Nancy L. Holm v. Daniel M. Purdy

SYLLABUS This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court and may not summarize all portions of the opinion. Nancy L. Holm v. Daniel M. Purdy (A-39-21) (086229) Argued September 12, 2022 -- Decided December 13, 2022 PATTERSON, J., writing for the Court. In this appeal, the Court considers whether defendant Daniel Purdy, an insurance broker, had a duty under N.J.S.A. 34:15-36 to inform the members of Holmdel Nurseries, LLC that an LLC member actively performing services on the LLC’s behalf is eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. The Court also considers the standard for finding a breach of any such duty, as well as the evidence presented to support proximate cause in this case. Robert Friedauer and his brother, Walter Friedauer, owned Holmdel Nurseries and formed an LLC in which they each owned a fifty percent interest. Robert Friedauer’s sons, Michael and Christopher Friedauer, were full-time employees. Defendant became the insurance broker for Holmdel Nurseries in 2002; he also served as the personal insurance broker for each of the four Friedauers. For approximately a year after workers’ compensation coverage became available to LLC members in New Jersey, Holmdel Nurseries elected to obtain that coverage for Robert and Walter Friedauer. After determining that the coverage was not cost- effective for himself or Walter, Robert Friedauer informed defendant of the LLC members’ decision not to purchase workers’ compensation coverage for themselves. From 2002 to 2012, Holmdel Nurseries’ workers’ compensation policies provided no coverage to the LLC members, in accordance with those instructions. As employees, however, Christopher and Michael Friedauer were covered by Holmdel Nurseries’ workers’ compensation policy during that period. Michael Friedauer and Christopher Friedauer eventually purchased Walter’s fifty percent interest in Holmdel Nurseries. As of January 1, 2012, they were no longer employees of the business, but rather members of the LLC, each owning a twenty-five percent share. On July 12, 2012, defendant held his annual meeting with Holmdel Nurseries management to discuss the LLC’s insurance needs. He learned at the meeting that 1 Walter Friedauer was no longer involved in the business and that Christopher Friedauer and Michael Friedauer had become members of the LLC. Defendant did not tell Christopher Friedauer or Michael Friedauer that because they were LLC members rather than employees, they were no longer covered by Holmdel Nurseries’ workers’ compensation insurance, or that the LLC could elect to purchase workers’ compensation insurance that would cover them in case of a work-related accident. Robert Friedauer testified that following the meeting, he had “no reason to believe” that his sons were not covered by Holmdel Nurseries’ workers’ compensation policy. According to defendant, all three LLC members knew that they were excluded from workers’ compensation coverage and were satisfied. Like Holmdel Nurseries’ workers’ compensation policies for the period between 2002 and 2012, the policies that defendant secured for the LLC for 2013, 2014, and 2015 excluded the LLC members from workers’ compensation coverage. On the morning of February 15, 2015, Christopher Friedauer was at work at Holmdel Nurseries preparing trucks for snowplowing. Michael Friedauer testified that he encountered Christopher, who told Michael that while he was trying to get his truck running, he had slipped and fallen on his head, hitting his head “so hard I saw stars.” Later that day, Michael Friedauer did not see his brother at Holmdel Nurseries, and searched for him at another location where employees were snowplowing. He testified that he found Christopher Friedauer “dead in a truck.” Shortly after Christopher Friedauer’s death, defendant filed a workers’ compensation claim for death benefits on behalf of Christopher’s dependents, plaintiff and her two minor children. He testified that he had no reason to expect that Holmdel Nurseries’ workers’ compensation policy covered the dependents’ claim because the LLC members had not opted for coverage. Plaintiff Nancy L. Holm, administratrix of the estate of her husband, Christopher Friedauer, brought this action against defendant, alleging that he failed to provide to the LLC the notice mandated by N.J.S.A. 34:15-36 and that Christopher was unaware that he no longer had workers’ compensation coverage in his new role as an LLC member. She alleges that as a result of defendant’s negligence and breach of fiduciary duty, Christopher Friedauer’s dependents were deprived of a workers’ compensation death benefit to which they would have been entitled had he been covered at the time of his death. The trial court rejected plaintiff’s argument that an LLC’s insurance broker has a duty to inform individual LLC members of their right to elect workers’ compensation coverage and also found that plaintiff had not presented adequate evidence as to proximate cause. The court accordingly granted defendant’s motion for an involuntary dismissal and defendant’s motion for judgment at trial. 