Title: Evanson v. Wigen
Citation: 221 N.W.2d 648
Docket Number: 9012
State: north-dakota
Issuer: north-dakota Supreme Court
Date: August 30, 1974

221 N.W.2d 648 (1974) Richard E. EVANSON, Petitioner/Appellee, v. J. O. WIGEN, Commissioner of Insurance, Respondent/Appellant. No. 9012. Supreme Court of North Dakota. August 30, 1974. *649 Thomas O. Smith, Sp. Asst. Atty. Gen., Dept. of Ins., Bismarck, for respondent/appellant. McGee, Hankla, Backes &amp; Wheeler, Minot, for petitioner/appellee. *650 KNUDSON, Judge. This is an appeal by the Commissioner of Insurance [hereinafter Commissioner] from an order of the district court declaring void the Commissioner's order revoking the licenses of Richard E. Evanson [hereinafter Evanson] as a resident insurance agent, and remanding the matter to the Commissioner for a hearing on the merits. A complaint was filed with the Commissioner by Grayce E. Twito in regard to Evanson's conduct as an insurance agent. Pursuant to the complaint, the Commissioner gave a notice of opportunity for hearing, stating the Commissioner's proposed order: Upon receipt of the notice of opportunity for hearing, Evanson filed with the Commissioner a request for a hearing and asserted therein that the allegations in the complaint were false. Thereupon the Commissioner issued a notice of hearing notifying Evanson that a hearing would be held in the Commissioner's office on September 18, 1973 at 3:00 P.M. CDST. Evanson was neither present nor represented by counsel at the hearing. The Commissioner proceeded in the absence of Evanson with the hearing and received the following documents: Upon the motion by the counsel for the Commissioner and the exhibits received, the Commissioner entered an order revoking Evanson's licenses. The Commissioner's findings of fact, conclusions of law, decision, and order were served upon Evanson by certified mail. Evanson asserts that shortly thereafter he met with the Commissioner and discussed the matter of obtaining a rehearing. The date of the meeting is not clear and the substance of the discussion is in dispute. However, it is agreed that the Commissioner at this time advised Evanson to retain counsel. Whatever may have been the matter discussed, no rehearing was granted by the Commissioner. Evanson then filed with the district court a petition for a judicial review of the proceedings of the Commissioner with an affidavit in support thereof for an order to show cause why the licenses should not be reinstated. The Commissioner filed a motion to vacate the order to show cause and a return to the order to show cause. The matter came on for hearing before the district court, whereat no additional testimony was taken. The court declared the order revoking Evanson's licenses void, and remanded the matter to the Commissioner for a hearing on the merits. It is from this order that the Commissioner appeals. The Commissioner charged Evanson had violated the provisions of paragraphs (e), (h) and (j) of § 26-17-01.12, N.D.C.C., which provides the Commissioner with authority to revoke an insurance agent's license under certain conditions. It provides, in part relevant to this matter: The Commissioner contends, notwithstanding that a request for a hearing had been filed with him, that upon the nonappearance by Evanson at the hearing, the Commissioner could enter the proposed order. This contention is not persuasive. The statute, subsection 4 of § 26-17-01.12, provides that when a hearing is requested and conducted the Commissioner shall make and state his findings of fact and separate conclusions of law and his decision based upon such findings and conclusions. The statute does not state that one must appear at the hearing after requesting it in order to set in motion the requirement that the Commissioner must make findings of fact before making a decision. The language used is an apt method of ensuring that upon a request for a hearing the Commissioner's decision would be based upon a careful consideration of the evidence adduced, rather than upon a mere statement of the allegations in the complaint and upon a motion by counsel for the Commissioner to enter the order. *652 Evanson was entitled to a notice from the Commissioner of the intent to make an order revoking Evanson's licenses regardless of his failure to attend the hearing, as he had made an appearance in the proceeding by his request for a hearing. In the usual civil action, judgment by default may be entered if a party has failed to plead or appear, but if the party against whom judgment is sought has made an appearance in the action he must be served with notice of the application for judgment. North Dakota Rules of Civil Procedure, rule 