COURT OF APPEALS DECISION DATED AND FILED September 18, 2008 David R. Schanker Clerk of Court of Appeals |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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APPEAL
from an order of the circuit court for
Before Dykman, Vergeront and Bridge, JJ.
¶1 VERGERONT, J. The issue on this appeal is the scope of the privilege established in Wis. Stat. § 601.465 (2005-06)[1] for the Office of Commissioner of Insurance (OCI). We agree with the circuit court that the privilege does not apply to the facts of this case, although our reasoning is somewhat different. We therefore affirm the court’s order denying reconsideration, in which it reaffirmed its ruling granting the motion to compel the deposition of the then OCI deputy commissioner, Randy Blumer.
BACKGROUND
¶2 This action was initiated by a petition for issuance of a
subpoena to compel Blumer to appear at a deposition for a
¶3 During
Blumer’s deposition, OCI counsel asserted on his behalf a privilege under Wis. Stat. § 601.465 in response
to all questions regarding information Blumer had obtained on Reliance while
participating in NAIC and the Financial Group. In response, Deloitte filed a motion to compel
the continued deposition of Blumer.
Deloitte argued, among other points, that § 601.465 protected only
documents, and testimony about those documents, generated or received by
OCI. According to Deloitte, because it
was seeking information that Blumer had obtained as chair of the Financial
Group and not information provided by OCI from or to NAIC, the statutory privilege
did not apply. OCI’s position was and is
that Blumer’s participation in NAIC and the Financial Group was part of his
official duties as OCI deputy commissioner and therefore the privilege applies
to those activities.
¶4 The
circuit court granted Deloitte’s motion.
It concluded that the record did not establish that either NAIC or the
Financial Group was itself conducting an investigation or an examination of the
financial condition of Reliance as required by Wis. Stat. § 601.465.
Rather, in the court’s view, the Pennsylvania Insurance Commissioner was
conducting the investigation and the Financial Group was simply requesting
information the Pennsylvania Insurance Commissioner obtained so that the
Financial Group could monitor Reliance’s financial condition. The circuit court also determined that the
confidentiality of the documents provided by the Pennsylvania Insurance
Commissioner to Blumer had been “shattered” because that office had already provided
in discovery the documents regarding its investigation of Reliance and because
the
¶5 The
court denied OCI’s motion for reconsideration. It reaffirmed its prior ruling, clarifying
certain points. OCI appeals from the
order denying its motion for reconsideration.
DISCUSSION
¶6 OCI
asserts that the circuit court erred because the record shows that NAIC and the
Financial Group were conducting an investigation of Reliance. They point to Blumer’s affidavit in which he
avers that the activities of NAIC and the Financial Group in which he
participated included “coordinated investigations of certain insurance
companies, including Reliance Insurance Company.” Deloitte in response points to correspondence
between Blumer, as chair of the Financial Group, and the Pennsylvania Insurance
Commissioner’s office that describe the Financial Group’s task as “monitoring”
and “identifying” insurance companies rather than “investigating” or “examining.” In addition, Deloitte contends, as it did in
the circuit court, that the documents at issue are not documents provided by
OCI or received by OCI, which, it contends, is required by Wis. Stat. § 601.465(3).
¶7 A resolution of this appeal requires that we construe and
apply Wis. Stat. § 601.465 to
facts that are not disputed.[3]
This is a question of law, which we
review de novo. Williams v. American Transmission
Co., LLC, 2007 WI App 246, ¶5, 306 Wis. 2d 181, 742 N.W.2d 882. In construing a statute we begin with the
language of the statute and give it its common, ordinary, and accepted meaning,
except that technical or specially defined words are given their technical or
special definitions. State ex rel.
Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶45, 271 Wis. 2d
633, 681 N.W.2d 110. Because the statute at issue here
establishes a privilege, we bear in mind that we are to construe the statute
narrowly. See Davison v. St. Paul Fire
& Marine Ins. Co., 75
¶8 Wisconsin Stat. § 601.465 provides:
Nondisclosure of information. The office [OCI] may refuse to disclose and may prevent any other person from disclosing any of the following:
(1) Testimony, reports, records and information that are obtained, produced or created in the course of an inquiry under s. 601.42.
(2) Except as provided in s. 601.44 (6) to (10), testimony, reports, records and information that are obtained, produced or created in the course of an examination under s. 601.43.
(3) Testimony, reports, records, communications, and information that are obtained by the office from, or provided by the office to, any of the following, under a pledge of confidentiality or for the purpose of assisting in the conduct of an investigation or examination:
(a) The National Association of Insurance Commissioners.
