No. 90-497
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
JAMES H. TROUT,
Plaintiff and Appellant. 9 r.
ANDREA BENNETT, as an individual and as
State Auditor and Ex Officio Commissioner
of Insurance; THE STATE OF MONTANA; THE APR 9 - 1992
JOHN ALDEN LIFE INSURANCE CO.; and THE
PHOENIX MUTUAL INSURANCE CO.,
Defendants and Respondents.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Jeffrey Sherlock, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James P. Reynolds, Reynolds, Motl, Sherwood
and Wright, Helena, Montana
For Respondents:
Michael J. Mulroney, Luxan & Murfitt, Helena,
Montana; Richard E. Gillespie, Keller, Reynolds,
Drake, Sternhagen & Johnson, Helena, Montana;
Stephen M. Frankino, Hughes, Kellner,
Sullivan & Alke, Helena, Montana
Submitted on Briefs: March 22, 1991
Decided: April 9, 1992
Filed:
' Clerk
Justice Fred J. Weber delivered the Opinion of the Court.
James H. Trout (Trout), appeals the adverse judgment in his
action as a licensed non-resident life insurance agent against
Andrea Bennett, individually and as Commissioner of Insurance. The
District Court for the First Judicial District, Lewis and Clark
County, bifurcated the action into two parts. In the first portion
the District Court held that Trout violated certain statutes, and
fined him $250 for placing business with an insurance carrier
before he had an appointment, and also fined him $250 for
advertising himself as an agency. In the second portion, the
District Court entered summary judgment for defendant Bennett,
individually and as Commissioner. The District Court concluded
that Andrea Bennett was not a llpersonlt
under 42 U. S.C. fj 1983, and
also concluded that Andrea Bennett was quasi-judicially immune.
Trout appeals. We affirm in part and reverse in part.
The issues before the Court are:
1. Did Trout violate fj 33-17-201(4), MCA (1985)?
2. Did Trout violate fj 33-18-203, MCA?
3. Is Andrea Bennett, individually and as Commissioner,
immune from fj 1983 claims?
4. Does the doctrine of quasi-judicial immunity render
Andrea Bennett, individually and as Commissioner, immune from suit
under state law as to the remaining claims?
5. Did the District Court err in failing to rule on Trout's
motion to file a second amended complaint?
Trout is a California resident licensed as an insurance agent
2
in the State of ~alifornia. He started his business in Montana in
1983. A non-resident life insurance agent's license was issued to
him by the Montana Department of Insurance (Department). The
license listed a California address and authorized Trout to sell
life and disability insurance in Montana as a non-resident insurer.
The license further provided that he could not wsolicit business
nor accept premiums under the name of [his] employing agency, or in
conjunction with, or under the name of any other organization."
Two events sparked the investigation of Trout. First, the
Department received a phone inquiry as to whether Trout was
licensed to do business in Montana as "Trout Insurancett and
received a letter complaining about Trout's activities. Second,
the Department received a letter from Trout himself containing the
letterhead ItTrout Insurancett, listing his Billings business
address.
The Department investigator proceeded on the assumption that
Trout, a licensed non-resident agent, was not permitted to maintain
a ~illings office and sell insurance in Montana, and that the
stationery and telephone book ads indicated he was holding himself
out to the public as a resident insurer. Trout filed the assumed
business name of "Trout Insurance Agencyttwith the Secretary of
State, under 5 30-13-203, MCA. The Department investigator
informed Trout he could not operate an office or do any business as
Trout Insurance because he was not licensed as such.
After completion of the investigation, filing of a complaint
by the Department, giving of notice of hearing, and hearing before
a hearing examiner at which both Trout and the Department were
represented in person and by counsel, the hearing examiner made
proposed findings of fact, conclusions of law and order dated May
28, 1986. The Commissioner reviewed the same and in turn made
extensive findings of fact, conclusions of law and order dated July
16, 1986. The Commissioner concluded that Trout had violated the
statutes in a number of respects and by order revoked his non-
resident license for twelve months and also ordered that he pay an
administrative fine of $2,500 to the office of the Commissioner.
