NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4860-15T1
M&S WASTE SERVICES, INC.,
Plaintiff-Appellant,
v.
PRAETORIAN INSURANCE CO.,
Defendant-Respondent,
and
RICHARD LECOMTE and
STATE OF NEW JERSEY DIVISION
OF WORKERS COMPENSATION,
Defendants.
_______________________________
Argued November 13, 2017 - Decided August 24, 2018
Before Judges Messano and Accurso.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No.
L-1977-12.
Ralph P. Ferrara argued the cause for
appellant (Ferrara Law Group, attorneys;
Ralph P. Ferrara and Morgan J. Zucker, on
the briefs).
James P. Ricciardi, Jr. argued the cause for
respondent (White Fleischner & Fino, LLP,
attorneys; James P. Ricciardi, Jr., on the
brief).
PER CURIAM
This matter, a dispute over cancellation of a workers'
compensation policy for non-payment of premium, returns to us
following our remand in 2014. See M&S Waste Servs. v.
Praetorian Ins. Co., A-4246-12 (App. Div. Aug. 14, 2014) (slip
op. at 9). We reversed summary judgment to defendant Praetorian
Insurance Co. and remanded to determine whether its alleged
prior practice of accepting late premiums and reinstating the
policy after cancellation reasonably led plaintiff M&S Waste
Services, Inc. to assume "to its detriment, that the policy
would be reinstated" when Praetorian cashed M&S's premium check
ten days after the date the policy was to be cancelled for non-
payment in October 2011. Ibid.
Following some additional discovery on remand, Praetorian
in 2015 again moved for summary judgment. The court dismissed
M&S's bad faith claim and ruled that Praetorian complied with
its statutory obligations for cancelling the policy under
N.J.S.A. 34:15-81(b), thus granting the motion in part. Finding
the factual dispute we found over the parties' course of dealing
relating to the acceptance of late premium payments not to have
2 A-4860-15T1
been "addressed and eliminated" by the additional discovery,
however, the court denied Praetorian summary judgment in part,
and the parties proceeded to a plenary hearing on that issue
before another judge.
That judge took testimony over the course of two days from
M&S's principal and the individual overseeing Praetorian's
workers' compensation operations and permitted the parties to
read into the record deposition testimony from her predecessor,
no longer employed by the company. After hearing from the
witnesses and considering the documents in evidence and the
arguments of counsel, the judge put a comprehensive opinion on
the record rejecting M&S's claims. Specifically, the judge,
although not "doubt[ing] [M&S's principal's] sincerity or his
bona fides at all," found "all of the prior cancellation notices
were paid before the cancellation took effect, and this one
wasn't."
Recapping his detailed findings, the judge stated:
I don't view this as a situation where
equitable estoppel applies whatsoever. The
course of conduct was that [M&S's principal]
always paid before the last date due, before
the cancellation took place. This is the
time that he didn't, and it cost him,
dearly, because he didn't have coverage.
Unfortunately, he didn't know about it,
because, for whatever reason, he didn't pay
attention to it until after the claim came
in. He didn't pay attention to it when he
3 A-4860-15T1
got notice of the audit, and I understand
that in the context that he had previously
had workers' compensation insurance with
different carrier or different carriers, and
knew that they do an audit to adjust the
premium at the end of the year. But this
wasn't the end of his . . . policy. This
was in December/January. His policy goes —
is supposed to go until April — the end of
April. So, again, it didn't set bells off
in his head that there was something amiss.
He's a reasonable person. He's a
reasonable businessman, and he made a
mistake in the Court's eyes that can't be
justified under the circumstances. So, for
those reasons I find in favor of the
defendant. I don't think there's a change
in the policy. I don't think it's a
situation where it . . . the grace [period]
applies, and even if it did, he passed it.
M&S appeals, arguing two points, one that the trial court
"committed reversible errors in its findings of fact and
conclusions of law which led to the erroneous dismissal of
claims." We reject that argument as without sufficient merit to
warrant discussion in a written opinion. See R. 2:11-
3(e)(1)(E). Final determinations of the trial court in a non-
jury case are subject to a limited and well-established scope of
review: "'we do not disturb the factual findings and legal
conclusions of the trial judge unless we are convinced that they
are so manifestly unsupported by or inconsistent with the
competent, relevant and reasonably credible evidence as to
offend the interests of justice[.]'" In re Trust Created By
4 A-4860-15T1
Agreement Dated December 20, 1961, ex rel. Johnson, 194 N.J.
276, 284 (2008) (quoting Rova Farms Resort, Inc. v. Investors
Ins. Co. of Am., 65 N.J. 474, 484 (1974)). Applying that
standard provides us no basis to disturb the judge's careful
findings here.
