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Matter of Title, Etc., Co. of Buffalo, 152 Misc. 428, 274 N.Y.S. 270 (1934),
affirmed, 243 A.D. 277, 276 N.Y.S. 802. While the rehabilitator operated the
title insurance company with the aim of conserving its assets, the claims of all
creditors were suspended pending the outcome of the rehabilitation.
Furthermore, the insurance code authorized an order of rehabilitation which
cut off the remedies of the certificate holders to sue the title company upon its
default under the three‐year clause.
Millgard Corp. v. E.E. Cruz/Nab/Frontier‐Kemper, E.E. Curz & Co., No. 99 CIV.
2952 LBS, 2002 WL 31812710 (S.D.N.Y. Dec. 12, 2002). The federal district court
refused to stay a third party action against the third party defendant, who was
insured by an insolvent insurer, even though a stay of the third‐party action was
possible based on Burford principles; this contract dispute did not involve
difficult or unsettled questions of state law, and had only incidental contact with
state liquidation proceedings.
G.C. Murphy Co. v. Reserve Ins. Co., 74 A.D.2d 235, 427 N.Y.S.2d 800 (1980). It
was held that the trial court erred in not allowing a continuance to permit
proper service on the Illinois insurance commissioner as rehabilitator and
liquidator where the commissioner should have formally been served with all
the papers filed in a suit against a foreign insurance company in liquidation
proceedings in Illinois. The trial court should have granted the continuance
and allowed the liquidator opportunity to respond to a motion to join the
insurer's New York affiliate as a defendant in the action. However, since New
York and Illinois were reciprocal states, both having adopted the Uniform
Insurers Liquidation Act, New York should have recognized the Illinois
commissioner's right to seek a stay of proceedings against the insurer and to
take possession of the insurer's assets. Therefore, the action to recover
unearned premiums was stayed.
New York Title Co. v. Friedman, 153 Misc. 697, 276 N.Y.S. 72 (1934). The court
held that a set‐off did violate an order restraining policyholders and creditors
from bringing suits against the insurer.
Pink v. Title Guarantee & Trust Co., 274 N.Y. 167, 8 N.E.2d 321, reargument
denied, 274 N.Y. 610, 10 N.E.2d 575 (1937). Pursuant to an order of
rehabilitation which prohibited all persons from commencing actions against
an insolvent company, its assets, or its rehabilitator, a creditor of the company
was not permitted to pursue a claim either by direct action or by way of a
counterclaim to an action brought by the rehabilitator.
Pires v. Ortiz, 795 N.Y.S. 2d 9 (App. Div. 2005). The court rejected the insureds’
argument that an inquest into a default judgment entered against the insureds
was barred because it was conducted while a liquidation stay against their
insurer was in effect. The stay took effect after the insurer had disclaimed
coverage, and therefore was inapplicable at the time of the inquest.
Public Serv. Truck Renting, Inc. v. Ambassador Ins. Co., 175 A.D.2d 632, 572
N.Y.S.2d 559 (1991). Vermont is one of New York's "reciprocal states" within
the meaning of New York Insurance Law § 7408(b)(6). Although Vermont,
unlike New York, has not enacted the Uniform Insurers Liquidation Act, its
statutory scheme is so materially similar that it has enacted the Uniform Act "in
substance and effect." Accordingly, the court affirmed a stay of further
proceedings in the New York action during the pendency of liquidation
proceedings in a related Vermont action.