On July 31, 2025, the Georgia Court of Appeals overturned a $153,363 workers’ compensation judgment in favor of Ace American Insurance Company against Preston Building and Renovations, LLC. The dispute arose after Ace American issued a workers’ compensation policy to Preston Building in June 2019 with an initial premium of $1,500, based on payroll data. Following an audit, Ace American increased the premium to $193,745, alleging higher payroll and misclassified subcontractors. After crediting the $1,500 paid, Ace American sought $153,363 plus $44,283.04 in prejudgment interest.
Preston Building, a single-member construction firm owned by Dylan Preston, challenged the premium, arguing that Ace American misclassified subcontractors and failed to credit those with their own valid insurance. Preston provided documentation, including bank statements, 1099s, tax returns, contracts, W-9s, and certificates of insurance, to support his claim that the audit overstated the premium. The trial court initially ruled for Ace American, dismissing Preston’s evidence as hearsay and unsupported by business records.
The appeals court reversed, finding that Preston’s affidavit, based on his personal knowledge as the company’s sole owner, along with attached invoices and certificates of insurance, created a genuine issue of material fact. The court emphasized that workers’ compensation premiums are calculated post-policy using actual payroll and proper classifications, as per the policy terms. The case was remanded to the trial court for further proceedings, highlighting the need for insurers to substantiate audit and classification methods.