                                NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1353-18T2

FOURNIER TRUCKING, INC.,

          Plaintiff-Appellant,

v.

NEW JERSEY MANUFACTURERS
INSURANCE COMPANY (d/b/a
NEW JERSEY CASUALTY
INSURANCE COMPANY),

     Defendant-Respondent.
________________________________

                   Argued March 16, 2020 – Decided April 9, 2020

                   Before Judges Sabatino, Sumners, and Natali.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Bergen County, Docket No. L-2953-16.

                   Denise Marra DePekary and Brad A. Baldwin argued
                   the cause for appellant (Weber Gallagher Simpson
                   Stapleton Fires & Newby, LLP, attorneys; Andrew L.
                   Indeck, Brad A. Baldwin, and Denise Marra DePekary,
                   of counsel and on the briefs).

                   Richard J. Williams, Jr. argued the cause for respondent
                   (McElroy, Deutsch, Mulvaney & Carpenter, LLP,
            attorneys; Richard J. Williams, Jr., of counsel and on
            the brief).

PER CURIAM

      This litigation arises out of an insurance company's audit revealing that a

policyholder had withheld material information about its operations and thereby

underpaid its workers' compensation premiums. After a non-jury trial, the Law

Division judge ruled that the policyholder had violated the workers'

compensation fraud statute, N.J.S.A. 34:15-57.4. Pursuant to that statute, the

judge ordered the policyholder to pay the insurer $145,231 in unpaid premiums,

plus interest, costs, and counsel fees.

      The policyholder appeals the trial court's final judgment on various

grounds. The policyholder chiefly argues that the carriers it engaged to haul

goods for its customers were not "subcontractors" within the meaning of

N.J.S.A. 34:15-79(a). The policyholder maintains it therefore was not liable

under that statute to provide coverage to employees of the fourteen carriers it

used that lacked such workers' compensation coverage.

      The policyholder also appeals a pretrial order granting partial summary

judgment and dismissing its Consumer Fraud Act claims, which had alleged the

insurer engaged in unconscionable practices by demanding certain documents

in the audit process and by sharply increasing premiums.

                                                                         A-1353-18T2
                                          2
       We affirm.

                                        I.

       The rather complicated facts and procedural history are detailed at length

in the trial court's extensive pretrial and post-trial written decisions, and we

presume the parties' familiarity with those details. We summarize key portions

of that background here.

       A. Fournier Trucking's Business

       The policyholder, plaintiff Fournier Trucking, Inc., describes itself as a

freight forwarding company that facilitates the transport of goods for shipping

companies. Fournier Trucking has a facility in East Rutherford, New Jersey.

Shippers within New Jersey utilize Fournier Trucking's services to ship goods

to other states primarily on the West Coast.

       Fournier Trucking's president and owner is Thomas Fournier, who lives

and works in Minnesota. 1 Fournier's daughter, Marlee Grady, is the company's

vice president of operations. The operations manager is Shawn Gaetz.

       According to the trial testimony of Grady and Gaetz, Fournier Trucking

is hired and paid by the shipping companies. Shippers call upon Fournier

Trucking when they must transport less than a full truckload of product, or when


1
    When we refer to "Fournier", we mean Mr. Fournier and not his company.
                                                                         A-1353-18T2
                                         3
they must make deliveries to multiple locations that require few products.

Fournier Trucking is hired to collect and consolidate freight locally, and then

ensure that it reaches its final destination.

      The shipping companies that hire Fournier Trucking pay one price for

each shipment. The price covers both the consolidation and transportation of

the goods at issue.

      Fournier Trucking employs several drivers who perform the consolidation

aspect of its services by collecting loads from its shipping company clients in

the New York tri-state area and gathering them in Fournier Trucking's

warehouse. For its out-of-state transportation services, Fournier Trucking hires

what it refers to as "independent motor carriers" to haul freight to the West

Coast.

      Fournier Trucking identifies loads for transport and, based on the

destination, offers them to the carriers. If a carrier accepts the load, Fournier

Trucking directs the driver to a specific warehouse loading dock to procure the

goods for transport. The decision to hire a carrier rests with Fournier Trucking,

not the customer.

      Fournier Trucking informs its customers that it does not ship the products

itself and provides the customers with the contact information for the assigned


                                                                         A-1353-18T2
                                          4
carrier.   Thereafter, Fournier Trucking regularly, but not exclusively,

coordinates communications between the customer and the carrier.

      Grady testified that Fournier Trucking exercises no control over whether

particular carriers will accept or reject loads, or the specific routes chosen by

carriers. The company does not provide any of the equipment used by the

carriers. Fournier Trucking sends the customers an invoice that covers the entire

process, and then separately pays the carrier for the transportation services.

      As acknowledged by Grady, although Fournier Trucking relies upon

motor carriers to haul its customers' freight, it maintains the ultimate

responsibility to ensure the goods reach the destination.

      The parties agree that neither the carriers nor the carriers' employees are

Fournier Trucking employees. As we confirmed at oral argument, to date no

employees of Fournier Trucking or its carriers have filed a workers'

compensation claim with the defendant insurer, New Jersey Manufacturers

Insurance Company ("NJM").

      Fournier Trucking has "transportation agreements" with the carriers it

hires, which either party may terminate at any time. At trial, NJM introduced

an agreement between Fournier Trucking and a redacted carrier as a

representative sample.      Under the agreement, Fournier Trucking must


                                                                          A-1353-18T2
                                        5
compensate the carrier for transporting products and materials. The agreement

is non-exclusive, allowing Fournier Trucking to contract with multiple carriers.

The agreement requires the carrier to employ licensed personnel and furnish and

maintain its own equipment, and contains indemnification and liability

assigning provisions. In the agreement, the carrier is defined as an "independent

contractor" that has "exclusive control and direction of the persons operating the

equipment or otherwise engaged in such transportation services."

      The agreement states that a carrier working with Fournier Trucking must

maintain its own public liability insurance policies required by law.            The

agreement specifically requires carriers to provide proof of workers'

compensation coverage of their employees to Fournier Trucking.

      B. Fournier Trucking's Workers' Compensation Insurance Policies

      NJM's role as Fournier Trucking's workers' compensation insurer arose

from an assigned risk program administered by the New Jersey Compensation

Rating and Inspection Bureau ("CRIB"). The Legislature created CRIB in 1917

to "[e]stablish and maintain rules, regulations and premium rates for workers'

compensation and employers' liability insurance and equitably adjust the same,

as far as practical, to the hazard of individual risks, by inspection by the bureau."

N.J.S.A. 34:15-90.2(f).      CRIB also develops the New Jersey Workers'


                                                                             A-1353-18T2
                                         6
Compensation and Employers' Liability Insurance Manual (the "CRIB

Manual"), which sets forth rules for workers' compensation insurance coverage.

N.J.S.A. 34:15-90.2(i) to -90.2(j).2

      In 2003, Fournier Trucking applied to CRIB for an assigned risk workers'

compensation policy after failing to obtain such insurance through the voluntary

market. The State granted the application, designating NJM as the insurance

company for Fournier Trucking's workers' compensation insurance policy.

      At trial, Fournier testified that, when submitting the 2003 insurance

application, he represented that neither Fournier Trucking nor any of its

contracted businesses used owner-operators or had hauling contracts.

      NJM continued to insure Fournier Trucking's New Jersey operations in

subsequent years.

