ILNews

Opinion rules on 2 issues of first impression

Back to TopCommentsE-mailPrintBookmark and Share


The Indiana Court of Appeals was faced with two issues of first impression in one opinion – the meaning of Indiana Code Section 27-9-3-34(d) and whether a party is entitled to a jury trial for disputes concerning claims in liquidation proceedings.

In Carol Cutter, as the Commissioner of the Indiana Department of Insurance v. Classic Fire & Marine Insurance Co. v. J.W., et al., No. 49A05-0906-CV-315, Indiana company Classic Fire & Marine Insurance issued a general liability policy to Alaska corporation Allvest in 1995 for one year. During its policy coverage, Allvest let CFM know that women were going to file claims of sexual molestation against an Allvest employee. In 1998, the Indiana Department of Insurance’s petition for liquidation against CFM was granted.

Allvest’s claim for indemnification from CFM under the policy was identified as disputed claim 83, which the Allvest bankruptcy estate sold to the women’s attorney. Allvest was placed in involuntary Chapter 11 bankruptcy in Alaska several years after the women filed their claim. The women, known as the J.W. claimants, got final judgments against Allvest totaling more than $1.22 million before Allvest went into bankruptcy. The bankruptcy court awarded them more than $430,000.

The J.W. claimants wanted a jury trial on the disputed claim and argued they were entitled to full faith and credit in the Indiana insolvency proceedings based on the Alaska judgments. In 2006, the Alaska bankruptcy court approved more than $555,000 from Allvest’s bankruptcy estate for the J.W. claimants, which the Department of Insurance as liquidator objected to based on double recovery. The trial court agreed with the liquidator and dismissed disputed claim 83.

The appellate court ruled that the J.W. claimants’ claim against Allvest and Allvest’s claim against CFM are two separate, distinct claims, so a distribution on the disputed claim 83 won’t result in a double recovery. The trial court erred in its decision.

With respect to judgments or orders entered against an insured, such as Allvest in CFM’s liquidation proceedings, Indiana Code Section 27-9-3-34(d) says “The following do not need to be considered as evidence of liability or the measure of damages: A judgment or order against an insured or the insurer entered after the date of filing a successful petition for liquidation.”

The liquidator argued the J.W. claimants have to prove their claim against Allvest from scratch; the J.W. claimants argued the Alaska judgments are entitled to full faith and credit. Since it’s first impression for Indiana courts, the judges looked to Montana and Pennsylvania cases, which held a judgment or order against an insured filed after a successful petition for liquidation against the insurer isn’t conclusive of liability or the quantum of damages. In CFM’s liquidation proceedings, the Alaska judgments aren’t conclusive evidence of liability or the measure of damages, the COA judges concluded.

The judges noted that the statute doesn’t prohibit a judgment or order against an insured or an insurer entered after the date of filing a successful petition for liquidation from being considered as evidence of liability or the measure of damages.

“The particular facts of each case, the legal issues involved, and the Indiana Rules of Evidence should be used to determine whether such a judgment or order may be considered as evidence of liability or the measure of damages,” wrote Judge Terry Crone.

In the other matter of first impression, the appellate judges ruled that a party isn’t entitled to a jury trial for disputes concerning claims in liquidation proceedings. I.C. Section 27-9-3-37(b) prescribes a hearing before a judge, not a jury.

The case was remanded for further proceedings.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
2015 Distinguished Barrister &
Up and Coming Lawyer Reception

Tuesday, May 5, 2015 • 4:30 - 7:00 pm
Learn More


ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. why is the State trying to play GOD? Automatic sealing of a record is immoral. People should have the right to decide how to handle a record. the state is playing GOD. I have searched for decades, then you want me to pay someone a huge price to contact my son. THIS is extortion and gestapo control. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW.

  2. I haven't made some of the best choices in the last two years I have been to marion county jail 1 and two on three different occasions each time of release dates I've spent 48 to 72 hours after date of release losing a job being denied my freedom after ordered please help

  3. Out here in Kansas, where I now work as a government attorney, we are nearing the end of a process that could have relevance in this matter: "Senate Bill 45 would allow any adult otherwise able to possess a handgun under state and federal laws to carry that gun concealed as a matter of course without a permit. This move, commonly called constitutional carry, would elevate the state to the same club that Vermont, Arizona, Alaska and Wyoming have joined in the past generation." More reading here: http://www.guns.com/2015/03/18/kansas-house-panel-goes-all-in-on-constitutional-carry-measure/ Time to man up, Hoosiers. (And I do not mean that in a sexist way.)

  4. This is why it is important to consider Long term care insurance. For you and for your loved ones

  5. I am terrified to see Fracking going on not only in Indiana but in Knox county. Water is the most important resource we have any where. It will be the new gold, and we can't live without it and we can live without gold. How ignorant are people?

ADVERTISEMENT