Court Opinion

ID: 9545359
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:10:31.306451+00
Date Added: 2024-06-11T15:14:33.544328
License: Public Domain

Rosellini, J.
(dissenting)—This action was instituted against the then Insurance Commissioner Karl Herrmann and his wife, and the companies which provided his official bond. Also named as defendants were certain individuals and companies engaged in the business of insurance in this state, an individual who allegedly purchased an asset of one of these companies then in receivership, an individual appointed by the Commissioner to conduct the receivership and to perform other services, and an individual who allegedly received payments of state funds under a contract with *357the Insurance Commissioner during the period covered by the complaint.
The complaint alleged eight causes of action. The first cause of action stated:
Between January 1, 1969, and the present date, defendant Karl Herrmann has committed acts of malfeasance, misfeasance or nonfeasance in public office, specifically the office of Insurance Commissioner, and/or used the powers of said office for the private financial benefit of himself and/or other persons in breach of the public trust imposed upon said defendant by law, and in violation of law.
With respect to this "cause of action" the Attorney General prayed for "such damages and other relief as the court may deem just and equitable."
The second cause of action alleged, in effect, that Herrmann (hereinafter called the Commissioner), by means of official acts, aided the defendants Federated American, Thompson, and Financial American Life, in consummating a transaction favorable to them but contrary to the public policy of the State. This transaction involved the sale of a permit issued prior to the Commissioner's tenure but allegedly extended by him in several successive actions. The purchaser allegedly paid $50,000 to the holder of the permit, of which $10,000 was allegedly paid to the Commissioner. The complaint alleged that the extensions were made without good cause and for the private financial benefit of certain private persons and entities, and that they resulted in "a breach of trust which directly resulted in financial benefit to said defendants, including the defendant Karl Herrmann, in the amount of $50,000 or more."
Upon this cause of action, the Attorney General prayed for judgment against the defendants involved in the transactions, including the Commissioner, in the amount of $50,000, and against one of the Commissioner's bondsmen.
The third cause of action alleged that the defendant McAfee, acting as special deputy insurance commissioner in charge of the receivership of Federal Old Line Insurance *358Company, negotiated a sale of one of its assets to a person with whom he was closely associated and who held the property partly for his benefit; that a subsequent resale of the property resulted in a profit to the purchaser and McAfee of $34,000; and that this transaction constituted a breach of trust on the part of McAfee. It was further alleged that the Commissioner knew or should have known of this transaction and that his participation in or failure to prevent the acts alleged constituted a breach of public trust, misfeasance, malfeasance or nonfeasance on his part.
For a fourth cause of action, the complaint alleged that the acts described in the third cause of action constituted a violation of RCW 42.18, the Executive Conflict of Interest Act, as a result of which the special deputy and the purchaser of the asset received an unlawful benefit in violation of the chapter, in the amount of $34,000. This cause of action again alleged the Commissioner's involvement.
It was alleged in the fifth cause of action that the sale and subsequent resale of the Federal Old Line assets constituted violations of RCW 42.20.010, .010(3), .040 (misconduct of public officers), RCW 42.21.030 (code of ethics for public officials), and RCW 42.22.030 (code of ethics for public officers and employees). The complaint alleged that the three defendants were jointly and severally liable for the profits received by them.' The prayer with respect to the third, fourth and fifth causes of action asked for judgment in the amount of $34,000 against the individuals involved and against the Commissioner's bonding companies in the amount of their bonds. Also, penalties in the sum of $306,000 were demanded in the fourth cause of action.
The sixth cause of action sought recovery of $6,000 from the Commissioner and Ohio Casualty Company. This amount was allegedly paid to one McEvoy for a contract which was not performed.
The seventh cause of action alleged that, according to the belief of the Attorney General, certain services required by a contract which the Commissioner entered into with the defendant McAfee were not performed by him, but were *359performed by persons in the Commissioner's office. It was alleged that the Commissioner knew this or should have known it and that "the payment of $27,500 under that contract constituted malfeasance, misfeasance or nonfeasance on the part of Herrmann." The prayer asked for judgment against these two defendants in that amount and against Ohio Casualty Company in the amount of $25,000.
