Travelers Property Casualty Company of America v. Gilley Construction, Inc.

07/23/2026 IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE January 7, 2026 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA V. GILLEY CONSTRUCTION, INC. Appeal from the Circuit Court for Coffee County No. 2021-CV-47240 Robert Thomas Carter, Judge No. M2025-00026-COA-R3-CV This case concerns the interpretation of an assigned risk workers’ compensation insurance policy. The trial court construed the contract to give the insurer the authority to determine the meaning of the NCCI classification code provision at issue and granted summary judgment in favor of the insurer. We have determined that the trial court erred in its interpretation of the pertinent code provision and, therefore, we reverse and remand. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed and Remanded ANDY D. BENNETT, J., delivered the opinion of the Court, in which W. NEAL MCBRAYER and JEFFREY USMAN, JJ., joined. James D. Lane, Tullahoma, Tennessee, and Sam David Knight and Grant E. Reese, Birmingham, Alabama, for the appellant, Gilley Construction, Inc. Benjamin Micah Rose, Brentwood, Tennessee, for the appellee, Travelers Property Casualty Company of America. OPINION FACTUAL AND PROCEDURAL BACKGROUND Gilley Construction, Inc. (“Gilley”) is a Tennessee corporation headquartered in Manchester, Tennessee. The primary construction job at issue in this dispute was part of the State of Alabama’s reconstruction of Interstate 59/20 through downtown Birmingham. Gilley entered into a subcontract with the prime contractor concerning the installation of steel reinforcement for interstate bridges.  Under Tennessee law, Gilley was required to maintain workers’ compensation insurance for its employees or meet the statutory requirements for self-insurance. Tenn. Code Ann. § 50-6-405(a). Gilley purchased a workers’ compensation insurance policy from Travelers Property Casualty Company of America (“Travelers”) for the period from July 27, 2018, through July 27, 2019 (“Policy 1”). Travelers also issued a subsequent policy to Gilley covering the period from July 27, 2019, through July 27, 2020 (“Policy 2”).1 The policies at issue here are assigned risk policies obtained by Gilley through Tennessee’s Workers’ Compensation Insurance Plan (“the WCIP”). The Commissioner of Commerce and Insurance approves assigned risk plans, which provide insurance to employers unable to obtain coverage on the voluntary market. The assigned risk program in Tennessee is administered by the National Council for Compensation Insurance (“the NCCI”), a rating organization that promulgates rules, classifications, and rating plans for workers’ compensation insurance. See Am. Zurich Ins. Co. v. MVT Servs., Inc., No. M2011- 01266-COA-R3-CV, 2012 WL 3064650, at *2 (Tenn. Ct. App. July 27, 2012). The NCCI assigned Travelers to write the workers’ compensation policies for Gilley. At the beginning of the coverage period for each policy, Gilley paid the estimated premiums requested by Travelers—$115,104.68 for Policy 1 and $56,990.72 for Policy 2. As will be discussed more fully below, the policies provide that the initial premiums are subject to change based upon a post-policy audit and that the insured is required to pay the final premium amount. Travelers conducted an audit after Policy 1 ended and determined that the proper NCCI classification code was 5222 rather than code 5213, which had been used initially. This reclassification resulted in an increase of $735,366.60 in the premiums due from Gilley under the two policies. Gilley disputed the audit results, and Travelers initiated an audit dispute process. At the end of the audit dispute process, Travelers continued to request the increased premium amounts, which Gilley did not pay. In February 2021, Travelers filed suit against Gilley for breach of contract or, in the alternative, to collect a debt on an open account. Gilley answered the complaint, admitting that “there may be an amount due and owing” under the policies but denying the sums alleged to be owed. Travelers filed a motion for partial summary judgment on its breach of contract claim. In March 2022, the court entered an agreed order providing that Travelers was entitled to partial summary judgment on the sole issue that, as regards the alleged breach of contract, “there is no dispute from Gilley regarding the fact that payments to Travelers were not made and that the issue of the Breach of Contract is not disputed.” All other issues, including the amount due and the categories used by Travelers to calculate the amount