TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

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NO. 03-98-00056-CV

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Texas Workers' Compensation Insurance Facility, Appellant

v.

Peakload Inc. of Bexar County, et al., Appellees

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FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NO. 96-00513, HONORABLE HUME COFER, JUDGE PRESIDING

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The Texas Workers' Compensation Insurance Facility (the "Facility") sued numerous Peakload corporations ⁽¹⁾ and individual members of the Dowdy family ⁽²⁾ (collectively "appellees") to recover the difference between the amount of insurance premiums paid by the corporations and the amount claimed to be owing under the Facility's allegations. The Facility appeals from a summary judgment that it take nothing by its claims against appellees. We will affirm the summary judgment.

THE CONTROVERSY

The Facility is a non-profit, unincorporated association of insurers authorized to write workers' compensation insurance in Texas for employers unable to obtain coverage through private insurance companies. ⁽⁴⁾ These employers are designated "rejected risks." Tex. Ins. Code Ann. art. 5.76-2, § 1.01(10) (West Supp. 1998). The Facility must provide insurance coverage under the statutory scheme for any "risk" (employer) that appears to be "in good faith entitled to insurance." Id. § 4.02(b) (West Supp. 1998). Once the Facility determines that a company is entitled to coverage, the Facility calculates the premium in accordance with classifications and rates established by the Commissioner. ⁽⁵⁾

Two factors are used to account for risk in the premium calculation: (1) employees are classified according to risks associated with the work performed; and (2) an employer is rated according to its history of claims filed. Texas Workers' Comp. Ins. v. Personnel Serv., 895 S.W.2d 889, 891 (Tex. App.--Austin 1995, no writ). Employers are assigned an experience modifier based on loss history in order to promote safety and to encourage the filing of fewer claims. An employer with fewer claims receives a credit modifier, namely a multiplier less than 1.0, that reduces the standard premium for workers' compensation insurance. An employer with frequent job-related claims is assigned a multiplier greater than 1.0, or debit modifier, that increases the standard premium. A new business with no loss history is assigned the neutral modifier of 1.0 and pays the standard premium.

Several Peakload corporations obtained workers' compensation insurance from the Facility. ⁽⁶⁾ Six insurance policies are at issue in this appeal: a policy issued to Peakload Inc., of Bexar County for the period January 16, 1991, through January 16, 1992; two annual policies obtained in the name of Peakload Inc., of Harris County for the period March 14, 1992, to March 14, 1994; and three annual policies obtained in the name of Peakload Personnel Services, Inc., for the period April 15, 1991, to April 15, 1994. Each policy was the subject of a final audit by the Facility's servicing carriers. The Facility concedes the Peakload corporations paid in full the resulting premiums calculated and charged by the Facility.

Believing the various corporations owned by the Dowdy family were mere "shells" used to avoid application of the debit modifiers, by shifting payrolls from corporations with high debit modifiers to newly created Peakload corporations entitled to the standard premium, the Facility brought two causes of action in the present lawsuit: (1) an action for fraud based upon the Dowdys' misrepresentation of the "true nature" of the relationships between the Peakload corporations; and (2) an action for breach of contract based on a theory that the Peakload corporations were in fact and law a single employer and failed to pay premiums calculated on that basis by means of a proper debit modifier. Both causes of action depend upon a common element: the Dowdy family and the Peakload corporations misrepresented the fact that the corporations were, in truth, a single employer or business entity for the purpose of calculating workers' compensation insurance premiums. Because we find the record disproves conclusively this essential element of the Facility's causes of action for fraud and breach of contract, we need not discuss appellees' affirmative defense that the causes of action are barred by the statute of limitations found in section 16.004(a)(3) of the Civil Practice and Remedies Code. ⁽⁷⁾  

Fraud

In its third point of error, the Facility contends the trial court erred in granting appellees' motion for summary judgment because the summary judgment record raised a genuine issue of material fact concerning whether the Dowdys misrepresented or concealed material facts regarding the true ownership, control, and relationships among the Peakload corporations in order to evade the debit modifier, causing the Facility to provide insurance in excess of the risk for which it received premiums.

