Benitez-Pons v. Com. of Puerto Rico
| Decision Date | 04 November 1997 |
| Docket Number | P,BENITEZ-PON,No. 96-2254,96-2254 |
| Citation | 136 F.3d 54 |
| Parties | Jose Rafaellaintiff, Appellant, v. The COMMONWEALTH OF PUERTO RICO, et al., Defendants, Appellees. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
William Ramrez-Hernandez, Rio Piedras, PR, with whom Nora Vargas-Acosta, San Juan, PR, and Vargas & Ramrez Law Office, Rio Piedras, PR, were on brief, for appellant.
Roberto Ruiz-Comas, San Juan, PR, and Edgardo Coln-Arraras, Hato Rey, PR, with whom Gaztambide & Plaza, Goldman Antonetti & Crdova, Hato Rey, PR, and Cherie K. Durand were on brief, for appellees.
Before LYNCH, Circuit Judge, CYR, Senior Circuit Judge, and DiCLERICO *, District Judge.
After administrative proceedings resulted in the revocation of his securities brokerage license, plaintiff-appellant Jose Rafael Bentez-Pons filed a motion for reconsideration with the Office of the Commissioner of Financial Institutions (OCFI), which issued an interlocutory order tolling the period for judicial review. No resolution of the motion for reconsideration was issued, although the agency and the plaintiff engaged in negotiations. The plaintiff then filed a complaint in federal court alleging violations of the Federal and State Constitutions and statutes in connection with the revocation of his securities license. The district court granted summary judgment to the defendants on the grounds that the claims were barred by the statute of limitations. We affirm the grant of summary judgment.
The plaintiff, Jose Rafael Bentez-Pons, was a practicing licensed securities broker and licensed supervisor of other securities brokers. In April 1988, he co-founded and became president and majority owner of First Continental Corporation (FCC), a now defunct securities brokerage firm. After suspecting improper securities transactions by two of the brokers at FCC, the plaintiff filed a complaint with OCFI. OCFI's investigation eventually included the plaintiff himself.
On January 27, 1992, OCFI issued a cease and desist order to FCC, and ordered the plaintiff to show cause why further action should not be taken against him. On January 30, 1992, the plaintiff entered into a consent decree with OCFI. The consent decree provided, inter alia, that the plaintiff was to cease all supervisory and administrative functions at FCC for one year, that FCC would name another person to supervise and perform administrative functions at FCC, that FCC would comply with certain filing requirements, that the plaintiff and FCC would pay certain fines, and that the plaintiff would supply a copy of a resolution of the FCC Board of Directors ratifying such measures.
The plaintiff and FCC failed to comply with the consent decree. On March 13, 1992, Peter Smith and other governmental employees or agents of OCFI entered FCC's premises. They conducted a warrantless search of the premises which included, in part, downloading computer information and seizing computer programs and disks, accounting books, a registry, shareholder contracts, and security boxes.
On March 19, 1992, OCFI issued another order against the plaintiff and FCC finding, inter alia, that the consent decree had not been complied with and that the plaintiff had engaged in other misconduct. In the order, OCFI ultimately concluded that the situation at FCC placed investors and the securities industry in Puerto Rico at risk. It summarily suspended the plaintiff's license, ordered him to show cause why further actions should not be taken against him, and informed him of his right to seek an administrative hearing. 2 The plaintiff exercised his right to an administrative hearing.
On September 28, 1992, the plaintiff was afforded an administrative hearing on the issue of the revocation of his license. There is no evidence that the plaintiff raised any search and seizure claims, privacy claims, or illegal detention claims during the administrative hearing. On December 28, 1992, OCFI issued a resolution and ordered the plaintiff's license permanently revoked. On January 19, 1993, the plaintiff filed a timely motion for reconsideration with OCFI. This step was a procedural prerequisite to seeking judicial review. In the plaintiff's motion for reconsideration, the plaintiff asserted that the proceedings had violated his constitutional rights. 3
OCFI responded to the motion for reconsideration with an interlocutory order issued January 28, 1992, pursuant to section 3.15 of Puerto Rico's Uniform Administrative Procedures Act (codified at 3 L.P.R.A. § 2165). See P.R. Laws Ann. tit. 3, § 2165 (1994) (hereinafter section 2165). 4 The plaintiff's translation of OCFI's interlocutory order states:
That upon review of the Motion for Reconsideration of January 19, 1993, filed by the Respondant [sic], the Commissioner orders that it be considered and resolved.
