Insurance Commissioner v. Lincoln National Life Insurance

BLOOM, Judge. The sole issue in this appeal is one of statutory construction. The statute in question, Md.Code Ann., art. 48A, § 234B(b) (1991 Repl.Vol.), was interpreted one way by the Insurance Commissioner of Maryland and a different way by the Circuit Court for Baltimore City, to which the Commissioner’s decision was appealed by Lincoln National Life Insurance Corporation (Lincoln). The Commissioner and Gerald Veydt, in whose favor the Commissioner had ruled, then filed this appeal from the judgment of the circuit court.

We believe that the Commissioner’s interpretation of the statute was the correct one; accordingly, we shall reverse the circuit court’s judgment. Background Veydt, pursuant to a written “Career Producer’s Contract” with Lincoln, solicited applications for life and health insurance policies on behalf of Lincoln. On 28 March 1988 ¹¹⁷ Lincoln wrote to Veydt, informing him that his agency contract would be terminated as of 31 March 1988. Veydt filed a complaint with the Insurance Division, asserting that Lincoln’s termination of his agency contract on three days notice violated Md.Code Ann., art. 48A, § 234B(b) (1991 Repl.Vol.).

Following a hearing on Veydt’s complaint, the Insurance Commissioner, through Associate Deputy Commissioner Thomas P. Raimondi, who served as hearing officer, concluded that Lincoln had violated § 234B(b) of art. 48A in terminating Veydt’s agency and ordered Lincoln to reinstate Veydt’s agency contract immediately. On Lincoln’s appeal to it from that decision and order, the Circuit Court for Baltimore City reversed the Commissioner, ruling that § 234B(b) did not apply to insurance companies that issued life, health, surety, wet marine, or title insurance and their brokers and agents who generated such policies. The Statute Subsections (a) and (b) of § 234B of art. 48A (the Insurance Code) provide: (a) No insurer may cancel a written agreement with a broker or agent with respect to insurance or refuse to accept insurance business from such broker or agent unless it complies with the provisions of this section. (b) If an insurer intends to cancel a written agreement with an agent or broker, or intends to refuse any class of renewal business from the agent or broker, the insurer shall give the agent or broker not less than 90 days written notice.

Notwithstanding any provision of the agreement to the contrary, the insurer shall continue for not less than one year after termination of the agency agreement to renew through the agent or broker any of the policies which have not been replaced with other insurers as expirations occur. This subsection shall not apply to: (1) agents or brokers or policies of a company or group of companies represented by agents or brokers ¹¹⁸ who by contractual agreement represent only that company or group of companies if the business is owned by the company or group of companies and the cancellation of any contractual agreement does not result in the cancellation or refusal to renew any policies of insurance; or, (2) life, health, surety, wet marine and title insurance policies. Standard of Review The standard of review applied by a reviewing court to quasi-judicial decisions of the Insurance Commissioner is set forth in article 48A, § 40, which states: (5) Judgment — The court may affirm the decision of the Commissioner or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (i) In violation of constitutional provisions; or (ii) In excess of the statutory authority or jurisdiction of the Commissioner; or (iii) Made upon unlawful procedure; or (iv) Affected by other error of law; or (v) Unsupported by competent, material, and substantial evidence in view of the entire record as submitted; or (vi) Against the weight of competent, material and substantial evidence in view of the entire record, as submitted by the Commissioner and including de novo evidence taken in open court; or (vii) Unsupported by the entire record, as submitted by the Commissioner and including de novo evidence taken in open court; or (viii) Arbitrary or capricious. If the issue before us were whether the Commissioner’s decision (or that of any administrative agency) is supported by substantial evidence, ie., “such relevant evidence as a ¹¹⁹ reasonable mind might accept as adequate to support a conclusion,” State Election Bd. v. Billhimer, 314 Md. 46, 58 , 548 A.2d 819 (1988), cert. denied, 490 U.S. 1007 , 109 S.Ct. 1644 , 104 L.Ed.2d 159 (1989), we would be bound by the rule that a reviewing court must not substitute its judgment for the expertise of the agency, id. at 58, 548 A.2d 819 , because the decisions of administrative agencies are prima facie correct, and thus must be viewed in the light most favorable to the agency.

