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GENIE TRUCKING LINE v. AMERICAN HOME ASSURANCE COMPANY (04/24/87)

filed: April 24, 1987.

GENIE TRUCKING LINE, INC., APPELLANT,
v.
AMERICAN HOME ASSURANCE COMPANY, APPELLEE



Appeal from Judgment of the Court of Common Pleas, Civil Division, of Cumberland County, No. 297 Civil, 1985.

COUNSEL

James D. Flower, Jr., Carlisle, for appellant.

Kenneth F. DeMarco, Philadelphia, for appellee.

Wieand, Olszewski and Tamilia, JJ.

Author: Wieand

[ 362 Pa. Super. Page 457]

The issue in this appeal is the correct computation of premiums owed by Genie Trucking Lines, Inc. (Genie) for workers' compensation coverage provided by a policy of insurance issued by American Home Assurance Company (American Home). Genie contended that it had overpaid the premiums by $7,506.09 and commenced an action to recover the same. American Home contended that the premiums had been underpaid by $17,764.00 and counterclaimed for that amount. After trial without jury, the court found that Genie was indebted to American Home in the amount of $17,764.00 and, following denial of Genie's post-trial motion, judgment was entered in favor of American Home for that amount. Genie appealed. We affirm.

G. Kenneth Bishop was president and one of three stockholders of Genie. Shortly after becoming president in 1981,

[ 362 Pa. Super. Page 458]

Bishop requested the issuance of a policy of workers' compensation insurance from James E. Bankes, a member of the Rollins-Burdick-Hunter Agency. Bishop told Bankes that Genie regularly utilized the services of trucking contractors whose trucks were driven by drivers employed by the trucking contractors, and that he wanted a policy of insurance which did not provide coverage for the contractors or their drivers. Bankes, despite diligent efforts, was unable to find an insurance company willing to issue workers' compensation coverage without charging a premium because of the exposure created by potential claims on behalf of the trucking contractors and their drivers. Bankes ultimately obtained a policy from American Home, for which Genie was billed $8,776.00.*fn1 This premium was determined by including trucking contractors and their drivers in the premium rate base. It was paid by Genie.

Thereafter, an audit was conducted to verify the number of persons covered, together with their remuneration, so that the precise amount of the premium could be determined. After the audit had been completed, Bishop became displeased because the contractors and their drivers had been included in the premium rate base. Bishop requested another audit and displayed to the auditor the lease agreements with trucking contractors. He was thus able to persuade the auditor that the trucking contractors were independent contractors and that their drivers were not employees of Genie. In reliance thereon, Genie contended that it had overpaid the correct premium ($1,269.91) by $7,506.09. American Home denied that a refund was owed. It notified Genie that the premium had initially been underestimated and that the correct premium was $26,540.00. Based on this computation, Genie allegedly owed a balance of $17,764.00.

The dispute at trial was whether the trucking contractors and their drivers were to be included in the premium rate base. According to the language of the policy, coverage was provided for "clerical employees and truckmen," and the premium was to be determined according to whether the

[ 362 Pa. Super. Page 459]

    truck drivers "may render the company liable under the policy for injury to or death of such person in accordance with the workmen's compensation law."*fn2 The trial court found that potential liability did exist with respect to the drivers of the trucking contractors and ...


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