55, provides: We have held that when a party has made an appearance in an action he must be served with notice of the application for default judgment. It is agreed by the Commissioner and Evanson that the Commissioner of Insurance is an administrative agency within the meaning of the Administrative Agencies Practice Act, Chapter 28-32, N.D.C.C. See Krueger v. American Christian Mutual Life Insurance Co., 77 N.D. 436, 43 N.W.2d 676 (1950); National Farmers Union Life Ass'n v. Krueger, 76 N.D. 619, 38 N.W.2d 563 (1949). But, Evanson urges that Chapter 28-32 is not applicable in this case. Chapter 28-32 is applicable to govern the rules of procedure in all proceedings brought before an administrative agency, except where otherwise excepted by law. In this case, appeals from an order of the Commissioner, unless otherwise specifically provided by law, shall be subject to review on appeal to the courts, in the manner provided by Chapter 28-32. It is argued at length whether or not the meeting between Evanson and the Commissioner constituted a sufficient petition for rehearing as a condition precedent to a judicial review of the Commissioner's order within the meaning of § 28-32-14, N.D.C. C., which reads: *653 In our view, it is not necessary to decide whether or not the oral discussion between Evanson and the Commissioner is sufficient to constitute a petition for rehearing within the meaning of that statute as a condition precedent to taking an appeal. This Court, in Petition of Village of Wheatland (Northern Pacific Ry. Co. v. McDonald), 77 N.D. 194, 220, 42 N.W.2d 321, 336 (1950), said that a petition for rehearing to the administrative agency was not a prerequisite to an appeal, in the following language: and held at Syllabus 10: In the Wheatland case we held that a failure to request a rehearing under § 28-3214, NDRC 1943, did not preclude the railroad from appealing to the district court. In that case the railway company was "not seeking equitable relief. It did not invoke equitable remedies. It invoked the specific legal remedy which the legislature has provided for a review of the decisions of the Public Service Commission." The Commissioner would distinguish the instant case from the Wheatland case because Evanson is seeking equitable relief. But Evanson is not seeking equitable relief. He is invoking "the specific legal remedy which the legislature has provided for a review of the decisions" of the Commissioner in revoking the licenses of insurance agents under the provisions of § 26-17-01.12, N.D.C.C., by petitioning the district court for a review under § 26-17-01.13, N.D.C.C., which provides: On the matter of an appeal from decisions of the Commissioner, § 26-01-16, N.D.C.C., provides: But an order of the Commissioner of Insurance revoking an agent's license under authority of § 26-17-01.12, N.D.C.C., is one that is "otherwise specifically provided for by law" within the meaning of § 26-01-16. Section 26-17-01.12, N.D.C.C., giving the Commissioner authority to revoke the licenses of insurance agents, is immediately followed by § 26-17-01.13, giving an agent aggrieved by an order of the Commissioner revoking his license the right to judicial review of the proceedings. Section 26-17-01.12, subsection 3, N.D.C.C., states that *654 in the conduct of the hearing, the Commissioner shall have the powers specified in Chapter 28-32 and that the proceedings shall conform to Chapter 28-32 so far as applicable and not in conflict with § 26-17-01.12. The reference to Chapter 28-32 is to the hearing itself; no mention is made in § 26-17-01.12 of an appeal being governed by Chapter 28-32. The judicial review provisions of Chapter 28-32 are not exclusive and § 26-17-01.13 is an additional remedy. A review of § 28-32-15, N.D.C.C., which provides for appeals from administrative agency decisions, reveals that a party is not required to exhaust his administrative remedies by requesting a rehearing as a prerequisite to an appeal to the district court. The relevant part of § 28-32-15 reads: The reference in § 28-32-15 to a request for a rehearing before the administrative agency is in the alternative, and is permissive only. The statute provides that any party may appeal from a decision of the administrative agency within thirty days after notice thereof, or if a rehearing has been requested and denied, may appeal within thirty days after notice of such denial. The Commissioner contends that § 26-17-01.13 is a special statute with limited application and should be used only in situations where the Commissioner has arbitrarily or summarily revoked an agent's license without due process, as where he has not afforded an agent proper notice of