Lagueux v. Leonardi ( 2014 )

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LAGUEUX v. LEONARDI—DISSENT
BISHOP, J., dissenting. As noted by the majority, the
principal issue raised in this appeal requires this court
to engage in statutory interpretation. Specifically, our
task is to determine whether the General Assembly’s
2001 enactment of the National Association of Insur-
ance Commissioners Model Act, as embodied by Gen-
eral Statutes § 38a-702a et seq., entirely replaced
provisions of General Statutes § 38a-769 as they related
to insurance producers. This appeal further requires us
to determine whether the provisions of General Statutes
§ 46a-80, regarding human rights and opportunities in
government employment generally, apply to the licen-
sure of insurance producers. While I agree with the
majority’s well reasoned opinion that § 38a-702a et seq.
supplanted § 38a-369 as it related to insurance produc-
ers, I cannot agree with the majority’s conclusion that
the provisions of § 46a-80 apply to insurance producers.
Accordingly, I respectfully dissent.
In 2001, the General Assembly enacted No. 01-113
of the 2001 Public Acts (P.A. 01-113), titled ‘‘An Act
Concerning the Licensing of Insurance Producers,’’
which largely tracks the National Association of Insur-
ance Commissioners Model Act. In an analysis of the
bill, the General Assembly’s Office of Legislative
Research made the following observation: ‘‘The bill also
modifies the commissioner’s responsibilities in
determining whether an applicant is suitable. It requires
her to find that such applicant (1) is at least [eighteen]
years of age; (2) has not committed any acts that are
grounds for denial, suspension or revocation; and (3)
where required, has completed a pre-licensing course
for the lines of authority applied for. Current law
requires the commissioner to satisfy himself that each
applicant is properly qualified, trustworthy, and that
granting a license is in the public interest.’’ Office of
Legislative Research, Amended Bill Analysis for Substi-
tute Senate Bill No. 1096 as amended by Senate Amend-
ments A and B, p. 3. As to any actions that may be
grounds for denial, suspension or revocation, the lan-
guage of the statute states specifically that such grounds
are those which are set forth in § 38a-702k, which con-
cerns denial, nonrenewal or revocation of a producer
license. In pertinent part, this statute sets forth the
bases on which the commissioner may refuse to issue
an insurance producer license. They are as follows: ‘‘(1)
Providing incorrect, misleading, incomplete or materi-
ally untrue information in the license application; (2)
violating any insurance laws, or violating any regulation,
subpoena or order of the commissioner or of another
state’s commissioner; (3) obtaining or attempting to
obtain a license through misrepresentation or fraud; (4)
improperly withholding, misappropriating or con-
verting any moneys or properties received in the course
of doing an insurance business; (5) intentionally misrep-
resenting the terms of an actual or proposed insurance
contract or application for insurance; (6) having been
convicted of a felony; (7) having admitted or been found
to have committed any insurance unfair trade practice
or fraud; (8) using fraudulent, coercive or dishonest
practices, or demonstrating incompetence, untrustwor-
thiness or financial irresponsibility in the conduct of
business in this state or elsewhere; (9) having an insur-
ance producer license, or its equivalent, denied, sus-
pended or revoked in any other state, province, district
or territory; (10) forging another’s name to an applica-
tion for insurance or to any document related to an
insurance transaction; (11) improperly using notes or
any other reference material to complete an examina-
tion for an insurance license; (12) knowingly accepting
insurance business from an individual who is not
licensed; (13) failing to comply with an administrative
or court order imposing a child support obligation; or
(14) failing to pay state income tax or comply with any
administrative or court order directing payment of state
income tax.’’ General Statutes § 38a-702k. Importantly,
the statute provides elsewhere: ‘‘(a) Unless a person is
denied a license pursuant to section 38a-702k, any per-
son who has met the requirements of sections 38a-702d
and 38a-702e shall be issued an insurance producer
license.’’ General Statutes § 38a-702f (a).
The enactment of P.A. 01-113 also impacted § 38a-
769 in a manner significant to the issues on review.