due, remained in dispute. Travelers made a second motion for partial summary judgment in July 2023 on the appropriate NCCI classification code to assess Travelers’s risk associated with the work 1 Policy 2 was canceled before the end of the policy period. -2- performed by Gilley. In support of this motion, Travelers submitted Gilley’s subcontract agreement, photographs of the Birmingham bridge project, materials from the Scopes manual2 on the two NCCI classification codes at issue, and an NCCI rule on classification assignment. Gilley responded in opposition to Travelers’s motion and submitted the following: photographs of the work site; videos prepared by the prime contractor; emails between Travelers and Gilley; affidavits of Robert Gilley, Shonta Gilley, and James Jones; and a response to Travelers’s statement of undisputed material facts. The email communications between Travelers and Gilley include the following:  10/8/2019: Connie McCalla (Travelers premium auditor) to LaToya Pierce (Travelers account manager underwriter) stating that she met with Gilley employees the previous week for the audit and providing “a narrative of what transpired with this company in the past couple of years,” which included an internal dispute between the company owner and her daughter/corporate officer/employee that culminated in the daughter leaving the company and the mother filing a lawsuit against her over alleged payroll improprieties.  10/15/2019: Ms. Pierce to Shawn Curreri (Travelers CFE, residual markets division) referring account to open a file “based on the information that was presented to the auditor after my initial inquiries.”  11/25/2019: Ms. Pierce to Mr. Curreri stating that “a dispute may be forthcoming” based upon correspondence from Gilley.  12/13/2019: Shonta Gilley to Travelers audit dispute. Forwarding email from Vicki Gilley (President of Gilley) with attached color-coded “interpretation” of the 2018- 2019 audit. Vicki states that the attachments are from their QuickBooks program, which “also provides all our Certified WH-347 forms we send out daily.” She states that Gilley is disputing the audit.  12/20/2019: Autumn Beatty (Travelers dispute resolution specialist) to Ms. Pierce. Stating she was working with insured to resolve dispute but insured says “they are pending cancellation for 12/24.” “Will a rescind be issued?”  12/23/2019: 9:34 a.m. Ms. Pierce to Ms. Beatty. Flagging that “the rescind should feed tomorrow.” Also noting that the account had been sent to special investigations a few months earlier based upon “a situation that was reported to our auditor” and “some conflicting information” and advising to let Mr. Curreri know if “anything appears out of the ordinary with regards to the paperwork” on the dispute.  12/23/2019: 9:38 a.m. Ms. Beatty to Ms. Pierce. “The payroll is in line with the audit.” “Is there an issue with class because it appears the main issue is the allocation of wages between building work and bridges. The majority was placed under the 2 The two NCCI publications referenced by the parties are Basic Manual of Workers’ Compensation Insurance (“the Basic Manual”) and Scopes of Basic Manual Classifications (“the Scopes Manual”), which are specialized industry publications. This Court is limited to the excerpts provided by the parties and the available legal interpretations of the publications. -3-  bridges class. Where it appears per the reports and per my conversation with the insured the majority of the work is with buildings.”  12/23/2019: 10:44 a.m. Mr. Curreri to Ms. Pierce and Ms. Beatty agreeing that “the major difference is the allocation of payroll between building work and bridges.” Curreri recommended obtaining copies of “all job contracts and certified payroll records (Form WH-347’s) for the policy period.” Noted that Gilley had a subcontract on the “bridge project at I-59/20” and that “the insured seems to have that coded blue for building work.”  1/14/2020: 8:55 a.m. Ms. Beatty to Ms. Pierce. “The insured is working on getting the job contracts that I requested per Shawn’s request. However the insured indicated it is over 7000 pages of documents so they are working on getting them over but it is taking time.”  1/14/2020: 9:47 a.m. Ms. Pierce to Ms. Beatty inquiring if she has heard back from the insured on emails dated 1/6/20 and 1/10/20. She stated that 30 days would have passed [presumably, from the initiation of the audit dispute] the following day and, if the insured had not responded, they would be “closing the dispute out with no change at this time if Shawn agrees.” Ms. Pierce also stated: “The insured has been aware since last November that these are the types of records (contracts, certified payroll records, etc.) that are required not only from their calls to the audit department but also from outgoing calls that I made.” The affidavit of Robert Gilley, an officer and director of Gilley, states that he was present “on multiple occasions, at the location where Gilley performed all of its work [on the subcontract] at an off-site casting yard that was 3 to 5 miles away” from the I-20/59 bridge site. He provided further context regarding the photographs and videos provided by Gilley. In the affidavit of Shonta Gilley, Gilley’s secretary/treasurer, she explained that her duties were “paying bills, bookkeeping including accounts receivable and accounts payable, profit and loss statements and payroll summaries.” Having reviewed Gilley’s records, Shonta stated that, after she forwarded the audit dispute email from Vicki to Travelers, the company did not receive a response to the audit dispute. James Jones, the primary insurance agent who helped Gilley obtain the Travelers workers’ compensation policies at issue, described the audit dispute initiated by Gilley and Gilley’s efforts to provide materials to Travelers. He stated that, based upon his review of the documents concerning the work performed by Gilley employees at the off-site casting yard, the use of Code 5222 was not appropriate because Gilley’s employees “were never on a bridge or bridge decking” and that the project should have been rated under Code 5213. In its response to Travelers’s statement of undisputed material facts, Gilley provided the following additional information regarding Gilley’s work under the subcontract: 3. The Scope of Work for Gilley contained in Exhibit A to the Contract provides that Gilley was responsible to “Install Steel Reinforcement.” -4-  RESPONSE: Exhibit A to the Contract, entitled “Scope of Work and Supplemental Terms and Conditions” identified Gilley as a Subcontractor and references, as part of the scope of work, “Install Steel Reinforcement.” Exhibit A also includes a heading of “Supplemental Terms and Conditions” specifying the job that Gilley was to perform on behalf of the primary contractor including furnishing tie wire and the necessary tools for rigging and tying racks/horses. Templates for column and wall dowels, unloading, hoisting and setting prefabricated cages and other jobs specific to the portion of the job assigned to Gilley. In its reply to Gilley’s response and supporting materials, Travelers submitted additional emails:  1/6/2020: 12:03 p.m. Ms. Beatty to Robert Gilley. Requesting additional documentation: “copies of all job contracts and certified payroll records (Form WH-347’s) for the policy period.”  1/6/2020: 1:48 p.m. Robert Gilley to Ms. Beatty. “I will get on this ASAP however I’m not sure how to do this as it will be hard to copy roughly 3000 pages but we may can look at a Dropbox and I can send digital/note some of these jobs didn’t require a WH347 “certified payroll” but the [sic] can be generated from QuickBooks.”  1/10/2020: Ms. Beatty to Robert Gilley checking “the status of the additional information needed. Please advise.”  1/13/2020: Robert Gilley to Ms. Beatty. “We are in the process its just looking like 7000 pages.” Says they were not expecting to have to provide this information and needed to “scrub sensitive employee info from these reports.”  1/23/2020: 4:41 p.m. Ms. Beatty to Robert Gilley stating that, “At this time I have to close the dispute file no change. Once you are able to provide the requested information the audit can be placed back into dispute status.”  1/23/2020: 8:15 p.m. Robert Gilley to Ms. Beatty. “Whoa, we have got to keep this going! This is unorthodox materials that will not help prove or disprove but we haven’t said we wouldn’t or couldn’t do this.” States they are working on the request and asked her to “please advise if all is ok with current policy staying in place or if this will affect the status!” After a hearing in September 2023, the trial court denied Travelers’s motion because, based upon the proof submitted, the court could not determine as a matter of law which of the two competing NCCI classification codes should apply. Contrary to Travelers’s position, the trial court found that there was sufficient evidence that “Gilley did attempt to correct the code assignment at the close of the audit.” The court also rejected Travelers’s argument that Gilley was required to exhaust its administrative remedies by appealing to the Commissioner of Insurance. -5-  In June 2024, Travelers