Dean Const. Co. v. Agricultural Ins. Co.
| Decision Date | 14 April 1964 |
| Citation | 249 N.Y.S.2d 247,42 Misc.2d 834 |
| Parties | DEAN CONSTRUCTION COMPANY, Inc., et al., Plaintiffs, v. AGRICULTURAL INSURANCE COMPANY et al., Empire Mutual Insurance Company, Defendants. |
| Court | New York Supreme Court |
Leo Fixler, New York City, for plaintiffs.
Lawrence Isaacs, New York City, for Empire Mut. Ins. Co.
This is a motion by Empire Mutual Insurance Company to dismiss the twelfth cause of action of the amended complaint on the ground that such company has been dissolved by order of the Court of Common Pleas of Dauphin County, Pennsylvania, which enjoins the institution or prosecution of all actions against the defendant and directed liquidation of its assets by the Commissioner of Insurance of the State of Pennsylvania.
The movant is an insurance company that was incorporated under the Laws of Pennsylvania, and which was not authorized to transact business in New York State. In March of 1962, the plaintiffs sustained damage to their premises caused by a windstorm, and claim that such loss was covered under a policy of insurance issued by the movant. On January 15, 1963, the plaintiff commenced this action to recover under the policy. The moving defendant appeared in the action, and the plaintiff subsequently obtained an order from this Court requiring the defendant to post a bond in the sum of $65,000.00 pursuant to Section 59-a of the Insurance Law. On January 31, 1964, the defendant's charter was terminated in the State of Pennsylvania where it was incorporated.
An unauthorized foreign or alien insurer is required, as a condition precedent to the filing of any pleading in an action, to deposit security or to file a bond in an amount sufficient to secure the payment of any final judgment that may be rendered against it (Insurance Law, § 59-a, subd. 3).
The statute makes it abundantly clear that the public policy of this State is to afford residents protection against the obstacles encountered in pursuing their legal rights against alien insurers in foreign forums. The purpose is accomplished first by making unauthorized foreign insurers subject to the jurisdiction of our courts through service on the Secretary of State, and secondly, by requiring the deposit of money or the filing of a bond to insure a fund for the payment of any judgment that may be obtained in the action (New York State Legislative Annual, 1949, p. 252).
The plaintiffs contend that a dismissal of the action would defeat the very purpose for which Section 59-a was enacted. This follows, say the plaintiffs, from the fact that a dismissal would effect a cancellation of the bond, and would relegate them to pursuing their remedies in Pennsylvania against the liquidation of the defendant company's assets.
The movant, on the other, urges that dismissal must follow under the common law principle that all actions, either pending or thereafter instituted, abate upon the final dissolution of a corporation (Matter of National Surety Company [Pink], 286 N.Y. 216, 36 N.E.2d 119; Matter of National Surety Company [Laughlin], 283 N.Y . 68, 27 N.E.2d 505, cert. den. Laughlin v. Pink, 311 U.S. 707, 61 S .Ct. 175, 85 L.Ed. 459; Martyne v. American Union Fire Insurance Company of Philadelphia, 216 N.Y. 183, 110 N.E. 502). A judgment subsequently entered against a foreign corporation is therefore null and void (Matter of National Surety Company [Laughlin], supra).
The common law principle that dissolution of a corporation abates all litigation to which the corporation is a party, has been so subjected to statutory modification as to be almost non-existent today. Corporation laws and statutes governing practice almost without exception provide for continuance of corporate existence after dissolution. A significant exception, however, does exist under the Insurance Law of this State, the provisions of which can effect complete and total demise not only of...
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Allstate v. Administratia Asigurarilor De Stat, 86 Civ. 2365 (DNE).
...against an unauthorized insurer or reinsurer. See N.Y.Ins.L. 1213(c)(1)(A) (McKinney 1985); Dean Constr. Co. v. Agricultural Ins. Co., 42 Misc.2d 834, 835-36, 249 N.Y.S.2d 247 (N.Y.Sup.Ct.1964), aff'd, 22 A.D.2d 82, 254 N.Y.S.2d 196 (N.Y.App.Div.1964) (discussing N.Y.Ins.L. § 59-a, the stat......
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...was denied by the New York Supreme Court and the cross-motion to strike the defense was granted. Dean Constr. Co. v. Agricultural Ins. Co., 42 Misc.2d 834, 249 N.Y.S.2d 247 (Sup.Ct. 1964). On November 9, 1964, the Appellate Division, Second Department, affirmed "because Empire is not, under......
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...judgment against a principal may be a condition precedent to recovery on a bond). Murphy's reliance upon Dean Construction Co. v. Agricultural Ins. Co., 42 Misc.2d 834, 249 N.Y.S.2d 247 aff'd on other grounds, 22 A.D.2d 82, 254 N.Y.S.2d 1962 would appear to be misplaced. In Dean, Empire Mut......
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...bond to insure a fund for the payment of any judgment that may be obtained in the action. (Cit.)" Dean Construction Co. v. Agricultural Ins. Co., 42 Misc.2d 834, 249 N.Y.S.2d 247, 249 (1964). ...