Court Opinion

ID: 4429219
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:20:10.704771+00
Date Added: 2024-06-11T14:50:44.176779
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0354-17T2

RICHARD J. BADOLATO,
COMMISSIONER, NEW
JERSEY DEPARTMENT
OF BANKING AND
INSURANCE,

          Petitioner-Respondent,

v.

PAUL J. VINCI,

     Respondent-Appellant.
___________________________

                    Argued January 22, 2019 – Decided March 1, 2019

                    Before Judges Sumners and Mitterhoff.

                    On appeal from the New Jersey Department of Banking
                    and Insurance.

                    Thomas H. Prol argued the cause for appellant (Laddey,
                    Clark & Ryan, LLP attorney; Thomas H. Prol, on the
                    briefs).

                    Carl M. Bornmann, Deputy Attorney General, argued
                    the cause for respondent (Gurbir S. Grewal, Attorney
                    General, attorneys; Melissa H. Raksa, Assistant
            Attorney General, of counsel; Carl M. Bornmann, on
            the brief).

PER CURIAM

      Respondent Paul J. Vinci appeals a final agency decision of the

Department of Banking and Insurance (the "Department") revoking his

insurance producer license 1 and ordering that he pay fines totaling $7,500. The

Commissioner of the Department found that respondent violated N.J.A.C.

11:17D-2.5(e) by working for a licensed insurance producer while his license

was voluntarily suspended. On appeal, respondent contends that the orders of

the Commissioner should be reversed because his employment during his license

suspension did not violate the regulation.         We disagree and affirm the

Department's final decision for the reasons that follow.

      Respondent was licensed as an insurance producer from May 2, 1990 until

his license expired on April 30, 2006 in the State of New Jersey.2 He has also

been licensed to produce insurance in New York as a resident producer since

August 2005. Prior to respondent's license expiring, he was convicted of cocaine

1
 0A license is required before one can sell, solicit or negotiate insurance in this
State. N.J.S.A. 17:22A-29.
2
  An insurance producer is a "person required to be licensed under the laws of
this State to sell, solicit or negotiate insurance." N.J.S.A. 17:22A-28.
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                                        2
possession in 1999. He failed to disclose this conviction to the Department when

it occurred and when he re-applied for his license in July 2007, after its

expiration.

      Respondent was hired as an insurance producer by Otterstedt Insurance

Agency ("OIA") on September 2, 2008. OIA has been licensed as a resident

business entity insurance producer in New Jersey with a business and mailing

address in Englewood Cliffs since June 11, 1975.

      From June 2006 through February 2007, while respondent's license was

expired, he continued to sell, solicit, and negotiate New Jersey insurance

policies, and received commissions for these activities. On March 29, 2012,

respondent signed and entered into a consent order with the Department,

admitting and accepting responsibility for violations of the New Jersey

Insurance Producer Licensing Act, N.J.S.A. 17:22A-26 to -57. Respondent

admitted that he continued engaging in insurance producer activities in New

Jersey after his license expired, failed to notify the Commissioner within thirty

days of a criminal conviction, and failed to report on a licensing application that

he had been convicted of a crime. He agreed to pay a $15,000 fine and to have

his New Jersey insurance producer license suspended for two-and-one-half years

beginning on March 29, 2012.

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                                        3
      On May 1, 2014, prior to the conclusion of respondent's suspension,

respondent submitted an application for a nonresident insurance producer

license that identified OIA as his employer.    The Department rejected the

application.

      Thereafter, the Department began investigating respondent's employment.

Lydia Barbara Bashwiner, Esq., OIA's counsel, stated in a letter to the

Department that respondent's employment as an insurance producer with OIA

began on September 2, 2008, and was terminated effective June 20, 2014.

Bashwiner's letter also stated that respondent "did not conduct any New Jersey

insurance business while employed at OIA," that "OIA did not maintain any

offices outside of New Jersey" and that respondent "attended sales meetings,

marketing meetings and other company functions at our New Jersey office."

Respondent also "had access to OIA's computer network and insurance carrier

interface systems."

      After investigating respondent's employment, the Department issued a

two-count order to show cause on July 1, 2015. The first count alleged that

respondent continued to work at OIA despite having a suspended insurance

producer license. The second count alleged that respondent continued to work

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                                      4
for an insurance producer despite having agreed to a thirty-month suspension of

his insurance producer license pursuant to a consent order with the Department.

      After hearing oral argument on the Department's motion for summary

decision and respondent's cross-motion for summary decision, the Honorable

Jeff S. Masin, A.L.J., issued an initial decision granting the Department's motion

as to both counts and denying respondent's cross-motion.            Judge Masin

recommended a $5,000 penalty on the first count, a $10,000 penalty on the

second count, and revocation of respondent's insurance producer license.

