72 Pa. Commw. 274 | Pa. Commw. Ct. | 1983
Opinion by
Albert 0. Friedman appeals from an order of the Commissioner of the Pennsylvania Department of Insurance revoking Ms agent’s license and ordering him to pay a $1,000 penalty to the Commonwealth. We affirm.
On September 19, 1980, the department issued .an order to show cause, alleging violations of sections 603
The commissioner rejected that argument and, on August 18,1981, issued his revocation order.
On appeal, Mr. Friedman contends that the department (1) violated his constitutional guarantee against double jeopardy by fining him under the Act after the federal court had already imposed a $10,000 criminal penalty; (2) denied him a right to trial by jury under article I, section 6 of the Pennsylvania Constitution, and (3) did not provide him with a meaningful opportunity to be heard.
As a preliminary matter, the department contends that Mr. Friedman is primarily challenging the constitutionality of the Act’s implementing regulations and that he is doing .so for the first time on appeal. Thus, the department argues that under Tancredi v. State Board of Pharmacy, 54 Pa. Commonwealth Ct. 394, 421 A.2d 507 (1980), interpreting the Administrative Agency Law, 2 Pa. C. S. §703(a), Mr. Friedman has waived his right ¡to be heard. We disagree.
Section 703(a) provides that a party proceeding before a Commonwealth agency may question the va
Those practical considerations are not present here. Moreover, we note that, unlike the pharmacists in Tancredi who challenged the regulations but not an almost identical statutory provision, Mr. Friedman has .challenged the Act and the regulations in tandem. Cf. Fumo v. Insurance Department, 58 Pa. Commonwealth Ct. 392, 427 A.2d 1259 (1981) (imprecise but not unconstitutionally vague statutory language vests insurance commissioner with broad discretion to establish precise criteria for license revocations through promulgation of regulations).
Double J eopardy
The fifth amendment guarantee against double jeopardy,
Although the United States Supreme Court has held that Congress may impose both a criminal and a civil sanction with respect to the same act or omission and that the clause applies only to criminal punishment, Helvering v. Mitchell, 303 U.S. 391, 399 (1937), and to proceedings that are essentially criminal, Breed v. Jones, 421 U.S. 519, 528 (1975), it has also held that an ostensibly civil penalty can amount to a criminal sanction if the legislature intended .the penalty to be punitive rather than remedial, Mitchell at 398-99, or if the fine is so “unreasonable or excessive that it transforms what was clearly intended as a civil remedy into a criminal penalty.” One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237 (1972). See also City of Philadelphia v. Kenny, 28 Pa. Commonwealth Ct. 531, 539, 369 A.2d 1343, 1348, cert. denied, 434 U.S. 923 (1977).
Thus, given these constitutional parameters, we must decide if the commissioner's imposition of a fine
“Whether the Act and its implementing regulations impose civil or criminal ¡sanctions is primarily a question of statutory construction. Helvering, 303 U.S. at 399 (as matter of statutory construction, IRS did not violate taxpayer’s guarantee against double jeopardy by imposing fifty percent additional assessment for fraud on taxpayer acquitted in criminal tax evasion trial).
Here, the commissioner fined Mr. Friedman under section 639 of the Act, 40 P.S. §279(2), which empowers the commissioner to “[ijmpose a civil penalty of not more than one thousand dollars for each and every ... violation ...,” upon satisfactory evidence of conduct which would disqualify an agent from initial issuance of a license. [Emphasis added.]
Mr. Friedman would have us eschew the civil label attached to section 279 ’s penalty and rule that his fine was punitive rather than remedial, designed solely to exact punishment for an offense against the “public justice.”