Trout then commenced the present action in which he alleged
that Andrea Bennett individually and as Commissioner had violated
various of his constitutional rights and caused damages to him. He
sought a reversal of the Commissioner's order of July 16, 1986,
with regard to the statutory violations and fine, and also
requested a reversal of his license suspension. By the same
complaint Trout claimed damages on various theories under 42 U.S.C.
5 1983, and also a denial of constitutional rights by reason of the
requirement of taking down a sign and ceasing the selling of
insurance in Montana, as well as other constitutional tort
theories. The District Court entered an order bifurcating the
causes of action covered by the complaint.
As the first part of the bifurcation, the District Court
considered the appeal from the order of the Commissioner. The
District Court considered the matter under 5 33-1-711 (4), MCA,
which provides that upon receipt of the transcript and evidence,
the District Court shall hear the matter and following hearing,
that the District Court is to consider the evidence contained in
the transcript, exhibits and documents together with such other
additional evidence as may be offered by either party. Proceeding
under that authority, the District Court reconsidered the evidence
and made new findings of fact and conclusions of law. The District
Court reversed the determination of the Commissioner in a number of
respects which are not involved in this appeal. By its orders
dated August 25, 1989, and January 31, 1990, the District Court
concluded that Trout had violated 5 33-17-201(4), MCA (1985), by
placing business with John Alden Life Insurance Company before he
held an appointment issued by the Commissioner, and fined Trout
$250 for the offense; and also concluded that Trout violated 5 33-
18-203, MCA, by advertising himself as I1TroutInsurance Agencyn and
fined Trout $250 for that violation. The District Court
specifically reversed the Commissioner with regard to the
suspension of his license and allowed Trout to continue to sell
insurance without interruption, and also reversed the $2500 fine.
As the second step in the bifurcation process, on May 30,
1990, the District Court ruled on the motion for summary judgment
made by Andrea Bennett, individually and as Commissioner. The
District Court first concluded that the Commissioner was not a
"personm under 42 U.S.C. 5 1983, and granted summary judgment in
the omm missioner's favor on 5 1983 claims. The District Court
concluded that Will v. Michigan Dept. of State Police (1989), 491
U.S. 58, was controlling. The District Court stated:
Will v. Michigan Dept. of State Police, 491 U.S.
I 109 S.Ct. I 105 L.Ed.45 (1989), decided after
Trout filed his amended complaint, disposes of this
issue. 42 U.S.C., Section 1983, the provision under
which Trout seeks monetary damages, provides that any
"personw acting under color of state law, who violates
another's constitutional rights is liable to the injured
party. Will affirmed a Michigan Supreme Court decision
which held that neither a state nor a state official
acting in his or her official capacity is a llpersonw
under 42 U.S.C., section 1983. I . at - 1
d 109 S.Ct. at
, 105 L.Ed. at 58.
. . . Clearly Will holds that "a [section 19831 suit
against a state official in his or her official capacity
is not a suit against the official but rather is a suit
against the official's office." Will concluded that
neither the states nor state officials are vlpersonsll
subject to suit under Section 1983. Although Trout
alleges in his amended complaint that certain statutes
are unconstitutional, the constitutional counts in the
amended complaint rely exclusively on 42 U.S.C., Section
1983 for relief, and do not request declaratory or
injunctive relief. Summary judgment, dismissing both
[Andrea Bennett] personally and the Office of State
Auditor and Ex Officio Commissioner of Insurance on the
counts alleging constitutional violations, is therefore
proper.
The District Court cited Koppen v. Board of Medical Examiners
(1988), 233 Mont. 214, 759 P.2d 173, and concluded that the
Commissioner was quasi-judicially immune from suit on the remaining
counts and granted the Commissioner's motion for summary judgment
on those counts. As a result, the ~istrictCourt dismissed the
Commissioner individually and as State Auditor and Ex Officio
Commissioner of Insurance, with prejudice.
Trout brings this appeal from both parts of the bifurcated
proceeding.
Did Trout violate 5 33-17-201(4), MCA (1985)?
Section 33-17-201(4), MCA (1985) provided:
No agent shall place any business, other than coverage of
his own risks, with any insurer as to which he does not
then hold an appointment or license as agent under this
chapter. ...
