034-14T4
schedule for and is on the regular payroll of the Named Insured,
with federal and state taxes withheld." Dr. Copur testified at his
deposition that he was not an employee, and it is undisputed that
he was not on Clara Maass's "regular payroll."
The other policies do not define the term "employee" by
insisting upon that person being on the named insured's "regular
payroll" but nevertheless require that the purported "employee"
be "a person paid by [Clara Maass] in connection with [its]
business." Again, there is no dispute that Dr. Copur was not paid
by Clara Maass; FirstChoice was compensated by Clara Maass,11 and
Dr. Copur was paid by FirstChoice.
Undaunted, plaintiffs argue that even in the absence of
evidence that Dr. Copur was paid by Clara Maass, other indicia of
the relationship suggested that Dr. Copur was not an "independent
contractor," which none of the policies defined. In other words,
because "independent contractor" was not defined, plaintiffs argue
that evidence tending to show Dr. Copur did not fit the common-
law understanding of an "independent contractor" would, a
fortiori, demonstrate his status as an "employee." We are not
persuaded. Because the word "employee" is defined by reference to
11
Plaintiffs have not argued that FirstChoice was an "employee"
for purposes of any of these insurance policies.
9 A-4034-14T4
specific attributes and "independent contractor" is not defined
at all, we reject plaintiffs' syllogism.
General rules of interpretation require that, so long as it
leads to a result in harmony with the contracting parties' overall
objective, a specific, defined term controls a general, undefined
term. See Bauman v. Royal Indem. Co., 36 N.J. 12, 22 (1961); George
M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 35
(1954); Burley v. Prudential Ins. Co., 251 N.J. Super. 493, 500
(App. Div. 1991). "Specific language in a contract controls over
general language, and where specific and general provisions
conflict, the specific provision ordinarily qualifies the meaning
of the general." DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d
954, 961 (Del. 2005). "Even absent a true conflict, specific words
will limit the meaning of general words if it appears from the
whole agreement that the parties' purpose was directed solely
toward the matter to which the specific words or clause relate."
11 Williston on Contracts § 32.10, at 744 (4th ed. 2012).
Contrary to plaintiffs' contentions, we must first ascertain
whether Dr. Copur meets the policy's specific definition of what
it means to be an "employee" for purposes of insurance coverage.
If he does not meet that definition, we may then conclude he was
10 A-4034-14T4
an independent contractor.12 We should not, as plaintiffs argue,
determine whether Dr. Copur is an independent contractor and, if
not, conclude he must be an employee even if he does not possess
the one attribute the contracting parties obviously viewed as
controlling – whether he was paid by Clara Maass.
Moreover, we reject an even more basic premise to plaintiffs'
argument – their contention that we must look to definitions of
"employee" and "independent contractor" contained in the common
law or as defined by or consonant with remedial legislation. We
must not forget we are construing a contract created by
sophisticated parties. The insurance policies in question do not
remotely suggest that we should look to principles of law
applicable to different circumstances as a means for ascertaining
the meaning of the policies' terms. The contracting parties had a
particular understanding that Clara Maass "employees" should be
covered but that the attributes of an employee were specific and
were not to be broadened by resort to common-law principles applied
12
In short, an individual in this situation can fit only two
categories – employee or independent contractor – and that if he
fell within one he cannot fall within the other and vice versa.
We recognize the policies suggest other possibilities, i.e.,
volunteer, temporary worker, and leased worker. But there is no
dispute that Dr. Copur was not a volunteer or temporary worker,
and we find no merit, as discussed later, in the argument that he
was a leased worker. Consequently, we approach the immediate
problem as questioning only whether Dr. Copur was an employee and,
if not, he was an independent contractor.
