Brown v. State Farm Fire & Cas. Co.Brown v. State Farm Fire & Cas. Co.
Brace B. Godfrey, Jr., E‘Vinski L. Davis, Baton Rouge, Counsel for State Farm Fire & Casualty Company Defendant-Appellee.
The Commissioner of Insurance (hereinafter, “Commissionеr“) appeals its dismissal from litigation by an exception of no right of action claiming he has a constitutional right to seek judicial review of adverse administrative decisions. The Commissioner also appeals the trial court‘s failure to allow him to amend the petition to allege additional facts which would remove the objection to the grounds for the exception of no right of action. For reasons stated herein, we affirm the trial court‘s judgment.
FACTS
On June 5, 1998, Administrative Law Judge (hereinafter, “ALJ“) Rufus D. Hayes rendered a decision ordering the Department of Insurance to approve the form оf a “Rental Condominium Unit Owner‘s Policy” submitted by State Farm. On July 2, 1998, the Commissioner filed for judicial review with the Nineteenth Judicial District Court.
On August 9, 1999, State Farm filed a peremptory exception of no right of action claiming the Department of Insurance, a state agency, was precluded from pursuing judicial review under thе provisions of the Louisiana Administrative Procedure Act or the Division of Administrative Law. The trial court entered a judgment sustaining the exception on January 19, 2000, dismissing the Commissioner‘s petition for judicial review. The Commissioner appealed, asserting two assignments of error.
ASSIGNMENTS OF ERROR
The Commissioner alleges that:
1. The trial judge erred in ruling that the Commissioner of Insurance does not have standing to seek judicial review of the decision rendered by the Division of Administrative Law.
2. The trial judge erred in dismissing the suit with prejudice without allowing the Commissioner of Insurance an opportunity to amend the petition.
DISCUSSION
State Agency‘s Right to Judicial Review
Louisiana Revised Statute 49:964(A)(2) and Louisiana Revised Statute 49:992(B)(3), as аmended by Acts 1999, No. 1332, effective July 12, 1999, expressly provide that “no agency or official thereof, or other person acting on behalf of an agency or official thereof, shall be entitled to judicial review” of a decision made pursuant to the Louisiana Administrative Procedure Act (hereinafter, “LAPA“) or Division of Administrative Law (hereinafter, “DAL“). There is no dispute that the ALJ‘s decision was made pursuant to the LAPA and the DAL. Thus, the plain terms of Acts 1999, No. 1332 mandate dismissal of the Commissioner‘s petition.
The Commissioner, in his official capacity, however, argues Acts 1999, No. 1332 violates the Department of Insurancе‘s constitutional right to appeal an adverse decision rendered by the ALJ. The Commissioner specifically cites article 1, § 22 of the Louisiana Constitution which provides:
All courts shall be open, and every person shall have an adequate remedy by due process of law and justice, administеred without denial, partiality, or unreasonable delay, for injury to him in his person, property, reputation, or other rights. (Emphasis added.)
Despite the definition under
However, the Department of Insurance is a juridical person as opposed to a natural person. See
Accordingly, the question before us is whether the provisions of the LAPA provide an “adequate remedy by due process of law and justice” to the Department of Insurance, as a juridical person, for its alleged injuries as the Louisiana Constitution requires in art. 1, § 22.
NATURE AND RIGHTS OF JURIDICAL PERSON
Juridical persons, also called juristic persons, are “creatures of the law.” A.N. Yiannopoulos, Louisiana Civil Law System § 48 (1977). In discussing the “personality” of governmental entities, Professor Yiannopoulos observed as follows:3
They are indispensable for the realization of human interests, and, in order to assure their function, the law grants to them the power to participаte in legal life by the attribution of legal personality. These entities have no physical existence, but they are formed by human beings for the satisfaction of needs that require unison of effort. (Emphasis added.) Id.
According to Professor Yiannopoulos, the theory underlying the provisions of the Louisiana Civil Cоde of 1870 dealing with juridical persons appears to be that “juristic persons are artificial creatures of the politically organized society; they are created by a concession, and their interests are purely those recognized by the law.” Id. § 57.
The Commissioner argues that it has a right of review through access to the courts pursuant to Louisiana Constitution article 1, § 22, which provides that a “person” shall have an “adequate remedy at law by due process of law and justice.” The Commissioner appears to claim to the Department of Insurance the same rights as pоssessed by natural persons.