Prior to the enactment of P.A. 01-113, General Statutes
(Rev. to 2001) § 38a-769 (a) provided in relevant part:
‘‘Any person, partnership, association or corporation
. . . desiring to act within this state as an insurance
producer, a public adjuster, casualty adjuster, motor
vehicle physical damage appraiser, certified insurance
consultant, surplus lines broker or desiring to engage
in any insurance-related occupation for which a license
is deemed necessary by the commissioner, shall make
a written application to the commissioner for a resident
license.’’ As a result of P.A. 01-113, the inclusion of ‘‘an
insurance producer’’ from the list of those occupations
covered by § 38a-769 was eliminated and the statute’s
catchall reference to ‘‘any insurance-related occupation
for which a license is deemed necessary by the commis-
sioner’’ was modified by the addition of the clause
‘‘other than an occupation as an insurance producer.’’
As reasoned by the majority, the clear import of the
enactment of P.A. 01-113 was to create an entirely new
process for the processing of applications for those
desirous of obtaining licensure to produce insurance.
To conclude, as argued by the commissioner, that rem-
nants of the old process, which gave the commissioner
discretion based on subjective factors in assessing
applications for licensure, still apply would require us
to ignore the wholesale changes to the statutory scheme
for the licensure of insurance producers effectuated by
the adoption of § 38a-702a et seq.
In sum, I agree completely with the majority’s analysis
that the enactment of P.A. 01-113 had the effect of
replacing previous provisions of § 38a-369 with the new
and more restrictive provisions of § 38a-702a et seq.
Our agreement, however, ends at that point.
In concluding that the commissioner retains discre-
tion to make subjective determinations in processing
applications from would-be insurance producers, the
majority takes its analysis two steps too far. First, the
majority construes the term ‘‘shall’’ in § 38a-702f to
mean less than the term’s normal connotation, and,
secondly, the majority concludes that, notwithstanding
the language of § 38a-702a et seq. dealing specifically
with insurance producers, the commissioner retains
discretion pursuant to § 46a-80 to reject an application
to produce insurance on the basis of an applicant’s
general unsuitability. In reaching this conclusion, the
majority may have fashioned a better policy than the
General Assembly enacted but, in doing so, I believe,
respectfully, the majority has overstepped judicial
bounds by creating rather than interpreting statutory
law.
In dismissing the direction in § 38a-702f that, unless
an applicant has been denied a license pursuant to
§ 38a-702k, the applicant ‘‘shall be issued an insurance
producer license,’’ the majority adopts the notion that
the term ‘‘shall’’ need not always mean what it says. That
is, the term ‘‘shall’’ need not always connote mandatory
action. To be sure, decisional law supports the general
notion that the use of the term ‘‘shall’’ can denote direc-
tory and not mandatory language in certain contexts.
Pointedly, we are instructed that when the word ‘‘shall’’
is juxtaposed with a substantive action verb, it creates
a mandatory duty. See Wiseman v. Armstrong, 295
Conn. 94, 101, 989 A.2d 1027 (2010). Our court has
expressed the axiom of statutory construction in this
manner: ‘‘The test to be applied in determining whether
a statute is mandatory or directory is whether the pre-
scribed mode of action is the essence of the thing to
be accomplished, or in other words, whether it relates
to a matter of substance or a matter of convenience.
. . . If it is a matter of substance, the statutory provi-
sion is mandatory. . . . If, however, the . . . provi-
sion is designed to secure order, system and dispatch
in the proceedings, it is generally held to be directory
. . . . Definitive words, such as must or shall, ordi-
narily express legislative mandates of a nondirectory
nature. . . . As we recently noted, the word shall cre-
ates a mandatory duty when it is juxtaposed with [a]
substantive action verb.’’ (Internal quotation marks
omitted.) State v. Jones, 140 Conn. App. 455, 464, 59
A.3d 320, cert. denied, 308 Conn. 911, 61 A.3d 1099(2013). Here, the word ‘‘shall’’ cannot fairly be said to
regard only a matter of convenience or procedural
nicety as it relates to the substantive subject of the
ability of a person or entity to engage in business within
the state. Indeed, it could be argued that the use of the
term ‘‘shall’’ in this context gives to an applicant not
statutorily disqualified, an expectancy in the order of
a property right.
