winter2004

n e w y o r k p e n n s y l v a n i a c a l i f o r n i a w a s h i n g t o n , d c n e w j e r s e y

new j e r s e y l a wI S S U E S & T R E N D S I N

Businesses Face Aggressive DEP Initiative for Recovery ofNatural Resource DamagesB y J o h n M . A r m s t r o n g , P a r t n e r

When federal and state legislation wasenacted in the 1970s and early 1980s for thepurpose of dealing with the release ofhazardous substances into the environment,the legislation not only provided a statutorymechanism for the federal and stategovernments to require responsible partiesto remediate that contamination, but alsoprovided a mechanism for them to seekrestoration and reimbursement of naturalresource damages (“NRDs”).

For the past two decades, the primary focus of

enforcement has been directed toward

remediation – not NRD claims. However, a new

statute in New Jersey establ ishes

December 31, 2005, as a cut-off date for the

New Jersey Department of Environmental

Protection (“DEP”) to bring past NRD claims

under New Jersey law or risk losing the right to

bring those claims based on statute of

limitations grounds. N.J.S.A. 58:10B-17.1b.

In response to the deadline, DEP has begun an

initiative to pursue NRD claims and has retained

outside counsel to assist it in this process. DEP

is reviewing approximately 9,000 different files

for the purpose of pursuing NRD claims. It

bel ieves that i t may actual ly seek rel ief at as

many as 4,000 different sites in the state.

In short, if you are in any way responsible for

causing contamination at a site in New Jersey

where there is potential ecological damage or

groundwater contamination, it may make sense

in this issue

1 B u s i n e s s e s F a c e A g g r e s s i v e

D E P I n i t i a t i v e f o r R e c o v e r y o f

N a t u r a l R e s o u r c e D a m a g e s

3 N e w J e r s e y E m p l o y e r s L i k e l y t o F a c eM o r e L a w s u i t s F r o m I n j u r e d E m p l o y e e s

6 N e w J e r s e y L e g i s l a t u r e F o c u s i n g o n M o l d H a z a r d i n H o m e P u r c h a s e s

(cont inued)

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 1

PG.02 winter 2004

to evaluate that site in anticipation of a

possible claim by either DEP or one of i ts

outside law firms. Factors to consider

include:

� Whether it makes sense to become avolunteer and approach DEP beforereceiving the notice letter;

� What defenses may be available toavoid liability;

� Whether (and to what extent) yourliability insurance policies may cover ifNRD claims are made against you; and

� What potential NRD liabil ity isassociated with any company or realproperty you are planning to acquire inthe future.

DEP contends that its authority to seek

remediation of NRDs from any party

responsible for causing injury to natural

resources arises from several state

statutes, including (1) the Spill Act, N.J.S.A.

58:10-23.11a et seq.; (2) the Water

Pollution Control Act, N.J.S.A. 58:10A-1 et

seq.; (3) the Industrial Site Recovery Act,

N.J.S.A. 13:1K-6 et seq. and (4) the

Brownfield and Contaminated Site

Remediation Act, N.J.S.A. 58:10B-1 et seq.

Also, DEP reasons that it is authorized to

bring NRD claims based upon the common

law Public Trust Doctrine. DEP contends

that

under this long held doctrine, theState is responsible, as a trustee ofthe state’s natural resources, tomanage these natural resourcesfor the benefit of the present andfuture citizens of New Jersey. TheState also has a fiduciary obligation

( cont inued on page 4 )

WHAT ARE NRDs?DEP defines NRDs as

releases of hazardous substances that have resulted in injuries to naturalresources (loss or impairment of ecological function) or the deprivation ofnatural resource services (e.g., water supply, recreation, ecologicalservices) with respect to resources owned by, managed by, or otherwisewithin the trustee ship or co-trustee ship of the State of New Jersey.

See DEP Policy Directive 2003-07. The New Jersey Spil l Compensation andControl Act (“Spil l Act”) defines natural resources to mean “all land, fish,shellfish, wildlife, biota, air, waters, and other such resources owned, managed,held in trust, or otherwise controlled by the State.” N.J.S.A. 58:10-23.11b.

