Insurance Com'rs v. Mutual Medical Ins., Inc., 30735

• Citation: 241 N.E.2d 56,251 Ind. 296
• Decision Date: 25 October 1968
• Docket Number: No. 30735,30735
• Parties: The INSURANCE COMMISSIONERS of the State of Indiana and the Indiana State Podiatrists Association, Inc., Appellants, v. MUTUAL MEDICAL INSURANCE, INC., Continental Assurance Company, Liberty Mutual Insurance Company and Union Life Insurance company, Appellees.
• Court: Supreme Court of Indiana

Page 56

241 N.E.2d 56

251 Ind. 296

The INSURANCE COMMISSIONERS of the State of Indiana and the Indiana State Podiatrists Association, Inc., Appellants, v. MUTUAL MEDICAL INSURANCE, INC., Continental Assurance Company, Liberty Mutual Insurance Company and Union Life Insurance company, Appellees.

No. 30735.

Supreme Court of Indiana.

Oct. 25, 1968.

Cassatt Martz, Robert C. Walsman, Indianapolis, for appellant, Indiana State Podiatrists Association, Inc. Martz, Beattey, & Wallace, Indianapolis, of counsel.

John J. Dillon, Atty. Gen., Virginia Dill McCarty, Douglas B. McFadden, Deputy Attys. Gen., Indianapolis, for appellant, Insurance Commissioner of the State of Indiana.

Byron Emswiller, Albert W. Ewbank, Indianapolis, for appellee, Mutual Medical Insurance, Inc.

LEWIS, Chief Justice.

This appeal is brought by the Insurance Commissioner of Indiana and the Indiana State Podiatrists Association, Inc. from the judgment of the Marion County Superior Court, Number Four, which vacated an order of the Insurance Commissioner. The action originated with the filing of a complaint by the Podiatrists Association against the appellees before the Insurance Commissioner in April of 1963. Essentially the complaint alleged that certain insurance policies of the appellees under the applicable insurance laws of Indiana illegally exclude from compensation scheduled services, when said services are performed by podiatrists.

After a 'show cause' notice issued by the Commissioner, a hearing was held and the Commissioner entered his finding and order, which, in part, reads:

'4. The Respondents, up to and including the 21st day of May, 1963, refused to compensate legally qualified podiatrists for the performance of scheduled podiatry services upon their insureds on the basis of provisions contained within their accident and sickness policies or contracts; and such refusal was solely by reason of the fact that none of such podiatrists held unlimited licenses to practice medicine in the State of Indiana. * * *

Under the provisions of the Statutory Law and the Public Policy of the State of Indiana the Commissioner herewith further finds that no accident and sickness insurance * * * shall use restrictive terms or language, nor be construed to use restrictive terms or language, which defeats or tends to defeat the insured's right of reimbursement for medical or surgical services covered in the policy when those services are rendered by a person duly qualified under the law of the State of Indiana to perform such services.

The herein aforesaid Public Policy of this State is, that payment of a claim for compensation for scheduled services performed by licensed practitioners, including podiatrists, must be conditioned solely upon the occurrence of the scheduled services and not upon who performs the services. * * *'

On appeal to the Marion County Superior Court, No. 4, this judgment was vacated pursuant to Burns' Indiana Statutes, Anno., (1961 Repl.) § 63--3018, which provides, in part, as follows:

'* * * If such court finds such finding, decision or determination of such agency is:

(1) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; or

(2) Contrary to constitutional right, power, privilege or immunity; or

(3) In excess of statutory jurisdiction, authority or limitations, or short of statutory right; or

(4) Without observance of procedure required by law; or

(5) Unsupported by substantial evidence, the court may order the decision or determination of the agency set aside. * * *'

The Trial Court found the decision of the Insurance Commissioner to be arbitrary and capricious, contrary to constitutional right, in excess of statutory authority and unsupported by substantial evidence. In a lengthy assignment of errors, appellants essentially challenge the conclusions of law rendered by the Superior Court pursuant to the review by this Court granted in Burns' Indiana Statutes, Anno., (1961 Repl.), § 39--5309. Appellants additionally argue that the Superior Court erred in overruling the motion to dismiss the appellees appeal in the lower court filed by one of the appellants, the Podiatrists Association. Appellees have argued, as they did both before the Commissioner and the Superior Court, that appellant Podiatrists Association which instituted this legal action, has no justiciable interest in the controversy. Accordingly, they argue that because appellants had no legal standing as a party to the issues before the administrative agency, it was in no position to assert errors on review. See Town of Windfall City v. First National Bank (1909) 172 Ind. 679, 87 N.E. 984, 89 N.E. 311.

