Court Opinion

ID: 5871873
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:49:15.076045+00
Date Added: 2024-06-11T08:44:44.185913
License: Public Domain

OPINION OF THE COURT
Milonas, J.
The sole issue on appeal involves the authority of the Superintendent of Insurance to appoint a Special Deputy Superintendent to be a hearing officer at an administrative proceeding.
Petitioner American Transit Insurance Company, a domestic property and casualty insurer, and several of its principal officers were charged with certain violations of the Insurance Law *31and regulations promulgated thereunder. Pursuant to subdivision 1 of section 11 of the Insurance Law, respondent Superintendent of Insurance of the State of New York appointed Simon J. Liebowitz, a retired Justice of the Supreme Court, to act as hearing officer and to report his findings and recommendations to the Superintendent or his designee. According to respondent Superintendent, it was necessary to designate an outside hearing officer since “virtually all employees and Deputy Superintendents] of Insurance who were otherwise qualified to act as hearing officers had reviewed material related to and participated in conferences about American Transit Insurance Company.” Thus, in order to protect petitioner’s due process rights, respondent contends, the appointment of a hearing officer was warranted.
Following the commencement of the hearing, petitioner brought the instant proceeding pursuant to CPLR article 78, challenging the legal authority of the Superintendent of Insurance to appoint as a Special Deputy Superintendent to act as hearing officer a person who was not a full-time or salaried employee of the Department. Special Term, which found persuasive petitioner’s interpretation of the relevant case and statutory law, granted the petition to the extent of declaring a nullity any hearing before respondent Liebowitz and directed the Superintendent to select a new hearing officer.
Subdivision 1 of section 11 of the Insurance Law provides that the “superintendent shall appoint a first deputy superintendent and may appoint other deputies as provided for by law”. Section 23 of the Insurance Law states that unless “otherwise provided in this chapter, any hearing pursuant to this chapter may be held before the superintendent, any deputy superintendent, or any competent salaried employee of the department authorized by the superintendent for such purpose.” The implementing regulation of the Insurance Department (11 NYCRR 4.2 [a]) declares that adjudicatory proceedings
“shall be conducted by a presiding officer chosen from among the following persons:
“(1) the Superintendent of Insurance;
“(2) any Deputy Superintendent of Insurance; or
“(3) any competent salaried employee of the department authorized by the superintendent for such purpose.”
The law is clear that the Superintendent of Insurance “is vested with broad power to interpret, clarify, and implement the legislative policy”. (Breen v Cunard Lines S.S. Co., 33 NY2d *32508, 511; Ostrer v Schenck, 41 NY2d 782.) Furthermore, the Superintendent “possesses whatever powers may be ‘reasonably implied’ from the statute” (Ostrer v Schenck, supra, at p 785). While the Superintendent, in formulating a regulation under section 23 of the Insurance Law (11 NYCRR 4.2 [a]), may have largely tracked the language of the statute, it is well established that “the construction given statutes and regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld.” (Matter of Howard v Wyman, 28 NY2d 434, 438; see, also, Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Ostrer v Schenck, supra.) To deny the Superintendent the authority to appoint a Special Deputy as a hearing officer simply because section 23 refers only to “any deputy superintendent” and does not specifically mention a Special Deputy Superintendent is to exalt form over substance. As the Court of Appeals asserted in Matter of John P. v Whalen (54 NY2d 89, 96): “The rule of construction that specific mention of one thing impliedly excludes others is not, however, anything more than an aid to construction and ‘must not be utilized to defeat the purpose of an enactment or to override the manifest legislative intent’ ”.
There is no prohibition in the Insurance Law against the designation of Special Deputy Superintendents as hearing officers. Nor does the State Administrative Procedure Act (see § 303) specify that hearing officers be full-time salaried employees. However, assuming for the sake of argument that there are two possible definitions of the word “any”, one of which would restrict the Superintendent to selecting a hearing officer from among the current group of Deputies and the other which would permit him to add to that group, then this court does not have the authority to find that the Superintendent’s interpretation, which is not inconsistent with the legislative intent, is an improper choice. Indeed, the use by the Superintendent of Insurance of Special Deputies as hearing officers in appropriate situations has, according to the Department of Insurance, long been the customary practice, and, as the Court of Appeals has stated, “history is of far more than passing interest.” (McGowan v Mayor of City of N. Y., 53 NY2d 86, 94.)
There is certainly nothing unreasonable or irrational in the Superintendent’s interpretation of the statutory phrase “any deputy superintendent” (Insurance Law, § 23) to include a Special Deputy Superintendent appointed for the purpose of conducting an administrative hearing. On the contrary, the employment of outside persons to act as hearing officers is desirable in instances where, as appears to be the case here, there has *33been an allegation of bias and misconduct against Insurance Department personnel and in view of the pendency of a Federal civil rights action against a number of its high officials. Moreover, it is difficult to understand Special Term’s conclusion that the “Superintendent has not demonstrated that no deputy superintendent or other competent salaried employee of the department could fairly and impartially serve as hearing officer.” Even assuming that such a showing is mandated, which is by no means evident, the Superintendent has certainly established the fact that the designation of a Special Deputy Superintendent with regard to the instant matter was justified. Consequently, there was no basis for finding that the Superintendent of Insurance acted in excess of his authority in appointing respondent Liebowitz as hearing officer.
We note that if the Superintendent of Insurance had merely called his appointee a “hearing officer” — which, of course, he was — instead of using the words Special Deputy Superintendent, even the verbal basis for the present objection would not be present. (See State Administrative Procedure Act, § 303.)
Judgment of the Supreme Court, New York County (Edward Greenfield, J.), entered on March 23, 1984, which, inter alia, granted the petition pursuant to CPLR article 78 to the extent of declaring a nullity and hearings held before respondent Simon J. Liebowitz and directed respondent Superintendent of Insurance of the State of New York to select another hearing officer, should be reversed, on the law, to the extent appealed from and the petition dismissed to the extent appealed from, with costs and disbursements.