filed a third motion for summary judgment asserting that, based upon the additional information obtained through discovery and Gilley’s failure to exhaust its administrative remedies, Travelers was entitled to judgment as a matter of law. In support of its motion, Travelers relied upon the documents filed with its two previous summary judgment motions as well as the affidavit of Shawn Curreri (with an attached statement of account) and the depositions of Robert and Shonta Gilley. On July 23, 2024, the trial court entered an order granting summary judgment to Travelers. The court found the following undisputed material facts: 1. Gilley applied for and was issued a TWIC policy for the 2018-2019 coverage period. 2. Gilley agreed to be bound by the terms of [the] policy and NCCI protocol which obligated Gilley to produce certain evidence in the event of a risk/premium audit. 3. Gilley was audited at the end of the coverage period. 4. During the audit Gilley did not turn over US Dept of Labor WHL 347 [sic] forms or individual daily work logs. 5. These forms would be best evidence of the actual risk exposure of the workers. 6. Gilley was advised of its administrative appeal rights. 7. Gilley did not appeal the audit findings to the Tennessee Workers[’] Compensations [sic] Appeals Board. The court then concluded that “Travelers made a reasonable premium calculation based on the information available at the audit.” Judgment was entered against Gilley in the amount of $732,101.60. Gilley filed a motion to alter or amend the judgment, which the court denied in an order entered on December 5, 2024. This appeal followed. We restate the issues raised by Gilley on appeal as follows: (1) Whether the trial court erred in placing the burden of proof on Gilley, the non-movant, to show that Travelers was not entitled to collect additional workers’ compensation premiums; (2) whether the trial court erred in granting summary judgment to Travelers based, at least in part, upon Gilley’s failure to exhaust administrative remedies; (3) whether the trial court erred in granting summary judgment to Travelers based, in part, upon Gilley’s failure to provide Travelers with WH-347 forms; and (4) whether the trial court erred in its determination that NCCI code 5222 was the appropriate NCCI classification code to use to determine Gilley’s premium for the employees at issue. Travelers makes the additional argument that Gilley waived its arguments in opposition to the third motion for summary judgment. -6-  STANDARD OF REVIEW We review a trial court’s summary judgment determination de novo, with no presumption of correctness. Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015). This means that “we make a fresh determination of whether the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been satisfied.” Id. We “must view the evidence in the light most favorable to the nonmoving party and must draw all reasonable inferences in that party’s favor.” Godfrey v. Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002); see also Acute Care Holdings, LLC v. Houston Cnty., No. M2018- 01534-COA-R3-CV, 2019 WL 2337434, at *4 (Tenn. Ct. App. June 3, 2019). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” TENN. R. CIV. P. 56.04. When a party moves for summary judgment but does not have the burden of proof at trial, the moving party must either submit evidence “affirmatively negating an essential element of the nonmoving party’s claim” or “demonstrating that the nonmoving party’s evidence at the summary judgment stage is insufficient to establish the nonmoving party’s claim or defense.” Rye, 477 S.W.3d at 264. “[I]f the moving party bears the burden of proof on the challenged claim at trial, that party must produce at the summary judgment stage evidence that, if uncontroverted at trial, would entitle it to a directed verdict.” TWB Architects, Inc. v. Braxton, LLC, 578 S.W.3d 879, 888 (Tenn. 2019) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986)). Once the moving party has satisfied its burden, the nonmoving party “‘may not rest upon the mere allegations or denials of [its] pleading.’” Rye, 477 S.W.3d at 265 (quoting TENN. R. CIV. P. 56.06). Rather, the nonmoving party must respond and produce affidavits, depositions, responses to interrogatories, or other discovery that “set forth specific facts showing that there is a genuine issue for trial.” TENN. R. CIV. P. 56.06; see also Rye, 477 S.W.3d at 265. If the nonmoving party fails to respond in this way, “summary judgment, if appropriate, shall be entered against the [nonmoving] party.” TENN. R. CIV. P. 56.06. If the moving party fails to show he or she is entitled to summary judgment, however, “‘the non-movant’s burden to produce either supporting affidavits or discovery materials is not triggered and the motion for summary judgment fails.’” Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 83 (Tenn. 2008) (quoting McCarley v. W. Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998)). The interpretation of an insurance policy, which is a contract, presents a question of law, which is subject to de novo review, with no presumption of correctness. Garrison v. Bickford, 377 S.W.3d 659, 663 (Tenn. 2012); Clifton v. Tenn. Farmers Mut. Ins. Co., 638 S.W.3d 664, 671 (Tenn. Ct. App. 2021). -7-  ANALYSIS We must determine whether the trial court erred in granting summary judgment in favor of Travelers in this case. The issues presented relate to the burden of proof, exhaustion of administrative remedies, Gilley’s failure to provide requested information, and the appropriate NCCI classification code.3 For the reasons discussed below, we have concluded that the trial court erred in granting summary judgment to Travelers. I. Burden of proof on summary judgment Gilley asserts that the trial court erred by placing the burden upon the insured to establish that it was not required to pay additional premiums in this dispute over the correct NCCI classification code. Travelers asserts that the trial court employed the proper burden of proof for summary judgment “consistent with the unique type of workers[’] compensation policy at issue here.” In its arguments in favor of summary judgment to the trial court, Travelers explained its position: In this unique workers compensation insurance dispute, the burden of proof is particularly important, separate and apart from the aforementioned summary judgment standards. Simply stated, Gilley has the burden of proof to establish summary judgment should be denied to Travelers. This is because, as stated by the Tennessee Court of Appeals in American Zurich Insurance Company v. MVT Services, Inc., 2012 WL 3064650 (Tenn. Ct. App. July 27, 2012) at *11, regarding individual worker risk: “When disputes arise, given that the purposes of the Workers’ Compensation Law is to provide a reliable remedy to injured workers, the burden is on the insured employer to establish that its workers should be excluded from premium consideration.” (emphasis added) Moreover, Gilley should have done so as part of the audit process, not belatedly after it was sued here. In the course of such a retrospective audit, the burden is on [the insured] to establish exclusion from premium 3 Travelers asserts that Gilley waived all of its arguments in opposition to the third motion for summary judgment because “there is no response in opposition to the third motion for summary judgment in the record.” Travelers is correct that the record on appeal does not contain Gilley’s response to the motion for summary judgment at issue. Gilley had an obligation to ensure that the record on appeal contained all relevant documents, including its response to the motion at issue on appeal. See TENN. R. APP. P. 24(a). The transcript of the hearing on the motion for summary judgment, which is part of the appellate record, reflects that Gilley did, in fact, submit a response to the motion for summary judgment in the trial court, and Travelers does not assert to the contrary. We decline to consider Gilley’s arguments on appeal waived based solely upon this omission from the appellate record. -8-  consideration.” MVT Services, Inc., 2012 WL 3064650, at *17. (emphasis added). The court continued, “In a retrospective premium audit, the issue is not whether the worker would have certainly been covered had he filed a claim on the insurance policy; rather, the audit is an after-the-fact analysis designed ‘to examine the actual risk which [the insurance company] undertook during the policy period.’” Id. at *12 (quoting Royal Insurance Company v. R & R Drywall, Inc., 2003 WL 21302983, at *4 (Tenn. Ct. App. June 6, 2003)). (emphasis added). ... This is admittedly a very high burden for Gilley to satisfy, even on summary judgment as proposed by Travelers. As the appellate court [in] MVT opined, “[U]nder the terms of the [policy], [the insured] need only show that it ‘could’ be liable for workers’ compensation benefits for the disputed employees. Moreover, as we have emphasized, ‘the burden ordinarily falls on the insured . . . to establish’ that the disputed ‘should be excluded from premium consideration.’” Id. (quoting Couch on Ins. 3d § 69:15) The trial court adopted the framework suggested