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company was then placed in liquidation and the agency filed an action over a
payment dispute. A motion to compel arbitration was granted, and the trial
court stayed such arbitration pending a decision on appeal. In affirming, the
appellate court determined that the primary issue in this case was whether Ohio
or Tennessee law applied to resolve the contract dispute regarding arbitration.
The parties’ choice of law was honored. Therefore, Ohio law controlled.
Because Ohio law provided that on procedural matters, such as arbitration, the
law of the forum governed, Tennessee law was applied to determine whether
an issue is arbitrable. Applying Tennessee law, the dispute was subject to
arbitration under Tennessee Code § 29‐5‐302(a).
Davis v. Amra Grotto M.O.V.P.E.R., Inc., 169 Tenn. (5 Beeler) 564, 89 S.W.2d 754
(1936). When Tennessee creditors had impounded the Tennessee assets of
insolvent Ohio insurance company, and the Ohio receiver asserted that all of
these assets should be transferred to the receiver, it was held that this issue
was not properly presented for determination because Ohio receiver was not a
creditor, where the order appointing the receiver did not vest the receiver with
title to all assets of the insurer. The court also noted that even if the Ohio
receiver should be allowed to intervene, the receiver would not be allowed to
remove Tennessee assets as long as the insurance company owed obligations
to local creditors, where the insurance company, although incorporated in
Ohio, had domesticated in Tennessee.
Taylor v. Life Ass'n. of America, 13 F. 493 (C.C. W.D. Tenn. 1882). When
Tennessee policyholders of insolvent Missouri life insurer brought suit in
Tennessee to attach its assets and distribute them according to Tennessee law,
it was held that because under Tennessee law the Tennessee creditors had
acquired no specific lien or right or priority prior to the transfer of assets to the
receiver, the suit of the Tennessee creditors must be dismissed, and the
creditors must seek satisfaction in the insolvency proceeding in Missouri.
Texas Bard v. Charles R. Myers Ins. Agency, 839 S.W.2d 791 (Tex. 1992), reversing 811
S.W.2d 251 (Tex. App.‐‐San Antonio 1991). Receiver of insolvent Vermont
insurer sued insurance agents pursuant to correspondent's agreement for
payment of earned premiums. Defendants filed compulsory counterclaims,
which resulted in a jury award for defendants on the counterclaim. Receiver
claimed the Vermont liquidation order, which included injunctions against
maintaining counterclaims or other actions against the receiver in any court
other than the Vermont liquidation court, should have been enforced in the
Texas court under principles of full faith and credit and/or comity. Reversing a
contrary appellate court judgment, the Texas Supreme Court agreed. The
court found the liquidation order sufficiently final to be entitled to full faith and
credit. The fact that the receivership court retained jurisdiction to discharge
the receiver and enter further orders with respect to assets of the estate did
not mandate a finding that the liquidation order was an interlocutory judgment
which was therefore not entitled to full faith and credit.
Further, the fact that a receiver is entitled to prosecute claims of the
insolvent estate in foreign jurisdictions does not also require the receiver to
be subjected to prosecution of claims against him in that foreign jurisdiction.
The Texas compulsory counterclaim statute did not require a contrary result;
the counterclaim requirement is a procedural rule which fosters judicial
economy by foreclosing piecemeal litigation. The order of the liquidation
court which requires all claims against the receiver to be brought in Vermont
(or to be heard in Texas by a Special Master appointed by the liquidator) also
operated to further judicial economy by ensuring that all claims against the
insolvent estate are prosecuted in one forum, enabling the receivership
court to ensure that all claimants are treated uniformly. The claims were
ordered dismissed without prejudice to prosecute them in Vermont.