Court Opinion

ID: 9428707
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:24:31.085407+00
Date Added: 2024-06-11T17:23:14.839233
License: Public Domain

Justice White,
with whom Justices Powell and Stevens join,
concurring in the judgment.
I agree with much of the discussion in the majority opinion on the scope and function of the principles of res judicata. I also agree with the majority that “it is clear that the Rehabilitation Court had personal jurisdiction over all parties necessary to its determination that the North Carolina Association could not satisfy pre-rehabilitation claims out of the North Carolina deposit.” Ante, at 711.
The only parties over which the Indiana court needed jurisdiction in order to prohibit the Association from moving against the North Carolina deposit were the Association and Underwriters National Assurance Co. (UNAC). It had *717jurisdiction over the latter in a rehabilitation proceeding, because Indiana was the State of incorporation; it had jurisdiction over the Association because, as the majority opinion amply demonstrates in Part I, the Association appeared before the court as a party and participated in the Rehabilitation Plan. With jurisdiction over UNAC and the Association, the Indiana court clearly had the authority to adjudicate the amount and character of the claim that the Association had against UNAC, including its claim against the North Carolina deposit.
This is true regardless of the jurisdiction the Indiana court may or may not have had over any other parties with potential interests in the controversial deposit. There are at least two such parties: the trustees and the North Carolina policyholders. In my view, the Indiana court did not have jurisdiction to determine the interests of either of these parties in the controverted fund. Neither of these parties appeared before the Indiana court, and I am quite unconvinced that the Indiana court had jurisdiction over the North Carolina deposit in the sense that it could adjudicate the validity of or scale down The lien on that fund held by nonappearing North Carolina policyholders and trustees. I agree with the majority, therefore, that it is proper for this Court to reserve at least the issue of whether the trustees “have an interest in the deposit, independent of that asserted by the North Carolina Association, which was not considered by the Rehabilitation Court.” Ante, at 716, n. 25. As for the policyholders, as I understand the opinion of the North Carolina court, under North Carolina law the Association was subrogated to the rights of the policyholders when it entered the service contract and undertook to make the policyholders whole. The policyholders thus no longer have an independent interest in the deposit.* See 48 N. C. App. 508, 518, 269 S. E. 2d 688, 694 (1980).
*718The authority of the Indiana court so to resolve the claims of the Association existed regardless of that court’s jurisdiction over any particular asset of UN AC, including the North Carolina deposit. In Riehle v. Margolies, 279 U. S. 218 (1929), a creditor received a judgment against a corporation in state court. While the creditor’s claim was being litigated in state court, a federal court appointed a receiver of the corporation’s property. This Court held that the judgment from the state court regarding the creditor’s claim had to be recognized as res judicata in the federal court, despite the fact that neither the corporation nor the receiver had undertaken to defend in the state court. The Court adopted a twofold distinction between control over claims and over assets:
“In so far as [a court order] determines, or recognizes a prior determination of the existence and amount of the indebtedness of the defendant to the several creditors seeking to participate, it does not deal directly with any of the property. [This] function, which is spoken of as the liquidation of a' claim, is strictly a proceeding in per-sonam. . . . There is no inherent reason why the adjudication of the liability of the debtor in personam may not be had in some court other than that which has control of the res” Id., at 224.
The reasoning of Riehle was specifically applied to judgments between States under the Full Faith and Credit Clause in Morris v. Jones, 329 U. S. 545, 549 (1947): “[T]he distribution of assets of a debtor among creditors ordinarily has a ‘twofold aspect.’ It deals ‘directly with the property’ when it fixes the time and manner of distribution. . . . But proof and allowance of claims are matters distinct from distribution.” Id., at 548-549. Thus, in my view, jurisdiction over the deposit is simply not relevant to the question of the res judicata effect of the'Indiana court’s judgment as to the Association.
*719The Rehabilitation Plan fully determined the nature of the claim that the Association would have against UNAC and established the manner in which it could collect on those claims. Ante, at 698-700. That decision must be given res judicata effect by the North Carolina court vis-a-vis the Association, unless the Indiana court failed to follow the procedural requirements of the Due Process Clause. I believe those requirements were met in this case, and, therefore, I concur in the judgment of the Court reversing the decision below.

 Since the policyholders and the Association appear to be the only possible beneficiaries of the trust, the trustees may have no beneficial interest to protect. This, however remains a matter of state law.