Court Opinion

ID: 9623097
Source: CourtListenerOpinion
Date Created: 2023-08-22 06:27:38.548694+00
Date Added: 2024-06-11T18:05:23.441244
License: Public Domain

Hunter, J.
(dissenting)—I disagree both with the major-
ity’s interpretation of RCW 48.19.170(2) and with the resulting failure to resolve the major issue presented in this case; namely, who has the responsibility to manage and control insurance rating organizations licensed under that statute. I further think that the case should not be dismissed because the issue is properly presented through the Insurance Commissioner’s unopposed intervention. In addi*910tion, I would affirm the trial court because the trial court’s solution properly causes the Washington Surveying and Rating Bureau (Bureau) to be administered and controlled pursuant to the licensing requirements of RCW 48.19.170(2), and in the absence of improper connections with any insurer. Therefore I dissent.
The purpose of the statutory scheme in RCW 48.19.170, as the majority points out, is to permit the insurance companies to act together in determining rates notwithstanding anti-trust implications. But, as the majority also notes, any connection between a rating organization and its insurer subscribers permitted by RCW 48.19 is an exception to the anti-compact section of the insurance code, see RCW 48.30.020, and must be strictly construed. See Insurance Co. of N. America Cos. v. Sullivan, 56 Wn.2d 251, 257, 352 P.2d 193 (1960). In order to come within RCW 48.19.170(2), therefore, a rating organization must meet the requirements set forth therein, and it is this statute alone that sets forth the conditions that must be met in order for a license to issue.
Consequently, the controlling issue in the present case is the interpretation of RCW 48.19.170, which as admitted even by the majority is somewhat undefined. At this point it also should be noted that any prior administrative interpretations of the statute by insurance commissioners is never controlling upon the courts in determining legislative intent as to what a statute means. See Hama Hama Co. v. Shorelines Hearings Bd., 85 Wn.2d 441, 448, 536 P.2d 157 (1975).
A reading of the statute, however, ineluctably demonstrates that any interpretation must include who has the duty to manage and conduct a rating organization licensed thereunder “as a nonprofit public service institution.”9 The statute, after stating that the ownership of a rating organi*911zation shall be vested in trustees, goes on in the same sentence to state the fashion in which it shall be conducted. I interpret this to mean that the trustees as nominal owners of the rating organization are also the ones with the responsibility for its conduct and operation in compliance with the statute. Under the scheme set up pursuant to the statute, the trustees are the only logical parties to do so and it appears that this is what the legislature intended.
Undoubtedly, the legislature intended to prevent the insurance companies from combining to set rates, and yet still allow the operation of rating organizations set up by the insurance industry. This is the reason the statutory scheme requires that ownership be placed in the hands of trustees for rating organization subscribers rather than in the subscribers themselves. In addition, RCW 48.19.170 (2) (c) explicitly prohibits any connection between the rating organization and the insurance subscribers other than as subscribers.
The statute, however, which defines the required conditions for licensing of rating organizations is the sole basis for permitting a rating organization to operate. Certainly the connection resulting from the trustees’ relationship with the subscribers as trustees is not, as the majority suggests, the type of connection to which RCW 48.19.170(2) (c) is directed. The more sensible interpretation of these provisions is that the trustees have a duty imposed by statute to conduct the rating organization as required by RCW 48.19.170(2), the statute without which such organizations could not exist at all. The prohibition against any connection between a rating organization and its subscribers does not include the trustee relationship itself, which is, after all, subject to RCW 48.19.170(2), which allows rating organizations in the first place. In other words, the trustees have a statutory duty to conduct the rating organization in accordance with RCW 48.19.170(2); the statute necessarily gives them the power to do so in order to carry out the purpose of the trust, which exists only by virtue of the specific legislation.
*912Moreover, it is wholly inappropriate to send this case back to the Commissioner for a determination of who has the duty to control and direct a rating organization licensed under RCW 48.19.170(2). The question is one of statutory interpretation and is clearly judicial in nature. See State ex rel. Humiston v. Meyers, 61 Wn.2d 772, 777, 380 P.2d 735 (1963). As such, in the final analysis it can be settled only by this court. See Floe v. Cedergreen Frozen Pack Corp., 37 Wn.2d 886, 226 P.2d 871 (1951); cf. In re Juvenile Director, 87 Wn.2d 232, 241, 552 P.2d 163 (1976). Any determination made by the Commissioner will not be binding on a review court because the interpretation of the statute is a pure question of state law of which this court is the final arbiter. See Leschi Improvement Council v. State Highway Comm’n, 84 Wn. 271, 286, 525 P.2d 774 (1974); Zappala v. Industrial Ins. Comm’n, 82 Wash. 314, 321, 144 P. 54 (1914). This is true since, as mentioned earlier, an administrative interpretation, while entitled to great weight where a statute is ambiguous, is still never controlling upon the courts. See M & M Leasing Corp. v. Seattle-First Nat’l Bank, 391 F. Supp. 1290, 1295 (W.D. Wash. 1975) (Sharp, J.); Hama Hama Co. v. Shorelines Hearings Bd., supra. Even the parties cannot bind the court by their stipulations of law. See Rusan’s, Inc. v. State, 78 Wn.2d 601, 606, 478 P.2d 724 (1970). Similarly, the legislature may not take from the courts the right to determine the law, and furthermore, it would be impermissible for the courts to surrender “the duty imposed upon them by the constitution to determine the law.” In re Buffelen Lumber & Mfg. Co., 32 Wn.2d 205, 209, 201 P.2d 194 (1948). Thus, it is entirely improper in the present case for this court in effect to remand to the Commissioner the basic question of who has the responsibility to conduct a rating organization in compliance with RCW 48.19.170. The interpretation of the statute is an obligation of this court and I would adopt the interpretation expressed above.
