Hardware Mut. Cas. Co. v. Premo

• Decision Date: 06 February 1964
• Docket Number: No. 135267,135267
• Citation: 25 Conn.Supp. 309,203 A.2d 433
• Court: Connecticut Superior Court
• Parties: HARDWARE MUTUAL CASUALTY COMPANY et al. v. Alfred N. PREMO et al.

Page 433

203 A.2d 433

25 Conn.Supp. 309

HARDWARE MUTUAL CASUALTY COMPANY et al. v. Alfred N. PREMO et al.

No. 135267.

Superior Court of Connecticut, Hartford County.

Feb. 6, 1964.

Wiggin & Dana and William L. Hadden, New Haven, for plaintiffs.

Cooney & Scully and Robinson, Robinson & Cole, Hartford, for defendants The Aetna Cas. and Sur. Co., The Hartford Accident and Indemnity Co. and The Travelers Ins. Co.

Harold M. Mulvey, Atty. Gen., and Louis Weinstein, Asst. Atty. Gen., for named defendant.

HOUSE, Judge.

This is an action brought in two counts by ten mutual insurance companies doing business in this state against three domestic stock insurance companies and the Connecticut insurance commissioner. The first count seeks a declaratory judgment as to the constitutionality of Public Act No. 347, enacted by the General Assembly in 1963, relating to the regulation of casualty and property insurance rates. By way of relief, the plaintiffs in the first count also pray that, if Public Act No. 347 is found invalid and void, an injunction issue restraining the defendant commissioner from approving any filings made pursuant thereto and directing him to revoke or rescind any orders theretofore issued approving filings pursuant to the provisions of Public Act No. 347. The substituted second count seeks a declaratory judgment to determine the validity and enforceability of a certain notice or exhibit originally issued by the commissioner under date of June 27, 1963, and subsequently revised. These documents were entitled 'Notice to Rating Bureaus and Companies Which May File Rating Plans' and include, as supplemented, copies 'of a revised exhibit indicating the minimum premium levels by line of insurance which this department feels it can accept as eligibility criteria in rating plans permitted by Public Act No. 347.' The later 'notice' also carried the further notation, 'We wish to emphasize that this information is intended to be by way of preliminary guide lines to filers and does not constitute prejudgment of any plan that may be filed with this department.'

In addition to seeking a declaratory judgment as to 'whether or not such exhibits are invalid, void and unenforceable,' the second count, like the first, seeks by way of further relief, if they are determined to be invalid, void and unenforceable, an injunction restraining the defendant commissioner from enforcing them and requiring him to revoke or rescind any orders already entered approving any filings pursuant thereto.

At this point it is unnecessary to consider in detail the provisions of Public Act No. 347. It suffices to note that it amends portions of chapters 679 and 682 of the General Statutes relating to regulation of certain insurance rates. See §§ 38-116, 38-187, 38-189(e). It is entitled 'An Act Concerning the Establishment of Rates of Insurance Purchased by the State' and permits the modification of insurance rating plans to produce rates of individual risks which 'provide for recognition of variations in hazards or in expense requirements, or both,' and which 'may include application of the judgment of the insurer and may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.' The act further provides that each rating plan shall establish appropriate eligibility criteria for determining significant risks which are to qualify under the plan and that all such plans shall be at all times subject to the approval of the insurance commissioner and 'shall include as an eligible significant risk the state of Connecticut or its instrumentalities.'

The defendant have filed a demurrer to each count of the complaint, the grounds of demurrer being divided into three principal parts. Part I, addressed to the first count (plaintiffs' claim of unconstitutionality) rests upon the assertion that the plaintiffs have failed to comply with the notice provisions for declaratory judgment actions contained in § 309(d) of the 1963 Practice Book and the further assertion that the plaintiffs have failed to meet the requirements of § 52-105 of the General Statutes, relating to class actions. Part II raises the same objections to the substituted second count that Part I raises to the first count. Part III raises the further objections to the substituted second count that the plaintiffs failed to exhaust their administrative remedies before seeking a judicial determination as to the validity of the exhibits, and, in brief, that the substituted second count fails to allege a justiciable case or controversy.

