State Ex Rel. Indiana Life & Health Insurance Guaranty v. Superior Court of Marion County

399 N.E.2d 356, 272 Ind. 421, 1980 Ind. LEXIS 582
CourtIndiana Supreme Court
DecidedJanuary 16, 1980
Docket1279S344
StatusPublished
Cited by8 cases

This text of 399 N.E.2d 356 (State Ex Rel. Indiana Life & Health Insurance Guaranty v. Superior Court of Marion County) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Indiana Life & Health Insurance Guaranty v. Superior Court of Marion County, 399 N.E.2d 356, 272 Ind. 421, 1980 Ind. LEXIS 582 (Ind. 1980).

Opinion

PIVARNIK, Justice.

The proceedings giving rise to this original action are now pending in the Marion Superior Court, Room 7, as Dept, of Ins., State of Indiana v. Pilgrim Life Ins. Co., cause number S 779-0979. By its Verified Petition for a Temporary Writ of Prohibition and Alternative Writ of Mandate, the Indiana Life and Health Insurance Guaran *357 ty Association seeks a writ from this Court prohibiting the Marion Superior Court, Room 7, from exercising further jurisdiction in this proceeding and compelling the trial court to grant the Association’s motion to dismiss for lack of subject matter jurisdiction. Alternatively, the Association seeks a writ of mandate compelling said Superior Court to grant the Association’s motion to transfer the proceeding to the Marion Circuit Court.

On August 1, 1979, the Indiana Department of Insurance commenced a rehabilitation proceeding against the Pilgrim Life Insurance Company in the Marion Superior Court by filing its “Verified Application for Rehabilitation and Petition for Order to Show Cause.” This application was filed pursuant to Ind.Code § 27-1-4-1 et seq. (Burns 1975). Under this statute the Department of Insurance was authorized to take possession, pursuant to judicial order, of the business and property of any financially impaired domestic insurance company, and to take appropriate steps to rehabilitate it. On August 2, the Superior Court entered an order of rehabilitation which appointed the Commissioner of the Department of Insurance as rehabilitator and authorized him to take steps to rehabilitate Pilgrim Insurance. However, on September 1, 1979, a new act of the Indiana Legislature, Ind.Code § 27-9-1-1 et seq. (Burns 1979 Supp.), took effect. This statute repealed Ind.Code § 27-1-4-1 et seq., referred to above.

This new act contains two provisions which prescribe the procedure by which the Commissioner of the Department of Insurance may obtain judicial approval to liquidate an insuror. § 27-9-3-5(a) of the new act concerns liquidation where rehabilitation has failed:

“Whenever the Commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders or the public, or would be futile, the Commissioner may petition the Marion County Circuit Court for an order of liquidation. A petition under this subsection has the same effect as a petition under section 6 [§ 27-9-3-6] of this Chapter.”

In addition, § 27-9-3-6 is a general provision pertinent to all liquidations:

“The Commissioner may petition the Marion Circuit Court for an order directing him to liquidate a domestic insurer or an alien insurer domiciled in Indiana on the basis: (1) Of any ground for an order of rehabilitation as specified in section 1 [§ 27-9-3-1] of this chapter whether or not there has been a prior order directing the rehabilitation of the insurer; (2) That the insurer is insolvent; or (3) That the insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policy holders, its creditors, or the public.”

On October 15, 1979, the Department of Insurance, having determined that its rehabilitation efforts were not likely to succeed, filed with the Superior Court its “Petition for Order to Liquidate and to Cease Making Payments.” By this petition, the Department, purporting to seek an order satisfying the requirements of § 27-9-3-7, sought an order from the Superior Court declaring Pilgrim Insurance to be insolvent, appointing the Commissioner as liquidator, and directing the Commissioner to liquidate the business of Pilgrim Insurance. The Superi- or Court scheduled a hearing on the Department’s petition for November 5, 1979. After a hearing the Superior Court entered its order of liquidation appointing the Commissioner as liquidator and ordering the Commissioner to take the necessary steps to liquidate Pilgrim. On November 20, Indiana Life and Health Insurance Guaranty Association appeared in the Superior Court proceeding, and on December 7, filed a motion to dismiss for lack of subject matter jurisdiction, under Ind.R.Tr.P. 12(B)(1). This motion was denied. The Association then filed a motion to transfer the proceedings to the Circuit Court of Marion County, pursuant to Ind.R.Tr.P. 75. This motion was also denied.

The petitioner Association contends here that the new liquidation statutes, by direct *358 ing that this type of action be brought in Marion Circuit Court, gave exclusive subject matter jurisdiction of such proceedings to the Circuit Court. Therefore, the Association argues, the respondent Marion Superi- or Court did not have subject matter jurisdiction of the proceedings. We find that the Marion Superior Court, Room 7, did have subject matter jurisdiction of these proceedings, and hold that the- petition should be denied.

Respondents contend that the legislative directive, that all insurance company delinquency proceedings are to be filed and heard in the Marion Circuit Court, imposes a requirement of venue and not of subject matter jurisdiction. Their position is based on Trial Rule 75, which explicitly states that Indiana has a unified court system in which all courts have comprehensive subject matter jurisdiction. Respondents argue that all statutes, such as the new act under consideration here, which specify the court in which an action is to be filed and tried, impose venue rather than jurisdictional requirements. Trial Rule 75 states in part:

“(A) Venue. ■ Any case may be venued, commenced and decided in any court in any county .
(D) Other venue statutes superseded by this rule. Any provision of these rules and any special or general statute relating to venue, the place of trial or the authority of the court to hear the case shall be subject to this rule, and the provisions of any statute fixing more stringent rules thereon shall be ineffective. No statute or rule fixing the place of trial shall be deemed a requirement of jurisdiction.”

The Court of Appeals considered a similar issue in Etherton v. Wyatt, (1973) 155 Ind. App. 440, 293 N.E.2d 43. The defendant there asserted that the Boone Circuit Court lacked jurisdiction over the subject matter of an action seeking the transfer of funds from the State’s General Fund to the Indiana State Teachers Retirement Fund. The basis of this argument was Ind.Code § 34-4-16-1 (Burns 1971), which required that such suits be filed in the Marion Superior Court and tried by that court sitting en banc. Relying on Trial Rule 75, the Court of Appeals found that Boone Circuit Court did have jurisdiction, and in its opinion quoted the following explanation of Trial Rule 75:

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Bluebook (online)
399 N.E.2d 356, 272 Ind. 421, 1980 Ind. LEXIS 582, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-indiana-life-health-insurance-guaranty-v-superior-court-of-ind-1980.