Gordon v. Hardware Mut. Cas. Co.

• Decision Date: 12 April 1972
• Parties: Joseph A. GORDON v. HARDWARE MUTUAL CASUALTY COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 573

281 N.E.2d 573

361 Mass. 582

Joseph A. GORDON v. HARDWARE MUTUAL CASUALTY COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Feb. 9, 1972.

Decided April 12, 1972.

Ralph Arnoldy, Boston, for plaintiff.

Frank W. Kilburn, Boston, for defendant.

Before CUTTER, SPIEGEL, REARDON, QUIRICO and BRAUCHER, JJ.

BRAUCHER, Justice.

The plaintiff brought a bill in equity under § 9 ¹ of the Regulation of Business Practice and Consumer Protection Act, G.L. c. 93A, seeking relief for himself and others similarly situated from an alleged unfair act or practice of the defendant. The plaintiff now appeals from a denial of his motion to strike the defendant's plea in abatement, from an interlocutory decree sustaining a demurrer by the defendant, and from a final decree dismissing the plaintiff's bill. 'The plaintiff also claimed other appeals, but he has not argued them and they are therefore deemed waived. Angelico v. Commissioner of Ins., 357 Mass. 407, 408, n. 2, 258 N.E.2d 299.

The plaintiff's bill alleges the following facts. For several years prior to 1970, the plaintiff purchased automobile insurance from the defendant. During this time the defendant filed each year with the Commissioner of Insurance (commissioner) for permission to deviate from the manual rates in an amount of approximately fifteen per cent on coverages other than compulsory bodily injury liability, medical payments, and uninsured motorists protection. The premiums paid by the plaintiff during this time reflected this deviation in reduced rates. The defendant knew during the summer of 1969 that it would not file for permission from the commissioner to deviate from the manual rates for 1970 and, therefore, would charge the plaintiff a premium higher than before and higher than the plaintiff anticipated.

About the end of September or the beginning of October, 1969, the plaintiff completed the defendant's automobile insurance renewal questionnaire, and before January 1, 1970, the defendant mailed to the plaintiff a motor vehicle registration certificate validated by it as insurer to enable the plaintiff to register his automobile. The plaintiff received no notification of the higher rate, was not aware of it, and had no reason to anticipate it until the end of January or the beginning of February, 1970, when the plaintiff received a copy of his 1970 automobile insurance policy to gether with a premium notice. Upon examining the premium notice he realized that it was higher than that of the previous year. The defendant's failure to inform him was an unfair act or practice and caused him a loss of money in the amount of the increased premium rate; had he known of the defendant's intention not to seek a deviation before January 1, 1970, he would have purchased insurance from another other company which did seek a deviation for 1970, but because of the short rates on cancellation he could not cancel his 1970 policy with the defendant without loss of money.

On February 23, 1970, in accordance with G.L. c. 93A, § 9(3), inserted by St. 1969, c. 690, the plaintiff wrote a letter to the defendant setting forth his complaint and asking for reimbursement to the extent of the fifteen per cent discount. The defendant replied on February 27, 1970, admitting the discontinuance of the fifteen per cent discount, but offering no settlement. The plaintiff then waited the thirty days required by G.L. c. 93A, § 9(3), and commenced this suit on March 30, 1970. The defendant demurred and assigned as one ground, among others, that the plaintiff had not exhausted his administrative remedies.

