Source: http://nj.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19910403_0041026.NJ.htm/qx
Timestamp: 2017-01-21 08:49:28
Document Index: 741852741

Matched Legal Cases: ['§ 7401', '§ 7401', '§ 7404', '§ 7404', '§ 7405', '§ 7401', '§ 7432', '§ 7416']

| Superintendent of Insurance v. International Equipment Leasing Inc.
Superintendent of Insurance v. International Equipment Leasing Inc.
SUPERINTENDENT OF INSURANCE OF THE STATE OF NEW YORK AS LIQUIDATOR OF UNION INDEMNITY INSURANCE COMPANY OF NEW YORK, PLAINTIFF-APPELLANT,v.INTERNATIONAL EQUIPMENT LEASING, INC., DEFENDANT-RESPONDENT
[247 NJSuper Page 120] We granted leave to plaintiff Superintendent of Insurance (Superintendent) of the State of New York as liquidator of Union Indemnity Insurance Company (Union Indemnity) to appeal from an order of the Law Division that denied its motion for summary judgment with respect to the counterclaim filed by defendant International Equipment Leasing, Inc. (International) for costs, counsel fees and punitive damages. At issue is whether the claims asserted by International against the out-of-state liquidator of an insolvent insurance carrier can be brought in a state other than the state in which the liquidation proceedings were instituted. The trial court held as a matter of law that the counterclaim was properly brought in the Law Division. We disagree and reverse. [247 NJSuper Page 121]
On July 16, 1985, the Honorable Ira Gammerman, Justice of the Supreme Court of the State of New York, County of New York, adjudged Union Indemnity insolvent and appointed the Superintendent as liquidator. The Superintendent instituted this action in the Law Division against International to collect premiums for insurance coverage provided by Union Indemnity. International counterclaimed for costs, counsel fees and punitive damages. The trial court granted International's motion for summary judgment, thereby dismissing the Superintendent's claim. The trial court also granted the Superintendent's cross-motion to strike International's counterclaim but on reconsideration, reinstated the counterclaim. Thereafter, the Superintendent moved for summary judgment, seeking a dismissal of the counterclaim on the ground that New Jersey law requires pursuit of any claim against the liquidator in the State of New York court which ordered the liquidation. As a separate and independent basis for summary judgment, the Superintendent argued that the counterclaim essentially alleged malicious use of process, not fraud, and as an action for malicious use of process, it failed to state a claim upon which relief could be granted. The trial court denied the motion, holding that the counterclaim was properly brought in the Law Division and that genuine issues of material fact with respect to the substantive claim existed. This appeal followed.
Both New Jersey and New York adopted the Uniform Insurers Liquidation Act ("Act"), N.J.S.A. 17:30C-1 et seq.; N.Y.Ins.Law § 7401 et seq. (Consol.1985), and therefore, are reciprocal states under the Act. N.J.S.A. 17:30C-1(f); N.Y.Ins.Law § 7401. "The Act provides for a uniform, orderly and equitable method of making and processing claims against defunct insurers and provides for a fair procedure to distribute the assets of defunct insurers." Ballesteros v. New Jersey Property Liab. Ins. Guar. Assoc., 530 F. Supp. 1367 (D.N.J.), aff'd, 696 F.2d 980 (3d Cir.1982).
The Superintendent monitors the financial health of all domestic insurance companies. The Superintendent may seek a [247 NJSuper Page 122]
liquidation order in the trial court. N.J.S.A. 17:30C-2; N.Y.Ins.Law § 7404, 7421. Grounds for a liquidation order include insurer insolvency, refusal to cooperate in the Superintendent's regulatory oversight or a finding that further transactions will be hazardous to policyholders, creditors or the public. N.J.S.A. 17:30C-8; N.Y.Ins.Law § 7404. The liquidation order directs the Superintendent to take possession of the insurer's property and to liquidate the business.
The court may direct the Superintendent to manage the insurer's property in the insurer's name or in the Superintendent's name. The order vests the Superintendent with title to all of the insurer's property, excluding assets located in reciprocal states that have appointed ancillary receivers, and rights to all of the insurer's contracts and causes of action. N.J.S.A. 17:30C-9; N.Y.Ins.Law §§ 7405, 7410(b). New Jersey defines "reciprocal state" as:
any state other than this State in which in substance and effect the provisions of the Uniform Insurers Liquidation Act, as defined in section 23 of this act are in force, including the provisions requiring that the commissioner or equivalent insurance supervisory official be the receiver of a delinquent insurer. [ N.J.S.A. 17:30C-1(f)].
New York defines "reciprocal state" in a similar manner. N.Y.Ins.Law § 7401.
After ordering the insurance company into liquidation, the court maintains continuing jurisdiction over the liquidation proceedings to ensure that the Superintendent's office properly discharges its duties. Lac D'Amiante du Quebec, Ltee. v. American Home Assurance Co., 864 F.2d 1033, 1040 (3d Cir. 1988). When issuing the liquidation order or at any time thereafter, the court may issue an order declaring the insurer insolvent. N.J.S.A. 17:30C-30; N.Y.Ins.Law § 7432(a). The court may also dissolve the corporate existence of the insurer if certain statutory grounds for such an action are present. N.J.S.A. 17:30C-8; N.Y.Ins.Law § 7416. In addition, the court may enjoin the insurer or its agents from interfering with the [247 NJSuper Page 123]
Superintendent's liquidation. N.J.S.A. 17:30C-5; ...