National American Life Insurance Co. v. Baxter

385 P.2d 956, 73 N.M. 94
CourtNew Mexico Supreme Court
DecidedSeptember 16, 1963
Docket7134
StatusPublished
Cited by27 cases

This text of 385 P.2d 956 (National American Life Insurance Co. v. Baxter) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National American Life Insurance Co. v. Baxter, 385 P.2d 956, 73 N.M. 94 (N.M. 1963).

Opinion

PER CURIAM.

Upon consideration of motion for rehearing, the original opinion heretofore filed is withdrawn and the following substituted therefor.

CHAVEZ, Justice.

This cause is before us pursuant to writ of error issued by this court directed to the Hon. Robert W. Reidy, judge of the district court of the second judicial district for Bernalillo County, New Mexico. Plaintiff-in-Error, Rocky Mountain Life Insurance Company, a New Mexico corporation, petitioned this court for its writ of error as a result of the order of the district court filed February 12, 1962, directing the superintendent of insurance of New Mexico to pay over and deliver the sum of $10,000 from the assets of Rocky Mountain Life Insurance Company to Merrill L. Norton, attorney at law, as and for attorney’s fees and expenses for defendants-in-error, in connection with conservation proceedings instituted against Rocky Mountain Life Insurance Company by R. F. Apodaca, superintendent of insurance of New Mexico, in the district court of Bernalillo County.

Since the issuance of the writ of error, Rocky Mountain Life Insurance Company has merged into and been absorbed by National American Life Insurance Company, a Louisiana corporation, and an appropriate substitution of parties has been effected. As the circumstances out of which this cause arose preceded the merger, and in the interest of clarity, plaintiff-in-error will be hereinafter referred to as “Rocky Mountain,” R. F. Apodaca, superintendent of insurance of New Mexico, will be referred to as the “Superintendent,” and defendants-in-error will be referred to as the “Baxter Group.”

The proceedings in the court below originated on June 28, 1961, with the filing of the Superintendent’s petition in the district court for an order of rehabilitation, reorganization and conservation against Rocky Mountain and five of its named officers and directors, pursuant to §§ 58-6-1 to 58-6-14, N.M.S.A., 1953 Comp. Incorporated by reference in the Superintendent’s petition and attached thereto is a petition to the Superintendent, signed and verified by Jesse E. Baxter, on behalf of himself (present secretary-treasurer of Rocky Mountain), H. Lawson Montieth, N. Roy Kramer, Wade B. Campbell and Nathan B. Lamb. These are the parties referred to as the “Baxter Group.”

The Baxter Group’s petition alleged that the five-named officers and directors of Rocky Mountain had breached their fiduciary obligations to Rocky Mountain and to its stockholders, and had converted its assets to their own use. The Baxter Group requested the Superintendent to obtain from the Bernalillo County district court a temporary order restraining the five-named officers and directors from further acting as alleged, requiring them to submit and deliver to the Superintendent, in trust, all of their shares of Rocky Mountain stock, any proceeds thereof, and any Rocky Mountain assets in their possession, and to remove the five-named individuals from their positions as officers and directors of Rocky Mountain; also to institute proceedings in the district court for the receivership, rehabilitation, reorganization and conservation of Rocky Mountain. This petition also asks the Superintendent to request of the attorney general an appointment of a special assistant to aid in said investigation.

On the same day that the Superintendent’s petition was filed, June 28, 1961, the district court issued its “Order of Conservation,” finding that the allegations contained in the Superintendent’s petition and the exhibit attached thereto, present just cause for immediate relief; that irreparable harm will result if the injunctive relief is not afforded; and that the Superintendent is the properly authorized officer to act as set forth in the Superintendent’s petition. The district court’s order also authorized the Superintendent to employ and appoint special deputy superintendents, counsel, clerks and assistants, as he deems necessary, and ordered that all expenses in connection therewith in conducting the proceedings be paid out of the assets of Rocky Mountain, subject to the court’s approval, and specifically approved the appointment of Patricio S. Sanchez and Leland S. Sedberry, Jr., as attorneys for the Superintendent.

The district court, by its order, directed the Superintendent to take possession of the assets, properties, books and records of Rocky Mountain, and to administer the same in accordance with the court’s orders. The district court also ordered that title to all of the property, contracts, rights of action, and all of the books and records of Rocky Mountain, vest in the Superintendent as conservator and the Superintendent was directed to take such steps toward the removal of the causes and conditions in the nature of rehabilitation, reorganization and conservation, which made the proceedings necessary. The district court further ordered and commanded the five-named officers and directors to deliver to the Superintendent all books and records relating to the affairs of Rocky Mountain.

On July 3, 1961, Rocky Mountain moved to quash the district court’s “Order of Conservation” and also filed its verified response to the Superintendent’s petition, denying all allegations of wrongdoing on the part of the five-named officers and directors.

Thereafter, on September 5, 1961, the Baxter Group filed directly with the district court in the conservancy proceeding a “Petition for an Order to Bring Suit and for Payment of Expenses and Attorney’s Fee.” This petition asks the court for an order to be directed to the Superintendent to bring suit against any and all persons responsible for the damages and losses suffered by Rocky Mountain during the period from September 12, 1958, to June 28, 1961, and in addition the Baxter Group’s petition asks the court for reimbursement of expenses and attorney’s fees for matters related to the exposure and follow-up of the matters' necessitating the receivership. They alleged further that the Baxter Group had initiated the proceedings by their petition to the Superintendent, and notwithstanding the actions taken by the Superintendent as conservator, that he had done little, if anything, to rehabilitate Rocky Mountain; that the Superintendent is the only party having standing to bring such suit; that the Superintendent had accumulated great multitudes of evidence to be used in the prosecution of a suit to recover the damages and losses suffered by Rocky Mountain; that the Baxter Group had incurred certain expenses and attorney’s fees in the initial investigation and pursuit of the matters set forth in the petition in the amount of $5,825.63 owing to Merrill L. Norton, attorney; and that the Baxter Group should be reimbursed by Rocky Mountain for the reason that they were incurred in the interest and benefit of Rocky Mountain.

On September 18, 1961, the Superintendent filed a 'report and petition informing the court as to the circumstances and evidence attending his receivership; asking the court for an order authorizing him to enter into and execute a stipulated plan of operation for Rocky Mountain; to return to the company its assets, property, books, records, contracts and rights of action; and to approve payment of attorney’s fees for Patricio S. Sanchez, Leland S. Sedberry, Jr. and Burns and Ferris, in the amount of $16,080.79 from Rocky Mountain’s assets.

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Bluebook (online)
385 P.2d 956, 73 N.M. 94, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-american-life-insurance-co-v-baxter-nm-1963.