11 A-4034-14T4
in other circumstances, particularly those principles and policies
that call for a broad or liberal interpretation of the term. For
example, the word "employee" has been defined broadly when
determining whether an individual was entitled to the benefits of
the workers' compensation statutes, the Conscientious Employee
Protection Act, N.J.S.A. 34:19-1 to -14, and the Tort Claims Act
(TCA), N.J.S.A. 59:1-1 to 12-3. See Lippman v. Ethicon, Inc., 222
N.J. 362, 379 (2015); D'Annunzio v. Prudential Ins. Co. of Am.,
192 N.J. 110, 126-27 (2007); Lowe v. Zarghami, 158 N.J. 606, 617-
18 (1999). In those instances, public policy and the remedial
nature of the underlying social legislation "dictate[d] a more
liberal standard." Id. at 618. Those same societal interests are
not at play here.
In short, we decline the invitation to interpret the parties'
expressions of what it means to be an "employee" for their purposes
as if those insurance policies stated:
Your "employees" are covered, "independent
contractors" are not; the terms "employee" and
"independent contractor" are to be defined by
and construed in accordance with New Jersey
common law.
That is not a plausible interpretation of these policies.
12 A-4034-14T4
(2)
Having rejected plaintiffs' proposed methodology for
interpreting these policies, for the sake of completeness we
examine plaintiffs' argument that Dr. Copur was not an independent
contractor within the meaning of the common law. In their
description of the common-law approach, plaintiffs correctly
observe that our courts use "two different tests to distinguish
employees from independent contractors," i.e., the "control test"
and the "relative nature of work test." Lowe, supra, 158 N.J. at
615-16.
The "control test" requires consideration of four factors:
"(1) the degree of control exercised by the employer over the
means of completing the work; (2) the source of the worker's
compensation; (3) the source of the worker's equipment and
resources; and (4) the employer's termination rights." Id. at 616.
A worker's status as an employee can "often be solidly proved on
the strength of one of the four items." Tofani v. LoBiondo Bros.
Motor Express, Inc., 83 N.J. Super. 480, 486 (App. Div.), aff'd
o.b., 43 N.J. 494 (1964). The Supreme Court described the
relationship of the "control test" with the "relative nature of
work test":
If the court determines that a person is an
employee under the control test, then the
inquiry ends there. If, however, the control
13 A-4034-14T4
test is inconclusive, then the court must
determine whether it is appropriate to apply
the relative nature of the work test.
[Lowe, supra, 158 N.J. at 618.]
The "relative nature of the work test" calls for an examination
of "the extent of the economic dependence of the worker upon the
business he serves and the relationship of the nature of his work
to the operation of that business." Marcus v. Eastern Agricultural
Ass'n, 58 N.J. Super. 584, 603 (App. Div. 1959) (Conford, J.A.D.,
dissenting), rev'g on dissent, 32 N.J. 460 (1960); see also Lowe,
supra, 158 N.J. at 616. When "the working relationship" – like
here – "involves professional services where an employer cannot
exercise control over the methods used to provide those services,
the relative nature of the work test may provide a more accurate
assessment of the working relationship." Id. at 618.
Application of the "control test" overwhelmingly precludes a
finding that Dr. Coper was an employee. As we have already
observed, Dr. Copur was not paid by Clara Maass, and Clara Maass
had no control over Dr. Copur's efforts on behalf of the patient,
even though FirstChoice's contractual arrangement with Clara Maass
called for Dr. Copur's compliance with Clara Maass's bylaws and
14 A-4034-14T4
regulations.13 And the use by Dr. Copur of any equipment provided
by Clara Maass was purely incidental to his treating of patients.
It may be true, in considering the test's fourth aspect, that
Clara Maass was entitled to prevent Dr. Copur from practicing
medicine in its facility, but, in the final analysis, the control
test has no application to the relationship between Dr. Copur and
Clara Maass because his services on behalf of patients were not
guided by Clara Maass but by the doctor's own knowledge, experience
and judgment. As the Court recognized in Lowe, "it would be
inconsistent with the nature of a physician's work for [the]
employer to dictate the details of how [to] perform[] the practice
of medicine . . . [as] control is 'inimical to the task to be
performed,' since the nature of the work depends upon the
professional's independent exercise of judgment." 158 N.J. at 618-
20 (quoting Delbridge v. Office of Pub. Def., 238 N.J. Super. 288,
322 (Law Div. 1989)). Dr. Copur could not be viewed as an employee
under the control test.
