Wade Clark Mulcahy LLP

The New Jersey Appellate Division recently reversed an award of summary judgment in a coverage dispute for the parties’ failure to properly establish the necessary facts as required by Rule 4:46-2. In On Target Staffing, LLC v.

Zurich American Insurance Company, the Court addressed motions regarding Zurich’s duty to defend and indemnify On Target Staffing (“On Target”) for the claims asserted in an automobile accident case involving several On Target employees. On Target is a temporary staffing agency and the accident occurred when its employees were driving from their work location to On Target’s office.

Zurich disclaimed coverage for the employees’ lawsuit under commercial general liability and automobile liability policies based on several policy exclusions. On Target sought declaratory judgment action against Zurich but the trial court found that there was no coverage and awarded summary judgment to Zurich.

In reviewing the record, the Appellate Division found that the parties’ Rule 4:46-2 Statement of Material Facts detailed the provisions of the applicable policies and that Zurich rejected On Target’s tender for coverage.

However, the statements established only “sparse” additional facts concerning the employees’ activity and details of the accident, including that On-Target deducted funds from employees’ paychecks to pay the driver for “his contracted transportation services.” The Court noted that “other than those cursory facts that were established as undisputed in Rule 4:46-2 statements, the parties offered no other facts in accordance with the Rule.” Despite that, the parties’ summary judgment arguments, and the trial court’s findings of fact, were based on information not established in the statements and that were “gleaned by rummaging through deposition transcripts.”

In reversing the award of summary judgment to Zurich and remanding the case for further proceedings, the Appellate Division observed that “Rule 4:46-2’s requirements are not procedural niceties that may be ignored by the parties or the court.” The Court criticized the trial court for making findings of fact that were not properly set forth in the parties’ Rule 4:46-2 statements. The Court added that the facts laid out in the parties’ statements were “wholly inadequate to support a determination that either party is entitled to judgment as a matter of law.” Specifically, the Court refused to address the “hired auto” exclusion relied on by the trial court because the parties’ statements did not offer any facts permitting a determination as to whether the exclusion applied.

This decision highlights the importance of providing a detailed Statement of Uncontested Material Facts when moving for summary judgment. The decision shows that New Jersey courts will not award summary judgment, or affirm an award on appeal, unless the supporting facts are properly set forth in a Rule 4:46-2 statement.