The substance of a common-law fraud action is deception as to an existing material fact. Southwestern Bell Tel. Co. v. Meader Constr. Co., 574 S.W.2d 839, 843 (Tex. Civ. App.--El Paso 1978, writ ref'd n.r.e.). The substantive elements are: (1) a material representation, (2) that is false, (3) that the defendant knew was false when made, (4) that was made with the intention that it be acted upon by the other party, (5) that the party acted in reliance on it, and (6) damages. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992).

In its first amended petition, the Facility alleged six instances of fraudulent conduct, ⁽⁸⁾ all allegedly motivated by the Dowdys' attempt to conceal that Peakload Inc. was "actually operating as a single employer to intentionally prevent the Facility from acquiring the necessary and material information to compute the proper amount of workers' compensation insurance premiums to charge." ⁽⁹⁾ The Facility alleged that based upon these misrepresentations, it provided workers' compensation insurance to "the corporate shells of Peakload Inc." at substantially lower premiums than would have been charged had the Facility not been deceived into believing that the "corporate shells" were separate legal entities.

To determine if the record raises an issue of whether the Dowdys defrauded the Facility in the manner alleged, we consider first what constitutes the "employer" ⁽¹⁰⁾ when applying for workers' compensation insurance. ⁽¹¹⁾ The Facility contends its method of calculating premiums for workers' compensation insurance is based on evaluating the "entire experience of the . . . employer on all of its operations." The Facility states,

No matter how many operations, or forms of operations, a risk has, the first question which must be addressed in determining coverage under a workers' compensation insurance policy is who is the employer. Once the employer is determined, the workers' compensation rules provide that even separate employers may be combined for purposes of workers' compensation insurance if those separate employers are owned by the same people or group of people.

The Facility argues: (1) that the Peakload corporations should be considered a single employer known as "Peakload Inc.," but (2) if the Peakload corporations are indeed separate employers, they are combinable under the rules of the Commissioner for the purpose of calculating premiums.

To support its contention that the various Peakload corporations should be considered a single employer known as "Peakload Inc.," the Facility relies on the deposition testimony of J. H. Dowdy and Marc Dowdy. According to the Facility, certain admitted practices of the Peakload corporations--moving payroll obligations from one corporation to another, moving employees from one corporation to another without a change in job responsibilities, and performing administrative work for all the corporations out of the same central office--suggest that a single employer wielded control over all of the Peakload corporations and their employees. This brings the case within the rule that the employer of an individual is the entity having the right to control the manner of performing his or her services. See Texas Workers' Comp. Ins., 895 S.W.2d at 893.

We reject the Facility's theory. It is undisputed that the three corporations in question--Peakload Inc. of Bexar County, Peakload Inc. of Harris County, and Peakload Personnel Services, Inc.--are distinct legal entities. It is undisputed that each paid premiums calculated accordingly. Each is a corporation organized and existing under the laws of the State of Texas; none of the three is owned by the same person or group of persons. ⁽¹²⁾ While it is true that an "employer" of an individual is the entity having the right to control the manner of performing his or her services, ⁽¹³⁾ it does not necessarily follow that corporations organized and existing as separate legal entities become a single employer merely because each allegedly exercises control, at different times, over the same individuals.

None of the decisions cited by the Facility discuss employee control in the present context where legally distinct employers are alleged to be in fact and law a single employer. The decisions discuss instead the liability of one legal entity for the obligations of another legal entity when employees of the first employer become "borrowed employees" ⁽¹⁴⁾ of the second employer. Resolution of the "borrowed employee" issue involves a determination of whether the services of an employee in the general employment of one employer have been loaned temporarily to another employer. The present controversy does not involve a question of which corporate entity was the employer of a particular employee at the time of a particular workers' compensation claim. These decisions do not, therefore, support the Facility's "single employer" theory.

The two decisions ⁽¹⁵⁾ cited by the Facility for the proposition that, under Texas law, multiple entities can be a single employer for the purposes of workers' compensation insurance fail to substantiate the argument. We reject the Facility's "single employer" argument.