M&S's second point, that the motion judge erred in granting
partial summary judgment to Praetorian based on the court's
finding that Praetorian complied with the statutory requirements
for cancelling the workers' compensation policy, requires
discussion.
N.J.S.A. 34:15-81, the statute that governs cancellation of
workers' compensation policies, provides in pertinent part that:
No such policy shall be deemed to be
canceled until:
a. At least ten days' notice in
writing of the election to terminate such
contract is given by registered mail by the
party seeking cancellation thereof to the
other party thereto; and
b. Until like notice shall be filed in
the office of the commissioner of banking
and insurance, together with a certified
statement that the notice provided for by
paragraph "a" of this section has been
given; and
c. Until ten days have elapsed after
the filing required by paragraph "b" of this
section has been made.
5 A-4860-15T1
M&S does not dispute that Praetorian provided M&S with the
notice required by subsection (a). The question is whether the
"like notice" it provided to CRIB, the Compensation Rating and
Inspection Bureau, and specifically its "certified statement
that the notice provided for by paragraph 'a' of this section
has been given," complied with N.J.S.A. 34:15-81(b).
The Supreme Court addressed the certified statement
requirement in Sroczynski v. Milek, 197 N.J. 36, 41 (2008).
There, New Jersey Manufacturers sent its insured notice of
cancellation of its workers' compensation policy for non-payment
of premium by certified mail and filed its "like notice" with
the Commissioner of the Department of Banking and Insurance via
the electronic file transfer protocol (FTP) established by CRIB.
Id. at 39-40. The judge of compensation found NJM did not
effectively cancel the policy because it failed to file a
written "certified statement" when it transmitted the data by
way of the FTP, notwithstanding NJM's reliance on the CRIB
manual in filing its "like notice." Id. at 41.
We affirmed the decision on appeal, rejecting NJM's
arguments that the compensation judge engaged in "a hyper-
technical approach to statutory construction" and that NJM's
"failure to provide the 'certified statement' represent[ed] an
inconsequential deviation from the statutory requirements."
6 A-4860-15T1
Sroczynski v. Milek, 396 N.J. Super 248, 256 (App. Div. 2007).
Instead, we concluded accepting those arguments "would require
us to ignore a portion of the statutory scheme that the
Legislature believed was important, and would in effect
constitute a rewriting of the statute by this court." Ibid.
The Supreme Court affirmed in a per curiam opinion for the
reasons we expressed, adding that "[t]he language of N.J.S.A.
34:15-81 is clear and unambiguous, allowing for no
interpretation other than that filing a certified statement with
the Commissioner is a prerequisite to effectuating the
cancellation of coverage." Sroczynski, 197 N.J. at 43. The
Court concluded "the use of the FTP system to transmit data
about policy cancellations, without any accompanying
certification, cannot be effective in light of the clear and
unambiguous demands of N.J.S.A. 34:15-81(b)." Ibid.
The Court also emphatically rejected NJM's argument that
its submission without the certified statement substantially
complied with the statute, writing:
[T]his is not a case that satisfies the
policies that inform the substantial
compliance doctrine. Here, the Legislature
did not simply require notice to the
Commissioner but also commanded that the
insurer provide a certification by an
employee attesting to the truthfulness of
the fact that proper notice was afforded the
insured. Although the legislative history
7 A-4860-15T1
of the Act is sparse, it seems obvious that
the purpose of that provision was to place
personal responsibility on an employee of
the insurer to assure that proper notice of
cancellation was given and to require that
employee to certify to that fact,
recognizing the legal implications of a
false certification. The electronic
provision of information to the
Commissioner, without a certification,
completely defeats the notion of personal
responsibility that the certification
provision was intended to secure. It was,
thus, not simply a technical misstep. As
such, the insurer could derive no comfort
from a substantial compliance analysis which
is meant to ameliorate the harsh
consequences of actions that meet the spirit
of a law but technically fall short.
[Id. at 44.]
The record on summary judgment on remand established that
Praetorian used an outside vendor, Madison Consulting Group, to,
in the words of its former head of workers' compensation
operations, "transmit [Praetorian's] statistical code quoting
data to the respective workers comp bureaus, in this case, New
Jersey." The record contains a transmittal letter, FORM TL-1,
to CRIB dated September 30, 2011, submitting by electronic FTP
twenty records reflecting transactions for the period from
September 22, 2011 through September 29, 2011. The transmittal
letter does not reference M&S, but the parties agree that among
the records submitted under cover of that letter on September
8 A-4860-15T1
30, 2011, was a notice of cancellation to M&S mailed on the same
date. The transmittal letter provides:
9. The person signatory hereto certifies on
behalf of the (Praetorian Insurance Company)
and its property casualty affiliates that
all attached data furnished herewith are
correct and in accordance with the company's
records. The undersigned, on behalf of the
carriers, further certifies that like notice
of election to terminate the stated
contracts of insurance have been given to
the employers in accordance with the
requirements of N.J.S.A. 34:15-81.