      The annual premium for Fournier Trucking's workers' compensation



2
   As we note, infra, we do not need to reach the thorny legal question of the
validity of the rules and Manual, which are issued by CRIB without adherence
to the public notice-and-comment processes prescribed under the Administrative
Procedure Act ("APA"), N.J.S.A. 52:14B-1 to -31. In Aetna Insurance Co. v.
Trans America Trucking Service, Inc., 261 N.J. Super. 316, 328-29 (App. Div.
1993), we found that the Manual had "not been adopted as regulations under the
[APA] and [did] not have the force or effect of law." However, in a later opinion
in Romanny v. Stanley Baldino Construction Co., 142 N.J. 576, 581 (1995), the
Supreme Court relied on the CRIB Manual, without addressing whether it had
been properly adopted.
                                                                         A-1353-18T2
                                       7
policy with NJM was based on the remuneration Fournier Trucking paid to its

employees and to "all other persons engaged in work that could make [NJM]

liable" for workers' compensation payments. Every year, NJM first set forth an

estimated premium, and then subsequently modified it through a post-period

audit process by analyzing the policyholder's records to obtain actual payro ll

information. The purpose of the audit is to determine the extent of the actual

risk NJM incurred, so that the estimated premiums may be adjusted

retrospectively. This estimate and audit system is consistent with the CRIB

Manual.

      For the first policy issued for the 2003-2004 period, NJM assigned senior

premium auditor Estelle Cibiniak to conduct the audit. At that audit, after a

discussion with Grady's predecessor, Cibiniak's understanding was that the

drivers employed on Fournier Trucking's payroll were the only ones making

deliveries out of state. She was not informed of the motor carriers utilized by

the policyholder.

      NJM conducted annual audits from 2004 to 2015, in which Fournier

Trucking represented that it used no subcontracted work or owner-operators, and

never mentioned anything about the independent motor carriers. During that

time frame before 2015, Grady had never discussed the issue of subcontractors


                                                                       A-1353-18T2
                                      8
with NJM, and NJM did not receive any information suggesting that Fournier

Trucking used subcontractors. Fournier Trucking had provided the W-2 tax

forms (reporting wages, salaries, and tips) for its own employees but had never

provided names and addresses, tax forms, or proof of workers' compensation

coverage for any of the carriers. According to the trial testimony of Henry H.

Reese, the administrator of NJM's premium audit unit, before 2015 NJM had no

knowledge of the carriers hired by Fournier Trucking.

      C. The Audit of Fournier Trucking's 2014-2015 Workers' Compensation
      Insurance Policy

      This case specifically involves the premium for the assigned risk workers'

compensation insurance policy issued to Fournier Trucking by NJM for the

2014-2015 policy period, and the associated audit.

      The parties' policy agreement obligated Fournier Trucking to maintain all

records needed to compute the premium and to provide copies upon request.

Fournier Trucking also agreed to let NJM "examine and audit all [its] records

that relate to this policy" to collect information that "will be used to determine

the final premium," and to inspect its workplace for issues related to insurability

and premiums. Under the "assigned risk eligibility" endorsement included in

the policy, one of the conditions to maintain eligibility for the assigned risk plan

is Fournier Trucking's compliance with NJM's requests to audit and examine

                                                                            A-1353-18T2
                                         9
records or inspect the workplace.

      For Fournier Trucking's 2014-2015 policy, which was issued in April

2014, NJM initially estimated an annual premium of $43,193.           The total

estimated cost was $45,579. Subsequently, NJM assigned Cibiniak to audit that

policy to determine the actual remuneration due.

      In support of its summary judgment motion, NJM submitted certifications

from Richard Micklovic, who worked as the assistant vice president for

commercial lines at NJM, and Tiffany Steele, who works in NJM's workers'

compensation underwriting department. In their certifications, Micklovic and

Steele explained that in March 2015, NJM analyzed Fournier Trucking's history

to determine whether to switch it from an assigned risk policy to a voluntary

policy. According to Reese, voluntary policies are more affordable to the

policyholder because they represent less risk.

      As part of her review in 2015, Steele observed a discrepancy in the number

of drivers reported by Fournier Trucking and the number of drivers for the

company listed in a federal licensing database. That discrepancy prompted a

physical inspection of Fournier Trucking's warehouse by NJM's underwriting

department.

      During the underwriting department's inspection, a Fournier Trucking


                                                                        A-1353-18T2
                                      10
employee told the NJM inspector that Fournier Trucking used between fifteen

and twenty independent motor carriers to complete its shipping services.

      NJM became concerned by these revelations because, if Fournier

Trucking utilized "subcontractors" that did not maintain their own workers'

compensation insurance, NJM was exposed to risk as the insurer of the general

contractor. As prescribed by N.J.S.A. 34:15-79(a):

            Any contractor placing work with a subcontractor shall,
            in the event of the subcontractor's failing to carry
            workers' compensation insurance as required by this
            article, become liable for any compensation which may
            be due an employee or the dependents of a deceased
            employee of a subcontractor. The contractor shall then
            have a right of action against the subcontractor for
            reimbursement.

            [(Emphasis added).]

      On or about May 8, 2015, after receiving the information from the

underwriting department's inspection, Cibiniak sent a letter to Fournier Trucking

as part of her audit. Her letter requested all payroll information, a summary of

all paid subcontractors, any tax forms issued to independent contractors (Form

1099s), and certificates of insurance. At trial, Cibiniak explained that she would

ask for that information customarily as part of every audit.

      According to Reese, the Form 1099s were necessary to determine the

amount of NJM's exposure if the carriers lacked their own workers'

                                                                          A-1353-18T2
                                       11
compensation coverage. He explained that the Form 1099s contained enough

information for NJM to research whether the carriers had workers' compensation

insurance using the CRIB website and, if not, the exact remuneration paid by

Fournier Trucking for the purposes of determining the policy premium. At trial,

Cibiniak similarly explained that Form 1099s were necessary so she could obtain

the names of the carriers and research whether they maintained their own

workers' compensation insurance policies. If so, that would remove them from

the premium calculation.

      During a subsequent telephone conversation on May 15, 2015, Cibiniak

requested from Grady information regarding the payments that Fournier

Trucking made to carriers. Grady responded that the drivers had their own

separate businesses and their own insurance coverage, and she denied that they

were subcontractors.

      Immediately following the call with Cibiniak, Grady telephoned her

father, who instructed her not to turn over any Form 1099s for the carriers. At

trial, Fournier testified that he was aware that the carriers sometimes used

multiple drivers, and that the carriers would have been required to maintain

workers' compensation insurance for their employees, but he chose not to relay

that information to NJM.     He testified that NJM "wouldn't listen" to his


                                                                       A-1353-18T2
                                     12
explanation of "what we do," so he decided to "let them discover it."

      Grady and Cibiniak spoke again four days later regarding NJM's request

for documents. Grady responded that she would "see what I can do," although

her father had already instructed her not to produce the information.

      By July 2015, NJM still had not received any Form 1099s or certificates

of insurance for the carriers utilized by Fournier Trucking for its audit. During

a phone call on July 13, 2015, Cibiniak again asked for the documents. Grady

declined, telling Cibiniak that Fournier Trucking would not provide any

information regarding the carriers.

      As a result of Fournier Trucking's failure to provide any information

regarding its carriers, NJM initially estimated the remuneration paid by Fournier

Trucking to the uninsured carriers as $100,000. According to Micklovic and

Steele, NJM hoped that by making and communicating the estimate, Fournier

Trucking would be encouraged to provide the information so the audit could be

completed and corrected.

      NJM released an audit report of the April 2014 to April 2015 policy period

on August 10, 2015. Based upon the audit and NJM's then-existing estimations

regarding the activity of the carriers, Fournier Trucking's total standard premium

increased to $57,042, with the total audited cost identified as $70,980.


                                                                           A-1353-18T2
                                       13
      The adjusted premium was predicated upon the $100,000 sum that NJM

then estimated Fournier Trucking had paid in remuneration to uninsured

carriers. At trial, Reese explained that NJM uses one-third of the remuneration

paid to uninsured subcontractors when calculating the premium, rather than the

entire remuneration, in accordance with a formula in the CRIB Manual.