The Facility contends that even if the Peakload corporations are separate employers, they are nevertheless combinable under the Commissioner's rules as a "single business enterprise." ⁽¹⁶⁾ The Facility relies upon a rule that even legally distinct employers may be combined for purposes of workers' compensation insurance if the majority interest in those separate employers is owned by the same people or group of people. See Texas Basic Manual of Rules, Classifications and Rates for Workers Compensation and Employers' Liability Insurance, Rule III B(1)-(3). ⁽¹⁷⁾ Rule III B(1) provides as follows: "Separate legal entities may be insured in one policy only if the same person, or group of persons, owns the majority interest in such entities. Classifications shall be applied separately to each legal entity."

On its face, Rule III B(1)-(3) is not applicable. As stated previously, it is undisputed in the summary judgment record that each Peakload corporation is a corporation organized and existing under the laws of Texas and none of the capital stock of the three pertinent corporations ⁽¹⁸⁾ is owned by the same person or group of persons. The Facility contends that the various Peakload corporations remain combinable, nevertheless, because of the precedential effect of a 1995 Commissioner decision in an appeal by a corporation titled L.S. Mitchell & Sons, Inc. The Commissioner's order upholds cancellation of the Mitchell workers' compensation insurance policy for nonpayment of assessed premiums. The findings of fact made in the agency proceeding indicate that the Mitchell corporation, a corporation known as Highland's Manufacturing, Inc. ("HMI"), and a corporation known as Baytown Ship Repair ("BSR"), were separate legal entities owned by three different individuals. In the order, the Commissioner made the following conclusion of law:

Based on Findings of Fact Nos. 5 through 31, [Mitchell] and HMI should be treated as a single employer for the purposes of obtaining workers' compensation insurance from the Fund. Rule III.B.2 and 3 of the Texas Workers' Compensation and Employers' Liability Manual.

The Commissioner's order was affirmed in an unpublished decision of a Travis County District Court. ⁽¹⁹⁾ The record made before the Commissioner is not included in the record now before us on appeal, and an examination of the face of the Commissioner's order does not convince us that the circumstances in the Mitchell case are sufficiently similar to the present case to be persuasive. In particular, there is nothing in the order to indicate the Commission considered the central issue involved in the present controversy, namely a disregard of the autonomous legal status of distinct corporations in order to establish fraud and collect additional workers' compensation premiums. Instead, the order appears to base a cancellation of workers' compensation insurance on a failure to pay assessed premiums. ⁽²⁰⁾

We hold, therefore, that under Rule III B(1)-(3), the Peakload corporations are not combinable because the Rule requires that "the same person, or group of persons, [own] the majority interest in [the separate legal] entities." ⁽²¹⁾ The Facility's summary judgment proof, detailing the various factors upon which a court could base a decision applying the rule, does not raise a disputed material fact issue in that regard.

Nothing in the summary judgment record suggests the Peakload corporations acted as either a single employer or a single business entity; each Peakload corporation must therefore be considered a separate employer for the purpose of workers' compensation insurance. It is true, as the Facility contends, that the Peakload corporations had a statutory duty to fully disclose information concerning their true ownership, change of ownership, operations, and payroll. See Tex. Ins. Code Ann. art. 5.65-B(b) (West Supp. 1998). Nothing in the record shows a violation of this statute. The record shows instead, without dispute, that each Peakload corporation provided the Facility with accurate representations, based upon its status as a separate legal entity, and thus complied exactly with the disclosure requirements of the statute. All of the summary judgment evidence relied upon by the Facility to prove the Peakload corporations misrepresented and concealed material facts, is based upon a premise that an entity known as "Peakload Inc." was in fact the single employer of all employees of each Peakload corporation. Nothing in the summary judgment record tends to establish this premise; it is merely a proposition alleged and assumed by the Facility. The Facility has alleged no other basis for its claim of fraud; therefore, appellees have met their burden of showing there is no genuine issue of material fact concerning the fraud claim. We overrule point of error three.

Breach of Contract

The word "breach," as applied to contracts, is defined as a failure without legal excuse to perform a promise which forms a whole or a part of the contract. See 17A Am. Jur. 2d, Contracts § 716 (1991). The Facility contends the Peakload corporations breached their contracts for workers' compensation insurance by failing to pay premiums based on their alleged operation as a single employer.

