State ex rel. Huntington Ins. Agency, Inc. v. Duryee, 94-1970

• Decision Date: 30 August 1995
• Docket Number: No. 94-1970,94-1970
• Citation: 73 Ohio St.3d 530,653 N.E.2d 349
• Parties: The STATE ex rel. HUNTINGTON INSURANCE AGENCY, INC. v. DURYEE, Superintendent.
• Court: Ohio Supreme Court

Page 530

73 Ohio St.3d 530

653 N.E.2d 349

The STATE ex rel. HUNTINGTON INSURANCE AGENCY, INC. v. DURYEE, Superintendent.

No. 94-1970.

Supreme Court of Ohio.

Submitted June 6, 1995.

Decided Aug. 30, 1995.

In October 1987, then-Superintendent of Insurance, George Fabe, requested an opinion from the Ohio Attorney General concerning, inter alia, whether R.C. 3905.01 and 3905.04 prohibited affiliates of noninsurance financial institutions from being licensed as insurance agents. In 1988, the Attorney General issued Opinion No. 88-056, which stated in part that neither R.C. 3905.01 nor 3905.04 prohibits the licensing of a corporate appointee insurance agency merely because it was owned by, or affiliated with, a noninsurance financial institution.

In December 1988, amicus curiae, Independent Insurance Agents of Ohio, Inc. ("Independent"), an association of independent property and casualty insurance agents, filed a complaint against Fabe seeking a declaratory judgment that the principal-purpose test of R.C. 3905.01(B) and 3905.04 prohibits the licensing of applicants affiliated with noninsurance financial institutions. Upon subsequent appeal, this court held that R.C. 3905.01(B) and 3905.04 do not prohibit the licensing of applicants affiliated with noninsurance financial institutions, and an applicant for a license as an other-than-life insurance agent is not precluded from licensure by R.C. 3905.01(B) and 3905.04 merely because an affiliate of the applicant would be precluded thereunder, unless the applicant is the alter ego of the precluded affiliate. Indep. Ins. Agents of Ohio, Inc. v. Fabe (1992), 63 Ohio St.3d 310, 587 N.E.2d 814 ("Fabe"), paragraphs one and two of the syllabus. The court further stated that "[w]hether a particular applicant for a license is but the alter ego of an otherwise precluded entity requires a case-by-case analysis." Id. at 315, 587 N.E.2d at 818.

Relator, Huntington Insurance Agency, Inc. ("Huntington"), is an Ohio corporation organized for the purpose of acting as an insurance agent. Huntington is a subsidiary of Huntington Insurance Agency Services, Inc., a subsidiary corporation wholly owned by the Huntington State Bank, Alexandria, Ohio. The Huntington State Bank is a wholly owned subsidiary of Huntington Bancshares, Inc., a bank holding company.

On March 19, 1993, Minnesota Mutual Fire & Casualty Company, an insurance company authorized to transact business in Ohio, notified respondent, Superintendent of Insurance Harold T. Duryee, of its appointment of Huntington to act as its agent in Ohio. On April 2, 1993, Huntington submitted an application for licensure as an other-than-life insurance agent with the Ohio Department of Insurance. Huntington certified that it did not seek, and would not hold, an agency license with the principal purpose or intention of soliciting or placing insurance on or in connection with its property for which it acts as agent, custodian, vendor, bailee, trustee, or payee. Huntington's application is complete, and it has responded to all outstanding requests for supplementary information or clarification made by Duryee.

In June 1993, Independent filed an action for declaratory and injunctive relief in the Franklin County Court of Common Pleas, naming Duryee as defendant. In its complaint, Independent sought a declaratory judgment that any determination by the superintendent of whether an applicant for licensure as an other-than-life insurance agent was the alter ego of a precluded affiliate would constitute an unconstitutional exercise of legislative power by the superintendent. Independent also requested that the superintendent be enjoined from taking any action on Huntington's application, and any other application by affiliates of non-insurance financial institutions, until the General Assembly defines "alter ego" or delegates to the superintendent the power to define the term. However, Independent never filed a motion for a temporary restraining order or preliminary injunction.

Huntington is not a party in the common pleas court case, although it attempted to intervene as a defendant. On July 29, 1993, the common pleas court dismissed Independent's complaint based on this court's decision in Fabe, supra. The common pleas court also determined that Huntington's motion to intervene was moot because of the dismissal. On appeal, the Court of Appeals for Franklin County reversed the dismissal and remanded the case to the common pleas court based on its holding that the court's decision in Fabe did not bar Independent's action for declaratory and injunctive relief. Indep. Ins. Agents of Ohio, Inc. v. Duryee (1994), 95 Ohio App.3d 7, 641 N.E.2d 1117. A discretionary appeal to this court was not allowed. 70 Ohio St.3d 1448, 639 N.E.2d 115.