We do not agree. As the department has argued persuasively in its brief, the Commonwealth’is interest here is not to protect the public against acts- of criminal conspiracy and transportation of stolen goods, interests served by the criminal prosecution of Mr. Friedman in federal district court. Rather, the statutorily-based imposition of a fine upon offending agents is a necessary part of the Commonwealth’s reg
Finally, we do not find the imposition of a $1,000 fine “so unreasonable or excessive,” One Lot Emerald Gut Stones at 237, that it transforms the Acts civil remedy into a criminal penalty. See Romano at 21, 404 A.2d at 759 (revocation of license and imposition of $1,000 penalty for felony conviction not disproportionate to conduct in light of commissioner’s obligation to protect public from unscrupulous agents).
Accordingly, we reject Mr. Friedman’s double jeopardy claim.
Trial by Jury
Our Supreme Court has construed article 1, section 6 of the Pennsylvania Constitution
Certainly there were elements of fraud in Mr. Friedman’s insurance check conversion scheme. The commissioner, however, revoked Mr. Friedman’s license and imposed a penalty not as punishment for fraudulent conduct, but to protect the insurance-buying public from unscrupulous agents. Bomano at 21, 404 A.2d at 759.
Thus, because the proceeding here has no basis in common law, we hold that Mr. Friedman was not entitled to a trial by jury.
jDue Process
Painting his hearing as a “sham” and a “pro forma gesture,” Mr. Friedman also contends that section 639 of the Act fails to provide insurance agents in his situation with a meaningful opportunity to be heard because the commissioner has no alternative but to revoke a license for prior criminal convictions. We disagree.
Section 639 specifically provides that the commissioner “may in his discretion” revoke an offending agent’s license or impose a civil penalty for violations of the Act. Although we have held that the criminal conviction of an insurance agent establishes a prima facie case of unworthiness for licensure, Fumo at 398, 427 A.2d at 1263, we have also held that section 639
Here, as noted in the commissioner’s opinion, the presiding officer made every effort to determine why Mr. Friedman and his counsel were absent from the revocation proceeding and if they intended to present evidence rebutting the department’s prima facie case of unworthiness. Considering the department’s scrupulous attention to his due process rights, Mr. Friedman, having presumed the futility of the administrative hearing, cannot claim that .the commissioner denied him a meaningful opportunity to be heard. Cf. Canonsburg General Hospital v. Department of Health, 492 Pa. 68, 74, 422 A.2d 141, 145 (1980) (courts ■should not presume futility in administrative appeal).
Accordingly, we affirm.
Order
Now, February 23,1983, the order of the Insurance Commissioner, Docket No. P80-6-11, is hereby affirmed.
Section 603 of the Act, 40 P.S. §238, provides in pertinent part:
(a) The Insurance Commissioner may issue, upon certification as aforesaid by any company, association, or exchange, authorized toy law to transact business within this Commonwealth, an agent’s license to any person .of at least eighteen years of age. . . . Before any such license is granted, the applicant shall first make answer, in writing and under oath, to interrogatories on forms and supplements such as the Insurance Commissioner shall prepare and submit, which answers shall be vouched for by indorsement of the company, association, or exchange interested, and to the effect that the applicant is of good business reputation. . . . When the Insurance Commissioner is satisfied that the applicant is worthy of license, and that he is reasonably familiar with provisions of the insurance law of this Commonwealth, he shall .issue a license. . . .
Section 639 of the Act, 40 P.S. §279, provides in pertinent part:
Upon . . . satisfactory evidence of such conduct as would disqualify such agent . . . from initial issuance of a license under sections six hundred three [40 P.S. §233], . . . the Insurance Commissioner may in his discretion, pursue any one or more of the following courses of action . . . :
(1) Suspend or revoke or .refuse to renew the license of such offending party or parties;
*277 (2) Impose a civil penalty of not more than one thousand dollars for each and every act in violation of any of said sections by .said party or parties.
31 Pa. Code §33.7(b) provides in pertinent part:
(b) A showing that, within five years prior to making application for an agent’s or broker’s license, an applicant has pleaded guilty, entered a plea of nolo contendere, or has been found guilty in a court of competent jurisdiction of criminal conduct which clearly reflects on the honesty and integrity of the applicant, shall be evidence of lack of fitness for licensure.