Trout was fined $250 for violating 5 33-17-201(4), MCA (1985), by
placing business with John Alden Life Insurance Company before he
held an appointment to do so issued by the Commissioner. The
District Court found that Trout requested John Alden Life Insurance
Company to appoint him as a non-resident agent in Montana. The
District Court found that Trout solicited insurance business prior
to receiving a validated appointment from that company as was
required by the Commissioner. The record contains substantial
evidence to support that finding.
We affirm the conclusion of the District Court in holding that
Trout did violate H 33-17-201(4), MCA (1985).
Did Trout violate 5 33-18-203, MCA?
Section 33-18-203, MCA, provides:
No person shall make, publish, disseminate, circulate, or
place before the public, or cause, directly or
indirectly, to be made, published, disseminated,
circulated, or placed before the public, in a newspaper,
magazine, or other publication or in the form of a
notice, circular, pamphlet, letter, or poster or over any
radio or television station or in any other way, an
advertisement, announcement, or statement containing any
assertion, representation, or statement with respect to
the business of insurance or with respect to any person
in the conduct of his insurance business, which is
untrue, deceptive, or misleading. (Emphasis added).
Trout maintains that he never advertised as an llagency.lt He
contends that his Billings phone book listings as llTroutJim
Insurancew and ItTrout InsuranceI1 did not represent an agency. As
the Commissioner pointed out, and as found by the District Court,
Trout alleged the following in his Amended Complaint:
12. Trout registered an assumed name, "Trout Insurance
Agency," with the Montana Secretary of State on January
21, 1985. Thereafter he ordered and used stationery with
the name Trout Insurance Agency and the address of his
Billings office for correspondence relating to his
insurance sales in Montana. . .. (Emphasis added).
The District Court further concluded that Trout had signed a
restriction letter which indicated that the license was issued to
him as an individual, but that Trout had represented himself as an
agent. We conclude there is substantial evidence to support the
findings of the District Court. We affirm the holding that Trout
violated 5 33-18-203, MCA.
Is Andrea Bennett, individually and as Commissioner, immune
from 5 1983 claims?
Title 42 U.S.C. 5 1983 provides:
Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State or Territory
or the District of Columbia, subjects, or causes to be
subjected, any citizen of the United States or other
person within the jurisdiction thereof to the deprivation
of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other
proper proceeding for redress. ...
Trout points to the reliance of the District Court on the Will
case, as above described, and argues that Will applies only to
those claims against Andrea Bennett in her "official capacity. 'I He
further argues that Will provides no protection for claims against
her in her "personal capacity." Trout concedes that under Will,
Andrea Bennett is immune in her official capacity from the 5 1983
claims against her. Trout's argument is further emphasized in his
special brief regarding the case of Hafer v. Melo (1991), 112 S.Ct.
358, which was decided on November 5, 1991.
Andrea Bennett contends that she was acting within the scope
of her official duties and employment. She maintains that under
Will, neither a state nor a state official acting in his or her
official capacity is a ''person11under 5 1983. Andrea Bennett
further contends that Hafer has no bearing on the outcome of this
case. We disagree.
Because Hafer is dispositive of this issue, we will discuss it
at some length. Hafer sought election as Auditor General of
Pennsylvania. During the campaign she was given a list of names of
persons who allegedly secured their jobs in the Auditor General's
office through payments to former employees. Shortly after
becoming Auditor General she dismissed eighteen employees. Eight
of those employees sued Hafer in Federal District Court asserting
a claim under 42 U.S.C. 1983. Other respondents also sought
damages because they alleged they had been discharged because of
their political affiliation and support for Haferls opponent. The
United States Supreme Court granted certiorari "to address the
question whether state officers may be held personally liable for
damages under 5 1983 based upon actions taken in their official
capacities.I1 The United States Supreme Court discussed at some
length the comparison between official capacity suits and personal
capacity suits. The court pointed out that personal capacity suits
seek to impose individual liability for actions under color of
state law, and as a result it is sufficient to establish personal
liability under 5 1983 by showing that an official acted under
color of state law and caused deprivation of a federal right. The
court pointed out how this is specifically covered by the above
quoted definition from 5 1983.
