FILED

May 28, 1997

Cecil W. Crowson

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

STATE OF TENNESSEE, ex. rel., )

DOUGLAS M. SIZEMORE, ) Davidson Chancery Court

Commissioner of the Department ) Rule No. 92-1120-I(II)

of Commerce and Insurance for the )

State of Tennessee, ) Appeal No.

) 01A01-9610-CH-00484

Plaintiff/Appellee, )

)

VS. )

)

UNITED PHYSICIANS INSURANCE )

RISK RETENTION GROUP, (In )

receivership under T.C.A. § 56-9-101 )

et seq.) )

)

Defendant/Appellee, )

)

Claim of JANINA LOSHEK, )

)

Claimant/Appellant, )

)

Claim of ROBERT J. SLUTZKY, M.D., )

)

Claimant. )

APPEAL FROM THE DAVIDSON COUNTY 

CHANCERY COURT OF NASHVILLE, TENNESSEE

HONORABLE ELLEN HOBBS LYLE, CHANCELLOR

JOHN KNOX WALKUP SARAH HIESTAND

Attorney General and Reporter Assistant Attorney General

Financial Division

500 Charlotte Avenue

Nashville, TN 37243-0496

RENARD A. HIRSCH, JR. #009489

619 Woodland Street

Nashville, TN 37206

ATTORNEYS FOR DEFENDANTS/APPELLEES

HOLLINS, WAGSTER & YARBROUGH

John L. Norris #6007

Suite 2210, SunTrust Center

424 Church Street

Nashville, TN 37219

ATTORNEY FOR CLAIMANT/APPELLANT

REVERSED AND REMANDED

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

BEN H. CANTRELL, JUDGE

DAVID H. WELLES, JUDGE

By designation
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STATE OF TENNESSEE, ex. rel., )

DOUGLAS M. SIZEMORE, ) Davidson Chancery Court

Commissioner of the Department ) Rule No. 92-1120-I(II)

of Commerce and Insurance for the )

State of Tennessee, ) Appeal No.

) 01A01-9610-CH-00484

Plaintiff/Appellee, )

)

VS. )

)

UNITED PHYSICIANS INSURANCE )

RISK RETENTION GROUP, (In )

receivership under T.C.A. § 56-9-101 )

et seq.) )

)

Defendant/Appellee, )

)

Claim of JANINA LOSHEK, )

)

Claimant/Appellant, )

)

Claim of ROBERT J. SLUTZKY, M.D., )

)

Claimant. )

O P I N I O N

This appeal involves the rejection of a claim against a liability insurer in a

chancery receivership. The appellant, Janina Loshek, was a patient of Dr. Robert Slutsky who

was insured against professionalliability by United Physicians Insurance Retention Group which

has been placed in receivership under T.C.A. §§ 56-9-101 et seq.

On April 22, 1992, the patient, Ms. Loshek received unanticipated injury during

surgery conducted by Dr. Slutsky. On April 29, 1992, the doctor reported the incident to the

claims department of his insurer. 

On July 16, 1992, the Trial Court entered an “Agreed Order of Rehabilitation”

providing in part as follows:

W. The liquidator shall give or cause to be given notice of the 

Order of Liquidation in accordance with T.C.A. § 56-9-311 as 

soon as possible. (4) By first class mail to all persons known or 

reasonably expected to have claims against the insurer including 

all policyholders, at their last known address as indicated by the 

records of the insurer. (Emphasis supplied)
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X. Except as otherwise established by the liquidator with 

approval of the Court, notice to potential claimants under 

T.C.A. § 56-9-311(a) shall require claimants to file with the

liquidator their claims together with proper proofs thereof

under T.C.A. § 56-9-324, on or before the date the liquidator

shall specify in the notice, which deadline shall be 12:01 a.m., 

July 21, 1993.

On August 5, 1992, the doctor reported the injury of Ms. Loshek to the claims

department of the insurer, sending a copy of a letter from the attorney for the patient, dated July

23, 1992, requesting medical records of the patient. The letter from the attorney contained his

name and address, and was subsequently delivered to the receiver by the insurer as part of the

general transfer of records to the receiver.

On August 17, 1992, the receiver of the insurer sent to the doctor a notice of the

deadline for filing claims. No notice of the deadline was sent to the patient.

