Ronda v. Joint Underwriting Ass'n, CIVIL 11-1826CCC

NOEMI TORRES RONDAand ANGELO RIVERA LAMBOY Plaintiffs v. JOINT UNDERWRITING ASSOCIATION;CARIBBEAN ALLIANCE INSURANCE COMPANY;CHARTIS INSURANCE COMPANY OF PUERTO RICO;COOPERATIVA DE SEGUROS MULTIPLES DE PUERTO RICO;INTEGRAND ASSURANCE COMPANY;MAPFRE-PRAICO; NATIONAL INSURANCE COMPANY;OPTIMA INSURANCE COMPANY;REAL LEGACY ASSURANCE COMPANY, INC.;ROYAL & SUN ALLIANCE OF PUERTO RICO, INC.;SEGUROS TRIPLE-S PROPIEDAD INC.;UNIVERSAL INSURANCE COMPANY;ALLSTATE INSURANCE COMPANY;GENERAL ACCIDENT INSURANCE COMPANY;NATIONWIDE MUTUAL INSURANCE COMPANY;RAMON L. CRUZ COLON, in his official capacityas Insurance Commissioner of the Commonwealth of Puerto Rico;RUBEN A. HERNANDEZ GREGORAT, in his official capacityas Secretary of the Department of Transportationand Public Works; and JESUS F. MENDEZ, in his official capacityas Secretary of the Department of the Treasuryof the Commonwealth of Puerto Rico Defendants

CIVIL 11-1826CCC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

September 30, 2019

OPINION AND ORDER

On August 19, 2011, plaintiffs filed a Class Action Complaint alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") and Commonwealth law. The remaining defendants are Joint Underwriting Association ("JUA"); Cooperativa de Seguros Múltiples de Puerto Rico ("Cooperativa"); AIG (formerly known as Chartis Insurance Company of Puerto Rico); Integrand Insurance Company ("Integrand"); MAPFRE; QBE Optima Insurance Company ("Optima"); Real Legacy Assurance Co, Inc. ("Real Legacy"; formerly known as Royal & Sun Alliance of Puerto Rico, Inc.); Seguros Triple S Propiedad, Inc. ("Triple S"); Universal Insurance Company ("Universal"); Allstate Insurance Company ("Allstate"); and CAICO (formerly known as Nationwide Mutual Insurance Company).

Plaintiffs allege that defendants took advantage of Law 253 of 1995, the Compulsory Motor Vehicle Liability Insurance Act, which requires every motor vehicle owner to buy automobile insurance for a set premium of $99. 26 L.P.R.A. §§ 8051, 8056. Plaintiffs allege that JUA and defendant insurance companies are required by law to refund to purchasers a portion of the premium intended for acquisition and administrative costs that were never expended. Rather than issuing such a refund, plaintiffs allege that the defendants conspired to retain the full premium. The class is composed of all motor vehicle owners in Puerto Rico who purchased compulsory automobile liability insurance from 1998 until the adjudication of this action.

Before the Court is the Joint Motion for Summary Judgment (d.e. 413) filed June 18, 2018 filed by defendants JUA, Cooperativa, MAPFRE, Optima, Integrand, Real Legacy, Triple S, Universal, and CAICO ("appearing defendants"); the accompanying Statement of Undisputed Material Facts (d.e. 414) and Joint Memorandum in Support of Motion for Summary Judgment (d.e. 415) filed on June 18, 2018; plaintiffs' Opposition to Joint Motion for Summary Judgment (d.e. 454) filed on August 5, 2019; plaintiffs' Response to Statement of Undisputed Material Facts and Statement of Additional MaterialFacts (d.e. 455) filed on August 5, 2019; appearing defendants' Reply to Response (d.e. 462) filed on September 11, 2019; and appearing defendants' Reply to Opposition to Joint Motion for Summary Judgment (d.e. 464) filed on September 11, 2019. Also before the Court is an earlier Motion for Summary Judgment (d.e. 229), Brief in Support (d.e. 230); and Statement of Undisputed Material Facts (d.e. 231) filed on behalf of all defendants on November 14, 2014; plaintiffs' Opposition (d.e. 280) and Response to Statement of Undisputed Material Facts (d.e. 284) filed March 10, 2015; defendants' Reply (d.e. 325) filed May 8, 2015; and plaintiffs' Sur-Reply (d.e. 360) filed July 27, 2015.

RELEVANT UNDISPUTED FACTS

1. On December 27, 1995, Law No. 253 was enacted to create a compulsory third-party fault-based automobile insurance to cover vehicles and to be provided by private insurers to vehicle owners who requested it, except to those vehicle owners rejected pursuant to criteria to be promulgated by the Commissioner of Insurance. (d.e. 280, para. 26).

2. JUA was created by Law No. 253 with the original main purpose of insuring compulsory liability insurance applicants rejected by private insurers. Law 253 required all private insurers who are licensed or might be licensed in the future to underwrite vehicle insurance to be members of JUA. (d.e. 280, para. 28).

