State ex rel. Lanier v. Vines, 521

• Decision Date: 27 November 1968
• Docket Number: No. 521,521
• Citation: 274 N.C. 486,164 S.E.2d 161
• Parties: STATE of North Carolina ex rel. Edwin S. LANIER, Commissioner of Insurance v. James Abner VINES.
• Court: North Carolina Supreme Court

Page 161

164 S.E.2d 161

274 N.C. 486

STATE of North Carolina ex rel. Edwin S. LANIER Commissioner of Insurance v. James Abner VINES.

No. 521.

Supreme Court of North Carolina.

Nov. 27, 1968.

Atty. Gen. T. W. Bruton and Asst. Atty. Gen. Bernard A. Harrell for the State.

Nance, Collier, Singleton, Kirkman & Herndon, Fayetteville, for defendant.

LAKE, Justice.

The questions before us are:

(1) Assuming the penalty to have been lawfully imposed, may an action to collect it be brought in the name of the State on the relation of the Commissioner of Insurance?

(2) Did the Commissioner of Insurance have authority to impose a civil penalty of $3,000 upon the defendant?

After revoking permanently the licenses which had been issued to the defendant, the order of the Commissioner of Insurance states:

'It is further ordered that * * * James Abner Vines shall pay to the State of North Carolina a civil penalty in the amount of $3,000. Upon the payment of the amount of such civil penalty to the Treasurer of the State of North Carolina, the civil penalty imposed hereunder shall be forever satisfied and discharged.'

The prayer of the complaint is for 'a judgment ordering defendant to pay the civil penalty as imposed, with interest.'

The caption of the complaint designates the plaintiff as 'State of North Carolina, Ex Rel. Edwin S. Lanier, Commissioner of Insurance.' The body of the complaint states, 'The plaintiff is the duly appointed, qualified and acting Commissioner of Insurance of the State of North Carolina.' It is verified by the Commissioner.

G.S. § 58--9(5) provides that the Commissioner of Insurance 'shall have power to institute civil actions * * * for any violation of the provisions of this chapter.' G.S. § 58--44.6, under which the penalty was imposed and which is set forth in full below, provides that if a penalty imposed thereunder is not paid within ten days from the date of the order imposing it, the Commissioner of Insurance may revoke the license of the person so penalized. Clearly, the failure to pay the penalty assuming the penalty to be lawfully imposed, is a violation of a provision of chapter 58 of the General Statutes for which G.S. § 58--9(5) authorizes the Commissioner to institute a civil action.

67 C.J.S. Parties § 12, states, 'Where a cause of action is created by statute and the statute also provides who is to bring the action, the person or persons so designated, and, ordinarily, only such persons, may sue.' See also, Hunt v. State, 201 N.C. 37, 158 S.E. 703; McIntosh, North Carolina Practice and Procedure, 2d Ed., § 607. The institution of an action in the name of the State upon the relation of the party entitled to maintain the action does not vitiate the proceeding. Warrenton v. Arrington, 101 N.C. 109, 7 S.E. 652. We hold, therefore, that if the penalty sued for was lawfully imposed, this action to collect it was lawfully instituted.

We are therefore, brought to the question of the authority of the Commissioner of Insurance to impose the penalty upon the defendant.

G.S. § 58--44.6, which is the source, if any, of the authority of the Commissioner of Insurance to impose the penalty in question, provides:

