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SJC-07754
FLORENCE M. DIBIASE vs. COMMISSIONER OF INSURANCE
& others.
Suffolk. November 6, 1998. - February 1, 1999.
Present: Wilkins, C.J., Abrams, Lynch, Greaney, Fried, &
Ireland, JJ.
Insurance, Savings bank life insurance. Bank. Due Process of
Law, Taking of property, Notice. Limitations, Statute of.
Civil action commenced in the Superior Court Department on
August 30, 1996.
The case was heard by Nonnie S. Burnes, J., on a motion for
partial summary judgment.
The Supreme Judicial Court granted an application for direct
appellate review.
John Traficonte for the plaintiff.
Michael A. Walsh (William D. Troyka with him) for Savings
Bank Life Insurance Company.
Pierce O. Cray, Assistant Attorney General, for the
Commissioner of Insurance.
WILKINS, C.J. On December 31, 1991, the Massachusetts
savings bank life insurance system, devised by Louis D. Brandeis,
adopted in 1907 (St. 1907, c. 561), and later codified at G. L.
c. 178 (repealed by St. 1990, c. 499, 22) ceased to exist. In
its place, pursuant to G. L. c. 178A (inserted by St. 1990,
c. 499, 23), a new plan of savings bank life insurance was
established, to be operated by a domestic stock life insurance
company, the defendant The Savings Bank Life Insurance Company of
Massachusetts (SBLIC). G. L. c. 178A, 2.
On August 30, 1996, the plaintiff, to whom a participating
savings bank had issued policies under the prior law, brought
this action alleging that her rights (and those of persons
similarly situated) had been violated by certain actions taken in
the conversion from the prior system to the new one. She
alleged that her contract rights had been impaired in violation
of the State and Federal Constitutions, that her property had
been taken in violation of her constitutional rights to due
process of law, and that the defendant Commissioner of Insurance
(commissioner) and SBLIC had violated 42 U.S.C. 1983 (1994 &
Supp. II 1996). The State defendants and SBLIC moved to dismiss
the plaintiff's amended complaint on the ground that her claims
were barred by the applicable statute of limitations. The
plaintiff moved for partial summary judgment on her claim that
her rights had been taken without due process of law. She filed
affidavits in support of her motion. The plaintiff argued that
she had property interests that could not properly be taken from
her in the absence of personal service, or some other
constitutionally adequate notice, that she had had no such notice
more than three years before commencing this action, and thus
that the commencement of this action was timely. This argument
is based on a claimed denial of procedural due process. The
plaintiff makes no independent argument that the statute of
limitations had not run when she commenced this action.
A judge in the Superior Court entered summary judgment in
favor of all defendants on all counts, dismissing the amended
complaint. She did so on the ground that the action was not
commenced within three years of the time the various claims
accrued, the period of limitations prescribed by G. L. c. 260,
2A. The plaintiff appealed. We granted the defendants'
application for direct appellate review.
The motion judge did not reach the question whether the
plaintiff had property interests that were adversely affected by
the reorganization, or demutualization, of the savings bank life
insurance system. She assumed the existence of such rights. In
1987, the Justices of this court submitted answers to questions
that the House of Representatives had propounded to them
concerning the proposed repeal of G. L. c. 178 and the enactment
of a proposed G. L. c. 178A, providing for the creation of a
domestic stock insurance company that would take over existing
savings bank life insurance policies. Opinion of the Justices,
401 Mass. 1211 (1987). The bill then pending before the
Legislature is not the same as the bill that the Legislature
enacted in 1990 inserting G. L. c. 178A. Nothing that was said
in that opinion bears on the issues on which we decide this
appeal.
We briefly set forth the changes made by the 1990
legislation that the plaintiff asserts involved an
unconstitutional taking of her property. Each participating
savings bank prior to 1992 was obliged to maintain a statutory
surplus in its insurance department. G. L. c. 178, 21.
Section 5 of G. L. c. 178A directed that SBLIC assume each bank's
surplus and that it "be distributed as additional annual
dividends over a period of not less than eight nor more than
twelve years in accordance with a schedule prepared by [SBLIC]
and approved by the commissioner." The plaintiff asserts that
she should have been compensated for the full value of her share
of the statutory surplus (and any additional surplus) and that
the distribution of her share over time (eight to twelve years)
has deprived her of that full value to the improper benefit of
SBLIC. The plaintiff also asserts that she had a property
interest in the General Insurance Guaranty Fund (see G. L.
c. 178, 14, 17) that, pursuant to G. L. c. 178, 18, was
"held as a guaranty for all obligations on policies or annuity
contracts of the insurance departments of all savings and
insurance banks." Under the 1990 legislation, the General
Insurance Guaranty Fund was abolished (G. L. c. 178A, 8),
effective December 31, 1991, and the assets of that fund were
transferred to the Commonwealth (St. 1990, c. 499, 25).