In addition to concluding that the term ‘‘shall’’ is not
mandatory, the majority concludes that the commis-
sioner retains authority pursuant to General Statutes
§§ 46a-80 and 46a-81 to reject an application for lack
of suitability. In coming to this view, the majority also
concludes that without importing the discretionary pro-
visions of §§ 46a-80 and 46a-81 into the more limiting
authority set forth in § 38a-702a et seq., the latter statute
would lead to an absurd result. I respectfully disagree.
Section 46a-80 (c) provides, in part, that a person
may be denied a license to engage in an occupation in
Connecticut by reason of a prior conviction of a crime
if ‘‘after considering (1) the nature of the crime and its
relationship to the job for which the person has applied;
(2) information pertaining to the degree of rehabilita-
tion of the convicted person; and (3) the time elapsed
since the conviction or release, the state, or any of its
agencies, determines that the applicant is not suitable
for the position of employment sought or the specific
occupation . . . for which the license . . . is sought.’’
The majority reasons that since General Statutes § 38a-
702e requires that an applicant for licensure as an insur-
ance producer must utilize the uniform application
which, in turn, requires an applicant to disclose any
criminal history, it would be absurd to conclude that
the commissioner does not have the authority, as set
forth in §§ 46a-80 and 46a-81, to deny licensure to one
convicted of a crime who has not shown adequate reha-
bilitation. In reaching its conclusion, the majority
appears to have ignored the well accepted axiom of
statutory construction that when there are two statutes
dealing with the same subject, one more general than
the other, the more specific statute will control if the
statutes cannot be harmonized. See Kepner v. United
States, 195 U.S. 100, 125, 24 S. Ct. 797, 49 L. Ed. 114(1904); Charlton Press, Inc. v. Sullivan, 153 Conn. 103,
110, 214 A.2d 354 (1965). Of course, if the two statutes
can be harmonized, then our task is to construe them
as consistent with each other, thereby giving effect to
both. See Kupersmith v. Kupersmith, 146 Conn. App.
79, 87, A.3d (2013). I believe this principle is applica-
ble to the issue at hand. In my view, the commissioner
must apply the specific provisions of § 38a-702a et seq.
and not the provisions of § 46a-80, in assessing an insur-
ance producer application because the inconsistent pro-
visions of the two statutes cannot reasonably be
harmonized. In short, the application of the broader
and subjective discretionary parameters of § 46a-80 to
the insurance producer context would render meaning-
less the strictures of § 38a-702e and the requirements
of § 38a-702f that any person not disqualified under
§ 38a-702e shall be given a license to produce insurance.
Since the statutes are inconsistent, they cannot be
applied without torturing the language of one of them.
Indeed, the General Assembly appears to have recog-
nized the potential conflict between the specific author-
ity of particular departments of government and the
authority of government, generally, to consider an appli-
cant’s criminal record and the extent of rehabilitation
in granting or denying employment or licensure. By the
provisions of § 46a-81, the General Assembly has made
the provisions of General Statutes §§ 46a-79 through
46a-81 controlling over ‘‘any other provisions of law
which purport to govern the denial of licenses . . . on
the grounds of a lack of a good moral character, or
which purport to govern the suspension or revocation
of a license, permit, certificate or registration on the
grounds of conviction of a crime.’’ On the basis of my
review of § 38a-702a et seq., § 46a-81 does not apply
to the licensure of insurance producers because that
statutory scheme does not grant the commissioner dis-
cretion to deny a license due to an applicant’s lack of
good moral character nor does it permit suspension or
revocation of a license on the grounds of conviction of
a crime.
