THE LOWER COURT WAS WRONG IN FINDING THAT THERE WAS LIABILITY IN THE FIRST PLACE, AND THE LOWER COURT WAS WRONG IN THE AMOUNT OF DAMAGES, SO WE REVERSE AND VACATE THE JUDGMENT OF THE LOWER COURT AND REMAND IT FOR ANOTHER TRIAL. MR. SLENKER WAS SUCCESSFUL IN THE SUPREME COURT OF VIRGINIA.
NOW, WHEN THEY REMANDED THAT, THEY DID JUST LIKE MY LITTLE HYPOTHET IN THE CITY COURT. THEY REMANDED IT FOR ANOTHER TRIAL. THERE HAS BEEN A LOT OF TALK BACK AND FORTH IN THIS COURTROOM ABOUT WHETHER OR NOT THE COMMISSIONER WAS ENTITLED TO GET THAT MONEY BACK, BECAUSE, AS YOU KNOW, AFTER PHYSICIAN'S NATIONAL RISK RETENTION GROUP PUT UP THE MONEY, THE COMPANY WENT WHAT I CALL BELLY-UP; IT WAS INSOLVENT.
IT WAS TAKEN OVER BY A LOUISIANA COURT. AND THE COMMISSIONER WAS ORDERED BY THE COURT TO LIQUIDATE IT. AND HE'S GOT CERTAIN DUTIES AND RESPONSIBILITIES IN CONNECTION WITH THAT LIQUIDATION.
THE FIRST DUTY AND RESPONSIBILITY THE COMMISSIONER HAS UNDER THE LAW IS TO MARSHAL, COLLECT, FIND ALL OF THE ASSETS OF THE COMPANY. AND IT IS VERY SIMILAR TO BANKRUPTCY. I TOLD YOU THE OTHER DAY, INSURANCE COMPANIES DON'T GO BANKRUPT; THEY HAVE TO FOLLOW A DIFFERENT PROCEDURE. AND YOU MIGHT SAY WHY. I CAN'T TELL YOU WHY, OTHER THAN THAT IS WHAT THE LAW SAYS. THAT'S THE WAY THE CONGRESS AND THE LEGISLATURES OF THE VARIOUS STATES HAVE DONE.
*764 BUT THE INSURANCE COMMISSIONER STEPS INTO THE SHOES OF THE COMPANY, TAKES OVER ALL OF THE COMPANY'S ASSETS, AND IS THE BENEFICIARY OF ALL OBLIGATIONS OWED UNDER ALL CONTRACTS PREVIOUSLY ENGAGED IN BY THE INSURANCE COMPANY.
BUT BECAUSE THIS IS SIMILAR TO BANKRUPTCY, THE COMMISSIONER IS NOT NECESSARILY BOUND TO FULFILL ALL OF THE CONTRACTS AND OBLIGATIONS THAT THE COMPANY HAD UNDERTAKEN BEFORE IT WAS PLACED INTO LIQUIDATION.
IF YOU THINK ABOUT THAT, THAT'S OBVIOUS. IT HAS TO BE THAT WAY, BECAUSE THE COMPANY NOW CAN'T PAY ALL OF ITS OBLIGATIONS BECAUSE IT'S INSOLVENT. IT DOESN'T HAVE ENOUGH ASSETS. SO, FOR THAT REASON, THE LAW SAYS THE COMMISSIONER WILL GET ALL OF THE ASSETS TOGETHER, COLLECT THEM, FIND THEM WHEREVER THEY ARE, AND THEN HE WILL PAY AS MANY CLAIMS AS HE CAN, ACCORDING TO THE LAW, AND AS PRIORITY, WHO GETS PAID FIRST AND ALL THIS KIND OF STUFF.
YOU TRY TO PAY ALL OF THEM, BUT UNLESS THERE IS ENOUGH ASSETS, HE CAN'T PAY ALL OF THEM. SO, THAT'S WHAT THIS COMMISSIONER WAS DOING DURING THE COURSE OF THESE PROCEEDINGS. HE WAS TRYING TO COLLECT ALL OF THE ASSETS.
THERE HAS BEEN SOME EVIDENCE THAT THEY DIDN'T DO A VERY GOOD JOB SOMETIMES. THAT'S GOT NOTHING TO DO WITH IT. HIS DUTY IS TO COLLECT ALL OF THE ASSETS.
NOW, WHEN THE SUPREME COURT OF VIRGINIA VACATED THE JUDGMENT AND SET IT ASIDE, IT CREATED A POTENTIAL PROBLEM, IF THE COMMISSIONER SAID GET THE MONEY BACK.
PROBLEM? YES, BECAUSE DR. DAVOUDLARIAN WANTED TO MAKE SURE THAT IF HE WENT TO TRIAL