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 2

winter 2004 PG.03

New Jersey Employers Likely to Face More Lawsuits from Injured EmployeesB y E d w a r d J . M c B r i d e , J r . , P a r t n e r

For nearly a century, an employeeinjured on the job has been entitled tobenefits under the workers’compensation system and has beenbarred from filing a lawsuit against theemployer. There has been onesignificant exception to this ban onemployee lawsuits against employers forworkplace injuries, but New Jerseycourts have always applied the exceptionnarrowly and have generally prohibitedemployee lawsuits, even when there isevidence that the employer consciouslydisregarded employee safety.

However, in a series of recent rulings, the New Jersey

Supreme Court has signaled a shift in the law that is likely

to prompt more and more injured employees to sue for

damages rather than simply pursuing a claim for workers’

compensation benefits. Because there is a serious

question about the availability of insurance protection for

this type of lawsuit, this trend in the law could prove to be a

costly one for employers.

The basis for the bargain struck by the workers’

compensation law is that there are certain natural risks to

any employment and that injuries that occur because of

those risks should be addressed quickly and efficiently

through the workers’ compensation system rather than

through the tort system. However, the law has long

recognized that not all work-related accidents are (or

should be) covered by the workers’ compensation system.

For example, exempted from the system are intentionally

self-infl icted injuries and injuries caused by an

employee’s wil lful fai lure to use an employer-provided

safety device. Another exception – and the one that is the

most widely unknown and litigated – permits an injured

employee to sue the employer when the injury resulted

from “intentional wrong.” The premise behind these

exceptions to the workers’ compensation system is that

intentionally harmful conduct (either by the employee or

the employer) is not a natural risk of employment and does

not naturally arise out of employment.

Perception Develops That System Is SlantedAgainst Employees

Over the last 20 to 30 years there has been a growing

perception that the workers’ compensation system is no

longer a good bargain for injured employees. One reason

for this perception is that the l imited compensation

available in the workers’ compensation system often

pales in comparison with the amount that an employee

would be able to recover if the injury had occurred outside

of work and the employee had been able to file a regular

lawsuit. Perhaps a more significant reason for the

( cont inued on page 8 )

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 3

PG.04 winter 2004

to seek restoration when any of thestate’s natural resources areinjured or otherwise impaired as aresult of a discharge.

See DEP FAQ sheet (December 15, 2003).

In addition, it is DEP’s position that it has

authority to bring NRD claims under

federal law, including the Comprehensive

Environmental Response Compensation and

Liability Act (“CERCLA”), 42 U.S.C. § 9601

et seq.; the Clean Water Act, 33 U.S.C.

§ 1251 et seq. and the Oil Pollution Act of

1990, 33 U.S.C. § 1301 et seq. These

statutes use similar definitions for natural

resources.

The NRD CharacterizationProcess

Characterization of NRDs falls into

two categories: ecological injury and

groundwater injury.1 Both categories are

currently incorporated in DEP’s technical

requirements for site remediation. N.J.A.C.

7:26E.

( i ) Ecological In jury

The first step in determining ecological injury

is to conduct a baseline ecological evaluation.

The baseline ecological evaluation focuses on

three issues: (1) whether there is the

presence of a contaminant of ecological

concern existing at a particular site (e.g., the

discharge of a hazardous substance);

(2) whether there is the presence of an

environmentally sensitive natural resource at

or near the site (e.g., wetlands); and

(3) whether there is a pathway that could link

the contaminant of ecological concern with

the environmentally sensitive resource.

If the answer to all three of these questions

is yes, then the responsible party will have to

conduct an ecological risk assessment. The

ecological risk assessment evaluates the

likelihood that adverse ecological effects to

natural resources have occurred, are

occurring or may occur, as a result of the

release of a contaminant at the site. The

assessment is then used to identify and

characterize the injuries to natural

resources and natural resource services,

which is often then used to provide the

scope of the restoration necessary to

compensate for the injury.

( i i ) Groundwater In jury

Groundwater injury is characterized at the

remedial investigation stage through the

delineation of both the horizontal and

vertical extent of the groundwater

contamination discovered at the site. DEP

has used a formula called the “groundwater

injury calculation” to determine the

monetary value of groundwater injuries for

settlement purposes. The formula attempts

to place a dollar value by evaluating the

aerial extent of the groundwater

( cont inued)

(Businesses Face Aggressive DEP. . . c o n t i n u e d f r o m p a g e 2 )

1 At this time, it appears that DEP is focusingprimarily on sites where there has beenalleged groundwater injury.

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 4

winter 2004 PG.05

The ecologicalrisk assessmentevaluates thelikelihoodthat adverseecologicaleffects tonaturalresources haveoccurred, areoccurring ormay occur, as aresult of therelease of acontaminant atthe site.

contamination plume, and the duration of

contamination in the groundwater.

