A title insurance company barred from doing business in Indiana after the Department of Insurance found hundreds of violations in an audit cannot sue to reclaim the licenses it voluntarily surrendered, the 7th Circuit Court of Appeals has ruled.
The Chicago appeals court affirmed Indiana Southern District Senior Judge Sarah Evans Barker’s ruling in American Homeland Title Agency, Inc., et al. v. Stephen Robertson, 18-3293.
Barker granted summary judgment in favor of Indiana Department of Insurance Commissioner Stephen Robertson, rejecting Homeland’s argument that the department had discriminated against it because the Cincinnati-based business operated by attorneys John Yonas and Martin Rink was an out-of-state business.
“We need not reach the merits of that discrimination claim,” Judge Diane Sykes wrote for the panel in affirming the district court. “In its agreement with the Department, American Homeland consented to the same penalties it now challenges. It hasn’t provided a valid reason to void that agreement, so judicial review is unavailable.”
Indeed, the panel noted that after the DOI’s audit, examiners recommended that Robertson fine American Homeland $70,082 and order $42,202 in consumer reimbursements. After several rounds of negotiations, examiners also insisted Yonas and Rink lose their licenses to do business in Indiana.
“Later, one of the Department’s attorneys informed American Homeland that if it refused to agree to the penalties, it could seek administrative review. But if American Homeland did that, it could face the maximum fine of $9.5 million. Fearing that exposure, American Homeland agreed to the recommended sanctions” and signed a consent decree that included surrendering its licenses, Sykes wrote.
The panel found against American Homeland’s claims of discrimination and reputational harm, among others.
“American Homeland claims that the Department was impermissibly biased, but nothing makes it illegal to enter an ordinary consent decree; nor would performance of this contract require any illegal conduct,” Sykes wrote. “Moreover, American Homeland hasn’t even alleged that there is anything wrong with the provision at issue: the waiver of judicial review. American Homeland wants a jury to find that the penalty provisions were unconstitutionally severe; it does not argue that the waiver itself was unlawful. And according to that provision, we can’t inquire into the terms of the agreement at all.”
Sykes also noted that American Homeland did nothing to aid its cause during oral arguments, when it “tried a new approach” and “analogized this case to the plight of a criminal defendant who challenges his sentence after entering a plea bargain. If anything, the analogy hurts American Homeland’s case. When a criminal defendant waives appellate review of his plea bargain, we will generally enforce that waiver.
“… American Homeland’s analogy shows only that it is asking for a degree of leniency that even a criminal defendant doesn’t receive,” the panel concluded. “… Because the company waived its right to judicial review of the penalties, its claims are foreclosed. As a result, we need not reach the merits of American Homeland’s equal-protection claim.”