Appellees filed undisputed summary judgment proof that each Peakload corporation paid all premiums calculated and assessed by the Facility. Appellees are therefore entitled to summary judgment unless the summary judgment record raises a genuine issue of fact concerning misrepresentations by appellees that led to the calculation and assessment of unlawfully low premiums. Because each Peakload corporation is a separate employer for purposes of workers' compensation insurance premiums, the record does not raise such a fact issue. Appellees have in consequence disproved as a matter of law the Facility's contention that appellees failed to perform a whole or part of any workers' compensation insurance contract.

We affirm the summary judgment.

John Powers, Justice

Before Justices Powers, Aboussie and Kidd

Affirmed

Filed: November 19, 1998

Do Not Publish

1. The Peakload corporations, all involved in the businesses of employee leasing and temporary labor services, are: Peakload Inc. of Bexar County, Peakload Personnel Services, Inc., Peakload Inc. of Texas, Peakload Inc. of Harris County, and Peakload Inc. of America. Each is a corporation organized and existing under the laws of the State of Texas.

2.

The individual members of the Dowdy family named in suit are: J. H. Dowdy, Dona J. Dowdy, Marc S. Dowdy, Yolanda Canales Dowdy, and Gilbert Munoz. J. H. Dowdy is the founder of the family business and is married to Dona J. Dowdy. Marc Dowdy is married to Yolanda Dowdy, Gilbert Munoz' mother. At the time suit was filed, the Dowdy family members named above (as well as Marc Dowdy's daughter, Tiffany, who was not a named defendant) were the sole owners ⁽³⁾

3. Marc S. Dowdy's daughter, Tiffany Dowdy, was listed as a part owner of three of the corporations, but she was not named individually in the lawsuit.

4. The Facility operates as a governmental body only for purposes of the Open Records and Open Meeting Acts, Tex. Ins. Code Ann. art. 5.76-2, §§ 2.01, .11 (West Supp. 1998). The Facility stopped writing workers' compensation insurance on December 31, 1993. See Act of Aug. 25, 1991, 72d Leg., 2d C.S., ch. 12, § 18.24, 1991 Tex. Gen. Laws 362, 362. On January 1, 1994, the Texas Workers' Compensation Insurance Fund became the insurer of last resort for workers' compensation insurance in Texas. Tex. Ins. Code Ann. art. 5.76-4 (West Supp. 1998).

5. The duties of the former State Board of Insurance are now performed by the Commissioner of Insurance or the Texas Department of Insurance consistent with their respective powers and duties set forth in the Insurance Code. See Tex. Ins. Code Ann. arts. 1.01A, .02 (West Supp. 1998); see also Act of May 27, 1991, 72d Leg., R.S., ch. 242, § 13.01, 1991 Tex. Gen. Laws 939, 1133. For convenience, we will use the word "Commissioner" to refer to both the Commissioner of Insurance and the Texas Department of Insurance.

6. The Facility contracts with an independent insurer to become a servicing carrier for the Facility. A servicing carrier issues and services insurance policies on behalf of the Facility, including auditing and collecting premiums. The Facility and not the servicing company is the insurer. See Maintenance v. ITT Hartford Group, Inc., 895 S.W.2d 816, 818 (Tex. App.--Texarkana 1995, writ denied). The servicing company is simply an agent that issues a policy for the pool. Id.

7. We review the record under familiar precepts: (1) a movant for summary judgment bears the burden of showing the absence of a genuine issue of material fact and that he is entitled to judgment as a matter of law; (2) in deciding whether there exists a disputed issue of material fact precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference from the record must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). A defendant is entitled to summary judgment if the record disproves conclusively at least one of the essential elements of the plaintiff's cause of action or establishes as a matter of law the elements of an affirmative defense. See Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex. 1990).

8. The petition states,

This fraudulent conduct included, but was not limited to the following:

a. Every application denied that the company operated under the name Peakload Inc.

b. Every application denied that the controlling owners of applicant owned over 50% of any other business operation in Texas.

c. Every application denied that applicant had previously applied to the Facility for insurance coverage.

d. Every applicant misrepresented the estimate of payroll initially.

e. Every applicant refused to maintain by employee in class of work accurate records of the total remuneration earned by each employee and when audited misrepresented that the employees were not all employees of one employer.

f. Every application misrepresented that the true ownership of the applicant was the Dowdy family, and that applicant was merely a part of a single employer.

