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the 11th amendment, as he was not a real party in interest. In making these
rulings, the court was persuaded by the body of case law holding that where
a state insurance officer is a party only because of his status as receiver or
liquidator of an insolvent insurance company, the state is not the real party
in interest. Furthermore, the court determined that abstention was not
appropriate after examining three factors: (1) the case involved federal law;
(2) the interpleader action had little effect upon the state liquidation
proceedings; and (3) no other forum could adequately protect the rights of
all parties. In addition, the law firm representing the insolvent insurer could
intervene as of right because it held an attorneys' fee lien against the
proceeds for judgment in the state court. Finally, the court held that
because the SBA paid out on a guaranty agreement upon the default of a
contractor and became subrogated to the rights of AFFI, it had become the
equitable owner of AFFI's rights against General Railway, and thus could
collect directly.
Florida
Kentucky
Southeastern Staffing, Inc. v. Florida Dep’t of Ins., 728 So. 2d 248 (Fla. Dist.
Ct. App. 1998) (certified question to Florida Supreme Court pending). The
Florida Department of Insurance as receiver of an insolvent workers'
compensation fund could assess fund members for workers' compensation
claims, awards and administrative expenses of the receivership. Such
assessment was authorized by statute and was not an impermissible taking
of private property.
Guidice v. Koetters, 2005 U.S. Dist. LEXIS 14084 (W.D. Ky. 2005). Discharged
employee who claimed a right to severance pay did not show that
rehabilitator’s termination of her employment without severance pay violated
procedural due process. The court found that a pre‐deprivation hearing would
not lessen the risk that a rehabilitator would act in an unauthorized manner to
deprive the employee of her severance benefit. State law provided an adequate
post‐deprivation remedy because nothing in the statutory scheme prevented
the employee from bringing an action for breach of contract. The fact that a
state law might have limited her ability to recover did not matter because a
state’s choosing to limit recoveries by some creditors is not a violation of
procedural due process. Because the remaining claims were uniquely state law
in nature, the court refused to retain jurisdiction.
Louisiana Green v. Champion Insurance Company, 577 So.2d 249 (La. App. 1st Cir. 1991),
writ den'd, 580 So.2d 668 (La. 1991). Champion Insurance Company was
declared insolvent and the Insurance Commissioner was appointed liquidator.
Faced with criminal charges relating to Champion, the Commissioner moved to
recuse himself as liquidator, and a liquidator ad hoc was appointed. The
liquidator ad hoc sued twelve individual defendants, all officers and
stockholders of Champion or its various affiliates, and nine corporate
defendants related to Champion, including holding companies, a premium
finance company and managing general agent corporations. The trial court
found that all of the corporate defendants had been operated as a "single
business enterprise," and issued an order declaring that the assets of the
defendant corporations were assets of Champion to be distributed in the
liquidation proceeding. He further issued an injunction restraining the
defendants from using or otherwise disposing of those assets without a prior
hearing.
In response to a challenge that the appointment of the ad hoc liquidator was
an unconstitutional exercise of powers reserved to the executive branch, the
appellate court held that the Louisiana statutory scheme merely expresses a