opportunity for hearing and a notice of hearing as required under § 26-17-01.12. For that proposition, the Commissioner cites the legislative history of § 26-17-01.13 and that of Chapter 28-32 of the North Dakota Century Code. Section 26-17-01.13, N.D.C.C., relating to judicial review of acts of the Commissioner, first was enacted by Section 3 of Chapter 152, Session Laws of 1935, and was codified as Section 26-1705, RC 1943, and subsequently as Section 26-17-05, N. D.C.C. In 1967, however, § 26-17-05, N. D.C.C., was repealed and reenacted by Chapter 230, Section 13, without change in language, and presently appears as § 26-17-01.13, N.D.C.C. The legislative purpose in enacting Section 3 of Chapter 152, Session Laws 1935, was to provide for both the revocation of insurance agents' licenses and judicial review of such revocations by the district court. Codification of Section 3 into two separate sections, § 26-1704, relating to revocation of licenses, and § 26-1705, relating to judicial review of such revocations, in the Revised Code of 1943 did not abrogate an agent's right to a judicial review by the district court of the revocation of his license by the Commissioner. A division of a statute in two parts in reenacting it does not change its meaning. 50 Am.Jur. Statutes § 445. In Jones v. Mills County, 224 Iowa 1375, 279 N.W. 96, 99 (1938), quoting 59 C.J. § 494, page 897, the Iowa Supreme Court stated: This is the rule in North Dakota. The Report of the Code Revision Commission of 1943 affirmatively states that Section 3, Chapter 152, S.L.1935, was revised for separate statement without change in meaning. Therefore, the provisions for the revocation of licenses in § 26-17-01.12 and the provisions for judicial review in § 26-17-01.13, N.D.C.C., should be read together. The Commissioner contends that the appeal must be taken pursuant to Chapter 28-32, N.D.C.C., the Administrative Agencies Practice Act, which came into being in Chapter 240, S.L.1941, as being enacted later in time than the review provisions of § 26-17-01.13. At the time the Administrative Agencies Practice Act was enacted there may have been a question whether the appeal provisions of that Act took precedence over what is now § 26-17-01.13, since Chapter 28-32 was a later declaration of legislative intent. Section 26-17-01.13, N.D.C.C., is a special statute dealing with judicial review of decisions of the Commissioner refusing, suspending, or revoking an insurance agent's license, and at first glance may appear to be in conflict with § 28-32-15, N. D.C.C., which deals with judicial review of administrative agency decisions generally. Although § 26-17-01.13 is a reenactment of an existing statute, it is nevertheless a later declaration of the Legislature. As an aid in interpreting statutes, the Legislature has enacted § 1-02-07, N.D.C. C., which provides: This Court said in First American Bank &amp; Trust Co. v. Ellwein, 198 N.W.2d 84, 98 (N.D.1972): See also, Brusegaard v. Schroeder, 201 N.W.2d 899 (N.D.1972); In re Estate of Jensen, 162 N.W.2d 861 (N.D.1968). *656 Thus, it would appear that § 26-17-01.13, being a special statute in conflict with the general statute on judicial review of agency decisions and being a later enactment, must prevail over § 28-32-15 if the conflict is irreconcilable or it must be construed as an additional, alternative, remedy to be exercised at the option of one who is aggrieved by a decision of the Insurance Commissioner to revoke his license if effect is to be given to both provisions. By enacting Chapter 28-32 the Legislature sought to create uniform rules of practice for the administrative agencies. The Legislature was free, however, to create such exceptions to this scheme as it chose. This the Legislature did in the form of § 26-17-01.13 which was enacted to provide insurance agents with a plain, speedy, and efficient remedy for review of decisions of the Commissioner revoking their licenses. We hold that an order of the Commissioner under § 26-17-01.12 is reviewable in the district court under § 26-17-01.13. The Commissioner contends that although review under § 26-17-01.13 is proper there must be compliance with the requirement of § 28-32-15 that the appellant execute an undertaking in the district court. Section 28-32-15, N.D.C.C., provides that an "undertaking must be executed by the appellant, with sufficient surety to be approved by the judge of the district court." The judge may require none. Also, we have stated that: While that case dealt with an undertaking in an appeal to this Court, an undertaking is likewise not jurisdictional when a district court's appellate jurisdiction is being exercised. Furthermore, since § 