IMO Liquidation of Indemnity Insurance Corporation, RRG

IN THE SUPREME COURT OF THE STATE OF DELAWARE
IMO LIQUIDATION OF §
INDEMNITY INSURANCE § No. 185, 2022
CORPORATION, RRG §
§
§ Court Below–Court of Chancery
§ of the State of Delaware
§
§
§ C.A. No. 8601
§
Submitted: July 5, 2022
Decided: July 28, 2022
Before VAUGHN, TRAYNOR, and MONTGOMERY-REEVES, Justices.
ORDER
After consideration of the notice to show cause and the parties’ responses, it
appears to the Court that:
(1) On April 10, 2014, the Court of Chancery entered a Liquidation and
Injunction Order under the Delaware Uniform Insurers Liquidation Act (“DUILA”)
concerning the liquidation of Indemnity Insurance Corporation, RRG (“IIC”).
Among other things, the Liquidation Order appointed Delaware’s Insurance
Commissioner as IIC’s receiver (the “Receiver”). By order dated August 17, 2020,
the Court of Chancery approved the Receiver’s claim final determination plan and
service plan (the “Plans”). According to the Receiver’s fourth accounting, as of
December 31, 2020, the estate had substantially completed its review of proof of
claims and has prepared approximately 2,945 notices of determination. On
December 20, 2021, the Receiver filed its first claim recommendation report and a
motion for order to show cause setting a deadline for claimants to object. The report
and motion remain pending in the Court of Chancery.
(2) On February 23, 2021, the appellant, IIC’s founder and former
controller Jeffrey Cohen, filed objections to the Receiver’s claim determinations
and, on September 7, 2021, Cohen filed a motion for leave to file a complaint against
the Receiver and its counsel. On April 14, 2022, the Court of Chancery denied
Cohen’s motions (the “Order). The Court of Chancery concluded, among other
things, that the motion for leave to file a complaint was yet another inappropriate
attempt by Cohen to bring an independent action subsumed within the liquidation
proceeding. And the court found that, to the extent Cohen’s objections to the
Receiver’s claim determinations had not previously been resolved, they would be
addressed as contemplated by the Plans. This appeal followed.
(3) Because the case remains pending in the Court of Chancery, the Senior
Court Clerk issued a notice directing Cohen to show cause why his appeal should
not be dismissed for his failure to comply with Supreme Court Rule 42 when taking
an appeal from an apparent interlocutory order.1 In his response to the notice to
1
Cohen filed his notice of appeal on May 31, 2022—more than thirty days after the Court of
Chancery issued the Order. Cohen’s appeal was therefore subject to dismissal on this basis alone.
Del. Supr. Ct. R. 6(a)(i); Carr v. State, 554 A.2d 778, 779 (Del. 1989) (“Time is a jurisdictional
2
show cause, Cohen contends that the order is final because it prevents him from
suing the Receiver.
(4) At the Court’s request, the Receiver also responded to the notice to
show cause and argues that the Order is interlocutory. Under the DUILA, “[a]n
appeal shall lie to the Supreme Court from an order granting or refusing
rehabilitation, liquidation or conservation and from every order in delinquency
proceedings having the character of a final order as to the particular portion of the
proceedings embraced therein.”2 The Receiver observes that we recently held that
the dismissal of a complaint in a rehabilitation proceeding does not have “the
character of a final order” when the rehabilitation process is ongoing and it is
possible that the petitioner could recover as part of that process.3 And the Receiver
notes that the Court of Chancery emphasized that Cohen’s objections to the
Receiver’s claim determinations may be made under the Plans.
(5) “An order is deemed final and appealable if the trial court has declared
its intention that the order be the court’s final act in disposing of all justiciable
matters within its jurisdiction.”4 We agree with the Receiver that the Order is not a
final and appealable order. Absent compliance with Rule 42, this Court lacks
requirement. Accordingly, this Court has held that when an appeal is not filed within the statutory
time period the Court is without jurisdiction to hear the appeal.”).
2
18 Del. C. § 5902(e).
3
Protective Life Ins. Co. v. Navarro, 2020 WL 5405865, at *3 (Del. Sept. 4, 2020).
4
Eastern All. Ins. Co. v. Henry, 2021 WL 2418979, at *1 (Del. June 10, 2021).
3
jurisdiction to hear an interlocutory appeal.5 The appeal must therefore be
dismissed.
NOW, THEREFORE, IT IS HEREBY ORDERED, under Supreme Court
Rule 29(b), that the appeal is DISMISSED.
BY THE COURT:
/s/ Gary F. Traynor
Justice
5
Julian v. State, 440 A.2d 990, 991 (Del. 1982).
4