In discussing the distinction further, the Supreme Court
pointed out that state officials sued in their official capacities
are not persons for purposes of suit because they assume the
identity of the government which employs them. By contrast,
officers sued in their personal capacity come to court as
individuals, so that a government official in the role of a
personal capacity defendant fits comfortably within the above
statutory term llperson.wAt this point the court pointed out that
Hafer attempted to argue that the distinction turned upon the
capacity in which the state official was acting when the plaintiff
was injured. The court refused to accept this theory, pointing out
that the requirement of action under state law means that Hafer may
be liable for discharging respondents precisely because of her
authority as Auditor General. Hafer also argued there was a
distinction as to acts taken under color of state law, claiming
that such actions were immune. Again the court found no support in
the broad language of 5 1983.
The court emphasized that it has in the past refused to extend
absolute immunity beyond a very limited class of officials,
including the President, legislators carrying out their legislative
functions, and judges carrying out their judicial functions, "whose
special functions or constitutional status requires complete
protection from suit.tt Hafer, 112 S.Ct. at 364. In support of
that conclusion, the Supreme Court stated:
State executive officials are not entitled to absolute
immunity for their official actions. Scheuer v. Rhodes,
supra.
- at 364.
Id. Hafer further contended that under Will, there should
not be recovery because the Eleventh Amendment bars suits in
federal court by private parties seeking to impose a liability
which must be paid from public funds in the state treasury. In
discussing this issue, the Supreme Court stated:
"[Slince Ex parte Younq, 209 U.S. 123 [28 S.Ct. 441, 52
L.Ed. 7141 (1908),It we said ItIthas been settled that the
Eleventh Amendment provides no shield for a state
official confronted by a claim that he had deprived
another of a federal right under the color of state law.It
... While the doctrine of Ex parte Younq does not apply
where a plaintiff seeks damages from public treasury,
damages awards against individual defendants in federal
courts "are a permissible remedy in some circumstances
notwithstanding the fact that they hold public office.It
... That is, the Eleventh Amendment does not erect a
barrier against suits to impose "individual and personal
liabilityvt state officials under 5 1983.
on
Hafer, 112 S.Ct. at 364.
After such an extensive discussion, the Court unanimously
held:
We hold that state officials, sued in their
individual capacities are ttpersonsMwithin the meaning of
5 1983. The Eleventh Amendment does not bar such suits,
nor are state officers absolutely immune from personal
liability under 5 1983 solely by virtue of the "officialn
nature of their acts.
Hafer 112 S.Ct. at 365.
In connection with the holding in Hafer, we point out that the
amended complaint in the present case named Andrea H. Bennett, as
an individual and as State Auditor and Ex Officio Commissioner of
Insurance in the title, and also alleged the following in the
complaint:
This action is brought against this Defendant in her
official and personal capacities.
We conclude that under Hafer, which had not been decided at
the time of the summary judgment by the District Court, the
District Court's interpretation of Will as holding that neither
states nor state officials are "personsw subject to suit under 5
1983, must be reversed. We hold that under the United States
Supreme Court decision in Hafer, Andrea Bennett, State Auditor and
Commissioner of Insurance of Montana was sued by Trout in her
individual capacity and as a result can be classified as a l'personll
within the meaning of 5 1983, and that as such a state officer,
Andrea Bennett is not absolutely immune from personal liability
under 5 1983 solely by virtue of the "official" nature of her acts.
We reverse the District Court on this issue and remand for further
proceedings consistent with this opinion.
Does the doctrine of quasi-judicial immunity render Andrea
Bennett, individually and as Commissioner, immune from suit under
state law as to the remaining claims?
Trout concedes that the doctrine of quasi-judicial immunity
protects the Commissioner from her actions in filing charges
against him, the holding of the administrative hearing, and the
ultimate decision finding him to have violated various code
provisions. However, he argues that a distinction must be made
between these quasi-judicial functions, and the actions in behalf
12
of the Commissioner prior to the filing of the administrative
charges. In particular, he urges that the actions of the
Commissioner through her agent, Dan McGowan, in ordering him to
remove his sign from his Billings office and requiring that he
cease the sale of insurance in Montana under his non-resident
license, clearly violated his constitutional rights to due process,
equal protection, freedom to travel and free speech. While Trout
might agree that the investigation made in order to provide a basis
for the filing of charges was quasi-judicial in nature, he contends
a distinction must be made with regard to the actions which
essentially forced him out of business. He argues that this issue
involves questions of fact which preclude summary judgment on the
issue.
