Opinion
CV125015628S.
11-20-2012
Michael J. LAGUEUX v. Thomas B. LEONARDI, Insurance Commissioner.
UNPUBLISHED OPINION
HENRY S. COHN, Judge.
The plaintiff, Michael J. Lagueux, appeals from a May 16, 2012 final decision on reconsideration issued by the defendant Thomas B. Leonardi, Insurance Commissioner (the commissioner). The commissioner denied reconsideration of his April 30, 2012 decision approving an April 25, 2012 hearing officer's decision that had sustained the insurance department's rejection of the plaintiff's application for an insurance producer's licence.
Because the plaintiff was denied an insurance producer's license by the commissioner, he is aggrieved for purposes of § 4-183(a).
On April 25, 2012, the hearing officer issued a proposed decision that became final on the approval of the commissioner. The hearing officer made the following findings of fact.
1. Petitioner [Lagueux] was convicted after a jury trial, following not guilty pleas, on four counts of Harassment in the Second Degree in violation of Conn. Gen.Stat. Section 53a-183, a class C misdemeanor, on November 8, 1996 based on a December 29, 1995 charge brought by Danbury Police. He was sentenced to three months in jail, execution suspended; two years probation with psychiatric evaluation and/or treatment a condition of probation; and was fined $500.
2. Petitioner was convicted of two counts Harassment in the Second Degree on October 23, 1996 after pleading guilty to those counts based on an April 22, 1996 arrest by New Milford police. He was sentenced to 90 days in jail, execution suspended; and one year of probation, with psychiatric treatment and/or evaluation a condition of probation.
3. Petitioner was convicted after a trial, following a not guilty verdict, of Harassment in the Second Degree on January 14, 1999 based on a November 16, 1998 arrest by Danbury police. He was sentenced to 90 days in jail, 30 days to serve; and one year of probation.
4. Petitioner was convicted of violation of probation in violation of Conn. Gen.Stat. § 53a-32, an unclassified misdemeanor, on June 3, 1999, and his probation based on a prior charge of Harassment in the Second Degree was revoked. He was sentenced to 60 days in jail.
5. Petitioner was convicted after pleading guilty to Criminal Trespass in the Second Degree in violation of Conn. Gen.Stat. § 53a-108, a class B misdemeanor, on December 11, 1998 based on a December 7, 1998 charge brought by Danbury police. He was fined $75.
6. Petitioner applied for a Connecticut resident producer license by an application dated June 30, 2011.
7. In a statement dated June 30, 2011 accompanying his application, Petitioner described in detail the facts surrounding his convictions, and also stated the following in describing his violation of probation:
On 6/3/1999, I was convicted for violation of Connecticut General Statute 53a-32 Violation of Probation. I paid the psychiatrist $240 per session twice a month and lost days of work to show up [to] be lectured about how repeat offenders like me who spent time in prison had to be rehabilitated so as not to relapse into criminal acts of aggression against society once again. I never explained to my boss at work why I didn't show up because I hated working in construction anyways. It was nothing but a bunch of drunks and druggies and I neither drank nor did drugs and it felt like I only went to work to pay taxes, union dues, gas, and the shrink who would rather bust my balls because I wrote these completely pathetic letters to women who would rather send me to prison than to go out on a date with me or give me the time of day to let me know that they already had a boyfriend, a husband, or were just flat out not interested in my completely neurotic ass. I lost my job and I went to my last appointment and told the shrink in confidence that my $240 paid to him would be better spent hiring a whore to get me laid and that his services were no longer needed as far as I was concerned. I refused to set up another appointment with him and I didn't show up to my probation officer's appointment until after work at my new job was complete. On 5/26/1999, I was arrested, at the Office of Adult Probation in Danbury, with an outstanding warrant for failing to show up that morning to meet with my probation officer who called in two police officers to handcuff me and bring me to jail and told me, " You've violated the conditions of your probation. Making an appointment with me is like making a Doctor's appointment. You can't just show up when you feel like it! The Judge is going to have to deal with you now." I went before the same Magistrate who convicted me on 1/14/1999, and he sentenced me to the maximum sentence of 60 days on 6/3/1999 for Violation of Probation on the original charge of Harassment in the 2nd Degree.
8. Petitioner's Application was denied by the Connecticut Insurance Department (" Department") in a letter from the Connecticut Insurance Department Licensing Unit dated December 19, 2011. The letter concluded, " Because the Department is charged with protecting the public interest, under sections 38a-702k, 38a-774 and 38a-769 of the Connecticut General Statutes, we are denying your request for a Producer's license." Counsel for the Department stipulated at the hearing that denial of his license application was not based on Conn. Gen.Stat. § 38a-702k.