Recent Enforcement Steps byDEP

In 2003, DEP took several steps to mobilize

its program to enforce NRD claims. These

include:

� Retaining the Louisiana law firm of Allan

Kanner & Associates, P.C. to identify

candidate sites at which NRD claims

may be pursued. Where claims cannot

be settled, the firm may pursue NRD

claims on behalf of DEP on a contingent

fee basis.

� DEP has also advertised in the New

Jersey Law Journal to retain other law

firms to assist it in bringing NRD claims,

also presumably on a contingency fee

basis.

� Since August 2003, DEP has sent

demand letters to more than 100

potentially responsible parties (“PRPs”)

providing them with 10 days to agree to

meet to resolve their alleged NRD

liabil ity without the need for judicial

action. These letters require the PRPs

to waive statute of limitations defenses.

� On September 19, 2003, DEP issued a

directive to more than 60 PRPs

requiring them to assess natural

resource damages along the Lower

Passaic River.

� On November 12, 2003, DEP

announced that it had reached a

$17,000,000 settlement with PPG

Industries, Honeywell International, and

Tiera Solutions, Inc. with respect to

NRDs associated with 210 chromium

waste sites and groundwater

contamination.

(Schnader attorney George E. McGrann

participated in these settlement

discussions on behalf of one of the

settling parties.)

What the Future Holds

DEP states that it wil l continue to press

ahead with bringing NRD claims against

PRPs. It continues to state that it will be far

more reasonable with those parties that

voluntari ly approach DEP about potential

NRD claims. A volunteer is a party that

approaches DEP with a good faith effort to

resolve its NRD liability prior to receiving a

notice letter. Since January 2, 2004, once a

party receives a notice letter, that party will

no longer be considered a volunteer for

purposes of negotiating its NRD liability with

DEP.

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 5

PG. 6 winter 2004

There is presently a bill in the New Jersey State Legislature that, if enacted, would require the Seller of residential housing to provide

to the Buyer a mold hazard information pamphlet developed by the Department of Community Affairs (“DCA”), disclose to the Buyer

any known mold hazard and permit the Buyer a 10-day period to conduct a risk assessment or inspection for the presence of mold

hazards. Every contract for the purchase or sale of any interest in residential housing would have to contain a mold hazard warning

statement. The DCA would establish standards for mold remediation. No construction permits would be issued for the construction

of new residential buildings except after the submission to the construction official of documentation sufficient to establish that the

construction would be in accordance with the mold hazard code standards adopted pursuant to the bill. No Certificate of Occupancy

would be issued for any newly constructed residential building except upon verif ication by the construction official that the

residential building conforms to the mold hazard code standards. The bill has been referred to the Assembly Environment and Solid

Waste Committee.

Another mold remediation bill, relating to condominiums and multiple dwellings, is in the Assembly Housing and Local Government

Committee. Neither bill has been reported out of committee as of the writing of this article.

However, while there are not yet any specific New Jersey statutory mold disclosure requirements with which a Seller must comply in

connection with the sale of residential real estate, other existing statutes may give the purchaser of a home “mold protection.” The

Consumer Fraud Act and the Planned Real Estate Full Disclosure Act require that the Seller notify the Buyer of a material fact upon

which the Buyer would rely and that would adversely affect the value of the property. These laws have not yet been applied with

respect to mold; but given New Jersey’s propensity to protect the consumer, compliance with these statutes should include

disclosure of the existence of mold, as well as any past experience with mold, and its remediation.