2  The Appellate Division reversed, holding that N.J.S.A. 34:15-36 imposes on an insurance broker a non-waivable duty to advise new members of an LLC that workers’ compensation coverage is available to them if all LLC members elect to obtain such coverage. The Appellate Division did not require plaintiff to prove that defendant committed “a willful, wanton or grossly negligent act of commission or omission” in order to recover damages, as N.J.S.A. 34:15-36 prescribes. Instead, the appellate court concluded that plaintiff presented sufficient evidence to warrant a jury determination whether defendant breached a duty to inform Christopher Friedauer and whether Christopher Friedauer’s death was compensable. The Court granted certification. 250 N.J. 14 (2022). HELD: Informed by the Legislature’s expression of public policy in N.J.S.A. 34:15-36, the Court concurs with the Appellate Division that defendant had a duty to advise the LLC members, at the time of the workers’ compensation policy’s purchase or renewal, that an LLC member actively performing services on the LLC’s behalf is eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. Consistent with N.J.S.A. 34:15-36, however, the Court holds that defendant may not be held liable for breach of that duty unless the damages alleged were caused by defendant’s willful, wanton or grossly negligent act of commission or omission. The Court disagrees with the trial court’s assessment of the evidence presented by plaintiff on the question of proximate cause. 1. N.J.S.A. 34:15-36 provides that a member of an LLC who actively performs services on behalf of the LLC shall be deemed an employee of the LLC for purposes of receipt of benefits and payment of premiums under the Workers’ Compensation Act if the LLC elects, when it purchases or renews its workers’ compensation policy, to obtain coverage for the LLC members. The Legislature imposed notice obligations on insurers and insurance producers, including brokers. N.J.S.A. 34:15- 36 mandates that every application for workers’ compensation include “notice, as approved by the Commissioner of Banking and Insurance, concerning the availability of workers’ compensation coverage” for limited liability company members. The law further requires that the application contain a notice of election of coverage and clearly state that coverage for LLC members “shall not be provided under the policy unless the application containing the notice of election is executed and filed with the insurer or insurance producer.” Ibid. N.J.S.A. 34:15-36, however, does not create a statutory remedy for a violation of its provision. Indeed, it limits the liability of insurers and insurance producers in the event of a common- law claim, providing that they shall not be liable for an LLC’s failure to obtain workers’ compensation coverage for its members “unless the insurer or insurance producer causes damage by a willful, wanton or grossly negligent act of commission or omission.” Ibid. (pp. 18-20) 3 2. To determine whether a duty of care should be imposed in a given context, a court must first consider the foreseeability of harm to a potential plaintiff and then analyze whether accepted fairness and policy considerations support the imposition of a duty by weighing the (1) relationship of the parties, (2) nature of the risk, (3) opportunity and ability to exercise care, and (4) public interest. See Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993). In certain settings, determination whether to impose a duty may be informed by a statute, even when the statute creates no civil cause of action for a violation. Ultimately, courts strive for solutions that properly and fairly resolve the specific case and generate intelligible and sensible rules to govern future conduct. (pp. 21-23) 3. The Court reviews duties that insurance brokers owe as fiduciaries to their clients and notes that its jurisprudence constrains the fiduciary duty of an insurance broker to the categories of insurance coverage that the broker undertakes to obtain for the insured, or