Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

State v. International Indemnity Co.

Supreme Court of Georgia

February 4, 2019

STATE OF GEORGIA et al.
v.
INTERNATIONAL INDEMNITY CO. et al. REGULATORY TECHNOLOGIES, INC.
v.
STATE OF GEORGIA et al.

          NAHMIAS, Presiding Justice.

         We granted writs of certiorari in these cases involving the liquidation of an insurance company to review the Court of Appeals' decision in State of Georgia v. International Indemnity Company, 343 Ga.App. 647 (809 S.E.2d 64) (2017) (Intl. Indem. Co.). The dispositive issue presented is whether the official immunity provision in OCGA § 33-37-8.1 applies to claims for a "surcharge" and attorney fees against the State Insurance Commissioner and two other state employees, all in their official capacities as the liquidator and his deputies, and against a private company involved in the liquidation. As explained below, because the Court of Appeals incorrectly concluded that § 33-37-8.1 may be applicable to these parties, we reverse the part of the Court of Appeals' judgment allowing the claims to proceed against the state officer and employees in their official capacities, but we affirm the part of the judgment allowing the case to proceed against the private company.

         1. The liquidation proceeding underlying these cases began nearly two decades ago.[1] In January 2001, the Commissioner of Insurance of the State of Georgia, who was then John W. Oxendine, was appointed by the trial court to act as the liquidator of International Indemnity Company, following the procedures set forth in the Insurers Rehabilitation and Liquidation Act, OCGA § 33-37-1 et seq. (Liquidation Act).[2] The liquidator appointed a deputy and an assistant deputy liquidator, Donald Roof and Harry Sivley, and Regulatory Technologies, Inc. (Reg Tech) was retained to assist in the liquidation. In March 2008, the State ex rel. (on the relation of) the Insurance Commissioner applied for an order from the trial court approving the final accounting of the liquidation estate and discharging the liquidator. Sun States Insurance Group, Inc., the sole shareholder of International Indemnity, objected to the application for discharge, contending that the estate was owed more money and asking the court to appoint an independent auditor to review the allocation of administrative costs by Reg Tech and its affiliates and contractors. An auditor was appointed and ultimately reported that hundreds of thousands of dollars were owed to the International Indemnity estate.

         In August 2012, a joint pretrial order was entered in which Sun States said that it sought an order "surcharging" the liquidator, deputy liquidator, assistant deputy liquidator, and Reg Tech for charging the estate excessive expenses, along with attorney fees. The State moved to join Reg Tech as an indispensable party to the litigation, and the trial court granted the motion, designating Reg Tech as a respondent to Sun States' pending objection to discharge. The State then moved to dismiss Sun States' claims against it, asserting that they were claims for a money judgment against the State (the liquidator, deputy liquidator, and assistant deputy liquidator) that were barred by sovereign immunity and by official immunity under both the Liquidation Act, see OCGA § 33-37-8.1 (b), and the Georgia Tort Claims Act, see OCGA § 50-21-20 et seq.[3] Reg Tech joined in the motion, arguing in part that because Reg Tech worked under the direction of the State, it is entitled to the same statutory immunities as the liquidator.[4]

         In October 2013, the trial court ruled that the State had waived sovereign immunity through the Liquidation Act to the extent that the court could order the liquidator to repay to the liquidation estate any administrative expenses that were excessive or had been improperly removed and could order the liquidator to pay attorney fees. The court explained that although the term "surcharge" is not found in the Liquidation Act, it "is a concept found in fiduciary law" that imposes liability on a fiduciary for willful or negligent misconduct in the administration of his duties. The trial court also ruled that the official immunity granted by OCGA § 33-37-8.1 (b) to "the receiver and his or her employees" might not apply to court-imposed surcharges, but even if it does, Sun States could introduce evidence showing "intentional or willful and wanton misconduct," which would eliminate any official immunity under § 33-37-8.1 (b).

         The State and Reg Tech immediately appealed from the trial court's denial of their motion to dismiss, and the Court of Appeals affirmed in part and reversed in part. See State of Ga. v. Sun States Ins. Group, Inc., 332 Ga.App. 197 (770 S.E.2d 43) (2015) (Sun States I). All three parties then petitioned for certiorari, and this Court granted all three petitions. Rather than addressing the merits of the sovereign and official immunity arguments, however, we vacated the Court of Appeals' opinion, holding that because the denial of a motion to dismiss based on governmental immunity was not a final judgment or otherwise immediately appealable under OCGA § 5-6-34 (a), the Court of Appeals should have dismissed the appeals due to the appellants' failure to follow the interlocutory appeal procedures in § 5-6-34 (b). See State of Ga. v. Sun States Ins. Group, Inc., 299 Ga. 489, 489-490 (788 S.E.2d 346) (2016).

         After the cases were returned to the trial court, the court vacated its original order denying the motion to dismiss, reentered a similar order with an additional footnote expressly declining to reconsider its sovereign immunity holding in light of the (vacated) Court of Appeals' opinion, and issued a certificate of immediate review. The Court of Appeals then granted the State's and Reg Tech's applications for interlocutory appeal.

         In Division 2 of its opinion on the appeals now properly before it, the Court of Appeals reversed the trial court's holding that the Liquidation Act waived sovereign immunity. See Intl. Indem. Co., 343 Ga.App. at 650-653. The Court of Appeals explained that the language of the Act neither provides for a specific waiver of sovereign immunity nor describes the extent of such a waiver, nor could a waiver be implied from the provisions in the Act that the trial court had cited. See id. at 652-653.[5]

         In Division 3, the Court of Appeals affirmed the trial court's holding that even if OCGA § 33-37-8.1 (b) granted official immunity to the liquidator and his deputies, "'evidence could be introduced to show that intentional or willful or wanton conduct of the liquidator or his deputies permitted the payment of excessive or improper administrative expenses of the [International Indemnity] estate.'" Intl. Indem. Co., 343 Ga.App. at 653 (quoting Sun States I, 332 Ga App. at 203). The Court of Appeals therefore affirmed the trial court's ruling that it would "'consider further evidence in connection with the applicability of OCGA § 33-37-8.1 (b) to this matter, '" and remanded the State's case to the trial court "'for consideration of Sun States' objections related [to the discharge] and . . . the relief Sun States seeks in accordance with OCGA § 33-37-8.1 (b).'" Intl. Indem. Co., 343 Ga.App. at 654 (quoting Sun States I, 332 Ga.App. at 203).

         Finally, in Division 4, the Court of Appeals dispensed with Reg Tech's arguments as follows:

Reg Tech states that it joins in the appeal of the state and raises the same issues, arguing that the trial court erred in finding a waiver of sovereign immunity and in finding that the official immunity of OCGA § 33-37-8.1 (b) does not apply to this case. As we have addressed those arguments above in [the State's appeal], we need not address them again in this case.

Id. The Court of Appeals thus affirmed in part and reversed in part the trial court's order as to Reg Tech as well as the State, and remanded the cases for further proceedings.

         The State and Reg Tech each petitioned for certiorari, arguing that while the Court of Appeals correctly held that sovereign immunity was not waived by the Liquidation Act, the court erred in remanding for consideration of their misconduct under OCGA § 33-37-8.1 (b) rather than concluding that sovereign immunity bars all of Sun States' claims. We granted both petitions.

         2. We begin by noting that sovereign immunity is no longer at issue in these cases as they come to this Court. The Court of Appeals held that the Liquidation Act does not waive sovereign immunity, and Sun States did not file a petition for certiorari to challenge that holding.[6] The only question properly before us is whether the Court of Appeals was correct in concluding that the trial court should further consider the application of official ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.