Appeal from the Order of the Insurance Department of the Commonwealth of Pennsylvania in case of In Re: Appeal of Joseph Dillinger, Docket No. A75-4-4.
Joseph K. Pierce, with him Ralph D. Tive and Baskin, Boreman & Tive, for appellant.
Barbara A. Brown, with her Andrew F. Giffin, for appellees.
Judges Crumlish, Jr., Wilkinson, Jr. and Rogers, sitting as a panel of three. Opinion by Judge Rogers.
[ 26 Pa. Commw. Page 495]
The appellant, Joseph Dillinger, was convicted in the Courts of Montgomery County of perjury and embezzlement while engaged in the insurance business, and on May 26, 1972 was sentenced to a prison term of three years. He served ten months in prison, two months in a community treatment center and then placed on parole for the balance of the two years of his term. However, the Governor of Pennsylvania commuted Mr. Dillinger's sentence as of December 26, 1974.
[ 26 Pa. Commw. Page 496]
Mr. Dillinger is trained in the insurance business and has, since his difficulties with the law, desired to be a licensed insurance agent. To this end, in 1973 and 1974 he communicated with persons in the insurance department, both personally and through insurance companies who desired to employ him, inquiring as to the possibility of his obtaining an agent's license. He and the companies sponsoring him were told that no license would be issued while he was on parole. He was, however, advised by the Director of the Licenses and by an Assistant Attorney General that he might apply for licensure when his situation changed.
The Governor's commutation of course terminated the parole and two insurance companies soon sponsored Mr. Dillinger for an agent's license. Accompanying the applications sent to the Department were full disclosures of Mr. Dillinger's earlier difficulties with the law. The Department permitted Mr. Dillinger to take the insurance agent's examination which he passed on January 4, 1975. On January 10, 1975, over the signature of the Insurance Commissioner of the Commonwealth of Pennsylvania, Mr. Dillinger was licensed to act as agent for American Independent Insurance Company. On January 13, 1975, over the signature of the Insurance Commissioner, Mr. Dillinger was authorized to act as agent for Old Heritage Mutual Insurance Company.
On February 18, 1975, Mr. Dillinger received a letter from the Insurance Commissioner who had signed both of his recently granted licenses, that the licenses had been granted in error because they "failed to take proper account of the reference in your application to your prior criminal record." The letter goes on to inform Mr. Dillinger that the licenses issued to him "are hereby rescinded." The letter ends by affording Mr. Dillinger the right to a hearing on the
[ 26 Pa. Commw. Page 497]
subject of the letter's "denial" of the licenses (which, of course, had in fact been granted).
Mr. Dillinger has appealed the Insurance Commissioner's adjudication represented by the letter of February 18, 1975 on the ground that having exercised his undoubted discretion to issue the licenses with full knowledge of his, Dillinger's, previous misdeeds, the Commissioner is powerless to rescind or deny the licenses. Mr. Dillinger concedes that his licenses may after hearing be revoked based on his lack of fitness, and that a prior conviction of criminal conduct reflecting on his honesty and integrity would constitute evidence which the Department might consider in this connection. He says, however, quite correctly, that in such proceedings the burden would rest upon the Department to justify the revocation, in contrast to the hearing conducted in ...