9. The Facility denominates the alleged single employer "Peakload Inc." Appellees deny that such an entity exists, flatly stating, "There is no such thing as 'Peakload, Inc.' which like 'Peakload Services' is a trade name utilized by all the Peakload companies, as was repeatedly disclosed to [the Facility]." The summary judgment record does not show the existence of a legal entity bearing the title "Peakload Inc." Nothing in the summary judgment record purports to attack the corporate status of any of the Peakload corporations.

10. The Texas Workers Compensation and Employers Liability Manual defines employer as "an individual, partnership, joint venture, corporation, association, or a fiduciary such as a trustee, receiver or executor, or other entity."

11. The Facility places its discussion of this issue in its first point of error.

12. According to applications filed with the Facility and Marc Dowdy's affidavit filed in the cause, at the times material to the litigation Yolanda Canales Dowdy owned all the capital stock of Peakload Inc., of Bexar County, Gilbert Munoz owned all the capital stock of Peakload Inc., of Harris County, and Dona J. Dowdy owned all the capital stock of Peakload's Personnel Services, Inc.

13. See Texas Workers' Comp. Ins. v. Personnel Serv., 895 S.W.2d 889, 893 (Tex. App.--Austin 1995, no writ); Marshall v. Toys-R-Us Nytex, Inc., 825 S.W.2d 193, 196 (Tex. App.--Houston [14th Dist.] 1996, writ denied).

14. Texas courts recognize that a general employee of one employer may become the borrowed servant of another. Sparger v. Worley Hosp., Inc., 547 S.W.2d 582, 583 (Tex. 1977). The doctrine protects the employer who had the right of control from common-law liability. Dension v. Heber Roofing Co., 767 S.W.2d 862, 864 (Tex. App.--Corpus Christi 1989, no writ).

15. See Maryland Cas. Co. v. Sullivan, 334 S.W.2d 783 (Tex. 1960); Gomez v. Texas Cas. Ins. Co., 355 S.W.2d 546 (Tex. Civ. App.--Austin 1962, no writ).

16. By considering the application of the "single business enterprise" theory, we impliedly reject appellees' argument that the Commissioner has primary jurisdiction to decide whether the Peakload corporations may be treated as a single business enterprise. A recent opinion by this court considered another rule contained in Texas Basic Manual of Rules, Classifications and Rates for Workers Compensation and Employers' Liability Insurance and made no mention of any unresolved administrative issues that had to be first adjudicated by the Commissioner. Texas Workers' Comp. Ins., 895 S.W.2d at 891. Moreover, the Facility "has the legal rights of a private person in this state and the power to sue in its own name. No procedure established under [article 5.76-2 of the Insurance Code] is a prerequisite to the exercise of the power by the facility to sue." Tex. Ins. Code Ann. art. 5.76-2, § 2.05(m) (West Supp. 1998). Accordingly, we do have jurisdiction to decide whether premiums are owed on the basis of the "single business enterprise" theory.

17. The rules contained in the

Texas Basic Manual of Rules, Classifications and Rates for Workers Compensation and Employers' Liability Insurance were promulgated by the Commissioner. Texas Insurance Code section 5.96(a) gives the Commissioner the power to promulgate rules governing workers' compensation insurance. Although the rules are not published in the Texas Register, the Commissioner gives notice through the Register when new rules or changes to rules are proposed. Tex. Ins. Code Ann. § 5.96(a) (West Supp. 1998). Texas Insurance Code section 5.96(k) states, "The Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes), does not apply to [Commissioner] action taken under this article." Therefore, the rules in question were not promulgated under the Administrative Procedure Act and do not appear in the Texas Administrative Code. Tex. Ins. Code Ann. § 5.96(k) (West Supp. 1998).

18. The corporations that obtained insurance policies at issue in this appeal are: Peakload Inc., of Bexar County, Peakload Inc., of Harris County, and Peakload Personnel Services, Inc.

