Opinion ID: 1796802
Heading Depth: 1
Heading Rank: 3

Heading: c. what the experts say

Text: Although the factors cited above, regarding what the plurality says Regency should have disclosed to the McCullars, are juxtaposed with the conclusion that Regency may have acted fraudulently, the opinion directs more attention to another issue, and for good reason. The issue of the legality of the credit insurance policy is fatal to the plaintiff's claim. It is clear from the affidavits of Mr. Dyer, consulting actuary for the State of Alabama Department of Insurance, and Mr. Floyd, supervisor of the Bureau of Loans for the State of Alabama Banking Department, that Regency and Universal in no way violated Ala.Code 1975, § 5-19-20 (part of the Mini-Code) or State Department of Insurance Regulation No. 28, § III(A) and (B). The State Banking Department is the agency charged under the Mini-Code with making the regulations and rules under which the Mini-Code is administered. The plurality opinion states that the agencies have misinterpreted the statute. The agencies have interpreted the statute and the regulation this particular way for approximately 25 years. Their interpretation is correct, and it is in accord with the rule in a majority of the states of this country. (See Appendix.) Even if the agencies had misinterpreted the statute, Regency and Universal, who have relied on the agencies' interpretation for years, should not be charged with fraud, because they misrepresented nothing to the McCullars. Why would they try to misrepresent something that to their knowledge was completely legitimate and in accord with Alabama law and regulations? Judge Cherner of the Tenth Judicial Circuit of Alabama faced almost identical facts in a case in 1986. One piece of history indicating how long credit insurance has been issued as a total of payments type of policy in the State of Alabama is that case, Payne v. Ford Motor Credit Co. and Belcher Motor Co. (Jefferson Circuit Court, CV-83-5010601, August 18, 1986). In that case, Judge Cherner entered a summary judgment. Mr. Floyd provided an affidavit in that case that is almost identical to the affidavit he provided in this case. Judge Cherner noted the importance of courts' giving deference to administrative agencies and their interpretation of statutes, quoting a very appropriate statement from a decision of the United States Court of Appeals for the Fifth Circuit: But it is an axiom of judicial review that an administrative agency's interpretation of its own regulations must be accorded the greatest deference. Udall v. Tallman, 1965, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801, 13 L.Ed.[2d] 616, rehearing denied, 380 U.S. 989, 85 S.Ct. 1325, 14 L.Ed.2d 283; Bowles v. Seminole Rock & Sand Co., 1945, 325 U.S. 410, 413-414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700, 1702. When, as here, that interpretation obviously incorporates quasitechnical administrative expertise and a familiarity with the situation acquired by long experience with the intricacies inherent in a comprehensive regulatory scheme, judges should be particularly reluctant to substitute their personal assessment of the meaning of the regulation for the considered judgment of the agency. If the agency interpretation is merely one of several reasonable alternatives, it must stand even though it may not appear as reasonable as some other. Allen M. Campbell Co. General Contractors, Inc. v. Lloyd Wood Construction Co., 446 F.2d 261 (5th Cir.1971). How does the plurality opinion stand up to that standard? Not very well.