Commercial Ins. Co. v. American and Foreign Ins. Ass'n

370 F. Supp. 345, 1974 U.S. Dist. LEXIS 13006
CourtDistrict Court, D. Puerto Rico
DecidedJanuary 2, 1974
DocketCiv. 343-70
StatusPublished
Cited by7 cases

This text of 370 F. Supp. 345 (Commercial Ins. Co. v. American and Foreign Ins. Ass'n) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commercial Ins. Co. v. American and Foreign Ins. Ass'n, 370 F. Supp. 345, 1974 U.S. Dist. LEXIS 13006 (prd 1974).

Opinion

MEMORANDUM AND ORDER

CANCIO, Chief Judge.

The following motions are presently before this Court in this case:

1. Plaintiff’s motion under Rule 60(b), filed on February 7, 1973, requesting that our Order of December 20, *347 1972 be vacated and our Order of September 28, 1972 be reinstated. Defendants have filed opposition to this motion.

2. Defendants’ motion for protective order filed on March 15, 1973. Plaintiff has filed opposition to this motion.

3. Defendants’ motion for continuance of deposition of March 15, 1973.

4. Plaintiff’s motion filed on March 23, 1973 requesting that a date for taking of depositions be set by this Court.

5. Plaintiff’s motion for sanctions filed on March 23,1973.

The parties have submitted their respective briefs and new documentary evidence and have appeared for oral argument. This Court now rules on the merits of the respective motions.

Our Order of September 28, 1972 held that defendants American and Foreign Insurance Association, hereinafter called AFIA, and Compañía de Seguros “La Continental” had both acted as unauthorized insurers in Puerto Rico and ruled that therefore AFIA was required to post the security bond required of unauthorized insurers by 26 L.P.R.A. § 1006(1) and that “La Continental” was required to file an appearance before this Court following service through the Insurance Commissioner of Puerto Rico as an unauthorized insurer, pursuant to 26 L.P.R.A. § 1005(2).

The Court at that time set forth the facts in this case and ruled on the applicability of sections 303(1), 1006(1), 1005(1), and 329(1) of the Insurance Code of Puerto Rico (26 L.P.R.A.). However, upon reconsideration this Court found that under the provisions of 26 L.P.R.A., Section 303(4), defendants AFIA and “La Continental” were not required to obtain authorization from the Insurance Commissioner in order to transact insurance in Puerto Rico and, therefore, have not acted as unauthorized insurers in Puerto Rico. Our Order of December 20, 1972, consequently, vacated and set aside our Order of September 27, 1972, denied Commercial Insurance Company’s motion for security bond and granted Compañía de Seguros “La Continental’s” motion to quash summons.

Upon reconsideration, the main issue to be resolved by this Court is whether the provisions of 26 L.P.R.A., Section 303(4) do, in fact, determine that AFIA and “La Continental” were not required to obtain authorization of the Insurance Commissioner in order to transact insurance in Puerto Rico. If the Court so finds, our Order of December 20, 1972 must be affirmed; otherwise, said Order must be vacated and set aside.

As may be recalled, the Court based its determination on the following argument:

1. The only insurance policy which can provide grounds for a finding that AFIA and “La Continental” are “unauthorized insurers” is the policy issued by “La Continental” in favor of codefend-ant Cristalería Peldar, S. A.

2. The Insurance Code of Puerto Rico specifies the instances where an insurer does not require the authorization of the Commissioner of Insurance in order to transact insurance in Puerto Rico.

3. Section 303(4) of the Insurance Code specifically covers the situation in this case as it provides that: “As to an insurance coverage on a subject of insurance not resident, located, or expressly to be performed in Puerto Rico at time of insurance, and solicited, written, and delivered outside Puerto Rico, no such authority shall be required of an insurer as to subsequent transactions in Puerto Rico on account thereof.” (Emphasis added.)

4. The insurance policy in question was solicited, written and delivered outside Puerto Rico on December 31, 1966 and, at that time, it covered no subject of insurance resident, located or expressly to be performed in Puerto Rico.

In other words, this Court found that since eodefendant “La Continental” issued its policy on December 31, 1966, under the provisions of 26 L.P.R.A. § 303(4), she could not be held an unauthorized insurer because, at that time, the policy did not cover a subject of in *348 surance located or expressly to be performed in Puerto Rico. Further, since “La Continental” was not acting as an unauthorized insurer, then codefendant AFIA could not be considered an unauthorized insurer under 26 L.P.R.A., Sec. 1005(1) for her services on behalf of “La Continental.”

Plaintiff’s motion for reconsideration alleges that this Court committed error in that the applicable policy was not the one issued on December 31, 1966, for said policy expired on December 31, 1967. Plaintiff’s position is that the policy applicable to the case at bar was issued by “La Continental” on December 31, 1968, to expire on December 31, 1969, and that at the time of issuance, this policy did cover a subject of insurance to be performed in Puerto Rico and a risk located in Puerto Rico. Therefore, plaintiff argues, the provisions of 26 L.P.R.A. § 303(4) cannot be invoked to maintain that “La Continental” is not an unauthorized insurer in Puerto Rico and that, as a consequence, AFIA cannot be considered an unauthorized insurer either.

Clearly, in order to decide the controversy regarding the provisions of 26 L. P.R.A. Sec. 303(4), this Court must determine if the policy in force at the time liability was incurred (June 23, 1969) was issued on December 31, 1968 rather than on December 31, 1966 and, in either case, whether or not it specifically covered a subject of insurance located or expressly to be performed in Puerto Rico and a risk located therein at the time of issuance.

As a general rule, a renewal of insurance, where there is no provision in the policy for its renewal, is a new contract on the same terms as the old one, while renewal in accordance with a policy provision is simply an extension of the old contract. See: Firemen’s Ins. Co. v. Floss, 67 Md. 403, 10 A. 139; Epstein v. Northwestern Nat. Ins. Co., 267 Mass. 571, 166 N.E. 749; Farmers Ins. Exchange v. Allstate Ins. Co., D.C.Mich., 143 F.Supp. 213; Okst v. Metropolitan Life Ins. Co., Sup., 50 N.Y.S.2d 919; International Life Ins. Co. v. Mowbray, 7 Cir., 22 F.2d 952; Steele v. Great Eastern Casualty and Indemnity Co., 158 Minn. 160, 197 N.W. 101; Maryland Medical Service, Inc. v. Carver, 238 Md. 466, 209 A.2d 582; Rice v. Provident Life and Accident Insurance Co., 231 Mo.App. 560, 102 S.W.2d 147; Pearl Assurance Co. v. School District No. 1, 10 Cir., 212 F.2d 778; Government Employees Insurance Co. v. United States, 400 F.2d 172 (10th Cir. 1968), and March v. Snake River Mutual Fire Insurance Co., 89 Idaho 275, 404 P.2d 614.

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Bluebook (online)
370 F. Supp. 345, 1974 U.S. Dist. LEXIS 13006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-ins-co-v-american-and-foreign-ins-assn-prd-1974.