It may be noted at the start that '[a] demurrer to a complaint for a declaratory judgment is proper when the facts alleged do not bring the case within the scope of the statute and rules relating to declaratory judgments.' Buxton v. Ullman, 147 Conn. 48, 50, 156 A.2d 508, 510. It is also proper to demur to a complaint for a declaratory judgment which also contains a prayer for coercive relief since, under such circumstances, it is essential for the plaintiff to state a cause of action not only for a declaratory judgment but also for the coercive relief. United National Indemnity Co. v. Zullo, 143 Conn. 124, 130, 120 A.2d 73; see also Heiberger v. Clark, 148 Conn. 177, 184, 169 A.2d 652.

Also, the basic principles which must always govern the determination of a demurrer must constantly be borne in mind: the demurrer admits the material allegations of the pleading to which it is addressed, the allegations of the pleading under attack must be tested by the facts provable under them, and they must be given the same favorable construction that a trier might deem itself required to give in admitting evidence under them to prove the facts asserted. International Union v. General Electric Co., 148 Conn. 693, 697, 174 A.2d 298.

PARTS I and II

As already indicated, Parts I and II of the demurrer attack both counts on the ground that the complaint fails to comply with the requirements of § 52-105 of the General Statutes and § 309(d) of the Practice Book. Section 52-105 provides as follows: 'When the persons who might be made parties are very numerous, so that it would be impracticable or unreasonably expensive to make them all parties, one or more may sue or be sued or may be authorized by the court to defend for the benefit of all.' It may also be noted that the language of § 52-105 has been adopted as § 52 of the 1963 Practice Book. Section 309(d) of the 1963 Practice Book provides: 'The court will not render declaratory judgments upon the complaint of any person: * * * (d) unless all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof.'

Paragraphs 7 and 8 are the same in both counts. Paragraph 7 expressly alleges that the plaintiffs are insurance companies engaged in the business of writing insurance in Connecticut and subject to regulation under chapters 679 and 682. Paragraph 8 alleges that the three defendant companies are also engaged in writing insurance in Connecticut and subject to the same regulation. It is further alleged: 'Plaintiffs and said defendants and all other insurance companies which write said types of insurance in the State of Connecticut compete with each other. It would be impractical and unreasonably expensive to make all insurance companies writing any of the foregoing several types of insurance in Connecticut parties in this action and the companies named as plaintiffs and defendants are competent to participate in this action on behalf of all such companies as authorized by section 52-105 of the General Statutes (1958 Revision).'

The truth of this allegation is, of course, admitted by the demurrer. International Union v. General Electric Co. supra. While the words 'are competent to participate in this action' are open to interpretation, nevertheless it cannot be held as a matter of law that the allegation as it stands, with the specific reference to § 52-105 of the General Statutes, is not sufficiently broad to permit the plaintiffs to establish that all of the necessary prerequisites for a 'class' action are present. This is particularly so in the light of the existing broad statutory powers to cite in new and additional parties (see §§ 52-103 and 52-107) and the express authority contained in § 52 of the Practice Book and in § 52-105 of the General Statutes (expressly alleged in paragraph 8 of both counts) for the court upon proper application to authorize one or more parties to defend for the benefit of all. At this stage in the proceedings and necessarily before any evidence is introduced to support or contravene the allegations of paragraph 8 of the complaint, the court cannot determine whether the plaintiffs will be able to prove those allegations. For the purposes of the demurrer the truth of the allegations is admitted. This being so, and the plaintiffs having broadly alleged in paragraph 8 that the circumstances of the parties are such as to bring the action within the provisions of § 52-105 of the General Statutes, the demurrer of defendants so far as it is based upon a claim that the complaint does not comply with the provisions of that statute must be overruled.

The second ground of demurrer is, of course, closely related to the previous discussion in that it partly involves the question of necessary parties. As already noted, this is an action for a declaratory judgment which seeks, in addition to the declaratory judgment, coercive relief primarily directed against the defendant insurance commissioner but secondarily involving the possibility of rights of undisclosed parties. This arises from the prayers for injunctive relief. The first count seeks an injunction not only restraining the commissioner from approving any filings made pursuant to Public Act No. 347 but directing him to revoke and rescind forthwith any orders already issued approving such filings. The second count...