by Travelers, stating that, under the policy and caselaw, it was “incumbent on Gilley to prove its employees should be excluded from the policy and by extension that a lower risk code should apply to its employees.” Travelers relies heavily on this Court’s decision in American Zurich Insurance Co. v. MVT Services, Inc., No. M2011-01266-COA-R3-CV, 2012 WL 3064650 (Tenn. Ct. App. July 27, 2012). Therefore, we will examine that case in detail. American Zurich involved a trucking company, Mesilla Valley Transportation (“MVT”), headquartered in Texas with a business location in Tennessee. Id. at *1. At its Tennessee business, MVT “employed as many as 143 over-the-road drivers who resided in Tennessee.” Id. MVT purchased an assigned risk workers’ compensation policy from American Zurich Insurance Company (“Zurich”), a policy administered by the NCCI. Id. at *2. The policy provided for retrospective rating for the calculation of insurance premiums, which this Court has described as follows: This method of insurance premium calculation bases the premium on the total payroll of covered employees during the policy period. It is typically used where the exact composition of the employer’s workforce is subject to substantial variation, or where the insured’s risk is difficult to measure at the beginning of the policy period. See Lee R. Russ & Thomas F. Segalla, 5 Couch on Ins.3d § 69:15 (2008). Under the retrospective rating method, the employer deposits an estimated premium with the insurance company at the beginning of the policy period. Shortly after the policy period expires, the insurance company conducts a routine retrospective premium audit, looking back at the workers who were actually on the insured’s payroll during the policy period, utilizing records provided by the insured employer related to -9-  employee payroll and classification. The actual insurance premium due for the immediate past policy period is then determined based on the results of the audit. Depending on the audit result, the insured employer may either receive a refund on the premium paid or be required to pay additional premiums to the insurance company. Id. (footnote omitted). The policy required MVT “to produce to Zurich Insurance payroll records and any other records for work that was completed during the policy period for all of its employees and subcontractors for use in the insurance company’s retrospective premium audit,” and “MVT was required under the policy to pay insurance premiums for all employees and workers who may have placed Zurich Insurance at risk of loss during the audited policy period.” Id. at *3. While maintaining the Zurich policy for Tennessee employees, MVT created an alternative program for its Texas employees. Id. Unlike in Tennessee, Texas law did not require companies to maintain workers’ compensation for their employees. Id. So, MVT created an occupational benefit plan (“OB plan”), a company-sponsored and less expensive avenue for Texas employees to recover for on-the-job injuries. Id. Once the OB plan was established, MVT “did not pay premiums to Zurich Insurance for its Tennessee-resident over-the-road drivers, taking the position that those employees were actually Texas employees who were covered under the Texas OB Plan.” Id. MVT notified Zurich of its reclassification of these workers and ceased making premium payments to Zurich. Id. at *4. As required by its policies, Zurich conducted audits after each policy period ended. Id. In May 2005, Zurich discovered that MVT had not paid premiums for twenty workers who had filed claims. Id. At that point, the insurance company instituted a specific policy that it would no longer accept claims for MVT’s Tennessee-resident drivers. Id. The insurer was concerned about its risk exposure for those employees and investigated further. Id. The NCCI guidelines, as found in the NCCI Scopes Manual, provided that, in the absence of information from the insured concerning a driver’s base terminal or the location where the driver spent the majority of their driving time, the employees should be assigned according to their state of residence. Id. at *5. Zurich conducted another audit of the policy period that ended in March 2006 and a subsequent policy period that ended in June 2006 (when Zurich canceled the policy due to nonpayment) and determined that, under the NCCI guidelines, MVT owed $328,341 in retrospective premiums, which MVT refused to pay. Id. at *6. Zurich filed suit against MVT in March 2008 seeking the retrospective premiums. Id. at *7. After discovery, the insurance company filed a motion for summary