Jack C. Anshutz, Plaintiff, v. J. Ray Mcdermott Company, Inc., et al., Defendants.m. Electric and Construction Company, Inc., Third-partyplaintiff-appellant, v. Market Insurance Company, Third-party Defendant-appellee, 642 F.2d 94 (5th Cir. 1981)

Annotate this Case
US Court of Appeals for the Fifth Circuit - 642 F.2d 94 (5th Cir. 1981)

Unit A

March 23, 1981.

Bruce A. North, New Orleans, La., for plaintiff.

Adams & Reese, Robert A. Vosbein and Thomas G. O'Brien, New Orleans, La., for defendants.

Appeal from the United States District Court for the Eastern District of Louisiana.



As one aspect of this litigation involving several parties, M. Electric & Construction Co., Inc. sought recovery from Market Insurance Co., its insuror. The district court granted summary judgment in favor of Market on the ground that the insurance policy held by M. Electric did not cover the particular claim. M. Electric appealed. While this appeal has been pending, Market Insurance has been placed under a Final Order of Liquidation by the Circuit Court of Cook County, Illinois. As is typical in such situations, to avoid preferences the Court has enjoined the pursuit of any claims against Market Insurance except through the Director of Insurance and has enjoined the obtaining of any judgments, attachments or liens against the company.

Recognition by this Court of the effectuation of the liquidation of this insurance company by the State of Illinois is in accordance with federal policy which directs that the control over the insurance business remain in the hands of the states. 15 U.S.C. § 1012; Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S. Ct. 1142, 90 L. Ed. 1342 (1946). An orderly liquidation requires that this Court not interfere with the order of the Circuit Court of Cook County. Clark v. Williard, 292 U.S. 112, 54 S. Ct. 615, 78 L. Ed. 1160 (1934).

Market Insurance moves to dismiss the appeal or in the alternative for a stay of the appeal. Since the dismissal of the appeal would implicate the merits, a stay pending actions of the state court such as dissolution of the injunction is the proper course. Hemmerle Industries, Inc. v. Kassuba, 575 F.2d 513 (5th Cir. 1978) (stay of litigation of a claim pending completion of bankruptcy proceedings).

It is ORDERED that the motion for a stay of the appeal of Market Insurance Co. is GRANTED, pending further order of the Court.