Court Opinion

ID: 878719
Source: CourtListenerOpinion
Date Created: 2013-06-04 22:52:19.429239+00
Date Added: 2024-06-11T09:07:26.576245
License: Public Domain

NO. 85-55
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1985

MOUNTAIN STATES INSURANCE COMPANY,
                 Plaintiff and Appellant,

STATE OF MONTANA, acting by and through
the BOARD OF HAIL INSURANCE, DEPT. OF
AGRICULTURE, et al.,
                 Defendants and Respondents.

APPEAL FROM:     District Court of the First Judicial District,
                 In and for the County of Lewis & Clark,
                 The Honorable Henry Loble, Judge presiding.
COUNSEL OF RECORD:
         For A.ppellant:
                 Philip W. Strope argued, Helena, Montana
                 Roger Tippy argued, Helena, Montana
         For Respondent:
                 Garth Jacobson argued, Bd. of Hail Insurance, Helena,
                 Montana
                 Robert Throssell, State Auditor's Office, Helena,
                 Montana
         For Amicus Curiae:
                 John J. Oitzinger, Governor's Council on Management,
                 Helena, Montana

                                   Submitted:    September 24, 1985
                                      Decided:   November 4, 1985

         N O V -~ 1985
Filed:

                                                 8
                                      %ddd
                           p.

                           &;f~257(
                                  Clerk
Mr. Justice John C.           Sheehy delivered the Opinion of the
Court.

      Mountain States Insurance Company brought this action
for a declaratory judgment in the First Judicial District,
Lewis and Clark County, seeking an order declaring the Eoard
of Hail- Insurance to be unconstitutional.               Both plaintiff and
defendants filed motions for summary judgment.                The District
Court    granted      defendants '    motion     for     summary   judgment.
Plaintiff appeals.       We affirm the District Court.
      Appellant Mountain States Insurance raises three issues
on appeal.      First, does the statutory duty of the State
Auditor to serve on the Board of Hail Insurance violate the
constitutional        prohibition     against     dual    office   holding?
Second, is there a conflict of interest between the State
Auditor's duties as a member of the Hail Board                      and the
Auditor's     duties     as    ex    officio    insurance     commissioner?
Third, assuming arquendo the presence of the State Auditor on
the Hail Board is illegal, does the entire act creating the
Hail Board fail for lack of a severability cia-use?
        In 1917, the Montana legislature established the Hail
Insurance     Roard     to    administer      Montana's    hail    insurance
program for agricul-tural crops.              The hail insurance program
provides low cost hail insurance to farmers.                  Five persons
serve on the Hail Board which administers the program:                   the
State Auditor, the director of the Department of Agriculture,
and   three   persons        appointed   by    the     Governor.     Section
2-15-3003, MCA.
      The State Auditor and the Director of the Department of
Agriculture are not compensated for their service on the Hail
Roard.     Section 80-2-202 ( 3 ) , MCA.        The State Auditor is an
elected official who serves as ex officio Commissj.oner of
Insurance pursuant to section 2-15-1903, MCA.         As ex officio
insurance commissioner, the State Auditor is required by law
to approve the form of all hail insurance policies written in
Montana and at the same time is required by statute to sit as
a member of the Board of Hail Insurance which establishes the
form, substance and rates of all hail policies issued.

     Appellant,     Mountain    States    Insurance   contends   the
statutory appointment of the State Auditor to the Hail Board
violates the constitutional prohibition against dual office
holding in Art. VI,      $   5, 1972 Mont. Const.      That section
provides :
     During his term, no elected officer of the
     executive branch may hold another public office or
     receive compensation for services from any other
     governmental agency. He may be a ca.ndidate for any
     public office during his term.
The State Auditor is an elected officer of the executive
branch whose duties are prescribed by law.        Art. VI, S 4(5),
1972 Mont. Const.
        In this case, appellant contends the State Auditor is
violating the constitutional prohibition against dual office
holding by virtue of the legislatively-assigned duty to be a
member of the Hail Board.       This Court has already held the
State Auditor could. be a member of the Industrial. Accident
Board     without   violating   the   constitutional    prohibition
against dual office holding.      Shea v. North-Butte Mining Co.
(1919), 55 Mont. 522, 179 P. 499.        We stated in Shea:
     The next contention made by counsel is that the
     board is an unlawful body because the state
     auditor, one member of it, holds two offices. By
     this we presume counsel mean that because the
     auditor is made a member of the board and. is
     required to execute a bond to guarantee the
     faithful   performance  of   his   duties,   this
    constitutes him a public officer, in a capacity
    other than as state auditor. A complete answer to
    this contention is found in section 1 of Article
    VII of the Constitutj.on. This section enumerates
    the state executive officers.     It then provides
    that they shall perform such duties as are
    prescribed in the Constitution and by the Laws of
    the State.    It is not necessary to refer to the
    constitutional duties enumerated appertaining to
    the auditor's office. The only limitation imposed
    upon the legislature in imposing duties upon the
    auditor is found in section 1 of Article IV. This
    prohibi-ts the imposition of duties upon him that
    appertain    to   the   legislative   or   judicial
    departments of the government.     So long as this
    limitation is not violated, the legislature is at
    liberty to impose any governmental duty upon this
    officer.

