BRUNO L. MORAES VS. SUPREME AUTO TRANSPORT (DIVISION OF WORKERS' COMPENSATION)

NOT FOR PUBLICATION WITHOUT THE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-0702-20
BRUNO L. MORAES,
Petitioner-Respondent,
v.
SUPREME AUTO
TRANSPORT,
Respondent-Appellant.
_________________________
Submitted May 18, 2021 – Decided June 4, 2021
Before Judges Moynihan and Gummer.
On appeal from the New Jersey Department of Labor
and Workforce Development, Division of Workers'
Compensation, Claim Petition No. 2018-21550.
Naulty, Scaricamazza & McDevitt, LLC, attorneys for
appellant (Jerry Yang, on the briefs).
Garces Grabler & LeBrocq, attorneys for respondent
(David N. Fiveland, on the brief).
PER CURIAM
Defendant Supreme Auto Transport (Supreme) appeals a judge of
compensation's decision denying its motion to dismiss the claim petitioner filed
against it, denying its motion to implead BMH Auto Transport LLC (BMH) as
petitioner's actual employer, and finding petitioner was employed by Supreme
at the time of the accident. Because the judge failed to consider Colorado law
in accordance with a choice-of-law provision in the contract between Supreme
and BMH, we reverse and remand.
Supreme, which is located in Colorado, describes itself as an "interstate
brokerage corporation that facilitates the moving of cars between auto
manufacture[r]s." Supreme enters into contracts with auto manufacturers and
motor-carrier transportation companies to move the auto manufacturer's
vehicles.
Petitioner registered BMH as a business organization with the State of
New Jersey on May 13, 2015. Petitioner is the sole owner, operator, member,
and employee of BMH, which is located in New Jersey.
On January 21, 2018, Supreme and BMH entered into an "authorized
carrier lease," in which Supreme leased "certain motor vehicle equipment" from
BMH for one year. Supreme represented it "desire[d] to perform authorized
transportation in certain equipment it does not own." BMH represented it
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"desire[d] to provide a driver and to operate the equipment as a[n] independent
contractor." The lease contained the following provision:
3. Independent Contractor Status. The parties to this
Agreement expressly intend to create an independent
contractor relations [sic] between [Supreme] and
[BMH]. [BMH] shall be the sole party responsible for
determining the manner in which it meets its
obligations under this Agreement. This includes, but is
not limited to, . . . workmen's compensation of its
employees; . . . . In no event do the parties to this
Agreement intend to create a master-servant, employer-
employee, or principal-agent relationship. The
independent contractor relationship shall be for all
purposes, including Workmen's Compensation as
allowed by the applicable state workman's
compensation laws. Furthermore, [BMH] agrees to
provide a Workmen's Compensation Insurance Policy
for itself and its employees and to pay the premiums for
the policy as prescribed by state law, and maintain the
policy at all times while engaged in the performance of
any duties arising from this Agreement. Furthermore,
[BMH] agrees to provide any necessary information
and agreements to any state Workmen's Compensation
Insurance Authority, as reasonably requested by
[Supreme]. Finally, should [BMH] receive any
notification of cancellation of any such policy, [BMH]
agrees to provide [Supreme] with a copy of such
notification within twenty-four (24) hours after receipt.
The lease also provided Colorado law "shall govern this Contract." Supreme's
representative signed the lease in Colorado. Petitioner signed the lease in New
Jersey as BMH's representative.
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On August 7, 2018, petitioner filed a claim with the State of New Jersey
Division of Workers' Compensation, alleging he was injured in a May 25, 2018
motor vehicle accident while employed by Supreme. On the day of the accident,
petitioner drove from Rhode Island to Pennsylvania, where the accident
occurred. In its answer, Supreme denied it had employed petitioner on the day
of the accident.
Supreme moved to dismiss petitioner's claim against it, asserting
petitioner's actual employer was BMH, not Supreme. Supreme also moved to
implead BMH as petitioner's "correct employer." The parties dispute whether
Supreme employed petitioner or BMH, acting as Supreme's independent
contractor, employed petitioner. In its argument to the judge of compensation,
Supreme contended Colorado law applies pursuant to the contractual choice-of-
law provision and Colorado law presumes an independent-contractor
relationship based on the language of the lease.
