Olivine Corp. v. United Capitol Insurance
Olivine Corp. v. United Capitol Insurance
Opinion of the Court
Olivine Corporation sued United Capitol Insurance Company for insurance coverage. While the case was pending on appeal, an Illinois court entered a liquidation order against United Capitol. This order enjoined all parties from continuing to assert any claims against United Capitol outside the Illinois liquidation proceedings. The trial court nevertheless refused to dismiss or stay this case, and United Capitol appealed. Because Illinois is a reciprocal state under Washington’s insurers liquidation statute, the trial court should have dismissed the action once it learned of the Illinois order. We reverse and dismiss the case.
FACTS
Clearwater Resource Recovery operated an incinerator in Whatcom County and leased its premises from Olivine
Both Olivine and United Capitol moved for summary judgment. In December 1998, the trial court granted summary judgment in Olivine’s favor on the coverage issue, and in January 2000, the court granted summary judgment in Olivine’s favor on the damages issue. In March 2001, this court affirmed, holding that the United Capitol insurance policy covered Olivine.
[all parties] having knowledge of this Order of Liquidation, are hereby restrained and enjoined from bringing, asserting or further prosecuting any claim, action or proceeding, at law or in equity or otherwise, whether in this State or elsewhere, against the Defendant, United Capitol,... except insofar as those claims, actions or proceedings arise in or are brought in these liquidation proceedings ....
One month after this order was issued, the Washington Supreme Court agreed to review our March 2001 decision. It appears that neither Olivine nor United Capitol notified the Supreme Court of the Illinois court’s order. In August
DISCUSSION
The Uniform Insurers Liquidation Act (UILA), chapter 48.99 RCW, governs the liquidation, rehabilitation, and reorganization of insurance companies having assets and liabilities in more than one state.
Whether the trial court should have dismissed or stayed the proceedings depends on whether Illinois is a reciprocal state for UILA purposes. Washington defines “reciprocal state” as “any state other than this state in which in substance and effect the provisions of this chapter are in force, including the provisions requiring that the insurance commissioner or equivalent insurance supervisory official be the receiver of a delinquent insurer.”
But Olivine notes that United Capitol’s position is contradictory because it benefited from the Supreme Court’s decision, yet now claims that the Illinois order that was issued before the Supreme Court’s decision bars further proceedings. Olivine suggests that this court can remedy
But this argument is flawed. First, this court cannot vacate a Supreme Court opinion. And second, a judgment entered by a court that lacks jurisdiction must be vacated once that lack of jurisdiction is brought to the court’s attention.
Olivine also argues that United Capitol waived its right to a stay or dismissal by failing to promptly alert the appropriate Washington court to the Illinois court’s order. Waiver applies in the insurance context if the insurer voluntarily and intentionally surrenders a known right or if its conduct may be interpreted as relinquishing this right.
Finally, Olivine argues that United Capitol lost its right to comity and full faith and credit by disregarding a trial court order.
In response, United Capitol points out that the Illinois court issued an order of conservation in September 2001. This order enjoined United Capitol from paying any claims or contractual obligations without the court’s approval. If this is, in fact, the reason why United Capitol failed to comply with the trial court’s order, United Capitol
We reverse and dismiss the case.
Coleman and Schindler, JJ., concur.
Review denied at 153 Wn.2d 1011 (2005).
Olivine Corp. v. United Capitol Ins. Co., 105 Wn. App. 194, 198-200, 19 P.3d 1089 (2001), rev’d in part, 147 Wn.2d 148, 52 P.3d 494 (2002).
Olivine Corp. v. United Capitol Ins. Co., 147 Wn.2d 148, 166, 52 P.3d 494 (2002).
Jay M. Zitter, Annotation, Validity, Construction, and Application of Uniform Insurers Liquidation Act, 44 A.L.R.5th 683, 703 (1996).