Duryee has not acted to either grant or deny Huntington's license application. The superintendent has determined to take no action on Huntington's pending application as long as Independent's claim that his alter ego determination would be an unconstitutional exercise of legislative power is pending.

Huntington instituted this action requesting a writ of mandamus ordering Duryee to act on its pending application for licensure. Although the common pleas court originally set Independent's complaint for declaratory and injunctive relief for trial following remand from the court of appeals, the common pleas court stayed the case pending the outcome of this action on joint motion of the superintendent and Independent.

We issued an alternative writ, and the parties filed stipulated facts and briefs. Independent filed an amicus brief urging denial of the requested writ.

Porter, Wright, Morris & Arthur, Anthony J. Celebrezze, Jr., H. Grant Stephenson, Kathleen M. Trafford and Michael J. Barren, Columbus, for relator.

Betty D. Montgomery, Atty. Gen., Ava W. Serrano and Julia M. Graver, Asst. Attys. Gen., for respondent.

Emens, Kegler, Brown, Hill & Ritter, William J. Brown and Roger P. Sugarman, Columbus, urging denial for amicus curiae, Independent Ins. Agents of Ohio, Inc.

PER CURIAM.

As a preliminary matter, amicus Independent contends that the writ must be denied because Huntington failed to comply with R.C. 2731.04. R.C. 2731.04 provides that an action for a writ of mandamus "must be * * * in the name of the state on the relation of the person applying * * *." This court has previously held that a writ of mandamus may be denied where the action is not brought in the name of the state on the relation of the person requesting the writ. Gannon v. Gallagher (1945), 145 Ohio St. 170, 171, 30 O.O. 351, 352, 60 N.E.2d 666; Maloney v. Court of Common Pleas of Allen Cty. (1962), 173 Ohio St. 226, 227, 19 O.O.2d 45, 181 N.E.2d 270; Maloney v. Sacks (1962), 173 Ohio St. 237, 238, 19 O.O.2d 51, 52, 181 N.E.2d 268, 269. Huntington's complaint for a writ of mandamus does not comport with R.C. 2731.04, since it was not brought in the name of the state on relation of Huntington.

Nevertheless, mandamus actions filed originally in this court "shall proceed under the Ohio Rules of Civil Procedure." S.Ct.Prac.R. X(2); State ex rel. Shimola v. Cleveland (1994), 70 Ohio St.3d 110, 112, 637 N.E.2d 325, 326. Civ.R. 17(A) provides:

" * * * When a statute of this state so provides, an action for use or benefit of another shall be brought in the name of this state. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of the real party in interest. * * * "

In addition, Civ.R. 15(A) allows a party to seek leave of court to amend a pleading beyond the time period when amendments are allowed as a matter of course.

After Independent claimed in its amicus brief that Huntington had not complied with R.C. 2731.04, Huntington filed a motion for leave to amend the caption of the complaint to specify that this action is brought in the name of the state on relation of Huntington. " 'The spirit of the Civil Rules is the resolution of cases upon their merits, not upon pleading deficiencies.' " Patterson v. V & M Auto Body (1992), 63 Ohio St.3d 573, 577, 589 N.E.2d 1306, 1309, quoting Peterson v. Teodosio (1973), 34 Ohio St.2d 161, 175, 63 O.O.2d 262, 269, 297 N.E.2d 113, 122. Liberal amendment of pleadings is also favored. Wilmington Steel Products, Inc. v. Cleve. Elec. Illum. Co. (1991), 60 Ohio St.3d 120, 121-122, 573 N.E.2d 622, 624. Finally, neither the superintendent nor Independent filed anything in opposition to Huntington's motion for leave to amend. Therefore, the motion is granted, and the case caption is amended to specify that it is brought in the name of the state on the relation of Huntington. See State ex rel. Cosmos Broadcasting Corp. v. Brown (1984), 14 Ohio App.3d 376, 378-379, 14 OBR 481, 483-484, 471 N.E.2d 874, 879.

As to the merits of this case, in order to be entitled to a writ of mandamus, Huntington must establish that it possesses a clear legal right to have the superintendent act on its license application, that the superintendent is under a clear legal duty to so act, and that Huntington has no plain and adequate remedy at law. State ex rel. Carter v. Wilkinson (1994), 70 Ohio St.3d 65, 637 N.E.2d 1.

R.C. 3905.01(B) provides:

" * * * Upon written notice by an insurance company authorized to transact business in this state of its appointment of a person to act as its agent, the superintendent, if he is satisfied * * * that in applying for such license it is not the appointee's purpose or intention principally to solicit or place insurance on the appointee's own property or that of relatives, employers, or employees or that for which they or the appointee is agent, custodian, vendor, bailee, trustee, or payee * * *. If such appointee within the preceding two years has not been appointed as a licensed insurance agent * *...