Opinion ID: 1644439
Heading Depth: 1
Heading Rank: 3

Heading: Right of action as owner of ANA

Text: The only claim litigated in the trial court arose from the Commissioner's staged sale of the M-Tel securities. Those securities were owned by USGA, a company which was never owned by Barbara Presley. Barbara Presley's reconventional demand against the Commissioner was filed in her individual capacity, alleging that, as a beneficial owner of ANA, she incurred monetary losses as a result of the programmed sale of the USGA-owned M-Tel securities. There is much dispute regarding whether Barbara Presley or Sam Presley was the actual owner of ANA. However, we need not decide which of the two had actual ownership of ANA in order to resolve this matter. By law, once an order of liquidation is entered, the Commissioner takes possession of the property, business, and affairs of the insolvent insurer. La. R.S. 22:735(A). [12] The Commissioner is responsible for all of the assets that come into his possession, and is vested by operation of law with the title to all property of the insurer. Id. Once the trial court entered judgment declaring that USGA, AFSI and ANA constituted a single business enterprise, [13] the Commissioner, as liquidator, was vested with ownership of the property belonging to the SBE for purposes of the liquidation. La. R.S. 22:735; Green v. Champion Insurance Company, 577 So.2d 249 (La.App. 1st Cir.1991); [See also Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 5:38 (2005) ]. We hold that the court of appeal erred in holding that Barbara, as owner of ANA, acquired a right of action to sue for breach of a fiduciary duty owed to USGA. We find no authority for the proposition that Barbara's Presley's purported ownership interest in ANA was transformed into an ownership interest in USGA by virtue of the SBE designation. The nature and effect of the SBE judgment was simply to allow the Commissioner, as liquidator, to gather the assets of all of the SBE entities in order to use all of those assets to satisfy the claims of creditors. Thus, while the SBE judgment vested title to the assets of all of the SBE entities in the Commissioner for the purposes of the liquidation, it did not change ownership of each affiliated corporation making up the SBE, such that ownership in one entity became ownership in all the related entitles. The single business enterprise doctrine is essentially a theory for imposing liability where two or more business entities act as one. There was no confusion of ownership created by the SBE designation. We hold that any right to pursue a claim arising out the Commissioner's handling of the sale of the M-Tel securities would have to arise from an ownership interest in the company whose assets were sold, namely USGA. Moreover, considering that title to all of the SBE companies, including ANA and USGA, was vested with the Commissioner once the order of liquidation was entered, Barbara would have been divested of any alleged ownership interest by the court's liquidation order. [14]