Connecticut Life and Health Ins. Guaranty Ass'n v. Jackson

• Decision Date: 02 August 1977
• Citation: 173 Conn. 352,377 A.2d 1099
• Court: Connecticut Supreme Court
• Parties: CONNECTICUT LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION v. Jay W. JACKSON, Insurance Commissioner.

Page 1099

377 A.2d 1099

173 Conn. 352

CONNECTICUT LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION v. Jay W. JACKSON, Insurance Commissioner.

Supreme Court of Connecticut.

Argued June 7, 1977.

Decided Aug. 2, 1977.

Ralph G. Elliot, Hartford, for appellant (plaintiff).

John G. Haines, Asst. Atty. Gen., with whom were Barney Lapp, Asst. Atty. Gen., and, on the brief, Carl R. Ajello, Atty. Gen., for appellee (defendant).

Before HOUSE, C. J., and LOISELLE, BOGDANSKI, LONGO and SPEZIALE, JJ.

LONGO, Associate Justice.

The plaintiff brought this action in the Superior Court, seeking a declaratory judgment and injunctive relief as a result of the defendant's interpretation of General Statutes § 38-308(j). The defendant filed a plea in abatement alleging that the Superior Court lacked jurisdiction, and the court sustained the plea on the ground that the plaintiff had failed to exhaust its administrative remedy. The plaintiff appealed to this court from the judgment issued on the plea in abatement.

The facts giving rise to this action are not in dispute. The plaintiff, hereinafter CLHIGA, was created by the legislature to provide protection to policyholders of life and health insurance when the company issuing a policy became impaired and could not honor its obligations. General Statutes §§ 38-301-38-318. CLHIGA's members are insurance companies and the association is under the supervision of the insurance commissioner. Sometime between October 1, 1972, and October 1, 1975, Seaboard Life Insurance Company of America, an insurer covered by the act, became an impaired insurer within the meaning of the statute and presented the first occasion for an interpretation of certain sections of the CLHIGA act. The parties agree that CLHIGA is responsible for some portion of Seaboard's obligations, but they disagree over the extent of CLHIGA's liability. The dispute arose over the proper interpretation of General Statutes § 38-308(j) which, at the time Seaboard became impaired, ¹ read as follows: "The contractual obligations of the impaired insurer for which the association (CLHIGA) becomes or may become liable shall be as great as but no greater than the contractual obligations of the impaired insurer would have been in the absence of an impairment unless such obligations are reduced as permitted by subsection (d) of this section but the association shall have no liability with respect to any portion of a covered policy to the extent that the death benefit coverage on any one life exceeds an aggregate of twenty-five thousand dollars, or to the extent that any benefit under a covered policy other than life insurance exceeds an aggregate of twenty-five thousand dollars." The plaintiff's complaint discloses the gravamen of the dispute when it states: "Defendant is enforcing, and will enforce Sec. 38-308(j) with respect to Seaboard, and has interpreted that statute as requiring CLHIGA to pay up to $25,000 on any one life, including but not limited to surrenders, policy loans, options and privileges relating to such values and non-forfeiture benefits, for policy holders whose aggregate death benefits do exceed $25,000." The plaintiff contends that "the correct interpretation of Sec. 38-308(j) requires plaintiff's death benefit coverage obligation to be limited to $25,000, and its obligation on any other values (such as cash values or loan values) arising under the policy or contract to be limited to a value based upon a death benefit of $25,000, with a value of a given policy being determined from the table of values in that policy a table which demonstrates cash values, loan values, paid up values, and extended term durations for each $1,000 of insurance, and thus controls the internal values of that policy." In its complaint the plaintiff requested a declaratory judgment interpreting General Statutes § 38-308(j) and injunctions restraining the defendant from enforcing the statute in accordance with his interpretation and requiring him to enforce the statute as interpreted by the plaintiff.

The principal question posed by this appeal from the judgment sustaining the defendant's plea in abatement is whether the Superior Court lacked jurisdiction to entertain the plaintiff's complaint. The trial court determined that the plaintiff had an administrative remedy consisting of a petition to the insurance commissioner for a declaratory judgment ruling pursuant to General Statutes § 4-176 ² which could be reviewed in the Court of Common Pleas, as provided by General Statutes § 4-175 ³ and § 4-183. ⁴ The plaintiff denies the availability of the administrative remedy described by the trial court and argues that in any event it is not the exclusive means by which declaratory relief may be sought.

In support of its claim that an administrative remedy is unavailable, CLHIGA argues that the grant of authority to agencies in § 4-175 to rule on the "applicability" of statutory provisions only permits an agency to determine whether a statute applies to a given set of facts and does not permit statutory interpretation. We find this argument without merit. There are clear indications in the Uniform Administrative Procedure Act (UAPA); General Statutes §§ 4-166-4-189; that the legislature intended that administrators issue declaratory rulings based on their interpretations of statutes. Section 4-183(g) allows judicial reversal or modification of an agency decision that is "(i)n violation of constitutional or statutory provisions" or "affected by other error of law." Section 4-175 provides that a declaratory judgment may not be rendered by the Court of Common Pleas unless the plaintiff has first requested the agency "to pass upon the validity or applicability of the regulation or order in question, pursuant to section 4-176." (Emphasis added.) As the trial court observed, administrative agencies must necessarily interpret statutes which are made for their guidance. To rule otherwise would be to ignore the subtle and intricate interaction of law and fact. It is inherent in our judicial system of dispute resolution that the interpretation of statutes, like the development of the common law, grows out of the filtering of a set of facts through the law, as seen by the administrator or judge. The result of this application is a hybrid, composed in part of fact, in part of law, which by its existence contributes to the interpretation of a statute. As is recognized by our policy of declining to give advisory opinions; Reply of the Judges, 33 Conn. 586; by our doctrines of standing and mootness and by our desire that even declaratory rulings be grounded in some real controversy, a statute cannot be read in a vacuum but must be illuminated by the force of concrete, everyday pressures. We conclude that CLHIGA has an administrative remedy.

CLHIGA contends that even if an administrative remedy is available to it under the UAPA, the remedy is not exclusive. This court, however, has repeatedly affirmed the principle that when an adequate administrative remedy is provided by law, it should be exhausted. Country Lands, Inc. v. Swinnerton, 151 Conn. 27, 33, 193 A.2d 483; State Water Commission v. Norwich, 141 Conn. 442, 447, 107 A.2d 270; McNish v. American Brass Co., 139 Conn. 44, 53, 89 A.2d 566. The UAPA provides a completely adequate method of resolving the questions presented by this case. The real issue in this case, therefore, becomes whether the method provided in the UAPA is exclusive and assumes precedence over any other form of relief. Though the UAPA contains no provisions for exclusivity, the legislature did indicate its intention that the agencies and the Court of Common Pleas be the principal forums for deciding such questions, by stating that the UAPA applies to all agencies and agency proceedings not specifically exempted (§ 4-185); by expressly charging the Court of Common Pleas with responsibility for reviewing administrative actions and rendering declaratory judgments after the agency has passed on the validity or applicability of a regulation or order or has declined to do so (§ 4-183(b), § 4-175); by granting the Court of Common Pleas the power to stay agency orders (§ 4-183(c)); and by repealing all statutes which...