Foremost Life Ins. Co. v. Trimble

Decision Date04 April 1978
Docket NumberCA-CIV,No. 1,1
Citation119 Ariz. 222,580 P.2d 360
PartiesFOREMOST LIFE INSURANCE COMPANY, Appellant, v. J. N. TRIMBLE, as Director of Insurance of the State of Arizona, Appellee. 3621.
CourtArizona Court of Appeals
OPINION

HAIRE, Presiding Judge.

Appellant, Foremost Life Insurance Company, has appealed from a Maricopa County Superior Court judgment which upheld the refusal of the Director of Insurance to approve policy forms submitted by appellant for credit life insurance on loans or other credit transactions in excess of ten years duration. Before discussing the merits of the substantive issues raised by appellant, a jurisdictional issue raised by the Director must be considered.

The Director's order after hearing denying the request of Foremost for the approval of the policies involved was issued on October 17, 1975. Thereafter, Foremost filed its "Complaint (Unclassified Civil) Appeal from Hearing of Director of Insurance" in the Maricopa County Superior Court on October 28, 1975, without first seeking rehearing before the Director. Although not urged in the trial court, the Director now urges on appeal that the filing of a written request for rehearing, and the Director's denial thereof, is a jurisdictional prerequisite to appellant's right to appeal to the superior court. Since jurisdictional defects may be raised for the first time on appeal, Bates & Springer of Arizona, Inc. v. Friermood, 109 Ariz. 203, 507 P.2d 668 (1973); Cooper v. Commonwealth Title of Arizona, 15 Ariz.App. 560, 489 P.2d 1262 (1971), we will consider the alleged jurisdictional defect at this time.

A.R.S. § 20-164 E provides for rehearing in matters heard by the Director of Insurance, as follows:

"E. Upon written request of a party to a hearing being filed with the director within thirty days after any order made pursuant to a hearing has been mailed or delivered to the persons entitled to receive such order, the director may grant a rehearing or reargument of the matters involved in the hearing. Notice of such rehearing or reargument shall be given as provided in § 20-163."

A.R.S. § 20-166 grants a right of appeal to the superior court from the director's orders and sets forth in detail the procedures governing such appeals. Subsection 20-166 A is pertinent to the jurisdictional issue raised by the Director, and reads as follows:

"A. An appeal from the director shall be taken only from an order on hearing or an order refusing a hearing. A person aggrieved by any such order may, within thirty days after the order has been mailed or delivered to the persons entitled to receive it, or within thirty days after the director's order denying rehearing or reargument has been so mailed or delivered, appeal from such order on hearing or such order refusing a hearing by petition to the superior court for Maricopa county. A copy of such petition shall also forthwith be served upon the director and other parties in interest, if any, and the director shall thereupon certify and file in such court a transcript of the record of such hearing and a copy of the order appealed from." (Emphasis added).

It would appear that the emphasized language of § 20-166 A clearly allows an appeal to the superior court from the Director's order made following a hearing without the necessity of a rehearing. Also, if a rehearing has been requested, then an appeal may be made within 30 days after the Director's order denying rehearing.

Notwithstanding the seeming clarity of § 20-166 A, the Director, referring to § 20-165 B, contends that the phrase "order on hearing" as used in subsection 20-166 A refers only to an order made after rehearing.

A.R.S. § 20-165 B provides:

"B. Within thirty days after termination of the hearing or of any rehearing thereof or reargument thereon, the director shall make his order on the hearing, covering matters involved in such hearing and in any rehearing or reargument thereof, and shall give a copy of such order to the same persons given notice of the hearing." (Emphasis added).

We reject the Director's argument that the above-emphasized portion of § 20-165 B was intended as a technical definition of the phrase "order on hearing" so as to make that phrase applicable only when the order includes the disposition of a rehearing. To adopt such a construction would require that we ignore the initial language of § 20-165 B which unambiguously indicates that the phrase "order on the hearing" applies equally to the Director's order made "(w) ithin thirty days after termination of the hearing" or to the order made "(w) ithin thirty days after . . . any rehearing thereof or reargument thereon." When considered together, the provisions of A.R.S. §§ 20-165 and 20-166 clearly and unambiguously demonstrate a legislative intention to allow an appeal to the superior court without requiring as a prerequisite a request for rehearing before the Director.