      During an October 16, 2015 phone call between Grady, Gaetz, and Reese,

Grady initially represented that Fournier Trucking issued no Form 1099s to any

entities other than cleaners. Gaetz corrected her misstatement and informed

Reese that Fournier Trucking does furnish some of the independent motor

carriers with Form 1099s. Nevertheless, Grady repeatedly insisted that each

carrier used by Fournier Trucking maintained its own insurance. Grady asserted

that Fournier Trucking had all the confirming documents in its possession.

      Reese stated to Grady and Gaetz that the $100,000 remuneration used to

calculate the revised premium was just an estimate. He explained to them that

the increased premium could be removed if Fournier Trucking provided the

requested information regarding the carriers.

      Through its counsel, Fournier Trucking sent a letter dated December 23,

2015 to NJM, objecting to the increased premium, but agreeing to continue

payments under protest. The letter described Fournier Trucking's business in


                                                                        A-1353-18T2
                                      14
detail and reported that the company contracted with sixty-four independent

motor carriers. The letter also attached a sample copy of the company's carrier

contract, which recited that carriers are required by Fournier Trucking to

maintain their own workers' compensation insurance policies.              Notably,

Fournier Trucking's attorneys acknowledged in the December 2015 letter that

the motor carriers used by the company "in certain cases employ their own

employees."

      During a conversation between Grady and Reese on February 4, 2016,

Grady confirmed that Fournier Trucking possessed insurance certificates for the

carriers. She repeatedly represented that Fournier Trucking had no Form 1099s

for the carriers, despite Gaetz's previous admission to the contrary during the

October 2015 phone call. Grady also represented that the carriers had no

employees, despite Fournier Trucking's lawyers' previous admission to the

contrary. She later admitted at trial that she had no basis for saying the carriers

lacked employees and recanted her earlier statements and acknowledged that

Fournier Trucking was, in fact, in possession of Form 1099s for some motor

carriers in October 2015.

      In that same conversation, Reese explained that NJM would have to once

again adjust the premium because Fournier Trucking's lawyers had told NJM


                                                                           A-1353-18T2
                                       15
that Fournier Trucking utilized sixty-four carriers. In response, Grady stated

that the estimate of $100,000 would "easily" cover the remuneration paid to all

sixty-four of Fournier Trucking's carriers. At trial, Reese explained he was

"taken aback" by Grady's statement, because the $100,000 figure for sixty-four

carriers "seemed awfully low" based on his experience.

        In her own trial testimony, Grady stated that she had told Reese in

February 2016 that $100,000 would "easily" cover the payments for all the

carriers because she believed the carriers should not factor into the premium

equation at all. However, she admitted that, at the time, she was aware that the

remuneration paid to the carriers far exceeded $100,000.

        Reese also explained to Grady during their February 2016 conversation

that if the carriers did have employees but no workers' compensation coverage,

Fournier Trucking would be responsible for that coverage under the applicable

statutes. Conversely, if the carriers did in fact carry their own insurance, Reese

advised Grady that NJM would not charge Fournier Trucking for any additional

risk.

        NJM did not receive any further information from Fournier Trucking after

that conversation. As a result, on February 8, 2016, NJM released a re-audit of

the 2014-2015 policy.


                                                                          A-1353-18T2
                                       16
      In this second audit, NJM declared a significantly higher total standard

premium of $344,001, and a total audited cost of $426,359. The increase was

the result of NJM recalculating the portion of the premium derived from the

estimated remuneration paid by Fournier Trucking to its uninsured carriers.

According to Micklovic and Reese, NJM recalculated the remuneration based

upon the sixty-four carriers referenced in the December 2015 letter sent by

Fournier Trucking's counsel.

      Through a letter to NJM dated March 3, 2016, counsel for Fournier

Trucking alleged that NJM had improperly classified its contracted motor

carriers as persons to whom NJM may have liability under its workers'

compensation coverage. Fournier Trucking demanded that NJM retract the

imposition of additional premiums resulting from the classification, the

reimbursement of previously paid additional premiums, and the renewal of its

policy. Notably, in this letter Fournier Trucking's attorneys once more referred

to the employees of the carriers, arguing that they would not qualify as

employees of Fournier Trucking.

      On March 9, 2016, NJM issued an earned premium notice to Fournier

Trucking, identifying an outstanding balance of $380,780. Fournier Trucking

continued making payments in 2016 "under protest" to avoid cancellation.


                                                                        A-1353-18T2
                                      17
        By the time Fournier Trucking commenced this litigation, NJM had still

not received information from Fournier Trucking concerning Form 1099s or

certificates of insurance for the carriers.

        Later during discovery, Fournier Trucking provided a spreadsheet that

listed, in anonymous fashion, eighty-one carriers it utilized.        Of the listed

carriers, fifteen had multiple drivers.       Fournier Trucking also produced in

discovery redacted certificates of insurance, identifying them by a number

assigned to each carrier. The certificates for the fifteen carriers that had multiple

drivers contained no proof of workers' compensation insurance. 3

        D. This Litigation

        In April 2016, Fournier Trucking filed a verified complaint and order to

show cause in the Law Division seeking preliminary and temporary restraints

against NJM. The policyholder sought injunctive relief to maintain the status

quo of its workers' compensation insurance coverage pending the litigation

(counts one and two) and reimbursement of paid insurance premiums (count

three).

        As requested, the trial court temporarily restrained NJM from cancelling,

refusing to renew, or increasing the premium of the workers' compensation


3
    As we will discuss, infra, that figure was later corrected to fourteen.
                                                                              A-1353-18T2
                                         18
coverage.     After an initial hearing, the court converted these measures to

preliminary restraints to remain in effect during the pendency of the action.

         NJM filed an answer and counterclaim. The counterclaim alleged breach

of contract (count one), and sought compensatory damages, specific

performance (count two) and declaratory relief (count three). The counterclaim

also alleged that Fournier Trucking violated the civil liability portion of N.J.S.A.

34:15-57.4, the workers' compensation fraud statute, and sought damages (count

four).

         Fournier amended its complaint to add claims against NJM of breach of

contract (count four), breach of the covenant of good faith and fair dealing

(count five), violation of the Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-2

(count six), and violation of the civil liability portion of the New Jersey anti -

racketeering statute ("NJRICO"), N.J.S.A. 2C:41-4(c) (count seven).

         E. Partial Summary Judgment

         After certain discovery was conducted, NJM moved for partial summary

judgment. In its motion, NJM sought dismissal of Fournier Trucking's second

amended complaint and relief pursuant to the first three counts of its

counterclaim.

         The court granted NJM's motion on April 26, 2018, issuing a twenty-five-


                                                                            A-1353-18T2
                                        19
page written decision.

      With regard to Fournier Trucking's breach of contract claims (counts four

and five), and NJM's breach of contract, specific performance, and declaratory

judgment counterclaims (counts one through three of the counterclaim), the

motion judge found the policy agreement between Fournier Trucking and NJM

unambiguously granted NJM the authority to conduct an audit to assess the

appropriate premium.

      The judge also found that the policy obliged Fournier Trucking to

cooperate with NJM's requests for information. NJM was "rightfully entitled"

to information regarding the carriers in order to complete a premium audit of the

policy. The judge held that Fournier Trucking breached the policy agreement

by refusing to provide information. The judge dismissed counts four and five

of the second amended complaint and granted summary judgment to NJM on the

first three counts of NJM's counterclaim.

      The judge dismissed the first three counts of Fournier Trucking's second

amended complaint, which had sought temporary relief, as moot.

      The judge also dismissed Fournier Trucking's CFA claim (count six of the

second amended complaint). The judge ruled that the CFA does not apply to the

auditing of workers' compensation insurance policies, and that even if it did,


                                                                         A-1353-18T2
                                      20
NJM did not engage in any unlawful conduct because it requested documents it

was entitled to receive under the terms of the policy.