the coverage necessitated by a particular peril known to the broker -- the Court has not imposed a general duty on brokers to advise an insured about the myriad varieties of insurance available on the market. In the unusual setting in which a broker is held to have a duty to a third party, that duty is premised on the broker’s obligation to provide the insured with a type of coverage that the insured has requested, as well as considerations of foreseeability and fairness. (pp. 23-27) 4. Here, it was foreseeable that if defendant did not inform Holmdel Nurseries’ LLC members that the LLC could obtain workers’ compensation coverage for Christopher Friedauer, his dependents could be harmed in the event that Christopher were to die in a work-related accident without such coverage. The threshold inquiry is thus satisfied. Turning to fairness and policy considerations, the Court explains in detail why each of the four Hopkins factors favors the recognition of a duty here. In accordance with N.J.S.A. 34:15-36, the Court holds that an insurance broker for an LLC, charged by the LLC to obtain workers’ compensation coverage on its behalf, has a non-waivable duty to provide notice that such coverage is available to LLC members who actively perform services on behalf of the LLC -- but that such coverage is available only if the LLC elects the coverage when the policy is purchased or renewed. Because it is foreseeable that the failure to provide such notice may harm an LLC member or the member’s dependents, the broker’s duty may extend not only to the LLC, but also to LLC members eligible for workers’ compensation coverage under N.J.S.A. 34:15-36. In the circumstances here, in which the LLC had only three members -- all working at Holmdel Nurseries and all in contact with defendant during the relevant period -- defendant had a duty to provide notice directly to the members. The Court does not address whether an insurance broker must provide direct notice to all LLC members eligible for workers’ compensation coverage in cases involving LLCs with numerous members. Because the trial court based its judgment mainly on its finding that defendant owed no duty to the LLC members, it erred in granting defendant’s motions. (pp. 27-32) 4 5. N.J.S.A. 34:15-36 precludes imposition of liability on an insurance broker absent proof of “a willful, wanton or grossly negligent act of commission or omission.” That standard should govern any common-law claim based on a failure to provide the notice mandated by the statute. In this case, and in other cases premised on an alleged breach of an insurance broker’s duty to provide notice of the availability of workers’ compensation insurance for LLC members, a plaintiff must prove that the damage was caused by a willful, wanton, or grossly negligent act of commission or omission by the broker. -Ibid. - - (pp. 32-33) 6. The Court next addresses the trial court’s ruling on the question of proximate cause. First, accepting the testimony of Robert and Michael Friedauer as true for purposes of the motion and according to that evidence all reasonable inferences, a rational juror could conclude that all three LLC members -- all part of the same family -- wanted to maximize insurance coverage for Christopher Friedauer, a parent of young children whose work for Holmdel Nurseries was sometimes dangerous. Although the jury may have been persuaded by defendant’s testimony that the LLC would have opted against such coverage given its longstanding decision to decline it, the Court cannot conclude that no rational juror would decide in plaintiff’s favor on that issue. Second, in order to award a death benefit to Christopher Friedauer’s dependents, a workers’ compensation court would have to find that his death resulted from an “accident arising out of and in the course of his employment.” N.J.S.A. 34:15-1. In the procedural posture of this appeal, in which there was no workers’ compensation proceeding, the Court expresses no view as to what evidence a workers’ compensation judge would have required in order to make that finding but explains why it disagrees with the trial court’s conclusion that plaintiff presented no evidence that Christopher Friedauer died in a work-related accident and that it therefore did not need to reach the question of proximate cause. The trial court should have reached whether plaintiff’s proofs on the question of proximate cause concerning Christopher Friedauer’s injury were sufficient to warrant denial of defendant’s motions for involuntary dismissal and for judgment at trial. (pp. 33-37) 7. Because it recognized no duty on the part of an insurance broker to an LLC member to provide notice of the availability of workers’ compensation coverage, the trial court did not consider whether the evidence supported a finding that defendant “cause[d] damage by a willful, wanton or grossly negligent act of commission or omission” under N.J.S.A. 34:15-36. The Court remands to the trial court for that determination and provides guidance for the remand proceedings. (p. 37) AFFIRMED AS MODIFIED and REMANDED to the trial court. CHIEF JUSTICE RABNER; JUSTICES SOLOMON, PIERRE-LOUIS and FASCIALE; and JUDGE SABATINO (temporarily assigned) join in JUSTICE PATTERSON’s opinion. 