Dyer v. Superintendent of Ins.

• Court: Superior Court of Maine
• Decided: January 18, 2012
• Docket: CUMap-11-11
• Status: Unpublished

Opinion

STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss Location: Portland Docket No.: BCD-AP-11-11 , ·' f'i, .,- " , .~ - L "'"' \J 'v\ .\ ~ I ;I :~ ' ' '<

) PAULA. DYER, ) ) Petitioner, ) ) v. ) ) SUPERINTENDENT OF INSURANCE, ) ) Respondent ) )

DECISION ON RULE soC APPEAL

Petitioner Paul A. Dyer appeals from a decision of Respondent Superintendent of

Insurance in which the Superintendent found that Dyer violated numerous provisions of the

Insurance Code in the course of an annuity transaction with Joan Van Horn. (Administrative

Record (hereinafter, "A.R.") 205-06.) As a result, the Superintendent revoked Dyer's insurance

producer license and insurance consultant license and ordered him to pay restitution to Van

Horn and a fine of$5500. (A.R. 198.)

FACTUAL BACKGROUND

Dyer has been licensed by the Bureau ofinsurance since 1982 and, at the time of these

proceedings, held a Resident Insurance Producer License and a Resident Insurance Consultant

License. (A.R. 198.) Dyer met Van Horn in the fall of 2004 after Dyer gave a speech on long

term care protection at the Augusta Civic Center. (A.R. 198.) Dyer and Van Horn had several

meetings and Van Horn decided to apply for long-term care insurance, but she was denied

coverage on a medical basis. (A.R. .198.) After the denial of coverage, Van Horn signed a

1 Consultant Agreement with Dyer on January 18, 2005, engaging Dyer to review her insurance,

financial, and estate plans and advise her on her current plans or needs. (A.R. 199.)

According to Dyer, he created a four-part plan to guarantee Van Horn an mcome

stream so that she could safely reinvest her assets in other tools with a higher yield and pass

her estate to her heirs. (A.R. 199.) The plan, however, was never reduced to a single document

and was only communicated to Van horn orally; the Superintendent concluded that the full

four-part plan was not adequately documented or explained to Van Horn. (A.R. 199-200.) The

only part of the alleged four-part plan that was completed was the purchase of a

single-premium immediate annuity (SPIA) from Old Mutual Financial Network 1 (Old Mutual)

through a section 1035 tax-free partial exchange. See 26 U.S.C.S. § 1035(a)(3) (LexisNexis

2011). (A.R. 200.)

When Dyer and Van Horn met, Van Horn held an annuity through Modern Woodmen

of America with a value of $143,818.58; a base interest rate of 5.45%; a guaranteed rate of

4.00%; and additional credited interest rate of 0.25% on balances over $100,000. (A.R. 200.)

Van Horn received a monthly withdrawal of $550. (A.R. 200.) On Dyer's advice, Van Horn

surrendered a portion of the Modern Woodmen annuity and applied for a SPIA. (A.R. 200.)

Dyer did not review the application with Van Horn personally, and Van Horn did not know or

understand what a SPIA or a section 1035 exchange was. (A.R. 200.)

There was conflicting testimony regarding the SPIA. Van Horn testified that Dyer told

her the SPIA would have an interest rate of6% to 7% (A.R. 201.) Dyer testified that the SPIA

quote he received from Old Mutual had a 2% to 3% interest rate, but he did not retain a copy of

the quote. (A.R. 200.) Dyer also testified that he warned Van Horn that the SPIA would have

a low yield of only 2%-3%, but the remainder of the four-part plan would make up for the loss

1Fidelity and Guaranty Life Insurance Company issued the policy; Old Mutual Financial Network purchased Fidelity and Guaranty Life Insurance Company shortly after the transaction. (A.R. 200.) in interest rate as part of a Medicaid impoverishment strategy. (A.R. ~W0-01.) Van Horn,

however, testified that Dyer did not warn her about the lower yield, did not discuss the

importance a low-yielding SPIA to a Medicaid impoverishment strategy, and did not discuss

the advantages and disadvantages of gifting money to her children prior to her death. (A.R.

201.) The Superintendent credited Van Horn's testimony over Dyer's testimony and found

that Dyer "consistently failed to explain his plans to [Van Horn] in writing or to maintain

adequate records of his planning activities and his conversations." (A.R. 202.)

