| Matter of Ideal Mut. Ins. Co. |
| 2011 NY Slip Op 01878 [82 AD3d 518] |
| March 15, 2011 |
| Appellate Division, First Department |
| In the Matter of Ideal Mutual Insurance Company. AllstateInsurance Company, Appellant, v Superintendent of Insurance for the State of NewYork, Respondent. |
—[*1] Herzfeld & Rubin, P.C., New York (David B. Hamm of counsel), for respondent.
Order, Supreme Court, New York County (Marylin G. Diamond, J.), entered June 2, 2010,which denied claimant/objector reinsurer's motion to reject the referee's report, dated August 17,2009, recommending approval of respondent liquidator's reclassification of claimant/objector'sclaim and granted respondent's cross motion to confirm the report, unanimously affirmed, withcosts.
The findings of the referee are supported by the record (see Nager v Panadis, 238AD2d 135, 135-136 [1997]).
Claimant/objector has no "vested right" to share in the dividend distribution from thisliquidation (see Matter of Hodes v Axelrod, 70 NY2d 364, 369-370 [1987]). The 1992order authorizing respondent to distribute assets in this proceeding was an initial order beginningthe distribution process and was not a final order within the meaning of Insurance Law §7434 (e) (see Burke v Crosson, 85 NY2d 10, 15-16 [1995]). Notably, when the order wasissued, there were more than 500 outstanding reinsurance claims in this proceeding. Further,claimant/objector's claim was never "allowed" by respondent, and no order was ever enteredapproving payment of the claim. Significantly, the 1992 order limited dividend payments to"claims duly allowed in this proceeding." Claimant/objector does not have a vested right todistribution of dividends by virtue of respondent's issuance in 1998 of the first court-ordereddividend distribution, since there was no allowance or court order with respect toclaimant/objector's claim then, and there has been none since.
To the extent claimant/objector claims it had a vested right by operation of law under theprior distribution scheme, we find that the retroactive application of the current version ofInsurance Law § 7434 does not unconstitutionally impair that purported right (seeMatter of Union Indem. Ins. Co. of N.Y., 2009 NY Slip Op 30387[U] [Sup Ct, NY County2009] [analyzing constitutionality of retroactive application of Insurance Law § 7434according to factors cited in Alliance of Am. Insurers v Chu (77 NY2d [*2]573, 586 [1991])]). Insurance Law § 7434 is a remedialstatute and does not impair vested rights; the priority scheme in force at any given time is subjectto change at the discretion of the Legislature; and the Legislature was acting in the public interestwhen it applied the new priority scheme to existing liquidations so as to institute a moreequitable and consistent scheme for the distribution of an insolvent's assets and better protect thepublic (Senate Mem in Support, L 1999, ch 134, reprinted in 1999 McKinney's Session Laws ofNY, at 1596; Assembly Mem in Support, L 1999, ch 134, 1999 NY Legis Ann, at 73; Mem ofAssemblyman Alexander B. Grannis, L 2005, ch 33, 2005 NY Legis Ann, at 23 ["The purpose ofthis bill is to ensure the workers' compensation security fund has adequate funds to pay claims ofinjured workers insured by insolvent carriers"]).
Claimant/objector had no more than a hope or expectation of future dividend distribution, nota vested, absolute right to distribution.
While claimant/objector is correct that even under the new statutory scheme all creditors inthe same class are to be treated alike, when the Legislature enacted Insurance Law § 7434(e) it was cognizant that dividend distributions had been made in liquidation estates to which thepriority classification would be retroactively applied, and yet it made no exception or exemptionfor those estates. It exempted only estates in which a final court order of distribution had beenmade. We must infer that "what is omitted or not included was intended to be omitted orexcluded" (Matter of Jose R., 83 NY2d 388, 394 [1994]).
We have considered claimant/objector's remaining contentions and find them unavailing.Concur—Tom, J.P., Saxe, DeGrasse, Freedman and RomÁn, JJ. [Prior CaseHistory: 2010 NY Slip Op 31365(U).]