However,
The LAPA allows the Commissioner to argue its position before the ALJ, which it vigorously did in this case. With Acts 1999, No. 1332, however, the legislature specifically has chosen to deny state agencies any entitlement to judicial review under the LAPA,
The Commissioner cites several cases including Bowen v. Doyal, 259 La. 839, 253 So.2d 200 (La. 1971) and Buras v. Board of Trustees of Police Pension Fund of City of New Orleans, 367 So.2d 849 (La. 1979), where the Louisiana Supreme Court agreed that certain agencies did have a right to judiciаl review.
Since those cases were decided, however,
Thus, in State of Louisiana Department of Public Safety and Corrections, Offiсe of Motor Vehicles v. Lee, 98-0270, pp. 2-3 (La.App. 1st Cir.2/19/99), 729 So.2d 717, 718-719, this court found that the Department of Public Safety and Corrections, (hereinafter, “DPSC“) had no right to appeal the results of an administrative hearing because
A “person” is defined in
We do not interpret
Louisiana Constitution art. 1, § 22 guarantees the Department of Insurance through its commissioner an adequate remedy by due process of law and justice for injury to the Department or its rights. As a matter of law and of Constitutional interpretation, however, we cannot say the
We refuse to say without positive law that the rights of a juridical person transcend the law that created it. The trial court committed no error in maintaining State Farm‘s exception of no right of action in this matter. The first assignment of error is without merit.
Commissioner‘s Right to Amend Petition
The Commissioner alleges that the trial court erred by dismissing his suit without allowing him to amend his petition for judicial review in order to assert that Acts 1999, No. 1332 is unconstitutional. The Commissioner cites
When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection cannot be so removed, or if plaintiff fails to comply with the order to amend, the action shall be dismissed.
The Commissioner argues that he should have been allowed to amend the pleadings to bring an action to challenge the constitutionality of
We have adequately addressed the first of these proposed challenges above. State Farm‘s exception of no right of action contested the Commissioner‘s right to challenge the ALJ decision because the lеgislature‘s enactment of Acts 1999, No. 1332 had gone into effect. The Commissioner responded asserting that the Department of Insurance has a constitutional right as a “person” to seek judicial review, the LAPA notwithstanding. Both parties fully addressed the constitutionality of the Commissioner‘s right to seek judicial reviеw independent of the LAPA. Consequently, the constitutionality of this statute in this regard was squarely before the trial court and was thoroughly argued by both parties. While the trial court gave no oral or written reasons for sustaining State Farm‘s exception of no right of action, it is clear that the trial court conсluded in this regard that the act was constitutional. As discussed above, the trial court was correct in so ruling, and we find no error in its failing to allow the Commissioner to amend the petition to allege the unconstitutional usurpation of his power.
The Commissioner‘s petition for judicial review was before the trial court under its appellate jurisdiction pursuant to
While the Commissioner alleges he should have been allowed to amend his petition to аllege a usurpation of the rights of the judiciary, nothing in the record or briefs explain how he could successfully amend a petition for judicial (appellate) review to cumulate or substitute some type of ordinary proceeding, nor is the permissibility of such amendment apparent to this cоurt. The proposed amendment apparently would not merely add a cause of action or a party, but would substitute one lawsuit for another, changing the parties, the form of procedure and the relief sought. In Sivils v. Mitchell, 96-2528, p. 6, n. 4. (La.App. 1st Cir.11/7/97), 704 So.2d 25, 29 n. 4, this court observed as follows:
Under LSA-C.C.P. art. 934, when the grounds of the objection pleaded by a peremptory exception may be removed by an amendment, the judgment should order such amendment. However, to allow the amendment contemplated by LSA-C.C.P. art. 934, there should be some indication that the defective petition can be amended so as to state a lawful right of action, and а plaintiff must be able to remove the grounds for the objection. (Emphasis added.) (Citations omitted.)
Where it is not apparent how the grounds of State Farm‘s objection of no right of action can be removed by amendment, we cannot conclude the trial court erred in failing to allow the Commissioner to amend his petition to allege the unconstitutionality of the LAPA. We are not obligated to speculate on how the Commissioner‘s petition might be successfully amended. We also observe that the Commissioner appears to have an adequate remedy at law in this regard by filing a declarаtory judgment action or some other type proceeding.
This assignment of error is without merit.
CONCLUSION
For reasons stated, we affirm the judgment of the trial court. Costs are taxed to the Department of Insurance through its Commissioner in the amount of six hundred and 54/100 dollars ($600.54).
AFFIRMED.
KUHN, J., concurs.