Birnbaum v. Alliance of Am. Insurers

• Decision Date: 20 May 1999
• Parties: (Tex.App.-Austin 1999) David "Birny" Birnbaum, Appellant v. Alliance of American Insurers, et al., Appellees David "Birny" Birnbaum; John Cornyn, Attorney General of Texas; and Elton Bomer, Commissioner of Texas Department of Insurance, Appellants v. National Association of Independent Insurers, et al., Appellees NO. 03-97-00660-CV NO. 03-98-00208-CV
• Court: Texas Court of Appeals

Page 766

994 S.W.2d 766 (Tex.App.-Austin 1999)

David "Birny" Birnbaum, Appellant v. Alliance of American Insurers, et al., Appellees David "Birny" Birnbaum; John Cornyn, Attorney General of Texas; and Elton Bomer, Commissioner of Texas Department of Insurance, Appellants v. National Association of Independent Insurers, et al., Appellees

NO. 03-97-00660-CV

NO. 03-98-00208-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

May 20, 1999

Rehearing Overruled July 15, 1999.

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NOS. 97-09206 & 97-09206-A, HONORABLE PETER M. LOWRY, JUDGE PRESIDING AND HONORABLE PAUL R. DAVIS, JUDGE PRESIDING

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Before Justices Kidd, B. A. Smith and Powers^*

John E. Powers, Justice

In the first cause of a consolidated appeal, David "Birny" Birnbaum appeals from an order granting a temporary injunction on the application of several automobile insurance companies and trade associations ("appellees").¹ In the second cause, Birnbaum, joined by Attorney General and Elton Bomer,² Commissioner of the Texas Department of Insurance (the "Department"), appeals from a summary judgment granting a permanent injunction as requested by appellees. Both the temporary injunction and the permanent injunction prohibit the Department from releasing information to Birnbaum in response to his open records request. We will reverse the summary judgment and dissolve the permanent injunction; we will modify the temporary injunction order, affirming it as modified.

THE CONTROVERSY

Texas law requires that motor vehicle operators establish their financial responsibility. See Tex. Transp. Code Ann. 601.051 (West 1999). Compliance typically involves the purchase of an automobile liability-insurance policy. See id. 601.071-.088; Office of Pub. Ins. Counsel v. Texas Auto. Ins. Plan, 860 S.W.2d 231, 233 (Tex. App.-Austin 1993, writ denied). Insurers are prohibited to engage in unfair discrimination by refusing to insure, refusing to continue to insure, limiting the amount, extent, or kind of coverage available, or charging an individual a different rate for the same coverage because of the individual's age, gender, marital status, or geographic location. See Tex. Ins. Code Ann. art. 21.21-6, 1, 3(b) (West Supp. 1999) (emphasis added).

In order to allocate high-risk drivers among insurers, the 73d Legislature established the Texas Automobile Insurance Plan Association ("TAIPA"). See Tex. Ins. Code Ann. art. 21.81, 2(a); see also Office of Pub. Ins. Counsel, 860 S.W.2d at 233 n.2. TAIPA is a nonprofit corporation with members, all of which are authorized automobile insurers. See Tex. Ins. Code Ann. art. 21.81, 2(a).

The governing committee of TAIPA is responsible for making, amending, and administering a "plan of operation," subject to the approval of the Commissioner of Insurance (the "Commissioner"). See id. 3(a), (c). The purpose of the plan is to provide automobile liability-insurance coverage for drivers who are unable to obtain such coverage in the open or voluntary market. See id. 1(4). The plan adopted by TAIPA contains an incentive program to encourage TAIPA members to write insurance on a voluntary basis for consumers in "underserved"³ geographic areas reducing thereby the need for TAIPA to assign high-risk drivers to specific insurers.⁴ See id. 3(e). An insurer who voluntarily sells automobile insurance in underserved areas is eligible for credits against such insurer's quota of TAIPA assignments. The TAIPA plan of operation establishes the method for calculating basic quotas and credit-adjusted quotas.⁵ See 20 Tex. Reg. 334 (1995).

The Texas Private Passenger Automobile Statistical Plan ("Statistical Plan"), promulgated by the Department, requires the reporting of certain information necessary for the calculation of quotas and credits. Four reports are required to be submitted to the Department by all companies "writing direct private passenger automobile business in Texas." The four reports are: the Annual Aggregate Experience Report, Annual Reconciliation Report, Quarterly Market Report, and Quarterly Detailed Experience Report.