After hearing the testimony of petitioner and Supreme's chief operating
officer, the judge rendered an order and oral opinion, denying Supreme's
motions and finding Supreme was petitioner's employer at the time of the
accident. The judge made no reference to the lease provision requiring Colorado
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law to govern, did not consider Colorado law, and made his decision based
solely on New Jersey law.
On appeal, Supreme argues, among other things, the judge erred in
applying New Jersey law instead of Colorado law. In response, petitioner
incorrectly asserts Supreme raises the contractual choice-of-law provision for
the first time on appeal and argues we should not consider it.1
Our review in workers' compensation cases is limited to "whether the
findings made could have been reached on sufficient credible evidence present
in the record . . . with due regard also to the agency's expertise." Close v.
Kordulak Bros., 44 N.J. 589, 599 (1965); see also Sager v. O.A. Peterson
Constr., Co., 182 N.J. 156, 164 (2004). We do not defer to a judge of
compensation's legal conclusions. Hager v. M&K Constr., ___ N.J. ___, ___
(2021) (slip op. at 12); see also Hersh v. Cty. of Morris, 217 N.J. 236, 243
(2014).
"Ordinarily, when parties to a contract have agreed to be governed by the
laws of a particular state, New Jersey courts will uphold the contractual choice
if it does not violate New Jersey's public policy." Instructional Sys., Inc. v.
1
Supreme clearly raised the contractual choice-of-law provision in its brief to
the judge of compensation.
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Comput. Curriculum Corp., 130 N.J. 324, 341 (1992). To override the parties'
contractual choice of law, a judge must find:
(a) the chosen state has no substantial relationship to
the parties or the transaction and there is no other
reasonable basis for the parties' choice, or (b)
application of the law of the chosen state would be
contrary to a fundamental policy of a state which has a
materially greater interest than the chosen state in the
determination of the particular issue and which, under
§ 188, would be the state of the applicable law in the
absence of an effective choice of law by the parties.
Kramer v. Ciba-Geigy Corp., 371 N.J. Super. 580, 598
(App. Div. 2004) (quoting Restatement (Second) of
Conflicts of Laws § 187 (Am. Law Inst. 1971)).
The substantial-relationship prong of the Restatement clearly did not
prevent the judge of compensation from applying Colorado law because
Supreme is located in Colorado. See N. Bergen Rex Transp. v. Trailer Leasing
Co., 158 N.J. 561, 569 (1999) (finding substantial-relationship standard met by
company being headquartered in contractually-chosen state). To apply New
Jersey law, the judge would have had to determine: (1) application of Colorado
law would be contrary to a fundamental policy of New Jersey; (2) New Jersey
has a materially greater interest in this matter than Colorado; and (3) under
general choice of law considerations, New Jersey law would apply. See Kramer,
371 N.J. Super. at 598-99; Newcomb v. Daniels, Saltz, Mongeluzzi, & Barrett,
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Ltd., 847 F. Supp. 1244, 1248 (D.N.J. 1994). Unfortunately, the judge of
compensation erred by making no such determination and applying by rote New
Jersey law despite the contractual provision requiring the application of
Colorado law. Accordingly, we reverse and remand with the instruction that the
judge of compensation make that determination before deciding anything else
about the case.
We decline Supreme's invitation to make the factual findings or legal
determinations necessary to conclude Colorado law applies under paragraph
(2)(b) of section 187 of the Restatement. Factual disputes, which should be
addressed by the judge of compensation, may exist. For example, although
Supreme repeatedly asserts it was incorporated in Colorado, the "Authorized
Carrier Lease Statement" indicates Supreme is "an Oklahoma corporation." We
also believe in fairness the parties should be given an opportunity to address
fully the factual and legal considerations at issue in paragraph (2)(b) of section
187 of the Restatement.
Reversed and remanded. We do not retain jurisdiction.
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