In addition, real estate agents in New Jersey typically attach to the Agreement of Sale for a previously owned property a Disclosure of

Real Property Condition Statement (“Disclosure Statement”) for completion by the Seller. This may be because the courts of New

Jersey have determined that a Seller has a duty to disclose latent conditions not observable by a Buyer that are significant or

material to the sale. See Weintraub v. Krobatsch, 64 N.J. 445 (1974). Questions contained in the Disclosure Statement ask if there

are or were any present or past water leakage or dampness in various areas of the house or if there had been any repairs or other

attempts to control any water or dampness problem. If any of the questions is answered “yes,” the Seller is asked to provide detailed

information at the end of the Disclosure Statement. Because these questions address past as well as present conditions with

respect to water, dampness or leaks, if there had been water damage resulting in a mold problem, the Seller should probably reveal

the mold problem and how it was remediated. In short, if remediation of a prior mold problem would materially affect property value,

it should be disclosed.

In addition, there are at least two other theories that could be construed as requiring the disclosure of an existing mold condition.

First, with regard to new construction sold by the builder, New Jersey case law implies a warranty – sometimes called the “implied

New Jersey Legislature Focusing on Mold Hazard in Home Purchases

B y N i n e t t e B y e l i c h , A s s o c i a t e

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 6

winter 2004 PG.7

warranty of habitability” – that the property is free from latent defects.1 See McDonald v. Mianecki, 79 N.J. 275 (1979).

Second, New Jersey case law requires the Seller of any residence to disclose known, latent defects.2 See Strawn v. Canuso,

140 N.J. 43 (1995).

� � �

Emerging and existing laws addressing mold disclosure requirements for Sellers of residential real estate vary from state to

state. For example, disclosure is equally important in neighboring Pennsylvania. Like New Jersey, there currently exists no

Pennsylvania statute specifically dealing with disclosure of mold in residential real estate. However, the Pennsylvania Real

Estate Seller Disclosure Law (“RESDL”) requires the Seller of one to four dwelling units to disclose in writing to the Buyer –

before any agreement of sale is executed – any “material defects” of the property known to the Seller.3 RESDL defines

“material defect” as “a problem with the residential property or any portion of it that would have significant adverse impact on

the value of the property or that involves an unreasonable risk to people on the property.”

While RESDL never mentions mold explicit ly, and the courts have not yet addressed whether or when mold should be

considered to be a “material defect” under the statute, the prescribed disclosure form requires the Seller to disclose “any

material defects to the property, dwelling or fixtures which are not disclosed elsewhere on this form.” In addition, RESDL

requires disclosure of the moisture conditions that cause mold to grow. The form includes several questions about water

problems. For example, the Seller must notify the Buyer if the roof ever leaked; if there had been any repairs or attempts to

control any water or dampness problems in the basement or crawl space; or if there had been any past or present leakage in

the house. The Seller must provide specific information concerning the repair or treatment. In other words, the form asks the

Seller not only to identify current problems but also whether there had been problems in the past, what these problems were

and whether they have been corrected.

In light of the above, it would always be prudent, in preparing a disclosure consistent with RESDL, to disclose past experience

with mold, especially if the Seller believes that the mold had been caused by “water leakage” (as to which RESDL expressly

requires disclosure of past experience) and/or when the Seller believes it likely that the conditions that caused the mold in the

past have not been completely remediated.

Sellers of Pennsylvania residential property are subject to yet another disclosure obligation that may be extended to include

disclosure of known conditions of mold. Under the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), which

applies to any sale of residential real estate, any “fraudulent or deceptive conduct creating a likelihood of confusion or of

misunderstanding” leads to liability. See 73 Pa. C.S. §§ 201-1 et seq. See also Gabriel v. O’Hara, 534 A.2d 488 (Pa. Super.

1987). For example, a Seller’s fraudulent misrepresentation to a Buyer that no drainage problems existed on the property

constitutes a violation of UTPCPL.

Therefore, even absent specific statutes dealing with mold, Sellers of residential housing in both New Jersey and

Pennsylvania should disclose the existence of mold, as well as any past problems with mold, in order to avoid liability.

1 Pennsylvania also recognizes the implied warranty of habitability. See Tyus v. Resta, 476 A.2d 488 (Pa. Super. 1987).

2 Pennsylvania has an analogous requirement. See Quashnock v. Frost, 445 A.2d 121 (Pa. Super. 1982); Glanski v. Ervine, 409 A.2d 425 (Pa. Super. 1979).