- at 538-39, 179 P. at 504-05.
Id.
     In the case at hand, the legislature chose to impose
upon the State Auditor the governmental duty of being a
member of the Hail Board.     The State Auditor d.oes not hold
dual offices by carrying out his duties.
    Appellant contends that State ex rel. Barney v. Hawkins
(1927), 79 Mont.   506, 257 P. 411 controls.     In Barney, a.
state legislator was hired as an auditor for the Board of
Railroad Commissioners.     The issue before this Court was:
Did a legislator who was hired as an auditor violate the
constitutional prohibition against legislators holding public
offices?
     In Barney, we adopted a five-part test to determine if a
position of public employment was a public office.    However,
that test is inapplicable here because Barney is clearly
distinguishable on its facts.   Barney dealt with a legislator
who sought another governmental position while in office.
However in the case at hand, the State Auditor was assigned
ex officio duties by the legislature.      As we held in Shea,
the only limit upon the duties which may be assigned by the
legislature to an officer of the executive branch is that the
duties     may    not     pertain    to    the     legislative or         judicial
departments of government.                We conclude that the statutory
appointment of          the    State Auditor        to   the Hail Board          is
constitutional.
                                        11.

     The second issue appellant raises on appeal is whether
there is a conflict of interest between the State Auditor's
du-ties as Hail Board member and the Auditor's duties as ex
officio     insurance         commissioner.         Appellant        contends   two
conflicts exist:          a statutory conflict and an incompatibility
between     the     two      offices.       The     appellant        contends   the
statutory        conflict     arises    because      section     33-1-305, MCA
prohibits        the    insurance       commissioner        from      having    any
financial interest in an insurer or insurance transaction.
"Financi-a1 interest" is defined in section 2-2-102(4) as "an
interest held by an individual, his spouse, or minor children
which is:        . . .       (f) a directorship or officership in a
business."       Appellant contends the Hail Board is the business
in which the State Auditor is financially interested.                           We
find the State Auditor as ex officio insurance commissioner
is not financially interested in the Hail. Board within the
meaning of section 2-2-102(4), MCA.                  That section is a part
of   the     Code       of    Ethics.         The    Code       of    Ethics    was
constitutionally mandated              by Art.      XITI,   5    4, 1972 Mont.
Const., which states, "The legislature shall provide a code
of   ethics      prohibiting      conflict        between   public      duty    and
private interest for members of the legislature and all state
and local officers and employees. "                 When the Code of Ethics
was passed by the legislature, a statement of purpose was
enacted in section 2-2-101, MCA.                  "The purpose of this part
is to set forth a code of ethics prohibiting conflict between
public     duty   and   private    interest    as   required   by    the
constitution of Montana."         The State Auditor has no private
interest in the Hail Board.          He derives no compensation for
his   service on    the Hail      Board.      The State Auditor has
affirmatively alleged and it is not denied that he has never
received any compensation, benefit, or gain from the Hail
Insurance     Program    or   from    any   other    source    for   the
performance of his       d.uties as a       Hail Board member.       We
conclude there is no statutory conflict of interest that
would preclude the State Auditor from serving on the Hail
Board.

      Appellant next contends the two offices of Insurance
Commissioner and Hail Board member are incompatible offices
which create a conflict of interest.             Appellant relies on
Bath Club, Inc. v. Dad.e County (Fla. 19811, 394 So.2d 110.
In the -- case, the Florida legislature created a real
       Bath Club
property    tax equalization board made up of three county
commissioners and two school board members.             The board was
challenged as being constitutionally defective in light of
the Florida provision against dual office holding.                   The
appellant contended an inherent conflict of interest existed
between the board's duty to grant impartial hearings on tax
assessments, and the board members' desire to secure adequate
revenues for their agencies.          The Florida Court held that
there was no conflict of interest between the duty of county
commissioners and school board members to levy the ad valorem
taxes on real property and the "limited function of Board
members to review and correct individual assessments made by
the county tax appraiser."           --
                                     Bath Club,     394 So.2d at 112.
Likewise, in this case, there is no conflict of interest
between   the duty of    the Haii Board members to set hail
insurance rates and the limited function of the State Auditor
as insurance commissioner to review those rates.      We conclude
the District Court was correct in holding no conflict of
interest exists.    Because we have held the State Auditor may
be a member of the Hail Eoard, we do not reach the issue of
whether the entire act creating the Hail Board must fall due
to the lack of the severability clause.
    We also do not reach the issue presented by              amicus
curiae in a brief submitted in this case, as to whether the
Hail Insurance Program violates economic due process.             In
State ex rel. Bennett v. Bonner (1950), 123 Mont. 414, 214
P.2d 747, we held that an amicus has no right to question the
constitutionality of an act because he is not a party, and
his rights are not being affected.       This Court "will not pass
on grounds of invalidity urged by an amicus curiae but not
presented by the parties."      - at 421, 214 P.2d at 751.
                                Id.
     Therefore,    the   judgment   of   the   District   Court   is
affirmed.

We Concur:
d 5/fi'YIP--9
 z .
The Hon. C. B. McNeil,
District Judge, Sitting
for the Hon. William E.
Hunt, Sr.