In the eighth and final cause of action, it was alleged that the State of Washington had expended $41,897.87 of state funds for expenses, including compensation of a special deputy acting for the Insurance Commissioner in connection with delinquency proceedings involving Federal Old Line; that RCW 48.31.120(6) requires that such compensation and expenses be paid from the funds or assets of Federal Old Line, and that the defendant Guaranty Association is liable for the payment of those amounts under RCW 48.32A. It further alleged that the Guaranty Association refused to pay more than $29,604.58; that the Commissioner knew or should have known of the expenditures and should have taken some action to prevent them or recover the funds and that his failure to do so constituted misfeasance or nonfeasance. The prayer asked for judgment in the amount of $12,293.29 against the Guaranty Association and the Commissioner.
Nowhere in this complaint is there any allegation that, as a result of acts of the Commissioner, the State of Washington suffered damage. The first cause of action is so vague that it can be viewed only as an introduction to the succeeding causes of action, which specify the actions of which complaint is made, and even there it is not claimed that the State had suffered injury to its person or property.
The term "damages" in its legal sense is the compensation which the law will allow for an injury done. State ex rel. Macri v. Bremerton, 8 Wn.2d 93, 111 P.2d 612 (1941). Compensation is the fundamental principle of the law of damages. Ross v. Norton, 36 Wn.2d 835, 221 P.2d 476 (1950). In Baldwin v. Alberti, 58 Wn.2d 243, 245, 362 P.2d 258 (1961), this court approved the following statement *360found in Spokane Truck & Dray Co. v. Hoefer, 2 Wash. 45, 51, 25 P. 1072 (1891):
"... 'damages are given as a compensation or satisfaction to the plaintiff for an injury actually received by him from the defendant. They should be precisely commensurate with the injury, neither more nore less; and this whether it be to his person or estate' ..."
The $50,000 transaction described in the second cause of action resulted in no claimed loss to the State, and the same is true of the transactions involved in the third, fourth and fifth claims. The total amount asked, by way of forfeitures and penalties with respect to these transactions, was over $390,000.
The remaining three causes of action seek recovery of amounts paid on two contracts which allegedly were not performed, and expenses paid by the State which should have been paid by an insurance company. It is implicit that all of these amounts were paid by the treasurer in the mistaken belief that they were owed by the State, and what is being asked is restitution, not damages. The Commissioner's liability for such restitution is based upon his alleged knowledge of the facts and his failure to object to the payments or seek their recovery.
Penalties and forfeitures, both of which are punitive and neither of which is compensatory, do not constitute damages, as that term is ordinarily understood in the law. Nor is an action for restitution properly viewed as one seeking compensation for an injury suffered. The distinction between such an action and a damage action is described in the Restatement of Restitution § 5, comment a at 22 (1937), as follows:
In substance, the action is different from an action brought to secure damages for breach of contract, since the plaintiff seeks to be put back into his original position rather than to recover damages for the breach of promise.
While restitution or reimbursement is the remedy sought in three of the claims, I am willing to concede that it is *361possible to view them as damage claims, at least insofar as liability is sought to be imposed upon the Commissioner, since they allege an improper expenditure of state funds which he could have prevented. These claims, however, total less than $46,000. Viewed as a whole, the action is not one for damages. It is punitive in nature, rather than compensatory. Even the Attorney General in his brief exhibits an understandable reluctance to call this a damage action, and instead terms it one for "monetary recovery." Yet the majority opinion concludes, without inquiry, that the action is one for damages and is therefore subject to the provisions of RCW 4.92.060 and .070.
The presence of a few "damage" claims should not convert the entire action into one for damages. But if they are damage claims, the Attorney General nevertheless has the duty to defend them, assuming RCW 4.92.060 and .070 apply to actions brought by the State. The acts in question were concededly not ultra vires, and as to acts or omissions within the scope of official duties, under these sections the Attorney General has no discretion to refuse representation. It is apparent that the words "good faith" modify the words "purported to be" rather than the words "acts or omissions."
But whether or not this is a damage action, I do not think that it is governed by the provisions of RCW 4.92-.060, .070, and .130. It is quite obvious to me that these provisions were never intended to apply to actions brought by the State against one of its officers. If chapter 4.92 is viewed as a whole, it will readily be seen that the legislature had in mind actions brought by private individuals or corporations against state officers or employees. RCW 4.92.010 begins: "Any person or corporation having any claim against the state of Washington shall have a right of action against the state in the superior court." The succeeding sections provide for service of summons and complaint, for the procedure to be followed, and the limitation of actions. This brings us to RCW 4.92.060 and .070, which provide:
*362Whenever an action or proceeding for damages shall be instituted against any state officer, including state elected officials, or employee, arising from his acts or omissions while performing, or in good faith purporting to perform, his official duties, such officer or employee may request the attorney general to authorize the defense of said action or proceeding at the expense of the state.