Nationwide Mutual Insurance Company v. Insurance Commissioner, 67 Md. App. 727 , 509 A.2d 719 (1986). This appeal, however, does not involve fact-finding. We are faced with an issue of statutory interpretation, which necessarily involves a question of law. People’s Counsel v. Maryland Marine, 316 Md. 491, 497 , 560 A.2d 32 (1989); Supervisor v. Chase Associates, 306 Md. 568, 574 , 510 A.2d 568 (1986).

The Court of Appeals has held that when an agency’s decision is predicated solely on an error of law, no deference is appropriate and the reviewing court may substitute its judgment for that of the agency. Billhimer, 314 Md. at 59 , 548 A.2d 819 ; Washington Nat’l Arena v. Comptroller, 308 Md. 370, 378-79 , 519 A.2d 1277 (1987); Ramsay, Scarlett & Co. v. Comptroller, 302 Md. 825 , 490 A.2d 1296 (1985); Thames Point Assoc. v. Supervisor, 68 Md.App. 1, 9-10 , 509 A.2d 1207 (1986). We note that construction of a statute by an agency charged with its enforcement is entitled to great weight. See Public Serv.

Comm’n v. Howard Res., 271 Md. 141,152 , 314 A.2d 682 (1974); Jackson Marine Sales v. St. Dep’t., 32 Md.App. 213, 217 , 359 A.2d 228 (1975), cert. denied, 278 Md. 725 (1976). Nevertheless, a reviewing court is charged with ascertaining errors in the interpretation and application of law. Therefore, a reviewing court, faced with an erroneous interpretation and application of a law, may substitute its own judgment for that of the administrative agency. ¹²⁰ Discussion With those standards of review in mind, we turn to the statute at hand, Md.Code Ann., art. 48A, § 234B. Before undertaking to construe § 234B(b), it is appropriate that we review the principle canons of statutory construction. “To ascertain and effectuate the actual legislative intention in enacting any statute is, of course, the cardinal rule of statutory interpretation,” State v. Intercontinental, Ltd., 302 Md. 132, 137 , 486 A.2d 174 (1985); In Re Criminal Investigation No. 1-162, 307 Md. 674, 685 , 516 A.2d 976 (1986); Sites v. State, 300 Md. 702, 710 , 481 A.2d 192 (1984), cited in Gray v. Anne Arundel County, 73 Md.App. 301, 309 , 533 A.2d 1325 (1987), the primary source of which is the language of the statute itself.

Gray, 73 Md.App. at 309 , 533 A.2d 1325 ; Bridges v. Nicely, 304 Md. 1, 10 , 497 A.2d 142 (1985); Blum v. Blum, 295 Md. 135, 140 , 453 A.2d 824 (1983). We said in Ford Motor Land Development v. Comptroller: Thus, where “there is no ambiguity or obscurity in the language of a statute, there is usually no need to look elsewhere to ascertain the intent of the General Assembly.” City of Baltimore v. Hackley, 300 Md. 277, 283 , 477 A.2d 1174 (1984). Furthermore, the statute must be construed considering the context in which the words are used and viewing all pertinent parts, provisions, and sections so as to assure a construction consistent with the entire statute. Comptroller v. Mandel Re-election Com., 280 Md. 575, 579 , 374 A.2d 1130 (1977).

And, if there is no clear indication to the contrary, a statute must be read so that no part of it is “rendered surplusage, superfluous, meaningless, or nugatory.” Bd. of Educ., Garrett Co. v. Lendo, 295 Md. 55, 63 , 453 A.2d 1185 (1982); Baltimore Building and Construction Trades Council v. Barnes, 290 Md. 9, 15 , 427 A.2d 979 (1981). On the other hand, we “shun a construction of the statute which will lead to absurd consequences”. Erwin & Shafer, Inc. v. Pabst Brewing Co., 304 Md. 302, 311 , 498 A.2d 1188 (1985), or “a proposed statutory interpretation if its ¹²¹ consequences are inconsistent with common sense.” Blandon v. State, 304 Md. 316, 319 , 498 A.2d 1195 (1985). 68 Md.App. 342, 346-47 , 511 A.2d 578 (1986), cert. denied, 307 Md. 596 , 516 A.2d 567 (1986). Moreover, we “may not insert or omit words to make a statute express an intention not evidenced in its original form.” Hockley, 300 Md. at 283, 477 A.2d 1174 .

We are mindful, however, of what the Court of Appeals stated in Kaczorowski v. City of Baltimore, 309 Md. 505