On appeal from Superior Court, Law Division, Middlesex County.
Petrella, Long and Keefe. The opinion of the court was delivered by Petrella, P.J.A.D.
[261 NJSuper Page 318] Aetna Insurance Company (Aetna) appeals from the denial of its motion for summary judgment and the grant of Trans American Trucking Service's (Trans American) cross-motion for
summary judgment on its counterclaim. Aetna instituted suit in 1989 to recover for what it claimed as additional workers' compensation insurance premiums for Trans American's 1986-1987 policy period.*fn1 Trans American denied owing additional premiums, and counterclaimed for reimbursement of $38,938.48 in contested additional premiums on the preceding year's policy.
Notwithstanding that it had moved for summary judgment, Aetna now takes the position on appeal that the record on which the motion Judge dismissed its complaint and entered summary judgment in favor of Trans American "was totally inadequate."*fn2 Aetna claims entitlement to additional premiums for the workers' compensation insurance policy because the yearly premium charged at the beginning of each policy period represents an estimate which is subject to adjustment at the end of the policy period based upon Aetna's actual exposure during that period. To assist Aetna in determining if potential liability was more or less than "estimated," its policy provides for an audit of its insured's records relating to risks covered by the policy. One such record Aetna examines is the insured's payroll for the policy period to determine the number of covered employees.
In the case of an insured which operates a trucking company, when Aetna cannot gain access to what it considers all payroll records for its audit, it adjusts the premium by a formula in § 3:3-46 of the New Jersey Workers' Compensation and Employers' Liability Insurance Manual,*fn3 (hereinafter "Workers'
Compensation Manual") compiled by the Compensation Rating and Inspection Bureau (Bureau).*fn4 This section contains what is referred to by the parties as the "hired vehicle rule," and provides:
46. Hired Vehicles. If vehicles, including drivers, chauffeurs and helpers are employed under contract and if the owner of such vehicles has not insured its compensation obligation and furnished evidence of such insurance, the actual payroll of the drivers, chauffeurs and helpers shall be included in the payroll of the insured employer at the proper rate for the operations in which the insured employer is engaged. If such payroll cannot be obtained, one-third (1/3) of the total amount paid for the hire of such vehicles under contract shall be considered as the payroll of the drivers, chauffeurs and helpers. If the proprietor or partners*fn5 who own the vehicles are also drivers, one-third (1/3)
of the contract amount for the vehicles operated by such proprietor or partners shall be included in the payroll of the insured employer. Such amounts shall exclude fuel surcharge costs, in accordance with Interstate Commerce Commission regulations provided the employer's books and records are maintained to show such costs separately and in summary. [Emphasis supplied].
The dispute giving rise to this case stems from Aetna's attempts to charge Trans American additional premiums (under the hired vehicle rule) based on Trans American's use of outside truckers or independent contractors in addition to its regular full-time drivers.*fn6
Aetna audited Trans American's books and records for the 1984-1985 policy period, including those relating to independent contractors, and did not charge any additional premiums for them for that period.*fn7
For the 1985-1986 policy period, Aetna again audited Trans American's records, but this time it billed Trans American $38,938.48 for coverage of the "independent contractors." Trans American paid that amount.*fn8 It says it objected to the additional charge, but paid under protest after Aetna threatened to cancel all of its insurance unless full payment of the
disputed amount was made. Aetna contends that Trans American paid the sum without reservation and sought reimbursement only after being charged an additional premium for the next policy period.
Trans American took the position when Aetna conducted the 1986-1987 policy period audit that Aetna could not examine records pertaining to truckers used under its independent contractor program because it did not have to provide workers' compensation coverage for them. As a result, Aetna used the amount from the previous policy period and applied the formula for hired vehicles to arrive at an additional premium for that policy period of $47,714.*fn9 Trans American refused payment and suit by Aetna ensued.
During pretrial discovery, Trans American propounded certain interrogatories upon Aetna concerning the independent contractor issue. The relevant questions and Aetna's responses were:
42. Whether Aetna contends that Trans American Trucking Services, Inc. is required to pay premiums for independent owner operators. If so,
a) Set forth the factual and legal basis for Aetna's position.
[Aetna's response] See policy manual attached and case law attached.*fn10 Aetna contends that the defendant is required to pay premiums for independent owner operators if they do not have their own insurance coverage. Same is pursuant to the New Jersey Workers' Compensation and Employers' Liability Insurance Manual ...