First Am. Title Ins. Co. v. Robertson

• Decision Date: 13 November 2014
• Docket Number: No. 49S04–1311–PL–732.,49S04–1311–PL–732.
• Citation: 19 N.E.3d 757
• Parties: FIRST AMERICAN TITLE INSURANCE COMPANY, Appellant and Cross–Appellee (Petitioner below), v. Stephen W. ROBERTSON, Insurance Commissioner of the State of Indiana, in his official capacity, On Behalf of the Indiana Department of Insurance, Appellee and Cross–Appellant (Respondent below).
• Court: Indiana Supreme Court

19 N.E.3d 757

FIRST AMERICAN TITLE INSURANCE COMPANY, Appellant and Cross–Appellee (Petitioner below)

v.Stephen W. ROBERTSON, Insurance Commissioner of the State of Indiana, in his official capacity, On Behalf of the Indiana Department of Insurance, Appellee and Cross–Appellant (Respondent below).

No. 49S04–1311–PL–732.

Supreme Court of Indiana.

Nov. 13, 2014.

Thomas E. Wheeler, Sarah Steele Riordan, Maggie L. Smith, Frost Brown Todd LLC, Indianapolis, IN, Attorneys for Appellant.

Gregory F. Zoeller, Attorney General of Indiana, Thomas M. Fisher, Solicitor General, David L. Steiner, Deputy Attorney General, Heather Hagan McVeigh, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.

Stephen J. Peters, Plunkett Cooney, P.C., Indianapolis, IN, Josh S. Tatum, Plews Shadley Racher & Braun LLP, Indianapolis, IN, Attorneys for Amicus Curiae Indianapolis Bar Association Appellate Practice Section.

On Petition To Transfer from the Indiana Court of Appeals, No. 49A04–1206–PL–326

RUCKER, Justice.

In another opinion decided today we held that a petitioner seeking judicial review of an agency decision must file the agency record as defined by the Administrative Orders and Procedures Act and that the failure to do so results in dismissal of the petition. See Teaching Our Posterity Success, Inc., v. Ind. Dept. of Educ, 20 N.E.3d 149, No. 49S05–1411–PL–700, 2014 WL 5896107 (Ind. Nov. 13, 2014). We apply that holding here.

Facts and Procedural History

First American Title Insurance Company is an insurer licensed to do business in the State of Indiana. As such it is subject to the administrative and regulatory authority of the Indiana Department of Insurance through its Commissioner. Under provisions of the Insurance Examination Act—Indiana Code sections 27–1–3.1–1 to 27–1–3.1–18 –the Commissioner is authorized to “conduct an examination of every insurer licensed in Indiana ... once every five (5) years.” Ind.Code § 27–1–3.1–8(a)(2). In consequence on March 31, 2009 the Department issued First American a Market Conduct Examination warrant¹ to review its practices relating to premium charges to customers, collections of premiums from its appointed agents, consumer disclosures, and collection and remittance of certain fees. App. at 18. The examination covered the period between January 1, 2005 and December 31, 2008. For such purposes the Commissioner retained the services of a third party examiner who, after conducting its examination, submitted a report to the Department on September 30, 2010. In turn the Commissioner forwarded the report to First American. Thereafter, on December 10, 2010, First American submitted a rebuttal to the report's findings. The Commissioner was then required to take certain action within thirty days, namely: “enter an order” (1) adopting the report with or without modification; (2) rejecting the report and instructing the examiners to obtain more information and refile the report; or (3) calling for an investigatory hearing to obtain more documentation, data, information, and testimony. I.C. § 27–1–3.1–11(a). The Commissioner did not enter an order within thirty days. Instead the Commissioner requested that First American extend the deadline to permit the parties an opportunity to resolve the issues raised in the report. First American agreed to this extension. However the parties were unable to reach a resolution during this period, so the Commissioner requested and First American agreed to further extend the deadline until February 4, 2011. More than six weeks after that deadline passed, the Commissioner requested that First American agree to another extension of time through April 15, 2011. This time First American refused to agree. On April 15, 2011, the Commissioner issued an order ostensibly pursuant to Indiana Code section 27–1–3.1–11(a)(3) calling for a hearing and appointing an administrative law judge. The hearing was set for July 12, 2011.

