Comisionado De Seguros De Puerto Rico v. Integrand Assurance Company, KLAN202300675

Background

In 2008 Quiñones sued Jorge Mercado and his insurer Integrand; in 2010 the trial court entered judgment and Integrand deposited funds in court to satisfy the judgment (initial deposit 2010; additional deposit $434,185.02 on Jan 7, 2015).
The Carolina trial court later ruled the consignations were correct; that ruling survived appellate review and the Supreme Court denied certiorari (mandate notified May 22, 2019).
The Commissioner of Insurance filed to rehabilitate Integrand on May 30, 2019; that proceeding converted to liquidation and a San Juan trial court issued a liquidation order (notified Sept 25, 2019).
The Commissioner asserted the consignations were part of Integrand’s liquidation estate and potentially avoidable as a preferential transfer under the Insurance Code; Integrand and Quiñones argued the consignations extinguished the insurer’s obligation and therefore were not estate assets.
The Carolina court ordered release of the funds to Quiñones; after transfer of the funds record to San Juan, the San Juan trial court denied the Commissioner’s challenges and ordered the funds remitted to Quiñones; the Appeals Court affirmed.

Issues

Issue	Plaintiff's Argument (Comisionado)	Defendant's Argument (Quiñones)	Held
Whether the court-escrowed consignations are assets of Integrand’s liquidation estate	Consignation was only finally validated May 22, 2019, so funds are estate assets when liquidation petition filed May 30, 2019	Consignation, once judicially validated, operates retroactively to deposit date, so funds left Integrand’s patrimony in 2015	Held: consignations retroactively effective to deposit (2015); funds not assets of liquidation
Whether the consignations are avoidable preferential transfers under Art. 40.250 (Insurance Code)	Validation close in time to the rehabilitation petition makes the transfers voidable as preferences within one year	Because the consignation’s effects retroact to the 2015 deposit, the transfers fall outside the one‑year preference window and are not avoidable	Held: not a preferential transfer; cannot be annulled under Art. 40.250
Whether the release request to the trial court amounted to a prohibited execution of judgment under the Insurance Code	The claim was an execution of a judgment and, by statute, must proceed through the liquidation administrative process; trial court lacked jurisdiction	The funds were already extinguished and at claimant’s disposition; the request was simply for remittance, not execution	Held: not an execution of judgment barred by the Code; trial court jurisdiction to order remittance was proper
Whether the San Juan liquidation court had exclusive jurisdiction over the dispute	All matters involving the insolvent insurer must be funneled to the liquidation forum; Carolina’s earlier orders were superseded	The San Juan court (as liquidator forum) had jurisdiction over issues relating to Integrand and received the transferred funds; the claimant may seek remittance there	Held: San Juan court has centralized jurisdiction over Integrand matters; exercise of jurisdiction and remittance order were proper

Key Cases Cited

Tolic v. Rodríguez Febles, 170 D.P.R. 804 (establishes that a judicially-validated consignation retroactively produces the effects of payment to the date of deposit)
ASR v. Ex Parte Proc. Rel. Familia, 196 D.P.R. 944 (describes legal requirements and effects of consignation under Puerto Rico law)
A.I.I. Co. v. San Miguel, 161 D.P.R. 589 (endorses centralization of claims in the liquidation forum)
San José Realty, S.E. v. El Fénix de P.R., 157 D.P.R. 427 (trial court ordering liquidation retains jurisdiction over all actions against the insurer)
Mun. de San Juan v. Prof. Research, 171 D.P.R. 219 (explains execution procedure and that execution is used when a debtor refuses to pay)
Intaco Equipment Corp. v. Arelis Const., 142 D.P.R. 648 (characterizes liquidation as a special statutory proceeding limiting courts’ jurisdiction)