5  SUPREME COURT OF NEW JERSEY A-39 September Term 2021 086229 Nancy L. Holm, individually and as Administratrix of the Estate of Christopher R. Friedauer, deceased, Plaintiff-Respondent, v. Daniel M. Purdy, Defendant-Appellant. On certification to the Superior Court, Appellate Division. Argued Decided September 12, 2022 December 13, 2022 Michael J. Dunn argued the cause for appellant (Law Offices of Michael J. Dunn, attorneys; Michael J. Dunn, on the brief). Ryan Milun argued the cause for respondent (The Milun Law Firm, attorneys; Ryan Milun, on the brief). JUSTICE PATTERSON delivered the opinion of the Court. The New Jersey Workers’ Compensation Act provides that the members of a limited liability company (LLC) who actively perform services on behalf 1 of the LLC are eligible for workers’ compensation coverage if the LLC elects to obtain that coverage for its members. N.J.S.A. 34:15-36. The Act mandates that every application for workers’ compensation insurance include a notice of the availability of workers’ compensation coverage for LLC members and a form by which an LLC may elect such coverage. Ibid. However, the statute precludes the imposition of liability on an insurance broker based on the LLC’s failure to obtain such workers’ compensation coverage for an LLC member unless the insurance broker “causes damage by a willful, wanton or grossly negligent act of commission or omission.” Ibid. This action was brought by plaintiff Nancy L. Holm, administratrix of the estate of her husband, Christopher Friedauer, who died in 2015 after falling at his workplace, Holmdel Nurseries, LLC. As a longtime employee of the family-owned business, Christopher had been covered by workers’ compensation insurance, but he was no longer covered after he became a member of the LLC in 2012. Plaintiff claims that defendant Daniel M. Purdy, who served as the insurance broker for Holmdel Nurseries from 2002 to 2015, failed to provide to the LLC the notice mandated by N.J.S.A. 34:15-36, and that Christopher was unaware that he no longer had workers’ compensation coverage in his new role as an LLC member. She alleges that as a result of defendant’s negligence 2 and breach of fiduciary duty, Christopher Friedauer’s dependents were deprived of a workers’ compensation death benefit to which they would have been entitled under N.J.S.A. 34:15-13 had he been covered by workers’ compensation insurance at the time of his death. Defendant asserts that Christopher Friedauer’s father, Robert Friedauer, the LLC’s managing member for insurance issues, instructed defendant in 2002 that Holmdel Nurseries did not want to purchase workers’ compensation coverage for its LLC members because of the cost of that coverage. He claims that the LLC would have maintained that position even if he had advised the LLC members of their right to obtain such coverage when Christopher Friedauer became an LLC member. At the close of a jury trial, the trial court granted defendant’s motion for an involuntary dismissal pursuant to Rule 4:37-2(b) and his motion for judgment at trial pursuant to Rule 4:40-1. The court ruled that in light of Holmdel Nurseries’ previous decision not to purchase workers’ compensation insurance coverage for its LLC members, defendant had no duty to inform the LLC members in 2012 that such coverage was available to its new members if the LLC opted to pay a higher premium for that coverage. The trial court further found that plaintiff failed to present evidence that a breach of duty by defendant was the proximate cause of the damages alleged. 