No. 89-474
IN THE SUPREME COURT OF THE STATE OF MONTANA
BENJAMIN H. GERBER,
Plaintiff and Appellant,
-vs-
COMMISSIONER OF INSURANCE OF THE STATE
OF MONTANA; RICHARD E. BACH and DAVE DRYNAN,
Defendants and Respondents.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
George T. Radovich; Radovich Law Firm, Billings,
Montana
For Respondent :
Brad H. Anderson; Moulton, Bellingham, Longo & Mather,
Billings, Montana
Submitted on Briefs: Dec. 14, 1989
Decided: February 15, 1990
a
Chief Justice J. A. Turnage delivered the Opinion of the Court.
Plaintiff Benjamin H. Gerber appeals the order of the District
Court of the Thirteenth Judicial District, Yellowstone County,
dismissing his tort action against the Montana Commissioner of
Insurance and her employees Richard E. Bach and Dave Drynan. We
affirm.
The appellant raises the single issue of whether the District
Court erred in holding that quasi-judicial immunity barred the
appellant's tort action against respondents.
On October 14, 1983, appellant Gerber borrowed $10,000 from
Rimrock Bank of Billings, Montana, and applied for the attendant
credit-life-disability insurance from Acceleration Life Insurance
Company. That same day, the bank's loan officer informed Gerber
that the insurer would not accept coverage. Gerber filed two
complaints with the Commissioner of Insurance arguing that the
binder given to him by the loan officer created a contract
requiring the insurer to compensate him for an unspecified,
accidental injury. Following both complaints, insurance commission
employees issued Gerber written opinions which correctly stated
that under 5 33-21-203 (1), MCA, insurance policies do not become
effective until the insurer accepts the risk of coverage.
Gerber then filed a tort action against the Insurance
Commissioner, and against commission employees Richard Bach and
Dave Drynan claiming damages for bad faith, legal malpractice,
negligent misrepresentation, and intentional or negligent inflic-
tion of emotional distress. The complaint alleged that the Commis-
sioner failed to hold a hearing as required by 5 33-1-701(2), MCA,
and that Bach and Drynan verbally misrepresented to Gerber that he
was entitled to recover under the insurance binders. The District
Court granted the defendantst motion to dismiss under Rule
12(b)(6), M.R.Civ.P., for failure to state a claim upon which
relief can be granted. Gerber now appeals that dismissal.
The decisional standards in this case are not at issue. The
District Court may dismiss a claim on the pleadings when no set of
facts would support the claim. Wheeler v. Moe (1973), 163 Mont.
154, 161, 515 P.2d 679, 683. Our standard in reviewing motions to
dismiss is de novo. Koppen v. Board of Medical Examiners (Mont.
1988), 759 P.2d 173, 175, 45 St.Rep. 1433, 1436. We agree with the
District Court that the only issue in this case is a question of
law and that the law bars the appellant's claim.
With exceptions not relevant to this case, 5 2-9-305(5), MCA,
grants absolute immunity to state employees acting within the scope
of their employment. The appellant offers no allegation or
argument that respondents Bach and Drynan acted outside of the
scope of their employment. Therefore, the District Court properly
dismissed the claim against them.
We also affirm the District Court's dismissal of the claims
against the Insurance Commissioner. Gerber's District Court
complaint alleges that the Insurance Commissioner failed to
investigate his grievance against the insurer, misinformed him of
his rights, and refusedto enforce his alleged insurance contracts.
In Koppen v. Board of Medical Examiners this Court held that the
common law doctrine of quasi-judicial immunity protects executive
agencies when carrying out discretionary functions. Koppen, 759
P.2d at 176, 45 St.Rep. at 1438. The investigation of consumer
complaints such as Gerberls and the resulting action, if any, fall
within the Commissionerlsexpressly-provided, discretionary powers.
The commissioner may conduct such examinations
and investigations . . . as [she1 may deem
proper . ...
Section 33-1-311(3), MCA. (Emphasis added.)
The commissioner may hold hearings for any
purpose within the scope of this code deemed
by rherl to be necessary.
Section 33-1-701(1), MCA. (Emphasis added.)
The commissioner may, after having conducted
a hearing pursuant to 33-1-701, impose a fine
Section 33-1-317, MCA. (Emphasis added.)
Whenever it appears to the commissioner that
a person has engaged in or is about to engage
in an act or practice constituting a violation
of [this act, she] may . . . issue an order
directing the person to cease and desist . . .
[or] bring an action in a court of competent
jurisdiction to enjoin such acts or practices
Section 33-1-318, MCA. (Emphasis added.) As a discretionary
function, the Insurance conduct of an investigation
based on a consumerlscomplaint against an insurer is protected by
quasi-judicial immunity.
Gerber argues that, nonetheless, the Commissioner is not
immune from suit based on her failure to hold a hearing because the
hearing is not discretionary. He asserts that on filing of his
complaint against the insurer, the Commissioner was statutorily
required to convene a hearing on the issue and failed to do so.
The section cited by Gerber states in pertinent part:
The commissioner shall hold a hearing . . .
upon written demand therefor by a person
aggrieved by any act, threatened act, or
failure of the commissioner to act or by any
report, rule, or order of the commissioner
. . . . [Sluch hearing shall be held within 30
days after receipt by the commissioner of
demand therefor.
Section 33-1-701(2), MCA. (Emphasis added.)
The appellant misconstrues this section. Section 33-1-
701 (2), MCA, by its plain language, applies only to grievances
arising from the actions of the Insurance Commissioner. It does
not require the Commissioner to hold a hearing on consumer com-
plaints against an insurer.
Even if Gerber had demanded a hearing on the actions of the
Commissioner, the effort would have been futile. Gerberls griev-
ance is with the Commissionerls investigation and action on his
complaint. As noted above, those functions are protected by quasi-
judicial immunity.
Gerber's argument is analogous to claiming that a prosecutor
must prosecute every criminal complaint received. Like the
prosecutor, the Commissioner has the discretion to investigate and
determine whether further action is warranted. The Commissioner
is not required to hold a purely ritualistic hearing on every
groundless complaint.
Affirmed.
C
~~ie'f
Justice
We concur: