Civil Practice – Intervention – Liquidation Petition — N.C. Gen. Stat. §58-30-95 – Motion for a Continuance – Rehabilitation

As a shareholder, GBIG should not have been allowed to intervene and defend against the liquidation petition, as only a company’s directors are permitted to intervene to defend under N.C. Gen. Stat. §58-30-95.
We modified the trial court’s orders to clarify GBIG is not a proper party and affirmed.
This case was one of many cases stemming from the insolvency of several insurance companies owned by Greg Lindberg. Respondents-Appellees Southland National Insurance Corporation, BLIC, and CBLIC are licensed domestic insurers, owned by GBIG. GBIG is wholly owned by Lindberg. In 2018, Southland, BLIC, and CBLIC consented to be placed under administrative supervision, following concerns from Petitioner-Appellee Commissioner of Insurance Mike Causey, that the companies would be financially unable to meet outstanding obligations to their policyholders. During the period of administrative supervision, Causey determined that under the current investment structure, Southland, BLIC, and CBLIC lacked the liquidity to pay their policyholders and ultimately placed the companies into rehabilitation.
Intervenor-Appellant GBIG appealed from two orders entered in 2022—an order denying GBIG’s motion for a continuance to allow discovery and an order of liquidation against Bankers Life Insurance Company and Colorado Bankers Life Insurance Company. On appeal, GBIG argued the trial court erred in denying its motion for a continuance to allow for discovery and ordering BLIC and CBLIC into liquidation. We determined that GBIG should not have been allowed to intervene; nevertheless, the trial court did not err in denying GBIG’s motion to continue and ordering BLIC and CBLIC into liquidation.
The clear and unambiguous language of N.C. Gen. Stat. §58-30-95 states that “[t]he [c]ourt shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition[.]” The statute does not explicitly require directors to initiate a civil action or file a complaint. Rather, the statute only confers upon the directors of an insurer the option to take necessary actions to defend against a liquidation petition. Notably absent from the statute is any directive that directors shall file a civil complaint. For those reasons, we concluded N.C. Gen. Stat. §58-30-95 is a proceeding of a civil nature with its own specialized procedure, and therefore, it supplants the North Carolina Rules of Civil Procedure.
Having concluded that §58-30-95 supplants the Rules of Civil Procedure, it follows that the procedure for defending against a liquidation petition is contained in the express, unambiguous language of the statute, which grants directors, and directors alone, the power to take necessary actions to defend against liquidation petitions.
Where GBIG is not a director of either BLIC or CBLIC, non-party GBIG did not have standing to intervene, nor should it have been allowed to intervene in the liquidation proceeding simply because the trial court previously exercised its broad discretionary power to allow it to intervene in the Southland liquidation.
GBIG argued the denial of its motion for a continuance “prevented it from having a meaningful opportunity to defend against the liquidation petition” and therefore, the trial court erred in denying its motion to continue and entering the liquidation order. We disagreed. The trial court correctly determined that GBIG “should have made [its] motion to intervene some time ago,” given GBIG waited two weeks after the superior court noticed a hearing to seek a continuance. Further, GBIG’s argument that the denial of its motion to continue prevented it from having a meaningful opportunity to defend against liquidation is disingenuous, given both BLIC and CBLIC had been making detailed quarterly disclosures since being placed in rehabilitation.
We affirmed both the Continuance Order and the Liquidation Order and modified each order to clarify that GBIG should not have been allowed to intervene pursuant to N.C. Gen. Stat. §58-30-95 or through the exercise of the trial court’s broad discretionary power.
Modified and affirmed.
Causey v. Southland National Insurance Corporation (Lawyers’ Weekly No. 011-046-24, 17 pp.) (Julee Flood, J.) Appealed from Wake County Superior Court (A. Graham Shirley II, J.) Attorney General Joshua H. Stein, by Deputy Solicitor General James W. Doggett, Special Deputy Attorney General Daniel S. Johnson, and Special Deputy Attorney General M. Denise Stanford, for petitioner-appellee; Williams Mullen, by Wes J. Camden, Caitlin M. Poe, and Lauren E. Fussell, for respondents-appellees; Fox Rothschild LLP, by Matthew Nis Leerberg and Condon Tobin Sladek Thornton Nerenberg PLLC, by Aaron Z. Tobin, for intervenor-appellant. North Carolina Court of Appeals