Green v. Louisiana Underwriters Ins. Co.

• Decision Date: 03 December 1990
• Docket Number: No. 90-CC-0743,ANGLO-AMERICAN,90-CC-0743
• Citation: 571 So.2d 610
• Parties: Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. LOUISIANA UNDERWRITERS INSURANCE COMPANY, et al. Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v.INSURANCE COMPANY. Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. NEW ENGLAND INTERNATIONAL SURETY OF AMERICA, INC. Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. NATIONAL REPUBLIC LIFE INSURANCE COMPANY. Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. AMERICAN LLOYD'S.
• Court: Louisiana Supreme Court

Page 610

571 So.2d 610

Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. LOUISIANA UNDERWRITERS INSURANCE COMPANY, et al.

Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. ANGLO-AMERICAN INSURANCE COMPANY.

Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. NEW ENGLAND INTERNATIONAL SURETY OF AMERICA, INC.

Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. NATIONAL REPUBLIC LIFE INSURANCE COMPANY.

Douglas D. GREEN, Commissioner of Insurance, for the State of Louisiana v. AMERICAN LLOYD'S.

No. 90-CC-0743.

Supreme Court of Louisiana.

Dec. 3, 1990.

William J. Guste, Jr., Atty. Gen., Kenneth c. DeJean, Winston W. Riddick, J. David McNeill, III, Dorothy M. Taylor, James M. Ross, Asst. Attys. Gen., for State of La., and William J. Guste, others-applicants.

Tom F. Phillips, Frederick R. Tulley, J. Ashley Moore, Baton Rouge, for Douglas D. Green, plaintiff-respondent.

COLE, Justice.

The issue presented by these consolidated cases is whether La.R.S. 49:258 governs the appointment of counsel to represent the Insurance Commissioner, when the Commissioner is acting in his capacity as liquidator, rehabilitator, or conservator of a financially troubled insurance company.

This proceeding arises out of an intervention by the Attorney General of the State of Louisiana in the rehabilitation proceeding entitled Douglas D. Green, Commissioner of Insurance, for the State of Louisiana v. Louisiana Underwriters Insurance Company, et al. ¹ The Attorney General requested, among other things, that the Commissioner of Insurance show cause why he should not be enjoined from hiring private legal counsel and why the Attorney General should not appoint private legal counsel to represent the Insurance Department pursuant to La.R.S. 49:258.

In response to the intervention, the Insurance Commissioner moved to sever the issue of appointment and approval of attorneys for a separate evidentiary hearing. The trial court granted the Commissioner's motion. Subsequently, the Commissioner filed motions in each of the other liquidation or rehabilitation proceedings in which the law firm of Taylor, Porter, Brooks & Phillips was acting as counsel on his behalf, requesting the Attorney General to show cause why the legal services agreements with Taylor, Porter, Brooks & Phillips, as well as orders of court formally approving such agreements, should not be confirmed. The cases were consolidated for purposes of adjudicating the attorney appointment issue.

The trial court ruled La.R.S. 49:258 did not apply to insurance insolvency proceedings, because the Insurance Commissioner, when acting as a liquidator, rehabilitator or conservator of a domestic insurance company pursuant to the Insurance Code, is not a "state agency" under that provision. Consequently, the trial court confirmed the appointment of the law firm of Taylor, Porter, Brooks & Phillips to represent the Insurance Commissioner in the consolidated cases.

The Attorney General applied for writs to the Court of Appeal. The First Circuit, holding that La.R.S. 49:258 was intended to apply only in cases involving tort or contract suits in which the state or a state agency is a defendant, denied writs.

We granted writs to review the lower courts' decisions.

I. Literal Meaning vs. Legislative Intent

The starting point in every case involving the construction of a statute is the language of the statute itself. La.R.S. 49:258 provides as follows:

Notwithstanding the provisions of any other law to the contrary and specifically the provisions of any law that authorizes the state or a state agency to appoint, employ, or contract for private legal counsel to represent the state or state agency, including but not limited to the provisions of R.S. 42:261, 262, and 263, and R.S. 40:1299.39(E), any appointment of private legal counsel to represent the state or a state agency shall be made by the attorney general with the concurrence of the director of the office of risk management, in accordance with the following procedure:

(1) All attorneys appointed as private legal counsel to represent the state or a state agency shall meet or exceed written minimum qualifications and all appointments shall be made in accordance with a written appointments procedure, both of which shall be established by the attorney general and the governor, or their designees. The director of the office of risk management shall participate in the preparation of the minimum qualifications and the appointment procedure. The minimum qualifications and the appointments procedure shall be published at least annually in the Louisiana Bar Journal or such other publication as will reasonably assure dissemination to the membership of the Louisiana State Bar Association. The exercise of the authority provided in this Section shall not be subject to the Administrative Procedure Act.