The SPIA Van Horn purchased ended up yielding a negative interest rate. (A.R. 202.)

The Old Mutual SPIA issued on June 20, 2005, for a premium of $S9,S26.50. (A.R. 202.) The

SPIA had a fixed monthly payment of $648.2S for a five-year period. (A.R. 202.) At that rate,

only $S8,89S.80 would be repaid at the end of the term, $4S2.70 less than Van Horn paid for

the annuity. (A.R. 202.) The lower payments were due in part to the lower premium amount,

the inclusion of a 2% premium tax, and Dyer's commission, the latter two of which were not

discussed with Van Horn. (A.R. 202.) Old Mutual eventually increased the monthly payments

to $662.65. (A.R. 202.)

Dyer attempted to remedy the problem on Van Horn's behalf (A.R. 202.) At some

point in October or November of 2007, Dyer testified that Old Mutual left a message on his

answering machine promising to refund Van Horn her SPIA premium payment. (A.R. 202.)

Dyer testified that he did not save the message because it was recorded on his digital answering

machine, but that he played the message to Van Horn twice over the phone. (A.R. 202.) Van

Horn testified that she had no memory of hearing the message and that she would have

remembered if Old Mutual had made such a promise. (A.R. 202.) Dyer also told both Old

Mutual and Bureau of Insurance staff that the company had left the message on his answering

machine. (A.R. 20S.) Old Mutual, however, had no record of such a call and Dyer offered no documentation other than his own e-mails to Old Mutual to support any such message. (A.R.

203.) The Superintendent found that these e-mails were "part of a pattern of deception

designed to persuade Old Mutual to compensate [Van Horn] so that [Dyer] would not be

responsible for her losses." (A.R. 203.)

On April 24, 2008, Dyer and Van Horn filed a complaint against Old Mutual with the

Bureau of Insurance regarding the SPIA that alleged, among other things, that Old Mutual was

unresponsive to the problem with the SPIA. (A.R. 203.) Old Mutual contacted Dyer on June

27, 2008, seeking information about the purpose of the annuity, its suitability for Van Horn in

comparison to the Modern Woodman annuity, whether Dyer considered annuitizing the

Modern Woodman policy, any quotes Dyer received, and any promises made by Old Mutual.

(A.R. 203.) When Dyer did not respond, Old Mutual contacted Dyer's attorney on September

3, 2008, seeking the same information. (A.R. 203.) In response, Dyer's attorney sent Old

Mutual documents gathered during the purchase of the SPIA with a statement that the

documents were self-explanatory. (A.R. 203.) Old Mutual terminated Dyer's appointment for

failing to cooperate with a regulatory investigation and also determined that he violated certain

Old Mutual sales practices by selling an improper replacement product to Van Horn. (A.R.

203.)

On December 16, 2009, the Bureau filed a petition of enforcement against Dyer alleging

numerous violations of the Insurance Code. (A.R. 198.) A public adjudicatory hearing was held

on December 2 and 3, 2010. (A.R. 198.) The administrative record closed on January S I, 2011,

and the Superintendent issued a written decision on March 7, 2011. (A.R. 198, 207.)

In her written decision, the Superintendent concluded that in "his dealings with Van

Horn, and in his subsequent responses to inquiries by the Bureau oflnsurance and Old Mutual,

Dyer committed serious violations of the Insurance Code," which demonstrated "incompetence

4 and untrustworthiness." (A.R. 205.) The Superintendent penalized Dyer for eleven acts that

constituted, in most instances, multiple violations of the following sections of Title 24-A, the

Insurance Code:

