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Consultants & Administrators v. Dept. of Ins.

OPINION FILED JANUARY 12, 1982.

CONSULTANTS & ADMINISTRATORS, INC., PLAINTIFF-APPELLANT,

v.

THE DEPARTMENT OF INSURANCE ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.

JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:

Plaintiff Consultants & Administrators, Inc. (C&A), appeals from the decision of the circuit court of Cook County which upheld an administrative order entered by defendant Illinois Department of Insurance (DI). DI had directed C&A to comply with the provisions of the Voluntary Health Services Plans Act (the Health Act) (Ill. Rev. Stat. 1979, ch. 32, par. 595 et seq.) or show that it was exempt therefrom.

C&A argues that (1) DI lacks jurisdiction over it, having been preempted by the Federal Employee Retirement Income Security Act of 1974 (ERISA); (2) the Health Act is not mandatory, but rather is permissive in nature; (3) the Health Act violates "the constitutional and civil rights" of C (4) the circuit court violated C&A's procedural due process rights; and (5) DI is "perpetuating an unconstitutional monopoly" in violation of Federal antitrust law.

In 1966, the Chicago Newspaper Publishers Association and a division of the Teamsters Union agreed to create a trust entity (the Trust) for the benefit of the employees of Chicago's major daily newspapers. The trust agreement was amended in March 1976 to conform to the provisions of ERISA (29 U.S.C. § 1001 et seq. (1976)). *fn1 On March 15, 1976, the Trust entered into a contract with C&A. Under that contract, C&A was to provide facilities for a dental care program and an optometric/vision care program for beneficiaries of the Trust, and was to contract with professional and technical personnel to conduct the programs. The Trust was obligated to pay C&A $16.25 per month for each participant-beneficiary enrolled in the programs.

On February 1, 1979, defendant Illinois Vision Services Plan (IVSP), a business entity incorporated under the Illinois Vision Service Plan Act (the Vision Act) (Ill. Rev. Stat. 1979, ch. 32, par. 651 et seq.), complained to DI that it had encountered competition from C&A, which firm, IVSP believed, had not been incorporated under that statute. IVSP requested that DI conduct an investigation of C&A's activities to determine its compliance with Illinois law. DI proceeded with the requested investigation and eventually informed C&A that it believed the latter was operating in violation of both the Vision Act and the Illinois Dental Service Plan Act (the Dental Act) (Ill. Rev. Stat. 1979, ch. 32, par. 690.1 et seq.). DI suggested that C&A file an application for certification under the Health Act. C&A responded that it would seek a declaratory judgment in court on the matter (which action C&A apparently never pursued). In the face of C&A's intractability, DI initiated formal administrative proceedings to determine whether C&A was indeed operating in violation of the Health Act by providing dental and optical services without procuring a charter under that statute. Ill. Rev. Stat. 1979, ch. 32, par. 602.

On December 14, 1979, a hearing was held before an appointed hearing officer. *fn2 At that hearing, a single witness appeared, having been called by DI. Essentially, the witness, Ronald Chew, assistant deputy director in the health delivery section of DI, stated that he believed C&A was operating a voluntary health services plan in violation of the provisions of the Health Act. C&A did not attempt to rebut this conclusion, instead asserting among other things that the Health Act was preempted by ERISA, was unconstitutional, and was not intended to cover the operation of a private corporation.

The hearing officer recommended that DI terminate the proceeding without prejudice. The director of DI declined to accept this recommendation. Instead, he issued a lengthy administrative decision finding C&A to be operating a voluntary health services plan without incorporating under the Health Act, in violation of that statute. The director ordered C&A to comply therewith. C&A responded by seeking judicial review of this administrative determination. After hearing the parties' arguments and examining their briefs, the circuit court affirmed the administrative decision in its entirety.

I

C&A argues that ERISA preempts the Health Act and that DI thus lacked jurisdiction to proceed against it, relying on the following provisions of ERISA:

"(a) Except as provided in subsection (b) of this section, the provisions of [ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan * * *.

(b)(2)(A) Except as provided in subparagraph (B), nothing in [ERISA] shall be construed to exempt or relieve any person from any law of any State which regulates insurance * * *.

(B) Neither an employee benefit plan * * * nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer * * * or to be engaged in the business of insurance * * * for the purposes of any law of any State purporting to regulate insurance companies * * *." 29 U.S.C. § 1144 (1976).

• 1 Initially, we note that C&A has not adequately contested on this appeal the factual finding of DI, which was affirmed by the circuit court, that C&A is operating a "voluntary health services plan" as defined in the Health Act, *fn3 and that C&A has not incorporated under the provisions of the Health Act (Ill. Rev. Stat. 1979, ch. 32, par. 597). Our resolution of this appeal thus proceeds from the premise that these factual determinations are correct. Consequently, we note that under these circumstances, C&A is subject to the provisions of the Health Act unless it is able to succeed on the merits of the ERISA-preemption argument or on its other claims. *fn4

• 2 Turning to the merits of C&A's argument, we are faced with an insurmountable obstacle to our resolution thereof. C&A has asked us to establish new Illinois precedent on a question of weighty significance, but has cited to us only two tangentially related Federal decisions and a segment of a California statute which we find of no relevance. *fn5 C&A's brief presents no argument demonstrating the relationship of the cases and the California statute to the present circumstances; its presentation at oral argument failed to clarify the matter. We note that the briefs of the Attorney General (representing DI) and IVSP attempted to address the substance of the issue in a coherent manner despite C&A's failings. Nonetheless, we do not feel that the law on the question nor the theorizations of either side thereupon have been adequately presented so as to enable this court to establish enlightened precedent in this complex field. This court will not research and argue a case for an appellant. (See Thanopoulos v. Pickens (1980), 87 Ill. App.3d 906, 909, 409 N.E.2d 477; Fogel v. Hodes (1979), 68 Ill. App.3d 594, 600, 386 N.E.2d 389; 47th & State Currency Exchange, Inc. v. B. Coleman Corp. (1977), 56 Ill. App.3d 229, 231-33, 371 N.E.2d 294, appeal denied (1978), 71 Ill.2d 598.) This rule is especially applicable where, as here, the court's decision has such potentially significant ...


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