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Illinois law does not provide the Director with creditor status to assert
creditors' claims. Finally, in this context, the alter ego cause of action is
unnecessary, for the Director can bring a breach of fiduciary duty claim,
which involves the same assertion of parent‐shareholder misbehavior.
Cadillac Ins. Co. v. American Nat'l Bank, 1991 U.S. Dist. LEXIS 3238 (N.D. Ill.
Mar. 19, 1991). The case concerned the ownership of five Certificates of
Deposits ("CDs") totaling $4 million. Four were held in the name of Cadillac
Insurance Co. ("Cadillac"), and one was held in the name of United Fire
Insurance Co. ("Fire"), a wholly owned subsidiary of United Diversified Corp.
("Diversified"). The Illinois Director of Insurance ("Director") was the
Conservator of Diversified, the Liquidator of Fire, and Ancillary Receiver of
Cadillac in Illinois. The Director sought to intervene in the case because Fire
and Diversified made separate claims to the CDs. Both Cadillac and the
majority shareholder of Diversified, Towers Diversified Corp. ("Towers"),
pointed out potential ethical dilemmas facing the Director due to his
positions as Ancillary Receiver, Conservator, and Liquidator, and given the
allegedly divergent interests of Fire and Diversified. Towers sought to
intervene as well, and sought to have the Director removed from the suit.
Cadillac moved for summary judgment declaring it the owner of four CDs
totaling $3.5 million, which the Director disputed. The Director moved for
summary judgment declaring Fire the owner of the one CD worth $500,000.
Both Cadillac and the Director moved for summary judgment against
Towers, asserting it lacked standing to pursue Diversified interests. The
court declined all motions for summary judgment. The court held there was
a factual dispute concerning the ownership of the CDs, and that there was a
factual dispute over whether there was a conflict of interest for the Director.
Cadillac Ins. Co. v. American Nat'l Bank, 1991 U.S. Dist. LEXIS 17383 (N.D. Ill.
Dec. 2, 1991). The court denied the Michigan Commission of Insurance's
motion for a protective order seeking to bar discovery of documents held by
the Michigan Commissioner. In support of its motion, the Michigan
Commissioner cited a Michigan statute protecting examination reports held
by the Insurance Department from public inspection. The court, citing
Seattle Times v. Rhinehart, 467 U.S. 20 (1984), held that production of
documents in civil litigation did not constitute "public inspection," and thus
the statute did not preclude discovery of the documents. Although the
Michigan Commissioner also argued that it should not have to produce
documents as if it were an original party to the dispute, the court rejected
this effort to distinguish between identities of the insolvent insurance
company and the Commissioner. The court held that because the
Commissioner was the Liquidator for the insolvent insurer Cadillac, the
Commissioner stood in the shoes of Cadillac and could not assert that
Cadillac still maintained some separate identity. The Michigan Commissioner
also sought to limit the questioning of witnesses at depositions. The court
denied that motion, as the Michigan statute did not exempt witnesses from
giving relevant testimony on matters of which they had knowledge, and
because parties should not be precluded from inquiring into areas that may
lead to the discovery of permissible evidence.
Evans v. Illinois Surety Co., 220 Ill. App. 199 (Ill. App. 1920). affirmed, 298 Ill. 101,
131 N.E. 262 (1921). The receiver could not terminate the contracts of the
insolvent company as of the date of appointment, without the consent or
acquiescence of the other party to the contract. The receiver's mere
appointment does not terminate the contracts of the insolvent insurer nor