• Breaching his Consultant Agreement with Van Horn by 1420K( 1)(H) failing to make a proper evaluation of her plans and needs in 1467 violation of sections ... 2152 • Selling Van Horn an annuity product that caused her 1420K( 1)(H) unnecessary loss in violation of sections ... 1467 2152 • Representing to Van Horn that she would receive 6%-7% 1420K(1)(H) interest on the SPIA in violation of sections ... 1467 2152 2153 2155 • Selling Van Horn an annuity product without having 1420K( 1)(H) reasonable grounds to believe it was suitable for her and 1467 without conducting an adequate investigation to determine its 2152 suitability in violation of sections ... • Failing to provide Van Horn with an adequate explanation of 1420K( 1)(H) the SPIA in violation of sections ... 1467 2152 2155 • Failing to obtain assurance from Van Horn that she 1420K( 1)(H) understood the SPIA in violation of sections ... 1467 2152 •Failing to make sure the SPIA was properly issued and would 1420K( 1)(H) provide appropriate earnings in violation of sections ... 1467 • Failing to keep adequate records of his alleged four-part plan 1420K( 1)(H) in violation of sections ... 1447 • Failing to cooperate with Old Mutual in its response to a 1420K( 1)(H) regulatory investigation in violation of section ... • Falsely representing to Old Mutual that it had left him an 1420K( 1)(H) answering machine message promising Van Horn a refund of 2152 her SPIA premium payment in violation of sections ... • Falsely representing to the Bureau of Insurance that Old 1420K( 1)(H) Mutual had left him an answering message promising Van 2152 Horn a refund of her SPIA premium payment in violation of sections ...

(A.R. 206.) The Superintendent fined Dyer $500 for each act, for a total of $5,500, revoked his

producer license, and ordered him to pay restitution to Van Horn the full amount of

5 commissions and fees he received from any source for the transactions involving Van Horn. See

24-A M.R.S. § 12-A(1), (6) (2010); 24-A M.R.S. § 1420K(l)(H). Dyer filed this timely appeal in

Kennebec County Superior Court on April 6, 2011. The appeal was fully briefed when accepted

for transfer into the Business and Consumer Court on September SO, 2011. The court heard

oral argument on December 2, 2011.

STANDARD OF REVIEW

In an appeal of final agency action brought pursuant to M.R. Civ. P. soC, this court

reviews "the agency's decision for errors of law, abuse of discretion, or findings not supported

by substantial evidence in the record." Beauchene v. Dep't cif Health & Human Servs., 2009 ME

24, ~ 11, 965 A.2d S66, S70 (quotation marks omitted); see also Seider v. Bd. cif Exam'rs cif

Psychologists, 2000 ME 206, ~ S, 762 A.2d 551, 555. In an soC appeal of an agency's decision,

the court may affirm the decision, 5 M.R.S. § 11007(4)(A) (2010), remand for further

proceedings, 5 M.R.S. § 11007(4)(B) (2010), or:

[r]everse or modify the decision if the administrative findings, inferences, conclusions or decisions are:

(I) In violation of constitutional or statutory provisions; (2) In excess of the statutory authority ofthe agency; (3) Made upon unlawful procedure; (4) Affected by bias or error oflaw; (5) Unsupported by substantial evidence on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion.

5 M.R.S. § 11007(4)(C) (2010).

Factual findings must be affirmed if "they are supported by substantial evidence in the

record, even if the record contains inconsistent evidence or evidence contrary to the result

reached by the agency." Concerned Citizens to Save Roxbury v. Bd. cifEnvtl. Prot., 2011 ME 39, ~

24, 15 A.sd 126S, 1271 (quotation marks omitted). Substantial evidence is "any competent

evidence in the record to support a finding" based upon a review of the entire record to

6 determine whether "the agency could fairly and reasonably find the facts as it did." !d. "An

agency's findings of fact will be vacated only if there is no competent evidence in the record to

support a decision." !d. ~ 24, 15 A.3d at 1272 (quotation marks omitted). Credibility

determinations of witnesses are within the exclusive province of the Superintendent as fact

finder. See Sprague Elec. Co. v. Me. Unemployment Ins. Comm'n, 544 A.2d 728, 732 (Me. 1988).

DISCUSSION

I. Credibility Determinations by the Superintendent

Because many of Dyer's arguments touch upon the Superintendent's credibility

determinations of both Dyer and Van Horn, the court addresses that issues first. Dyer argues

that the Superintendent erred in crediting Van Horn's testimony over his own because of her

admitted memory lapses regarding the subject of the proceedings. Dyer argues that the clearly

erroneous standard, which is equivalent to the substantial evidence standard in administrative

proceedings, see Ne. Empire Ltd. P'ship # 2 v. Town rifAshland, 2003 ME 28, ~ 9, 818 A.2d 1021,

1024, applies equally to determinations of credibility thus allowing the court to review the

Superintendent's credibility determinations ofwitnesses.