        Finally, the judge dismissed the NJRICO claim (count seven of the second

amended complaint) because it found NJM could not be an NJRICO defendant

as a matter of law and the claim lacked evidential support. 4 As a result, the

entirety of Fournier Trucking's second amended complaint was dismissed.

        As a remedy for granting summary judgment on the first three counts of

NJM's counterclaim, the court ordered Fournier Trucking to provide copies of

information relating to its carriers, including all Form 1099s, unredacted

certificates of insurance, and a list of names and addresses of the fifteen carriers

that had multiple drivers. It also declared that NJM is entitled to charge a

premium for amounts paid to uninsured subcontractors pursuant to N.J.S.A.

34:15-79.     The only remaining issue was the fourth count of NJM's

counterclaim, which alleged that Fournier Trucking violated the civil liability

portion of N.J.S.A. 34:15-57.4, the workers' compensation fraud statute.

        F. NJM's Motion in Aid of Litigant's Rights and Further Discovery

        In May 2018, NJM moved to enforce litigant's rights seeking compliance

with the court's order for Fournier Trucking to produce discovery. The motion


4
    Fournier Trucking does not appeal the dismissal of its NJRICO claims.
                                                                            A-1353-18T2
                                        21
prompted Fournier Trucking to issue two letters providing NJM with Form

1099s for four of the carriers and unredacted certificates of insurance for the

fifteen carriers.

      The court granted the motion to enforce litigant's rights and ordered

Fournier Trucking to either produce Form 1099s for the remaining eleven

carriers, produce a report identifying the amounts paid to them, or be subjected

to sanctions. The order warned that if Fournier Trucking failed to produce the

information, an adverse inference could be applied against it at trial.

      After finally receiving detailed information relating to the out-of-state

carriers, NJM attempted to acquire information from them directly. Reese

conducted a search of the CRIB website to independently determine whether

those carriers had maintained workers' compensation insurance. Reese's search

confirmed that the carriers lacked such insurance.

      Through a cover letter dated June 15, 2018, Fournier Trucking produced

to NJM a document setting forth the amounts paid for the eleven outstanding

carriers in 2014. Collectively, the information provided by Fournier Trucking

indicated that it paid approximately $2.59 million to the fifteen carriers at issue

in 2014. Grady later confirmed that figure at trial. Further discovery-related

motions were dismissed after trial as moot.


                                                                           A-1353-18T2
                                       22
      G. Trial

      The parties agreed to waive a jury on NJM's workers' compensation fraud

counterclaim, and to proceed to a bench trial. The trial was conducted before

the same judge who had ruled earlier on the summary judgment motion and took

place over two days in June 2018.

      Reese and Cibiniak testified for NJM. NJM also called Gaetz and Grady

as witnesses.

      According to Reese's trial testimony, NJM had developed a new audited

premium for the 2014-2015 policy in light of the information it had recently

acquired from Fournier Trucking in discovery. Based upon the $2.59 million in

remuneration paid by the policyholder to the fifteen uninsured carriers that had

multiple drivers, Reese testified that the premium increase would be $148,237,

which was less than the previously revised estimate that included sixty-four

carriers.

      After trial, Reese amended this testimony in light of the revelation that

one of the fifteen carriers did, in fact, carry workers' compensation insurance.

The new revised premium increase was $145,231, which the court used to

calculate the damage award.

      In her trial testimony, Grady asserted that she had refused to turn over


                                                                        A-1353-18T2
                                      23
information to NJM because her father instructed her so, and because Fournier

Trucking believed that information relating to the carriers was irrelevant to

workers' compensation insurance. She did admit that she had known during the

audit that information relating to the carriers would impact the premium charged

by NJM.

      Plaintiff called Fournier as its sole witness.     He testified about his

company's attempts to procure workers' compensation insurance in the early

2000s, and his instructions to Grady not to turn over requested documents to

NJM because, in his view, NJM had "no right to them." He also testified that

Fournier Trucking had since obtained workers' compensation insurance through

another insurer that did not charge any premium for the motor carriers.

      H. The Trial Court's Decision and the Final Judgment Terms

      The judge issued a thirty-four-page written post-trial decision on October

1, 2018. She issued the order for judgment on November 8, 2018, entering

judgment in favor of NJM. The same day, the judge issued a decision regarding

NJM's unopposed application for counsel fees.

      In her decision, the trial judge rejected Fournier Trucking's argument that

the carriers are not subcontractors and thus not includable in Fournier Trucking's

remuneration total. She held the carriers hired or retained by Fournier Trucking


                                                                          A-1353-18T2
                                       24
are subcontractors who "were hired to complete the shipping services that

Fournier Trucking was contractually required to perform for its customers." The

judge further concluded that the driver teams used by the carriers were the

carriers' employees, which could be "reasonably and logically inferred" from the

record.

      The judge did not make explicit credibility findings about each of the

witnesses individually. Her opinion did note that the demeanor of Gaetz, who

prepared the 2014 spreadsheet and other company documents for the NJM audit,

"was humble, straightforward and compliant." The judge recognized that Gaetz

was in a difficult position of "facing his many bosses from the Fournier family

who were sitting in the courtroom." The judge found "his testimony left a lucid

impression of compliance with their directives, and as well as having been

compliant with the court's orders."

    By contrast, the judge observed that the testimony of Grady "was at times

ambiguous [and] wishy-washy" and that she "had a fuzzy memory regarding

[her] communications with NJM individuals." The judge noted that Grady "was

new to the insurance coverage department at the company at the time of the audit

and that her uncle had handled the insurance coverage issues in the past."

Further, the judge found that Grady "appeared not to be certain in her testimony


                                                                        A-1353-18T2
                                      25
regarding her handling of insurance issues."

    As an example of Grady's unreliable knowledge, the judge cited Grady's

admission at trial "that when she told Mr. Reese that the motor carriers had no

employees, she, in fact, did not know that to be true and made an 'incorrect

assumption.'" Moreover, as the judge further noted, Grady "further admitted that

to this day she does not know whether the motor carriers have employees."

    As another example, the judge found that Grady's trial testimony about

whether $100,000 in renumeration would cover the carrier's payroll exposure "is

not credible and belies what she said on the telephone [to Reese] over two years

prior." The judge pointed out that Grady ultimately admitted that she knew

Fournier Trucking "paid far more than $100,000 to its motor carriers" when she

spoke with Reese in February 2016. Quite succinctly, the judge found "[t]he

paper evidence conflicts with her [Grady's] testimonial evidence."

      The judge made no similar negative credibility findings about NJM's

representatives who testified. The judge did observe that Reese, the

administrator of NJM's workers' compensation premium assessment department,

has been with NJM since 2000 and "is specifically knowledgeable in the audit

process." As for Cibiniak, the judge favorably noted she has "thirty-one years

of auditing experience" with NJM, and that she had initiated and diligently


                                                                        A-1353-18T2
                                      26
pursued the audit process of Fournier Trucking through correspondence and

multiple documented telephone calls.

   The judge did not comment on whether Fournier himself was credible,

except the judge did underscore his insistence that NJM did not understand the

nature of his business. The judge also found it significant that Fournier had

personally directed Grady not to turn over the 1099 forms to NJM because they

had never been requested in the past and were, in his view, irrelevant.

      After reviewing the evidence, the judge concluded that NJM proved by a

preponderance of the evidence that Fournier Trucking had purposefully and

knowingly made misleading and false statements to NJM to avoid paying

additional premium, and withheld information concerning the carriers, in

violation of N.J.S.A. 34:15-57.4.

      Regarding damages, the judge relied upon the following statutory

provision:

             Notwithstanding any other provision of law, and in
             addition to any other remedy available under law, a
             person who evades the full payment of premiums
             pursuant to R.S.34:15-1 et seq. or improperly denies or
             delays benefits pursuant to R.S.34:15-1 et seq. is liable
             to pay the sum due and owing plus simple interest.

             [N.J.S.A. 34:15-57.4(c)(3) (emphasis added).]