3  Plaintiff appealed the trial court’s judgment. The Appellate Division affirmed in part and reversed in part and remanded the case for a new trial. The appellate court held that N.J.S.A. 34:15-36 imposes a non-waivable duty on insurance brokers to inform new LLC members of the availability of workers’ compensation coverage and the right to elect such coverage. The court found that plaintiff had presented sufficient evidence on the issue of proximate cause to warrant denial of defendant’s motion to dismiss and his motion for judgment at trial. We granted defendant’s petition for certification. Informed by the Legislature’s expression of public policy in N.J.S.A. 34:15-36, we concur with the Appellate Division that defendant had a duty to advise the LLC members, at the time of the workers’ compensation policy’s purchase or renewal, that an LLC member actively performing services on the LLC’s behalf is eligible for workers’ compensation coverage, but that the LLC must elect to purchase such coverage in order to obtain it. Consistent with N.J.S.A. 34:15-36, however, we hold that defendant may not be held liable for breach of that duty unless the damages alleged were caused by defendant’s willful, wanton or grossly negligent act of commission or omission. We disagree with the trial court’s assessment of the evidence presented by plaintiff on the question of proximate cause. 4  Accordingly, we concur that the trial court erred when it granted defendant’s motion to dismiss and his motion for judgment at trial, and we affirm as modified the Appellate Division’s judgment. We remand this matter to the trial court for further proceedings. I. A. We summarize the facts based upon the record presented at trial. 1. From 1978, Robert Friedauer and his brother, Walter Friedauer, owned Holmdel Nurseries, a business founded by their father that sold trees and other landscaping supplies. Robert and Walter Friedauer eventually formed an LLC in which they were members, each owning a fifty percent interest in the LLC. Robert Friedauer managed insurance issues for the LLC. Beginning when they were teenagers, Robert Friedauer’s sons, Michael Friedauer and Christopher Friedauer, worked part-time at Holmdel Nurseries. After graduating from college, they became full-time employees of the family business. Defendant has decades of experience as an insurance broker specializing in commercial insurance for agriculture-related businesses. During the period 5 relevant to this case, he owned a captive agency for Farm Family Insurance Company. Defendant became the insurance broker for Holmdel Nurseries in 2002. Thereafter, during annual in-person meetings and many telephone calls, defendant discussed with Robert Friedauer various types of coverage available to Holmdel Nurseries. Robert Friedauer instructed defendant to obtain for Holmdel Nurseries insurance policies covering the business’s buildings, vehicles, equipment, and other property; a general liability policy; an umbrella policy; and a workers’ compensation policy. The premium charged for Holmdel Nurseries’ workers’ compensation policy was based on the number of employees covered and the salaries paid to those employees, ascertained in annual audits conducted by the insurer. Because his compensation was based on commissions, defendant had a financial incentive to encourage Holmdel Nurseries to purchase workers’ compensation insurance that provided coverage to more employees at a higher premium. For approximately a year after workers’ compensation coverage became available to LLC members in New Jersey under N.J.S.A. 34:15-36, Holmdel Nurseries elected to obtain that coverage for Robert and Walter Friedauer. Robert Friedauer testified that after he broke his wrist in a work -related accident, he determined that it was not cost-effective for Holmdel Nurseries to 6 maintain workers’ compensation insurance for himself or Walter Friedauer, given the high cost of the coverage. Robert Friedauer testified that he and his brother “had an agreement, if one of us got hurt, we would take care of each other,” and that he advised defendant of the LLC members’ decision not to purchase workers’ compensation coverage for themselves. Accordingly, defendant’s initial proposal for Holmdel Nurseries’ workers’ compensation policy stated, “LLC members excluded.” Defendant testified that every policy renewal sent by Farm Family to Holmdel Nurseries included the form by which an LLC could elect workers’ compensation coverage for its members. He stated that it was Farm Family’s responsibility, not his agency’s, to send the notice of election. Plaintiff denies that the LLC received the required notices of election. Defendant also served as the personal insurance broker for Robert Friedauer and Walter Friedauer, and he discussed with each of them life insurance, disability insurance, homeowners’ insurance, auto insurance, and other types of coverage available to them. According to defendant, although the