If the attorney general shall find that said officer or employee's acts or omissions were, or purported to be in good faith, within the scope of his official duties, said request shall be granted, in which event the necessary expenses of the defense of said action or proceeding shall be paid from the appropriations made for the support of the department to which such officer or employee is attached. In such cases the attorney general shall appear and defend such officer or employee, who shall assist and cooperate in the defense of such suit.
The succeeding sections likewise obviously apply to claims brought against the State, its agents, officers, or employees, not to claims brought by the State.
These provisions exhibit no legislative awareness that their terms might be construed to apply to actions brought by the State against state officials. As the majority construes them, the Attorney General is required to represent the defendant only if he finds that he acted in good faith regardless of whether his act was within his official duties or ultra vires. Not only do the words of the statute not lend themselves to such a construction, but to so construe them leads to anomalous results. To condition the defendant's right to representation upon the- approval of the plaintiff is to give him no right at all. Furthermore, RCW 4.92.130 provides:
A tort claims revolving fund in the custody of the treasurer is hereby created to be used solely and exclusively for the payment of claims against the state arising out of tortious conduct and against its officers and employees for whom the defense of the claim was authorized under RCW 4.92.070.
*363Surely it was not the legislative intent that the State should pass judgment in its own favor, and yet the legislature saw no need to make an exception when the action is brought by the State.
Another factor to consider is that this provision manifests an understanding that the "damage" actions contemplated in RCW 4.92.070 are tort claims. Subsection (2) allows payment of claims which have been approved for settlement pursuant to RCW 4.92.140. This latter provision provides for the settlement of tort claims and claims brought under 42 U.S.C. § 1981 et seq. (popularly known as the Civil Rights Act). 42 U.S.C. § 1983, providing a civil action for deprivation of rights, has been construed in the context of tort liability. Rodriguez v. Jones, 473 F.2d 599 (5th Cir. 1973); Daly v. Pedersen, 278 F. Supp. 88 (D. Minn. 1967). Thus, it is clear to me that when the legislature used the expression "action or proceeding for damages" in RCW 4.92.060, it had in mind tort claims and claims of that nature. I know of no instance when this State has brought an action in tort, either against its own officials or against anyone else.
Theoretically, an action by the State for injuries to its "person" seems hardly conceivable, but an action for injuries to its property should be and is in fact available to a state. See 72 Am. Jur. 2d States § 90 (1974); 81A C.J.S. States § 308 (1977). However, such actions are rare, whereas private suits against state officials, employees and agencies for injuries to the person are becoming increasingly prevalent. I have no doubt that it was suits of that kind which the legislature had in mind in enacting the provisions under consideration. They are designed to alleviate the burdens of such suits, when the plaintiff seeks to hold the official or employee personally liable, by providing for defense by the Attorney General and payment of any judgment or settlement, provided the official or employee was performing, or in good faith purporting to perform, his official duties.
*364The provisions in question are consistent with a legislative intent that they should apply to tort actions for damages brought by private parties, and are entirely inappropriate if the legislature contemplated that they would apply to actions brought by the State. Having in mind the rule that statutes should be given a reasonable interpretation to effect their manifest purpose, I would construe these provisions as inapplicable to actions brought by the State or one of its officials.
I should state that I agree with the majority's holding that RCW 4.92.070, as well as .060, applies to elected officials. I conclude this from the plain wording of the section, however, and see no necessity of seeking clarification in the spotty reporting of proceedings found in the Senate Journal. Legislative intent is first to be deduced, if possible, from what is said in the statute. In re Estate of Lyons, 83 Wn.2d 105, 515 P.2d 1293 (1973). To find the meaning of a statute, all other legitimate avenues of search should be exhausted before resort is had to evidence which itself is so clouded with ambiguity. In this instance, it appears that one Senator was simply telling another what the provisions in question said. His comment added nothing to the words used in the sections.
While considerable intellectual contortion is required to bring the present action withiq the coverage of these statutory provisions, it fits neatly into RCW 43.10.030(3), which requires the Attorney General to " [djefend all actions and proceedings against any state officer or employee acting in his official capacity, in any of the courts of this state or the United States."
This is the section relied upon by the appellant in this proceeding. While he originally based his request for representation on RCW 4.92.060 and .070, he subsequently abandoned any reliance upon those provisions.
