Liberty Insurance Corp. v. Techdan, LLC
Annotate this CaseThe issue this case presented for the New Jersey Supreme Court's consideration was whether claims brought under the Insurance Fraud Protection Act (IFPA) and the Workers’ Compensation Act (WCA) by plaintiffs Liberty Insurance Corp. and LM Insurance Corp. (Liberty) against defendants Techdan, LLC (Techdan), Exterior Erecting Services, Inc. (Exterior), Daniel Fisher, Robert Dunlap, and Carol Junz were subject to the apportionment procedure of the Comparative Negligence Act (CNA). Liberty issued workers’ compensation policies to Techdan from 2004 to 2007. It alleged defendants misrepresented the relationship between Techdan and Exterior and the ownership structure of the two entities and provided fraudulent payroll records to reduce the premiums for workers’ compensation insurance. Techdan was indicted for second-degree theft by deception, and Dunlap entered a guilty plea to that charge on Techdan’s behalf. The court granted partial summary judgment as to Liberty’s IFPA claim for insurance fraud against Techdan, Exterior, Dunlap, and Fisher; partial summary judgment as to Liberty’s workers’ compensation fraud claim against all defendants; and partial summary judgment as to Liberty’s breach of contract claim against Techdan and Exterior. The court denied summary judgment as to Liberty’s remaining claims. The jury found Techdan liable for $454,660 in compensatory damages and found Exterior liable for $227,330 in compensatory damages, but awarded no compensatory damages against Dunlap, Fisher, or Junz. It awarded punitive damages in the amount of $200,000 against Dunlap, $10,000 against Fisher, and $45,000 against Junz, but awarded no punitive damages against Techdan or Exterior. The trial court determined all defendants should be jointly and severally liable for the $756,990 awarded as compensatory damages. The Appellate Division held the trial court erred when it imposed joint and several liability on defendants rather than directing the jury to allocate percentages of fault to defendants in accordance with N.J.S.A. 2A:15-5.2(a)(2). The Division concluded the trial court’s cumulative errors warranted a new trial, and it remanded for further proceedings. The Supreme Court concurred with the appellate court: the trial court should have charged the jury to allocate percentages of fault and should have molded the judgment based on the jury’s findings; the trial court’s failure to apply the CNA warranted a new trial on remand. The Court did not disturb the first jury’s findings on the issues of liability under the IFPA, the WCA, or Liberty’s common-law claims, or its determination of total compensatory damages. The Court found no plain error in the trial court’s failure to give the jury an ultimate outcome charge.
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