Under that section of the statute, the judge held that NJM was entitled to unpaid

                                                                          A-1353-18T2
                                       27
premium accounting for the carriers at issue.      The judge also relied upon

N.J.S.A. 34:15-57.4(b), which allows an injured party to recover costs and

attorneys' fees, in awarding the same.

      The final judgment awarded NJM $254,329.17, which represented unpaid

premium in the amount of $145,231, simple interest in the amount of $7,603.44,

costs in the amount of $6,802.73, and attorneys' fees in the amount of $94,692 .5

      This appeal by Fournier Trucking ensued.

                                         II.

      On appeal, Fournier Trucking principally argues that the trial court erred

in finding that it was liable under N.J.S.A. 34:15-79 to provide workers

compensation coverage for the employees of the uninsured motor carriers it used

for hauling shipments to its customers. Fournier contends those carriers were

independent contractors who cannot be its "subcontractors" for purposes of civil

liability under N.J.S.A. 34:15-79.

      Fournier further agues the trial court erred in dismissing its claims of

unconscionable practices, arguing such claims are viable under the CFA as a

matter of law, do not clash with the regulatory scheme, and are factually



5
  The counsel fee award has not been appealed, subject to our ruling on the
merits of the proven statutory violation.
                                                                         A-1353-18T2
                                         28
supported.

      We consider appellant's legal arguments de novo. Kaye v. Rosefielde,

223 N.J. 218, 229 (2015). By contrast, we defer to the trial judge's factual and

credibility findings, so long as they are supported by substantial evidence in the

record. Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484

(1974).

      Having carefully considered the appeal in light of the record, our scope of

review, and the applicable substantive law, we affirm the trial court's rulings

and the final judgment. We do so substantially for the sound reasons set forth

in the Judge Estela M. De La Cruz's detailed written opinion dated April 26,

2018 granting partial summary judgment, and her similarly comprehensive post-

trial opinion dated October 1, 2018. We amplify the judge's analysis with some

additional commentary.

                                       A.

      The Workers' Compensation Act ("WCA"), N.J.S.A. 34:15-1 to -142, was

enacted in 1911 to address "an increasing number of industrial accidents and the

inadequacies of the common-law tort remedies that were available to aid injured

workers." Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 174 (1985).

The statutory workers' compensation scheme is "designed to establish a no fault


                                                                          A-1353-18T2
                                       29
system of compensation for workers who are injured or contract a disease in the

course of employment." Fitzgerald v. Tom Coddington Stables, 186 N.J. 21, 30

(2006) (quoting Brock v. Pub. Serv. Elec. & Gas Co., 325 N.J. Super. 582, 588

(App. Div. 1999)).     It involves a "historic trade-off whereby employees

relinquished their right to pursue common-law remedies in exchange for

automatic entitlement to certain, but reduced, benefits whenever they suffered

injuries by accident arising out of and in the course of employment." Millison,

101 N.J. at 174.

      Pursuant to the WCA, "[w]hen employer and employee shall by

agreement, either express or implied . . . accept the provisions of" the WCA,

employers must compensate employees for work-related injuries "arising out of

and in the course of employment . . . without regard to the negligence of the

employer[.]" N.J.S.A. 34:15-7. Absent an express disclaimer, all parties to

every employment contract are presumed to have accepted the WCA's

provisions. N.J.S.A. 34:15-9. The WCA obligates any employer subject to its

provisions to provide coverage for their employee's injuries. N.J.S.A. 34:15-71,

-72. An injured employee entitled to benefits under the WCA is barred from

any alternative means of recovery, including tort lawsuits. N.J.S.A. 34:15 -8.

The WCA is recognized as "remedial social legislation" that "should be given


                                                                        A-1353-18T2
                                      30
liberal construction in order that its beneficent purposes may be accomplished."

Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33, 42 (2008) (quoting Torres

v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974)).

      The WCA defines the term "employee" as "synonymous with servant, and

includes all natural persons, including officers of corporations, who perform

service for an employer for financial consideration." N.J.S.A. 34:15-36. It does

not define "independent contractors," which "are neither entitled to benefits nor

subject to the limitations of the [WCA]." Estate of Kotsovska ex rel. Kotsovska

v. Liebman, 221 N.J. 568, 586 (2015).

      Our courts have defined an independent contractor as "one who, carrying

on an independent business, contracts to do a piece of work according to his own

methods, and without being subject to the control of his employer as to the

means by which the result is accomplished, but only as to the result of wor k."

Ibid. (quoting Auletta v. Bergen Ctr. for Child Dev., 338 N.J. Super. 464, 471

(App. Div. 2001)). Thus, the threshold determination under the WCA is whether

an injured or deceased worker was an employee or independent contractor. Ibid.

      This matter centers upon one particular aspect of the WCA that applies its

coverage to contractors in certain circumstances. Under N.J.S.A. 34:15-79(a),

the WCA obligates contractors to provide workers' compensation benefits to


                                                                         A-1353-18T2
                                      31
injured employees of any subcontractors that lack workers' compensation

coverage. "The statute is clearly intended to protect the injured employee

directly, as well as to create an incentive for general contractors to police their

sub-contractors' compliance with the workers' compensation law." Williams v.

A & L Packing & Storage, 314 N.J. Super. 460, 467 (App. Div. 1998). It

"requires the general contractor to make certain that the subcontractor insures

his liability to pay compensation benefits as provided by the statute or else the

general contractor himself will become liable to pay such benefits." Pollack v.

Pino's Formal Wear & Tailoring, 253 N.J. Super. 397, 404 (App. Div. 1992).

However, it "does not create the relationship of employer and employee as

between the general contractor and the employee of the subcontractor." Ibid.

      The WCA contains no definition of "subcontractor." As the trial court

correctly recognized, the meaning of that term is at the heart of this case.

      NJM concedes, and it is not in dispute, that Fournier Trucking's motor

carriers are independent contractors. In its summary judgment decision, the trial

court concluded that Fournier Trucking, not NJM, breached the workers'

compensation policy agreement by refusing to produce information relating to

its carriers, implicitly holding that the carriers are subject to the WCA. The

court expanded upon its reasoning in its decision following the bench trial, in


                                                                           A-1353-18T2
                                       32
which it explained that although the carriers are independent contractors, they

are also subcontractors to Fournier Trucking within the meaning of N.J.S.A.

34:15-79(a), bringing them within the ambit of the WCA.            The court's

conclusion and reasoning is correct.

      As set forth by Grady and Gaetz, Fournier Trucking is a business whose

"freight forwarding" model involves contracting with local shipping companies

to transport goods across the country.      The shipping companies that hire

Fournier Trucking pay one price covering both the consolidation and

transportation of the goods at issue. Nothing in the record suggests that the

shipping companies have any role in determining the means by which Fournier

Trucking transports the goods. Rather, according to Grady, Fournier Trucking

independently enters into agreements with carriers for that purpose, and then

regularly coordinates communications between the shippers and carriers.

Because the shipping companies that hire Fournier Trucking for individual

shipments exercise little control over Fournier Trucking's transportation

services, Fournier Trucking is clearly a "contractor" for those shipping

companies within the meaning of N.J.S.A. 34:15-79(a).

      Although the word "subcontractor" is not defined in the WCA, our courts

have described a subcontractor under that statute as one "who enters into a


                                                                       A-1353-18T2
                                       33
contract with a person for the performance of work which such person has

already contracted with another to perform." Brygidyr v. Rieman, 31 N.J. Super.

450, 453-54 (App. Div. 1954).        "In other words, subcontracting is merely

‘farming out’ to others all or part of work contracted to be performed by the

original contractor." Ibid. That definition is consistent with the plain meaning

of the term "subcontractor." See Black’s Law Dictionary 1722 (11th ed. 2019)

(defining subcontractor as "[s]omeone who is awarded a portion of an existing

contract by a contractor, esp. a general contractor").

