GUILLEMARD GINORIO v. Contreras

409 F. Supp. 2d 101, 2006 WL 47468
CourtDistrict Court, D. Puerto Rico
DecidedJanuary 10, 2006
DocketCivil 03-2317 (JAG)
StatusPublished
Cited by3 cases

This text of 409 F. Supp. 2d 101 (GUILLEMARD GINORIO v. Contreras) 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
GUILLEMARD GINORIO v. Contreras, 409 F. Supp. 2d 101, 2006 WL 47468 (prd 2006).

Opinion

AMENDED OPINION AND ORDER 1

GARCIA-GREGORY, District Judge.

On December 10, 2003 plaintiffs Lone Star Insurance Producers, Inc. (“Lone Star”) and its shareholders Andres Guillemard Ginorio (“Guillemard”) and his wife Maria Noble Fernandez (collectively the “plaintiffs”) filed this action against the Office of the Insurance Commissioner (“OIC”) and Fermín Contreras (“Contreras”), in his individual and official capacity as the former Insurance Commissioner of Puerto Rico, alleging civil rights violations pursuant to 42 U.S.C. § 1983 (Docket No. 1). On June 6, 2004, the plaintiffs amended the complaint to include Dorelisse Juarbe (“Juarbe”) in her individual and official capacity as the current Insurance Commissioner (Docket No. 58). On May 20, 2005 plaintiffs moved for the entry of partial summary judgment on their due process claims (Docket Nos. 204-207). On June 7, 2005 the defendants opposed the motion and cross-moved for summary judgment, seeking dismissal of the complaint (Docket Nos. 216, 218, 220, 221). On July 7, 2005, plaintiffs opposed (Docket Nos. 231-238). On August 31, 2005, the Court referred the motions to Magistrate-Judge Camille Velez-Rive for a Report and Recommendation (Docket No. 261). On November 17, 2005, the Magistrate-Judge recommended that the Court deny plaintiffs’ motion for summary judgment and grant in part and deny in part the defendants’ (Docket No. 287). On December 2, 2005, the parties filed objections to the Report and Recommendation (Docket Nos. 294, 296). For the reasons discussed below, the Court ADOPTS in part and REJECTS in part the Magistrate-Judge’s Report and Recommendation. Accordingly, the Court GRANTS plaintiffs’ motion for summary judgment and DENIES the defendants’ motion.

FACTUAL BACKGROUND 2

Plaintiff Guillemard is the President and fifty percent (50%) stockholder of Lone Star. Contreras was the Insurance Commissioner of Puerto Rico until his resignation became effective on December 31, *105 2003. On January 7, 2004, Juarbe was appointed as the Puerto Rico Insurance Commissioner.

On November 20, 2001, Contreras ordered an audit as to Lone Star’s operations and transactions from January 1, 1997 through September 30, 2001. On November 26, 2001, David Castro Anaya (“Castro-Anaya”) initiated the audit. Plaintiffs submit that Castro-Anaya’s sole purpose was to determine whether improper payments had been made to third parties (Exhibit 5, Castro-Anaya’s Deposition at p. 71). Plaintiffs made available to Castro-Anaya two (2) Certified Public Accountants to fully cooperate with the audit and provide all relevant documents (Exhibit 1, Guillemard’s Deposition at pp. 74, 52-54).

By December 17, 2001, the audit had concluded and one hundred percent (100%) of the documents pertaining to governmental agency insurance had been examined. (Castro-Anaya’s Deposition at p. 98; Guillemard’s Deposition at pp. 98-101). Castro-Anaya informed Guillemard and Miguel Carbonell, Lone Star’s CPA, that he found no irregularities or improprieties and that he would prepare a draft of his final report within the next few months and send them a copy (Castro-Anaya’s Deposition at pp. 99-100).

Neither during the year 2002 nor during the first half of the year 2003, did the plaintiffs receive a report from CastroAnaya. On July 10, 2003, Castro-Anaya submitted a report to his supervisor entitled “Final Investigation Findings Report”, but he did not send a copy to Guillemard. The report found no improper payments to third parties (Exhibit 7). The report, however, raised other issues not given as reasons for the initial investigation; in particular, that Lone Star had entered into a commission-sharing arrangement with an insurance broker, Urrutia Valles, Inc (“UVI”). The report concluded that the sharing of commissions is a violation to Section 939(2) of the Puerto Rico Insurance Code. Plaintiffs, not being informed of this report, had no opportunity to object or present evidence on their behalf.

On December 10, 2003, plaintiffs filed this federal lawsuit against Contreras for violations to their First and Fourteenth Amendment rights, alleging that defendants engaged in political discrimination by singling them out in an investigation not carried out in good faith and seeking to punish plaintiffs’ business because of Guillemard’s political activities. By that time, no order or draft on the audit report had been prepared. Contreras learned of plaintiffs’ lawsuit by December 11, 2003 (Exhibit 2, Contreras’s Deposition at pp. 112-113). On December 23, 2003, Contreras issued arí'Ntrder revoking plaintiffs’ insurance license for a period of five (5) years; denying any license in any capacity for a period of five (5) years; and imposing a fine of $2,035,000. The order included wording to the effect that plaintiffs had been “incompetent” and “untrustworthy” (Exhibit 11). The order further notified to plaintiffs of their right to request a hearing to review its findings, but stated that the revocation of their insurance agent’s license would remain in effect, while the administrative proceedings were ongoing (Id-¶ 8-9).

An administrative hearing was held on March 4, 2005. 3 Soon thereafter, Insurance Commissioner Juarbe issued a resolu *106 tion which still found violations to the Insurance Code and which imposed sanctions on Lone Star, but drastically reduced those sanctions that had been imposed by Contreras. The fíne of over $2,035,000 was reduced to $208,000; the five (5) year license suspension was reduced to three (3) months; the prohibition of filing for a license within five (5) years was eliminated, and the references within Contreras’ order as to plaintiffs’ “untrustworthiness” and “incompetence” were left without effect (Exhibit 12, Resolution ¶ 24-25).

DISCUSSION

A. Summary Judgment Standard

The court’s discretion to grant summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure. Rule 56 states, in pertinent part, that the court may grant summary judgment only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(c); See also Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir.2000).

Summary judgment is appropriate if “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” See Fed.R.Civ.P. 56(c).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Guillemard-Ginorio v. Contreras-Gomez
585 F.3d 508 (First Circuit, 2009)
Spinelli v. City of New York
579 F.3d 160 (Second Circuit, 2009)
Guillemard-Ginorio v. Contreras
603 F. Supp. 2d 301 (D. Puerto Rico, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
409 F. Supp. 2d 101, 2006 WL 47468, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guillemard-ginorio-v-contreras-prd-2006.