'Whenever any person, agent, adjuster, firm, corporation or company, subject to the provisions of chapter 57 of the General Statutes, as amended, and the provisions of chapter 58 of the General Statutes, as amended, shall do or commit any act or shall fail to comply with any requirements prohibited or required by said chapters, by virtue of which any license is subject to suspension or revocation, the Commissioner of Insurance, in addition to or in lieu of any other official action that may be taken by him, may, in his discretion, inflict a civil penalty in an amount to be fixed by said Commissioner of Insurance not in excess of twenty-five thousand dollars ($25,000.00), and if said civil penalty is not paid within ten (10) days from the date of the finding and order inflicting said penalty, then said Commissioner of Insurance may revoke any license of such person, agent, adjuster, firm, corporation or company subject to the provisions of said chapters. The Commissioner of Insurance before imposing any penalty or revoking any license shall conduct a hearing and shall make all necessary findings of fact in regard to the matter under inquiry. In giving notices, conducting hearings and producing evidence, as well as examining records, the Commissioner of Insurance shall have all the power and authority and shall follow the procedures conferred and given in (G.S.) § 58--54.6. Any person, agent, adjuster, firm, corporation or company subject to said chapters, whose rights are affected by the findings and order of the Commissioner of Insurance, shall have the right to appeal to the Superior Court of Wake County, and upon such appeal the record shall be certified to the Superior Court of Wake County, and the procedure and authority contained in § 58--9.3 shall be followed and shall govern. The commencement of proceedings, as herein authorized, shall not operate as a stay of the Commissioner's order or decision, unless so ordered by the court.'

For the purposes of this review, the findings of fact by the Commissioner of Insurance are not attacked by the defendant. Therefore, it must be deemed that the defendant wilfully violated, in each of the respects detailed in the Commissioner's findings of fact, the provisions of G.S. §§ 58--47, 58--53.1 and 58--53.2, and has dealt unjustly with and wilfully deceived persons in regard to insurance policies.

G.S. § 58--42 provides: 'When the Commissioner is satisfied that any insurance agent * * * (or) broker * * * licensed by this State has willfully violated any of the insurance laws of this State * * * or has dealt unjustly with or willfully deceived any person in regard to any insurance policies * * * the Commissioner may immediately suspend his license or licenses and shall forthwith give to such licensee ten days' notice of the charge or charges and of a hearing thereon, and if the Commissioner finds there has been any of the violations hereinbefore set forth, he shall * * * revoke the license of such agent * * * (or) broker * * *.' Therefore, the Commissioner had the authority to impose the penalty here in question unless G.S. § 58--44.6 is in excess of the authority of the General Assembly under the Constitution of this State, or is a violation of the Constitution of the United States, as the defendant contends.

We find no merit in the defendant's contention, asserted both in the answer and in the demurrer ore tenus, that some undesignated provision of the United States Constitution is violated by G.S. § 58--44.6 in that the statute is an attempt to confer upon the Commissioner legislative or judicial powers. Assuming that the statute does either of these things, it violates no prohibition of the United States Constitution. It is for the State to determine whether and to what extent its powers shall be kept separate between the executive, legislative and judicial departments of its government. Neblett v. Carpenter, 305 U.S. 297, 59 S.Ct. 170, 83 L.Ed. 182; Highland Farms Dairy v. Agnew, 300 U.S. 608, 57 S.Ct. 549, 81 L.Ed. 835; Dreyer v. Ill., 187 U.S. 71, 23 S.Ct. 28, 47 L.Ed. 79.

We turn, therefore, to the Constitution of North Carolina. Art. I, § 8, provides, 'The legislative, executive, and supreme judicial powers of the government ought to be forever separate and distinct from each other.' Art. II, § 1, provides, 'The legislative authority shall be vested in two distinct branches, both dependent on the people, to-wit: a Senate and a House of Representatives.' Art. IV, § 1, provides, 'The judicial power of the State shall, except as provided in section 3 of this article, be vested in a court for the trial of impeachments and in a General Court of Justice. The General Assembly shall have no power to deprive the judicial department of any power or jurisdiction which rightfully pertains to it as a co-ordinate department of the government, nor shall it establish or authorize any courts other than as permitted by this article.' Art. IV, § 3, provides, 'The General Assembly may vest in administrative agencies established pursuant to law such judicial powers as may be reasonably necessary as an incident to the accomplishment of the purposes for which the agencies were created. Appeals from administrative agencies shall be to the General Cou...