Dyan Furey v. Department of Insurance

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
DYAN FUREY, )
Appellant, )
v. ) C.A. No. N15A-06-005 ALR
)
DEPARTMENT OF INSURANCE, )
)
Appellee. )
Upon Appellant’s Appeal from the Delaware Insurance
Commissioner’s Final Decision and Order
REMANDED
Upon consideration of Appellant Dyan Furey’s appeal from the Delaware
Insurance Commissioner’s Final Decision and Order, the Court makes the
following findings:
1. In May 2013, Ms. Furey was diagnosed with and treated for bipolar
disorder. On June 13, 2013, Ms. Furey submitted an application to Golden Rule
Insurance Company (“Golden Rule”) seeking individual coverage under a health
insurance policy. The parties have stipulated that Ms. Furey’s answers to four
questions on her application to Golden Rule were false because she failed to
disclose her previous treatment and diagnosis of bipolar disorder.
2. After Ms. Furey’s health insurance policy was approved and became
effective on July 1, 2013, Ms. Furey incurred medical expenses as a result of a
ruptured appendix and necessary appendectomy. Ms. Furey submitted these
expenses to Golden Rule, which denied the claims and notified Ms. Furey that it
intended to rescind the policy because of Ms. Furey’s failure to disclose her
disorder in her application.
3. On October 18, 2013, Golden Rule formally requested the Appellee
Delaware Department of Insurance (“Department”) approve its request to rescind
Ms. Furey’s policy. On November 16, 2013, the Department upheld Golden
Rule’s rescission.
4. Ms. Furey challenged the Department’s decision and the dispute was
briefed before a Department Hearing Officer. At the request of both Ms. Furey
and the Department, the Hearing Officer dispensed with a hearing and proceeded
on the written submissions of the parties. On April 9, 2015, the Hearing Officer
issued Recommended Findings, recommending the Delaware Insurance
Commissioner (“Commissioner”) uphold the rescission.
5. On April 27, 2015, Ms. Furey filed Objections to the Hearing Officer’s
Recommended Findings. The Commissioner overruled Ms. Furey’s objections by
Final Decision and Order dated May 14, 2015.
6. Ms. Furey commenced a timely appeal of the Commissioner’s decision to
this Court on June 10, 2015. Ms. Furey argues that public policy and Delaware
statutory law dictate that nondisclosure of bipolar disorder cannot be a basis for
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rescission because the law affirmatively requires Golden Rule to cover bipolar
disorder.1 The Department differentiates between Golden Rule’s ability to provide
coverage and underwrite insurance policies, such that Gold Rule was permitted to
underwrite Ms. Furey’s policy based on her alleged material omissions regarding
her pre-existing condition.
7. This Court held oral argument regarding Ms. Furey’s appeal on December
7, 2015. Subsequently, on January 4, 2016, Ms. Furey filed a motion to amend her
appeal to add Golden Rule as an appellee and indispensible party, citing the
Delaware Supreme Court’s recent decision in Genesis Healthcare v. Delaware
Health Res. Bd.2 Golden Rule opposed Ms. Furey’s motion to amend; however,
Golden Rule conceded it was an indispensible party.3
8. This Court held oral argument on January 26, 2015. Counsel for Ms.
Furey, the Department, and Golden Rule were present. Ms. Furey argued in favor
of remand. Golden Rule again conceded that it was an indispensible party.
Nevertheless, Golden Rule argued that it cannot be added as a party under Rule 154
and, therefore, Ms. Furey’s appeal should be dismissed because of the procedural
1
See e.g., 18 Del. C. § 1711; 18 Del. C. § 3343 et. seq.
2
See 2015 WL 8486195, at *1 (Del. Dec. 8, 2015)(dismissing an appeal for failure to join an
indispensible party below).
3
Golden Rule’s Response to Dyan Furey’s Motion to Amend Notice of Appeal, Jan. 20, 2016,
para. 5.
4
See Del. Super. Ct. Civ. R. 15.
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error to include Golden Rule in the proceedings below. The Department did not
take a position.
8. The parties concede that Golden Rule is an indispensible party under Rule
19.5 The Delaware Supreme Court has held that that “all parties to the litigation
who would be directly affected by a ruling on the merits of an appeal, should be
made party to the appellate proceedings.” 6 Golden Rule’s ability to protect its
interest could have been impaired or impeded below and could be affected on
appeal. Golden Rule has a vested interest in the outcome of this litigation,
specifically in whether this Court determines that Golden Rule’s rescission was in
accordance with Delaware law and public policy.
9. “Appeals shall be heard and determined by the Superior Court from the
record of proceedings below, except as may be otherwise expressly provided by
statute.”7 Delaware statutory law gives this Court discretion to remand the matter
to the Commissioner. Specifically, 18 Del. C. § 328(h) provides that this “Court
may remand the case to the Commissioner for further proceedings in accordance
with the Court’s directions or, in advance of judgment and upon a sufficient
showing, the Court may remand the case to the Commissioner for the purpose of
taking additional testimony or other proceedings.”
5
See Del. Super. Ct. Civ. R. 19.
6
Genesis Healthcare, 2015 WL 8486195, at *2.
7
Del. Super. Ct. Civ. R. 72(g)(emphasis added).
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10. This Court concludes that remand is required for consideration of the
administrative board of the position of all indispensable parties. Remand under
these circumstances is contemplated by the governing statute.8 The Court does not,
therefore, reach the question of whether Golden Rule may be added as a party to
the appeal under the Superior Court Rules of Civil Procedure.
11. There is a strong public policy consideration dictating that matters
should be adjudicated on their merits.9
12. Accordingly, dismissing this appeal is not only wrong as a matter of law
which provides for remand under these circumstances, but also inconsistent with
the preference for adjudication on the merits.
13. This Court remands this matter consistent with public policy to expand
the record below to include Golden Rule as an indispensible, necessary party for
the proper adjudication of this matter.
8
See 18 Del. C. § 328(h).
9
See Hackett v. Bd. of Adjustment of City of Rehoboth Beach, 794 A.2d 596, 598 (Del.
2002)(“This Court has emphasized that courts functioning in an appellate capacity should permit
appeals to be decided on the merits, notwithstanding non-compliance with the technical niceties
of the appeal procedure.”); see also Dishmon v. Fucci, 32 A.3d 338, 346 (Del. 2011)(noting the
public policy for litigation on the merits); Kohler v. Hughes, 2000 WL 1211140, at *2 (Del.
Super. Feb. 2, 2000)(same); Keith v. Melvin L. Joseph Const. Co., 451 A.2d 842, 846 (Del.
Super. 1982)(same).
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NOW, THEREFORE, this 28th day of January, 2016, this matter is
remanded for consideration of rescission of Ms. Furey’s health insurance
policy, with direction to add Golden Rule Insurance Company as a party to
the administrative proceedings. Appellant’s Motion to Amend is rendered
MOOT by this remand. Jurisdiction is retained by this judicial officer for any
future appeals to the Superior Court regarding these administrative
proceedings.
IT IS SO ORDERED.
Andrea L. Rocanelli
____________________________________
The Honorable Andrea L. Rocanelli
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