In the Matter of GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Appellant,
ALFRED J. BOHLINGER, as Superintendent of Insurance of the State of New York, Respondent.
APPEAL from an order of the Supreme Court at Special Term (HECHT, J.), entered July 18, 1953, in New York County, which denied a motion by petitioner for an order pursuant to article 78 of the Civil Practice Act to annul a determination of respondent denying an application by petitioner for the approval of the purchase of certain real estate.
James B. Donovan of counsel (Daniel J. Reidy and Clarke S. Ryan with him on the brief; MacNeil Mitchell, attorney), for appellant.
Samuel A. Hirshowitz of counsel (Wendell P. Brown with him on the brief; Nathaniel L. Goldstein, Attorney-General, attorney), for respondent.
Robert M. Benjamin of counsel (Parker, Duryee, Benjamin, Zunino & Malone, attorneys), for Life Insurance Association of America, amicus curiae.
This is an appeal by Guardian Life Insurance Company from an order of Special Term denying its application, under article 78 of the Civil Practice Act, to annul a determination of the Superintendent of Insurance, who in turn denied an application by Guardian for approval of a purchase of real estate.
Guardian asserts that it proposes to use part of the real property for its own use--a purpose requiring the approval of the superintendent. Subdivision 7 of section 81 of the Insurance Law deals with real estate investments; paragraph (a) thereof authorizes the acquisition of real estate for a principal office; and paragraph (b) authorizes the acquisition of real estate '[s]uch as shall be requisite for its convenient accommodation in the transaction of its business'. Subdivision 7 further provides that no real property may be acquired for the purposes recited in paragraph (a) or paragraph (b) without
the approval of the superintendent. The provisions of paragraph (b) are directly applicable in this proceeding.
Guardian, prior to its application to the superintendent, had acquired certain vacant land in North White Plains, Westchester County. It purchased this property originally for investment purposes only, and not for company use, intending to improve it with an office building calculated to produce a reasonable return on its investment. Section 81 (subd. 7, par. [h]) does not require the superintendent's approval for an investment in real estate for the production of income, up to a total amount not exceeding 3% of the carrier's assets.
When Guardian applied to the City of White Plains to rezone the property, it struck the snag which required it to seek the superintendent's approval, pursuant to section 81 (subd. 7, par. [b]) for its own contemplated occupancy of the proposed building. The representatives of White Plains, who had been attracted by Guardian's earlier consideration of a large site for its principal office, balked at rezoning a smaller area 'for use as an investment by Guardian so Guardian can make money'. It appears that to win over the White Plains authorities Guardian finally informed them that it would itself occupy the proposed two-story office building in whole or in part. This eleventh-hour commitment compelled Guardian to seek the superintendent's approval under section 81 (subd. 7, par [b]). The superintendent did not 'look with favor' on the application, but volunteered to grant Guardian a hearing. The superintendent contends that this hearing was granted as a matter of grace and not as a matter of statutory right. There is no provision for a hearing in connection with an application under paragraph (b) of subdivision 7, although the Insurance Law provides a right to a hearing in a number of other situations.
At the hearing Guardian presented a somewhat indefinite program. It was uncertain as to what departments and what personnel would be removed to the new building, and as to how long it would occupy space in that building. Guardian owns a twenty-story building in New York County, in which it occupies thirteen floors and rents the remaining seven floors. The seven rented floors contain sufficient space for Guardian's expansion purposes. Since 1946 it has spent over $400,000 in modernizing this building. In addition, the superintendent some years ago approved the acquisition of an adjoining building to provide room for expansion, which building is not being used for that purpose. No adequate study was made of the facilities available
to Guardian. The contemplated move to White Plains was concededly planned as a temporary expedient, with Guardian taking some of the space for an undetermined period. Conflicting views were expressed as to the desirability of piecemeal moving of isolated departments of the insurance company. The deputy superintendent who conducted the hearings reported in part as follows: 'The Department would have no objection to the relocation by Petitioner of all its home office activities to a new building to be erected on a site of Petitioner's choosing elsewhere in New York State, provided a suitable plan was in contemplation for the orderly sale of its present building, and that such relocation and sale appeared to be in the interest of its policyholders. Admittedly, Petitioner's thinking in this regard is still in the stage of indecision.'
Guardian contended its present quarters were unsuited to its present and developing needs. It argued, in evident good faith, for the desirability of gradually vacating the New York County building that housed its principal office; but was unable to furnish the ultimate destination of the future principal office. After a thorough exploration of the facts the superintendent held that the proposed White Plains building was not 'requisite' for the convenient accommodation of Guardian's business.
We believe that the determination of the superintendent is not subject to more than a threshold judicial review to determine whether the superintendent misconceived or exceeded his authority, because such review is precluded by the statute. The right of the Legislature to proscribe judicial review of certain actions of administrative officers and boards is now well established ( Switchmen's Union v. Board, 320 U.S. 297; Labor Board v. Cheney Lumber Co., 327 U.S. 385; Federal C. C. v. RCA Communications, 346 U.S. 86, 90; Matter of Schwab v. McElligott, 282 N.Y. 182).
The pattern of the Insurance Law indicates a careful and consistent legislative design to grant judicial review in certain specific situations and to preclude such review in all others. Section 34 reads in part: 'Whenever by the provisions of this chapter any order or other act of the superintendent is declared to be subject to judicial review at the suit of any person, such person may maintain a proceeding under article seventy-eight of the civil practice act.'
While section 34 does not in so many words bar judicial review where the right is not explicitly granted, such proscription clearly emerges when read in the setting of the entire
Insurance Law. Of course, any other construction would stamp section 34 as a meaningless and unnecessary reaffirmation of the rights of an aggrieved party to pursue his remedies pursuant to article 78 of the Civil Practice Act; and the implication naturally follows that when the right is not specifically granted, article 78 may not be invoked.
In 1938, when general revision of the entire Insurance Law was under consideration by the Legislature, several insurance company organizations drove for the enactment of a provision for judicial review of all orders or acts of the superintendent. This effort was vigorously opposed by the superintendent, who argued that such 'reviewing procedure would include many acts for which judicial review is not appropriate' (see Memoranda of Association of Life Insurance Companies, Association of Casualty and Surety Executives, and Committee on Law Revision of the Insurance Department). Section 34 must be read in the light of this legislative history.
The Legislature has etched a recognizable design in granting judicial review. In general, it appears that provisions for licensing, or for the suspension or revocation of licenses, such as those affecting insurers (§ 40, subd. 7), salesmen of insurance securities (§ 51), insurance agents (§ § 117, 139-c), insurance brokers (§ 119) and adjusters (§ 123), all carry concomitant authorizations for judicial review. In similar vein, so do provisions for the merger, consolidation or conversion of insurers (§ § 486, 487). But provisions designed to protect policyholders' assets against improvident or illegal depletion, such as the one under consideration here, do not generally offer judicial review.
Similarly, section 121 of the Alcoholic Beverage Control Law authorizes judicial review of certain specified acts of the Liquor Authority, but is silent as to review of other actions. The courts have consistently held that section 121 constitutes a legislative mandate against judicial consideration of those actions of the Liquor Authority for which review is not authorized ( Matter of Millman v. O'Connell,300 N.Y. 539; Matter of Calvary Presbyterian Church v. State Liq. Auth.,249 A.D. 288, affd. 275 N.Y. 552; Reckler v. Quinn,255 A.D. 873, affd. 280 N.Y. 768; Matter of Roden v. New York State Liq. Auth.,258 A.D. 1076). It should be noted, however, that the argument for exclusion of judicial review where not specified is strengthened by a statement contained in section 2--the ...