SMA Life Assurance Co. v. Sanchez Pica

771 F. Supp. 15, 1991 U.S. Dist. LEXIS 11472, 1991 WL 155233
District Court, D. Puerto Rico·Decided August 9, 1991·No. Civ. 90-2019CCC·Published·Cited by 1 cases

Opinion

ORDER

CEREZO, District Judge.

Before the Court is SMA Life Assurance Company’s (SMA) Motion for Reconsideration of our Order of May 24, 1991 which denied a previous request for the issuance of an injunction against the Commissioner of Insurance of Puerto Rico. 764 F.Supp. 7. Plaintiff vehemently requests that the injunction be issued, arguing that otherwise it “will suffer irreparable injury and will be left without an adequate remedy at law, since the time to request administrative review of the Order of the Insurance Commissioner expired.” 1

We restate the chain of events that lead to plaintiff’s latest petition. On July 26, 1990 plaintiff filed a complaint before this Court seeking rescission of a disability insurance policy which it had issued to defendant. Since defendant failed to contest the allegations, judgment by default was entered in favor of plaintiff on November 26, 1990.2 Meanwhile, the defendant had chosen to litigate the matter before the Office of the Commissioner of Insurance of Puerto Rico, the local administrative agency in charge of regulating the insurance business. Upon his filing of a grievance before its complaints division, SMA promptly answered the same on November 5,1990. On December 12, 1990, just days after a final judgment was entered in this case, SMA decided to file a motion to dismiss alleging res judicata in the administrative proceeding.

The administrative proceeding continued its course. The parties were notified of a hearing to be held on February 5, 1991 and continued until February 20, 1991. Based on the evidence presented at that hearing, the Office of the Commissioner of Insurance entered an order on March 15, 1991. The agency expressly rejected SMA’s claim that the judgment entered by this Court precluded defendant’s proceedings before it and concluded that the doctrine of res judicata was not applicable. It ordered that SMA was to reinstate the policy and provided that “[a]ny party that deems itself prejudiced by this determination that precedes has the right to request reconsideration of the same ... within the term of twenty (20) days from the date of its notice.”3

It was not until April 19, 1991, more than a month after the conclusion of the administrative proceedings and nearly five months after the entry of judgment by default in this action, that plaintiff first filed its motion for an order to protect or effectuate that last judgment. The motion was denied based on considerations of equity, comity and federalism. Noting that the motion had been filed after the administrative agency had rejected plaintiff’s res judicata defense and proceeded to enter its final order, we observed the possible application of the “general rule that provides that when an action is pursued until the entry of a final decision inconsistent with a prior judgment, the second decision ordinarily prevails whether the res judicata effects of the first judgment were ignored by the parties or expressly rejected by the decision-maker in the second action.” See Order of May 24, 1991, docket entry 12, p. 4. In addition, given SMA’s active partic[17]*17ipation in all stages of the adjudicatory procedure conducted by the administrative agency, we assumed it had sought judicial review of the adverse decision. We expressed our confidence in the Commonwealth courts’ capacity to protect plaintiff “from the effects of the administrative decision by properly applying the doctrines of res judicata and collateral estoppel when judicially reviewing the same.” Id.

Plaintiff has returned to this Court to claim that the issuance of an injunction is its only available remedy since the time to request review of the Order of the Commissioner of Insurance has expired. It deliberately failed to request administrative reconsideration and, consequently, judicial review in the Commonwealth courts, in order to “rely on the finality and conclusiveness of the federal judgment by promptly seeking injunctive relief from this Court.” See docket entry 13, p. 3, ¶ 4.

Insofar as plaintiff attempted to procure this Court’s intervention in the administrative proceeding by terminating the state judicial process prematurely, foregoing state judicial review in order to attack the insurance commissioner’s order in federal court, its action constituted an improper use of this Court’s jurisdiction which we do not sanction. It seems clear that under these circumstances it was plaintiff who, by choice, created the situation allegedly constituting irreparable injury and inadequate remedy at law upon which it now bases the request for injunctive relief. As an injunction is certainly not an available remedy when the alleged irreparable injury is caused by the party that seeks relief, this situation alone constitutes sufficient cause to dismiss the request. See generally San Francisco Real Estate v. Real Estate Invest., 692 F.2d 814, 818 (1st Cir.1982).

There is a stronger consideration that militates against the issuance of the injunction. Plaintiff moved for the issuance of the injunction only after the administrative agency had concluded all the proceedings before it, after having actively litigated the matter there, and even when it had a judgment in its favor issued by this court since November 1990. A quasi-judicial proceeding was conducted in the administrative agency as plaintiff was properly notified of the action filed against it, was adequately represented by an attorney, filed memoranda of law in support of its claim, was afforded a hearing where it had the right to present evidence on its own behalf and to rebut evidence presented by defendant, received a decision in which the findings of fact and conclusions of law of the adjudicator were clearly stated, and later had the opportunity to contest those findings by seeking reconsideration of the decision and by appealing to the Commonwealth courts. See generally Puerto Rico Administrative Procedure Act, 3 L.P.R.A. §§ 2151-2177. It was in the midst of this procedure that plaintiff then invoked the doctrine of res judicata, which was later rejected by the administrative law judge when rendering a decision plainly inconsistent with our prior judgment. Under these circumstances, we deem applicable the generally known rule that provides that when an action is pursued until entry of a final decision inconsistent with a prior one, the second decision ordinarily prevails even when the res judicata effects of the first were rejected by the decision-maker in the second action. Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 4404, p. 26 (1981 & Supp.1991). After all, administrative decisions must be given res judicata effect when the agency rendering the decision “is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an opportunity to litigate.” United States v. Utah Construction Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966).

Plaintiff contends that pursuant to the Supreme Court’s decision in Parsons Steel v. First Alabama Bank, 474 U.S. 518, 106 S.Ct.

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SMA Life Assurance Co. v. Sanchez Pica, 771 F. Supp. 15, 1991 U.S. Dist. LEXIS 11472, 1991 WL 155233 (prd 1991).

771 F. Supp. 15 (SMA Life Assurance Co. v. Sanchez Pica) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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