We recognize, as urged by appellee, the general policy of the law which requires that one first exhaust all available administrative remedies before seeking appellate redress in the court system. See Mountain View Pioneer Hospital v. Employment Security Commission, 107 Ariz. 81, 482 P.2d 448 (1971); Stevens v. Industrial Commission, 104 Ariz. 293, 451 P.2d 874 (1969); Campbell v. Chatwin, 102 Ariz. 251, 428 P.2d 108 (1967). Appellee also places great reliance in the policy considerations discussed in our decision in Herzberg v. David, 27 Ariz.App. 418, 555 P.2d 677 (1976), a case involving an appeal from a determination made by the State Real Estate Commissioner, wherein he stated:

"If a rehearing procedure is provided, either by statute or rule, a party aggrieved by an administrative decision must avail himself of such administrative review remedy as a condition precedent to judicial review.

"The purpose of such rehearing provision is to afford the Commission the first opportunity to correct its own mistakes, thereby eliminating or minimizing subsequent appeals and relitigation."

27 Ariz.App. at 419, 555 P.2d at 678.

However, the appeal in Herzberg v. David, supra, was governed by the provisions of the Administrative Review Act (A.R.S. §§ 12-901 to 12-914) which is not applicable to an appeal from an order issued by the Director of Insurance. We have specifically addressed this question in Herzberg v. State ex rel. Humphrey, 20 Ariz.App. 428, 513 P.2d 966 (1973), wherein we held that inasmuch as A.R.S. § 20-166 provides for judicial review and establishes a definite procedure for such review, the provisions of the Administrative Review Act are not applicable to appeals from orders entered by the State Director of Insurance.

General policies of the law must give way when faced with conflicting express legislative enactments. Here the statutes unambiguously grant a right of appeal from an order of the Director made after hearing, without the necessity of any request for rehearing. Such right being expressly granted by statute, it may not be abrogated by any act of the Director or by any general policy considerations. We conclude that the Maricopa County Superior Court had jurisdiction to consider appellant's timely filed appeal from the Director's order after hearing, and we therefore proceed to a consideration of the substantive issues involved.

The issue presented to this Court was initiated when appellant, by written application, sought permission from the Director to write credit life insurance for loans in excess of ten years duration. In its application appellant indicated that it proposed to use policy forms which had already been filed and approved by the Director's office (pursuant to the provisions of Title 20, Chapter 6, Article 10, Arizona Revised Statutes) in connection with credit life insurance for loans not in excess of ten years.

The Director issued his order disapproving the application, based upon an opinion of the Arizona Attorney General which held that A.R.S. §§ 20-1601 and 1602 prohibited the writing of credit insurance on loans or other credit transactions of more than ten years duration.

Thereafter, pursuant to A.R.S. § 20-161, the Director set the matter for hearing. After hearing, the Director entered his order on the hearing, again denying appellant's application, for the reasons stated in his initial order of disapproval.

As we have previously stated, the Director's order on the hearing was timely challenged by the filing of appellant's complaint in the Maricopa County Superior Court. In the trial court, the defendant-director's motion for summary judgment, based upon the pleadings and an affidavit of Earl T. Nagel, the Deputy Director of the Arizona Department of Insurance, was granted, thereby in effect resulting in an affirmance of the Director's prior orders disapproving appellant's application. 1

The ultimate issue thus presented to this Court is whether the Director erred in refusing to approve appel...

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  • Green v. Garriott
    • United States
    • Arizona Court of Appeals
    • March 12, 2009
    ...preamble is not statutory text.... The preamble is devoid of operative effect.") (citations omitted); Foremost Life Ins. Co. v. Trimble, 119 Ariz. 222, 226, 580 P.2d 360, 364 (App.1978) ("To the extent that there is any conflict between these two sections, we hold that § 20-1602 is clear an......
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    ...is not statutory text. See Sakrison v. Pierce, 66 Ariz. 162, 172-73, 185 P.2d 528, 535 (1947); Foremost Life Ins. Co. v. Trimble, 119 Ariz. 222, 226, 580 P.2d 360, 364 (App.1978) (citing Sakrison, that where an unambiguous operative statutory section conflicts with the purpose or policy sec......
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    ...section of a statute, the operative section controls." Id. at 538, 1 29, 991 P.2d at 238 (citing Foremost Life Ins. Co. v. Trimble, 119 Ariz. 222, 226, 580 P.2d 360, 364 (App. 1978)). Although Section Two is not a preamble, at most it sets forth the purpose of the act and contains no operat......
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    ...section of a statute, the operative section controls." Id. at 538, 1 29, 991 P.2d at 238 (citing Foremost Life Ins. Co. v. Trimble, 119 Ariz. 222, 226, 580 P.2d 360, 364 (App. 1978)). Although Section Two is not a preamble, at most it sets forth the purpose of the act and contains no operat......
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