This case arises out of an administrative enforcement
After a hearing, the division's presiding officer (hearing officer) concluded that the four-year statute of limitations in G. L. c. 260, § 5A, governed an enforcement action brought under G. L. c. 175, § 177; applied the discovery rule to find that statute's limitations period tolled for a period of time; and, while finding that Anawan had committed violations of both G. L. c. 175, § 77, and G. L. c. 176D, § 2, assessed fines only for the c. 176D, § 2, violations under G. L. c. 176D, § 7. The Commissioner of Insurance (commissioner) affirmed the hearing officer's decision, and a judge in the Superior Court, acting on Anawan's appeal under G. L. c. 30A, § 14, also affirmed the division's decision.
1. Background. The Appeals Court sets out the undisputed facts of this case, taken from the hearing officer's decision and the exhibits that were admitted in the administrative proceeding. See Anawan, supra at 448-449. We summarize those facts here. The division received two anonymous letters in 1999 stating, among other allegations, that Anawan, in addition to its principal place of business in the West Roxbury section of Boston, had improperly begun operating out of a second location at 76 Shirley Avenue in Revere; one of the letters alleged that the name of the agency operating from that address was "Handel Ins." The division assigned an investigator to investigate the facts alleged in the anonymous letters. The investigation took a very long time, for reasons not explained in the record. During its course, the investigator learned that Kuntthy Prum was doing business as Handel Insurance Agency at 76 Shirley Avenue in Revere, that Prum had been licensed as an insurance broker from May 27, 1994, for three years (i.e., until May, 1997), but had not renewed his license thereafter. On June 1, 2004, the investigator sent a letter notifying Anawan that it had been the subject of a complaint received by the division, and requesting information. The letter asked specifically whether Anawan had ever employed Prum and if so, the dates of his employment and the insurance carrier or carriers with which Prum had placed insurance policies. On June 23, 2004, Anawan, through Michaels, responded, informing the division that Prum had brokered insurance business through Anawan from January 7, 1997, through December 31, 2001, and listing all the commissions
Anawan filed a response to the division's order to show cause in November, 2004. After the denial of Anawan's two separate motions for summary decision, an evidentiary hearing was held on March 28, 2006, before a hearing officer of the division. The hearing officer issued his decision with "compendious findings" (Anawan, supra at 449) in May, 2007.
The hearing officer ruled that Anawan had violated both G. L. c. 175, § 177, and G. L. c. 176D, § 2, in failing "to ascertain whether Prum had renewed his license before soliciting business from, accepting applications from and paying compensation to Prum after his license expired on May 27, 1997."
2. Discussion. We review in this case the division's decision under G. L. c. 30A, § 14, and in doing so, we are called on to interpret a number of statutes that bear on the validity of that decision. The court reviews "questions of statutory interpretation de novo," Commerce Ins. Co. v. Commissioner of Ins., 447 Mass. 478, 481 (2006), giving "substantial deference to a reasonable interpretation of a statute by the administrative agency charged with its administration [and] enforcement." Id. We may set aside or modify the division's decision if we determine "that the substantial rights of any party may have been prejudiced because," among other reasons, the decision is based on an error of law or is arbitrary, capricious, or an abuse of discretion. G. L. c. 30A, § 14 (7). Attorney Gen. v. Commissioner of Ins., 450 Mass. 311, 318 (2008).
a. Statute of limitations. General Laws c. 175, § 177, prohibits an insurance company, among others, from paying an individual "who is not then duly licensed as an insurance agent of the company for which he assumes to act or as an insurance broker."
"The essential nature of the right asserted determines the appropriate statute of limitations." Micera v. Neworld Bank, 412 Mass. 728, 731 (1992).
b. Discovery rule. We turn to the issue whether the discovery rule applies to G. L. c. 260, § 5A; as the division points out, that statute provides a four-year limitation period to begin "after the cause of action accrues," but is silent on when the accrual clock begins to run. The discovery rule tolls a statutorily mandated limitations period until the cause of action is discovered or reasonably should have been discovered by the plaintiff. See, e.g., Friedman v. Jablonski, 371 Mass. 482, 484-485, 487 (1976); Hendrickson v. Sears, 365 Mass. 83, 91 (1974). As previously mentioned, the hearing officer determined that the discovery rule did apply, and on the evidence presented, ruled that the statute of limitations period did not begin to run until well after October 25, 2000, so that when the division initiated this proceeding on October 25, 2004, it was entitled to impose penalties for violations of c. 175, § 177, occurring more than four years before that date. The Appeals Court, however, concluded that the discovery rule did not apply. It reasoned that
In reaching this conclusion, the Appeals Court cited and relied on Federal cases construing statutes of limitations solely applicable to actions for enforcement of civil fines or penalties. See Anawan, supra at 451-452, citing 3M Co. v. Browner, 17 F.3d 1453, 1455, 1460-1463 (D.C. Cir. 1994) (construing 28 U.S.C. § 2462, which establishes statute of limitations applicable to action or proceeding "for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise"; court rejected Environmental Protection Agency's argument that discovery rule should apply to toll running of statute's limitations period until its "discovery" of company's violations of Toxic Substances Control Act, 15 U.S.C. §§ 2601-2629, concluding that limitations period began to run when company committed violations); and Unexcelled Chem. Corp. v. United States, 345 U.S. 59, 65 (1953) (construing statute of limitations in Portal-to-Portal Act, 29 U.S.C. § 255: "It is [the] breach of duty [by regulated entity], not its discovery, that normally is controlling"). But the limitations statutes at issue in these cases pertained exclusively to actions brought to recover civil fines, penalties, or forfeitures. In that respect, they are more like the statute of limitations set out in G. L. c. 260, § 5, which similarly applies only to "[a]ctions for penalties or forfeitures under penal statutes." As discussed, however, c. 260, § 5, explicitly disclaims any intent to reach actions governed by G. L. c. 260, § 5A, and by its terms, § 5A covers not only actions for fines or penalties brought by a government entity, but also actions for
c. Damages. As mentioned earlier, the division's hearing officer found Anawan to have committed multiple violations of both G. L. c. 175, § 177, and G. L. c. 176D, § 2,
General Laws c. 176D, § 2, precludes trade practices connected to the business of insurance that are unfair or deceptive; G. L. c. 176D, § 7, provides the penalties for violations of c. 176D. See notes 15 and 16, supra. As the Appeals Court stated, G. L. c. 176D as a whole, including c. 176D, § 7, is a statute that applies generally "to all unfair practices in the insurance industry." Anawan, supra at 454. But that being said, G. L. c. 176D, § 12, provides that "[t]he powers vested in the commissioner by this chapter, shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts, and practices hereby declared to be unfair or deceptive" (emphasis added). In light of the unambiguous language of c. 176D, § 12, we think it clear that in a case such as this one, where violations have been found of both a specific statute such as c. 175, § 177, regulating one aspect of the insurance industry, and the more general c. 176D, the commissioner, acting through the division, permissibly may impose separate penalties under both statutes.
3. Conclusion. The judgment of the Superior Court is affirmed.