judgment on its complaint, asserting that “the undisputed facts established that MVT was responsible under the Zurich Policy for paying workers’ compensation insurance premiums for its Tennessee-resident over-the-road drivers, because those employees presented a risk of loss - 10 - to Zurich Insurance under the insurance policy.” Id. The trial court granted Zurich’s motion for summary judgment.4 Id. at *9. On appeal, “MVT’s primary argument [was] that the employment status of the disputed Tennessee-resident over-the-road drivers must be determined on a case-by-case basis for each driver, because the circumstances for each are different.” Id. at *10. Zurich argued that, “for insurance policies that provide for retrospective premiums, the burden is on the insured to establish that an employee should be excluded from the premium calculation.” Id. Zurich emphasized that its policy “covered employees who presented an arguable workers’ compensation risk” and that, on that basis, its calculation of retrospective premiums was correct. Id. This Court explained that retrospective rating provisions “are based on the reality that ‘any number of employees may be hired or terminated while the policy is in effect, thus increasing or decreasing the amount of risk to which the insurer is exposed.’” Id. at *11 (quoting CNA (Cont’l Cas.) v. King, No. M2004- 02911-COA-R3-CV, 2006 WL 2792159, at *6 (Tenn. Ct. App. Sept. 28, 2006)). We stated that the retrospective audit process “requires cooperation between the insurance company and the insured employer” to calculate the premiums: When disputes arise, given that the purpose of the Workers’ Compensation Law is to provide a reliable remedy for injured workers, the burden is on the insured employer to establish that its workers should be excluded from premium consideration. One commentator has explained: In most retrospective rate situations, the insured is required to provide the insurer with various documentation. If the information is incorrect, the insured runs the risk of having the insurance cancelled. Disputes may arise between the parties over the particular factors employed in calculating the retrospective rate. For example, the parties may disagree about the actual number of employees of the insured, whether particular goods were excluded from coverage, and whether the insurer lost the right to claim a particular loss item. Should one or more of these factors be called into question, the burden ordinarily falls on the insured, who usually has custody of the relevant information, to establish that it should be excluded from premium consideration. 5 Couch on Ins.3d, supra, § 69:15 (footnotes omitted). In a retrospective premium audit, the issue is not whether the worker would have certainly been 4 The trial court also granted summary judgment in Zurich’s favor on a counterclaim filed against it by MVT. - 11 -  covered had he filed a claim on the insurance policy; rather, the audit is an after-the-fact analysis designed “to examine the actual risk which [the insurance company] undertook during the policy period.” Royal Ins. Co. v. R & R Drywall, Inc., No. M2002-00791-COA-R3-CV, 2003 WL 21302983, at *4 (Tenn. Ct. App. June 6, 2003) (quoting the trial court decision). Id. at *11-12. The opinion then examined the relevant caselaw, which addressed retrospective premium demands based upon an insured’s employment of subcontractors who were not included in the original calculation of the insured’s premiums. Id. at *12-14. The two key cases emphasized that, “where the insurance company was exposed to the risk of defending a workers’ compensation lawsuit filed by a worker, even if only to litigate the worker’s status, the assessment of retroactive premiums was warranted under the insurance contract.” Id. at *14 (citing Hartford Underwriters Ins. Co. v. Penney, No. E2009-01330- COA-R3-CV, 2010 WL 2432058, at *5 (Tenn. Ct. App. June 17, 2010); King, 2006 WL 2792159, at *7-8). This Court then turned to the contractual dispute before it, noting that the insurance policy included a provision that the premium would include payroll for the services of MVT employees and “[a]ll other persons engaged in work that could make us liable” for workers’ compensation benefits. Id. at *15. The issue was whether the company “‘could’ have been liable for workers’ compensation benefits for the Tennessee-resident over-the- road drivers.” Id. We examined the other relevant policy provisions, which required MVT to “keep records of information needed to compute premium,” to “provide [Zurich] with copies of those records when [it] ask[s] for