Preston v. Meigs

CourtUnited States State Supreme Court (Kentucky)
Writing for the CourtHenry Meigs, II, Judge, Franklin Circuit Court, Frankfort, Donald P. Moloney, Lexington; REED
PartiesRobert D. PRESTON, as Commissioner of Insurance, Commonwealth of Kentucky, Petitioner, v. Honorable Henry MEIGS, II, Judge of the Franklin Circuit Court, and Nationwide Mutual Insurance Company, Respondents.
Decision Date26 February 1971

Page 271

464 S.W.2d 271
Robert D. PRESTON, as Commissioner of Insurance,
Commonwealth of Kentucky, Petitioner,
v.
Honorable Henry MEIGS, II, Judge of the Franklin Circuit
Court, and Nationwide Mutual Insurance Company,
Respondents.
Court of Appeals of Kentucky.
Feb. 26, 1971.

Lloyd Graper and Charmaine Marlowe, Dept. of Insurance, Frankfort, for petitioner.

Henry Meigs, II, Judge, Franklin Circuit Court, Frankfort, Donald P. Moloney, Lexington, J. Roth Crabbe, David L. Maynard, Columbus, Ohio, for respondents.

REED, Judge.

The Commissioner of Insurance seeks to invoke the original jurisdiction of this court under Section 110 of the Constitution of Kentucky, and to thereby secure the issuance of an order of prohibition addressed to the respondent judge of the Franklin Circuit Court in which it would be directed that the respondent has no jurisdiction to hear and determine a declaratory judgment action now pending in the court over which he presides. This suit is styled 'Nationwide Mutual Insurance Company v. Commonwealth of Kentucky, Department of Insurance, and Robert D. Preston, Commissioner of Insurance.' Complex and delicate questions of the proper relationship between courts and administrative agencies underlie the dispute. Under

Page 272

accepted judicial procedure, however, we are rather narrowly confined in the extent of action we may properly take because of the manner in which the issue is posed.

Nationwide Mutual Insurance Company is engaged in the property and casualty insurance business and is licensed to do business in Kentucky. This insurer adopted a company-wide corporate policy applicable to all states in which it does business, effective September 1, 1970, by which it refused to accept applications for automobile insurance from customers new to it. It sought to confine its Kentucky automobile insurance business to renewals of existing policies. It nevertheless, proposed to continue to accept new business by which it would insure new customers for other types of property and casualty insurance. A deputy commissioner of insurance and the Department's general counsel advised Nationwide that this corporate underwriting policy would have the effect of causing the insurer to be in violation of several provisions of the Kentucky Insurance Code. 1 The Code is a statutory scheme for regulation of the insurance business in this state; the primary function of regulation is placed in the Insurance Department and in the Commissioner of Insurance as head of that department.

The insurer first requested a hearing before the Commissioner of Insurance but before notice of hearing was issued the request was withdrawn and Nationwide filed the declaratory judgment action in the Franklin Circuit Court against the Insurance Department and its commissioner. Nationwide sought a declaration of rights to the effect that the adoption of the corporate underwriting policy was not in violation of any statute of the state nor of any rule or regulation of the Insurance Department and that any effort to revoke or suspend its license or to administer other punishment because of the adoption of the underwriting policy would be in excess of the powers granted under the Insurance Code and would be unconstitutional, illegal and void. The insurer also asked the trial court fo find that it was unnecessary to pursue or exhaust the administrative remedies provided by the Code. By agreed order a temporary injunction was issued prohibiting the Commissioner from taking any action so far as Nationwide was concerned during the pendency of the declaratory judgment action. The Commissioner thereupon applied to this court for an order of prohibition which would direct the circuit court not to proceed further in the pending declaratory judgment action or take any further steps therein.

The Commissioner had issued a notice of administrative hearing after the institution of the declaratory judgment action. The notice set out in detail various assertions concerning the effect of the adoption of the underwriting policy as evidence of lack of present financial stability of the insurer, and concerning impermissible deleterious effects upon insurance-purchasing citizens of the state, upon other competing insurers, and upon the insurer's own agents. Among the assertions was one which posed a question concerning whether the effect of the adopted underwriting policy so affected a recently granted premium rate increase, which the Commissioner had granted the insurer, as to render the increased premium rate excessive. Another assertion in the notice posed the question concerning whether the express reason for the adoption of the underwriting policy indicated the necessity for examination of the insurer's current financial status so that a determination in the public interest could be made as to whether the company is sufficiently...

