Westland Housing Corp. v. Commissioner of Ins.
| Decision Date | 13 April 1967 |
| Parties | WESTLAND HOUSING CORPORATION et al. v. COMMISSIONER OF INSURANCE et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Herbert P. Wilkins, Boston, for intervener, Massachusetts Workmen's Compensation Rating and Inspection Bureau and another (David W. Hays, Asst. Atty. Gen., for the Commissioner of Insurance, with him).
John M. Reed, Boston, for plaintiffs.
Summer H. Babcock and Richard M. Harter, Boston, for National Council on Compensation Insurance, amicus curiae, submitted a brief.
Before SPALDING, WHITTEMORE, KIRK, SPIEGEL and REARDON, JJ.
This is a petition for review under G.L. c. 30A, § 14, and G.L. c. 152, § 65M, 'so far as applicable,' and a suit for declaratory relief under G.L. c. 231A. When the case was here before we remanded it to the Superior Court because the 'record * * * (was) devoid of evidence from which we * * * (could) decide the jurisdictional question.' Westland Housing Corp. v. Commissioner of Ins., 346 Mass. 556, 557, 194 N.E.2d 714, 715.
The plaintiffs amended their petition in order to state an additional basis for jurisdiction under G.L. c. 231A. The Hanover Insurance Company (Hanover) was added as a defendant. The case was tried in the Superior Court on oral testimony plus a statement of agreed facts which incorporated a number of exhibits. The trial judge made findings, rulings and an order for decree. A final decree was entered setting aside the order of the Commissioner of Insurance (Commissioner) and ordering the Massachusetts Workmen's Compensation Rating and Inspection Bureau (bureau), the intervener, to 'establish rates for each of the petitioners as separate risks.' The Commissioner, Hanover, and the bureau (hereinafter referred to as the defendants) appealed from the final decree. The evidence is reported.
The judge found that the plaintiffs 'are Massachusetts corporations whose risks were assigned by the Massachusetts Voluntary Stock Pool for Assigned Workmen's Compensation Risks.' A predecessor of Hanover
The findings of the judge, from which he concluded that the plaintiffs were 'assigned risks within the purview of' G.L. c. 152, § 65A, are considered below. He also concluded that the plaintiffs 'have complied with the appropriate requirements concerning the time and manner of filing appeals to the Commissioner * * * (and) have fully complied with the appropriate requirements concerning the time and manner in respect of their appeal to the Superior Court, as provided in * * * (G.L. c. 152, § 65M).'
The judge ruled that '(t)he decision of the Commissioner * * * was reached in an adjudicatory proceeding' within G.L. c. 30A, § 1(1), that the plaintiffs had standing to seek review of that decision in the Superior Court under G.L. c. 30A, § 14, and that they had otherwise 'complied with the appropriate requirements concerning the time and manner of' seeking review under said section.
He also ruled that the decision of the Commissioner was a regulation within the meaning of G.L. c. 30A, § 1(5), and that G.L. c. 30A, § 7, provides the plaintiffs with 'standing to seek a declaration of rights' under G.L. c. 231A.
He then ruled 'that (a) the provision in Section III, Rule 9 of the experience rating plan established by the * * * (bureau), * * * 'that combination shall be made as respects risks in each of which the same person or group of persons, or corporation owns a majority interest,' is invalid as applied to the * * * (plaintiffs); (b) the premiums which have beenn charged to each of the * * * (plaintiffs) through the application of this provisions, are unreasonable, unfairly discriminatory and therefore unlawful.'
The plaintiffs assert that 'there are two adequate bases of jurisdiction--one the statutory review under G.L. c. 30A, § 14, and the other the controversy concerning the validity of the rule in question.'
Review of 'a final decision of any agency in an adjudicatory proceeding' may be had by 'any person * * * aggrieved' thereby under G.L. c. 30A, § 14. 'Adjudicatory proceeding' is defined in G.L. c. 30A, § 1, as 'a proceeding before an agency in which the legal rights, duties or privileges of specifically named persons are required by constitutional right or by any provision of the General Laws to be determined after opportunity for an agency hearing.'
The plaintiffs argue that G.L. c. 152, §§ 52D and 65K, required the 'hearing' which they had with the Commissioner.
Before the amendment of 1962 (St.1962, c. 342) § 52D governed only appeals by '(a)ny member of or subscriber to a rating organization * * * from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the filings of such rating organization.' It did not require or permit a hearing for the purpose of determining the rights of persons such as the plaintiffs who are customers of the insurance companies which are the members or subscribers of rating organizations. After the 1962 amendment, § 52D permitted 'any insured affected by a rate made by' a rating organization or insurer to challenge the 'manner in which such rating system has been applied in connection with the insurance afforded him' and to appeal to the Commissioner if, after a hearing with the rating organization or insurer, the insured was 'affected by the action of such rating organization or such insurer.' After a hearing the Commissioner could either affirm or reverse such action.
Even if we assume that the 1962 amendment became effective in time to govern the action of the Commissioner in the instant case, 1 § 52D, as amended, provides only for an adjudicatory proceeding on the issue of the manner in which a rating rule has been applied to an insured. It does not provide for a proceeding to challenge the validity of the rating rule itself.
Section 65K permits an appeal to the Commissioner by '(a)ny employer to whom a policy is issued pursuant to section sixty-five A * * * on the ground that the premium charged * * * is not reasonable or is unfairly discriminatory, and said commissioner may * * * after a hearing * * * approve or disapprove the premium charged.'
Section 65A 2 provides for the assignment of an employer, whose application for workmen's compensation insurance has been rejected by two insurers, to an insurer which is designated by the Commissioner to issue a policy to such an employer. The statute provides an explicit procedural framework in which such rejected risks are to be assigned. The employer, upon rejection by two insurers, must first appeal to the Division of Industrial Accidents. The division is then required to certify to the Commissioner 'that such employer is entitled to workmen's compensation insurance' after the division has determined that the employer has met the conditions set out in the statute. The Commissioner is then required to 'designate an insurer' who must issue a policy to the employer upon 'receipt of the payment for the premium therefor.'
The defendants argue that
The findings of the judge show clearly that there was no compliance with the provisions of § 65A: the division 'did not so certify, but referred these * * * (plaintiffs) to the Bureau; * * * a representative of the Division told * * * (the plaintiffs) that under an agreement between the Division, the Commissioner * * * and the Bureau, the Bureau would assign the risks; * * * personnel in the office of the Commissioner, including counsel to the Commissioner, likewise informed * * * (the plaintiffs) that the Bureau would assign the risks; * * * the Commissioner has not designated an insurer for an assigned risk since 1951; * * * the Division has not certified a rejected risk to the Commissioner since 1951; * * * the usual practice of the Division, upon presentment by an employer of two rejection letters is to refer the applicant to the Bureau and * * * in accordance with instructions from the Division a representative of the * * * (plaintiffs) presented two rejection letters from each of the * * * (plaintiffs) to the Bureau.'
The judge nevertheless ruled that
We do...
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