(b) An agent or employee of the National Association of Insurance Commissioners.
(c) The insurance commissioner of another state.
(d) An agent or employee of the insurance commissioner of another state.
(e) An international, federal, state or local regulatory or law enforcement agency.
(f) An
agent or employee of an agency described in par. (e).[4]
(Footnote added.)
¶9 OCI
does not contend that either Wis. Stat. § 601.465(1)
or (2) apply. We therefore focus on subsec.
(3). To qualify as a privilege under
subsec. (3), the testimony or documents must meet two fundamental requirements,
each of which contains alternatives.
First, the testimony or documents must be either obtained by OCI from
one of the listed entities or provided by OCI to one of those entities. Second, that must occur either under a pledge
of confidentiality or for the purpose of “assisting in the conduct of an
investigation or examination.” Section 601.465(3).
¶10 We
first examine whether the documents at issue were either obtained by OCI from
one of the listed entities or provided by OCI to one of them. We can immediately eliminate the latter
option. The documents were provided by
the Pennsylvania Insurance Commissioner; they were not provided by OCI. As for the former option, the documents were
obtained by Blumer as chair of the Financial Group. While it is undisputed that Blumer
participated in NAIC and the Financial Group as part of his duties as OCI
deputy commissioner, it does not follow that his request and receipt of documents
from the Pennsylvania Insurance Commissioner were on behalf of OCI. The letter he wrote is on NAIC letterhead and
he describes himself as chair of the Financial Group and as seeking the
documents to further the task of that group.
The response to Blumer’s letter from the Pennsylvania Insurance
Commissioner’s office is directed to Blumer at the NAIC address in
¶11 Similarly,
there is no evidence that OCI obtained the documents from NAIC or its agents,
including Blumer in his capacity as chair of the Financial Group.
¶12 Because
we conclude the first requirement of Wis.
Stat. § 601.465(3) is not met, we do not examine the second
requirement. Specifically, we do not
take up the issue whether the documents were obtained for “the purpose of assisting in the conduct of an
investigation or examination.” Section 601.465(3).
CONCLUSION
¶13 We
affirm the circuit court’s order denying OCI’s motion for reconsideration.
By
the Court.—Order affirmed.
Not recommended for publication in
the official reports.
[1] All references to the Wisconsin Statutes are to the 2005-06 version unless otherwise noted.
[2] Under Wis. Stat. § 887.24 a witness may be compelled by subpoena to attend and give testimony at a deposition in this state for a lawsuit pending in another state.
[3] Although the way the parties phrase their reliance on different parts of the record on the investigation/monitoring issue might suggest there is a factual dispute, they are not, as we understand it, disputing what NAIC and the Financial Group did with respect to Reliance. Rather, they are disputing whether that activity is “investigating” within the meaning of the statute.
[4] After the circuit court rendered its decision, Wis. Stat. § 601.465 was renumbered to § 601.465(1m) and amended by 2007 Wis. Act 170, § 7, effective April 9, 2008. The last phrase of § 601.465(3) (renumbered § 601.465(1m)(c)) now reads, with the new words italicized: “or for the purpose of assisting or participating in monitoring activities or in the conduct of an inquiry, investigation or examination.” In addition, a new subsection, 601.465(2m), was created:
(2m) Waiver and applicability of the privilege. All of the following apply to the privilege under this section:
(a) The privilege may be waived only by the affirmative written and specific consent of the commissioner.
(b) The privilege may not be constructively waived.
(c) The privilege applies to testimony, reports, records, communications, and information obtained, created, or provided by any official, employee, or agent of the office for the purpose of assisting or participating in monitoring activities or in the conduct of an inquiry, investigation, or examination by, or coordinated through, the National Association of Insurance Commissioners.
(d) The privilege applies to testimony, reports, records, communications, and information in existence on or after [April 9, 2008].
2007
OCI argues in a footnote in its main appellate brief that the issue raised in this appeal “now appear[s] to be moot” because the amendment now “clarifies that the privilege includes “monitoring activities.” Deloitte responds in a footnote that it is not moot, and OCI replies to that footnote. The arguments on mootness are too abbreviated to permit a complete analysis of the issue. More importantly, OCI seeks reversal of the circuit court’s order, not dismissal of its appeal on the ground of mootness. We therefore do not decide the issue of mootness.
The parties also address the recent amendment in their arguments on the proper construction of “investigation” in Wis. Stat. § 601.465(3). However, we resolve this appeal without addressing that issue. See infra paragraph 12. Therefore, we do not discuss the recent amendment in this opinion.