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04/16/96 ILA M. MAHAN v. ALBERT L. GUNTHER AND

April 16, 1996

ILA M. MAHAN, PLAINTIFF-APPELLANT,
v.
ALBERT L. GUNTHER AND KEYSTONE LINES, A CORPORATION, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Williamson County. No. 95-L-121. Honorable William H. Wilson, Judge, presiding.

As Corrected May 10, 1996.

The Honorable Justice Maag delivered the opinion of the court: Rarick, J., and Chapman, J., concur.

The opinion of the court was delivered by: Maag

The Honorable Justice MAAG delivered the opinion of the court:

Plaintiff, Ila Mahan, is an Illinois resident who claims to have been injured as the result of a traffic accident in which a Keystone Lines employee, Albert Gunther, allegedly backed the vehicle he was operating into the plaintiff's vehicle. The plaintiff filed this action against the defendants on March 6, 1995, in the circuit court of Williamson County, State of Illinois.

The defendants responded by filing a motion to stay proceedings. According to the defendants, Keystone Lines is insured by the American Inter-Fidelity Corporation (AIFC). AIFC is in rehabilitation in Indiana. The rehabilitation is being administered by the Indiana Department of Insurance through the Marion Circuit Court, State of Indiana, in cause number 49C019403-CP0959. As a part of the rehabilitation, the Indiana court entered an injunction order prohibiting and enjoining:

"(c) The commencement and prosecution of any suit, action or other proceeding against or involving the Exchanges and AIFC or the Rehabilitator, by way of original claim *** (or by way of claim against an insured of the Exchanges as to which the Exchanges or AIFC may be obligated to defend or pay a judgment), which seeks any one or more of the following types of relief against the Exchanges and AIFC or the Rehabilitator *** (1) money damages; (2) punitive damages; *** or (8) declaratory relief regarding liability based upon any of the foregoing[.]"

The defendants successfully argued to the Illinois trial court that the Indiana antisuit injunction prohibited the Illinois court from proceeding with the plaintiff's lawsuit against the defendants because the defendants are insureds of AIFC.

On September 29, 1995, the Williamson County circuit court entered an order staying the plaintiff's lawsuit until the Indiana rehabilitation action is resolved. The plaintiff now appeals from this injunctive order pursuant to Supreme Court Rule 307(a). 134 Ill. 2d R. 307(a).

I

The plaintiff raises a single issue on appeal. That issue is: "Did the trial court err in giving full faith and credit to the Indiana judgment and in staying plaintiff's action in reliance on that judgment?" The issue raised on appeal implicates several subissues that will be dealt with individually.

We begin by framing what we perceive to be the first issue before us. The plaintiff contends that she has had no contact with the State of Indiana, that she has never commenced or been joined in an action pending in Indiana, that she has never entered an appearance in Indiana, and that she has never been served a summons to appear in an Indiana action. Thus, the plaintiff argues that the Indiana court has no jurisdiction over her, and the Illinois court erred in giving full faith and credit to the Indiana injunction.

The defendants contend that the Indiana court has jurisdiction over the plaintiff's action against an AIFC insured, pursuant to the Indiana Insurance Supervision Rehabilitation Liquidation Act (Indiana Act). Ind. Code Ann. § 27-9-1-1 et seq. (Burns 1994). According to the defendants, the regulation of insurance is a matter which public interest dictates be left to the determination of the states (see McCarran-Ferguson Act, 15 U.S.C.A. § 1011 et seq. (West 1976)), and the Indiana Act is a pervasive regulatory scheme for the rehabilitation of insurance companies. Therefore, the public interest, as regulated by the Indiana Act, provides sufficient contact with Indiana to support personal jurisdiction over any party who may deplete the assets of the insolvent insurer through any court action against it or its insureds.

The defendants then claim that according to sections 221.1 through 221.13 of the Illinois Insurance Code (Code) (215 ILCS 5/221.1 through 221.13 (West 1994)), Illinois courts must recognize and give deference to insurance rehabilitation proceedings initiated in a "reciprocal state." Defendants argue that Indiana is a reciprocal state as defined by ...


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