The certification is signed by Ernest Rogers, Madison Consulting
Group.
The summary judgment record also reflects a "New Jersey
Approved Form for Filing Notice of Cancellation by Carrier,"
Form 116-B, which references M&S specifically, and states that
notice of cancellation "was mailed Employer" on September 30,
2011. That form contains a certification signed by the
president of Praetorian on the same date, stating:
"CERTIFICATION THE UNDERSIGNED INSURANCE CARRIER CERTIFIES THAT
LIKE NOTICE OF ELECTION TO TERMINATE THE STATED CONTRACT OF
INSURANCE HAS BEEN GIVEN THE EMPLOYER IN ACCORDANCE WITH
REQUIREMENT OF N.J.S.A. 34:15-81."
The parties dispute, however, when that Form 116-B was
filed with CRIB. Praetorian asserts the form was mailed to CRIB
on September 30, 2011. Praetorian, however, presented no proof
9 A-4860-15T1
of mailing on summary judgment. M&S asserts in accordance with
a letter from the Director of CRIB produced in discovery, that
Praetorian's Form 116-B was not filed with CRIB until March 23,
2012, well after both the purported date of cancellation and the
January 2012 accident and resulting workers' compensation claim
precipitating this suit.
Relying on the Supreme Court's opinion in Sroczynski, M&S
argued the certification by an employee of Madison Consulting
Group did not satisfy Praetorian's obligation for a certified
statement under N.J.S.A. 34:15-81(b) because Madison's employee,
Rogers, "plainly had no personal knowledge that the notice was
sent to [M&S] and could not certify to that fact as required by
the statute." Because N.J.S.A. 34:15-81(c) provides that no
policy "shall be deemed to be cancelled . . . [u]ntil ten days
have elapsed after the filing required by paragraph 'b' of this
section," M&S contended the policy was not effectively cancelled
on October 17, 2011.
M&S argued Praetorian's attempt "to 'cure' the defect" by
"backdate[ing]" its hard copy filing of Form 116-B with CRIB,
well after the accident was reported to Praetorian and after
Praetorian appeared in the workers' compensation hearing to deny
coverage supported a bad faith claim. Praetorian denied the
10 A-4860-15T1
allegations, claiming its Form 116-B was mailed to CRIB on
September 30, 2011.
The motion judge found "there were no genuine issues of
material fact regarding [Praetorian's] compliance with the
statutory requirements regarding the cancellation of the
policy." The judge distinguished Sroczynski on the basis that
the insurer in that case, NJM, "failed to provide any
certification at all." The court rejected the Sroczynski
Court's analysis that the purpose of the certification
requirement "was to place personal responsibility on an employee
of the insurer to assure that proper notice of cancellation was
given and to require that employee to certify to that fact,
recognizing the legal implications of a false certification,"
Sroczynski, 197 N.J. at 44, because "the statute does not
explicitly . . . impose the requirement that an employee provide
the certification, and . . . no other court decisions have
imposed that certification [requirement]."
The motion judge found the certification attesting to
notice of cancellation to the employer was made by Ernest
Rogers, "on behalf of" Praetorian. The judge rejected M&S's
reliance on the "CRIB Manual," which provides that cancellation
notices submitted in other than hard copy Form 116-B, e.g., via
electronic FTP, must be accompanied by the New Jersey
11 A-4860-15T1
Transmittal Letter and "contain the signature of the carrier in
Item 9 [the certification]," because "[t]he manual does not
explicitly state that an employee's signature is required."
The court concluded "[t]hat Mr. Rogers was not an employee
[of] Praetorian does not constitute a violation of the statute.
The purpose of the statute was effected, in that the state was
put on notice of the cancellation and defendant had, in fact,
received the like notice, as certified." Although acknowledging
the parties' dispute over when Praetorian filed its Form 116-B,
the court found it immaterial based on its conclusion that Mr.
Rogers's certification "on behalf of" Praetorian on the
transmittal letter, FORM TL-1 satisfied the carrier's
obligations under N.J.S.A. 34:15-81(b).