      As the trial court correctly found, the relationship between Fournier

Trucking and its carriers fits neatly into the "farming out" definition. Shippers

hire Fournier Trucking to consolidate and transport goods; Fournier Trucking

consolidates the goods itself, and then subcontracts with the carriers to perform

the transportation. Therefore, Fournier Trucking is a contractor, and the carriers

it uses to fulfill part of its contracts with shippers are subcontractors.

      Fournier Trucking argues that the WCA does not apply to the carriers

because they are "independent contractors." It relies upon the transportation

agreements and the declarations in those agreements that carriers are

independent contractors. This argument misses the mark.




                                                                             A-1353-18T2
                                        34
      NJM acknowledges that the carriers are not Fournier Trucking's

employees for the purposes of applying a workers' compensation obligation t o

Fournier Trucking, and the record does not suggest otherwise. However, it is

equally as clear that the WCA applies to the employees of carriers.

      To the extent that the carriers maintain employees, those carriers are

statutorily obligated to maintain workers' compensation coverage, as is any other

employer within the state. By operation of N.J.S.A. 34:15-79(a), to the extent

those carriers fail to satisfy their statutory obligation, Fournier Trucking, as the

general contractor, is obliged to provide benefits to any carrier employee who

suffers an injury while providing services under Fournier Trucking's general

contract. See Eger v. E.I. Du Pont DeNemours Co., 110 N.J. 133, 137 (1988)

(holding that N.J.S.A. 34:15-79 is designed to provide relief against general

contractor to employees of subcontractor that violates statutory obligation to

provide workers' compensation coverage).

      Fournier Trucking's reliance upon the Supreme Court's decision in

Kotsovska is unavailing. In that case, the decedent's estate filed a wrongful

death action against the decedent's employer, who had negligently caused

injuries that resulted in her death. 221 N.J. at 575. The employer argued that

the decedent was his employee within the meaning of the WCA, which would


                                                                            A-1353-18T2
                                        35
preclude recovery in tort. Ibid. The estate argued that the decedent was an

independent contractor and could thus properly filed a wrongful death lawsuit.

Id. at 575-76. Thus, at trial, the key issue for the jury was whether the decedent

was an employee or an independent contractor. Id. at 578.

      On appeal from this court's decision, the Supreme Court in Kotsovska

reviewed two different tests to distinguish employees from independent

contractors: the "control test" and the "relative nature of the work test." Id. at

592. The Court cited with approval the "hybrid test" it had previously adopted

within the context of discrimination claims, which identified twelve factors for

courts to consider when determining a worker's status. Id. at 594-95. It held

that the same hybrid test would apply "in the context of a dispute over the

applicability of the [WCA]." Id. at 595.

      Here, Judge De La Cruz's well-reasoned post-trial decision explained that

Fournier Trucking's reliance upon Kotsovska was "misplaced" because that

opinion did not concern N.J.S.A. 34:15-79(a).         Kotsovska concerned the

distinction under the WCA between employees and independent contractors. As

noted, the critical question here is not whether the carriers are Fournier

Trucking's employees under Kotsovska. The issue is whether the carriers are

subcontractors to Fournier Trucking under N.J.S.A. 34:15-79(a).               The


                                                                          A-1353-18T2
                                       36
Kotsovska Court did not cite N.J.S.A. 34:15-79(a), and nothing in that decision

suggests any attempt to modify or otherwise disturb the unambiguous statutory

language.

      Fournier Trucking challenges the trial court's application of the "farming

out" definition of "subcontractor" set forth in Brygidyr, 31 N.J. Super. at 453-

54.   According to Fournier Trucking, the "operative part" of the defin ition is

that the task "farmed out" must be "one actually and routinely performed by a

contractor or its employees." Fournier Trucking argues that because its

employees do not perform long haul trucking, the carriers it hires to perform

those services are not subcontractors.

      In support of its position, Fournier Trucking mainly relies upon cases

interpreting the definition of "subcontractor" in the Municipal Mechanic's Lien

Law, N.J.S.A. 2A:44-64 to -124. Under that statute, a subcontractor is "a person

having a contract under a contractor for the performance of the same work, or

any specified part thereof." N.J.S.A. 2A:44-126.

      In particular, Fournier Trucking relies upon Morris County Industrial Park

v. Thomas Nicol Co., 35 N.J. 522 (1961), a construction case that discussed the

difference between a subcontractor and a materials supplier in construction

projects. In that case, the Supreme Court concluded that, "[t]he emphasis is, of


                                                                        A-1353-18T2
                                         37
course, on the subcontractor being engaged to do all or some part of the Work,

i.e., the construction itself, involving at least some labor in the installation of

materials and not merely the supplying of materials." Id. at 534. The Court held

that the alleged subcontractor was actually a materials supplier because he

simply delivered supply fill dirt where the general contractor on the construction

project ordered it dumped. Id. at 534-35.

      Fournier Trucking's reliance upon Morris County is misguided. There, the

issue was not whether the contractor's employees and alleged subcontractor's

employees actually performed the same exact job duties. It was whether the

alleged subcontractor performed part of the general contract, or simply supplied

materials.

      Here, Fournier Trucking contracts with shipping companies to consolidate

and transport goods, and it then hires motor carriers to make the deliveries. At

trial, Grady confirmed that Fournier Trucking owes a contractual responsibility

to the shipper to ensure that the goods reach their destination, and the carriers

are the means used by Fournier Trucking to accomplish that duty. Thus, the

carriers perform "some part of the work" required under Fournier Trucking's

general contracts.




                                                                           A-1353-18T2
                                       38
      In a later case, the Supreme Court reviewed the meaning of the term

"subcontractor" as used in the New Jersey Bond Act, N.J.S.A. 2A:44-143 to -

147. Unadilla Silo Co. v. Hess Bros., 123 N.J. 268, 277-89 (1991). Although

the Court recognized that the Bond Act did not define "subcontractor," it

described the Mechanic's Lien Law as an analogous statute and looked to its

definition, and Morris County, for guidance. Id. at 277-78. After reviewing

foreign case law regarding the distinction between subcontractors and materials

suppliers in construction projects, the Court developed the following "functional

standard" to determine whether a supplier of materials is a subcontractor within

the meaning of the Bond Act:

            1) whether the material supplier agreed to perform a
            definite and substantial part of the same work that the
            general contractor was obligated to perform;

            (2) whether the work was performed according to plans
            and specifications in the original contract; and

            (3) whether the materials required off-site fabrication
            prior to installation at the job site.

            [Id. at 288-89 (emphasis added).]

      The Unadilla standard, which Fournier Trucking neglects to mention in its

brief, confirms that the "same work" requirement Fournier Trucking relies upon

refers to the work set forth in the general contract. See also Twp. of Parsippany-


                                                                          A-1353-18T2
                                       39
Troy Hills v. Lisbon Contractors, Inc., 303 N.J. Super. 362, 370 (App. Div.

1997) (holding that use of word subcontractor in Mechanic's Lien Act

"contemplates protection only for work that is specific to the contract, would

not have been performed but for the contract, and results in some labor which

leads directly to the finished product.") (emphasis added). It is not a requirement

that the general contractor's employees must perform the same exact functions

as the subcontractor's employees. Thus, Fournier Trucking's carriers satisfy the

definition of "subcontractor" posited by Fournier Trucking, because they

execute a large part of the work Fournier Trucking agrees to perform in its

contracts with shippers.

      Fournier Trucking also cites to Gaydos v. Packanack Woods Dev. Co., 64

N.J. Super. 395 (Law Div. 1960). In that case, the general contractor hired an

excavating company to perform an excavation. That company, in turn, leased a

truck and driver from a subcontractor to do the excavating work. Id. at 397. An

employee of the subcontractor was injured, and the court held that under

N.J.S.A. 34:15-79, the excavating company was obligated to provide benefits.

