Webster v. Superior Court

In Webster v. Superior Court (1988) 46 Cal.3d 338, an insurer was placed into conservatorship during personal injury litigation in which the plaintiff sued the insurer as the employer of the person who inflicted injury on him. The trial court refused to relieve the plaintiff from the stay imposed by the Insurance Code. The Supreme Court found the trial court's refusal was an abuse of discretion because the plaintiff had stipulated he would not seek to recover payment from the insurer's assets but only from the insurer's insurance proceeds. "To interpret Insurance Code section 1020 to require a stay regardless of the circumstances would put the liquidation court in a procedural straitjacket. The court could not allow a pending action to go forward even when doing so might expedite matters or conserve the commissioner's resources. An extreme example would be the situation in which a complex action against the insolvent is in the midst of trial when the insolvent is placed under the commissioner's conservatorship. The best interests of all concerned might be served by allowing the action to proceed to its conclusion rather than requiring the commissioner to begin anew a resolution of the claim against the insolvent." (Id. at p. 345.)