In State v. District Court (1990), 246 Mont. 225, 805 P.2d
1272, this Court addressed the issue of whether the State and the
Division of Workers' Compensation are protected by quasi-judicial
immunity for their admitted negligence in renewing the privilege of
an employer to self-insure under the Workerst Compensation Law.
This Court held that the nature of the functions performed were
central to the determination of the issue, and stated:
For immunity to apply the function of the Division must
be quasi-judicial rather than administrative or
ministerial.
State v. ~istrictCourt, 805 P.2d at 1274. Furthermore, the Court
provided the following definitions:
~uasi-judicial functions are those which lie midway
between the judicial and ministerial ones. The lines
separating them from such . . . are necessarily
indistinct; but, in general terms, when the law, in words
or by implication, commits to any officer the duty of
looking into facts, and acting upon them, not in a way
which it specifically directs, but after a discretion in
its nature judicial, the function is termed quasi-
judicial.
In the same line, a ministerial act has also been defined as
an act performed in a prescribed legal manner, in obedience to
the law or the mandate of legal authority, without regard to,
or the exercise of, the judgment of the individual upon the
propriety of the acts being done.
- at 1275. In distinguishing State v. District Court from Koppen
Id.
v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173,
we looked at the definition of quasi-judicial function found in 6
2-15-102 (lo), MCA:
gfQuasi-judicial function" means an adjudicatory
function exercised by an agency, involving the exercise
of judgment and discretion in makins determinations in
controversies. ...
The Court stated:
The case before us is distinguishable from Kop~en.
In KoDDen, the Board allegedly failed to respond to
complaints, adversarial in nature, that it received
regarding a physician's fitness to practice medicine and
to take remedial action. We noted that the action or
inaction by the Board in Ko~pen was its decision not to
revoke or limit the physician's license or initiate such
action when faced with complaints concerning his
professional conduct. There was no allegation that the
Board failed to even consider the complaints.
Here, we first note that there is no controversy
from the outset as in Ko~pen. The facts merely involve
the filing of an application rather than an adversarial
setting involving a dispute or controversy. We conclude
that immunity does not attach because the Division is not
expressly designated a quasi-judicial board, see § 2-15-
124, MCA, see generally Title 2, Chapter 15, MCA, nor was
it performing a quasi-judicial function ... (Citations
Omitted). (Emphasis in original.)
- at 1275.
Id.
In pertinent part § 2-15-102(10), MCA, provides:
(10) nQuasi-judicial functionl1 means an
adjudicatory function exercised by an agency, involving
the exercise of judgment and discretion in making
determinations in controversies. The term includes but
is not limited to the functions of interpreting,
applying, and enforcing existing rules and laws granting
or denying privileges, rights, or benefits; issuing,
suspending, or revoking licenses, permits, and
certificates; determining rights and interests of adverse
parties; evaluating and passing on facts; awarding
compensation; fixing prices; ordering action or abatement
of action; adopting procedural rules; holding hearings;
and any other act necessary to the performance of a
quasi-judicial function.
On the question of whether or not an investigation by the
commissioner s office should be classed as quasi-judicial in
nature, the case of Gerber v. Commissioner of Ins. (1990), 242
Mont. 369, 786 P.2d 1199, is controlling:
As a discretionary function, the Insurance Commissionerfs
conduct of an investigation based on a consumerfs
complaint against an insurer is protected by quasi-
judicial immunity.
As a result, the investigation of Trout clearly is protected by
quasi-judicial immunity.
The narrow issue which concerns us does not involve the
investigation itself. The issue is whether the agent of the
commissioner properly required Trout to remove his sign and stop
the sale of insurance. Our review of the 1985 sections of Montana
Code Annotated which applied to these particular actions does not
disclose any statutory provision granting authority to the
Commissioner or any agent of the Commissioner to require an agent
or insurance producer to take down a sign in the manner alleged by
Trout, or requiring an agent or producer to close down his office
so far as the sale of insurance is concerned, as again is alleged
by Trout. The record before us on this aspect is both confusing
and incomplete so that we are not able to determine the specific
actions which were alleged to have occurred on the part of Dan
McGowan in behalf of the Commissioner.
