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06/20/97 WAUSAU GENERAL INSURANCE COMPANY v. KIM'S

June 20, 1997

WAUSAU GENERAL INSURANCE COMPANY, A CORPORATION, PLAINTIFF-APPELLEE,
v.
KIM'S TRUCKING, INC., A CORPORATION, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. No. 94-L-13758. Honorable David G. Lichtenstein, Judge Presiding.

Rehearing Denied July 22, 1997. Released for Publication August 5, 1997.

The Honorable Justice Theis delivered the opinion of the court. Greiman, P.j., and Quinn, J., concur.

The opinion of the court was delivered by: Theis

JUSTICE THEIS delivered the opinion of the court:

Defendant, Kim's Trucking, Inc. (Kim's), appeals from the trial court's order granting summary judgment in favor of plaintiff, Wausau General Insurance Company (Wausau), and denying Kim's cross-motion for summary judgment. Wausau sued Kim's to collect premiums allegedly due under two workers' compensation insurance policies issued to Kim's. Wausau successfully argued to the trial court that the insurance policies required Kim's to pay premiums for its own employees as well as for outside truck haulers hired by Kim's. On appeal, Kim's asserts that it is not liable for the premiums because the haulers were independent contractors. For the following reasons, we affirm.

Kim's Trucking, Inc., is an Illinois corporation. Kimberly Keyl-Bulmann is the president and sole officer. Kim's is in the business of "road construction trucking," that is "road construction which revolves around the hauling of asphalt, broken asphalt, excavated materials, sand and stone." According to the deposition testimony of Keyl-Bulmann, Kim's hauls construction materials and is not involved in the loading or unloading of those materials. When Kim's has more work than its own employees can handle, it will hire outside haulers on a job specific basis.

In April 1991, Kim's obtained a workers' compensation and employer liability insurance policy from Wausau General Insurance Company, a Wisconsin corporation. The policy was to insure all employees and drivers for an estimated annual premium of $6,262. The policy period was from April 1991 to April 1992 (1991-92 policy year). Kim's obtained a second policy in April 1992 to run from April 1992 to April 1993 (1992-93 policy year). During the 1991-92 policy year, Kim's retained three employees and contracted out for 13 additional haulers on an as-needed basis. During the 1992-93 policy year, Kim's retained three employees and contracted out for two additional outside haulers. During both policy years, Kim's paid the premiums for its retained employees.

Nevertheless, Wausau claimed that under the terms of the insurance policies, Wausau was also entitled to premiums for the outside haulers unless Kim's could provide proof that they were insured elsewhere. Kim's produced certificates of insurance for a few of the outside haulers, but argued that the remaining entities were independent contractors, and, therefore, Kim's was not liable for their workers' compensation insurance. Wausau then filed suit to collect the additional premiums alleging that Kim's owed $27,857 for the 1991-92 policy year and $5,553 for the 1992-93 policy year.

Wausau and Kim's filed cross-motions for summary judgment. In its summary judgment motion, Wausau argued that Kim's was engaged in excavation, an extrahazardous activity under the Workers' Compensation Act (the Act), which requires employers to provide automatic insurance coverage for their own employees as well as for the employees of any independent or subcontractors. Ill. Rev. Stat. 1991, ch. 48, par. 138.1(a)(3). As such, Wausau could be potentially liable for Kim's outside haulers and, thus, was entitled to recover insurance premiums from Kim's for the outside haulers.

In its response and cross-motion for summary judgment, Kim's argued that it was not engaged in excavation so as to require Kim's to provide automatic insurance coverage for employees of its independent contractors under the Workers' Compensation Act. In addition, Kim's claimed that Wausau had the burden of proving that the money was due and that Wausau had improperly tried to shift this burden. The trial court granted summary judgment in favor of Wausau in the amount of $32,437, plus court costs. On appeal, Kim's argues that the trial court erred by granting summary judgment in favor of Wausau and reasserts the arguments made to the trial court.

In reviewing a trial court's order granting summary judgment, we examine the evidence and issues de novo. We consider all of the facts in the light most favorable to the nonmovant, in this case, Kim's Trucking. Koehler v. Scandinavian Airlines Systems, 285 Ill. App. 3d 520, 524, 674 N.E.2d 112, 116, 220 Ill. Dec. 841 (1996). Summary judgment is appropriate when the pleadings, depositions, and admissions on file demonstrate that there is no genuine issue of fact such that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West 1992).

Resolution of this case turns on interpretation of the insurance policies issued by Wausau to Kim's. The policy terms contained in Part 5 relating to premiums explain that premiums are calculated based on payroll:

"And all other remuneration paid or payable during the policy period ...


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