3 RESDL does not apply to “[t]ransfers of new residential construction that has not been previously occupied when: (i) the buyer has received a one-year orlonger written warranty covering such construction; (ii) the dwelling has been inspected for compliance with the applicable building code or, if there is noapplicable code, for compliance with a nationally recognized model building code; and (iii) a certificate of occupancy or a certificate of code compliance hasbeen issued for the dwelling.” 68 Pa. C.S. § 7302(2).

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 7

PG.08 winter 2004

perception is that New Jersey courts have

historically applied the “intentional wrong”

exception extremely narrowly. Thus, even

employees who were injured under

circumstances that showed employer

indifference or disregard for employee

safety nonetheless were forced to accept

only the l imited compensation available

under the Workers’ Compensation Act.

Also fueling the perception that the system

was ti lt ing against employees were

developments in workplace product liability

cases. Such cases are commonly brought

by employees who were injured while

working with industrial equipment and who

seek to recover regular tort damages from

the equipment manufacturer on the theory

that the equipment was a defective product.

But in cases where the employer has altered

the equipment, such as by removing a safety

device, manufacturers have been able to

defeat the employee’s claim with the

argument that the employer’s conduct was

the cause of the accident, not any defect in

the product.

In addressing this situation, one court

noted:

Severe inequities are visited upon workers by the action of their employers in removing,disconnecting, refusing to install,or otherwise thwarting safetydevices that are provided to protectthe users of industrial machinery.Such employees are generally left

( cont inued)

( New Jersey Employers. . . c o n t i n u e d f r o m p a g e 3 )

HHIISSTTOORRYY AANNDD PPUURRPPOOSSEE

OOFF WWOORRKKEERRSS’’

CCOOMMPPEENNSSAATTIIOONN SSYYSSTTEEMM

In 1911, New Jersey Governor (and later UnitedStates Pres ident ) Woodrow Wi lson pushedthrough the Legislature and signed into law theNew Jersey Workers ’’ Compensation Act. The lawsought to address one of the major soc ia lprob lems that had accompanied the growingindustr ial izat ion of the workforce. The problemwas that v ic t ims of indust r ia l acc idents o f tenwere not ab le to obta in any compensat ionbecause the only route to such compensation – alawsui t aga inst the employer – was usua l lyblocked by var ious common-law pr inciples thatwere then in effect. The principles included thedoctr ine of assumption of the r isk (under whichthe employee was deemed to have assumed therisk of workplace injury by agreeing to work forthe employer) and the fel low-servant rule (whichprevented an employee from suing the employerfor injury caused by a fel low employee).

The so lu t ion prov ided by the workers ’compensat ion system cons is ted of a barga inbetween employees and employers that involveda t rade-of f by both groups. Employeesrel inquished their r ight to f i le lawsuits and seekcommon- law remedies (such as an award forpa in and suf fer ing) in exchange for automat icent i t lement to certain, albeit reduced, benefi ts.Employers re l inqu ished the i r common- lawdefenses ( inc luding the basic requirement thatthe employee prove negligence) in exchange fora re la t ive ly s tab le , pred ic tab le and reducedregime of compensation for injured employees.

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 8

winter 2004 PG.09

to the inadequate remedies ofworkers’ compensation, virtuallysacrificed on the altar of productionquotas with no downside risk to theemployer.

Calderon v. Bollegraaf, 285 N.J. Super. 623,

636 (App. Div. 1995). The court in Calderon

went on to state that it is ironic that an

employer that removed safety devices stil l

may be entit led to the protection of the

Workers’ Compensation Act while an

employee who wil lful ly fai ls to use an

employer-provided safety device is not

entitled to any compensation at all. “Thus, if

an employee is blinded after repeatedly

failing to use safety goggles, his blindness

goes uncompensated. Yet, if the employer

cuts away a heavy metal safety grate and

requires that the employee place his hand in

the potential path of descending spikes, the

employer’s protections remain intact. We

must question the justice of this latter

proposition.” Id. at 636-37 n.5.

The New Jersey Supreme CourtReacts

I t is in this context that the New Jersey

Supreme Court recently decided to address

the historically narrow interpretation of the

“intentional wrong” exception and to

consider the possible expansion of employer

liability for workplace injuries. In Laidlow v.

Hariton Machinery Company, 170 N.J. 602

(2002), the court made clear that

“intentional wrong” meant more than the

actual subjective intent to injure someone.