The Commonwealth provides a comprehensive statutory scheme for the regulation of all phases of the insurance business. G.L. cc. 174A--178. 'The commissioner, as we have recognized, has been given very broad supervisory powers over insurance companies.' ROCKLAND MUT. INS. CO. V. COMMISSIONER OF INS., MASS., 277 N.E.2D 493^B and cases cited. Chapter 175 is the basic insurance law; § 3A charges the commissioner with its administration and enforcement, and § 5 gives him power to revoke the license of a foreign insurance company, such as the defendant, for unsound or improper business policies or methods or for transacting business fraudulently. Chapter 175, §§ 113B and 113C, as amended by St.1968, c. 643, §§ 2 and 3, and by St.1968, c. 660, provided for rate regulation with respect to certain coverages, including provisions for deviation and for judicial review. See INSURANCE RATING BD. V. COMMISSIONER OF INS., MASS., 268 N.E.2D 144.^C Chapter 175A, providing for rate regulation with respect to certain other coverages, was enacted in 1947, after study by a recess committee. See Insurance Rating Bd. v. Commissioner of Ins Mass., ^d 260 N.E.2d 922. Chapter 175A, § 6, provides for rate filings, § 7(b) for hearings at the instance of any person aggrieved, § 8 for the licensing of rating organizations, and § 9 for the type of deviation in issue here.

Particularly relevant are G.L. c. 175A, § 11, as amended by St.1969, c. 424, § 2, and G.L. c. 176D, §§ 3 and 9, both inserted by St.1947, c. 659. General Laws c. 175A, § 11, as amended by St.1967, c, 424, § 2, provides for a hearing by the insurer or rating organization on the written request of 'any person aggrieved by the application of its rating system,' and for an appeal to the commissioner, who may affirm or reverse the action of the insurer or rating organization. General Laws c. 176D, § 3, inserted by St.1947, c. 659, forbids any corporation engaged in the business of insurance to engage in 'an unfair or deceptive act or practice in the business of insurance.' General Laws c, 176D, § 9, so inserted, permits the commissioner to hold a hearing with respect to such an act or practice and, through the Attorney General, to cause a petition to be filed in this court to enjoin and restrain the insurer from engaging in the act or practice.

We said in Saint Luke's Hosp. v. Labor Relations Commn., 320 Mass. 467, 470, 70 N.E.2d 10, 12: 'To permit judicial interference with the orderly administration by the commission of matters entrusted to it by the Legislature before it has commenced to exercise its authority in any particular case or before it has had an opportunity to determine the facts and make a final decision, would in effect transfer to the courts the determination of questions which the Legislature has left in the first instance to the commission, and would result in the substitution of the judgment of the court for that of the commission. Courts must be careful not to invade the province of an administrative board. The instances are rare where circumstances will require such interference.'

The plaintiff argues that the administrative remedies cannot provide the relief available to him under G.L. c. 93A. The question 'is not whether the alternative (administrative) remedy is in all respects as prompt and as broad' but whether it is 'inadequate.' See Jordan March Co. v. Labor Relations Commn., 312 Mass. 597, 601--602, 45 N.E.2d 925, 927; Ullian v. Registrar of Motor Vehicles, 325 Mass. 197, 198--199, 89 N.E.2d 780. We do not think that here there is a 'futility apparent in the application of the statute' which 'makes such resort to the administrative agency unnecessary.' Compare Boston Edison Co. v. Board of Selectmen of Concord, 355 Mass. 79, 84, 242 N.E.2d 868, 872.

The provisions of G.L. c. 93A, §§ 9 (3) and (4), for minimum damages, multiple damages, attorney's fees and costs do not confer upon the plaintiff rights of the type which must be vindicated by an administrative remedy in order for it to be adequate. The full extent of the damages alleged by the plaintiff is the difference between the premium charged by the defendant to the plaintiff for his 1970 automobile insurance and the discounted premium charged for the previous year. We need not consider at this stage whether the commissioner can, after a hearing under the provisions of G.L. c. 175A, §§ 7(a) or (b), declare a previously filed rate ineffective as of the date of filing. See INSURANCE RELATING BD. V. COMMISSIONER OF INS., SUPRA, 260 N.E.2D 922.^E Nor need we consider whether the commissioner could, under G.L. c. 175A, § 11, require the defendant to make a rebate equivalent to the plaintiff's previous discount. We should not pass upon such questions without having the benefit of a prior determination by the commissioner.

The defendant did not assign as a ground of demurrer G.L. c. 93A, § 3(1)(a), inserted by St.1967, c. 813, § 1, exempting 'transactions or actions...