In addition to the language of § 46a-81 making that
chapter’s provisions applicable to certain other govern-
mental contexts, the General Assembly has shown its
ability to incorporate § 46a-80 into more specific licen-
sure statutes. For example, General Statutes § 20-316
(a), which delineates the grounds for refusing to license
real estate brokers and salespersons provides, in perti-
nent part: ‘‘No license under this chapter shall be denied
. . . to any applicant who has been convicted of forg-
ery, embezzlement, obtaining money under false pre-
tenses, extortion, criminal conspiracy to defraud or
other like offense or offenses . . . except in accor-
dance with the provisions of section 46a-80.’’ Similarly,
General Statutes § 36a-541, concerning the licensure
of sales finance companies, while setting forth several
criteria for licensing, provides: ‘‘Any denial of an appli-
cation by the commissioner shall, when applicable, be
subject to the provisions of section 46a-80.’’ While Gen-
eral Statutes § 36a-489 (a) (1) sets forth the parameters
of the banking commissioner’s discretion in dealing
with licensing applications for mortgage lenders and
brokers, that statute provides as well: ‘‘The commis-
sioner shall not issue an initial license for a mortgage
lender, mortgage correspondent lender or mortgage
broker unless the commissioner, at a minimum, finds
that: (A) The applicant meets the requirements of sub-
section (a) of section 36a-488; (B) notwithstanding the
provisions of section 46a-80, the applicant, the control
persons of the applicant and the qualified individual or
branch manager with supervisory authority at the office
for which the license is sought have not been convicted
of, or pled guilty or nolo contendere to, a felony in a
domestic, foreign or military court during the seven-
year period preceding the date of the application for
licensing or at any time preceding the date of applica-
tion if such felony involved an act of fraud, dishonesty,
a breach of trust or money laundering, provided any
pardon or expungement of a conviction shall not be a
conviction for purposes of this subdivision . . . .’’
The point of these examples is that they are apt dem-
onstrations of the General Assembly’s awareness of the
provisions of § 46a-80 and that, when enacting legisla-
tion regarding specific areas of licensing, the General
Assembly has reflected this awareness by incorporating
or delineating the provisions of § 46a-80 from specific
licensing legislation. Given the General Assembly’s his-
tory of having incorporated the provisions of § 46a-80
into certain specific licensing statutes, I believe,
respectfully, it is not our place to fill in what we may
consider to be a legislative void where the General
Assembly has chosen not to do so. That the General
Assembly chose not to incorporate § 46a-80 into the
scheme for licensing insurance producers should not
be ignored.
Finally, we cannot dismiss the clear legislative man-
dates and limitations of § 38a-702a et seq. on the basis
that strict application of the statutory scheme would
lead to absurd results. Here, I believe the majority con-
flates the notion of absurdity as it is used in statutory
interpretation with a public policy concern that, per-
haps, the commissioner should be vested with the dis-
cretion he wishes to exercise in this instance.
In support of the trial court’s judgment, the commis-
sioner has argued, with apparent success, that constru-
ing § 38a-702a et seq. without also incorporating § 46a-
80 into its provisions would lead to the absurd result
that, while an applicant must disclose his or her criminal
history on the mandated application form, the commis-
sioner, nonetheless, does not have the authority pursu-
ant to § 38a-702a et seq. to deny an application for
licensure on the basis of an applicant’s criminal back-
ground. The commissioner’s point in this regard is that
in construing § 38a-702a et seq., we must incorporate
the provisions of § 46a-80 regarding the allowable treat-
ment of an applicant’s criminal record because, other-
wise, it makes no sense to require applicants to utilize
a form that includes a recitation of one’s criminal
record. In acceding to this argument, the majority
ignores the provision of § 38a-702k, which expressly
gives the commissioner the authority to reject an appli-
cation from one who has been convicted of a felony.
Thus, it is entirely reasonable and not absurd that the
statutory scheme for the licensing of insurance produc-
ers as set forth in § 38a-702a et seq. requires an applicant
to set forth his or her past criminal record as the comple-
tion of the application provides a vehicle for determin-
ing whether an applicant may be statutorily disqualified
for having a felony conviction.
To be sure, it may well be bad public policy not to
permit the insurance commissioner the discretion to
weigh whether an applicant for an insurance producer
license is a trustworthy applicant or a person of good
moral character or a person previously convicted of a
misdemeanor who has not been rehabilitated, but judi-
cial notions of a beneficial public policy are not part
of the court’s task in statutory interpretation. Moreover,
it is beyond the bounds of statutory interpretation for
a court to refuse to enforce the clear language of a
statute on the basis that the statute, as written, makes
bad public policy. Enacting legislation is uniquely the
function of the legislative branch. Fixing flawed statutes
is as well. In this instance, I would not affirm the trial
court’s judgment. Rather, I would reverse the judgment
of the trial court and remand this case with direction
that the matter be further remanded to the administra-
tive hearing officer for a determination, after a hearing,
of whether the applicant is entitled to an insurance
producer license on the basis of the criteria and process
as set forth in § 38a-702a et seq.
Accordingly, I respectfully dissent.