life and disability policies he suggested offered a death benefit, Robert Friedauer declined to purchase such policies, commenting that “we’re good.” Defendant also acted as the personal insurance broker for Michael and Christopher Friedauer. He testified that he secured for Christopher Friedauer 7 homeowners’ insurance, automobile insurance, boat insurance, and an umbrella policy. He stated that he offered to obtain life insurance and disability insurance for Christopher Friedauer, but “he did not show any interest [in that insurance] to me.” It is undisputed that from 2002 to 2012, Holmdel Nurseries’ workers’ compensation policies provided no coverage to the LLC members, in accordance with Robert Friedauer’s instructions to defendant. As employees, however, Christopher Friedauer and his brother Michael Friedauer were covered by Holmdel Nurseries’ workers’ compensation policy during that period. 2. In April or May 2012, Michael Friedauer and Christopher Friedauer reached an agreement with Walter Friedauer to purchase Walter’s fifty percent interest in Holmdel Nurseries. Michael, Christopher, and Walter Friedauer made their agreement retroactive to January 1, 2012. As of that date, Michael Friedauer and Christopher Friedauer were no longer employees of the business, but rather members of the LLC, each owning a twenty-five percent share. On July 12, 2012, defendant held his annual meeting with Holmdel Nurseries management to discuss the LLC’s insurance needs. The parties 8 agree that Robert Friedauer, Michael Friedauer, and defendant attended the meeting. Plaintiff maintains that Christopher Friedauer was also present; defendant initially testified that Christopher did not attend the meeting but later said that he was uncertain whether Christopher was present. At the July 12, 2012 meeting, defendant learned for the first time that Walter Friedauer was no longer involved in the business and that Christopher Friedauer and Michael Friedauer had become members of the LLC. Defendant testified that the Friedauers’ primary concerns at the meeting were the deletion of Walter Friedauer’s name from Holmdel Nurseries’ insurance policies and insurance coverage for newly acquired machinery. Michael Friedauer testified, however, that he gave defendant “as much information as possible to just make sure we were protected.” It is undisputed that during the July 12, 2012 meeting, defendant did not tell Christopher Friedauer or Michael Friedauer that because they were LLC members rather than employees, they were no longer covered by Holmdel Nurseries’ workers’ compensation insurance, or that the LLC could elect to purchase workers’ compensation insurance that would cover them in case of a work-related accident. Robert Friedauer testified that following the July 12, 2012 meeting, he had “no reason to believe” that his sons were not covered by 9 Holmdel Nurseries’ workers’ compensation policy, and that he “never signed anything saying that they were in or out” of the LLC’s coverage. According to defendant, all three LLC members knew that they were excluded from workers’ compensation coverage and were satisfied “because they were saving premium dollars.” Like Holmdel Nurseries’ workers’ compensation policies for the period between 2002 and 2012, the policies that defendant secured for the LLC for 2013, 2014, and 2015 excluded the LLC members from workers’ compensation coverage. 3. On the morning of February 15, 2015, Christopher Friedauer was at work at Holmdel Nurseries preparing trucks for snowplowing. Michael Friedauer testified that he encountered Christopher, who was covered in snow, and observed that he “didn’t look like himself” and was “completely out of it.” According to Michael, Christopher told Michael that while he was trying to get his truck running, he had slipped and fallen on his head, hitting his head “so hard I saw stars.” Later that day, Michael Friedauer did not see his brother at Holmdel Nurseries, and searched for him at another location where employees were snowplowing. He testified that he found Christopher Friedauer “dead in a truck.” Christopher was taken to a hospital, where he was pronounced dead. 10  4. Shortly after Christopher Friedauer’s death, defendant filed a workers’ compensation claim for death benefits on behalf of Christopher’s dependents, plaintiff and her two minor children. He testified that he had no reason to expect that Holmdel Nurseries’ workers’ compensation policy covered the dependents’ claim because the LLC members had not opted for coverage. Holmdel Nurseries subsequently informed defendant by letter that