We also agree with the trial judge's rejection of the
contention that the "relative nature of the work" test required a
13
As observed in Lowe, the fact that Clara Maass exercised control
by rules applicable to "paperwork and other administrative
procedures," does not mean Clara Maass did or could exercise
"control over the way in which [Dr. Copur] operated on [a patient,]
or [the selection of Dr. Copur's] choice of treatment." 158 N.J.
at 619.
15 A-4034-14T4
finding that Dr. Copur was a Clara Maass employee. To repeat, we
emphasize there is nothing about the policy language that would
suggest an intention to apply this common law test as the means
for ascertaining whether a particular individual was covered by
the policies. But, even if we were to conclude otherwise, we find
the "relative nature of the work" test does not support an argument
that Dr. Copur was a Clara Maass employee.
This test has been used either as the means for determining
whether an individual is entitled to workers' compensation
coverage or whether an individual should be deemed a public
employee for TCA purposes. Lowe, supra, 158 N.J. at 617. For those
purposes, the test considers both economic dependence and "whether
the goals of the business are served by concluding that the
particular worker is an employee." Id. at 622. Lowe, which
considered the application of this test to a physician – but for
the purpose of determining whether he was a public employee
entitled to TCA immunities – nevertheless found the physician to
be an employee because he was "totally economically dependent on
UMDNJ and his work constituted an integral part of UMDNJ's
business." Id. at 623.
The record does not reveal the same degree of economic
dependence here as in Lowe. First, as we have repeatedly mentioned,
Clara Maass did not pay Dr. Copur. In addition, Dr. Copur and
16 A-4034-14T4
FirstChoice did not have offices at Clara Maass. And Dr. Copur and
FirstChoice could and did engage in the practice of medicine
outside the aegis of Clara Maass; in that regard, Dr. Copur
testified at a deposition that he had privileges at Hackensack
Hospital. Application of the second aspect of this test – "the
relationship of the nature of [the alleged employee's] work to the
operation of that business," id. at 616 – considers whether the
alleged employer's business goals would be promoted by the
individual's status as an employee. Id. at 622-23. Plaintiffs'
claim that this test applied here is belied by the fact that the
agreement between Clara Maass and FirstChoice did not require the
former to provide professional liability insurance for the latter.
And Clara Maass' business goal included a reduction of malpractice
exposure, the reduction of insurance costs, and an avoidance of
depletion of its self-insurance fund. Dr. Copur was, in essence,
a "house" physician14 for Clara Maass' clinic, which offered
services to patients of limited means. Increasing the costs of
these services through a finding that Dr. Copur, or other
physicians similarly situated, are entitled to be treated, for
insurance purposes, as Clara Maass employees would likely increase
the costs associated with operating the clinic.
14
In essence, being "available for emergencies."
17 A-4034-14T4
For all these reasons, we reject plaintiffs' argument that
Dr. Copur was a Clara Maass employee.
B
Plaintiffs also argue that FirstChoice falls within the so-
called "catch-all" provision. We, again, disagree.
This argument centers around provisions in the Executive Risk
and Lexington policies that incorporate a list of "named insureds"
which, along with those specifically named, includes coverage for:
[a]ny owned or controlled subsidiary,
associated or affiliated company,
corporation, partnership or entity as now
exists OR who may hereafter be constituted,
acquired or formed.
Plaintiffs argue that this provision is ambiguous – that it is
susceptible to more than one plausible interpretation, Chubb
Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238
(2008) – chiefly because, according to plaintiffs, individuals
involved in underwriting this policy "admitted that it is
ambiguous." Plaintiffs also contend that, because the phrase
"associated or affiliated company" is not defined in the policy,
a question of fact is presented as to whether a particular entity
is associated or affiliated with Clara Maass.
We reject plaintiffs' argument that "[t]he underwriter who
approved the catch-all provision admitted that it is ambiguous."