Am. Star Ins. Co. v. Grice, 123 Wn.2d 131,134, 865 P.2d 507 (1994) (citing G.C. Murphy Co. v. Reserve Ins. Co., 54 N.Y.2d 69,79,429 N.E.2d 111, 444 N.Y.S.2d 592 (1981); Prof’l Constr. Consultants, Inc. v. State ex rel. Grimes, 1982 OK 61, 646 P.2d 1262, 1266).
See RCW 48.99.010-.080.
Id.; Allied Fid. Ins. Co. v. Ruth, 57 Wn. App. 783, 785-86, 790 P.2d 206 (1990).
Babcock v. Mason County Fire Dist. No. 6, 144 Wn.2d 774, 784, 30 P.3d 1261 (2001) (citing Mountain Park Homeowners Ass’n v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994)).
RCW 48.99.010(7).
Lawrence v. Ill. Life & Health Guar. Ass’n, 293 Ill. App. 3d 489,495, 688 N.E.2d 675, 227 111. Dec. 982 (1997). Illinois’ version of UILA is codified in 215 Ill. Comp. Stat. (ILCS) 5/221.1-5/221.13 (1995).
RCW 48.99.010 corresponds to 215 ILCS 5/221.1; RCW 48.99.020 corresponds to 215 ILCS 5/187-5/221; RCW 48.99.030 corresponds to 215 ILCS 5/221.2 and 221.8; RCW 48.99.040 corresponds to 215 ILCS 5/221.3; RCW 48.99.050 corresponds to 215 ILCS 5/221.4; RCW 48.99.060 corresponds to 215 ILCS 5/221.5, .6, .7; RCW 48.99.070 corresponds to 215 ILCS 5/221.9; and RCW 48.99.080(2) corresponds to 215 ILCS 5/221.13. RCW 48.99.080(1) is Washington’s severability provision, and Illinois has no similar provision. But this is insufficient to render Illinois a nonreciprocal state. See Allied Fid., 57 Wn. App. at 786-90 (comparing the insurance liquidation statutes in Washington and Indiana and concluding that the two were of similar substance and effect because Indiana has an equivalent section for each provision of Washington’s statute with the exception of Washington’s severability provision).
Allied. Fid., 57 Wn. App. at 790.
Id. (citing Brickum Inv. Co. v. Vernham Corp., 46 Wn. App. 517, 520, 731 P.2d 533 (1987)).
Saunders v. Lloyd’s of London, 113 Wn.2d 330, 339, 779 P.2d 249 (1989) (citing Pub. Util. Dist. No. 1 of Lewis County v. Wash. Pub. Power Supply Sys., 104 Wn.2d 353, 365, 705 P.2d 1195, 713 P.2d 1109 (1985)).
Id. at 340 (citing Pub. Util. Dist. No. 1, 104 Wn.2d at 365).
Id. (citing McDaniels v. Carlson, 108 Wn.2d 299, 308, 738 P.2d 254 (1987)).
Judicial comity allows one jurisdiction’s court to give effect to laws of another jurisdiction out of deference and respect. Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 160-61, 744 P.2d 1032, 750 P.2d 254 (1987) (citing Mianecki v. Second Judicial Dist. Court, 99 Nev. 93, 97, 658 P.2d 422, cert, dismissed, 464 U.S. 806 (1983)). Whether to invoke comity is within the court’s discretion. Id. at 161 (citing Mianecki, 99 Nev. at 98).
Under the United States Constitution’s full faith and credit clause, another state’s judgment is valid in Washington unless the foreign state lacked jurisdiction or the judgment is constitutionally invalid. U.S. Const, article IV, § 1; State v. Gimarelli, 105 Wn. App. 370, 377, 20 P.3d 430 (citing State v. Berry, 141 Wn.2d 121, 127-28, 5 P.3d 658 (2000)), review denied, 144 Wn.2d 1014 (2001).
Reference
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- Olivine Corporation v. United Capitol Insurance Company
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