While there is some support for this assertion in non-administrative proceedings, see

Beal v. Bangor Publ'g Co., 1998 Me 176, ~ 10, 714 A.2d 805, 808, the better view in

administrative proceedings is that credibility determinations are part of the fact-finding

process. Conflicting testimony is presented in all types of proceedings, and a fact finder must

evaluate the credibility of witnesses and weigh the relative strength or weakness of the

evidence presented. A reviewing court, however, is not permitted to reevaluate credibility

determinations or assign evidence lesser weight than the administrative fact-finder. See

Anderson v. Me. Pub. Emps. Ret. Sys., 2009 ME 134, ~~ 27-28, 985 A.2d 501, 507. The

factfinder "is in the best position to evaluate the credibility of witnesses," and that testimony

7 cannot be discounted or dismissed unless it falls within the narrow exception of testimony that

is "so farfetched as to compel its disbelief by the administrative agency." W. S. Libbey Co. v. Me.

Emp't Sec. Comm'n, 446 A.2d 42, 44 (Me. 1982) (emphasis added); accord Merrow v. Me. Unemp't

Ins. Comm'n., 495 A.2d 1197, 1201 (Me. 1985). Testimony that is so farfetched as to compel

disbelief is substantially the same as whether a factual finding is clearly erroneous: "A finding

of fact is clearly erroneous if no record evidence exists to support it or if it is based on 'a clear

misapprehension of the meaning of the evidence."' Street v. Bd. rifLicensing rif Auctioneers, 2006

ME 6, ~ 8, 889 A.2d 319, 321 (quoting White v. Zela, 1997 ME 8, ~ 3, 687 A.2d 645, 646).

Thus, the court does not agree that credibility determinations are to be subjected to clear error

review, in as much as Dyer argues that the court must conduct an independent review of

credibility determinations. Rather, the court's role is to review the record for competent

evidence, taking into account the fact-finders stated credibility determinations, to determine

whether "the agency could fairly and reasonably find the facts as it did." Concerned Citizens to

Save Roxbury, 2011 ME 39, ~ 24, 15 A.sd at 1271 (quotation marks omitted).

Finally, Dyer suggested at oral argument that when a fact-finder is presented with

testimony that is not contradicted by any other witness, the fact-finder cannot make findings

contrary to that testimony based solely on her disbelief of the witness. That is not the case. See

Qualey v. Fulton, 422 A.2d 773, 776 (Me. 1980).

The fact that the testimony of a party to a suit is not directly contradicted does not necessarily make it conclusive and binding upon the [factfinder]. Of course it is not to be utterly disregarded and arbitrarily ignored without reason. It should be carefully considered and weighed with all of the other evidence in the case, and with all of the inferences to be properly drawn from facts established by the evidence; but if, on the whole case, it appears that such testimony is untrue, the [factfinder] is not required to put the stamp ofverity upon it, merely because it is not directly contradicted by other testimony.

Id. at 775 (quoting Mitchell v. Mitchell, 1S6 Me. 406,418, 11 A.2d 898, 904 (1940)).

8 In the present case, it is clear that the Superintendent credited the testimony of Van

Horn over Dyer. (A.R. 202, 203.) The Superintendent recognized the memory issues ofVan

Horn but stated: "[W]hen she lacked memory of prior events, she readily acknowledged it.

Her testimony on the most important points was clear and consistent, it was corroborated by

the written evidence and the credible portions of Mr. Dyer's own testimony, and I find it highly

credible." (A.R. 202.) Because credibility determinations of witnesses are within the exclusive

province of the Superintendent as fact finder, see Sprague Elec. Co., 544 A.2d at 732, the

Superintendent's apparent discrediting of Dyer's testimony in favor ofVan Horn's testimony is

not error, nor does Van Horn's testimony fall within the category of evidence the evidence that

is "so farfetched as to compel its disbelief by the administrative agency." W. S. Libbey Co., 446

A.2d at 44.

II. Substantial Evidence for Factual Findings

Dyer's challenges the evidence supporting three factual findings by the Superintendent:

1) Van Horn did not understand what a SPIA or what a 1035 exchange was; 2) Dyer did not

warn Van Horn that the SPIA would generate a lower yield; and 3) Dyer did not advise Van

Horn of the advantages of gifting prior to her death. Although there was conflicting testimony

from Van Horn and Dyer, each factual finding is supported by the testimony of Van Horn and

thus competent record evidence. See Sprague Elec. Co., 544 A.2d at 732; W. S. Libbey Co., 446

A.2d at 44. (See A.R. 465, 500-01.)