Armed with its unexplained assumption that an action seeking forfeitures, penalties, and restitution is an "action for damages", the majority opinion executes another leap to the conclusion that RCW 43.10.030(3) was impliedly *365repealed by RCW 4.92.060 and .070 as to all damage actions, including those brought by the State. This assumption is embraced, even though as the opinion construes these sections, when an action is brought by the State, the defendant official or employee cannot claim the benefits of these provisions and those of RCW 4.92.130. In other words, it is the majority's position that by the enactment of the latter provisions, the legislature intended, by implication, to deny state officials and employees the rights and benefits afforded by either of these statutes—this despite the fact that RCW 43.10.030(3) was enacted to implement Const. art. 3, § 21. That section of the constitution provides that the Attorney General shall be the legal adviser of the state officers.
The rule is that repeal or amendment by implication is not favored, and it is the duty of the courts to endeavor to harmonize statutory provisions wherever possible. Misterek v. Washington Mineral Prods., Inc., 85 Wn.2d 166, 531 P.2d 805 (1975). RCW 43.10.030(3) is a general law. applying to all actions and proceedings against state officers and employees acting in their official capacities. RCW 4.92.060, .070, and .130 are special laws applying only to damage actions brought against state officers or employees, arising from their acts or omissions while performing or in good faith purporting to perform their duties, and (as I interpret these provisions) applying only to such actions when they are brought by others than the State. Where general and special laws are concurrent, the special law applies to the subject matter contemplated by it to the exclusion of the general law. Wark v. Washington Nat'l Guard, 87 Wn.2d 864, 557 P.2d 844 (1976); State v. Walls, 81 Wn.2d 618, 503 P.2d 1068 (1972).
RCW 43.10.030(3) imposes upon the Attorney General the duty of defending all actions and proceedings brought against a state officer or employee acting in his official capacity. It does not give him discretion to defend actions which were ultra vires, and it does not provide for the payment of personal judgments against the officer or employee. *366RCW 4.92.060, .070, and .130, on the other hand, apply only to damage actions but cover certain ultra vires acts. Representation is required only where the acts or omissions were within the scope of the defendant's official duties. If they were in fact ultra vires, representation is made contingent upon the Attorney General's finding that the defendant acted in good faith in purporting to perform official duties.
The reason for this condition is made manifest when it is observed that the State obligates itself to pay any judgment recovered against such officer or employee, even though it be a personal judgment. The legislature's intent to protect the state's officers and employees from such burdensome liabilities is apparent in these provisions. We are all agreed that it was not its intent to afford such protection when the State brings the action. The only protection given to the official or employee in such circumstances is the right to be represented by the Attorney General, which is found in RCW 43.10.030(3), and I cannot find expressed in these statutes an intent to take that right away.
It is suggested that the Attorney General should not have a duty to represent an officer charged with breach of trust or malfeasance, misfeasance or nonfeasance. This introduces a question of public policy which the legislature must decide. That body has not seen fit to make an exception to this effect. It will be a rare case, I would think, in which an action brought against a state official does not allege some illegal or negligent conduct on his part, either threatened or consummated. The statute makes no exceptions, and it is plain that the legislature did not condition the right of defense upon the nature of the conduct alleged.
The legislative policy expressed in this statute, as it now stands, is that the presumption that a state official does his duty will carry through at least to the point of affording him a defender, even though his adversary be the State, where suit is brought against him for acts performed in his official capacity.
Whether the section is broad enough to require the defense of criminal prosecutions is a question we need not *367decide at this time. The language used covers all civil proceedings in any event, and it makes no exceptions with respect to actions brought by another department of the state.
This court, in Reiter v. Wallgren, 28 Wn.2d 872, 184 P.2d 571 (1947), had under consideration Rem. Supp. 1941, §§ 11034-3, a prior statute which imposed upon the Attorney General the same duty of representing state officials. There, a taxpayer's suit against the State Capitol Committee was dismissed because the Attorney General had not been asked to bring the action, the court rejecting a contention that the Attorney General could not be expected to bring such a suit, his adversary position being established by the fact that he defended the taxpayer's suit. We said, at page 879:
Inevitably, the attorney general, whatever may be his personal views, will be charged as a public officer with the responsibility of seeing that both sides of an issue are adequately presented to the court when there is a conflict between state officials or departments, or when there is a question as to whether a state officer, committee, or department is acting in an illegal manner, to the detriment of the public interest.