Birnbaum filed with the Department on October 29, 1996, an open-records request under the Texas Public Information Act seeking information in the Quarterly Market Reports for the first and second quarters of 1996. See Tex. Gov't Code Ann. 552.021 (West 1994 & Supp. 1999). The Quarterly Market Reports list by ZIP Code⁶ information concerning written premiums,⁷ policy and membership fees, number of vehicles on policies at the end of the previous quarter, number of vehicles on policies at the end of the current quarter, and changes in the number of vehicles insured⁸ for bodily injury liability and collision coverages. According to Department rules, information related to "the number of average vehicles on policies in force by company by ZIP Code" shall be available upon request in order that TAIPA, insurers, and the public may "make the necessary credit calculations and allow all interested parties to monitor which ZIP Code may be underserved in the future."28 Tex. Admin. Code 5.206(h)(1998).

Pursuant to Government Code section 552.301, the Department requested from the Attorney General a decision on whether the reports fell within any of the several exceptions to required disclosure. See Tex. Gov't Code Ann. 552.301, .101-.123 (West 1994 & Supp. 1999). The Attorney General decided initially that the reports of some of the companies were excepted from mandatory disclosure as either trade secrets or as commercial or financial information. See Tex. Att'y Gen. ORD-0301 (1997); see also Tex. Gov't Code Ann. 552.110 (West 1994). The Department requested that the Attorney General reconsider his decision. The Attorney General held again that the requested information was excepted from disclosure, but because Birnbaum alleged that the Department had previously released similar information, the Attorney General instructed the Department to decide whether to disclose the reports voluntarily. See Tex. Gov't Code Ann. 552.007 (West Supp. 1999).

The Department decided to release the information and appellees sued to enjoin the disclosure. After a pre-trial hearing, the district court determined the reports were probably protected from mandatory public disclosure under exceptions in the Texas Public Information Act that pertain to trade secrets, confidential commercial or financial information, and information "contained in or relating to examination, operating, or condition reports prepared by or for an agency responsible for the regulation or supervision of financial institutions or securities, or both." See Tex. Gov't Code Ann. 552.110, .112 (West 1994). Finding that appellees would sustain immediate and irreparable harm if the reports were released to the public, the district court enjoined the Department pendente lite from releasing the reports. Birnbaum appealed to this Court.

While Birnbaum's appeal from the temporary injunction was pending, the district court decided the merits of the case by ruling on appellees' motion for summary judgment. The district court determined the Quarterly Market Reports were excepted from mandatory public disclosure as information relating to the regulation of financial institutions or securities. See Tex. Gov't Code Ann. 552.112(a). A partial summary judgment was granted on this basis alone and the Department was permanently enjoined from releasing the reports. Birnbaum's motion to sever the partial summary judgment and make it the subject of a separate action was granted. Birnbaum and the State officials then appealed from the summary judgment order.

DISCUSSION AND HOLDINGS

Permanent Injunction

The trial court ruled summarily that the Quarterly Market Reports are excepted from mandatory disclosure, as a matter of law, pursuant to section 552.112 of the Texas Public Information Act, and enjoined their release to Birnbaum.

Section 552.112 provides an exception for "information contained in or relating to examination, operating or condition reports prepared by or for an agency responsible for the regulation or supervision of financial institutions or securities, or both." Tex. Gov't Code Ann. 552.112. Appellants Birnbaum and the State officials contend the exception does not apply to the Quarterly Market Reports. Birnbaum argues that the reports cannot be "operating or condition reports" because they do not provide a complete picture of the financial status or solvency of the affected insurance companies. The State officials assert that there is at least a factual dispute, precluding summary judgment, over whether the Quarterly Market Reports are "operating or condition reports." In addition, Birnbaum disputes that the insurance companies are "financial institutions" within the meaning of the exception.⁹ The State officials contend in addition that even if the Quarterly Market Reports come within section 552.112, the Department may nevertheless elect to release the information at its discretion.

Whether the Quarterly Market Reports are "operating or condition reports" of a "financial institution," within the meaning of section 552.112, is a matter of statutory construction. The term "financial institution" is not statutorily defined for purposes of section 552.112. Words that are not defined in a statute are generally given their ordinary meaning. See Tex. Gov't Code Ann. 312.002(a) (West 1998); Tijerina v. City of Tyler, 846 S.W.2d 825, 827 (Tex. 1992).

Birnbaum argues that the legislature ordinarily excludes insurers when defining the term "financial institution." This conclusion is based on a survey of fifteen Texas statutes that exclude insurers from the term "financial institutions."¹⁰ Birnbaum concedes that there are two "aberrational" statutes that do include insurance companies within the definition of "financial institutions,"¹¹...