Angelico v. Commissioner of Ins.
| Decision Date | 04 May 1970 |
| Citation | 357 Mass. 407,258 N.E.2d 299 |
| Parties | Vincent J. ANGELICO et al. v. COMMISSIONER OF INSURANCE et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
John R. Hally, Thomas H. Brown, Boston, for petitioners.
David C. Hawkins, Special Asst. Atty. Gen., for Commissioner of Insurance.
George C. Caner, Jr., Boston, on brief for Travelers Indemnity Co.
Before WILKINS, C.J., and SPALDING, KIRK, SPIEGEL and REARDON, JJ.
This is a petition for a writ of mandamus seeking, inter alia, to compel the respondent Commissioner of Insurance (Commissioner) to order the Travelers Indemnity Company (Travelers) 'to take immediate action to cease owning and operating the Travelers Auto Body Company' (Tabco). Travelers was permitted to intervene as a party respondent. Each of the respondents filed demurrers. The case is here on the petitioners' appeal from the sustaining of the demurrers 1 and denying the petitioners' motion to amend their petition. 2
The petitioners have alleged substantially the following. They are citizens and taxpayers in the Commonwealth. Travelers, a Connecticut corporation, is authorized to conduct certain insurance business in the Commonwealth, as provided for by G.L. c. 175. Tabco is a corporation organized under the laws of Connecticut to conduct an auto body repair business and is presently engaged in such business in Worcester. Tabco, since its incorporation in 1966, has been a wholly owned subsidiary of Travelers. After due demand by the petitioners, the Commissioner 'specifically refused to take appropriate action to enforce the provisions of * * * (G.L. c. 175) against Travelers.'
The petitioners also allege, in substance, that the Commissioner should have taken action against Travelers for the following reasons: (1) Under G.L. c. 175, § 3A, the Commissioner is charged 'with the duty of administering and enforcing the provisions of that chapter.' 3 (2) Travelers has no right to conduct an auto body repair business since under G.L. c. 175, § 150, as amended through St.1946, c. 250, 4 Travelers, as a foreign insurance company, can only participate in those 'kinds of business authorized' by the chapter. The Commissioner licensed Travelers only to conduct 'certain types of insurance business.' not an auto body repair business. (3) The relationship between Travelers and Tabco, that of parent and subsidiary corporations, and 'the complete control of Tabco by Travelers which is inherent in this relationship is sufficient in and of itself to violate the intent of * * * (G.L. c. 175, §§ 47, 150, 152).' 5 (4) Travelers initially invested $400,000 to $500,000 to create Tabco; the officers and directors of Tabco 'are present or former officers or employees of Travelers, or are * * * closely affiliated with Travelers'; officers and directors of Travelers have made statements in press releases and meetings to the effect 'that Tabco exists to serve the various purposes of Travelers and will be operated to that end'; and a spokesman for Travelers has stated that one of the primary purposes of Tabco 'is to serve as a research project searching for ways to reduce insurance premium costs.' (5) The operation of Tabco by its officers and directors is not in the best interest of Tabco, but 'for the benefit of Travelers and in accordance with decisions made by * * * their superiors in the Travelers organization, which are based on the needs and purposes of Travelers.' The Commissioner, through his general counsel, informed the petitioners that even 'if the facts set forth in * * * (the) petition are correct, Travelers is nevertheless not in violation of any provisions of * * * (G.L. c. 175.).' This conclusion is based on 'the fact that Tabco is a subsidiary corporation of Travelers, rather than an open and direct Travelers operation.'
In view of our disposition of the case, we pass questions of the timeliness of the appeal and the corporate relationship of Tabco and proceed to discuss whether there was error in sustaining the demurrers.
The petitioners contend, in effect, that mandamus will lie because '(t)he * * * (Commissioner) has no administrative discretion to refuse to enforce the insurance law where such refusal is based on an erroneous view of (the) law.' They argue that if the directive of the insurance law is to endure, 'the correct view of the extent of the Commissioner's discretion under § 3A is that he need not advise the Attorney General or take other action to enforce the law, if the facts as disclosed to him and developed by his investigation do not, in his opinion, constitute a violation of the law as correctly interpreted.' We do not agree.
General Laws c. 175, § 3A, provides that '(t)he commissioner shall administer and enforce the provisions of this chapter and * * * (i)f upon complaint, examination or other evidence exhibited to him he is of opinion that any provision * * * has been violated, he shall forthwith report the facts to the attorney general, to the proper district attorney or to the commissioner of public safety, who shall cause the offender to be prosecuted therefor' (emphasis supplied). Furthermore, under G.L. c. 175, § 5, as amended through St. 1933, c. 107, § 2, the Commissioner may revoke the license of a foreign insurance company, 'if he is satisifed * * * that any foreign company has violated any provision of law' (emphasis supplied). The Commissioner's duties under G.L. c. 175 are not solely ministerial, but involve the exercise of judgment and discretion in determining whether the provisions of the statute have been violated.
It is well established that a writ of mandamus will not issue unless the respondent is under a legal duty to perform some particular act or acts the performance of which the court can order in definite terms and enforce if necessary. Scudder v. Selectmen of Sandwich, 309 Mass. 373, 375, 34 N.E.2d 708, and cases cited. However, we are not confronted with such a case. In the case at bar, the Commissioner acted and found no violation of the law.
The petitioners, by way of a 'flank attack,' are arguing that the validity of the Commissioner's exercise of discretion depends on the correctness of his interpretation of the law and are seeking a...
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