26-17-01.13 is either an exception to the appeal provisions of Chapter 28-32 or an additional method of obtaining judicial review of decisions of the Commissioner, it stands alone and there need be no compliance with any of the requirements of § 28-32-15. Even without the benefit of § 1-02-07, § 26-17-01.13 would be a proper avenue of appealing the Commissioner's decision revoking Evanson's license. The Commissioner concedes that appeal under that section would be proper where the Commissioner has arbitrarily or summarily revoked an agent's license without due process. But a decision to revoke a license is arbitrary and capricious when the decision is not based upon findings of fact supported by evidence. Thus, even under the Commissioner's concept of the applicability of § 26-17-01.13, the revocation of Evanson's license was properly appealed under that statute. The Commissioner further urges that § 28-32-19, N.D.C.C., which provides that the evidence considered by the court shall be confined to the record filed with the court applies to a hearing held pursuant to a review by the district court under § 26-17-01.13, and that therefore Evanson's affidavit filed with his petition of review by the district court should not have been considered by the court. However, our statute and rules provide for the use of affidavits upon making a motion. Subsection 6 of § 31-04-05, N.D. C.C.; Rule 43(e), N.D.R.Civ.P. It appears that the trial court issued its order remanding the matter to the Commissioner on its construction of the law, § 26-17-01.13, but if the affidavit was considered *657 by the trial court it was properly considered. In any event, § 26-17-01.13 has already been shown to be either an exception to Chapter 28-32, or an additional avenue to judicial review of the Commissioner's decisions relating to license revocations. The Commissioner made the following findings of fact, conclusions of law, and decision: The designated findings of fact, numbered 1, 2 and 3 (above quoted), are not findings of fact at all, but are mere recitations of the status of Evanson as a duly licensed insurance agent, that he was duly served with the notice of hearing, and that he made no appearance. Section 26-17-01.12, N.D.C.C., provides that the Commissioner may revoke an insurance agent's license if he finds that the agent has committed any of the wrongful acts enumerated therein. The Commissioner's findings of fact do not state that Evanson has committed any of the proscribed acts. The findings do not constitute a basis for the Commissioner's decision to revoke the licenses of Evanson. "While a determination may be upheld where findings, though subject to criticism, are not challenged as to form, the inadequacy of findings alone is ordinarily sufficient reason for reversing a determination." 2 Am.Jur.2d Administrative Law § 458 (1962). The Commissioner's decision is properly reversed on this ground alone. The statute, § 26-17-01.12, N.D.C.C., authorizing the Commissioner to revoke an insurance agent's license for the commission of the proscribed acts enumerated in the statute for which his license may be revoked, provides that "If a hearing is requested. . . the commissioner shall make and state his findings of fact and separate conclusions of law and his decision based upon such findings and conclusions." Subsection 4, Section 26-17-01.12. This statutory requirement of making findings when a hearing is requested is mandatory, and the findings must be germane to the establishment of the acts proscribed by the statute. Inasmuch as the Commissioner has contended that Evanson has not complied with the Administrative Agencies Practice Act in his appeal to the district court, it is interesting to note that Act similarly requires findings of fact. The Act also requires the administrative agency to make findings of fact, conclusions of law and decision *658 based thereon. Section 28-32-13, N.D.C. C., provides that "the agency shall make and state concisely and explicitly its findings of fact and its separate conclusions of law, and the decision of the agency based upon such findings and conclusions." These provisions require the administrative agency to make findings of fact upon evidence adduced, make its separate conclusions of law, and render a decision based upon and supported by the findings and conclusions. Hvidsten v. Northern Pacific Ry. Co., 76 N.D. 111, 33 N.W.2d 615 (1948). This case is therefore remanded to the district court with directions to return the case to the Commissioner of Insurance for further proceedings comformable to law. For reasons stated, the order appealed from is affirmed. ERICKSTAD, C. J., and JOHNSON, VOGEL and PAULSON, JJ., concur.