Court of Appeals of Illinois, First District, First Division
JOHN T. BURNS, III, Plaintiff-Appellant,
THE DEPARTMENT OF INSURANCE and ANDREW BORON, Acting Director of The Department of Insurance, Defendants-Appellees
Plaintiff’s appeal from the trial court’s dismissal of his complaint for administrative review of the Department of Insurance’s revocation of his insurance producer’s license and the imposition of a $10, 000 penalty for selling fraudulent investment products was dismissed on the ground that he failed to exhaust his administrative remedies, notwithstanding his contention that the exception to the exhaustion requirement allowing judicial review when no issues of fact are presented or agency expertise is not involved applied to his case, since there was no transcript of the administrative hearing, the Department’s evidentiary rulings would be presumed to conform with the law and have a sufficient factual basis, and under the circumstances, the exhaustion doctrine would be best served by requiring plaintiff to exhaust his remedies by seeking a rehearing before filing for judicial review.
Appeal from the Circuit Court of Cook County, No. 12-CH-5077; the Hon. LeRoy K. Martin, Jr., Judge, presiding.
Sneckenberg, Thompson & Brody, LLP, of Chicago (William J. Sneckenberg and James P. Duchateau, of counsel), for appellant.
Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Linda Boachie-Ansah, Assistant Attorney General, of counsel), for appellees.
Panel Presiding Justice Connors and Justice Delort concurred in the judgment and opinion.
¶ 1 The plaintiff, John T. Burns III, appeals the circuit court order which, pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2012)), dismissed his complaint for administrative review of the decision of the defendants, the Department of Insurance and Andrew Boron, acting director of the Department of Insurance (Department), to revoke his insurance producer license and impose a civil penalty of $10, 000. For the reasons that follow, we affirm the judgment of the circuit court.
¶ 2 The plaintiff filed a complaint for administrative review, alleging the following facts. On March 1, 2011, the Department revoked the plaintiff's insurance producer license. On March 25, he requested a hearing to determine whether his license should be reinstated. The hearing was held on August 25, with hearing officer Helen Kim presiding over the proceedings. After hearing testimony from various individuals, Kim issued an opinion on November 10, 2011, recommending that the plaintiff's license be revoked and that he be fined. On January 10, 2012, the Department adopted Kim's opinion and recommendations, revoked the plaintiff's insurance producer license, and fined him $10, 000. The plaintiff requested that the Department's order be reversed and that his license be reinstated.
¶ 3 The plaintiff attached Kim's November 10, 2011, opinion. According to the opinion, the plaintiff proceeded pro se at the hearing at which several witnesses testified. While the transcripts of the administrative hearing are not part of the appellate record, we use Kim's summary of the proceedings to provide factual context.
¶ 4 Mary Lopez, an enforcement attorney for the Illinois Securities Department, testified that her department received several complaints from investors about the plaintiff's conduct while working for USA Retirement. The customer complaints identified the plaintiff as the one who led them to invest in fraudulent products. Specifically, Lopez knew of at least four investors that named the plaintiff, but she could not disclose their names because such information is confidential. The customers told Lopez that, while they lost their life savings, the plaintiff appeared to be doing very well, having purchased a big home and nice car while working at USA Retirement. According to Lopez, the customers, who lost about $1 million combined, were told about the fraudulent investment products when they initially sought estate planning or tax advice. In June 2010, the Securities Department issued a temporary order prohibiting the plaintiff from selling or offering securities. After the plaintiff failed to contest the temporary order, the order became final. After the Securities Department issued its order, the Department opened its investigation.
¶ 5 The plaintiff testified that he was employed by USA Retirement from November 2008 through March 2010. He obtained his insurance producer license in March 2009, but he denied that he ever sold any insurance products. He further denied that he ever offered or sold securities to any customer. The plaintiff was employed to hold seminars on estate planning issues and meet with customers regarding estate planning issues. In March 2010, USA Retirement was taken into receivership after the federal Securities and Exchange Commission filed a complaint against the managing partners of the company. The plaintiff denied knowledge of the "four consumers" that Lopez referred to in her testimony and denied purchasing a new home or a new car while working at USA Retirement. He also admitted that he did not request a hearing to contest the Securities Department's prohibition order.
¶ 6 Kim determined that, because the plaintiff was found by the Securities Department to have committed fraud and other violations of the Illinois Security Law of 1953 (Securities Act) (815 ILCS 5/12 (West 2010)), it was within the Director's discretion to revoke his insurance producer license pursuant to section 500-70(a)(8) of the Insurance Code (215 ILCS 5/500-70(a)(8) (West 2012)). Additionally, she recommended that the plaintiff be assessed a civil penalty of $10, 000, noting that since Lopez testified regarding four investors, he could be assessed up to $40, 000. However, Kim considered that the plaintiff was still owed a salary and had incurred financial hardship as a result of his employment at USA Retirement. She also found no evidence substantiating the claims that the plaintiff purchased a larger home and nicer vehicle during his employment. On January 10, 2012, the Department adopted Kim's factual findings, conclusions of law, and recommendations.
¶ 7 On February 14, 2012, the plaintiff filed the instant action for administrative review in the circuit court. On April 17, 2012, the defendants filed a section 2-619 motion to dismiss the plaintiff's complaint, arguing that he failed to petition for a rehearing or to reopen the hearing pursuant to section 2402.280 of title 50 of the Administrative Code (50 Ill. Adm. Code 2402.280 ...