Before the date of the hearing, First American filed a petition in the Marion Superior Court seeking judicial review of the Commissioner's order, contending the order was void because it was issued beyond the thirty-day time limit set forth in the Insurance Examination Act. In support of its petition First American attached a copy of the order and hearing date along with a letter from the Department addressed to First American's legal counsel, and a letter from First American's legal counsel addressed to the Department. The Commissioner countered with a motion to dismiss the petition on grounds that First American failed to submit the agency record as required by the Administrative Orders and Procedures Act (“AOPA”). After a hearing the trial court denied the Commissioner's motion to dismiss; and it denied First American's petition for judicial review on grounds that First American was required, but failed, to show that it was prejudiced by the untimely order.²

Both parties appealed. First American complained the trial court erred in not declaring the Commissioner's hearing order void in that Commissioner failed to comply with the statutory deadline, and the trial court erred in requiring First American to demonstrate a separate showing of prejudice. On cross-appeal the Commissioner for the first time alleged that First American's petition for judicial review should have been dismissed because First American failed to exhaust its administrative remedies thereby depriving the trial court of jurisdiction. The Commission also argued the trial court erred in failing to dismiss First American's petition for judicial review because First American did not submit an agency record.

The Court of Appeals affirmed the trial court's judgment in part, reversed it in part, and remanded the case for further proceedings. In so doing the court held: (1) the Commissioner's hearing order was untimely and therefore void; (2) a petitioner seeking judicial review of an agency decision need not demonstrate a separate showing of prejudice; (3) the exhaustion of administrative remedies under AOPA is a procedural error and does not implicate the trial court's subject matter jurisdiction, and the Commissioner waived this issue by not raising it timely; and (4) although First American failed to submit a formal agency record, the documents attached to its petition for judicial review were sufficient to allow the trial court to decide the issue raised. See First Am. Title Ins. Co. v. Robertson, 990 N.E.2d 9 (Ind.Ct.App.2013). The Commissioner sought transfer contending (1) the failure to exhaust administrative remedies deprives a trial court of subject matter jurisdiction, and (2) AOPA mandates the timely filing of a certified agency record prior to judicial review of an administrative order. Having previously granted transfer we now address these claims and reverse the judgment of trial court. Additional facts are set forth below.

Discussion

I. Exhaustion of Administrative Remedies

We summarily affirm that portion of the Court of Appeals opinion holding that the exhaustion of administrative remedies under AOPA is a procedural error and does not implicate the trial court's subject matter jurisdiction.³ And because the Commissioner does not otherwise challenge the point on transfer, we also agree with our colleagues that by raising this procedural issue for the first time on appeal, the Commissioner's exhaustion claim is waived. We hasten to add however that a finding of waiver may not be appropriate in every instance. The facts of a particular case may dictate otherwise. As we have previously observed certain benefits accrue in requiring the exhaustion of administrative remedies.

Premature litigation may be avoided, an adequate record for judicial review may be compiled, and agencies retain the opportunity and autonomy to correct their own errors. Even if the ground of complaint is the unconstitutionality of the statute, which may be beyond the agency's power to resolve, exhaustion may still be required because [“]administrative action may resolve the case on other grounds without confronting broader legal issues.[”] [Turner v. City of Evansville, ] 740 N.E.2d 860, 862 (Ind.2001) (quoting State Bd. of Tax Comm'rs v. Montgomery, 730 N.E.2d 680, 684 (Ind.2000) ). Justice Sullivan noted several additional benefits of this approach: [“]The exhaustion requirement serves to avoid collateral, dilatory action of the likes of the instant action and to ensure the efficient, uninterrupted progression of administrative proceedings and the effective application of judicial review. It provides an agency with the opportunity ‘to correct its own errors, to afford the parties and the courts the benefit of [the agency's] experience and expertise, and to compile a [factual] record which is adequate for review.’[”] Austin Lakes Joint Venture v. Avon Utils., Inc., 648 N.E.2d 641, 644 (Ind.1995) (quoting Uniroyal Inc. v. Marshall, 579 F.2d 1060, 1064 (7th Cir.1978) ) (alteration in original).

Advantage Home Health Care, Inc. v. Ind. State Dep't of Health, 829 N.E.2d 499, 503 (Ind.2005) (some alterations in original). Thus, even where a claim of failure to exhaust administrative remedies has been raised untimely that fact alone does not necessarily dictate the court should declare the claim waived. But we repeat that in this case the Commissioner does not argue the point. And we decline to speculate what if any adverse impact the alleged failure to exhaust may have had here.

II. Submission of Agency Record

The AOPA governs administrative proceedings and judicial review of decisions of DOE and certain other State agencies. See I.C. §§ 4–21.5–2–0.1 to 6. For the agencies to which it applies, AOPA includes extensive procedural requirements for adjudications under the Act. See, e.g., I.C. § 4–21.5–3–1 (governing notice of agency action); I.C. § 4–21.5–3–13 (governing qualifications of adjudicators); I.C. § 4–21.5–3–18 (governing notice and conduct of prehearing conferences); I.C. § 4–21.5–3–22 (governing...