III. Insufficient Evidence for Statutory Violations

Dyer's next challenge is to whether the Superintendent made sufficient factual findings

to support the legal conclusions that Dyer violated of 24-A M.R.S. §§ 1420-K( 1)(H), 1447,

2152, & 2155 (2010).

9 A. Violations of24-A M.R.S. § 1420-K(1)(H)

The Superintendent concluded that each of the eleven acts identified constituted a

violation of24-A M.R.S. § 1420-K(1)(H). Section 1420-K(1)(H) permits the Superintendent to

place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license or ... levy a civil penalty in accordance with section 12-A or take any combination of such actions, for any one or more of the following causes:

H. Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or fi·nancial irresponsibility in the conduct of business in this State or elsewhere.

24-A M.R.S. §§ 1420-K(1)(H) (emphasis added). Dyer argues that because the Superintendent

made no findings that Dyer acted fraudulently or dishonestly, there is no factual basis for the

conclusion that he violated this provision. The Superintendent, however, did not have to find

that Dyer committed fraud or used dishonest practices to conclude he violated the provision;

the statute also prohibits incompetent, untrustworthy, or financially irresponsible conduct in

the course of business. All of the conduct on the part of Dyer could be considered any of those

three and is supported by factual findings in the decision. In fact, the Superintendent's decision

states this very conclusion: "In his dealings with [Van Horn], ... Dyer committed serious

violation of the Insurance Code, which demonstrate incompetence and untrustworthiness." (R.

205.)

B. Violations of 24-A M.R.S. § 1447

The Superintendent concluded that Dyer violated 24-A M.R.S. § 1447 by failing to keep

adequate records of his alleged four-part financial plan for Van Horn. It is undisputed that

Dyer did not document his four-part plan. (A.R. 199-200.) Section 1447 requires an insurance

producer to keep records for "each insurance policy or contract placed through or sold by the

licensee," 24-A M.R.S. § 1447(1), "for a period of at least 3 years after completion of the

10 respective transactions," 24-A M.R.S. § 1447(2). Dyer argues that the statute does not require

him to keep records of plans, only completed transactions. While best practice would be to

document plans and keep them for future reference or inspection, the statute on its face requires

retention of records of actual insurance transactions, meaning the procurement of insurance,

and does not encompass records of plans or other activity short of transactions. The

Superintendent's determination that Dyer's failure to keep a record of the plans constituted a

violation of section 1447 was thus premised on an incorrect interpretation of the statute. 2

C. Violations of24-A M.R.S. § 2152

The Superintendent concluded that eight of the eleven acts were in violation of section

2152. (A.R. 206.) Section 2152 provides: "No person shall engage in this State in any trade

practice which is defined in this chapter, as, or determined pursuant to this chapter, to be an

unfair method of competition or an unfair or deceptive act or practice in the business of

insurance." 24-A M.R.S. § 2152. The parties agree that "unfair" and "deceptive" are not defined

in the Insurance Code, but analogize those terms to "unfair" and "deceptive" as defined by the

Unfair Trade Practices Act, 5 M.R.S. §§ 205-A to 214 (2010). 3

Dyer argues, and the court agrees, that the record IS unclear as to how the

Superintendent defined the terms "unfair" and "deceptive, and also unclear as to which of Dyer's

2 The court notes that the Superintendent's finding that Mr. Dyer's failure to keep adequate records of the four-

part plan violated 24-A M.R.S. § 1420K( 1)(H) is affirmed in this decision, see supra II, A.

:1 To justify a finding of unfairness under UTPA, the act or practice: (1) must cause, or be likely to cause, substantial injury to a client; (2) that is not reasonably avoidable by the client; and (s) that is not outweighed by any countervailing benefits to the client. See State v. Weinschenk, 2005 ME 28, 11 16, 868 A.2d 200, 206.

An act or practice is deceptive if it is a material representation, omission, act or practice that is likely to mislead [a client] acting reasonably under the circumstances. A material representation, omission, act or practice involves information that is important to [the client] and, hence, likely to affect their choice of, or conduct regarding, a product. An act or practice may be deceptive, within the meaning of section 2152], regardless of ... good faith or lack of intent to deceive.