(2) Examples of criminal violations which the Department will interpret as reflecting upon the honesty and integrity of applicants are unlawful advertising of insurance ■business, unlawful coercion in contracting insurance, furnishing free insurance as an inducement for purchases, unlawful collection agency practices, forgery or fraudulent practices, embezzlement, obtaining money under false pretenses, conspiracy to defraud, bribery or corrupt influence, perjury or false swearing, and any felony of the third degree or higher as graded in this ■Commonwealth.
31 Pa. Code §33.18 provides in pertinent part:
(a) The Department may revoke, suspend, or refuse to renew the license of any agent or broker upon finding, after a hearing, that such agent or broker has engaged in conduct which would disqualify him from initial issuance of a license. Such conduct includes -the indicated bases for initial denial of a license provided in §33.7 of this title (relating to standards for license issuance).
31 Pa. Code §33.21 provides in pertinent part:
(a) The Department may issue, upon receiving certification by any insurance company authorized by law to transact business within this Commonwealth, an agent’s license to any person, copartnership, or corporation who meets the appropriate requirements of this chapter.
*278 (t>) Before any such license is granted the applicant Shall first answer, in writing and under oath, interrogatories on forms and supplements which the Department will prepare and submit. Such answers shall be vouched for by endorsement of the company, association, or exchange interested and to the effect that the applicant is of good business reputation, of experience in underwriting other than soliciting, and is worthy of a license.
Act of September 27, 1961, P.L. 1700, as amended, 63 P.S. §§390-1—390-13.
In Taneredi, two pharmacists wbio challenged the revocation of their licenses to practice claimed that the State Board of Pharmacy had invalidly delegated its rnle-maMng authority and had violated procedural notice and publication requirements by the wholesale incorporation of federal regulations into Pharmacy Regulation 27.18(u).
Under section 703(a), we refused to consider that challenge to the regulations on appeal because (1) there was no factual finding that the board improperly adopted the pharmacy regulations at issue, (2) the pharmacists failed to address the issue of whether the legislature or agency had abrogated their duties to set meaningful violation standards, and (3) the pharmacists had not challenged an almost identical statutory provision under the Pharmacy Act.
The federal double jeopardy provides:
[N]or stall any person be subject for the same offense to be twice put in jeopardy of life or limb. . . .
The Pennsylvania double jeopardy clause provides:
No person shall, for the same offense, be ¡twice put in jeopardy of life or limb. . . .
Mr. Friedman does not challenge the revocation of his license on double jeopardy grounds, only the imposition of the $1,000 fine. See Helvering v. Mitchell, 303 U.S. 391, 399 (because revocation of privilege voluntarily granted is remedial sanction characteristically free of punitive criminal element, such sanction cannot be grounds for doube jeopardy challenge).
1 Pa. C. S. §1921 (b) provides:
When the words of a statute are clear and free from all ambiguity, 'the letter of it is not to be disregarded under the pretext of pursuing its spirit.
In deciding that Congress intended a civil rather than criminal penalty in Helvering, the Supreme Court also found persuasive. (1) the establishment of a civil procedure for the collection of the penalty and (2) a statutory design which imposed “separate and distinct” civil and criminal penalties, depending upon the offense. 303 U.S. at 402-04.
Here, too, the General Assembly has made clear its intention to treat the sanction imposed in this case as civil by (1) establishing an administrative procedure for revocations and fines and by (2) imposing criminal sentences for other violations of the Act. See section 639 of the Act, 40 P.S. §279, concerning notice and hearing requirements, and section 639 of the Act concerning misdeameanor convictions for the violation of sections 633.1 and 636-638, 40 P.S. §§273.1, 276-278.
Because we hold that <tihe commissioner's fine is civil, we need not reach Mr. Friedman’s dual sovereignity argument.
Article 1, section 6 provides in pertinent part:
Trial by jury shall be as heretofore, and the right thereof remain inviolate.