      On August 11, 2017, the Commissioner issued a final decision and order,

which adopted Judge Masin's initial decision with modifications.              The

Commissioner concluded that Vinci's employment with OIA during the term of

his license suspension violated N.J.A.C. 11:17D-2.5(e), and N.J.S.A. 17:22A-

40(a)(2) and (8).        The Commissioner also adopted Judge Masin's

recommendation to revoke respondent's insurance producer license, reduced the

total recommended penalty to $7,500, and imposed costs of $637.50.

      The Commissioner noted that respondent admitted to maintaining

employment with OIA, a licensed resident insurance producer in New Jersey,

during the time his producer license was suspended. The Commissioner found

that, while respondent's employment was limited to New York insurance

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                                        5
matters, he was required to attend meetings at the New Jersey office and had

access to OIA's computer network, which contained New Jersey insurance

business.

      The Commissioner rejected respondent's contention that the Department

was overstepping its regulatory authority because respondent's employment with

OIA involved New York insurance matters only. The Commissioner found that,

under N.J.A.C. 11:17D-2.5(e), respondent was not allowed to be employed by

an insurance producer licensed in New Jersey in any capacity, including any

employment roles that are not related to the sale, solicitation, and negotiation of

insurance, during the period of his suspension. Respondent was not prohibited

from engaging in insurance business under his New York resident insurance

producer license. During the suspension of his New Jersey license, respondent

was free to maintain employment with an insurance producer in New York, or

any other state where he may have been licensed, so long as the insurance

producer was not also licensed in New Jersey. The Commissioner concluded

that revocation of Vinci's insurance producer license was warranted for his

repeated failure to abide by New Jersey insurance laws, which showed a

purposeful disregard for these laws and the Department.

      This appeal followed.

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        On appeal, respondent contends that the Commissioner erred by granting

summary decision to the Department. Summary decision should be granted

where

             the pleadings, discovery and affidavits "show that there
             is no genuine issue as to any material fact challenged
             and that the moving party is entitled to prevail as a
             matter of law." Once the moving party presents
             sufficient evidence in support of the motion, the
             opposing party must proffer affidavits setting "forth
             specific facts showing that there is a genuine issue
             which can only be determined in an evidentiary
             proceeding." This standard is substantially the same as
             that governing a motion under Rule 4:46–2 for
             summary judgment in civil litigation.

             [Contini v. Bd. of Educ. of Newark, 286 N.J. Super.
             106, 121-22 (App. Div. 1995) (citations omitted).]

We review motions for summary decision "in accordance with the principles set

forth by the Supreme Court in Brill v. Guardian Life Ins. Co. of Am., 142 N.J.

520, 540 (1995)." Nat'l Transfer, Inc. v. N.J. Dep't of Envtl. Prot., 347 N.J.

Super. 401, 408 (App. Div. 2002). In Brill, the Court explained that

             a determination whether there exists a "genuine issue"
             of material fact that precludes summary judgment
             requires the motion judge to consider whether the
             competent evidential materials presented, when viewed
             in the light most favorable to the non-moving party, are
             sufficient to permit a rational factfinder to resolve the
             alleged disputed issue in favor of the non-moving party
             . . . . The import of our holding is that when the
             evidence "is so one-sided that one party must prevail as

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                                        7
            a matter of law," the trial court should not hesitate to
            grant summary judgment.

            [142 N.J. at 540 (citations omitted).]

      Respondent make two principal arguments regarding the Commissioner's

grant of summary decision. First, respondent argues that the Commissioner's

interpretation of N.J.A.C. 11:17D-2.5(e) was incorrect and leads to the absurd

result "that one cannot even be a janitor at the regulated entity" while his

insurance producer license is suspended.       Second, respondent argues that

Mayflower Sec. Co., Inc. v. Bureau of Sec. in Div. of Consumer Aff. of Dep't

of L. and Pub. Safety, 64 N.J. 85 (1973) is analogous to the instant case and

should act as controlling authority. We disagree with both arguments.

      The Commissioner's power to revoke an insurance producer license comes

from N.J.S.A. 17:22A-40, which provides, in relevant part:

            The commissioner may . . . revoke . . . an insurance
            producer's license or may levy a civil penalty . . . for
            any one or more of the following causes: . . .

            (2) Violating any insurance laws, or violating any
            regulation, subpoena or order of the commissioner or of
            another state's insurance regulator; . . .

            (8) Using fraudulent, coercive or dishonest practices, or
            demonstrating incompetence, untrustworthiness or
            financial irresponsibility in the conduct of insurance
            business in this State or elsewhere . . . .