19. See judgment by Judge Dietz, April 16, 1996, Travis County District Court, Cause No. 95-09147.

20. Finding of fact no. 31 states, "When assessed additional premium based on combining HMI's payroll with APPELLANT's payroll, APPELLANT did not pay the increased premium."

21. Appellees contend the Commissioner, in a series of letters sent to the Facility and various Peakload corporations, informed the Facility the Peakload corporations could not be combined for experience rating. Appellees argue the letters constitute "acts or decisions" of the Commissioner, appealable first to the Commissioner for reconsideration, and only then to district court. See Tex. Ins. Code Ann. art. 5.76-2, § 2.09(a) (West Supp. 1998) ("If the fund or facility is adversely affected by an act or decision of the board, it may make a written request for reconsideration to the board not later than the 30th day after the act or decision.") (emphasis added). Appellees argue the Facility never appealed the combinability decisions to the Commissioner and that the statutory time limit has expired, preventing any further reconsideration.

Our decision that the Facility's summary judgment proof does not raise a disputed material fact issue regarding fraud is not based on this collateral-attack argument. The use of the word "may" in a statute is usually construed to mean the Legislature intended the particular provision to be merely directory or permissive. See Valles v. Texas Comm'n on Jail Standards, 845 S.W.2d 284, 288 (Tex. App.--Austin 1992, writ denied). Upon receipt of the Commissioner's combinability decisions, the Facility chose not to make a written request for reconsideration. The Facility's lawsuit seeking money damages based on fraud and breach of contract is permissible and is not an improper collateral attack on the combinability decisions of the Commissioner.

employer who had the right of control from common-law liability. Dension v. Heber Roofing Co., 767 S.W.2d 862, 864 (Tex. App.--Corpus Christi 1989, no writ).

15. See Maryland Cas. Co. v. Sullivan, 334 S.W.2d 783 (Tex. 1960); Gomez v. Texas Cas. Ins. Co., 355 S.W.2d 546 (Tex. Civ. App.--Austin 1962, no writ).

16. By considering the application of the "single business enterprise" theory, we impliedly reject appellees' argument that the Commissioner has primary jurisdiction to decide whether the Peakload corporations may be treated as a single business enterprise. A recent opinion by this court considered another rule contained in Texas Basic Manual of Rules, Classifications and Rates for Workers Compensation and Employers' Liability Insurance and made no mention of any unresolved administrative issues that had to be first adjudicated by the Commissioner. Texas Workers' Comp. Ins., 895 S.W.2d at 891. Moreover, the Facility "has the legal rights of a private person in this state and the power to sue in its own name. No procedure established under [article 5.76-2 of the Insurance Code] is a prerequisite to the exercise of the power by the facility to sue." Tex. Ins. Code Ann. art. 5.76-2, § 2.05(m) (West Supp. 1998). Accordingly, we do have jurisdiction to decide whether premiums are owed on the basis of the "single business enterprise" theory.

17. The rules contained in the

Texas Basic Manual of Rules, Classifications and Rates for Workers Compensation and Employers' Liability Insurance were promulgated by the Commissioner. Texas Insurance Code section 5.96(a) gives the Commissioner the power to promulgate rules governing workers' compensation insurance. Although the rules are not published in the Texas Register, the Commissioner gives notice through the Register when new rules or changes to rules are proposed. Tex. Ins. Code Ann. § 5.96(a) (West Supp. 1998). Texas Insurance Code section 5.96(k) states, "The Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes), does not apply to [Commissioner] action taken under this article." Therefore, the rules in question were not promulgated under the Administrative Procedure Act and do not appear in the Texas Administrative Code. Tex. Ins. Code Ann. § 5.96(k) (West Supp. 1998).

18. The corporations that obtained insurance policies at issue in this appeal are: Peakload Inc., of Bexar County, Peakload Inc., of Harris County, and Peakload Personnel Services, Inc.

19. See judgment by Judge Dietz, April 16, 1996, Travis County District Court, Cause No. 95-09147.

20. Finding of fact no. 31 states, "When assessed additional premium based on combining HMI's payroll with APPELLANT's payroll, APPELLANT did not pay the increased premium