We therefore conclude there is a remaining issue of material
fact which precludes summary judgment with regard to the alleged
conduct of the required taking down of the Trout sign and the
closing of Trout Insurance. We conclude it is appropriate to
reverse the District Court on this narrow specific issue.
In addition Trout claims that he suffered damages by reason of
the notification of various insurance companies of his suspension
in derogation of the automatic stay provision under 5 33-1-711(2),
MCA, which in 1985 read:
(2) Upon filing of the notice of appeal therein,
the court shall have full jurisdiction and shall
determine whether such filing shall operate as a stay of
the order or action appealed from, except that in the
following instances the filing of the notice of appeal
shall automatically stay the order appealed from pending
the judgment of the district court on the appeal:
(a) appeal from suspension or revocation of the
license of an agent, solicitor, or surplus line agent;
(Emphasis added.)
Again the record is inadequate for us to determine the precise
steps which were taken. Again it appears there is an issue of
material fact which precluded summary judgment on this narrow
aspect as well.
We therefore hold that summary judgment is reversed with
regard to the claim of quasi-judicial immunity as to the alleged
removal of the sign, closing of the insurance business, and alleged
improper notification of insurance companies in light of the
automatic stay provided for in 1 33-1-711(2), MCA (1985). We
remand on these specific issues for further proceedings by the
District Court consistent with this opinion.
v
Did the District Court err in failing to rule on Trout's
motion to file a second amended complaint?
Rule 15(a), M.R.Civ.P., provides that after a responsive
pleading has been served, a party may amend his pleading only by
leave of court or by written consent of the adverse party, and that
"leave shall be freely given when justice so requires." Trout
filed his motion to amend his complaint after summary judgment was
entered against him. However, we note that he failed to provide
any basis for such an amendment. Instead, his motion consisted of
a one sentence request to amend without any explanation of why he
wished to do so. We conclude that there was no abuse of discretion
on the part of the District Court in denying Trout's motion to
amend and hold that such a denial was proper.
We affirm the ~istrictCourt on Issues I, 11, and V. We
reverse the District Court on Issue I11 regarding the 9 1983
claims, and on the specified narrow issues under Issue IV, and
remand for further proceedings consistent with this opinion.
/-
'\ Chief Justice
I
Justices
Justice Terry N. Trieweiler specially concurring in part and
dissenting in part.
I concur in part and dissent in part from the opinion of the
majority. My reasons are discussed under the headings assigned to
the various issues raised by the appellant.
CIVIL RIGHTS ACTION
I concur with the majority's reversal of the District Court on
this issue, but do not feel that it was necessary to make that
decision dependent on the Supreme Court decision in Hafer v. Melo
(1991), 502 U.S. , 112 S.Ct. 358, 116 L.Ed.2d 301.
In his complaint, plaintiff sued Andrea H. Bennett
individually in her personal capacity, and alleged that she
violated his constitutional rights in the manner in which she
personally applied provisions of the Montana Insurance Code to him.
He specifically alleged that Bennett applied the Montana Insurance
Code in such a way as to violate the Privileges and Immunities
Clause of the U.S. Constitution, Article IV, Section 2, and the
Equal Protection Clause of the Fourteenth Amendment to the
Constitution. He also alleged that the Commissioner personally
acted under color of state law to deprive him of his property
without due process of law in violation of the Fourteenth Amendment
to the United States Constitution.
The plaintiff's allegations were not controverted. Bennett
moved for summary judgment based purely on her assertion that she
was immune from suit. Summary judgment was granted by the District
Court based purely on its conclusion that Bennett could not be sued
under the Civil Rights Act because of the U.S. Supreme Courtfs
decision in Will v. Michigan Dept. of State Police (1989), 491 U.S. 58, 109
S.Ct. 2304, 105 L.Ed.2d 45. However, Will did not grant immunity to
public officials from suits under 42 U.S.C. H 1983, when the suit
is based upon allegations of personal misconduct by that public
official. In Will, the plaintiff alleged that he had been denied a
promotion within the Michigan Department of State Police for an
improper reason. He joined the Director of State Police as a
defendant in his official capacity without alleging that the
director himself had personally engaged in any culpable conduct.
