Connecticut Life & Health Ins. Guaranty Ass'n v. Daly

Decision Date15 November 1977
Docket NumberNo. 133068,133068
Citation35 Conn.Supp. 13,391 A.2d 735
PartiesCONNECTICUT LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION v. T. F. Gilroy DALY, Insurance Commissioner, et al.
CourtConnecticut Court of Common Pleas

Alcorn, Bakewell & Smith, Hartford, for plaintiff.

Carl R. Ajello, Atty. Gen., and John G. Haines, Asst. Atty. Gen., for named defendant.

KINNEY, Judge.

This case is an appeal under the Uniform Administrative Procedure Act; General Statutes, c. 54; from a declaratory ruling of the defendant insurance commissioner and an order directing the plaintiff to comply with that ruling.

The plaintiff association is composed of insurance companies which write life and health insurance in Connecticut. The association was created by the General Assembly to provide protection to policyholders of life and health insurance in instances where the company issuing the policies becomes impaired and cannot honor its contractual obligations.

The dispute between the plaintiff and the defendant commissioner arises out of conflicting interpretations of General Statutes § 38-308(j) which concerns the obligations of the plaintiff to the policyholders of an impaired insurer. The plaintiff contends that the statute obliges the association to pay only a proportionate part of policy values, such as cash and surrender values, where the death benefit policy coverage exceeds $25,000. The commissioner has ruled that § 38-308(j) obligates the plaintiff to pay in full all policy obligations and values up to $25,000, irrespective of any excess of death benefit coverage over $25,000. 1

Just prior to taking this appeal the plaintiff instituted an action in the Superior Court seeking a declaratory judgment to resolve this controversy. The Superior Court sustained a plea in abatement to that action and the Supreme Court affirmed on the ground that the Uniform Administrative Procedure Act provided the plaintiff with an adequate opportunity for judicial review of the commissioner's declaratory ruling. See Connecticut Life & Health Ins. Guaranty Assn. v. Jackson, 173 Conn. 352, 377 A.2d 1099. In its opinion the Supreme Court at least implicitly invited the plaintiff to institute a declaratory judgment action in the Court of Common Pleas under § 4-175 of the Uniform Administrative Procedure Act. The plaintiff, adopting this suggestion, has instituted such an action in this court.

While the Superior Court declaratory judgment action was pending, the plaintiff, anticipating that that action might be dispositive of the subject matter of this appeal, sought and obtained in this case a stay of the commissioner's ruling and order. As indicated, the prior declaratory judgment action did not prove dispositive of the issue in controversy.

The plaintiff now seeks an extension of the stay previously ordered herein until final judgment in this appeal or final judgment in the declaratory judgment action instituted in this court, whichever last occurs. The defendant opposes this extension, claiming that the plaintiff has failed to make an adequate showing to justify continuance of the stay order.

A stay of an order or ruling of an administrative agency is authorized in an administrative appeal by § 4-183(c) of the statutes which provides: "The filing of the petition (for judicial review) does not of itself stay enforcement of the agency decision. The agency may grant, or the reviewing court may order, a stay upon appropriate terms." This language was adopted almost verbatim from the Revised Model State Administrative Procedure Act. 2 Cooper, State Administrative Law, p. 627. The statute and the model act are completely silent as to what standards should apply to an application for a stay order. Approximately half the states with administrative procedure acts employ language substantially similar to that used in § 4-183(c) and the model act. The other half incorporate standards such as good cause, the threat of irreparable harm, consideration of the public interest, and the like. 2 Cooper, op. cit., p. 627.

The only reported Connecticut case addressing itself to the question of criteria applicable to a stay order application is Waterbury Hospital v. Commission on Hospitals & Health Care, 30 Conn.Sup. 352, 316 A.2d 787. The court there held (pp. 354-55, 316 A.2d p. 788): "In the consideration of applications for stay orders, the applicant must make a strong showing of the probability of succeeding on the merits of its appeal, of the probability of irreparable injury, and of the probability that the stay order will not be harmful to the public interest or to other parties." The threefold test proposed by the Waterbury Hospital case erects a very substantial obstacle to any applicant for a stay order. In the opinion of this court, the test is too stringent.

The Waterbury Hospital case is distinguishable on its facts. That case involved an application for retroactive implementation of rates. Additionally the case did not purport to decide what § 4-183(c) of the Uniform Administrative Procedure Act requires, but, rather, concerned the language of a specific statute, § 19-73p, applicable to appeals from the commission on hospitals and health care. Furthermore, the three-pronged test of the Waterbury Hospital case was derived from two cases which arose under the federal administrative procedure act. Both cases relied on by the court in the Waterbury Hospital case, Hamlin Testing Laboratories, Inc. v. United States Atomic Energy Commission, 337 F.2d 221 (6th Cir.), and Virginia Petroleum Jobbers Assn. v. Federal Power Commission, 104 U.S.App.D.C. 106, 259 F.2d 921, were decided under the federal administrative procedure act (formerly 5 U.S.C. § 1009(d), now 5 U.S.C. §...

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5 cases
  • Griffin Hosp. v. Commission on Hospitals and Health Care
    • United States
    • Connecticut Supreme Court
    • June 11, 1985
    ...Decision." The court appears to have followed the language contained in a trial court decision; Connecticut Life & Health Ins. Guaranty Assn. v. Daly, 35 Conn.Sup. 13, 16-17, 391 A.2d 735 (1977); which adopted the balancing test suggested in 2 Cooper, State Administrative Law, p. 629. See M......
  • Tenneco Oil Co. v. New Mexico Water Quality Control Com'n
    • United States
    • Court of Appeals of New Mexico
    • March 25, 1986
    ...have applied varying standards. See Tomasi v. Thompson, 635 P.2d 538 (Colo.1981) (en banc); Connecticut Life & Health Insurance Guaranty Ass'n v. Daly, 35 Conn.Sup. 13, 391 A.2d 735 (1977); Coordinating Committee of Mechanical Specialty Contractors Ass'n v. O'Connor, 92 Ill.App.3d 318, 48 I......
  • Vigilatore v. Connecticut State Board of Examiners for Physical Therapists
    • United States
    • Connecticut Superior Court
    • July 8, 2003
    ...J.). This burden "erects a very substantial obstacle to any applicant for a stay order." Connecticut Life & Health Ins. Guaranty Assn. v. Daly, 35 Conn.Sup. 13, 16, 391 A.2d 735 (1977). The first factor in determining the justification for a stay is the likelihood that the plaintiff will pr......
  • Wallingford Bd. of Ed. v. State Bd. of Ed.
    • United States
    • Connecticut Superior Court
    • May 15, 1980
    ...of this motion. In rejecting the motion, the court finds persuasive the cogent analysis in Connecticut Life & Health Insurance Guaranty Assn. v. Daly, 35 Conn.Sup. 13, 17, 391 A.2d 735. In that case, the court, in discussing a stay, applied a "balancing test." That test weighs the equities.......
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