9. The underlying facts that led to the Petitioner's criminal charges and convictions are (in chronological order):
a. He sent four letters that alarmed the recipient and her parents to an 18 year old woman he knew from elementary school to her home in Danbury in 1995. He was 19 at the time.
b. He sent two letters that alarmed the recipient to a 19 year old woman he knew from elementary school to her home in New Milford in 1995 and 1996. He was 19 at the time.
c. He sent a letter in 1998 that alarmed the recipient, her father-in-law and her mother-in-law, to an employee of a medical supply company where he had been a customer.
d. He was convicted of violation of probation after his conviction based on the 1998 arrest. As discussed in Finding of Fact # 7, he also ended his psychiatric treatment and failed to show up for an appointment with his probation officer.
e. He trespassed at the Ridgefield Athletic Club while looking for a rest room in 1998.
10. In describing what he argued was rehabilitation, Petitioner noted that it has been more than 12 years since his last misdemeanor conviction, he has received an associate's degree from Naugatuck Valley Community College, a bachelor's of arts degree from Western Connecticut State University, and a Master's of Business Administration degree from Southern Connecticut State University. He has also volunteered as a hospital volunteer at Midstate Medical Center for 82 hours and received two " Midstate Moment" recognitions for outstanding volunteer service, and was also an emergency medical technician.
11. Amy Stegall, program manager for the fraud and investigations unit, indicated Petitioner's letter explaining his criminal convictions, especially the reference to his violation of probation, caused concern because of its hostile tone, did not comply with court ordered actions and willingly violated his probation, and that he did not comply with court ordered actions. Ms. Stegall testified that licensees are frequently in contact with members of the public in their businesses and homes, have access to consumers' personal information and are subject to stress in their sales role when policies are not sold. Ms. Stegall testified that a combination of the nature of Petitioner's offenses, and the language used in the letter accompanying his application, raised a concern he could be an aggressive person.
12. In his petition for a hearing, Petitioner wrote:
I seek remedy through the legal right to be licensed by the state of Connecticut to be meaningfully employed despite the clear and evident desire to violate public policy by the state of Connecticut Insurance Commissioner, Thomas Leonardi, which is grounds for decommission, termination and/or resignation, so I might be protected under the law by a newly appointed commissioner who takes his role as protector to include my rights.
Commissioner Leonardi was not the author of the letter denying Petitioner his license application, and his only significant role in this proceeding at this point has been to appoint the undersigned as hearing officer.
13. Based on the above subordinate findings of fact, the undersigned finds that cause exists to deny Petitioner a producer's license pursuant to Conn. Gen.Stat. § 38a-769 in that (a) the Insurance Department has demonstrated that granting the Petitioner an insurance producer license would not be in the public interest; (b) the Insurance Department has demonstrated that the Petitioner is not trustworthy; and (c) the Petitioner has not furnished satisfactory evidence that he is a person of good moral character.(Return of Record, ROR, pp. 2-15.)
As seen in the language of Finding # 13, the commissioner relied on § 38a-769(c) and (d) in denying the plaintiff's application to be an insurance producer. The commissioner's reliance on § 38a-769 forms the sole basis of the plaintiff's appeal. The plaintiff claims that the provisions of § 38a-769 are inapplicable to one who has applied for an insurance producer's license, that is governed by § 38a-702e. The commissioner disagrees and finds that § 38a-769(c) and (d) are applicable in his review of the plaintiff's application.
Section 38a-769(c) provides in part: " Each applicant for a license shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and that the applicant is financially responsible." Section 38a-769(d) provides in part: " Upon finding that an applicant meets the licensing requirements of this title and is in all respects properly qualified and trustworthy and that the granting of such license is not against the public interest, the commissioner may issue to such applicant the license applied for, in such form as the commissioner may adopt, to act within this state to the extent therein specified."
The plaintiff stated at oral argument in this court on September 13, 2012 that while there were other arguments set forth in his brief he was now raising only the statutory interpretation issue as his ground of appeal.
In deciding the necessary statutory construction in this appeal, the court will not defer to the commissioner's interpretation as the issue " has not been subjected to judicial scrutiny or to a government agency's time-tested interpretation." Shanahan v. Dept. of Environmental Protection, 305 Conn. 681, 717, 47 A.3d 364 (2012). Shanahan continues: " Accordingly, in the present case, we exercise plenary review in accordance with our well established rules of statutory construction." Id.