I also, of course, disagree with the majority’s disposition of this case. Even if the plaintiffs other than the Commis*913sioner may properly be relegated to administrative remedies, there can be no doubt that the Commissioner may resort to the courts in order to enforce compliance with his regulations or applicable statutory provisions. RCW 48.02.080(3) specifically provides:
If the commissioner has cause to believe that any person is violating or is about to violate any provision of this code or any regulation or order of the commissioner, he may:
. . . and/or
(b) bring an action in any court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance thereof.
The majority’s passing reference to this section does not adequately demonstrate any limitation upon the Commissioner’s power to bring an action pursuant to this section. Since the Commissioner has the power and authority to institute and pursue court actions in order to enforce statutory provisions whenever they are being violated, then surely he can intervene in ongoing lawsuits to accomplish the same result. The majority recognizes this, at least tacitly, when it disposes of the standing issue based on the statutory standing of the Commissioner.
In the present case, the Commissioner chose to proceed with this particular method of enforcement by intervening in a private lawsuit seeking to enforce the statutory requirements of RCW 48.19.170. There is no reason to compel the Commissioner to utilize other procedures that may be available to him, especially in light of the legal nature of the question involved, as mentioned above. Furthermore, any decision of the Commissioner in this matter will be subject to the review procedures of the administrative procedures act, see RCW 34.04.150, and thus will present questions upon which the superior court, and ultimately this court, must pass. See RCW 34.04.070; .080; .130; .140.
Likewise, the Commissioner is not, as the majority suggests, precluded by any prior position on this matter from *914now exercising the statutory power contained in RCW 48.02.080(3) (b).
The failure of [state officers] to enforce any law may never estop the people to enforce that law either then or at any future time. It would be as logical to argue that the people may not proceed to convict a defendant of burglary because the sheriff perhaps saw him and failed to stop him or arrest him for another burglary committed the night before.
Kueckelhan v. Federal Old Line Ins. Co., 69 Wn.2d 392, 413, 418 P.2d 443 (1966), quoting Caminetti v. State Mut. Life Ins. Co., 52 Cal. App. 2d 321, 325, 126 P.2d 165 (1942). RCW 48.02.080(3) (b) unambiguously empowers the commissioner to utilize court actions to enforce statutory requirements. The failure of the Commissioner previously to challenge the appellants’ interpretation of the statute cannot prevent him from now enforcing the mandate of RCW 48.19.170(2) via court proceeding.
In addition, I would affirm the trial court upon the following reasoning. The Trust Declaration related to the Bureau specifically states its purpose as “enabling said Bureau to qualify under [RCW 48.19.170] .” It also states that the trustees are subject to the direction of the insurance company subscribers and that the subscribers may remove the trustees by majority vote. The trial court properly disregards this latter aspect of the Trust Declaration and gave effect instead to its stated purpose of qualifying the Bureau under RCW 48.19.170. The alternative would have been suspension of the license since such subscriber control over the trustees would be contrary to RCW 48.19.170 (2) (c). The trustees in any event have no duty to comply with any trust provision that is illegal or contrary to public policy. See Restatement (Second). of Trusts §§ 60, 62, 65, 166 (1959). The last mentioned provision is certainly contrary to the requirements and the public policy of RCW 48.19.170 and thus the trustees are under no duty to comply with it. Consequently, proper trustees may conduct the Bureau in the fashion necessary to qualify it under the conditions of the licensing statute.
*915The trial court, in the exercise of its equitable power to carry out the purpose of the statute and the public interest involved, and the trust declaration pursuant thereto, properly removed the trustees who are directly connected with the insurance industry, and appointed trustees qualified to operate the bureaus independent of the control of the insurance industry or the insurance subscribers. See 76 Am. Jur. 2d Trusts § 130 (1975). See also 27 Am. Jur. 2d Equity § 104 (1966); Virginian Ry. v. System Federation No. 40, Railway Employees, 300 U.S. 515, 81 L. Ed. 789, 57 S. Ct. 592 (1937).
The majority for the first time has raised the issue of the joinder of the insurance subscribers in the action. The record shows, however, that the Washington Surveying and Rating Bureau, the Washington Bureau (a corporation), the trustees, and Roe Corporations 1 through 200, were joined as parties to this action in the summons and complaint. The record is silent as to proper service having been obtained.
In any event, I see no necessity of joining the some 200 insurance subscribers who, by the statute, were prohibited from having any connection with or control over the trustees.
For the reasons heretofore stated, I would affirm the trial court.
Rosellini, J., concurs with Hunter, J.

 The text of RCW 48.19.170(2) (b) reads as follows:
“The ownership of such rating organization shall be vested in trustees for all its subscribers under such trust agreement as is approved by the commissioner, and the rating organization shall be and shall be conducted as a nonprofit public service institution.”