We agree with the motion judge that a three-year statute of
limitations bars the plaintiff's claims and that due process of
law did not require that she receive more notice than she had
before her claims could accrue. The judge rightly concluded that
any loss that the plaintiff sustained was the consequence of the
1990 act itself and that no notice of the impact of legislation
on a person's rights is constitutionally required beyond the
constructive notice that enactment of the legislation itself
provides. We agree that "the legislative determination provides
all the process that is due." Logan v. Zimmerman Brush Co.,
455 U.S. 422, 433 (1982). See Atkins v. Parker, 472 U.S. 115,
129 (1985); Liability Investigative Fund Effort, Inc. v.
Massachusetts Medical Professional Ins. Ass'n, 418 Mass. 436,
444, cert. denied, 513 U.S. 1058 (1994); Opinion of the Justices,
408 Mass. 1215, 1218-1221 (1990).
In Texaco, Inc. v. Short, 454 U.S. 516 (1982), the Supreme
Court considered an Indiana statute that provided that certain
mineral interests would automatically lapse from nonuse and would
revert to the current surface owners of the property unless the
mineral owners filed statements of claim within two years after
the effective date of the act. The Court rejected constitutional
challenges to the act, including a claim that, in violation of
their due process rights, the statute sought to extinguish the
plaintiffs' property rights without adequate notice. Id. at 532
("It is well established that persons owning property within a
State are charged with knowledge of relevant statutory provisions
affecting the control or disposition of such property"). It
rejected the claim that the mineral rights owners had a
constitutional right to be advised individually that, because of
their nonuse of their mineral rights for twenty years, their
rights would expire unless they filed timely notices of claim.
Id. at 538. The Supreme Court distinguished Mullane v. Central
Hanover Bank & Trust Co., 339 U.S. 306, 314-319 (1950), which
held that notice by publication of a judicial proceeding to
settle trust accounts was not sufficient to satisfy procedural
due process. Texaco, Inc. v. Short, supra at 534-535. The
crucial distinction concerning notice is between an adjudication,
as in the Mullane case, and self-executing features in
legislation, as in this case and in the Texaco case. The
plaintiff's claim has no greater force than a claim that a self-
executing statute of limitations is unconstitutional. Texaco,
Inc. v. Short, supra at 536.
There is a further reason to reject the plaintiff's
procedural due process argument. She did receive personal notice
of the enactment of the 1990 legislation. In December, 1991, the
plaintiff, as a savings bank life insurance policyholder,
received a letter from the president of Savings Bank Life
Insurance. The letter referred to the 1990 legislation and to
the "merger" of the savings bank life insurance system on
December 31, 1991, into SBLIC, which would assume all savings
bank life insurance policies. It referred to the intended payout
of surplus over twelve years as "extra" dividends, without,
however, discussing the reduced value of the surplus to
policyholders caused by delayed distributions. The notice
explicitly told policyholders that the General Insurance Guaranty
Fund would be discontinued, effective December 31, 1991, thereby
giving notice that the funds in that account would be transferred
somewhere. Surely, the plaintiff was on notice, personally and
directly, that changes affecting her savings bank life insurance
policies were taking place. Her rights to procedural due process
of law have not been denied by measuring the period of the three-
year statute of limitations from December 31, 1991.
There is no merit to the argument that the commissioner took
adjudicative steps in approving SBLIC's plan of assumption and
that, consequently, the plaintiff was entitled to individual
notice of the proceedings the commissioner conducted pursuant to
statute. See G. L. c. 178A, 6; Reid v. Acting Comm'r of the
Dep't of Community Affairs, 362 Mass. 136, 142-145 (1972). Nor
is there any basis for concluding that the conduct of any
defendant tolled the statute of limitations. See G. L. c. 260,
12. There was neither fraudulent concealment of facts nor the
breach of any fiduciary duty of full disclosure. Our conclusion
that the plaintiff's rights to procedural due process were not
violated should not be read as an endorsement of the quality of
the information that she received concerning the consequences of
the 1990 legislation.
Judgment affirmed.[top] [back to table]