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Texas Commerce Bank v. Garamendi, 28 Cal. App. 4th 1234 (Ct. App. 1994).
As prevailing parties in a declaratory judgment action challenging the
Commissioner's failure to designate their priority status as that of
policyholders, the appellants were entitled to an award of attorney fees and
costs as provided for in their investment contracts with the insurance
company. The Insurance Commissioner, as conservator of the insolvent
insurer, was not acting as a public official, but rather was standing in the
shoes of the insurer, when he determined that the appellants were not
policyholders and defended that position in the declaratory judgment action.
Colorado Phillips v. Lincoln Nat. Health & Cas. Ins. Co., 774 F. Supp. 1297 (D. Colo. 1991).
The Receiver of an insolvent health maintenance organization stands in the
shoes of the organization.
Connecticut Reider v. Arthur Andersen, LLP, 784 A.2d 464 (Conn. Super. 2001). In the
liquidator’s action against the defendant accounting firm alleging
misrepresentation of the value of accounts receivable owed to the insurer by
the insurer’s sole‐shareholder controlled corporation, the court held that the
Commissioner as liquidator had standing to assert the claims on behalf of
creditors and policyholders. The claims alleged did not belong individually to
creditors and policyholders, but instead involved allegations of wrongful
conduct that diminished the estate’s solvency. Also, it was proper to base the
liquidator’s claims of harm to the estate on allegations that the defendant
accounting firm misled the Commissioner concerning the financial condition of
the insurer.
Reliance Ins. Co. v. Ransom, No. CV0308296115, 2004 WL 3090643 (Conn. Super.
Nov. 29, 2004). The court granted a motion for summary judgment, holding
that a subrogation action brought by an insolvent insurer was untimely. The
Connecticut statute allowing the liquidator to file actions on behalf of the
insurer’s estate within two years of the liquidation order only applies only to
suits brought by the liquidator rather than to suits brought by the insolvent
insurer itself.
Delaware In the Matter of Tara Life Ins. Co. of America, No. 7135, slip op. (Del. Ch. Dec. 19,
1983). The question presented was whether the receiver and the court had the
power to direct the transfer of the outstanding stock of a Delaware insurance
company from it sole shareholder of record to another, where such action was
required to rehabilitate the insurance business of the insurer and to protect its
policyholders from loss from the impairment or insolvency of the corporation.
The sole shareholder was a Pennsylvania corporation, which was in
receivership in Pennsylvania. The Pennsylvania receiver objected, saying the
Delaware receiver had no power to sell the Pennsylvania corporation's interest
nor could the Delaware court so order without the Pennsylvania receiver's
consent. The Delaware court denied the objection and signed the order as
submitted by the Delaware receiver.
District of Columbia
Eastern Indem. Co. of Md. v. Content, 543 A.2d 361 (D.C. App. 1988). Eastern
Indemnity, now insolvent, had previously loaned funds to a leasing company in
order to purchase an airplane. The airplane crashed and the insurer of the
plane refused to compensate either the leasing company or Eastern for the
loss. The two companies then sought reimbursement from the estate of the
negligent pilot of the plane. The estate moved to dismiss the claim, because it
was not made within the 60‐day time limit imposed by the D.C. Code, and was
thus barred. The Court held that the claimants, Eastern's Receiver and
Bankruptcy Trustee, were not entitled to relief from the time requirements,