18 A-4034-14T4
In this regard, plaintiffs mainly rely on the underwriter's
deposition testimony where she expressed that she "did not
completely understand at the time – what they were intending." We
don't agree that this or any of her other testimony constituted
an admission that the catch-all phrase was ambiguous. Instead, the
deposition testimony – to the extent the underwriter's personal
view of the policy's meaning has relevance – reveals that the
catch-all provision did have for her a clear purpose, i.e., to
incorporate as a named insured any entity that might have been
omitted from the list of numerous entities that the principal
named insured wanted covered. As the underwriter explained, the
named insured basically presented a list of those entities then
insured and sought inclusion of language in the policy that would
provide coverage for any entity "inadvertently left off" the list;
in short, the underwriter described the catch-all provision as "a
belt and suspenders" provision.
To be sure, the underwriter's description of what was intended
is not entirely clear. But her testimony does not support
plaintiffs' declaration that the underwriter "admitted" the phrase
is "ambiguous." Even viewed expansively, we consider this
deposition testimony as revealing only an intent to include those
entities on a list of organizations and other similar organizations
19 A-4034-14T4
that might have been overlooked or might come into being during
the coverage period.
Moreover, any uncertainties expressed by the underwriter or
others cannot convert the plain ordinary meaning of the policies'
words and phrases into something doubtful and ambiguous. In
interpreting insurance policies, we give words and phrases their
ordinary meaning. Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595
(2001). In seeking relief, it is noteworthy that plaintiffs do not
provide what they believe is another plausible interpretation but,
instead, suggest only the presence of a genuine factual dispute
about the catch-all provision's scope because its terms are
undefined. The lack of a definition, however, does not, as
plaintiffs argue, "automatically" create an ambiguity. Priest v.
Roncone, 370 N.J. Super. 537, 544 (App. Div. 2004); see, e.g.,
Boddy v. Cigna Prop. & Cas. Cos., 334 N.J. Super. 649, 656-57
(App. Div. 2000).
Despite plaintiffs' failure to suggest a plausible
interpretation that might be applied to create coverage for
FirstChoice under the policies, we nevertheless examine the catch-
all provision in search of ambiguity.
We start with the fact that plaintiffs do not, because they
cannot, dispute that FirstChoice does not fit much of the
descriptive words contained in the catch-all phrase; FirstChoice
20 A-4034-14T4
was not an "owned or controlled subsidiary" of Clara Maass, and
it was not later "constituted, acquired or formed."
We also agree with the insurers that FirstChoice was not an
"associated or affiliated company." The latter part of this phrase
– "affiliated company" – has no application because that phrase
is ordinarily understood as conveying some degree of ownership or
control by the insured over the so-called "affiliated company."
That is, an "affiliate" is understood to be a "corporation that
is related to another corporation by shareholdings or other means
of control; a subsidiary, parent, or sibling corporation." Black's
Law Dictionary 69 (10th ed. 2014).15
Although of less certain meaning, the phrase "associated
company" should be understood as connoting something similar to
"affiliated company" pursuant to our familiar interpretive guides.
For example, it is well understood that "the meaning of words may
be indicated and controlled by those with which they are
associated." Germann v. Matriss, 55 N.J. 193, 220 (1970); see also
Shelton v. Restaurant.com, Inc., 214 N.J. 419, 440 (2013). As
15
We recognize this edition of Black's Law Dictionary was published
after the policies were formed. Earlier editions in existence at
that time, however, also insisted that an "affiliated company" be
"related to another corporation by shareholding or other means of
control," Black's Law Dictionary 59 (7th ed. 1999), or owned or
"effectively controlled by another company," Black's Law
Dictionary 58 (6th ed. 1990).