he was no longer its insurance broker, and Farm Family assigned another broker to handle the business’s insurance needs. On the advice of its new broker, Holmdel Nurseries elected to provide workers’ compensation insurance for its LLC members, but later decided to forego that insurance coverage in favor of disability policies for the LLC members. B. 1. Plaintiff filed this action in the Law Division. She asserted a claim for professional negligence, alleging that defendant breached a duty to act as an insurance broker of reasonable skill and diligence by “inexplicably fail[ing] to recommend or obtain basic insurance coverage for Friedauer, such as workers’ compensation insurance, disability insurance or life insurance.” She also asserted a claim for breach of fiduciary duty, alleging among other contentions 11 that defendant violated his duty to act in a manner consistent with Christopher’s best interests by failing to confirm that he had workers’ compensation, disability, and life insurance. After the parties conducted discovery, defendant moved for summary judgment and plaintiff cross-moved for partial summary judgment. The trial court denied both summary judgment motions, and the case was tried before a jury. At trial, plaintiff testified and presented the testimony of Robert Friedauer and Michael Friedauer. Robert and Michael testified that had they been aware of the availability of insurance coverage for LLC members, they would have opted to obtain such coverage. Plaintiff also presented the testimony of two expert witnesses. Plaintiff’s expert on insurance brokerage practices opined that it was a “necessity for an insurance broker” to advise Christopher Friedauer that he would not have workers’ compensation coverage unless Holmdel Nurseries opted to include its LLC members in its workers’ compensation policy. The expert characterized defendant’s failure to provide such advice as a “gross error.” Plaintiff’s damages expert opined that plaintiff suffered damages in the range of $570,272 to $858,099, representing the present value of the workers’ compensation death benefit that would have been awarded to Christopher Friedauer’s dependents, based on his past 12 compensation, had he been covered by Holmdel Nurseries’ workers’ compensation policy. Plaintiff sought to introduce into evidence the report of the medical examiner who conducted Christopher Friedauer’s autopsy as proof that decedent’s death was work-related. The trial court excluded the report, noting that plaintiff offered no medical testimony on the cause of death or other medical evidence to establish that the dependents would have been entitled to a workers’ compensation death benefit had Christopher Friedauer been covered by the LLC’s policy. At the conclusion of plaintiff’s case, defendant moved for an involuntary dismissal under Rule 4:37-2(b), arguing that plaintiff had failed to present prima facie proof that he breached a duty to plaintiff. The trial court reserved on the motion. Defendant testified on his own behalf. He also presented the testimony of an expert on insurance brokerage practices. The expert opined that defendant did not violate any duty to Holmdel Nurseries, given the LLC’s decision not to pay for workers’ compensation coverage for its members and the lack of evidence that any LLC member inquired whether such coverage was available to the new LLC members. At the close of the evidence, defendant moved for judgment at trial pursuant to Rule 4:40-1. 13  The trial court held that an insurance broker owes a duty to an LLC to inform it of the availability of workers’ compensation coverage for its members and of its option to elect such coverage. The court noted, however, that the interests of the LLC and the interests of its members may not align. It rejected plaintiff’s argument that an LLC’s insurance broker has a duty to inform individual LLC members of their right to elect workers’ compensation coverage. The trial court declined to recognize a special relationship between defendant and Christopher Friedauer that might give rise to a duty of care, noting that their limited discussions related only to Christopher’s personal insurance coverage, not to Holmdel Nurseries’ workers’ compensation coverage. Addressing the issue of proximate cause, the trial court found no evidence that Christopher Friedauer would have decided that the LLC should provide workers’ compensation coverage to its members had he been aware that such compensation was available. The court ruled that there was no evidence that Robert and Michael Friedauer had the authority to bind the LLC to that election without Christopher’s assent. Finding that there was not a scintilla of evidence in the record that Christopher Friedauer suffered a work- related injury, the court stated that it was not in a position to decide whether 14 Christopher’s death would have been compensable had Holmdel Nurseries opted to cover its members for workers’ compensation. The trial court accordingly granted defendant’s motion for an involuntary dismissal and defendant’s motion for judgment at trial. 