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U.S. ex rel. ACCA Const. Services, LLC v. F.A.S. Development Co., Inc., 304 F.
Supp. 2d 1359 (N.D. Ga. 2004). After surety became subject to rehabilitation
proceedings in North Carolina and state court issued preliminary injunction,
enjoining pending actions against surety, judicial administration required that
Miller Act suit be allowed to proceed on the grounds that Miller Act suit could
only be adjudicated in federal court and establishment of company's claim
should facilitate state liquidation process. 304 F. Supp. 2d at 1363. Having
decided that the case will proceed, a court may continue the case in order to
allow a party to confer with the rehabilitator in an effort to obtain authority to
pursue settlement negotiations and/or prepare for trial on the Miller Act claim.
304 F. Supp. 2d at 1363.
Hawaii
Illinois
Kansas
Massachusetts
Missouri
Nevada
Takayama v. Financial Sec. Ins. Co., 898 P.2d 610 (Haw. Ct. App. 1995). The
Court of Appeals held that during the period that the Insurance
Commissioner was the court‐appointed receiver of an insolvent insurer and a
stay order was in effect, no one, not even the Director of the Department of
Commerce and Consumer Affairs, could legally take any action with respect
to the insurer without the consent of the Commissioner and/or the court.
Therefore, the Director's involuntary dissolution of the insurer was void ab
initio on the grounds that it violated the stay order and impermissibly
interfered with the receivership court's valid assertion of jurisdiction.
O'Connor v. Insurance Company of North America, 622 F. Supp. 611 (N.D. Ill.
1985). reconsideration denied 688 F. Supp. 1183 (1987) appeal granted, (1989)
The court held that the reinsurers were not restrained by the state court stay
order from asserting their setoffs since the reinsurance proceeds sought by
the state liquidator in the federal court action were pre‐liquidation debts
subject to setoff.
Universe Life Ins. Co. v. Centennial Life Ins. Co., 35 F. Supp. 2d 1297 (D. Kan.
1999). Finding that exercise of federal jurisdiction would be disruptive to state
liquidation proceedings of an insolvent insurer, the court found that abstention
under Burford principles was proper. The court found, however, that a stay of
proceedings rather than a dismissal was appropriate for a garnishment action
brought before the federal court as this would retain plaintiff’s right to litigate
its claim in the federal forum should the state court fail to adjudicate the claim.
This would ensure plaintiff’s claim would not become time‐barred should
jurisdiction be lacking in the state court.
Clentimack v. AA Transportation Co., Inc., 2003 Mass. Super. LEXIS 373; Int’l
Church of the Foursquare Gospel v. City of Fitchburg, 17 Mass. L. Rep. 30 (Super.
Ct. 2003); Selinga v. Dukakis, 2003 Mass. Super. LEXIS 355; Jack‐O‐Lantern
Spectacular, Inc. v. Usovicz, 16 Mass. L. Rep. 335 ( Super. Ct. 2003). In each of
these four cases, the action had been stayed for many months pursuant to a
rehabilitation order involving the defendant’s insurer in another state. The
Court held that each case should proceed despite the stay because after such an
extended delay, the interests of justice before the present court outweighed
the justifications for continuing the stay.
Ainsworth v. Allstate Ins. Co., No. 85‐1209‐CV‐W‐6 (S.D. Mo. Dec. 2, 1985). The
domiciliary liquidator initiated litigation to collect reinsurance proceeds, but
the court held that the reinsurer was entitled to a stay of the litigation, pending
the outcome of arbitration, which was required under its reinsurance contract.
Integrity Ins. Co. v. Martin, 769 P.2d 69, 105 Nev. 16 (1989). The Supreme
Court of Nevada held that a Nevada state court should have stayed