them,” and to “let [Zurich] examine and audit all [of MVT’s] records that relate to this policy.” Id. Thus, MVT was required to keep and provide Zurich with pertinent records to allow Zurich to determine the final premium “based on the records provided to it by MVT.” Id. We stated that: “If Zurich Insurance uses methodology to determine the premium that is congruent with the policy and consistent with the records and information furnished by MVT, it has complied with its contractual obligation. If so, MVT owes the premium assessed.” Id. In addressing MVT’s argument that the employment status of each driver must be determined individually, this Court focused upon whether Zurich met its contractual obligation “to audit the information and records furnished by MVT and determine the retrospective premium.” Id. at *17. We reasoned that “[i]f MVT gave Zurich Insurance no indication in the audit that it felt that certain of the over-the-road drivers presented less risk to the insurance carrier than others, it cannot, in the ensuing litigation, ask the trial court to conduct a mini-trial on the circumstances of each individual driver.” Id. In the end, the Court concluded: - 12 -  Given the records and information produced by MVT in the retrospective premium audit, Zurich Insurance had little choice but to conclude that it “could” be liable to MVT’s Tennessee-resident over-the-road drivers. It is undisputed that all of the Tennessee-resident over-the-road drivers lived in Tennessee, and that their employment was necessitated by MVT’s establishment of a terminal in Tennessee to service its growing Tennessee client base. It is also undisputed that, for all of these employees, at least some of their work was performed in Tennessee. The lack of driving logs left Zurich Insurance with almost no information regarding the state in which these drivers spent the majority of their time. Id. Under these facts, Zurich was “at risk of being required to defend MVT against a claim filed by one of MVT’s Tennessee-resident over-the-road drivers, even if only to litigate the matter of coverage.” Id. at *18. In the present case, Travelers attempts to take some of the statements from MVT Services out of context and apply them to the present case. Respectfully, we find that the facts in the present case differ significantly from those in MVT Services. Here, the dispute is not over which workers are covered by the policy but over the applicable NCCI classification code. In MVT Services, one of the key provisions of the policy required coverage for any worker who might put Zurich at risk of having to defend a lawsuit. In the present case, such a provision does not come into play because the dispute is not over which workers are covered. Moreover, in MVT Services, the insurance company was guided by a specific provision in the Scopes manual providing a presumption for how to classify an employee in the absence of other information. As in MVT Services, we will analyze this case as a claim for breach of contract to determine if each party has acted in accordance with the contract terms and will apply the summary judgment burdens applicable under Tenn. R. Civ. P. 56. We decline to adopt Travelers’ position that, at the summary judgment level, the burden was on Gilley to prove Travelers was not entitled to summary judgment. II. Exhaustion of administrative remedies There is no dispute that Gilley did not exercise its right to pursue an administrative appeal of the audit findings at issue. Gilley asserts that it was not required to exhaust its administrative remedies and that, therefore, the trial court erred in granting summary judgment. The applicable statute is Tenn. Code Ann. § 56-5-109(b), which states, in pertinent part: - 13 -  Every insurer and rate service organization shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard on written request to review the manner in which the rating system has been applied in connection with the insurance afforded. (Emphasis added). As Gilley emphasizes, the statute states that the insured “may” be heard pursuant to the reasonable means provided by the insurer and rate service organization. This Court has previously cited the permissive statutory language as indicating that an appeal is not mandatory. Cook’s Roofing, Inc. v. Hartford Underwriters Ins. Co., No. W2019-00271-COA-R3-CV, 2020 WL 4151216, at *10 (Tenn. Ct. App. July 20, 2020) (concluding that the insured’s failure to pursue an administrative appeal did not deprive the trial court of subject matter jurisdiction). Travelers acknowledges that the language of the statute is permissive