21 A-4034-14T4
particularly relevant in the insurance world – where scriveners
often use series of similar words and phrases as the means of
reaching or ensuring a particular goal – "words of a feather flock
together." Consequently, we reject the contention that the phrase
"associated company" may be given a far greater scope than its
neighboring phrases – "owned or controlled subsidiary," and
"affiliated company" – were intended to encompass. In short, we
find implausible an interpretation that the catch-all provision
was meant to include an entity having no relation other than the
fact that it entered into an arms-length contract with a named
insured. Were we to interpret the provision as broadly as
plaintiffs would suggest, the policy would conceivably include
coverage for entities that provide janitorial services or garbage
removal to the named insureds. As a result, we conclude that the
phrase "associated company" requires some ownership link between
the named insured and the alleged "associated company." 16 Only in
that way, could this term be harmonized with its neighboring words
and phrases. Any other conclusion would be inconsistent with the
words utilized by the parties in defining their rights and
obligations.
16
Clara Maass refers to www.investopedia.com, where "associate
company" is defined as an entity whose parent company "owns only
a minority stake of the corporation, as opposed to a subsidiary
company, where a majority stake is owned."
22 A-4034-14T4
C
Plaintiffs lastly contend that the policies cover Dr. Chopur
because he was a "leased worker." We disagree with this as well.
We initially observe that the judge determined plaintiffs
failed to comply with their discovery obligations, as required by
Rule 4:17-7, by failing to identify this "leased worker" argument
in response to interrogatories. Because we find no merit in the
"leased worker" argument, we need not reach this discovery issue.
The policy definition of "employee," as mentioned earlier,
"includes a leased worker," which is defined as "a person leased
to [the named insured] by a labor leasing firm, under an agreement
between [the named insured] and the labor leasing firm, to perform
duties related to the operations as described in the Declarations
and which are at [the named insured's] direction."17 Key to a
determination of whether Dr. Copur was a "leased worker" is whether
FirstChoice was a "labor leasing firm." As understood in this
context, a "labor leasing firm" is
a company in the business of placing its
employees at client companies for varying
lengths of time in exchange for a fee. In other
words, a "labor leasing firm" is a business
concern that sells another person's work for
a specified time and for a specified fee.
17
We also previously observed that this definition expressly
excludes "a temporary worker or independent contractor."
23 A-4034-14T4
[Telamon Corp. v. Charter Oak Fire Ins. Co.,
850 F.3d 866, 870 (7th Cir. 2017) (quotations
and citations omitted).]
This definition does not turn on how the agreement between the
alleged lessor and lessee is labeled, i.e., the contract between
Clara Maass and FirstChoice need not have been described by them
as a "lease" in order to be encompassed. Scottsdale Ins. Co. v.
Torres, 561 F.3d 74, 78 (1st Cir. 2009).
But the application of this provision does depend on whether
FirstChoice was in the business of leasing its employees to others.
The record amply demonstrates that FirstChoice was an entity by
and through which its member physicians practiced medicine.
Although it provided physicians to perform certain services on
Clara Maass's behalf for specific compensation, there is no
evidence to suggest this was FirstChoice's sole or chief reason
for existing. As the record reveals, FirstChoice had offices in
Lyndhurst where its physicians saw and treated patients outside
Clara Maass's auspices and control. And to the extent its agreement
with Clara Maass might be assumed to be a leasing agreement, it
has not been shown that FirstChoice had any similar agreements
with any other entities. We, thus, reject the argument that
FirstChoice is a labor leasing firm.
In addition, for there to be coverage, it is still not enough
to determine that FirstChoice was a labor leasing firm. Plaintiffs
24 A-4034-14T4
were also required to show, as the provision demands, that the so-
called "leased worker" performed services for the company to which
he was leased "at [the named insured's] direction." Our earlier
determination – that Dr. Copur did not meet the "control test" –
leads us also to conclude that he did not perform services at the
hospital at Clara Maass's direction; instead, he was chiefly guided
by his own professional judgment in the rendering of treatment to
the hospital's patients.
Dr. Copur could not be considered a "leased worker" within
the meaning of the policies in question.
IV
We lastly note that plaintiffs have argued the judge erred
in dismissing their estoppel claims. We find insufficient merit
in that argument to warrant further discussion in a written
opinion. R. 2:11-3(e)(1)(E).
For all these reasons, we find no merit in plaintiffs'
arguments that the insurance policies in question provide coverage
for either Dr. Copur or FirstChoice.
Affirmed.