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12 practice notes
  • Puckett v. Cabinet for Health & Family Servs., 2019-SC-0282-DG
    • United States
    • United States State Supreme Court (Kentucky)
    • April 29, 2021
    ...determined some question or some aspect of some question 621 S.W.3d 409 arising in the proceeding before the court." Preston v. Meigs , 464 S.W.2d 271, 274 (Ky. 1971). In Preston , we quoted United States Supreme Court Justice Marshall, who explained, "When there is a basis for judicial act......
  • Petrey v. Cain, No. 98-SC-692-MR
    • United States
    • United States State Supreme Court (Kentucky)
    • March 25, 1999
    ...jurisdiction within the meaning of the rules applicable to prohibition connotes subject matter jurisdiction. Preston v. Meigs, Ky., 464 S.W.2d 271, 275 (1971). Ordinarily, "subject matter jurisdiction" refers to a court's authority to determine "this kind of case" as opposed to "this case."......
  • Knoppe v. Lincoln Nat'l Life Ins. Co., Civil Action No. 3:18-CV-264-RGJ
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Western District of Kentucky
    • January 9, 2020
    ...limited exception, Kentucky courts defer to the doctrine of exhaustion to promote uniform regulation and consistency. Preston v. Meigs, 464 S.W.2d 271, 273 (Ky. 1971). Kentucky recognizes two exceptions to the doctrine of exhaustion where: 1) a regulation is void on its face; or 2) continua......
  • Isaac v. Commonwealth, NO. 2017-CA-001355-MR
    • United States
    • Court of Appeals of Kentucky
    • July 19, 2019
    ...requires that action be deferred by the court until the agency has acted and the court may then review its action." Preston v. Meigs, 464 S.W.2d 271, 274-75 (Ky. 1971). The Cabinet has acted and is still awaiting the FHWA's final decision regarding the emergency order. Under these circumsta......
  • Request a trial to view additional results
12 cases
  • Puckett v. Cabinet for Health & Family Servs., 2019-SC-0282-DG
    • United States
    • United States State Supreme Court (Kentucky)
    • April 29, 2021
    ...determined some question or some aspect of some question 621 S.W.3d 409 arising in the proceeding before the court." Preston v. Meigs , 464 S.W.2d 271, 274 (Ky. 1971). In Preston , we quoted United States Supreme Court Justice Marshall, who explained, "When there is a basis for judicial act......
  • Petrey v. Cain, No. 98-SC-692-MR
    • United States
    • United States State Supreme Court (Kentucky)
    • March 25, 1999
    ...jurisdiction within the meaning of the rules applicable to prohibition connotes subject matter jurisdiction. Preston v. Meigs, Ky., 464 S.W.2d 271, 275 (1971). Ordinarily, "subject matter jurisdiction" refers to a court's authority to determine "this kind of case" as opposed to "this case."......
  • Knoppe v. Lincoln Nat'l Life Ins. Co., Civil Action No. 3:18-CV-264-RGJ
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Western District of Kentucky
    • January 9, 2020
    ...limited exception, Kentucky courts defer to the doctrine of exhaustion to promote uniform regulation and consistency. Preston v. Meigs, 464 S.W.2d 271, 273 (Ky. 1971). Kentucky recognizes two exceptions to the doctrine of exhaustion where: 1) a regulation is void on its face; or 2) continua......
  • Isaac v. Commonwealth, NO. 2017-CA-001355-MR
    • United States
    • Court of Appeals of Kentucky
    • July 19, 2019
    ...requires that action be deferred by the court until the agency has acted and the court may then review its action." Preston v. Meigs, 464 S.W.2d 271, 274-75 (Ky. 1971). The Cabinet has acted and is still awaiting the FHWA's final decision regarding the emergency order. Under these circumsta......
  • Request a trial to view additional results

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