The Will decision stands for the proposition that state officials
cannot be sued in their official capacity based simply on respondeat
superior because such a suit is not in reality against the official
as an individual, but rather against his office.
Where a 5 1983 action against a state official is based upon
that official's personal misconduct, he is still personally liable
to suit. The difference in liability was explained in Kentucky v.
Graham (1985), 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114, in the
following language:
Proper application of this principle in damages actions
against public officials requires careful adherence to
the distinction between personal- and official-capacity
suits. Because this distinction apparently continues to
confuse lawyers and confound lower courts, we attempt to
define it more clearly through concrete examples of the
practical and doctrinal differences between personal-and
official-capacity actions.
Personal-capacity suits seek to impose personal liability
upon a government official for actions he takes under
color of state law. See, e.g., Scheuer v. Rhodes, 416 U.S.
232, 237-238, 40 L.Ed.2d 90, 94 S.Ct. 1683, 71 Ohio
Ops.2d 474 (1974). Official-capacity suits, in contrast,
"generally represent only another way of pleading an
action against an entity of which an officer is an
agent. iy f oil evcs .
Monell v New York C t Dept. o S c a S r i e , 4 3 6 U S .
.
658, 690, n. 55, 56 L.Ed.2d 611, 98 S.Ct. 2018 (1978).
As long as the government entity receives notice and an
opportunity to respond, an official-capacity suit is, in
all respects other than name, to be treated as a suit
against the entity. Brandon, supra, at 471-472, 83 L.Ed. 2d
878, 105 S.Ct. 873. It is n t a suit against the official
o
personally, for the real party in interest is the entity.
Thus, while an award of damages against an official in
his personal capacity can be executed only against the
official's personal assets, a plaintiff seeking to
recover on a damages judgment in an official-capacity
suit must look to the government entity itself.
Graham, 473 U.S. at 165, 166.
Therefore, where it can be shown that a public official acting
under color of state law personally caused a deprivation of the
claimant's federal rights, that individual is still personally
liable under 42 U.S.C. 5 1983. The District Court erred when it
held that the personal suit against Bennett was barred by the U.S.
Supreme Court's decision in W l , regardless of the outcome in Hafer.
il
For these reasons, I concur in the decision to reverse the
District Court's summary judgment in favor ofthe defendant Bennett
which dismissed plaintiff's claims filed pursuant to 42 U.S.C.
QUASI-JUDICIAL IMMUNITY
The issue of whether Bennett's acts which are complained of
were administrative and ministerial, as opposed to quasi-judicial,
is an interesting one, and by itself was probably sufficient to
preclude summary judgment. However, it seems to me that there is
a more important issue involved with the dismissal of potentially
meritorious claims based upon judicially created quasi-judicial
immunity. Article 11, Section 18, of the Montana Constitution,
provides as follows:
The state, counties, cities, towns, and all other local
governmental entities shall have no immunity from suit
for injury to a person or property, except as may be
specifically provided by law by a 2/3 vote of each house
of the legislature.
To my knowledge, the Montana Legislature has never voted to impose
quasi-judicial immunity by a 2/3 vote, or by any other vote.
Therefore, to judicially create such immunity contravenes an
express provision of the Montana Constitution which this Court is
sworn to uphold. Our responsibility is to enforce the
Constitution, not to undermine it. For that reason, I would
reverse this Court s decisions in Koppen v. Board of Medical Examiners
( 1988) , 2 3 3 Mont . 2 14, 759 P .2d 173 , and Gerber v. Commissioner of Ins~lrance
(1990), 242 Mont. 369, 786 P.2d 1199. I would also reverse the
District Court's decision granting summary judgment to the
defendant on the basis of quasi-judicial immunity, and dissent from
that portion of the majority opinion which suggests that this
doctrine may protect the defendant in some activities, but not
others.
SECTION 33-18-203, MCA (1985)
Section 33-18-203, MCA (1985), prohibits an individual from
making untrue, deceptive, or misleading advertisements regarding
the insurance business. There was absolutely no evidence in this
case that plaintiff ever misrepresented anything or mislead anyone.