25 A-4034-14T4
_______________________________
OSTRER, J.A.D., concurring.
I concur in the court's judgment and join in all but part
III(A)(2) of its opinion. This is an insurance coverage case.
The issue before the court is whether Dr. Copur was an insured
under any of Clara Maass's policies. These policies covered
employees, but not independent contractors off the payroll. So,
the task turned to ascertaining whether Dr. Copur was an
"employee."
Plaintiff made a fundamental error in contending the control
test and relative nature of the work test inform the meaning of
the policy term. As the court ably explains, plaintiff was looking
for the definition of "employee" in the wrong place. The answer
lies in the language of the insurance agreements, in particular,
their definition of "employee." The parties to the policy were
free to include, or not, a variety of persons who labor in the
hospital. In this case, Dr. Copur and other independent
contractors not on the payroll were left out. Thus, it is
irrelevant whether Dr. Copur satisfied common law definitions of
an employee, either by the control test or by the relative nature
of the work test.
In a variety of legal settings, courts have grappled with
whether a worker is an "employee." The answer affects workers'
entitlements and companies' obligations under remedial social
legislation and third-party rights to compensation. See, e.g.,
Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440,
444-51, 123 S. Ct. 1673, 1677-81, 155 L. Ed. 2d 615, 623-27 (2003)
(applying the common law definition of employee in a case involving
Americans with Disabilities Act where Congress did not expressly
define the term); Estate of Kotsovska ex rel. Kotsovska v. Liebman,
221 N.J. 568 (2015) (adopting a "hybrid" approach for determining
a worker's status under the Workers' Compensation Act); Hargrove
v. Sleepy's, LLC, 220 N.J. 289 (2015) (concluding that an employee
under the Wage Payment Law should be defined according to the so-
called "ABC test" under N.J.S.A. 43:21-19(i)(6)); Basil v. Wolf,
193 N.J. 38, 63-66 (2007) (utilizing a control test to determine
that an insurer was not vicariously liable for the negligence of
the physician it hired to examine a claimant); Lowe v. Zarghami,
158 N.J. 606, 614-24 (1999) (applying relative nature of the work
test to determine that a physician under the circumstances was a
public "employee" for purposes of the Tort Claims Act); Carpet
Remnant Warehouse, Inc. v. N.J. Dep't of Labor, 125 N.J. 567, 580-
87 (1991) (applying the "ABC test" to determine whether carpet
installers' services constituted employment, making them eligible
for unemployment compensation).
2 A-4034-14T4
The analysis is context-specific. To determine whether a
worker is an employee, a court must look to the specific statute's
terms and purpose or the underlying goals of the common law
doctrine. See, e.g., D'Annunzio v. Prudential Ins. Co. of Am.,
192 N.J. 110, 122 n.7 (2007) (stating that "in each setting-
specific analysis, what matters most is that an individual's status
be measured in the light of the purpose to be served by the
applicable legislative program or social purpose to be served").
In this case, the court's analysis lacks essential context.
Though the majority notes that its reasoning is dicta, I am
concerned it may be misread to indicate that, putting the insurance
coverage issue aside, Clara Maass should not be vicariously liable
for Dr. Copur's actions because, according to the majority, it
fails the control test and relative nature of work test. I am not
so sure. For example, I cannot agree that an obstetric surgeon's
use of a hospital's operating room is "purely incidental to his
treating of patients." However, I will not analyze each of the
factors that the majority considered, because my point is that we
need not, and indeed should not, go there.
More broadly, I am wary of applying our traditional common
law standards to increasingly complex and novel workplace
relationships. Were Clara Maass's vicarious liability the issue,
we would also likely consider whether it should be grounded on
3 A-4034-14T4
principles of apparent agency. See, e.g., Estate of Cordero ex
rel. Cordero v. Christ Hosp., 403 N.J. Super. 306, 312-18 (App.
