Connecticut Blue Cross, Inc. v. White

• Decision Date: 01 July 1974
• Docket Number: 109761,Nos. 110102,s. 110102
• Citation: 328 A.2d 442,31 Conn.Supp. 257
• Court: Connecticut Court of Common Pleas
• Parties: CONNECTICUT BLUE CROSS, INC. v. Thomas C. WHITE, Insurance Commissioner, et al.

Page 442

328 A.2d 442

31 Conn.Supp. 257

CONNECTICUT BLUE CROSS, INC. v. Thomas C. WHITE, Insurance Commissioner, et al.

Nos. 110102, 109761.

Court of Common Pleas of Connecticut, Hartford County.

July 1, 1974.

Murtha, Cullina, Richter & Pinney, Hartford, for plaintiff.

Robert K. Killian, Atty. Gen., and Richard M. Sheridan, Asst. Atty. Gen., for named defendant et al.

Alexander A. Goldfarb, Hartford, for defendants Irwin et al.

COLLINS, Judge.

This is a consolidated appeal from a decision of Paul B. Altermatt, insurance commissioner, allowing the plaintiff, hereinafter called Blue Cross, a 5.61 percent rate increase in premiums for certain direct payment plans. Two appeals were taken from this decision, one under § 33-167 of the General Statutes and the other under § 4-183(b), as amended by Public Acts 1973, No. 73-620 § 13. By agreement of the parties the appeals were heard, and are to be decided, together.

On August 13, 1973, Blue Cross, pursuant to § 33-166 of the General Statutes, filed with the commissioner a request for approval of certain rates to be charged by Blue Cross to its direct payment subscribers. On August 28, 1973, the commissioner held a public hearing on the request and on September 5, 1973, issued his finding and order in respect thereto.

Blue Cross has appealed, alleging that the order is illegal, unreasonable, capricious or in abuse of the discretion vested in the commissioner in specified particulars. At the August 28, 1973, public hearing, Gail C. Irwin, Patricia A. Plourde, Gerald Shea and Allen Peichert were admitted as parties by the commissioner under § 4-166(5) of the General Statutes and were cited in and served as defendants by Blue Cross in its appeal. In respect to the latter two individuals, a default for failure to appear was granted by this court on December 7, 1973.

The filing made by Blue Cross to the commissioner requested that it be allowed to discontinue direct payment contract SP-100 and that on other contracts it be granted a rate increase averaging 13.65 percent or, in the alternative, if direct payment contract SP-100 was to be retained, that Blue Cross be granted an average rate increase of 15.61 percent. The commissioner in his order chose to require Blue Cross to continue to offer direct payment contract SP-100, and in this appeal Blue Cross has accepted that decision.

After examining all the evidence and testimony submitted to him, the commissioner concluded that Blue Cross's existing rates were inadequate but that the requested 15.61 percent raise was excessive. He thereupon made five deductions totaling 9.66 percent, which he rounded off to 10 percent, and allowed a rate increase of 5.61 percent. Blue Cross takes issue in this appeal with four of the five deductions, and argues that this court, if it finds any of them unlawful, can, under § 4-183(g) of the General Statutes, modify or reverse the commissioner's decision in respect thereto.

The defendants Irwin and Plourde, whose status in this appeal is questioned by Blue Cross and the commissioner, argue that (1) they are proper parties; (2) the insurance commissioner under General Statutes § 33-166 has no authority other than to approve or disapprove the filed schedule of rates; (3) § 33-166 gives him no power to modify a filing; (4) Blue Cross has violated its duty to the public interest by allowing members of its board of directors to sit on boards of directors of member hospitals; (5) Blue Cross has not sustained its burden of proving that the requested rate increases granted were not excessive, inadequate or discriminatory; (6) the commissioner was justified in finding the application excessive; and (7) there was insufficient evidence to support one paragraph of the commissioner's decision.

The commissioner maintains that the record herein contains sufficient evidence to support his decision and that there is established precedent that the insurance commissioner has power to modify a filed schedule of rates under § 33-166.

When Blue Cross initiated this appeal, it cited in as defendants the insurance commissioner, his deputy, and the four individuals admitted as parties at the public hearing, and it argues herein that the four individuals were only made defendants because § 4-183(b) provides that they must be served copies of the appeal.

Blue Cross has misread § 4-183(b). ¹ There is no requirement therein that all parties admitted to a public hearing before an agency must be included as a parties in any appeal from the agency's decision. The sole requirement is that all such parties be served a copy of the appeal, and whether any such party would be admitted as a party defendant or a party plaintiff in any appeal is something for this court to determine on proper motion by such party.

Generaly, courts are concerned with litigating the rights of parties with adverse interests who appear before them. Rommell v. Walsh, 127 Conn. 16, 22, 15 A.2d 6. Our adversary system mandates pleadings designed to set forth clearly the respective positions of the parties before the court. The elements of a cause of action or a defense must at some point be organized in relationship to the applicable substantive law, and pleadings become the culminating point for a complete analysis of a party's case in terms of that law. 1 Stephenson, Conn. Civil Proc. (2d Ed.) § 75c. Otherwise there can be no roderly administration of justice. Malone v. Steinberg, 138 Conn. 718, 721, 89 A.2d 213. This is as true for administrative appeals as it is for civil actions.

In this appeal, Irwin and Plourde, having been cited in as defendants and having filed no pleading which can in any way be construed as a cross appeal or a cross complaint, must be considered as having elected to have limited themselves to that status. Accordingly, this court cannot entertain any of the arguments they have advanced inconsistent with that position. See Sumara v. Liquor Control Commission, 165 Conn. 26, 33, 327 A.2d 549. Their point that their codefendant has no power under § 33-166 to modify a rate filing represents a position adverse to his and as such could only properly be raised by them after they had placed themselves in a position adverse to that codefendant by proper pleadings. Not having done so, they are limited to contesting the issues raised by the complaint which relate to them as codefendants. Affirmative relief can only be sought under a cross appeal or cross complaint, not through an answer. Wilson v. Darien, 130 Conn. 318, 322, 33 A.2d 330; Equitable Life Assurance Soc. v. Slade, 122 Conn. 451, 465, 190 A. 616; Sturges v. Wagner, 109 Conn. 1, 5, 144 A. 471; Union School Dist. v. Bishop, 76 Conn. 695, 699, 58 A. 13; see Practice Book § 78; Rizzo v. Price, 162 Conn. 504, 512, 294 A.2d 541.

Rate appeals are complex matters involving the forming of an opinion or evaluation by discerning and comparing complicated and often conflicting evidence. Such judgment, as exercised by an administrative agency, is not to be disturbed unless an appellant has sustained the burden of proving that in forming it the agency acted contrary to some statute or controlling rule of law or so arbitrarily and unreasonably as to have abused its discretion. Hardware Mutual Casualty Co. v. Premo, 153 Conn. 465, 477, 217 A.2d 698; Employers Mutual Liability Ins. Co. v. Premo, 152 Conn. 610, 617, 211 A.2d 154.

...