Id. at 404. It defined a subcontractor as "(o)ne who has entered into a contract,

express or implied, for the performance of an act with the person who has

already contracted for its performance." Id. at 400 (quoting Mittan v. O'Rourke,


                                                                           A-1353-18T2
                                       40
115 N.J.L. 177, 179 (Sup. Ct. 1935)). It also cited the "farming out" test. Ibid.

Fournier Trucking argues that in Gaydos, unlike in this case, the subcontractor

was supervised in a manner similar to an employee. However, that does not

mean that all subcontractors in all cases must be analogous to employees for

N.J.S.A. 34:15-79 to attach.

      Fournier Trucking also relies upon the outcome in Brygidyr, 31 N.J.

Super. at 453-54. In that case, we held that, under the WCA, the respondent was

not a subcontractor. Id. at 454. However, we made that finding because the

alleged general contractor was, in fact, the property owner, and not a contractor

at all. Id. at 453-54. Thus, the respondent was the original contractor, rather

than a subcontractor, and N.J.S.A. 34:15-79 did not apply. Fournier Trucking's

reliance upon the analysis in Brygidyr is plainly misplaced.

      Fundamentally, both case law and common sense show the terms

"independent contractor" and "subcontractor" are not mutually exclusive. A

company can choose to use its own workers to carry out its responsibilities, or

it can retain independent companies who may also qualify as subcontractors to

discharge some of those tasks. When it does the latter, the law of our State

requires the contracting company to assure that the subcontractor's employees

have adequate workers' compensation insurance. That is precisely why Fournier


                                                                         A-1353-18T2
                                      41
Trucking's own contracts with the motor carriers required such coverage.

Unfortunately, some carriers did not, requiring Fournier Trucking to serve as the

backstop.

      We have considered all of the other cases cited by Fournier Trucking in

its brief. None of them persuade us that the trial court erred in determining that

the fourteen motor carriers in question functioned as appellant's subcontractors,

and that appellant was thereby obligated under N.J.S.A. 34:15-79 to assure their

drivers had proper workers' compensation coverage if they failed to provide it.

      The trial court had ample evidence to support its finding that Fournier

Trucking violated the workers compensation fraud statute, N.J.S.A. 34:15-

57.4(a)(2), “in making false and misleading statements that resulted in the

avoidance of the full payment of premiums.” The record contains sufficient

proof, both direct and circumstantial, that the company acted through its agents

in a purposeful and persistent effort to evade its statutory coverage

responsibilities. See Bellino v. Verizon Wireless, 435 N.J. Super. 85, 96 (App.

Div. 2014). We have no reason to second-guess the judge’s first-hand

assessment of appellant’s deliberate course of conduct.




                                                                          A-1353-18T2
                                       42
                                        B.

      Fournier Trucking separately argues that NJM lacked the authority to

demand the carriers' 1099 forms and other documentation as part of the auditing

process, and, moreover, that the NJM abused whatever authority it might have

possessed by making onerous demands and escalating its premiums. As the trial

court correctly recognized, these arguments utterly lack merit. We need not say

much about them, except the following.

      By its very nature, the premium calibration process used by the parties

depends upon an audit after the insurance policy period has ended to determine

the policyholder's actual transactional activities. Such a retrospective process

requires the cooperation of the policyholder in the post-period audit. As the trial

court rightly noted, Fournier Trucking agreed to such auditing and access to

documents in the policy agreement itself. Its obligation to cooperate could not

be plainer.

      In an effort to refute these principles, appellant points to this court's

decision in Aetna, 261 N.J. Super. at 316. According to Fournier Trucking, that

case is "dispositive" regarding NJM's authority to conduct an audit, seek records,

and charge a higher premium. We beg to differ.




                                                                           A-1353-18T2
                                       43
      In Aetna, the insurer had filed a lawsuit to recover additional workers'

compensation insurance premiums from the defendant trucking company.

Aetna, 261 N.J. Super. at 319. Similar to this case, Aetna's practice was to

estimate the premium for the policy, and then audit the payroll at a later date to

adjust the premium to reflect actual risk exposure. Id. at 320-21. The dispute

arose from Aetna's attempt to charge additional premium based on the trucking

company's use of "outside truckers" in addition to its regular full-time drivers.

Id. at 321.

      The trucking company considered the outside truckers to be independent

contractors for whom it owed no obligation to provide workers' compensation

coverage. Id. at 324. Accordingly, for the policy period at issue, the company

refused to produce any payroll records for the outside truckers. Id. at 322. Aetna

nonetheless estimated payments to the outside truckers, included them in its

estimated premium charge, and then sued when the trucking company refused

payment. Ibid. It relied solely upon the CRIB Manual's "Hired Vehicles" rule,

which, among other things, required remuneration paid to owner-operator

drivers to be included in the premium calculation. Id. at 320-21. In discovery,

Aetna conceded that the outside truckers were independent contractors, yet still




                                                                          A-1353-18T2
                                       44
sought to charge premium for them as owner-operators under the Hired Vehicles

rule. Id. at 322-23.

      Notably, Aetna's policy made no reference to the Hired Vehicles rule. Id.

at 329-30. Aetna conceded in discovery that the truckers were independent

contractors yet continued in its attempt to charge premiums. Id. at 330. We

noted that Aetna could not assume that the outside truckers were employees

because of the mere possibility that they may claim employee status in the

future. Ibid. Because the trucking company's contracts established the outside

truckers as independent contractors, the burden was on Aetna to disprove that

status before charging premium for them as employees. Ibid. If an outside

trucker ever attempted to recover workers' compensation benefits as an

employee of the trucking company, Aetna would have the right to adjust the

premium to account for that employee. Ibid.

      Here, Fournier Trucking argues that NJM issued a "preemptive" premium

increase based on "speculation," contrary to Aetna.      In Aetna, the insurer

included the outside truckers in its premium estimate without any proof that

those contractors were employees, after receiving information that they were

independent contractors, based solely on the Hired Vehicles rule. The insurer

had no basis in the WCA or the policy itself to examine payroll records for what


                                                                        A-1353-18T2
                                      45
it knew were not employees. Critically, N.J.S.A. 34:15-79(a) was not cited in

Aetna because Aetna did not seek to charge premium for the outside truckers as

subcontractors.

      Here, on the other hand, NJM does not dispute that Fournier Trucking's

carriers are independent contractors, and unlike Aetna, does not seek to charge

premium by treating independent contractors as employees. Rather, NJM's

grounds for increasing the premium are twofold: (1) an unambiguous statute,

N.J.S.A. 34:15-79(a), which requires Fournier Trucking to provide benefits for

injuries suffered by its uninsured subcontractors' employees, and (2) the policy

agreement, which allows NJM to charge premiums based on the remuneration

Fournier Trucking pays to anyone to whom NJM must provide workers'

compensation benefits.

      NJM was entitled under the statute and the plain language of the policy to

request information and charge premium relating to those carriers. And, to its

credit, NJM only made an estimated premium increase after several months of

attempting to obtain the relevant records, in response to Fournier Trucking's

non-cooperation.




                                                                        A-1353-18T2
                                      46
         Fournier Trucking construes Aetna to mean that the WCA cannot apply to

the carriers until a motor carrier or one of its employees files a workers'

compensation claim. That is misreading of the opinion.

         In Aetna, we rejected the insurer's argument that the trial court should

have applied the tests for determining the existence of an employer -employee

relationship. Aetna, 261 N.J. Super. at 327-28. We stated that, "[s]ince no

trucker has claimed to have been an employee, there is no specific claimant

against whom" the employer-employee test can be applied. Id. at 328. Fournier

Trucking's reliance upon this quoted language is misplaced. In Aetna, the

insurer conceded that the outside truckers were independent contractors yet

attempted to charge premium anyway.           In this case, NJM was aware that

Fournier Trucking used subcontractors, but it lacked information regarding the

status of those companies and the remuneration they received solely because of

Fournier Trucking's refusal to provide it, in violation of the express policy

language.

