Attorneys for the California Department of Insurance Conservation and Liquidation office urge the San Mateo Superior Court overseeing the conservation of Applied Underwriters’ California Insurance Company to reject a New Mexico Attorney General motion to intervene in the case. New Mexico’s Attorney General Hector Balderas filed the motion last month to support Applied Underwriters and CIC in the proceeding. The motion experts say it reads a little like Applied wrote it.
CDI says the Court should reject the motion because California’s intervention statute doesn’t apply to conservation proceedings. Additionally, attorney Cynthia Larsen argues that “New Mexico has not and cannot show any lawful basis for intervention.”
Larsen’s filing notes that the California Supreme Court ruled over 80 years ago that conservation proceedings under Insurance Code section 1010 to 1062 are a “special proceeding” that is not subject to Part 2 of the Code of Civil Procedure. Part 2 includes the intervention statute cited by the New Mexico AG. “Thus, contrary to the New Mexico Attorney General’s contention, a non-party has no right to intervene in a California conservation proceeding pursuant to section 387,” she notes.
The filing points out that the New Mexico AG had an opportunity to file a position paper with the Court to express its support or opposition to the proposed rehabilitation plan but failed to do so by the Court’s deadline. Several months later, Balderas moved to file an amicus brief expressing its support for CIC.
“Although the deadline for submission of non-party papers had long since passed, the Conservator did not oppose the Court granting the Amicus Application,” Larsen notes. “Thus, New Mexico has been afforded the opportunity to argue its position regarding the plan to the Court.”
The Department’s opposition notes that New Mexico’s filing is largely lifted word-for-word from its earlier amicus application and that it fails to state what the state hopes to achieve by becoming a party.
“To the extent New Mexico seeks to intervene to attempt to end the conservation, the Court has already denied Respondent’s Application to Vacate, and the Motion does not dispute the grounds on which the Court based its decision to deny the Application – that Respondent never obtained the required approval of California’s Insurance commissioner for the merger of CIC into CIC II,” Larsen writes. “Nor does the Motion dispute that Steven Menzies never obtained the Commissioner’s approval of for (sic) his purchase of CIC from Berkshire Hathaway.”
The San Mateo Superior Court is scheduled to review New Mexico’s application to intervene at a hearing tomorrow.