Div. 2008); Arthur v. St. Peter's Hosp., 169 N.J. Super. 575, 581
(Law Div. 1979); see also Marjorie A. Shields, Annotation,
Liability of Hospital or Sanitarium for Negligence of Independent
Physician or Surgeon—Exception Where Physician Has Ostensible
Agency or "Agency by Estoppel", 64 A.L.R.6th 249 (2017);
Restatement (Second) of Torts § 429 (1965) ("One who employs an
independent contractor to perform services for another which are
accepted in the reasonable belief that the services are being
rendered by the employer or by his servants, is subject to
liability for physical harm caused by the negligence of the
contractor in supplying such services, to the same extent as though
the employer were supplying them himself or by his servants.").
We might also consider whether the traditional control and
relative nature of work tests should be modernized to account for
the shift in the nature of workplace relationships in our society,
which affects far more than the hospital or, more broadly, the
health care sector. See U.S. Gov't Accountability Office, GAO-
15-168R, Contingent Workforce: Size, Characteristics, Earnings,
and Benefits, 4, 12 (2015) (available at
http://www.gao.gov/assets/670 /669766.pdf) (most broadly defined,
contingent workers — that is, "temporary, contract or other forms
4 A-4034-14T4
of non-standard employment arrangements in which they may not
receive employer-provided retirement and health benefits, or have
safeguards such a job-leave under the Family Medical Leave Act" —
made up 35.3 percent of all employed workers in 2006 and 40.4
percent in 2010). No doubt, many workers desire independent
contractor or other non-standard employment relationships.
However, others are left with little choice but to accept them.
Over fifty years ago, Judge Conford recognized the
limitations of the control test in workers compensation cases
where "it is not in the nature of the work for the manner of its
performance to be within the hiring party's direct control . . . ."
Marcus v. Eastern Agricultural Ass'n, 58 N.J. Super. 584, 597
(App. Div. 1959) (Conford, J.A.D., dissenting), rev'g on dissent,
32 N.J. 460 (1960). The nature of work is changing. The advent
of the so-called "gig economy," and the increasing use of
"independent contractors," threaten to leave growing numbers of
workers unprotected by the remedial statutes designed to shield
them from the vagaries of the workplace. See Miriam A. Cherry &
Antonio Aloisi, "Dependent Contractors" in the Gig Economy: A
Comparative Approach, 66 Am. U. L. Rev. 635 (2017); Orly Lobel,
The Gig Economy & The Future of Employment and Labor Law, 51 U.S.F.
L. Rev. 51, 61 (2017) (observing that, "in the Gig Economy, the
distinction between independent contractor and employee continues
5 A-4034-14T4
to present definitional challenges and reveals the pervasive
practical difficulty in applying" traditional, multi-factor
tests). These new relationships also threaten to shield businesses
from liability for the harm those workers caused while laboring
on their behalf. Agnieszka A. McPeak, Sharing Tort Liability in
the New Sharing Economy, 49 Conn. L. Rev. 171, 188-215 (2016)
(describing how Uber and other companies in the "sharing economy"
that rely almost entirely on independent contractors present
challenges in the application of tort law). Scholars have
suggested that our common law needs to adapt in other ways to
assure compensation for wrongs committed by persons holding one
of these new positions. See, e.g., id. at 215-25.
The traditional common law tests, as applied by the majority,
may prove to be anachronistic. But that may be remedied. After
all, "[o]ne of the great virtues of the common law is its dynamic
nature that makes it adaptable to the requirements of society at
the time of its application in court." State v. Culver, 23 N.J.
495, 505, cert. denied, 354 U.S. 925, 77 S. Ct. 1387, 1 L. Ed. 2d
1441 (1957). "The common law has always had the inherent capacity
to develop and adapt itself to current needs . . . ." Collopy v.
Newark Eye & Ear Infirmary, 27 N.J. 29, 43-44 (1958); see also
White v. N. Bergen Twp., 77 N.J. 538, 551-52 (1978). Another
court, facing this issue more squarely than our panel, should
6 A-4034-14T4
consider whether the present circumstances warrant such an
adaptation.
As it is, this case does not require that we apply the
traditional control test and relative nature of work test.
Therefore, I would not.
7 A-4034-14T4