STATE OF GEORGIA et al.
INTERNATIONAL INDEMNITY COMPANY et al. REGULATORY TECHNOLOGIES, INC.
STATE OF GEORGIA.
MCFADDEN, P. J., BRANCH and BETHEL, JJ.
McFadden, Presiding Judge.
the second appearance of these related cases in this court.
The appeals arise from a trial court order finding, among
other things, that the state had waived sovereign immunity
under certain provisions of the Insurers Rehabilitation and
Liquidation Act, OCGA §§ 33-37-1 et seq. (the
"Act"). In the first appeal, we held, in part, that
the trial court had erred in finding a waiver of sovereign
immunity under that act. State of Ga. v. Sun States Ins.
Group, 332 Ga.App. 197, 199-202 (1) (770 S.E.2d 43)
(2015). The Georgia Supreme Court vacated that opinion on
jurisdictional grounds, finding that the appellants had
failed to comply with the interlocutory appeal procedures.
State of Ga. v. Sun States Ins. Group, 299 Ga. 489
(788 S.E.2d 346) (2016). On remand, the trial court vacated
its prior order, re-entered the same order, and issued a
certificate of immediate review. We granted applications for
interlocutory review, and these appeals followed. As in our
first decision, we again hold that the trial court erred in
finding a waiver of sovereign immunity.
Facts and procedural posture.
court's opinion in the first appeal set forth the
following statement of facts and procedural posture.
Pursuant to the Act, in January 2001 the Commissioner of
Insurance of the State of Georgia, then John W. Oxendine, was
appointed by the superior court as the liquidator of
[International Indemnity Company ("IIC")]. The
liquidator then appointed a deputy liquidator (Donald Roof)
and an assistant deputy liquidator (Harry Sivley) to act for
him in the liquidation of the IIC estate. Sivley was the
co-founding principal and chief executive officer of
[Regulatory Technologies, Inc. ("Reg Tech")], ...
[which] assisted in the liquidation of IIC.
After the liquidation of IIC was concluded, in March 2008 the
State of Georgia on the relation of the liquidator
(hereinafter "state/liquidator") sought an order
from the trial court approving the final accounting of the
assets and expenses of the liquidated estate and discharging
the liquidator, deputy liquidator and assistant deputy
liquidator. Sun States [Insurance Group, Inc.], the sole
shareholder of IIC, objected to the application for
discharge, to the extent of any other distributions to Sivley
or Reg Tech or their affiliates. Sun States complained about,
inter alia, administrative expenses charged to the IIC
estate, and asked the court to appoint an independent auditor
to review the change and allocation of administrative costs
by Reg Tech and its affiliates and contractors to the IIC
The court appointed an auditor, and almost sixteen months
later (in February 2010), the auditor submitted a report to
the court. The state/liquidator filed a modified accounting
and application for discharge, incorporating some, but not
all, of the credits (in the amount of $210, 260.24) [which]
the auditor opined were due the IIC estate. In response, the
trial court ordered the liquidator to provide certain
explanations and additional data to the auditor, and ordered
the auditor to supplement his report if he deemed it
necessary based on the additional information. In February
2012, as ordered, the state/liquidator supplemented its
modified accounting and application and provided additional
information to the auditor, and further agreed that
additional credits should be made to the IIC estate (in the
amount of $433, 569.71). But the state/liquidator continued
to refute allegations that the IIC estate had been charged
excessive administrative expenses in the form of contract
compensation, payroll, or overhead expenses for Reg Tech. The
state/liquidator asserted that Reg Tech and/or Sivley had
drawn funds directly from the IIC estate during the
liquidation process to cover the costs of administration
expenses, and that it had been done with little or no
oversight from the liquidator. The auditor's supplemental
report, however, continued to raise issues as to these
administrative expenses (payroll expenses, overhead expenses
and contractual compensation expenses).
In August 2012, a joint pretrial order was entered. Therein,
Sun States stated that it sought an order surcharging the
liquidator, deputy liquidator, assistant deputy liquidator,
and Reg Tech for excessive overhead expenses, over-allocation
of contractual compensation, and excessive salary and
benefits to Reg Tech personnel -matters identified in the
audit. Sun States also sought attorney fees. The
state/liquidator then moved to join Reg Tech as an
indispensable party to the litigation; the trial court
granted the motion, designating Reg Tech as a respondent to
the pending objection by shareholder Sun States to the
Liquidator's Modified Accounting. Approximately nine
months later (in June 2013), the state/liquidator moved to
dismiss Sun States's claims against it, asserting that
they were claims for a money judgment against the state
[that] were barred by the doctrine of sovereign immunity.
The trial court ruled that the State of Georgia, through the
Act, had waived sovereign immunity to the extent that the
court could order the liquidator to repay, or in other words
to put back into, the liquidation estate any administrative
expenses that were excessive or had been improperly removed
from the IIC estate. The trial court also ruled that it had
the authority to award attorney fees to Sun States (and thus,
would permit evidence on the issue of attorney fees at
State of Ga., 332 Ga.App. at 197-199 (punctuation
and footnotes omitted).
State of Georgia and Reg Tech filed direct appeals from the
trial court's denial of the state's motion to dismiss
on the basis of sovereign immunity, and this court affirmed
in part and reversed in part the judgment of the trial court.
See State of Ga., 332 Ga.App. at 197. However, on certiorari
review, the Supreme Court of Georgia found that direct
appeals from the denial of a motion to dismiss based on
governmental immunity were not permitted and that we
therefore should have dismissed the direct appeals before us
for failure of the appellants' to follow the
interlocutory appeal procedures. State of Ga., 299
Ga. at 490.
remand to the trial court, the state moved the trial court to
vacate its original order denying the motion to dismiss, and
then to reinstate the same order and issue a certificate of
immediate review. Reg Tech joined in the state's motion.
The trial court granted the motion and vacated the earlier
order, reinstated it, and granted a certificate of immediate
review. After this court granted applications for
interlocutory review, these appeals followed. The state
appeals in Case No. A17A1195 and Reg Tech appeals in Case No.