3. The compulsory liability insurance provided a maximum coverage of $3,000 per accident for a universal single premium of $99 for privatepassenger vehicles and a universal single rate of $148 for commercial vehicles. (d.e. 280, para. 29).

4. Law 253's requirement that every vehicle have compulsory liability insurance went into effect on January 1, 1998. (d.e. 280, para. 37).

5. Law 253 requires that the billing for compulsory insurance premiums be conducted by the Department of Transportation and Public Works ("DTPW") and the Secretary of Treasury. 26 L.P.R.A. § 8052(f).

6. Law 253 required the Commissioner of Insurance to establish, through regulation:

(a) the structure and operation of the JUA (after consultation with private insurers); and

(b) the measures necessary for fair and efficient coordination between compulsory and traditional liability insurance (d.e. 280, para. 39).

7. In 2000, the Commissioner of Insurance issued Rule LXX for the implementation of the compulsory liability insurance program mandated by Law 253. (d.e. 280, para. 94).

8. The certified class in the instant case is as follows:

All motor vehicle owners in the Commonwealth of Puerto Rico who in compliance with the Compulsory Motor Vehicle Liability Insurance Act, 26 LPRA ss8051 et seq., acquired compulsory insurance during the years 1998 until adjudication of this lawsuit.

Included in the class are all private motor vehicle owners in the Commonwealth of Puerto Rico, who, in compliance with the Compulsory Motor Vehicle Liability Insurance Act, acquired insurance during such period, paying the uniform annual premium of $99.00; and, all commercial motor vehicle owners in the Commonwealth of Puerto Rico, who, in compliance with the Compulsory Motor Vehicle Liability Insurance Act, acquiredcompulsory insurance during that same period, paying the annual premium of $148.00.

Excluded from the class are defendants, defendants' employees, officers, directors, legal representatives, heirs, successors and wholly or partially owned subsidiaries or affiliated companies; class counsel and their employees; the Judge and judicial officers and their immediate family members and associated court staff assigned to this case; and, all persons within the third degree of relationship to any such persons.

(d.e. 93).

9. During the relevant time period, JUA sold compulsory liability insurance. (d.e. 325, para. 268).

10. During the relevant time period, Cooperativa sold compulsory liability insurance. (d.e. 325, para. 269).

11. During the relevant time period, Optima sold compulsory liability insurance. For each client, the company printed an individualized declaration page, attached thereto the wording of the uniform compulsory insurance policy, and delivered this by mail to the insured. Optima utilized authorized brokers, agents and representatives in the sale of the policies and paid them commissions of up to 8% of the premium dollar. (d.e. 325, para. 272).

12. During the relevant time period, MAPFRE sold compulsory liability insurance. MAPFRE used authorized brokers to acquire the business and delivered copies of the policy to the insureds. (d.e. 325, para. 273).

13. During the relevant time period, Triple-S sold compulsory liability insurance. Triple-S used authorized brokers for the sale of the compulsory insurance and paid them 8% of the premium dollar. Triple-S delivered to each insured an individualized declaration page, which in the back had a summaryof the coverage and provides information of its Website, where the full uniform policy is posted. (d.e. 325, para. 274).

14. AIG, Allstate, Integrand, Universal, Real Legacy, and CAICO did not sell compulsory liability insurance during the relevant time period. (d.e. 325, para. 275-280).

STANDARD OF REVIEW

The standard applicable to summary judgment motions was summarized by the Court of Appeals in Johnson v. University of Puerto Rico, 714 F.3d 48, 52 (1st Cir. 2013):

Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Cox v. Hainey, 391 F.3d 25, 29 (1st Cir. 2004). We look to the pleadings, depositions, answers to interrogatories, admissions on file, and any affidavits in making the determination. Thompson [v. Coca-Cola Co.], 522 F.3d [168,] at 175 [(1st Cir. 2008)]. A dispute is genuine if "the evidence about the fact is such that a reasonable jury could resolve the point in favor of the non-moving party." Id. (quoting Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)) (internal quotation mark omitted). A fact is material if it has potential to determine the outcome of the litigation. Maymí v. P.R. Ports Auth., 515 F.3d 20, 25 (1st Cir. 2008).

Once a properly supported motion has been presented, where a nonmovant bears the burden of proof on an issue, the nonmovant must point to competent evidence and specific facts to defeat summary judgment. Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, 637 F.3d 53, 56 (1st Cir. 2011). The evidence proffered must be "significantly probative of specific facts," Pérez v. Volvo Car Corp., 247 F.3d 303, 317 (1st Cir. 2001), and the "mere existence of a scintilla of evidence" in supportof the nonmovant's position is insufficient, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986).

RELEVANT LAWS

Racketeer Influenced and Corrupt Organizations Act

A civil RICO suit must allege violations of 18...