Koken v. Villanova Ins. Co.
| Decision Date | 19 July 2005 |
| Citation | 583 Pa. 400,878 A.2d 51 |
| Parties | M. Diane KOKEN, Insurance Commissioner of the Commonwealth of Pennsylvania, v. VILLANOVA INSURANCE COMPANY, Mutual Risk Management, Ltd. (MRM), Psychiatrists' Purchasing Group, Inc., American Airlines, Inc., Pulte Homes, Inc., Metro Atlantic Landscape and Turf Association (Malta), Florida Workers Compensation Guaranty Association, Lloyd's Syndicate 271, Florida Insurance Guaranty Association, Intervenors, Appeal of M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, in Her Capacity as Rehabilitator for Villanova Insurance Company (In Rehabilitation) M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, v. Villanova Insurance Company, Mutual Risk Management, Ltd. (MRM), Psychiatrists' Purchasing Group, Inc., American Airlines, Inc., Pulte Homes, Inc., Metro Atlantic Landscape and Turf Association (Malta), Florida Workers Compensation Guaranty Association, Lloyd's Syndicate 271, Florida Insurance Guaranty Association, Intervenors, Appeal of M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, in her Capacity as Statutory Liquidator for Villanova Insurance Company M. Diane Koken, Insurance Commissioner, Commonwealth of Pennsylvania, v. Legion Insurance Company, Bensalem Township, Florida Workers Compensation Insurance Guaranty Association, Psychiatrists' Purchasing Group, Inc., Pulte Homes, Inc., American Airlines, Inc., Rural/Metro Corporation, Daniel Elrod, Shirley Elrod, Metro Atlanta Landscape and Turf Association (Malta), Kerry Kessler, Atwood Oceanics, Inc., Mutual Risk Management, Ltd. (MRM), Joseph McIntyre, Randstad North America, L.P., Florida Insurance Guaranty Association, Intervenors, Appeal Of M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, in her Capacity as Rehabilitator for Legion Insurance Company (In Rehabilitation) M. Diane Koken, Insurance Commissioner, Commonwealth of Pennsylvania, v. Legion Insurance Company, Bensalem Township, Florida Workers Compensation Insurance Guaranty Association, Psychiatrists' Purchasing Group, Inc., Pulte Homes, Inc., American Airlines, Inc., Rural/Metro Corporation, Daniel Elrod, Shirley Elrod, Metro Atlanta Landscape and Turf Association (Malta), Kerry Kessler, Atwood Oceanics, Inc., Mutual Risk Management, Ltd. (MRM), Joseph McIntyre, Randstad North America, L.P., Florida Insurance Guaranty Association, Intervenors, Appeal of M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, in her Official Capacity as Statutory Liquidator ("Liquidator") for Legion Insurance Company ("Legion"). |
| Court | Pennsylvania Supreme Court |
Amy L. Weber, Esq., David L. Bricker, Esq., Harrisburg, for M. Diane Koken.
Ann B. Laupheimer, Esq., Gregg W. Mackuse, Esq., David Michael Laigaie, Esq., Daniel J. McGravey, Esq., Jerome J. Shestack, Esq., Charles Mikell Hart, Esq., Jerome R. Richter, Esq., David F. Girard diCarlo, Esq., Gregory P. Miller, Esq., Leslie Anne Miller, Esq., Joseph Colin Crawford, Esq., Gaetan J. Alfano, Esq., Philadelphia, for M. Diane Koken, as Rehabilitator for Villanova Insurance Co.
Mary A. Lopatto, Esq., Washington, District of Columbia, for amicus curiae Certain Underwriters at Lloyd's, London.
Kathryn Lease Simpson, Esq., Harrisburg, for amicus curiae UnionAmerica Insurance Company, LTD.
Marianne Bessey, Esq., Franklin D. O'Loughlin, Esq., pro hac vice, Reading, for amicus curiae National Organization of Life and Health Insurance Guaranty Associations.
Gerald E. Arth, Esq., Philadelphia, for amicus curiae National Association of Insurance Commissioners.
Matthew T. Wulf, Esq., pro hac vice, for amicus curiae Reinsurance Association of America.
Teresa L. Jakubowski, Esq., Washington, District of Columbia, for amicus curiae American Council of Life Insurers.
Kathryn Lease Simpson, Esq., Harrisburg, for amicus curiae Transatlantic Reinsurance Company.
Paul M. Hummer, Esq., Philadelphia, for Villanova Insurance Company.
Robert L. Roth, Esq., Washington, District of Columbia, for amicus curiae American Psychiatric Association.
Claudine Q. Homolash, Esq., Eugene Anderson, pro hac vice, Philadelphia, for amicus curiae United Policyholders of America.
James Reeves Potts, Esq., Philadelphia, for Florida Workers Compensation Guaranty Ass'n. and Florida Insurance Guaranty Ass'n.
Christopher E. Martin, Esq., Terrence P. Cummings, Esq., pro hac vice, Michael D. Brown, pro hac vice, for Psychiatrists' Purchasing Group Inc.
Timothy Patrick Law, Esq., John N. Ellison, Philadelphia, for Pulte Homes Inc.
Richard F. McMenamin, Esq., James Edmond DelBello, Jr., Esq., Jay H. Calvert, Jr., Esq., Philadelphia, for American Airlines.
Helen Louise Gemmill, Esq., Kandice J. Giurintano, Esq., Harrisburg, for Lloyd's Syndicate 271. Heather Elizabeth Rennie, Esq., Ursula A. Siverling, Esq., Heidi B. Hamman Shakely, Esq., Richard T. Schadle Doherty, Esq., Philadelphia, for Metro Atlanta Landscape and Turf Association (MALTA) and Randstad North America, L.P.