We review summary judgment using the same R. 4:46-2
standard as the trial judge. RSI Bank v. Providence Mut. Fire
Ins. Co., __ N.J. __ (Aug. 7, 2018) (slip op. at 13-14); Brill
v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). Our
review of questions of law is de novo, without deference to any
interpretive conclusions we believe mistaken. Nicholas v.
Mynster, 213 N.J. 463, 478 (2013); Manalapan Realty, L.P. v.
Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). As the Court
has recently reminded, "[o]ur function is not 'to weigh the
evidence and determine the truth of the matter but to determine
12 A-4860-15T1
whether there is a genuine issue for trial.'" Petro-Lubricant
Testing Labs., Inc. v. Adelman, 233 N.J. 236, 256 (2018)
(quoting Brill, 142 N.J. at 540).
Applying that standard here leaves no doubt that summary
judgment on Praetorian's compliance with the cancellation
requirements of N.J.S.A. 34:15-81(b) was inappropriate on this
record. The motion judge erred in rejecting the Court's
statement in Sroczynski that "the purpose of [N.J.S.A. 34:15-
81(b)] was to place personal responsibility on an employee of
the insurer to assure that proper notice of cancellation was
given and to require that employee to certify to that fact,
recognizing the legal implications of a false certification,"
Sroczynski, 197 N.J. at 44, because "the statute does not
explicitly . . . impose the requirement that an employee provide
the certification, and . . . no other court decisions have
imposed that certification [requirement]."
The rule on dicta of our Supreme Court is clear and not
open to debate. See State v. Dabas, 215 N.J. 114, 136 (2013);
State v. Breitweiser, 373 N.J. Super. 271, 282 (App. Div. 2004).
Simply stated, "matters in the opinion of a higher court which
are not decisive of the primary issue presented but which are
germane to that issue . . . are not dicta, but binding decisions
of the court." State v. Rose, 206 N.J. 141, 183 (2011) (quoting
13 A-4860-15T1
5 Am. Jur. 2d Appellate Review § 564 (2007)). As the Court has
explained:
[A]ppellate courts are bound by the Supreme
Court's considered dicta almost as firmly as
by the Court's outright holdings,
particularly when, as here, a dictum is of
recent vintage and not enfeebled by any
subsequent statement. If lower courts felt
free to limit Supreme Court opinions
precisely to the facts of each case, then
our system of jurisprudence would be in
shambles, with litigants, lawyers, and
legislatures left to grope aimlessly for
some semblance of reliable guidance.
[Rose, 206 N.J. at 183 (quoting McCoy v.
Mass. Inst. of Tech., 950 F.2d 13, 19 (1st
Cir. 1991)).]
The Court's analysis of the purpose of the certification
requirement in Sroczynski is binding and controls the outcome of
this case. The motion judge's finding that "[t]he purpose of
the statute was effected" by notice to CRIB of the cancellation
without regard to the efficacy of the certified statement was
expressly rejected by the Court in Sroczynski. See 197 N.J. at
43-44.
Accordingly, we reverse the entry of summary judgment to
Praetorian on its compliance with the requirements of N.J.S.A.
34:15-81. We also vacate the judgment on the bad faith claim
limited to the issue of whether Praetorian attempted to "cure"
its failure to submit a properly certified statement to CRIB at
14 A-4860-15T1
the time it purported to cancel M&S's policy by backdating the
FORM 116-B tat CRIB claims was filed in March 2012, in the event
the court determines Praetorian failed to file a properly
certified statement when it purported to cancel the policy in
2011. We remand for further proceedings to resolve these two
discrete issues.
We portend nothing as to the outcome by our comments. We
also do not preclude Praetorian from attempting to prove, in
addition to the fact that it filed its FORM 116-B on September
30, 2011, that Ernest Rogers had personal knowledge of the
mailing of the cancellation notice to M&S and his company's
relation to Praetorian was such that his certification on the
FORM TL-1 "attesting to the truthfulness of the fact that proper
notice was afforded" M&S substantially complied with the
legislative purpose "to place personal responsibility on an
employee of the insurer to assure that proper notice of
cancellation was given and to require that employee to certify
to that fact, recognizing the legal implications of a false
certification." Sroczynski, 197 N.J. at 44.
We end by noting our dismay at having to again remand a
matter first presented to us five years ago. The parties'
apparent unwillingness to conduct the discovery necessary to
resolve the obvious factual dispute underlying Praetorian's
15 A-4860-15T1
filing of its certified statement with CRIB should not be
permitted to continue on remand.
Affirmed in part, reversed in part and remanded for further
proceedings as limited in this opinion.
16 A-4860-15T1