See id. 11 17, 868 A.2d at 206 (quotation marks and citations omitted). "Determination of whether an act or practice is 'unfair or deceptive' ... must be made by the fact-finder on a case-by-case basis." !d. 11 15, 868 A.2d at 206.

11 acts or practices were unfair or deceptive. The definitional vagueness is less problematic as to

the term "deceptive" than it is as to the broader term "unfair," which likely subsumes deception

and a host of other negative attributes. But even if the definitions applied were clear, the

Superintendent's reasoning in finding eight acts deceptive or unfair, or both, is not.

The only explicit finding of deception or unfairness in the decision is a finding of

deception regarding false representations made by Dyer to Old Mutual that it had left him an

answering machine message promising Van Horn a refund of her SPIA premium payment.

(A.R. 203, 206.) The decision does not identify whether the other remaining seven acts were

unfair, or deceptive, or both. Because on this record the court cannot determine the basis for

the Superintendent's conclusions that Dyer violated section 2152, the court must vacate that

portion of the decision and remand for further factual findings. See Widewaters Stillwater Co. v.

Bangor Area Citizens Organizedfor Responsible Dev., 2002 ME 27, ~ 12, 790 A.2d 597, 601.

D. Violations of 24-A M.R.S. § 2155

The Superintendent concluded that two of Dyer's acts were two violations of 24-A

M.R.S. § 2155: 1) representing to Van Horn that she would receive 6-7% interest on the SPIA,

and 2) failing to provide Van Horn with an adequate explanation of the SPIA. Section 2155

provides:

No person shall make or issue, or cause to be made or issued, any written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in any policy for the purpose if inducing or attempting or tending to induce the policyholder to lapse, forfeit, borrow against, surrender, retain, exchange, modify, convert, or otherwise affect or dispose of any insurance policy.

24-A M.R.S. § 2155 (emphasis added).

Dyer argues that because the Superintendent did not find that he acted with "purpose,"

there is insufficient evidence to constitute a violation of the statue. As the Superintendent

points out, however, a purposeful intent is not required to violated the statute; the statute can

12 be violated by making misrepresentations "tending to induce" a change or disposition of an

insurance policy. Competent record evidence shows that if Dyer had told Van Horn that the

interest rate would have been lower or explained the SPIA to her, she would not have

proceeded. (A.R. 500-01.)

IV. Exclusion of Evidence

Title 5 M.R.S. § 9057 (2010) governs evidence in administrative proceedings and states,

in pertinent part, that: "Evidence shall be admitted if it is the kind of evidence upon which

reasonable persons are accustomed to rely in the conduct of serious affairs. Agencies may

exclude irrelevant or unduly repetitious evidence." 5 M.R.S. § 9057(2). "No sworn written

evidence shall be admitted unless the author is available for cross-examination or subject to

subpoena, except for good cause shown." 5 M.R.S. § 9057( 5). Dyer challenges the exclusion of

two items of evidence offered by Dyer: testimony by John Consigli, a polygraph examiner, and

an affidavit of Katherine LaPierre.

A. Consigli Testimony

Consigli is a polygraph examiner who proposed to testify regarding a polygraph exam

he conducted on Dyer and the subsequent report. (A.R. 598-99; 158-65.) The Superintendent

excluded his testimony at the hearing, citing State v. Lavoie, 2010 ME 76, 1 A.sd 408, and

Ingerson v. State, 448 A.2d 879 (Me. 1982). (A.R. 605.) The Superintendent allowed Dyer to

brief the issue in post-hearing submissions, and she again concluded that Consigli's testimony

was not admissible on largely the same basis. (A.R. 183-85.)

In Lavoie, the Law Court reiterated a "long-standing, fundamental concern regarding

polygraph machines due to their non-existent value when it comes to determining credibility"

in both criminal and civil cases. 2010 ME 76, ~ 14, 1 A.sd at 412; accord Heselton v. Wilder, 496

A.2d 1063, 1066-67 (Me. 1985) (holding in a civil case that "the results of a polygraph

IS examination are entitled to no weight" and an individual's willingness to take a polygraph test

is inadmissible). Polygraph tests are neither reliable nor valid and implicate "the dangerous

possibility that credibility will be evaluated by the device rather than by the trier of fact."

Lavoie, 2010 ME 76, ~ 14, 1 A.sd at 412. The Law Court has also indicated that these

concerns regarding a polygraph apply equally to administrative proceedings, which are not

criminal trials and to which the Rules of Evidence do not apply. See Ingerson, 448A.2d at 880.