The clash of these two arguments raises two (2) questions of first impression for this Court. First.--May an administrative Agency entertain a hearing on a complaint brought by a complainant who has no justiciable interest in the alleged unlawful action charged? Second.--May a complainant, who has no legal standing to sue, become a party to the administrative proceeding with legal standing on appellate review?

It is clear that the Indiana Podiatrists Association, Inc. would have no legal standing to sue on the legality of the restrictive provisions of the appellees' insurance contracts in a court of law. It asserted no other justiciable, legally protected right under the insurance policy provisions. Therefore, appellees filed a motion to dismiss in response to the Commissioner's show cause order, alleging that the complaint-appellant was not the real party in interest. We resolve, however, that the Commissioner properly overruled the motion to dismiss the complaint.

The Insurance Law and the Administrative Adjudication Act do not contemplate the proposition that a complaint must be filed by a party with legal standing to invoke the jurisdiction of the Insurance Commissioner to review the legality of insurance policy provisions. Burns' Indiana Statutes, Anno., (1965 Repl.), § 39--4251, and Burns' Indiana Statutes, Anno., (1961 Repl.), § 63--3006. The personal merit, standing or legal interests and motives of a private complainant under these statutory provisions, are immaterial to the jurisdiction of the Insurance Commissioner, if the practice complained of is one in which the public generally has an interest. As a consequence, where a complaint is found to be of public interest generally, the nature of the interest of the complainant is insignificant and the hearing on the issues may stand as if brought by the Commissioner on his own motion.

While the administrative agency has jurisdiction to conduct a hearing on the practices complained of, it does not follow that the complainant becomes a party to the action. The Administrative Adjudication Act, Burns' Indiana Statutes, Anno., (1961 Repl.), § 63--3001 et seq. makes no explicit explanation of who shall qualify as parties to administrative hearings and determinations. Burns' Indiana Statutes, Anno., (1961 Repl.), § 63--3004, states:

'The agency shall afford all interested persons or parties the right and opportunity for the settlement or adjustment of all claims, controversies and issues, when such persons or parties desire such opportunity.' (Emphasis added)

In construing the above statutory requirement, it is important to consider the term 'interested' in light of the nature of many administrative proceedings, which often are adjudications of public rather than private rights. Legal standing to sue, an element of justiciability, is one of the judiciary's primary guarantees for an adversary proceeding. It is argued that to read into administrative proceedings the exacting requirements of standing would be to ignore both the specific provision which permits the Commissioner to invoke jurisdiction on his own motion and the general philosophy of the Administrative Adjudication Act, which expressly rejects many strict common-law judicial requirements. We note that these factors are persuasive arguments for fiexible intervention and amicus curiae practices. They do not, however, lead to the conclusion, as is advocated in the instant case: that one may become a party to a proceeding without legal standing.

Burns' Indiana Statutes, Anno., (1961 Repl.), § 63--3014, sets forth who may seek judicial review of administrative determinations:

'Any party or person aggrieved by any order or determination made by any such agency shall be entitled to a judicial review. * * *'

Justiciability as the primary guarantee of our adversary system and as a protection against collusive suits cannot be, and under the Administrative Act (supra) is not, abandoned on appellate review. It is equally clear that all parties before the Commissioner must be represented on appeal to assure an effective and complete review. Therefore, we are compelled to hold that this State's rules of standing (Burns' Indiana Statutes, Anno., (1967 Repl.), § 2--201 et seq.) are applicable to administrative proceedings; and, that, the Indiana State Podiatrists Association, Inc., was not a party to the hearing herein reviewed. As a consequence, appellant-Podiatrists Association (whose briefs we have considered only in the nature of an amicus curiae) could not assign errors below or properly file a motion to dismiss, thereby rendering the assignment of error on the overruling of the Podiatrists' motion below improperly founded.

The Commissioner ruled the appellees' policy provisions, which limit compensable scheduled injuries to those treated by physicians holding an unlimited license to practice medicine, to be in contravention of Burns' Indiana Statutes, Anno., ...