Janice Davis was injured on April 23, 2007 in a work-related accident. She filed a claim petition promptly against Yassien Mobility Assistance & Ambulance, Inc., her employer. On October 1, 2007, Yassien filed an answer stating that it had no insurance for workers’ compensation. The Uninsured Employers’ Fund (UEF) was joined in the matter as an additional party.
Yassien had previously obtained workers’ compensation insurance from Zurich American Insurance Company, which cancelled coverage in March 2006. The accident happened over a year after the cancellation.
Subsequent to these events, the Supreme Court of New Jersey held that cancellation of insurance policies will only be upheld if all aspects of the statute are strictly followed. N.J.S.A. 34:15-81 requires that the notice of cancellation be filed in the Office of the Commissioner of Banking and Insurance, together with a certified statement that the notice provided for in the statute has been given. The Supreme Court of New Jersey in Sroczynski v. Milek, 197 N.J. 36 (2008) stated that even a minor deviation such as not filing the certified statement will void the cancellation.
In this case, Zurich did not file the certified statement required under N.J.S.A. 34:15-81, but Yassien failed to argue this issue until 2013. The workers’ compensation case dragged on for many years until Yassien on February 9, 2013 filed a motion to amend its answer to the claim petition to join Zurich as an additional party. This was the first time Yassien formally contended that Zurich failed to properly cancel its policy in 2006.
The Judge of Compensation ruled in favor of Yassien and held that Zurich failed to properly cancel the policy and would therefore have to pay the workers’ compensation claim. Zurich appealed and argued that Yassien waited far too long to raise this issue — seven years, in fact. The Appellate Division reversed and held that Zurich was correct in arguing that Yassien waived its argument for improper cancellation by waiting seven years.
The Appellate Division reasoned that it would not be fair to carriers if employers could challenge proper cancellation many years after the cancellation occurred. The Court noted that Yassien did not raise the improper cancellation argument in 2007 or 2008 before the Sroczynski decision came down. The Court suggested that if Yassien had raised this issue in 2007 or 2008, before the Sroczynski case had been decided, its position would have been stronger. By waiting until 2013 to raise the improper cancellation issue for the first time, Yassien waived its right to challenge the cancellation.
The case can be found at Davis v. Yassien Mobility Assistance & Ambulance, Inc., A-0356-14T3 (App. Div. May 5, 2015).
