Court Opinion

ID: 9566819
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:43:41.162478+00
Date Added: 2024-06-11T09:42:21.199124
License: Public Domain

EDMONDS, J., Dissenting.
I do not join in the opinion of my associates for two reasons.
If the decision is based upon the ground that the order appealed from is self-executing and not subject to supersedeas, that determination is directly contrary, I believe, to the holding of Carpenter v. Pacific Mut. L. Ins. Co., 13 Cal.2d 306 [89 P.2d 637]. If, on the contrary, their conclusion is that, upon the facts shown, the petitioning policyholders are not entitled to the writ to maintain the status quo or to protect appellate jurisdiction, then I. disagree and point to evidence which, to me, compels the exercise of the court’s discretion in their behalf.
Ordinarily, a writ of supersedeas will be granted only where *767the judgment or order may be enforced pending the appeal by process for that purpose. But in the recent litigation concerning the Pacific Mutual Life Insurance Co., it was expressly held, upon the authority of Carpenter v. Pacific Mut. L. Ins. Co., 10 Cal.2d 307 [74 P.2d 761], that the procedural provisions of part II of the Code of Civil Procedure have no application to a proceeding under the Insurance Code. For that reason, the court declared, “We must presume that the Legislature intended that upon appeal from orders or judgments made under the Insurance Code the supersedeas should not be automatic, but whether one should be granted should rest in the sound discretion of the court in the exercise of its power to grant supersedeas where no státutory stay exists.” (Carpenter v. Pacific Mut. L. Ins. Co., 13 Cal.2d 306, 312 [89 P.2d 637].)
Considering the application in the present proceeding upon the merits, the order for which supersedeas is now sought is substantially the same in form as the one made for rehabilitating the Pacific Mutual Life Insurance Company except that it authorizes the Insurance Commissioner to merge the assets of insolvent companies with those of solvent ones. Four of the twelve insurance companies are insolvent, four of them are solvent but cannot properly continue in business, and the others are solvent with a fair chance for successful separate operation. By the rehabilitation agreement, the second largest of the latter group, which is asserted to be in the best financial condition, is required to reinsure and assume all of the liability of the other eleven companies.
Do not these facts show, beyond the possibility of successful contradiction, that if the commissioner proceeds to merge the assets of the twelve corporations and administer them as the property of Guaranty Union Life Insurance Company, subject to the libilities of each one of them, the interests of the policyholders in the solvent companies may be seriously jeopardized in the event of a reversal upon determination of the appeal Í And if the commissioner fixes “liens on the policies of certain of the companies to compensate for insolvencies and to equalize the financial burden under the reinsurance and assumption of liability features” or requires “that policyholders who have held insurance with inadequate rates must make certain elections between reduced insurance and increased rates” as he asserts must be done now, and the order is reversed, will it not be practically impossible to return the *768companies to their present position? Moreover, if I read the opinion of my associates correctly, the commissioner intends to pay death claims and cash values upon the basis of the reinsurance agreement and also to make readjustment of rates effective immediately. How might such steps be retraced in the event of a reversal.
These facts, in my judgment, present compelling reasons why the discretion of the court should be exercised in favor of granting the writ of supersedeas to maintain the status quo. And certainly the writ should not be denied upon the assumption that the commissioner “will not go forward with performance except to the extent necessary to preserve the equities which have been formalized by the agreement and the order.” Under that qualification of the decision, how will the commissioner, or any of the insurance companies, know to what extent he may go in carrying out the agreement and order pending a determination of the appeal?