Superior Court of California

County of Los Angeles

Department 50

charles quackenbush, Applicant, vs. mission insurance company, et al., Respondents.	Case No.:	C572724
	Hearing Date:	April 26, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: MOTION TO APPROVE AGREEMENT WITH CLAIMANTS TO THE JOHN HANCOCK ANNUITY

Background

Ricardo Lara, Insurance Commissioner of the State of California, in his capacity as Trustee of the Mission Insurance Company Trust, the Mission National Insurance Company Trust and the Enterprise Insurance Company Trust (the “Insurance Commissioner”) moves for the Court to approve a settlement agreement with two competing claimants to the John Hancock Life Insurance Company Annuity which provided a death benefit upon the death of decedent Curtis Murphy. No opposition to the motion has been filed.

Discussion

In the motion, the Insurance Commissioner indicates that “Mission Insurance Company Trust is a large insurance company insolvency involving a liquidating trust set up for handling the liquidation of an insolvent property and casualty insurer. This motion deals with the resolution of one disputed asset of Mission Insurance Company Trust, the proceeds of an annuity issued by John Hancock Life Insurance Company.” (Mot. at p. 4:1-5.)

The Insurance Commissioner notes that pursuant to Insurance Code section 1037, “[u]pon taking possession of the property and business of any person in any proceeding under this article, the commissioner, exclusively and except as otherwise expressly provided by this article, either as conservator or liquidator:

(a) Shall have authority to collect all moneys due that person, and to do such other acts as are necessary or expedient to collect, conserve, or protect its assets, property, and business, and to carry on and conduct the business and affairs of that person or so much thereof as to him or her may seem appropriate…

(c) Shall have authority to compound, compromise or in any other manner negotiate settlements of claims against that person upon such terms and conditions as the commissioner shall deem to be most advantageous to the estate of the person being administered or liquidated or otherwise dealt with under this article.

(d) Shall have authority without notice, to acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any real or personal property of that person at its reasonable market value, or, in cases other than acquisition, sale, or transfer on the basis of reasonable market value, upon such terms and conditions as the commissioner may deem proper. However, no transaction involving real or personal property shall be made where the market value of the property involved exceeds the sum of twenty thousand dollars ($20,000) without first obtaining permission of the court, and then only in accordance with any terms that court may prescribe.” (Ins. Code, § 1037, subds. (a), (c)-(d).)

The Insurance Commissioner seeks approval of a “Settlement Agreement as to 2021 Murphy Annuity Payment” (herein, the “Settlement Agreement”). (Vass Decl., ¶ 1, Ex. A.) The Settlement Agreement is between “Ricardo Lara, Insurance Commissioner of the State of California, in his capacity as Trustee (the ‘Insurance Commissioner’ or the ‘Trustee’) of the Mission Insurance Company Trust, Enterprise Insurance Company Trust and the Mission National Insurance Company Trust (the ‘Mission Trusts’),” Patricia Blackwell and Vickie Blackwell (jointly, the “Heirs”), and John Hancock Life Insurance Company USA (“JHUSA”). (Ibid.)

The Settlement Agreement provides, inter alia, that “Mission Insurance Company, Mission National Insurance Company, and Enterprise Insurance Company (the ‘Mission Companies’) were placed into liquidation on February 24, 1987 by the Superior Court of the State of California, County of Los Angeles (the ‘Mission Liquidation Court’). On April 20, 1990, a Final Order of Rehabilitation was entered as to the Mission Companies pursuant to which the Mission Companies estates were converted into Trusts and the Insurance Commissioner was appointed Trustee of the Trusts or given authority to act on behalf of each of the Mission Trusts.” (Vass Decl., ¶ 1, Ex. A, Recitals, ¶ 1.)

The Settlement Agreement further provides that “[t]he late Curtis R. Murphy was a claimant who brought a personal injury action against an entity, which entity asserted a right to insurance coverage from Enterprise Insurance Company. This case was settled on or about in 1980. Mission Insurance Company, Enterprise Insurance Company’s sister company, arranged for the purchase of an annuity from Manufacturers Life Insurance Company. This annuity is administered by JHUSA.” (Vass Decl., ¶ 1, Ex. A, Recitals, ¶ 2.) Per the Settlement Agreement, “[a]n issue exists between Heirs and the Trustee as to the proper entitlement to a $200,000 payment due to be paid in October 2021 (the 2021 Annuity Payment). JHUSA filed an interpleader action that named the California Department of Insurance on behalf of Mission but not the Trustee or Heirs. The Trustee and Heirs were subsequently identified as potential parties.” (Ibid., Recitals, ¶ 3.)

The Settlement Agreement further provides that “[t]he parties had a dispute as to whether the documentation created by Mr. Murphy and the Enterprise Insurance Company insured raised an issue as the proper recipient of the 2021 Annuity Payment. This settlement agreement seeks to resolve those issues. The parties intend to resolve the issue of the entitlement to the 2021 Annuity Payment by splitting those proceeds as follows: A. $150,000 shall be paid by JHUSA to Mission Insurance Company Trust; B. $ 25,000 shall be paid to Patricia Blackwell; C. $ 25,000 shall be paid to Vickie Blackwell.” (Vass Decl., ¶ 1, Ex. A, Recitals, ¶ 4.) The Settlement Agreement also provides that “[t]his Agreement will be submitted to the Mission Liquidation Court, and that approval of that Court is a condition precedent to the effectiveness of this Agreement and to payment of any distributions to the parties.” (Ibid., § IV.)

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Conclusion

Based on the foregoing, and in light of the lack of any opposition, the Court grants the Insurance Commissioner’s motion to approve the Settlement Agreement attached as Exhibit “A” to the Declaration of Michele Vass.

The Insurance Commissioner is ordered to give notice of this Order.

DATED: April 26, 2023 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court