Department of Insurance v. MacFarland

Opinion by Judge Crumlish, Jr., This is an appeal from an adjudication and order of the Commonwealth of Pennsylvania, Department of Insurance (Department), denying the application of Thomas J. MacFarland (Appellant) for licensing as an insurance agent. Previous to this, by adjudication and order of the Department, Appellant’s license as an agent had been permanently revoked for fraudulent conversion of insurance premiums. A formal hearing was held on Appellant’s application in December of 1974. This hearing was conducted [250] by James Keeney, the Department hearing examiner. Following an initial order denying the application, Appellant sought Department review. On October 20, 1975, the Insurance Commissioner (Commissioner) reaffirmed his earlier order denying Appellant’s application. Sometime subsequent to the initial hearing but prior to either of the Commissioner’s orders, Mr. Keeney left the Department. It is Appellant’s contention that the apparent nonparticipation of the hearing examiner was improper. Framed differently, Appellant alleges a denial of procedural due process based upon an assumed non-participation by the examiner in the adjudication. It is well settled that due process guarantees apply to administrative as well as judicial proceedings. Pioneer Finance Co. v. Pennsylvania Securities Commission, 21 Pa. Commonwealth Ct. 447, 346 A.2d 890 (1975). The due process concept in this context is particularly important in light of the significance of Appellant’s credibility to a determination of Appellant’s rehabilitation in establishing his fitness for a license. Regulation 35.203, 1 Pa. Code §35.203, controls the issue raised by Appellant. It provides as follows: Unavailability of presiding officer. If a presiding officer becomes unavailable to the agency, the agency head, will either designate another qualified officer to prepare a proposed report or will cause the record to be certified to it for decision, as may be deemed appropriate, giving notice to the parties. We find nothing in the record which enables us to find compliance by the Department with the foregoing regulation.1 We therefore must [251] Order And Now, this 1st day of December, 1976, the order of the Department of Insurance denying the license application of Thomas J. MacFarland is hereby reversed and the matter is remanded to the Insurance Commissioner with a direction that a full hearing be held to determine the merits of the application. Footnotes [1] Appellant has appended to his brief a letter dated July 31, 1975, from the Department in response to his own earlier letter of [251] July 14, 1975. Though this letter does refer to Mr. Keeney’s departure from the Department, it was not made a part of the record and we cannot rely upon it to establish compliance with Regulation 35.203.