Trout v. Bennett

• Decision Date: 07 May 1992
• Docket Number: No. 90-497,90-497
• Parties: James H. TROUT, Plaintiff and Appellant, v. Andrea BENNETT, as an individual and as State Auditor and Ex Officio Commissioner of Insurance; the State of Montana, the John Alden Life Insurance Co., and the Phoenix Mutual Insurance Co., Defendants and Respondents.
• Court: Montana Supreme Court

Page 81

830 P.2d 81

252 Mont. 416

James H. TROUT, Plaintiff and Appellant, v. Andrea BENNETT, as an individual and as State Auditor and Ex Officio Commissioner of Insurance; the State of Montana the John Alden Life Insurance Co., and the Phoenix Mutual Insurance Co., Defendants and Respondents.

No. 90-497.

Supreme Court of Montana.

Submitted on Briefs March 22, 1991.

Decided April 9, 1992.

Rehearing Denied May 7, 1992.

James P. Reynolds, Reynolds, Motl, Sherwood and Wright, Helena, for plaintiff and appellant.

Michael J. Mulroney, Luxan & Murfitt, Richard E. Gillespie, Keller, Reynolds, Drake, Sternhagen & Johnson, Stephen M. Frankino, Hughes, Kellner, Sullivan & Alke, Helena, for defendants and respondents.

WEBER, Justice.

James H. Trout (Trout), appeals the adverse judgment in his action as a licensed non-resident life insurance agent against Andrea Bennett, individually and as Commissioner of Insurance. The District Court for the First Judicial District, Lewis and Clark County, bifurcated the action into two parts. In the first portion the District Court held that Trout violated certain statutes, and fined him $250 for placing business with an insurance carrier before he had an appointment, and also fined him $250 for advertising himself as an agency. In the second portion, the District Court entered summary judgment for defendant Bennett, individually and as Commissioner. The District Court concluded that Andrea Bennett was not a "person" under 42 U.S.C. § 1983, and also concluded that Andrea Bennett was quasi-judicially immune. Trout appeals. We affirm in part and reverse in part.

The issues before the Court are:

1. Did Trout violate § 33-17-201(4), MCA (1985)?

2. Did Trout violate § 33-18-203, MCA?

3. Is Andrea Bennett, individually and as Commissioner, immune from § 1983 claims?

4. Does the doctrine of quasi-judicial immunity render Andrea Bennett, individually and as Commissioner, immune from suit under state law as to the remaining claims?

5. Did the District Court err in failing to rule on Trout's motion to file a second amended complaint?

Trout is a California resident licensed as an insurance agent in the State of California. He started his business in Montana in 1983. A non-resident life insurance agent's license was issued to him by the Montana Department of Insurance (Department). The license listed a California address and authorized Trout to sell life and disability insurance in Montana as a non-resident insurer. The license further provided that he could not "solicit business nor accept premiums under the name of [his] employing agency, or in conjunction with, or under the name of any other organization."

Two events sparked the investigation of Trout. First, the Department received a phone inquiry as to whether Trout was licensed to do business in Montana as "Trout Insurance" and received a letter complaining about Trout's activities. Second, the Department received a letter from Trout himself containing the letterhead "Trout Insurance", listing his Billings business address.

The Department investigator proceeded on the assumption that Trout, a licensed non-resident agent, was not permitted to maintain a Billings office and sell insurance in Montana, and that the stationery and telephone book ads indicated he was holding himself out to the public as a resident insurer. Trout filed the assumed business name of "Trout Insurance Agency" with the Secretary of State, under § 30-13-203, MCA. The Department investigator informed Trout he could not operate an office or do any business as Trout Insurance because he was not licensed as such.

After completion of the investigation, filing of a complaint by the Department, giving of notice of hearing, and hearing before a hearing examiner at which both Trout and the Department were represented in person and by counsel, the hearing examiner made proposed findings of fact, conclusions Trout then commenced the present action in which he alleged that Andrea Bennett individually and as Commissioner had violated various of his constitutional rights and caused damages to him. He sought a reversal of the Commissioner's order of July 16, 1986, with regard to the statutory violations and fine, and also requested a reversal of his license suspension. By the same complaint Trout claimed damages on various theories under 42 U.S.C. § 1983, and also a denial of constitutional rights by reason of the requirement of taking down a sign and ceasing the selling of insurance in Montana, as well as other constitutional tort theories. The District Court entered an order bifurcating the causes of action covered by the complaint.