         Relatedly, Fournier Trucking also argues that under Aetna, the trial court

erred because no evidence supports the court's conclusion that the drivers for

the carriers at issue were the "employees" of the carriers. This argument also

fails.


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      In her post-trial decision, Judge De La Cruz found that the relationship

between the carriers and their drivers "can be reasonably and logically inferred ."

The judge noted the evidence that the fifteen carriers at issue included teams of

drivers to complete shipments.       The spreadsheet of carriers produced by

Fournier Trucking in discovery, and the shipping manifests introduced at trial

confirm that the carriers at issue utilized teams of drivers to complete deliveries,

as explained by Gaetz's trial testimony. Further, the December 23, 2015 letter

sent by Fournier Trucking's counsel to NJM states that the sixty-four carriers

hired by Fournier Trucking "in certain cases employ their own employees ."

Fournier Trucking's counsel sent another letter dated March 3, 2016, that also

referenced the carriers' employees. Therefore, the record supports the court's

conclusion that the fifteen carriers that employed teams of drivers indeed had

employees.

      The identity and location of the carriers was exclusively within Fournier

Trucking's control. It is untenable for Fournier Trucking to now criticize the

trial court's finding of fact regarding employee status on the basis that it did not

have enough evidence in its summary judgment decision. The court resorted to

making inferences from the record solely because Fournier Trucking refused to

provide more detailed information relating to those carriers. The record plainly


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reflects that Fournier Trucking informed NJM of the names of its carriers only

after the court granted partial summary judgment to NJM, when the court

ordered it to do so, and on the eve of trial. At the summary judgment stage,

Fournier Trucking was required to produce evidence demonstrating a material

issue of fact regarding whether the fifteen carriers at issue have employees. It

failed to do so despite its ability to readily acquire that information . Fournier

Trucking should not now benefit from its refusal to produce any information

identifying the carriers in discovery prior to the summary judgment decision.

Washington v. Perez, 219 N.J. 338, 352 (2014) (quoting Graves v. United States,

150 U.S. 118, 121 (1893)) ("[I]f a party has it peculiarly within his power to

produce witnesses whose testimony would elucidate the transaction, the fact that

he does not do it creates the presumption that the testimony, if produced, would

be unfavorable.").

      Fournier Trucking further argues it was entitled, under Aetna, to a

presumption that its carriers are independent contractors. It claims tha t, like in

Aetna, NJM had the burden to disprove the independent contractor status of its

carriers. However, as noted repeatedly, NJM's asserted basis for the premium

increase did not depend upon characterizing the carriers as employees rather

than independent contractors. NJM relied upon N.J.S.A. 34:15-79(a) and thus


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had no need to disprove the carriers' independent contractor status, which is not

in dispute.

      Finally, citing Aetna, Fournier Trucking claims that "fairness" forbids

NJM's premium increase. We disagree.

      In Aetna, this court reasoned that the insurer could simply wait until an

outside trucker filed a workers' compensation claim against it and deny the claim

by arguing that the outside trucker was an independent contractor. Aetna, 261

N.J. Super. at 330-31. In other words, the insurer was attempting to have it both

ways by charging a premium for the outside truckers to account for the risk that

they would file claims as employees, while having the ability to deny those

claims by arguing that they were independent contractors.

      In this case, NJM was required by statute to provide benefits if Fournier

Trucking utilized subcontractors that have employees but lack coverage. Thus,

NJM had a clear entitlement under the policy to collect information regarding

those subcontractors to determine the extent of its exposure to risk, and to charge

premium to account for that risk. It was Fournier Trucking's defiant refusal to

provide any information that constituted a breach of the agreement and resul ted

in litigation.




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      The trial court's holding that NJM was entitled to collect information

regarding the carriers and charge a premium accordingly therefore was correct

under N.J.S.A. 34:15-79(a) and the plain terms of the policy agreement. The

court's decision did not conflict with Aetna, or, for that matter, any other

authority cited by appellant.

                                      C.

      Lastly, we need only say a few words about the dismissal of Fournier

Trucking's claims against NJM under the CFA. Regardless of whether such

claims are or are not preempted by state insurance regulatory scheme (and

regardless of the precise legal status of CRIB and the CRIB Manual), we are

satisfied that Fournier Trucking has presented no viable contentions that NJM's

engaged in wrongful conduct that violated the CFA.

      Fournier argues that NJM engaged in "unconscionable commercial

practices," which are unlawful under Section 8-2 of the CFA. See N.J.S.A. 56:8-

2. The trial court soundly rejected this argument.

      "An unconscionable practice under the CFA 'necessarily entails a lack of

good faith, fair dealing, and honesty.'" D'Agostino v. Maldonado, 216 N.J. 168,

189 (2013) (quoting Van Holt v. Liberty Mut. Fire Ins. Co., 163 F.3d 161, 168

(3d Cir. 1998)).   Although the word "unconscionable" must be interpreted


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liberally so as to effectuate the public policy of the CFA, the statute is not

intended to "erase the doctrine of freedom of contract, but to make realistic the

assumption of the law that the agreement has resulted from real bargaining

between parties who had freedom of choice and understanding and ability to

negotiate in a meaningful fashion." Kugler v. Romain, 58 N.J. 522, 544 (1971).

      In its briefs on appeal, Fournier Trucking only identities two examples of

what it claims was unconscionable commercial conduct: (1) NJM's "arbitrary"

increase of the premium estimate after the re-audit in 2016; and (2) NJM's

"forcing" Fournier to purchase workers' compensation insurance coverage it was

"not obligated to provide." Neither of these examples rise to the level of a CFA

violation.

      With respect to the first proffered example, the record demonstrates that

NJM only issued the substantial increase in premium in 2016 after appellant's

lawyer sent a letter to NJM that referenced sixty-four carriers. NJM thus

increased its estimate based on the little information it received from Fournier

Trucking itself, and in accordance with the policy agreement. Appellant could

have avoided the issue—apparently readily—by complying with the policy

agreement and producing all the requested information. At the direction of its

president, it persistently refused to do so.


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      During litigation, after it became known that only fifteen of the

subcontractors could have exposed NJM to risk under N.J.S.A. 34:15-79(a)

because they had multiple drivers, NJM only sought a premium increase for

those identified fifteen carriers. Its revised calculation reflects good faith, not

bad faith. After trial, when NJM learned that one of those fifteen maintained

workers' compensation insurance, it further adjusted its claim to unpaid

premium for only fourteen carriers.

      On the whole, NJM's conduct in revising the premium was fair and

consistent with the policy agreement. Nothing suggests it engaged in

unconscionable practices.

      As to Fournier Trucking's second assertion that NJM unconscionably

"forced" it to purchase coverage for workers "it was not obligated to provide,"

that argument is dispelled by our conclusion in Part II(A) that the motor carriers

functioned as appellant's subcontractors. Under the plain terms of the policy,

NJM was entitled to collect information and charge premium to account for this

risk, under both the policy agreement and N.J.S.A. 34:15-79(a).

      Lastly, as to one other example of alleged unfair dealing raised by

appellant at oral argument, we discern no inherent unconscionability in the

October 9, 2015 form letter from NJM’s collections department notifying CRIB


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that appellant had an unpaid outstanding premium balance. Although the letter

incorrectly states that appellant’s coverage had already been terminated by NJM,

Reese explained that it was appropriate to advise CRIB that a policyholder in

the assigned risk program owed an outstanding balance to its assigned insurer.

Moreover, as it turned out, the letter did not prevent appellant from obtaining a

policy from a different insurer.

                                       D.

      All other points raised on appeal lack sufficient merit to warrant

discussion. R. 2:11-3(e)(1)(E).

      Affirmed.




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