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Opinion rules on 2 issues of first impression

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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.
 

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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