Dyer's basic argument is that the Superintendent was not bound by the Rules of

Evidence and because Dyer's counsel would have laid an adequate foundation for the testimony,

the testimony should have been admitted. Dyer attempts to distinguish Ingerson on the

grounds that the examiner was available to testify and would have been subject to cross-

examination by the Bureau of Insurance. Dyer also points to cases from other jurisdictions in

which polygraph evidence has been admitted. See Evans v. DeRidder Mun. Fire, 815 So.2d 61

(La. 2002); Motell v. Napolitano, 588 N.Y.S.2d 452 (N.Y. App. Div. 1992). Given, however, the

Law Court's well-documented suspicion ofpolygraphs, it was not error for the Superintendent

to exclude Consigli's testimony.

B. LaPierre Affidavit

In post-hearing submissions, Dyer filed the LaPierre affidavit, which was not submitted

or presented at the hearing. (A.R. 171-72.) LaPierre is Van Horn's granddaughter and was

present for some of the meetings between Dyer and Van Horn. (A.R. 171.) The Bureau

objected to the late filing of the affidavit. Dyer had wanted to call LaPierre as a witness but

thought that LaPierre was deceased at the time of the hearing. (A.R. 182.) But, apparently, as

evidenced by her affidavit, she was not deceased. (A.R. 182.) The Superintendent sustained the

Bureau's objection to the late admission of evidence because Dyer offered no explanation for

14 why she was not called to testify at the hearing and because the affidavit is somewhat vague.

(A.R. 182-SS.)

Dyer argues that "good cause" exists because he had thought LaPierre had passed away

prior to the hearing, and only learned at the hearing that she was still alive. This argument,

however, was not presented to the Superintendent, nor did Dyer ever move to supplement the

record with the affidavit either at the administrative level or to this court. Although filed with

the administrative record, the LaPierre evidence was never properly before the Superintendent

and thus her decision not to consider that evidence was wholly justified.

V. Bias

Finally, Dyer asserts that the decision of the Superintendent is evidence of her bias

against him. Dyer also asserts that the decision to pursue the Van Horn matter was based on

the Bureau's dissatisfaction with the outcome of another matter before the Superintendent, the

Russell matter. At oral argument Dyer admitted that there was no affirmative evidence of bias

on the part of the Superintendent, but the court could extrapolate bias from the quantity and

magnitude of alleged inconsistencies in the Superintendent's decision. The court, however, can

divine no evidence ofbias from the record.

CONCLUSION

Based on the foregoing the court decides and orders as follows:

1. The court vacates that portion of the Superintendent's decision finding

violations of24-A M.R.S. § 2152 and remands to the Superintendent for further findings offact

and conclusions of law regarding what constitutes a "deceptive" or "unfair" act under the

statute and how Dyer's acts qualify as "deceptive" or "unfair," or both. On remand, the

Superintendent shall review and utilize the current record only.

15 2. The court vacates that portion of the Superintendent's decision finding a

violation of24-A M.R.S. § 1447.

s. Because the section 2152 findings were an element of eight of the violations

found and because the section 1447 violation was the basis for a ninth violation, the entire

question of penalties will have to be revisited on remand. The court vacates the license

revocation, the civil fines, and the restitution imposed with instructions for the Superintendent

to reconsider appropriate penalties in light of this decision and in light of any further findings

and conclusion made by the Superintendent on remand. Any penalties imposed after

reconsideration, however, may not be more onerous than the penalties imposed initially.

4. In all other respects, the decision of the Superintendent of Insurance dated

March 7, 2011, is affirmed.

Pursuant to M.R. Civ. P. 79(a), the Clerk shall incorporate this Decision and Order into

4ltl~ the docket by reference.

Dated: I ~ J tiV1 2o 1 2- A.'M:HOrtOI;,JUStice Maine Business & Consumer Court

Entered on the Docket: /, f3.1'2- Copies sent via Mail_ Electronically~

16 BUSINESS AND CONSUMER COURT

Paul A. Dyer v. Superintendent of Insurance BCD-AP-2011-11

Counsel ofRecord

Attorney Name Party Name

Adrianne Fouts, Esq. Paul A. Dyer

Jonathan Bolton, AAG Superintendent of Insurance