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                                       8
            [N.J.S.A. 17:22A-40(a)(2), (8).]

Additionally, "[n]o person whose license has been suspended or revoked may

be a partner, officer, director or owner of a licensed business entity, or otherwise

be employed in any capacity by an insurance producer." N.J.A.C. 11:17D-2.5(e)

(emphasis added).

      "The interpretation of regulations follows the principles of statutory

interpretation." Campo Jersey, Inc. v. Dir., Div. of Taxation, 390 N.J. Super.

366, 381 (App. Div. 2007) (citing State v. Hessen, 145 N.J. 441, 456 (1996)).

The first step in interpreting the statute is to look "to the plain language of the

statute," and "ascribe to the statutory language its ordinary meaning."

D'Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 119-20 (2007) (citations

omitted). Our "goal in the interpretation of a statute is always to determine the

Legislature's intent." Id. at 119 (citing Wollen v. Borough of Fort Lee, 27 N.J.

408, 418 (1958)). "Where a statute is clear and unambiguous on its face and

admits of only one interpretation, a court must infer the Legislature's intent from

the statute's plain meaning." O'Connell v. State, 171 N.J. 484, 488 (2002) (citing

V.C. v. M.J.B., 163 N.J. 200, 217, cert. denied, 531 U.S. 926 (2000)).

      The plain language of both N.J.S.A. 17:22A-40(a) and N.J.A.C. 11:17D-

2.5(e) are clear and unambiguous.        See D'Annunzio, 192 N.J. at 119-20;

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                                         9
O'Connell, 171 N.J. at 488.      The Commissioner may revoke an insurance

producer's license if he or she finds that the producer has violated an insurance

law, regulation, or order of the Commissioner. N.J.S.A. 17:22A-40(a)(2). A

person whose insurance producer's license has been suspended may not "be

employed in any capacity by an insurance producer." N.J.A.C. 11:17D-2.5(e)

(emphasis added). Here, respondent concedes that his license was suspended

while he worked at OIA and that OIA is a resident business entity insurance

producer in New Jersey. We find no merit in respondent's argument that his

employment did not violate the regulation because it was limited to New York

insurance matters. Under N.J.A.C. 11:17D-2.5(e), it makes no difference that

respondent did not handle New Jersey insurance matters during his employment

with OIA. The regulation is concerned only with whether respondent worked

for an insurance producer registered in New Jersey during his suspension.

      Furthermore, respondent's argument that Mayflower Securities should act

as controlling authority in the instant matter is meritless.      In Mayflower

Securities, the Court vacated a twenty-day suspension imposed by the Bureau of

Securities on Mayflower Securities' registration as a securities broker-dealer. 64

N.J. at 87, 99. The Bureau's suspension was based on findings that Mayflower

Securities violated provisions of the Uniform Securities Law (1967), N.J.S.A.

                                                                          A-0354-17T2
                                       10
49:3-47 to -83, by employing an unregistered agent. Id. at 87-88. Under the

Uniform Securities Law, suspension or revocation required a finding that the

broker-dealer "has willfully violated or willfully failed to comply with any

provision of this act or any rule or order authorized by this act[.]" Id. at 90

(quoting N.J.S.A. 49:3-58(a)(2)(ii)).

      The unregistered agent in Mayflower Securities, Alan Levine, completed

his registration application and submitted it to a Mayflower Securities manager.

Id. at 94. However, "[n]o one is certain what happened to Levine's application

after he returned it . . . following completion." Id. at 95. The Court concluded

that it was "clear that [Levine] thought he was registered and did business

accordingly and that Mayflower thought he was registered and employed him

accordingly."   Ibid.   Thus, the Court held that Mayflower's violation was

technical, not willful, and vacated the twenty-day suspension. Id. at 99.

      Mayflower Securities is factually distinct from the instant matter. The

Uniform Securities Law in Mayflower Securities required a willful violation of

law or regulation before one's securities broker license could be suspended. See

id. at 90. There is no such requirement before one's insurance producer license

can be suspended or revoked in the instant matter.       See N.J.S.A. 17:22A-

40(a)(2). Thus, unlike the Bureau of Securities in Mayflower Securities, the

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                                        11
Commissioner here was not required to find a willful violation of N.J.A.C.

11:17D-2.5(e) before revoking respondent's insurance producer license. See 64

N.J. at 90. Thus, we conclude that the Commissioner correctly interpreted

N.J.A.C. 11:17D-2.5(e) and properly granted summary decision to the

Department.

      The remaining arguments raised by respondent are without sufficient

merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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