The court ruled that, if the employer knew an

injury was substantial ly certain to result,

and if the context in which the injury

occurred could not fairly be viewed as a fact

of l i fe of industrial employment, then the

employer would not be protected from a

lawsuit and the injured employee would not

be restricted to recovery within the workers’

compensation system.

In Laidlow, the employee suffered a severe

hand injury while working on a roll ing mill

that lacked a safety guard. The employee

alleged that the employer had (1) removed

the safety guard on the equipment in order

to speed up production, (2) ignored several

close calls that had been reported to

management, and (3) deceived safety

regulators by reinstall ing the safety guard

only to remove it again once the inspectors

left. The Laidlow court found that these

allegations, if proven, would satisfy the

“intentional wrong” exception and were

enough to permit the injured employee to

proceed with a lawsuit against the employer

and present his claims to a jury.

After the Laidlow decision, the lower courts

in New Jersey continued to use a narrow

interpretation of the “intentional wrong”

exception. These courts did so by

concluding that the exception could be met

only when the injured employee could prove

the existence of all three of the

circumstances that were present in Laidlow.

However, when these cases reached the

New Jersey Supreme Court, that court made

perfectly clear its determination to liberalize

the “intentional wrong” exception and

thereby make it easier for injured employees

( cont inued)

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 9

PG. 10 winter 2004

under the “intentional wrong” exception. As

the court explained, the “totality of the

facts” must be reviewed in order to

determine whether an employee can

proceed with a lawsuit under the

“intentional wrong” exception. Mull, 176

N.J. at 392.

Ramifications for Employers

By adopting a standard as amorphous as

“totality of the facts,” the New Jersey

Supreme Court has invited more lawsuits by

injured employees who generally have

nothing to lose by filing such lawsuits. This

is because the injured employee is not

forced to chose between fi l ing a claim for

workers’ compensation benefits and filing a

lawsuit. An injured employee may fi le a

claim for workers’ compensation benefits

(and collect such benefits) and then may

also fi le a lawsuit against the employer to

seek the full range of tort damages. The only

l imitation on the employee is that, if the

employee wins the lawsuit, the amount of

workers’ compensation benefits would be

deducted from the judgment. Millison v. E.I.

du Pont de Nemours & Co., 101 N.J. 161,

186-88 (1985).

Exacerbating the problem created by the

likely increase in employee lawsuits is the

fact that employers almost certainly wil l

have to defend those lawsuits on their own,

without the benefit of insurance. By their

nature, these claims involve allegations that

the employer committed an “intentional

wrong.” The typical Employer’s Liabil ity

( cont inued)

to avoid the restrictions of the workers’

compensation system and seek the full

range of common-law remedies (including

pain and suffering damages) against

employers.

Through its decisions in Tomeo v. Whitesell

Construction Company, 176 N.J. 366

(2003), Mull v. Zeta Consumer Products,

176 N.J. 385 (2003), and Crippen v. Central

Jersey Concrete Pipe Company, 176 N.J.

397 (2003), the New Jersey Supreme Court

explained that there was no single factor to

be used in determining whether a case fell

within the “intentional wrong” exception.

For example, in Tomeo, the employee, whose

hand was injured when he tried to clear the

discharge chute of a snow blower that he

was using to clear snow from the employer’s

parking lot, claimed that the employer

committed an “intentional wrong” by

disabling the safety device on the snow

blower. The court ruled that the mere act of

disabling the safety device is not enough to

create a “substantial certainty” of injury and,

therefore, it is not sufficient to meet the

“intentional wrong” standard. Tomeo, 176

N.J. at 374. Meanwhile, in Crippen, the

court ruled that the plaintiff could meet the

standard even if there had been no prior

accidents involving the equipment at issue.

Crippen, 176 N.J. at 406. Finally, in Mull,

the employee was injured on a machine at a

plastic-bag manufacturing facil ity. While

the facil ity had been cited by safety

regulators, there was no evidence of any

deception by the employer. The court ruled

that the lack of such evidence would not

necessari ly defeat the employee’s claim

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 10

winter 2004 PG. 11

Insurance Policy excludes coverage for

intentional misconduct, and this exclusion

has been held to apply to “intentional

wrong” cases. New Jersey Manufacturers

Ins. Co. v. The Joseph Oat Corp., 287 N.J.