The court asked the commissioner to set forth any other proceedings in which § 38a-769(c) and (d) had, since the enactment of P.A. 01-113, been applied to insurance producers. The exhibits subsequently produced by the commissioner showed that these statutory provisions were often used in conjunction with other statutes, among others § 38a-702k. Section 38a-702k clearly applies to insurance producers. There was only case where § 38a-769 was cited as the section under which the producer's license was issued, but the commissioner did not supply any information as to the statute under which the license was revoked. As discussed below, only on the enactment of P.A. 01-113, did the issue first arise as to whether § 38a-769 applied to insurance producers in totality. The citations of the commissioner do not convince the court that the commissioner has made a " time-tested interpretation."
Our Supreme Court has set forth these rules of statutory construction as follows: " Under these principles, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of the case, including the question of whether the language actually does apply ... The sources to which we may look to make this determination are limited by the legislature's plain meaning rule. See General Statutes § 1-2z (‘ The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra textual evidence of the meaning of the statute shall not be considered.’)." (Brackets omitted; internal quotation marks omitted.) University of Connecticut v. Freedom of Information Commission, 303 Conn. 724, 733, 36 A.3d 663 (2012).
Turning to the issue raised by the plaintiff, prior to the enactment of P.A. 01-113, § 38a-769(a) provided that a person desiring to perform certain insurance-related tasks in this state had to make a written application to the commissioner for a license. One of the occupations covered by § 38a-769 was an insurance producer. Section 38a-769(c) required the applicant to demonstrate good moral character, and financial responsibility, and pass a written examination to test trustworthiness and competency. Section 38a-769(d) permitted the commissioner to issue a license to an applicant that met " the licensing requirements of this title and is in all respects properly qualified and trustworthy and that the granting of such license is not against the public interest ..."
In November 1999, Congress enacted the Gramm-Leach-Bailey Act that included reforms to the insurance producer licensing industry. 15 U.S.C. § 6751 et seq. In response to this federal legislation, the National Association of Insurance Commissioners adopted the Producer Licensing Model Act. This led to our legislature enacting P .A. 01-113, following the Model Act. This public act led to the phrase " other than an occupation as an insurance producer" being added to § 38a-769(a). It also led to § 38a-702e, new provisions related to an application for an insurance producer license. P.A. 02-19 also added further provisions relative to obtaining such a license that became subsections (e), (f), and (g) to § 38a-702e.
Section 38a-702e(a) provides that the commissioner shall not approve an application for an insurance producer's license unless (1) the applicant is at least eighteen, (2) " has not committed any act that is a ground for denial, suspension or revocation set forth in section 38a-702k, " (3) has completed, where required by the commissioner, a course of study, (4) has paid the requisite fees, and (5) successfully passed an examination for the lines of authority for which the applicant has applied.
Section 38a-702k(e) sets forth parameters of the course of study as well as an experience and training exception to the study requirement.
Section 38a-702k(f) sets forth a waiver provision for the examination requirement.
The applicant, as seen above, must satisfy § 38a-702k. This section allows the commissioner to refuse to issue an insurance producer's license where the applicant has provided incorrect, misleading, incomplete or materially untrue information on the application, violated insurance law, regulation or order, attempted to obtain a license through fraudulent misrepresentation, has been convicted of a felony, has committed any insurance unfair trade practice, has used practices exhibiting incompetence, untrustworthiness or financial irresponsibility in business, improperly using notes or reference materials to complete the required examination, failing to pay a child support obligation or failing to pay state income tax.
The court makes the following observations in light of these statutes adopted to meet the Model Act. First, the commissioner stipulated that the plaintiff did not commit any of the violations set forth in § 38a-702k. (ROR, p. 10.) Secondly, § 38a-702f states that the applicant shall be issued a license unless he has not complied with § 38a-702d (the examination requirement), § 38a-702e (the general application requirement) or § 38a-702k (violations).
Third, the three sections cited by the hearing officer that refer to § 38a-769 in the discussion portion of his proposed final decision (ROR, p. 10) do not support the applicability of § 38a-769(c) and (d) to an applicant for an insurance producer's license. Section 38a-709(b) regulates notice to a producer of termination of a contract an insurer. This section was enacted prior to the comprehensive revision of the Model Act. In addition, it refers to an insurance producer " licensed under section 38a-769." The specific terms of § 38a-769(a) no longer subject the producer to licensor under § 38a-769. Section 38a-760a(4), a definitional section of the Reinsurance Intermediary Act, and § 38a-880, establishing an insurance producer guaranty fund, also were adopted before the Model Act and refer to producers licensed under § 38a-769.
Fourth, the provisions of § 38a-702e and § 38a-769 are not consistent, showing that the legislature, when it enacted the Model Act revisions, did not intend that insurance producers would fall under any provisions of § 38a-769. By § 38a-702e, subject to exceptions, there is a requirement of a prelicensing course of study and an examination. In § 38a-769(c), there is only a testing requirement with § 38a-769(e) granting permission to the commissioner to issue regulations regarding schools offering courses in insurance.
