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transacting any insurance business or disposing of its property," is intentionally
broad to ensure that the jurisdiction of the liquidation court extends to persons
or entities such as defendants, who may have access, control, or possession of
the insurer's assets. Finally, the court held that it was not required to stay the
civil action pending the outcome of the criminal proceedings filed against
various individuals, because to do so would prejudice the liquidator's civil
remedy against those persons.
LeBlanc v. Bernard, 554 So.2d 1378 (La. App. 1st Cir. 1989), writ denied, 559 So.2d
1357 (La. 1990). Plaintiff sold immovable property to an individual who
immediately transferred the property to Commonwealth Securities Corporation
("Commonwealth"), which was wholly owned by the purchaser. The Act of Sale
recited that the purchase price had been paid in full. Thereafter,
Commonwealth was placed in liquidation. Plaintiff sued for dissolution of the
sale for the failure of purchaser to pay the purchase price, a fact which was not
disputed by the liquidator at trial. Plaintiff claimed that the liquidator stood in
the shoes of the buyer/transferee and was therefore charged with knowledge
that the purchase price had not been paid. The Court relied upon the
comprehensive and exclusive statutory scheme developed for insurer
insolvencies and held that the liquidator did not stand in the shoes of the insurer
for all purposes. Accordingly, in furtherance of his statutory duty to marshal all
assets of the insolvent's estate for the benefit of the public, the liquidator was
entitled to rely upon the public records which recited that the purchase price
had been paid.
Rimsky v. Currier, 26,379 (La. App. 2 Cir. 2/10/95), 649 So.2d 1248. While
waiting appeal of judgment for the plaintiff, insurer was placed in
liquidation. Judgment was affirmed, and plaintiff sought funds deposited
for the suspensive appeal. The Commissioner urges plaintiff is only entitled
to a pro rata share of the insurer’s assets, as any other creditor. The court
found that the proper dispersal of cash posted for a suspensive appeal was
governed by the rules of suspensive appeal, La. C.C.P. 2124, not by the
Louisiana Insurance Code. When the insurer relinquished possession of the
cash to the clerk of court, it created an enforceable security agreement and
perfected a security interest in the cash bond. Once judgment in favor of the
creditor becomes final, the cash appeals bond ceases to be an asset of the
insurer. The court stated that the rules of suspensive appeals do not
contravene Louisiana’s statutory liquidation scheme because the Louisiana
Insurance Code expressly recognizes a preference for creditors with secured
claims.
Maryland
Cappage v. Coleman, 263 Md. 639, 284 A.2d 211 (1971). The receiver of an
insolvent insurance company sued the receiver of an insolvent savings and loan
company for payment of interest on secured loans which the insurer had made
to the bank. The court held that since the sale of the pledged collateral
produced more than sufficient funds to pay principal and interest, the savings
and loan was obligated to pay the interest according to the terms of the loan
agreement. The court ruled that this outcome was unaffected by the fact that
both parties were in receivership or that there would ultimately be a claim
against the insurer on behalf of savings and loan regarding the deposits of the
savings and loan that the insurer covered.
United General Title Insurance Company v. Land Title Research of Maryland,
Inc., 875 F. Supp. 309 (1995). United General Title Insurance Company, a title
insurer, brought an action against Land Title Research of Maryland, its
former limited agent, to recoup payments resulting from agent’s alleged
embezzlement of premiums and failure to pay loan closings. The Court
granted a preliminary injunction which prohibited the title insurer’s agent
from wasting assets and transferred funds from the agent into the Registry