M. Koken v. Reliance Insurance Co. ~ In Re: Pet. of Rehabilitator for 180-day Exten. of Stay (Prelim. Findings In Support of Court's Order of 8/2/01) (Miscellaneous)
Annotate this Case
Download PDF
THE COMMONWEALTH COURT OF PENNSYLVANIA M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, Plaintiff v. Reliance Insurance Company, Defendant IN RE: Petition of Rehabilitator for 180-day Extension of Stay : : : : : : : : : No. 269 M.D. 2001 : : : PER CURIAM ORDER AND NOW, this 21st day of August 2001, the Preliminary Findings in Support of Court s Order of August 2, 2001 in the above-captioned matter shall be reported. IN THE COMMONWEALTH COURT OF PENNSYLVANIA M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, Plaintiff v. Reliance Insurance Company, Defendant IN RE: Petition of Rehabilitator for 180-day Extension of Stay : : : : : : : : : No. 269 M.D. 2001 : : : Preliminary Findings in Support of Court s Order of August 2, 2001 These preliminary findings are entered in support of the Rehabilitator s request for a stay of all proceedings pending in the various courts in the nation. Recognizing that the authority of this Court does not extend to our sister states in the Union, nor to the federal courts, it is requested that in the interest of comity a stay be entered in the cases of litigation listed in Exhibit A (attached) involving Reliance insureds. Overview On May 29, 2001, the Commonwealth Court of Pennsylvania entered an order placing Reliance Insurance Company (Reliance), 1 an insurer that wrote 1 Information related to the rehabilitation of Reliance Insurance Company can be found at the Pennsylvania Insurance Department s webiste, www.insurance.state.pa.us. Also, the docket policies throughout the United States, in rehabilitation pursuant to 40 P.S. §§221.1 - 22.163. In that order, M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, was named Rehabilitator, and directed to take immediate possession of the property, business, and affairs of Reliance. Further, the Rehabilitator was directed to marshal assets and identify interests relevant to the rehabilitation of Reliance, thereby creating a single forum in which to dispose equitably of Reliance s assets. In pursuit of that directive, the Rehabilitator has learned and informed this Court through affidavits,2 that there are over 190,000 claims, and 15,000 lawsuits pending against Reliance and its insureds. Additionally, there are over 4,500 outside counsel handling claims throughout the United States, many handling multiple lawsuits. In order to maximize the asset pool and minimize a disparity in payment of claims, the financial exposure of Reliance must be ascertained in the most expeditious yet economical manner possible. Therefore, the Rehabilitator has requested and this Court has entered a 60-day stay order relating to all litigation involving Reliance, thereby, providing the Rehabilitator with a distinct time period in which to analyze pending litigation and outline a strategy to approach and resolve, in an orderly and fair manner, the competing issues and demands pending against Reliance. Also, as a result of this Court s concern that all persons and/or entities with an interest in Reliance receive notice of the rehabilitation and any and all entries related to this matter can be found at the Administrative Office of the Pennsylvania Court s website which is www.aopc.org. 2 Two affidavit of William S. Taylor, Deputy Insurance Commissioner, were submitted to this Court in support of the request for a 180-day stay order. The affidavits are attached hereto. 3 action(s) taken by the Rehabilitator, on July 30, 2001, an order was entered granting a request for the appointment of a policyholders committee, and Robert H. Levin, Esq., was appointed interim counsel for said committee. In order to facilitate the flow of information to the Policyholders Committee, by order entered July 30, 2001, this Court directed that the Policyholders Committee be served with copies of all filings entered upon the docket of this Court.3 The Rehabilitator now seeks the entry of a 180-day stay in the actions listed in Exhibit A and requests that the stay include all proceedings, including discovery, and extend to suits and proceedings outside the Commonwealth of Pennsylvania, and to suits and proceedings pending in the federal courts of the United States. In making this request, there is no attempt here to impose the authority of this Court where constitutional principles do not so allow. Instead, jurisdiction has been invoked for the sole purpose of enforcing the statutory requirements of 40 P.S. §§221.1 - 221.63. Considering that the regulation of distressed insurance companies is an important state interest4 and the fact that Reliance is a Pennsylvania insurance company, this Court requests that under the principle of comity, recognition of this Court s authority to act and fulfill the mandate of 40 P.S. §221.1 - 221.63 be permitted via the entry of a 180-day stay by such courts or tribunals of those matters identified in Exhibit A. ____________________________________ JAMES GARDNER COLINS, Judge 3 4 Accord Grode v. Mutual Fire, Marine and Inland Insurance Company, 8 F.3d 953 (1993). Grode, 8 F.3d at 959. 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