Finally, § 1-2z requires the court in construing a statute to consider not only the text of the statute but also to consider the statute's relationship to other statutes. This is a summary of the rule of the doctrine of in pari materia: " [Under this rule] statutes relating to the same subject matter may be looked to for guidance in reaching an understanding of the meaning of a statutory term ... [T]he words of a statute are to be construed with common sense ... If a statute is capable of two constructions, one that is rational and effective in accomplishing the evident legislative objective, and the other leading to bizarre results destructive of that purpose, the former should prevail." (Citations omitted; internal quotation marks omitted.) State v. Pommer, 110 Conn.App. 608, 616-17, 955 A.2d 637 (2008).
In light of the Model Act that contains both a new method of applying for an insurance producer's license and a provision on disqualifying violations, the relationship of statutes shows that § 38a-769, in all its provisions, no longer applies to applicants for an insurance producer's license. The statutory scheme is plain, so that legislative history may not be consulted. See Germain v.. Manchester, 135 Conn.App. 202, 204-05, n. 3, 41 A.3d 1100 (2012).
The commissioner argued in his brief at page 17 that the public act summary (of the office of legislative research) demonstrated that § 38a-769's references to good moral character and trustworthiness still were applicable to insurance producers. Under § 1-2z however, the court does not rely on this legislative history.
The court agrees with the plaintiff that § 38a-769(c) and (d) do not apply to applicants for an insurance producer's license. See also Ofili v. Sullivan, Superior Court, judicial district of New Britain, Docket No. 10-6003402 (September 28, 2011, Cohn, J.) [ 52 Conn. L. Rptr. 739] (insurance commissioner lacked statutory authority to impose restitution on insurance producer when revoking his license for violations of § 38a-702k).
The court's legal conclusion does not resolve this appeal, however. Under § 4-183(j) and (k), the appeal may be not be sustained " where more than one outcome is possible on remand." Dufraine v. Commission on Human Rights & Opportunities, 236 Conn. 250, 264-65, 673 A.2d 101 (1996).
Here the hearing officer in his discussion portion of the proposed final decision stated: " Because there is an element of criminal conduct in determining whether Petitioner's application is in the public interest, and whether he is trustworthy and a person of good moral character; it is important to consider the requirements of Conn. Gen.Stat. § 46a-80. Section 46a-80(a), provides that a person shall not ‘ be disqualified to practice, pursue or engage in any occupation, trade, vocation, profession or business for which a license, permit, certificate or registration is required to be issued by the State of Connecticut or any of its agencies solely because of a prior conviction of a crime.’ "
The hearing officer continues: " Section 46a-80[c] then provides in pertinent part ‘ [A] person may be denied a license ... to pursue, practice or engage in any occupation, trade, vocation, profession or business by reason of the prior conviction of a crime if after considering (1) the nature of the crime and its relationship to the job for which the person has applied; (2) information pertaining to the degree of rehabilitation of the convicted person; and (3) the time elapsed since conviction or release, the state, or any of its agencies determines that the applicant is not suitable for the ... specific occupation, trade, vocation, profession or business for which the license ... is sought.’ " Finally, the hearing officer concludes by noting that " § 46a-81(a) provides that the previous provisions prevail over any other statutes ‘ which purport to govern the suspension or revocation of a license, permit, certificate or registration on the grounds of conviction of a crime.’ " (ROR, pp. 11-12).
The hearing officer incorrectly gives this citation as § 46a-80(b).
The hearing officer omitted the portion of § 46a-81(a) that provides that denials of licenses are also covered by its provisions.
The citation to these sections is also found in another matter considered by the commissioner after the enactment of § 38a-702e. See In the Matter of DeLucia, Docket No. LI 10-48 (June 25, 2010).
The hearing officer then partially analyzes the application of these provisions to the plaintiff's rehabilitation. However, the hearing officer never makes complete factual findings on §§ 46a-80(a), (c) and 46a-81(a). In addition, the hearing officer concludes the discussion of these sections by raising again § 38a-769. (ROR, pp. 12-13.) It is appropriate for the commissioner to reconsider the matter under his authority given by §§ 46a-80(a), (c) and 46a-81(a).
The commissioner may elect to hold a new hearing or to confine his review to the record as it currently stands.
The court, having found pursuant to § 4-183(j)(4), that the commissioner made an error of law in his approval of the denial of the plaintiff's application for an insurance producer's license, hereby remands the matter to the commissioner for further proceedings in accordance with this opinion.