Pursuant to section 3.15 of Law Number 170 of August 12, 1988 (Uniforme [sic] Administrative Procedures Act) supra, the thirty (30) day period in which to seek review is tolled and will begin to run again from the date in which a copy of the Resolution resolving the Motion for Reconsideration is filed and notified.
Docket and Notify.
In San Juan, Puerto Rico, on January 28, 1993.
On February 10, 1993, OCFI filed its opposition to the motion for reconsideration. OCFI never issued a decision by the Commissioner on the motion for reconsideration within the ninety day period as required by section 2165.
Following OCFI's interlocutory order of January 28, 1993, attorneys for OCFI and the plaintiff met to try to resolve the issue. The plaintiff asserts that during the months of March and April 1993, letters and telephone calls were exchanged to this end. The record indicates that the plaintiff's attorneys sent OCFI settlement proposals which were evidently rejected. The plaintiff's intention in the negotiations was to relinquish his constitutional claims in exchange for reinstatement of his license. The plaintiff asserts that representations were made that the statute of limitations was tolled, although there is no evidence in the record that substantiates this allegation beyond the interlocutory order. During these interactions, OCFI never indicated that it was not considering the motion for reconsideration. In September 1993, the Commissioner and the plaintiff accidentally met, and in response to an inquiry by the plaintiff, the Commissioner indicated that he would "follow up" on the plaintiff's motion for reconsideration. In June 1994, the attorney for the plaintiff filed a motion to "resign" from representing him. OCFI never responded to the motion.
In March and April 1995, the plaintiff contacted OCFI to inquire about the status of his case and request a copy of the examiner's findings. The plaintiff was told that no one at OCFI had any knowledge regarding his case, and that no one could help him with his inquiry.
On May 2, 1995, the plaintiff filed a complaint in the federal district court of Puerto Rico against the defendants. 5 The plaintiff sought declaratory relief, injunctive relief, and damages pursuant to 42 U.S.C. §§ 1983 and 1988, and 28 U.S.C. § 2201. The plaintiff asserted that the defendants violated his right to be free from unreasonable searches and seizures, his right to be free from illegal detention, his right to privacy, his property interest in his license, his liberty interest in his career, and his liberty interest in his right to contract for employment. He also asserted claims under the Puerto Rico Constitution, Article II, sections 7, 8, and 10, and Articles 1802 and 1803 of the Puerto Rico Civil Code.
On July 31, 1995, the defendants filed a motion for summary judgment. The defendants argued that the complaint was not filed within one year of the constitutional deprivations, and was therefore time barred. Furthermore, they asserted that the plaintiff failed to toll the statute of limitations because (1) the plaintiff failed to satisfy the applicable Puerto Rico tolling statute, which requires that there be identity of relief requested, and (2) equitable tolling was unavailable because the plaintiff could establish neither excusable ignorance nor that the defendant actively misled or prevented the plaintiff from asserting his rights. Finally, the defendants argued that OCFI's determination was final and unappealable because the statute of limitations had expired.
The district court granted the defendants' motion for summary judgment. The court first determined that a one year statute of limitations controlled the plaintiff's claims. It then determined that the last alleged violation occurred on September 28, 1992. The complaint therefore had to be filed by September 29, 1993. The court agreed with the defendants and found that the plaintiff had not tolled the statute of limitations on either of two bases: (1) the plaintiff failed to seek the same remedies in the district court as it had before the agency, and therefore failed to satisfy the requirements of the Puerto Rico statute governing the tolling of the statute of limitations through extrajudicial claims, and (2) the plaintiff failed to establish that the statute of limitations was equitably tolled. The court implicitly found that the plaintiff was neither excusably ignorant of the statute of limitations nor actively misled by OCFI. The court concluded that the administrative order was final and unappealable.
The plaintiff argues on appeal that the ninety day review period under section 2165 is waivable and was tolled by OCFI. The plaintiff also asserts that the defendants are equitably estopped from asserting the statute of limitations as a defense in this case. Finally, the plaintiff asserts that summary judgment is generally inapplicable in actions raising equitable tolling or estoppel arguments, and that genuine issues of material fact in this case precluded the grant of summary judgment. 6
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