The New Jersey Supreme Court held that a defendant insurance broker had a duty to advise LLC members that they were eligible for workers' compensation coverage, but that the broker may not be held liable for breach of that duty unless the damages alleged were caused by a "willful, wanton, or grossly negligent act of commission or omission."

According to the opinion, two brothers, Robert and Walter Friedauer, owned Holmdel Nurseries and formed an LLC in which each held 50% interest. The brothers ran the business, first founded by their father, since 1978. Robert Friedauer's sons Michael and Christopher began working for Holmdel as teenagers and were both full-time employees. Daniel Purdy, an insurance broker with decades of experience in commercial insurance for agriculture-related businesses, began serving as the insurance broker for Holmdel in 2002.