                of law and order dated May 28, 1986.   The Commissioner reviewed the same and in turn made extensive findings of fact, conclusions of law and order dated July 16, 1986.   The Commissioner concluded that Trout had violated the statutes in a number of respects and by order revoked his non-resident license for twelve months and also ordered that he pay an administrative fine of $2,500 to the office of the Commissioner
                

As the first part of the bifurcation, the District Court considered the appeal from the order of the Commissioner. The District Court considered the matter under § 33-1-711(4), MCA, which provides that upon receipt of the transcript and evidence, the District Court shall hear the matter and following hearing, that the District Court is to consider the evidence contained in the transcript, exhibits and documents together with such other additional evidence as may be offered by either party. Proceeding under that authority, the District Court reconsidered the evidence and made new findings of fact and conclusions of law. The District Court reversed the determination of the Commissioner in a number of respects which are not involved in this appeal. By its orders dated August 25, 1989, and January 31, 1990, the District Court concluded that Trout had violated § 33-17-201(4), MCA (1985), by placing business with John Alden Life Insurance Company before he held an appointment issued by the Commissioner, and fined Trout $250 for the offense; and also concluded that Trout violated § 33-18-203, MCA, by advertising himself as "Trout Insurance Agency" and fined Trout $250 for that violation. The District Court specifically reversed the Commissioner with regard to the suspension of his license and allowed Trout to continue to sell insurance without interruption, and also reversed the $2500 fine.

As the second step in the bifurcation process, on May 30, 1990, the District Court ruled on the motion for summary judgment made by Andrea Bennett, individually and as Commissioner. The District Court first concluded that the Commissioner was not a "person" under 42 U.S.C. § 1983, and granted summary judgment in the Commissioner's favor on § 1983 claims. The District Court concluded that Will v. Michigan Dept. of State Police (1989), 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45, was controlling. The District Court stated:

Will v. Michigan Dept. of State Police, 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989), decided after Trout filed his amended complaint, disposes of this issue. 42 U.S.C., Section 1983, the provision under which Trout seeks monetary damages, provides that any "person" acting under color of state law, who violates another's constitutional rights is liable to the injured party. Will affirmed a Michigan Supreme Court decision which held that neither a state nor a state official acting in his or her official capacity is a "person" under 42 U.S.C., Section 1983. Id. at 72, 109 S.Ct. at 2312, 105 L.Ed.2d at 58.

... Clearly Will holds that "a [section 1983] suit against a state official in his or her official capacity is not a suit against the official but rather is a suit against the official's office." Will concluded that neither the states nor state officials are "persons" subject to suit under Section 1983. Although Trout alleges in his amended complaint that certain statutes are unconstitutional, the constitutional counts in the amended complaint rely exclusively on 42 U.S.C., Section 1983 for relief, and do not request declaratory or injunctive relief. Summary judgment The District Court cited Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173, and concluded that the Commissioner was quasi-judicially immune from suit on the remaining counts and granted the Commissioner's motion for summary judgment on those counts. As a result, the District Court dismissed the Commissioner individually and as State Auditor and Ex Officio Commissioner of Insurance, with prejudice.

dismissing both [Andrea Bennett] personally and the Office of State Auditor and Ex Officio Commissioner of Insurance on the counts alleging constitutional violations, is therefore proper.

Trout brings this appeal from both parts of the bifurcated proceeding.

I

Did Trout violate § 33-17-201(4), MCA (1985)?

Section 33-17-201(4), MCA (1985) provided:

No agent shall place any business, other than coverage of his own risks, with any insurer as to which he does not then hold an appointment or license as agent under this chapter....

Trout was fined $250 for violating § 33-17-201(4), MCA (1985), by placing business with John Alden Life Insurance Company before he held an appointment to do so issued by the Commissioner. The District Court found that Trout requested John Alden Life Insurance Company to appoint him as a non-resident agent in Montana. The District Court found that Trout solicited insurance business prior to receiving a validated appointment from that company as was required by the Commissioner. The record contains substantial evidence to support that finding.

We affirm the conclusion of the District Court in holding that Trout did violate § 33-17-201(4), MCA (1985).

II

Did Trout violate § 33-18-203, MCA?

Section 33-18-203, MCA, provides:

No person shall make, publish, disseminate, circulate, or place before the...