DocketNumber: S18G0493; S18G0499
Citation Numbers: 823 S.E.2d 806, 305 Ga. 126
Judges: Nahmias
Filed Date: 2/4/2019
Status: Precedential
Modified Date: 7/29/2022
**126We 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,
1. The liquidation proceeding underlying these cases began nearly two decades ago.
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, **128asserting 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.
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.,
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.,
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.,
**130Finally, 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.
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.
For the purposes of this Code section, the persons entitled to protection under this Code section are:
(1) All receivers responsible for the conduct of a delinquency proceeding under this chapter, including present and former receivers; and
(2) Their employees, meaning all present and former special deputies and assistant special deputies appointed by the Commissioner and all persons whom the Commissioner, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding under this chapter. Attorneys, accountants, auditors, and other professional persons or firms who are retained by the receiver as independent contractors and their employees shall not be considered employees of the receiver for purposes of this Code section.
Because Sun States' claims are against the liquidator (receiver) and his deputies only in their official capacities, and because Reg Tech is not entitled to any protection under OCGA § 33-37-8.1, this official immunity provision actually has no application in these cases.
(a) Sovereign immunity and official immunity are distinct doctrines. The terminology may be confusing, but it is well-settled that sovereign immunity shields from suit the State and its departments and agencies, including claims against the State's officers or employees in their official capacity, while official immunity "offers public officers and employees limited protection from suit in their personal capacity." Cameron v. Lang,
Sun States now asserts that it brought its surcharge claim against the Insurance Commissioner and his deputies in their **132personal capacities, thereby invoking the official immunity provision in OCGA § 33-37-8.1 (b) along with its exception for "liability caused by the intentional or willful and wanton misconduct of the receiver or any employee." But Sun States has not pointed to any filings it made in the trial court or anything else in the record to support this assertion.
To the contrary, in the filing that initiated Sun States' surcharge (and related attorney fees) claims, Sun States requested an order surcharging "the Liquidator, Deputy Liquidator, Assistant Deputy Liquidator and Reg Tech"; not a single individual was identified by name, much less purported to be included in his personal capacity.
(b) OCGA § 33-37-8.1 (b) 's official immunity provision also has no application to Sun States' claims against Reg Tech, because Reg Tech is plainly not covered by that provision. OCGA § 33-37-8.1 (a) (2) says that the official immunity provided by this Code section does not protect "professional persons or firms who are retained by the receiver as independent contractors and their employees." It is undisputed that Reg Tech is a private corporation that was retained as a contractor to assist with International Indemnity's liquidation. Thus, Reg Tech is not entitled to any immunity afforded by § 33-37-8.1 (b), even if Reg Tech has not engaged in any misconduct. The Court of Appeals' judgment in Case No. S18G0499 is therefore affirmed to the extent that it affirmed the trial court's refusal to dismiss the claims against Reg Tech, but the judgment is reversed to **133the extent that it limited the trial court on remand to considering evidence of intentional or willful and wanton misconduct.
Judgments affirmed in part and reversed in part.
Melton, C.J., Benham, Blackwell, JJ., and Judge J. Ronald Mullins concur. Boggs, Warren, Bethel, and Ellington, JJ. disqualified. Peterson, J. not participating.
Additional details about these cases can be found in the Court of Appeals' opinion. See Intl. Indem. Co.,
On January 10, 2011, Ralph T. Hudgens became Insurance Commissioner, and he was automatically substituted for Oxendine as a party in this action in his official capacity. See OCGA § 9-11-25 (d) (1). On January 14, 2019, Jim Beck replaced Hudgens as Insurance Commissioner, so Beck has now been automatically substituted as a party.
OCGA § 33-37-8.1 (b) says:
The receiver and his or her employees shall have official immunity and shall be immune from suit and liability, both personally and in their official capacities, for any claim for damage to or loss of property, personal injury, or other civil liability caused by or resulting from any alleged act, error, or omission of the receiver or any employee arising out of or by reason of their duties or employment, provided that nothing in this provision shall be construed to hold the receiver or any employee immune from suit or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of the receiver or any employee.
"Receiver" is defined by the Liquidation Act to include, in this context, a "liquidator." OCGA § 33-37-3 (14).
Reg Tech also argued that Sun States had no right under the Liquidation Act to request a surcharge and that because Reg Tech was added as an "indispensable party," if the claims against the liquidator were dismissed, there could be no claims against Reg Tech. The trial court did not address these arguments; neither did the Court of Appeals; neither do we.
Specifically, the Court of Appeals considered OCGA §§ 33-37-20 (a) (4) and (5) and 33-37-41 (1) (A), which describe the liquidator's administrative expenses as "reasonable," "necessary," and "actual"; § 33-37-48, which allows the trial court to audit the books of an estate; and § 33-37-45 (a), which says that the trial court "may grant [a] discharge and make any other orders[.]"
In its briefs here, Sun States does not argue that the Court of Appeals erred in holding that the Liquidation Act does not waive sovereign immunity. Sun States does argue that a claim for "surcharge" simply does not implicate sovereign immunity because surcharge is a special kind of claim. This argument overlaps substantially with Sun States' contention in the trial court and Court of Appeals that sovereign immunity is waived by the Liquidation Act because the Act gives the trial court supervisory powers over a liquidation. That contention was expressly rejected by the Court of Appeals, and Sun States did not seek our review of that holding. To the extent the argument differs from Sun States' waiver argument, it was not addressed by the trial court, which simply found a statutory waiver of sovereign immunity, or by the Court of Appeals, which reversed only that ruling, and we will not address the argument for the first time here. We note that to the extent the surcharge claim seeks the payment or return of money from the State (including the liquidator and his deputies in their official capacities), the claim appears fundamentally to be one for money against the State. See Lathrop v. Deal,
The Georgia Constitution addresses sovereign immunity in subparagraphs (a), (b), (c), (e), and (f) of Article I, Section II, Paragraph IX, while official immunity is addressed in subparagraph (d).
Even in its first objection to discharge, Sun States did not identify the liquidator or deputy liquidator by name, only by official position. Although Sun States included Sivley by name (and position) in that filing, it did not request any money from Sivley; it asked only that International Indemnity's assets be distributed to "persons and entities not affiliated with Sivley or Reg Tech," and that the court permit Sun States to "commission an audit of Sivley's and Reg Tech's records."
The Court of Appeals' holding as to Reg Tech's claims for immunity was not entirely clear. As noted above, the court said only that it had addressed the issues of sovereign immunity and official immunity in ruling on the State's appeal and "need not address them again" as to Reg Tech. Intl. Indem. Co.,
At oral argument, counsel for Reg Tech indicated that the company is no longer in business and may be insolvent. But there is no evidence in the record before us regarding those matters; if true, we leave their implications to be addressed by the trial court on remand. The liquidator also apparently has a claim against Reg Tech to credit or reimburse any excessive or improper administrative expenses. We similarly do not address that claim to the extent it may differ from Sun States' claims against Reg Tech.