David R. Moffitt, Esq., Philadelphia, for Rural/Metro Corporation.
Ann B. Laupheimer, Esq., Douglas Y. Christian, Esq., Gregg W. Mackuse, Esq., David Michael Laigaie, Esq., Daniel J. McGravey, Esq., Jerome J. Shestack, Esq., Charles Mikell Hart, Esq., Gregory P. Miller, Jr., Jerome R. Richter, Esq., David F. Girard diCarlo, Esq., Leslie Anne Miller, Esq., Joseph Colin Crawford, Esq., Gaetan J. Alfano, Esq., Philadelphia, for M. Diane Koken, in her capacity as Statutory Liquidator for Legion Ins. Co.
Marianne Bessey, Esq., Franklin D. O'Loughlin, Esq., pro hac vice, Joel A. Glover, Esq., pro hac vice, Reading, for National Organization of Life and Health Insurance Guaranty Associations.
Paul M. Hummer, Esq., Philadelphia, for Legion Insurance Co.
Joseph Barry Sobel, Esq., Harrisburg, for Kerry Kessler.
Barbara Mary Kirk, Esq., Trevose, for Bensalem Township.
James Reeves Potts, Esq., Michael F. Consedine, Esq., Philadelphia, for Florida Workers Compensation Insurance Guaranty Association.
Paula Jane McDermott, Esq., Camp Hill, for Daniel Elrod.
Thomas A. Beckley, Esq., Harrisburg, for Atwood Oceanics, Inc.
Ann B. Laupheimer, Esq., Gregg W. Mackuse, Esq., David Michael Laigaie, Esq., Daniel J. McGravey, Esq., Jerome J. Shestack, Esq., Charles Mikell Hart, Esq., Jerome R. Richter, Esq., David F. Girard diCarlo, Esq., Gregory P. Miller, Esq., Leslie Anne Miller, Esq., Joseph Colin Crawford, Esq., Gaetan J. Alfano, Esq., Philadelphia, for M. Diane Koken, as Rehabilitator for Legion Ins. Co.
Amy L. Weber, Esq., David L. Bricker, Esq., Harrisburg, for Department of Insurance.
Ann B. Laupheimer, Esq., Gregg W. Mackuse, Esq., David Michael Laigaie, Esq., Daniel J. McGravey, Esq., Jerome J. Shestack, Esq., Charles Mikell Hart, Esq., Jerome R. Richter, Esq., David F. Girard diCarlo, Esq., Gregory P. Miller, Esq., Leslie Anne Miller, Esq., Joseph Colin Crawford, Esq., Gaetan J. Alfano, Esq., Jerome J. Shestack, Philadelphia, for M. Diane Koken, in her capacity as Statutory Rehabilitator for Villanova Ins. Co.
Heather Elizabeth Rennie, Esq., Ursula A. Siverling, Esq., Heidi B. Hamman Shakely, Esq., Richard T. Schadle Doherty, Esq., Philadelphia, for Metro Atlanta Landscape and Turf Association ("MALTA").
BEFORE: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ.
AND NOW, this 19th day of July, 2005, the order of the Commonwealth Court is hereby AFFIRMED, on the basis of the Commonwealth Court opinion, Koken v. Legion Ins. Co., 831 A.2d 1196 (Pa.Cmwlth.2003).
NEWMAN files a dissenting statement in which Justice CASTILLE joins.
In these consolidated proceedings, M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, in her official capacity as Rehabilitator and Liquidator for both Villanova Insurance Company (Villanova) and Legion Insurance Company (Legion), appeals the Orders of the Commonwealth Court dated June 26, 2003, and July 25, 2003, which directed the liquidation of both insurance companies and granted certain corporate policyholder intervenors direct access to the insurance companies' reinsurance1 contracts. Because I believe that the Commonwealth Court erred in granting these corporate policyholder intervenors direct access to the reinsurance proceeds of Villanova and Legion, I must respectfully dissent.
The factual findings of the Commonwealth Court establish that Legion and Villanova are property and casualty insurers organized pursuant to the laws of the Commonwealth. At the time of the filing of the present litigation, both Legion and Villanova were in financial distress because of the failure of reinsurers to reimburse these property and casualty insurers for claims already paid out to a number of insureds.2 As a result, on March 28, 2002, the Insurance Commissioner petitioned the Commonwealth Court, seeking to place Legion and Villanova in statutory rehabilitation pursuant to Section 515 of the Insurance Department Act, 40 P.S. § 221.15.3 The Commonwealth Court complied with the request of the Insurance Commissioner and entered Orders placing both insurers in statutory rehabilitation. Pursuant to Section 516(b) of the Insurance Department Act, 40 P.S. § 221.16(b), the Insurance Commissioner, acting as the statutory Rehabilitator, assumed the power to collect overdue and future reinsurance proceeds on behalf of the insurers.4
Unfortunately, rehabilitation of Villanova and Legion proved futile.5 Therefore, on August 29, 2002, the Rehabilitator again petitioned the Commonwealth Court, this time seeking statutory liquidation of Legion and Villanova pursuant to Section 520 of the Insurance Department Act, 40 P.S. § 221.20.6 Meanwhile, on September 11, 2002, while the petition seeking liquidation was pending, Mutual Risk Management, Ltd. (MRM), the parent corporation of Legion and Villanova, was permitted to intervene in...
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