It is said that the Attorney General cannot adequately represent a defendant against whom he has brought suit. Nevertheless, the Attorney General has represented both sides of the issue in many suits brought to this court, and we have not heard it said that he neglected one or the other. Some of the cases are cited in the footnote below.1
*368It is true, as the majority states, that none of these cases was a damage action. It is also true that none of them was an action to compel forfeitures or recover penalties or for restitution. Most of our cases were obviously test cases wherein one state officer, usually the Attorney General, sought to restrain another officer from doing some allegedly illegal act or to compel him to perform his duty. Insofar as the research of those involved in this appeal has revealed, this case is unique in this jurisdiction. Cases cited, decided under different statutes and constitutional provisions, are of little assistance in interpreting our own laws. The fact that the suit is unique does not make the statutory provision any the less applicable. Its terms are certainly broad enough to serve the occasion.
If the legislature considers it to be in the public interest to place a limitation upon the kinds of actions which the Attorney General is required to defend, it has the means of making that intention clear. The statutes before us do not exhibit such a legislative purpose.
I would reverse the order of the trial court and order that the writ be granted. If the Attorney General believes that none of his staff is capable of providing the appellant a fair *369and diligent defense, he should appoint a special assistant to provide the representation which the statute requires.
Hicks, J., concurs with Rosellini, J.

The following are cases in which the Attorney General has used his own assistants to represent the officer or agency against whom the action was brought: State ex rel. Troy v. Yelle, 27 Wn.2d 99, 176 P.2d 459, 170 A.L.R. 1425 (1947); State ex rel. State Toll Bridge Authority v. Yelle, 32 Wn.2d 13, 200 P.2d 467 (1948) ; State ex rel. State Fin. Comm. v. Yelle, 33 Wn.2d 940, 207 P.2d 730 (1949) ; State ex rel. Troy v. Yelle, 36 Wn.2d 192, 217 P.2d 337 (1950); State ex rel. State Employees’ Retirement Bd. v. Yelle, 38 Wn.2d 70, 227 P.2d 745 (1951); State ex rel. Troy v. Martin, 38 Wn.2d 501, 230 P.2d 601 (1951); State ex rel. Eastvold v. Yelle, 46 Wn.2d 166, 279 P.2d 645 (1955); State ex rel. State Bldg. Financing Authority v. Yelle, 47 Wn.2d 705, 289 P.2d 355 (1955); State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 (1956); State ex rel. O'Connell v. Meyers, 51 Wn.2d 454, 319 P.2d 828 (1957); State ex rel. O’Connell v. Yelle, 51 *368Wn.2d 620, 320 P.2d 1086 (1958); State ex rel. State Toll Bridge Authority v. Yelle, 54 Wn.2d 545, 342 P.2d 588 (1959); State ex rel. State Toll Bridge Authority v. Yelle, 56 Wn.2d 86, 351 P.2d 493 (1960); State ex rel. State Toll Bridge Authority v. Yelle, 61 Wn.2d 28, 377 P.2d 466 (1962); State ex rel. State Fin. Comm. v. Martin, 62 Wn.2d 645, 384 P.2d 833 (1963); State Highway Comm'n v. O'Brien, 83 Wn.2d 878, 523 P.2d 190 (1974); State Higher Educ. Assistance Authority v. Graham, 84 Wn.2d 813, 529 P.2d 1051 (1974).
Following are cases in which special assistant attorneys general were appointed to represent the defending officers or agencies: State ex rel. State Toll Bridge Authority v. Yelle, 32 Wn.2d 13, 200 P.2d 467 (1948); State ex rel. Troy v. Yelle, 36 Wn.2d 192, 217 P.2d 337 (1950); State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 (1956); State ex rel. O’Connell v. Meyers, 51 Wn.2d 454, 319 P.2d 828 (1957); State ex rel. O'Connell v. Yelle, 51 Wn.2d 620, 320 P.2d 1086 (1958); State ex rel. State Toll Bridge Authority v. Yelle, 54 Wn.2d 545, 342 P.2d 588 (1959); State ex rel. State Toll Bridge Authority v. Yelle, 61 Wn.2d 28, 377 P.2d 466 (1962); State Highway Comm'n v. O’Brien, 83 Wn.2d 878, 523 P.2d 190 (1974); State Higher Educ. Assistance Authority v. Graham, 84 Wn.2d 813, 529 P.2d 1051 (1974).