Court Opinion

ID: 6258511
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:53:43.442875+00
Date Added: 2024-06-11T08:59:38.363744
License: Public Domain

Dissenting Opinion by
Mr. Justice Cohen:
Prior to the date of the order of dissolution of Seaboard Mutual Casualty Company each appellant had a claim and right of action only against Peoples Cab Company. Each had the right to pursue his action to final judgment and to enforce that judgment against Peoples Cab Company. If Peoples Cab Company did not satisfy the judgment, it could attempt to secure satisfaction of the judgment from the indemnitor— Seaboard. This would have been done by resort to a writ of attachment execution against Seaboard on its policy of insurance. However, the order of dissolution enjoined and restrained all persons from instituting or prosecuting any action at law or in equity or any attachment or execution against said company. This order was entered by the Commonwealth Court as provided by statute for the liquidation of insolvent insurance companies and its validity is not questioned.
*79Here appellants did obtain judgments against Peoples Oab Company, but these judgments were obtained after the receivership and after the order of the Commonwealth Court. It was then and only then that a right of action against the indemnitor (Seaboard) accrued. This right of action accrued not against the original Seaboard Mutual Casualty Company, but against the statutory receiver. All claims against the receivership were required to be filed with the statutory receiver and proof of the validity and amounts of the claims were required to be made. The claimants so proceeded, recognizing the propriety of the order of the Commonwealth Court.
The majority now hold that “[t]his procedure in no possible way detracted from the binding effect of the judgments” and that “they should have been honored by the statutory liquidator in the full amounts they represented.” I disagree with that conclusion of the majority.
The proceedings before the Insurance Commissioner acting as a statutory liquidator on a claim based on a cause of action which arose after the receivership is actually a de novo claim in which the statutory receiver makes a determination as to the value of the claim, its merit, and any other determination necessary to protect the assets of the defunct insurance company, as well as policyholders and other claimants. The action that a claimant has against the fund of the receivership is against the fund created from the assessments of the policyholders and that fund is protected from extravagant demands, spurious claims and fraudulent rights of action by the statutory liquidator in the exercise of his statutory duties.
Here, the statutory liquidator made determinations of the value of the claims against the fund. This in turn was appealed to the Commonwealth Court which affirmed the statutory liquidator’s determination, stat*80ing (1) that the judgments of the Court of Common Pleas of Allegheny County were not binding on the statutory liquidator and (2) that the claims of the plaintiff were exaggerated. The majority’s action ignores the purpose and statutory obligation of the statutory liquidator and substitutes its own notion as to the value and validity of the claims. It relies on Riehle v. Margolies, 279 U.S. 218 (1929), which, on analysis, clearly demonstrates that it is not authority. In Riehle the judgment obtained was obtained against the incapacitated company. Hence, the determination as to the value of the claim had been made in a proceeding against the receiver or the trustee. That is not the situation in this case. Here a judgment was obtained —not against the statutory liquidator and not against the company in liquidation — but against a third party. Moreover, this judgment against the third party was obtained after the court’s order and hence could have no effect whatsoever on the amount or validity of the claim. By statute, the amount and validity of claims must be determined by the statutory liquidator.
The majority opinion permits the circumvention of what has been established law and practice in the Commonwealth and permits these appellants to obtain an advantage not permitted to others in the same class at the time the decree was entered. If the equities which have always existed in liquidation of insurance companies are to continue, the majority opinion necessitates the adoption of new statutory procedures which, I hope, will not be ignored by subsequent courts.
Mr. Justice Jones joins in this dissent.