On October 22, 1992, counsel for the patient notified the doctor that the patient

intended to sue for damages. At this time, neither the patient nor her attorney knew of the

receivership or the deadline for filing claims.

On February 12, 1993, an employee of the receiver wrote to the doctor inquiring

about the status of the Loshek claim. The doctor responded that he had no further information.

On September 3, 1993, the receiver wrote the doctor that his claim had been

rejected for failure to file same on or before July 21, 1993.

The patient filed a late claim. The date of filing is not shown, but it was sworn

to on March 25, 1996. The receiver objected to the claim of the patient. The Trial Court referred

the issue to the Clerk and Master.
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On May 13, 1996, when the matter was heard by the Master, no distribution to

general liability claimants had been authorized or made. Approximately 50 disputed claims had

not been adjudicated.

The Master recommended that the receiver’s denial of the patients claim be

upheld. The Trial Court affirmed. 

On appeal, the patient presents a single issue, as follows:

1. Whether the proof of claim filing deadline was erroneously

enforced against Janina Loshek when she was not given notice of

the liquidation proceeding or of the proof of claim filing deadline

even though she was clearly entitled to such notice. 

The basis of appellant’s late claim is that she was entitled to notice of the

receivership and did not receive it. T.C.A. § 56-9-311 provides in pertinent part as follows:

Notice of liquidation order - Method - Contents - Effect of notice.

 (a) Unless the court otherwise directs, the liquidator shall give or

cause to be given notice of the liquidation order as soon as 

possible by:

- - - -

 (4) First class mail to all persons known or reasonably expected to

have claims against the insurer, including all policyholders, at 

their known address as indicated by the records of the insurer; and

- - - -

 (b) Except as otherwise established by the liquidator with approval

of the court, notice to potential claimants under subsection (a)

shall require claimants to file with the liquidator their claims, 

together with proper proofs thereof under § 56-9-324, on or before a date the liquidator shall specify in the notice.

- - - -

 (d) If notice is given in accordance with this section, the distribution of assets of the insurer under this chapter shall be conclusive 

with respect to all claimants, whether or not they received notice.

(Emphasis supplied.)

It is clear from the above that persons having a damage claim against insured may

file a claim in the receivership proceedings of the liability insurance company of the insured.

The receiver asserts that the patient is guilty of laches in delaying to file a claim

after learning of the liquidation. It does not appear that this defense was presented to or acted
-5-

upon by the Trial Court. The issue in this appeal is whether the patient should be allowed to file

a late claim because of failure to receive the notice of deadline as required by the statute and

order of the Trial Court.

The receiver relies upon Lawreszak v. Nationwide Insurance Co., Ohio App.

1977, 392 N.E.2d 1094 in which the injured party brought an action against the liability insurer

of the alleged tortfeasor and the Court held that the injured party has a “substantial, but unvested

right” in the liability insurance of the tortfeasor until judgment has been obtained against the

tortfeasor. This authority is distinguishable by the fact that the insurer was not in liquidation,

whereas the insurer in the present case is in liquidation under a statute which specifically

provides for notice to and claims of “all persons --- reasonably expected to have claims against

the insurer.” Also, the receiver received correspondence and records which reasonably notified

him of the claim of Ms. Loshek.

The brief of the receiver admits that the appellant sued Dr. Slutsky and obtained

a judgment against him on November 1, 1995. Even under Lawreszak v. Nationwide, the

“substantial unvested right” has now become an enforceable right.

The receiver’s brief states:

Loshek could have filed a claim against U.P.I. during the litigation

period. 

However, the right to file a claim includes the right to receive notice of the deadline. The failure

to receive a notice should excuse late filing unless the delay prejudiced the orderly proceedings.

The evidence shows that no such prejudice would result.
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The judgment of the Trial Court is reversed, and the cause is remanded to the Trial Court

for entry of an order requiring the acceptance and consideration of the claim of Janina Loshek

upon its merits, and for further appropriate proceedings. Costs of this appeal are assessed

against the receiver for payment out of the funds of the receivership.

REVERSED AND REMANDED

___________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

____________________________

BEN H. CANTRELL, JUDGE

____________________________

DAVID H. WELLES, JUDGE

By designation