2. Plaintiff appealed the trial court’s judgment. The Appellate Division affirmed the trial court’s denial of plaintiff’s cross-motion for summary judgment. It reversed the trial court’s grant of defendant’s motion for involuntary dismissal pursuant to Rule 4:37-2(b) and motion for judgment at trial pursuant to Rule 4:40-1. The Appellate Division held that N.J.S.A. 34:15-36 imposes on an insurance broker a non-waivable duty to advise new members of an LLC that workers’ compensation coverage is available to them if all LLC members elect to obtain such coverage. The Appellate Division did not require plaintiff to prove that defendant committed “a willful, wanton or grossly negligent act of commission or omission” in order to recover damages, as N.J.S.A. 34:15-36 prescribes. Instead, the appellate court concluded that plaintiff presented sufficient evidence to warrant a jury determination whether defendant breached a duty to inform Christopher Friedauer that he could obtain workers’ compensation coverage if all LLC members elected such coverage. The 15 Appellate Division further determined that plaintiff had presented sufficient circumstantial evidence that Christopher Friedauer’s death was compensable to warrant a jury determination of that issue. It remanded the case to the trial court for a new trial. We granted defendant’s petition for certification. 250 N.J. 14 (2022). II. A. Defendant contends that the Appellate Division contravened N.J.S.A. 34:15-36 when it (1) imposed on insurance brokers a duty to inform new LLC members, individually, that workers’ compensation insurance is available to them and that they may elect such coverage and (2) applied an ordinary negligence standard instead of requiring plaintiff to prove a “willful, wanton or grossly negligent act of commission or omission” in accordance with the statute’s terms. Defendant also argues that the appellate court wrongly concluded that plaintiff presented evidence on the question of proximate cause that warranted the denial of defendant’s motion to dismiss and motion for judgment at trial. B. Plaintiff asserts that the Appellate Division properly recognized an insurance broker’s duty to provide notice to LLC members that unless all 16 members opt to purchase workers’ compensation insurance, they will not be covered by such insurance for a work-related injury or death. She urges that we leave undisturbed the Appellate Division’s holding that her proof of causation was adequate and argues that, regardless of whether an ordinary negligence standard or a gross negligence standard governs this case, defendant breached his duty to Christopher Friedauer and should be held liable. III. A. We review de novo the trial court’s legal determination that defendant had a duty to Christopher Friedauer, affording no special deference to the appellate court’s interpretation of the law and the legal consequences that flow from established facts. Jeter v. Sam’s Club, 250 N.J. 240, 251 (2022); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). We review the trial court’s grant of defendant’s motion for involuntary dismissal under Rule 4:37-2(b) and defendant’s motion for judgment at trial pursuant to Rule 4:40-1 under the standard that governs a trial court determining both motions. Smith v. Millville Rescue Squad, 225 N.J. 373, 397 (2016). Under that test, “if, accepting as true all the evidence which supports 17 the position of the party defending against the motion and according him the benefit of all inferences which can reasonably and legitimately be deduced therefrom, reasonable minds could differ, the motion must be denied.” Ibid. (quoting Verdicchio v. Ricca, 179 N.J. 1, 30 (2004)). B. The Workers’ Compensation Act provides that “[w]hen personal injury is caused to an employee by accident arising out of and in the course of his employment, of which the actual or lawfully imputed negligence of the employer is the natural and proximate cause, he shall receive compensation therefor from his employer.” N.J.S.A. 34:15-1. N.J.S.A. 34:15-36, which defines the term “employee” for purposes of the Act,