(2) All appointments of private legal counsel representing the state or a state agency that are in effect on the effective date of this Section shall be reviewed to ensure that such counsel satisfy the minimum qualifications provided for in Paragraph (1) of this Section and all such changes in or terminations of such appointments shall be made as are necessary to ensure such compliance.

(3) For the purposes of this Section, "state agency" means any department, board, commission, agency, office, special district, authority, or other entity of the state, but does not include the Public Service Commission or any political subdivision of the state as defined by Article VI of the Constitution of Louisiana, or any entity of such political subdivision. (Emphasis added).

The Attorney General contends La.R.S. 49:258 clearly states without ambiguity any appointment of private counsel to represent the state or a state agency shall be made by the attorney general. In response, the Insurance Commissioner maintains when he acts as a liquidator, rehabilitator or conservator of an insolvent insurance company he is acting as a fiduciary of the company and not on behalf of the state or one of its agencies. Thus, it is the Insurance Commissioner's position that the term "state agency" as contained within La.R.S. 49:258 does not include state officers who are acting as fiduciaries for third parties.

At the outset, we must dismiss the contention that La.R.S. 49:258 is clear and unambiguous. While the literal language of La.R.S. 49:258 may include the Commissioner of Insurance within the definition of "state agency" ², it is the duty of this court to restrict broad statutory language if we are convinced the legislature did not intend such an effect. State ex rel. Thompson v. Department of City Civil Serv., 214 La. 683, 38 So.2d 385, 388 (1948); Curatorship of Parks, 210 La. 63, 26 So.2d 289, 292 (1946).

Our jurisprudence has consistently recognized a statutory ambiguity justifying judicial interpretation may arise with respect to the general scope and meaning of a statute when all of its provisions are examined. Matlack, Inc. v. Louisiana Pub. Serv. Comm'n, 260 La. 359, 256 So.2d 118, 121 (1971). The statutory language of La.R.S. 49:258 contains provisions which are obviously inconsistent with the Attorney General's position that the statute applies without limitation as to the type of case or legal matter in which the state or a state agency is involved.

Pursuant to La.R.S. 49:258, any appointment of private counsel by the attorney general must be made "with the concurrence of the director of the office of risk management". However, the office of risk management has no authority over and plays no role in the liquidation of failed insurance companies. ³ Thus, a literal reading of the statute produces an anomalous and illogical situation wherein the office of risk management is required to concur in the appointment of private legal counsel to represent the Insurance Commissioner in liquidation or rehabilitation proceedings. ⁴ We are convinced the legislature did not intend such a result.

When the literal construction of a statute produces absurd or unreasonable results "the letter must give way to the spirit of the law and the statute construed so as to produce a reasonable result." Smith v. Flournoy, 238 La. 432, 115 So.2d 809, 814 (1959); Dore v. Tugwell, 228 La. 807, 84 So.2d 199, 204 (1955). See also, La.Civ.Code art. 9 (West 1990). In ascertaining the true meaning of a word, phrase or section of a statute, the act as a whole must be considered. Fruge v. Muffoletto, 242 La. 569, 137 So.2d 336, 339 (1962).

A reading of Act No. 448 of 1988, by which the legislature enacted La.R.S. 49:258, provides insight into the overall purpose and spirit behind the statute. When all of the provisions of Act No. 448 are considered together, it is evident it was the overall intent of the legislature to provide a comprehensive method of administering and defending claims against the state. ⁵

Our conclusion concerning the legislative intent behind La.R.S. 49:258 is supported by the title of Act No. 448. ⁶ The title of Act No. 448 of 1988 states:

To amend and reenact R.S. 13:5109(A), R.S. 36:705(A)(1), R.S. 39:1533, 1535(A) and (B)(6), and R.S. 48:112, to enact R.S. 39:1535(B)(12) and (C), and R.S. 49:257 and 258, and to repeal R.S. 39:1543.2(e), and (3), and R.S. 48:111.1, relative to legal representation of the state; to provide for the attorney general and the Department of Justice to represent the state, departments, and state agencies in certain cases; to provide for authority to compromise certain legal claims; to provide for legal services for the office of risk management, division of administration; to provide for procedures relative to procurement of private legal services; to provide for the adjustment and settlement of claims against the state by the office of risk management; and to provide for related matters. (Emphasis added).

Based on the purpose and intent behind the...