The District Court determined that plaintiff violated the
above section by advertising himself as I1Trout Insurance Agency,"
when he in fact was only licensed individually. However, all of
the evidence was to the contrary.
Copies of his letterhead, his telephone book listing, and his
yellow pages advertisement were introduced into evidence at the
administrative hearing. Nowhere on any of these documents does the
word "agency" appear.
Plaintiff's letterhead refers to IrTrout Insurance. His
telephone listings in the Billings telephone books refer to IfTrout
Insurancen and I1Trout,Jim In~urance.~~ advertisement in the
His
yellow pages lists him as I1TroutIn~urance.~~
There was no evidence
offered by the Insurance Commissioner that plaintiff ever held
himself out as being associated with an agency.
Ignoring the record and ignoring the fact that plaintiff was
never charged by the Insurance Commissioner with advertising as
IvTrout Insurance Agency,I1 this Court concludes that an error in
plaintiff's amended complaint constitutes ggsubstantial
evidence" to
support the findings of the District Court.
Allegations in complaints are not evidence, and the majorityfs
opinion cites no evidence in support of the District Court's
conclusion that plaintiff violated 5 33-18-203, MCA (1985). The
fact that a person could be convicted of a statute as broad as this
statute without notice of the basis for the charges, and with
absolutely no evidence offered to support the charges, is a
frightening development. I would reverse the District Court's
conclusion that plaintiff violated that section, and dissent from
the majority opinion which affirms that conclusion.
SECTION 33-17-201 ( 4 1 , MCA (1985)-
The second statute that plaintiff was accused of violating
prevents agents from placing business with an insurer with whom he
does not hold an appointment. It does not specify the nature of
the appointment that is required. In this case, plaintiff did hold
an appointment with John Alden Life Insurance Company in California
at the time that he wrote the policy which formed the basis of the
charges against him.
It would have been reasonable for plaintiff to conclude that
pursuant to Montana's reciprocity agreement with California it was
permissible for him to write the policy in question. Section
33-17-403, MCA (1985) provides:
An applicant for a nonresident license must be licensed
in the state of his residence to act as agent for the
kinds of insurance for which he applies for licensing in
the state of Montana. The nonresident agent shall be
licensed to represent only those insurers which he is
licensed to represent in the state of his residence and
which are licensed in the state of Montana. The
insurance supervisory official of the applicant's state
of residence must certify that the applicant is licensed
and to the extent of the license.
If plaintiff's conduct in this case constituted a violation of
the law, it seems to me that fundamental principles of fairness and
prior case law require that he is at least entitled to advance
notice as to what the law commands and forbids. Papachristou v. City of
Jacksonville (1972), 405 U.S. 156, 92 S.Ct. 839, 31 L.Ed.2d 110. In
this case, the statutes that plaintiff was found to have violated
are totally deficient in that respect.
Section 33-17-201(4), MCA (1985), also provides for an
exception which was not mentioned in the majority opinion. The
statute makes its requirements applicable I1except as provided in
... 5 33-17-1104 as to life or disability insurance agents."
Plaintiff was in fact licensed as a "life and/or disability
insurance agent.
Section 33-17-1104, MCA (1985), provides that:
A life or disability insurance agent may from time to
time place excess or rejected risks in any other life or
disability insurer authorized to transact insurance in
this state, with the knowledge and approval of the
insurer or insurers as to which the agent is so licensed,
and may receive a commission thereon without being
required to have a license as to such other insurer.
There is a factual issue regarding whether the policy that
plaintiff actually wrote for John Alden prior to his appointment in
Montana was an excess or rejected risk. That issue was never
addressed by the District Court. However, if we assume that the
group for whom the policy was issued fits into either of those
categories, plaintiff did not violate the insurance code when he
placed the Computer Land account with John Alden.
For these reasons, I do not believe there is substantial
evidence to support the District Court's finding that plaintiff
violated 5 33-17-201(4), MCA (1985). I dissent from the majority
opinion which concludes that there was, and would reverse the
District Court on this issue.
I concur in the foregoing concurrence and dissent of Justice
Trieweiler.