Guillemard-Ginorio v. Contreras-Gomez

490 F.3d 31, 2007 U.S. App. LEXIS 13719, 2007 WL 1675837
CourtCourt of Appeals for the First Circuit
DecidedJune 12, 2007
Docket06-1436, 06-1819
StatusPublished
Cited by13 cases

This text of 490 F.3d 31 (Guillemard-Ginorio v. Contreras-Gomez) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guillemard-Ginorio v. Contreras-Gomez, 490 F.3d 31, 2007 U.S. App. LEXIS 13719, 2007 WL 1675837 (1st Cir. 2007).

Opinion

TORRUELLA, Circuit Judge.

This appeal arises out of a dispute over the propriety of an order issued by the Insurance Commissioner of Puerto Rico declaring Andrés Guillemard Ginorio, his wife, Maria Noble Fernández, and their insurance agency, Lone Star Insurance Producers (collectively, “Plaintiffs”), untrustworthy and incompetent; revoking Plaintiffs’ insurance licenses for five years; barring Plaintiffs from applying for other insurance licenses for five years; and imposing a $2,035,000 fine.

Plaintiffs allege, inter alia, .that in issuing this order without a hearing and in retaliation for their political beliefs, Fer-mín Contreras Gómez, former Insurance Commissioner, and Dorelisse Juarbe, the current Insurance Commissioner (collectively “Defendants”), violated Plaintiffs’ rights under the First Amendment and the Due Process Clause. Plaintiffs moved for partial summary judgment on their due process claim and Defendants moved for summary judgment on all claims. The district court granted Plaintiffs’ motion for partial summary judgment and denied Defendants’ motion. Defendants now appeal. In addition, Defendants also take this opportunity to appeal the district court’s denial of their motion to vacate the court’s judgment under Fed.R.Civ.P. 60(b) based on newly discovered evidence. After careful consideration, we affirm the district court’s denial of qualified immunity and dismiss any appeal taken from the court’s grant of partial summary judgment or its denial of the motion to vacate.

I. Factual and Procedural Background

Guillemard and Noble founded Lone Star Insurance Producers in 1984. Both are well-known members of the New Progressive Party (“NPP”).

Early in 2001, Contreras became the Insurance Commissioner for Puerto Rico. On November 2, 2001, the Office of the Insurance Commissioner (“OIC”) assigned Angela Rivera to investigate Urrutia Vallés, Inc. (“UVI”), an insurance brokerage company, for its conduct in connection with the performance of a contract with the government of Puerto Rico. For several years, Lone Star and UVI had worked together in obtaining and servicing property, casualty, and other types of insurance for several government agencies. Pursuant to the investigation, Rivera found that UVI paid commissions to Lone Star from the sale of the government insurance policies.

On November 7, 2001, an article in El Nuevo Día, a Puerto Rico newspaper, reported that the OIC investigation into UVI would also include Guillemard. That same day, Aurea López, the head of the OIC’s audit division, instructed Rivera to look for checks from UVI to Lone Star.

On November 20, 2001, the OIC issued a “Notification and Examination Order” calling for an audit of Lone Star’s operations and transactions from January 1, 1997 through September 30, 2001. The notice did not allege any wrongdoing. David Castro Anaya, an OIC auditor, was assigned to perform the Lone Star audit. According to Castro, the sole purpose of his investigation was to determine whether improper payments had been made to third parties. Guillemard made available to Castro two Certified Public Accountants *34 to cooperate with the audit and provide all relevant documents.

By December 17, 2001, all of the documents pertaining to insurance issued to government agencies had been examined and the audit had concluded. Castro informed Guillemard and Miguel Carbonell, Lone Star’s CPA, that he found no irregularities or improprieties. Castro also told Guillemard and Carbonell that he would prepare a draft of his final report within the next few months and send them a copy.

At some point after November 20, 2001, but before March 2002, Melvin Rosario, the Director of the Anti-Fraud Unit at the OIC and Castro’s supervisor, met privately with Contreras to tell him that he did not wish to investigate Lone Star for commission sharing. He explained that the sharing of commissions, as in the case of Lone Star and UVI, “was common, normal, in the way that business was conducted. And that [his] opinion in that regard was that [he] had not seen, in all honesty, anything in the Insurance Code indicating that this could not be done that way.” In response, Contreras told Rosario that he “would have to carry [out] the investigations against this N.P.P. member” anyway. Rosario asked to be relieved from the assignment, and Contreras agreed that Castro would report to López instead.

Early in 2002, Guillemard learned that the OIC had issued subpoenas to several Puerto Rico banks demanding account information for all transactions involving Guillemard, Noble, or Lone Star.

On July 10, 2003, Castro submitted the Final Investigation Findings Report (the “Report”) relating to the Lone Star audit to his supervisor. He did not send a copy to Guillemard. The Report found no improper payments to third parties, but it raised other issues. In particular, the Report noted that Lone Star had entered into a commission-sharing arrangement with UVI. The Report concluded that the sharing of commissions is a violation of section 939(2) of the Puerto Rico Insurance Code.

At the end of 2003, Plaintiffs were still being investigated by the OIC. On December 10, 2003, Plaintiffs filed a federal action against Contreras and the OIC, alleging that the investigation was motivated by political animus in violation of their rights under the First and Fourteenth Amendments. At that time, the OIC had not issued any reports or orders in connection with the Lone Star investigation since the submission of Castro’s July report.

Contreras found out about Plaintiffs’ lawsuit by the following day. 1 On December 23, 2003, Contreras issued an order declaring Plaintiffs incompetent and untrustworthy, revoking their insurance licenses for a period of five years; denying them any license in any capacity for a period of five years; and imposing a fine of $2,035,000 (the “Order”). The Order stated that it would become effective on January 7, 2004, but provided that Plaintiffs could request an administrative hearing to contest it. The Order also stated that a request for an administrative hearing would stay the imposition of the fine, the declaration that Plaintiffs were incompetent and untrustworthy, and the denial of any license in any capacity. However, pursuant to the Order, the revocation of Plaintiffs’ licenses would remain in effect pending a final administrative decision.

Following receipt of the Order, Plaintiffs promptly requested an administrative *35 hearing. They also amended their complaint to allege claims of retaliation under the First Amendment and violation of the Due Process and Equal Protection Clauses, as well as state law provisions. In addition, Plaintiffs requested a temporary restraining order to prevent the revocation from taking effect, and moved for a preliminary injunction. The district court granted the temporary restraining order and scheduled a hearing on the motion for a preliminary injunction. After a hearing, at which only Plaintiffs chose to present evidence, the district court entered an injunction restraining Contreras and the OIC from revoking Plaintiffs’ license pending completion of a full and fair hearing on Plaintiffs’ challenge to the revocation order.

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Bluebook (online)
490 F.3d 31, 2007 U.S. App. LEXIS 13719, 2007 WL 1675837, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guillemard-ginorio-v-contreras-gomez-ca1-2007.