Brown v. State Farm Fire & Cas. Co.

804 So. 2d 41, 2001 WL 700385
CourtLouisiana Court of Appeal
DecidedJune 22, 2001
Docket2000 CA 0539
StatusPublished
Cited by7 cases

This text of 804 So. 2d 41 (Brown v. State Farm Fire & Cas. Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. State Farm Fire & Cas. Co., 804 So. 2d 41, 2001 WL 700385 (La. Ct. App. 2001).

Opinion

804 So.2d 41 (2001)

James H. "Jim" BROWN, Commissioner of Insurance, State of Louisiana
v.
STATE FARM FIRE & CASUALTY COMPANY.

No. 2000 CA 0539.

Court of Appeal of Louisiana, First Circuit.

June 22, 2001.
Writ Denied December 7, 2001.

*42 Barry James Ingram, C. Noel Wertz, Baton Rouge, Counsel for James H. "Jim" Brown, Commissioner of Insurance, State of Louisiana Plaintiff-Appellant.

Brace B. Godfrey, Jr., E'Vinski L. Davis, Baton Rouge, Counsel for State Farm Fire & Casualty Company Defendant-Appellee.

*43 Before: WHIPPLE, KUHN, and DOWNING, JJ.

DOWNING, Judge.

The Commissioner of Insurance (hereinafter, "Commissioner") appeals its dismissal from litigation by an exception of no right of action claiming he has a constitutional right to seek judicial review of adverse administrative decisions. The Commissioner also appeals the trial court's failure to allow him to amend the petition to allege additional facts which would remove the objection to the grounds for the exception of no right of action. For reasons stated herein, we affirm the trial court's judgment.

FACTS

On June 5, 1998, Administrative Law Judge (hereinafter, "ALJ") Rufus D. Hayes rendered a decision ordering the Department of Insurance to approve the form of a "Rental Condominium Unit Owner's Policy" submitted by State Farm. On July 2, 1998, the Commissioner filed for judicial review with the Nineteenth Judicial District Court.

On August 9, 1999, State Farm filed a peremptory exception of no right of action claiming the Department of Insurance, a state agency, was precluded from pursuing judicial review under the provisions of the Louisiana Administrative Procedure Act or the Division of Administrative Law. The trial court entered a judgment sustaining the exception on January 19, 2000, dismissing the Commissioner's petition for judicial review. The Commissioner appealed, asserting two assignments of error.

ASSIGNMENTS OF ERROR

The Commissioner alleges that:

1. The trial judge erred in ruling that the Commissioner of Insurance does not have standing to seek judicial review of the decision rendered by the Division of Administrative Law.
2. The trial judge erred in dismissing the suit with prejudice without allowing the Commissioner of Insurance an opportunity to amend the petition.

DISCUSSION

State Agency's Right to Judicial Review

Louisiana Revised Statute 49:964(A)(2) and Louisiana Revised Statute 49:992(B)(3), as amended by Acts 1999, No. 1332, effective July 12, 1999, expressly provide that "no agency or official thereof, or other person acting on behalf of an agency or official thereof, shall be entitled to judicial review" of a decision made pursuant to the Louisiana Administrative Procedure Act (hereinafter, "LAPA") or Division of Administrative Law (hereinafter, "DAL"). There is no dispute that the ALJ's decision was made pursuant to the LAPA and the DAL. Thus, the plain terms of Acts 1999, No. 1332 mandate dismissal of the Commissioner's petition.

The Commissioner, in his official capacity, however, argues Acts 1999, No. 1332 violates the Department of Insurance's constitutional right to appeal an adverse decision rendered by the ALJ. The Commissioner specifically cites article 1, § 22 of the Louisiana Constitution which provides:

All courts shall be open, and every person shall have an adequate remedy by due process of law and justice, administered without denial, partiality, or unreasonable delay, for injury to him in his person, property, reputation, or other rights. (Emphasis added.)

Despite the definition under La. R.S. 49:951(5),[1] we acknowledge that the *44 Department of Insurance is a "person" under Louisiana law in that it has all of the attributes of personality including name, domicile, nationality and patrimony. See Louisiana Constitution art. IV, § 11 and Title 22 of the Louisiana Revised Statutes regarding the rights, obligations and duties of the Commissioner of Insurance. "Civilian terminology... employs the word person in a technical sense to signify a subject of rights and duties." See A.N. Yiannopoulos, Louisiana Civil Law System § 48 (1977).

However, the Department of Insurance is a juridical person as opposed to a natural person. See La. C.C. art. 24: "A juridical person is an entity to which the law attributes personality,.... (Emphasis added.) The personality of a juridical person is distinct from that of its members."[2] Comment (d) of La. C.C. art. 24 provides: "[t]he capacity of a juridical person is governed by provisions in its charter, governing legislation, and customs."

Accordingly, the question before us is whether the provisions of the LAPA provide an "adequate remedy by due process of law and justice" to the Department of Insurance, as a juridical person, for its alleged injuries as the Louisiana Constitution requires in art. 1, § 22.

NATURE AND RIGHTS OF JURIDICAL PERSON

Juridical persons, also called juristic persons, are "creatures of the law." A.N. Yiannopoulos, Louisiana Civil Law System § 48 (1977). In discussing the "personality" of governmental entities, Professor Yiannopoulos observed as follows:[3]

They are indispensable for the realization of human interests, and, in order to assure their function, the law grants to them the power to participate in legal life by the attribution of legal personality. These entities have no physical existence, but they are formed by human beings for the satisfaction of needs that require unison of effort. (Emphasis added.) Id.

According to Professor Yiannopoulos, the theory underlying the provisions of the Louisiana Civil Code of 1870 dealing with juridical persons appears to be that "juristic persons are artificial creatures of the politically organized society; they are created by a concession, and their interests are purely those recognized by the law." Id. § 57.

The Commissioner argues that it has a right of review through access to the courts pursuant to Louisiana Constitution article 1, § 22, which provides that a "person" shall have an "adequate remedy at law by due process of law and justice." The Commissioner appears to claim to the Department of Insurance the same rights as possessed by natural persons.

However, Louisiana Civil Code article 27 provides that "natural persons" enjoy general legal capacity to have rights *45 and duties. See also La. Const. art. 1, the Declaration of Rights. A "juridical person," conversely, as a creature of the law and by definition, has no more legal capacity than the law allows. Yiannopoulos, Louisiana Civil Law Systems § 53.

The LAPA allows the Commissioner to argue its position before the ALJ, which it vigorously did in this case. With Acts 1999, No. 1332, however, the legislature specifically has chosen to deny state agencies any entitlement to judicial review under the LAPA, La. R.S. 49:964(A)(2), denying these agencies even status as "persons" under its terms. La. R.S. 49:951.5. In so doing the legislature apparently has concluded that the Commissioner's remedy before the ALJ is adequate to protect the interests entrusted to him by law.

The Commissioner cites several cases including Bowen v. Doyal, 259 La. 839, 253 So.2d 200 (La.1971) and Buras v. Board of Trustees of Police Pension Fund of City of New Orleans,

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804 So. 2d 41, 2001 WL 700385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-state-farm-fire-cas-co-lactapp-2001.