Super. 190 (App. Div. 1995).

In summary, for New Jersey employers,

workplace injuries wil l no longer simply

mean a workers’ compensation claim that is

insured and that is handled by a claims

adjuster, often with little involvement by the

employer. Instead, workplace injuries may

produce both a workers’ compensation

claim and a lawsuit that is not insured and

that wil l certainly involve significant t ime

and expense for the employer.

JOHN M. ARMSTRONG i s co-cha i r o f the F i rm ’senv i ronmenta l p rac t ice group and manag ingpar tner o f the Cher r y H i l l o f f i ce . Act i ve as a t r ia land appe l la te l i t iga tor th roughout h is career, hefocuses on a l l aspects o f env i ronmenta ll i t iga t ion , w i th emphas is on CERCLA and NewJersey ’s Sp i l l Ac t . He is a lso exper ienced inhand l ing c iv i l l i t iga t ion , inc lud ing tox ic to r t ,persona l in ju r y and commerc ia l l i t iga t ion . Beforejo in ing the F i rm, Mr. Armst rong was a deputya t to rney genera l fo r the s ta te o f New Jersey.

EDWARD J. MCBRIDE ’’s pract ice inc ludes laborand employment , complex l i t iga t ion andadmin is t ra t i ve law mat te rs . New Jersey i s one o fthe most pro-employee ju r i sd ic t ions in thenat ion , and Mr. McBr ide has counse led andrepresented an ar ray o f New Jersey employers onnumerous employee re la t ions , compl iance andl i t iga t ion mat te rs . He has s ign i f i cant exper iencewi th a l te rnat i ve d ispute reso lu t ion and ser ves asa cour t -appo in ted med ia tor fo r the U.S. D is t r ic tCour t o f New Jersey. Pr io r to jo in ing Schnader ’sNew Jersey o f f i ce , he ser ved fo r th ree years asass is tant counse l to New Jersey Governor J imF lor io .

NINETTE BYELICH i s a l i t iga tor who hasrepresented c l ien ts in a var ie ty o f mat te rs ,inc lud ing product l i ab i l i t y, wrongfu l death ,persona l in ju r y, commerc ia l sh ipp ing, rea les ta te , ass is ted l i v ing and c iv i l r igh ts . Ms.Bye l ich has s ign i f i cant exper ience in a l l phasesof l i t iga t ion , inc lud ing appea ls . She has beenex tens ive ly invo lved in mass to r t p roduct l i ab i l i t yl i t iga t ion , represent ing g love manufac turers inthe La tex G love Mul t id is t r i c t L i t iga t ion .

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 11

woodland falls corporate park

220 lake drive east suite 200

cherry hill, nj 08002-1165

I s s u e s a n d Tr e n d s i n N e w J e r s e y L a w i s p u b l i s h e d p e r i o d i c a l l y b y S c h n a d e r H a r r i s o n S e g a l &

L e w i s L L P t o p r o v i d e c u r re n t i n f o r m a t i o n t o c l i e n t s a n d f r i e n d s . I s s u e s a n d Tr e n d s i n N e w

J e r s e y L a w i s i n t e n d e d o n l y t o i n f o r m , n o t t o p r o v i d e l e g a l a d v i c e , a n d re a d e r s s h o u l d s e e k

p r o f e s s i o n a l h e l p f o r s p e c i f i c a p p l i c a t i o n s o f t h e i n f o r m a t i o n . C o m m e n t s a n d q u e s t i o n s

a re a l w a y s w e l c o m e .

© 2 0 0 4 S c h n a d e r H a r r i s o n S e g a l & L e w i s L L P

E d i t o r : H a r r i s N e a l Fe l d m a n , E s q .n j l a w @ s c h n a d e r . c o m w w w . s c h n a d e r . c o m

S c h n a d e r H a r r i s o n S e g a l & L e w i s L L P

Wo o d l a n d Fa l l s C o r p o r a t e Pa r k 220 L a ke D r i v e E a s t S u i t e 200 C h e r r y H i l l N J 08002-1165

856.482.5222 FA X 856.482.6980

APDM

71488_SHSL_Nwsltr 3/25/04 2:58 PM Page 12