United States District Court, Northern District of Illinois, E.D
September 27, 1985
SEARS, ROEBUCK AND CO., PLAINTIFF,
NORTHUMBERLAND GENERAL INSURANCE COMPANY, DEFENDANT.
The opinion of the court was delivered by: Bua, District Judge.
The Court treats defendant's motion to stay proceedings as a
motion to dismiss in these circumstances. Accordingly,
defendant's motion is GRANTED and plaintiff's complaint is
dismissed without prejudice.
According to the Uniform Reciprocal Liquidation Act, of which
Illinois and New York are reciprocal states (see
Ill.Rev.Stat.Ann., ch. 73, par. 833.1, (Smith-Hurd 1985 Pocket
Part)), when a liquidation proceeding is commenced in a
reciprocal state involving an insurer domiciled in the reciprocal
state, controverted claims against the insurer by Illinois
resident claimants may be made in Illinois if there is a parallel
or ancillary liquidation proceeding being conducted in Illinois.
Clark v. Standard Life & Acc. Ins. Co., 386 N.E.2d 890, 899
(Ill.App.1st Dist. 1979). If no such ancillary proceeding is
pending in Illinois, the claim has to "be proved in the
domiciliary state as provided by the law of such state."
Ill.Rev.Stat. 1985, ch. 73, par. 833.4; Clark, supra, 386 N.E.2d
at 899. Domiciliary state means the state in which an insurer is
incorporated or organized or, in the case of an insurer
incorporated or organized in a foreign country, the state in
which such insurer . . . has, at the commencement of delinquency
the largest amount of its trusteed assets and deposits for the
benefit of its policy holder or policy holders and creditors in
the United States; and "domiciliary insurer" means an insurer in
its domiciliary state. Ill.Rev.Stat. 1985, ch. 73, par. 833.1(4).
In the present case, the defendant Northumberland General
Insurance Company is a Canadian corporation with its principal
office located in New York, New York. While it is not clear which
state possesses the largest amounted of Northumberland's trusteed
assets and deposits, the location of its principal office in New
York city and the prior pendency of the liquidation proceeding in
a reciprocal state (New York) persuades this Court that dismissal
of this action without prejudice is necessary to effectuate the
purpose of the Uniform Reciprocal Liquidation Act. Clark, supra,
386 N.E.2d at 899.
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