HRA, Inc. v. Tennessee Department of Commerce & Insurance

914 S.W.2d 512, 1995 Tenn. App. LEXIS 525
CourtCourt of Appeals of Tennessee
DecidedAugust 4, 1995
StatusPublished
Cited by6 cases

This text of 914 S.W.2d 512 (HRA, Inc. v. Tennessee Department of Commerce & Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HRA, Inc. v. Tennessee Department of Commerce & Insurance, 914 S.W.2d 512, 1995 Tenn. App. LEXIS 525 (Tenn. Ct. App. 1995).

Opinion

OPINION

TODD, Presiding Judge, Middle Section.

This appeal involves judicial review of an administrative decision regarding the proper premium charges to be paid by HRA, Inc. for its workers compensation insurance. The Trial Court determined that it was without jurisdiction because an interested party was not made a party to the petition for review. HRA has appealed and presented two issues as follows:

1. WHETHER THE COURT BELOW ERRED IN DISMISSING THE PETITION FOR JUDICIAL REVIEW FOR LACK OF SUBJECT MATTER JURISDICTION AND FAILURE TO JOIN AN INDISPENSABLE PARTY WHEN THE “INDISPENSABLE PARTY” HAD BEEN MADE A PARTY BY AN AMENDMENT AS OF RIGHT.
2. WHETHER THE COURT ERRED BY REFUSING TO CONSIDER THE AMENDMENT TO THE COMPLAINT.

The petition for review filed on June 2, 1994, states the following background:

HRA, Inc. was incorporated on November 15, 1991 and is engaged in the temporary personnel business, but is not an “employee leasing firm.”

On November 20, 1991, HRA purchased from the Internal Revenue Service at public sale the accounts receivable of IBM Enterprises, Inc., which was owned by Irwin Much.

HRA occupied some office space formerly occupied by IBM Enterprises, Inc., and released office equipment previously leased by the same corporation.

HRA hired some employees of IBM Enterprises, Inc., including Irwin Much, but he was terminated March 23,1992.

Much has never had any interest in or served as director of HRA

HRA has employee policies different from those of IBM Enterprises, Inc.

On December 11, 1991, HRA applied to National Council on Compensation Insurance (NCCI) for assigned risk workers compensation insurance. NCCI assigned to HRA an “experience modification factor” of 1.60 based upon a determination that the circumstances constituted a change in ownership of a continuing business justifying a continuance of the factor assigned to IBM Enterprises, Inc.

HRA appealed the decision of NCCI to the “Tennessee Appeals Board” which affirmed the action of NCCI.

HRA appealed to the Department of Commerce and Insurance, where the decision of NCCI was affirmed on April 25,1994.

On June 13, 1994, HRA filed in the Trial Court a motion for stay in which it was alleged that Liberty Mutual Insurance Company had billed HRA for insurance premiums based upon the 1.60 factor assigned by NCCI [514]*514and affirmed by the state agency, and a stay was issued on bond preventing Liberty Mutual Ins. Co. from cancelling the insurance of HRA.

On July 15, 1994, the Department moved to dismiss the petition for review for failure to timely comply with T.C.A. § 4-5-322(b) which requires that petitions for review must be filed within 60 days after the order to be reviewed, and “shall be served upon the agency and all parties of record ... in accordance with provisions of the Tennessee Rules of Civil Procedure pertaining to service of process.”

TRCP Rule 3, as amended July 1, 1992, provides that:

All civil actions are commenced by filing a complaint and summons with the clerk of the court. An action is commenced within the meaning of any statute upon the filing of such complaint and summons. (Emphasis supplied.)

The petition for review names only one party-defendant (respondent), Tennessee Department of Commerce and Insurance. It bears a certificate that a copy of the petition has been served upon an administrative judge of the Tennessee Department of State, assistant chief counsel of the Department of Commerce and Insurance and “Bennett Ross, Esq., Bass, Berry and Sims.”

It appears that Bennett Ross appeared as counsel for NCCI before the administrative hearing officer and before the Commissioner and that he was served with copies of the findings of the Administrative Judge and the Commissioner.

Although it appears that Liberty Mutual Insurance Company was directly and financially interested in this controversy, there is no indication of its participation in the administrative proceeding, except through the industry association, NCCI, and its counsel.

Clearly, under the quoted statute and rule, the petitioner, HRA was required to file a complaint (petition for review) and summons for service upon all interested parties, including NCCI. A complaint (petition) was filed naming only the department and was served upon all parties who participated in the administrative proceeding. However there is no evidence that process was filed against any party. A responsive pleading has been filed by the named respondent (the Department) which may amount to a waiver of process, but there is no indication that any response has been filed by NCCI.

On August 8, 1994, HRA filed a “First Amended Petition for Judicial Review” which stated in part:

3. The National Council on Compensation Insurance (“NCCI”) is a rating organization designated by the State of Tennessee to administer the assigned risk pool for workers compensation.
* * * * ⅜ *
21. The original Petition for Review in this matter was filed on June 2, 1994, and a summons issued and served on TDCI shortly thereafter. Although the Petition did not name NCCI as a respondent in the caption, and no summons was issued to NCCI, a copy of the Petition was served on NCCI’s counsel, Bennett Ross, as indicated on the Certificate of Service, which provided NCCI with actual notice of these proceedings. In addition, Petitioner has served copies of its other filings on Mr. Ross in the same manner, and notified him by letter and by telephone of the hearing on its Motion for Stay. See Exhibit 1. Accordingly, NCCI will not be prejudiced in maintaining its defense on the merits of this matter by its inclusion in this Amended Petition. In addition, NCCI knew or should have known that but for the inadvertent and excusable neglect of Petitioner’s counsel to name it as a respondent, the action would have included it as a respondent.

On August 15, 1994, HRA filed “Petitioner’s Response to Motion to Dismiss ... or, In the Alternative, Motion for Enlargement of Time.” In said pleading HRA asserted that its tardy inclusion (over 60 days) of NCCI in the judicial proceeding should relate back to the time of filing the original petition for review, or that the Trial Court should extend the statutory time of 60 days for filing petitions for review.

[515]*515On August 25, 1994, the Trial Court held that it had no jurisdiction and dismissed the petition.

In its “Statement of the Case” HRA states:

Since no responsive pleading had been served, HRA, pursuant to Rule 15, Tenn. R.Civ.P., as a matter of right amended the pleadings naming NCCI as a Defendant and had a summons issued to NCCI. On August 9, 1994, this summons was served on the TDCI as agent for NCCI.

Although service of process is not the issue in this appeal, it should be noted that no law or evidence is cited or found that TDCI (the Department) was the agent for NCCI, for service of process.

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Bluebook (online)
914 S.W.2d 512, 1995 Tenn. App. LEXIS 525, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hra-inc-v-tennessee-department-of-commerce-insurance-tennctapp-1995.