Bard v. Charles R. Myers Insurance Agency, Inc.

Bard (plaintiff), the Commissioner of Banking and Insurance for Vermont, was appointed in 1983 by a Vermont court as receiver for the attempted rehabilitation of the Ambassador Insurance Company (AIC), a Vermont-chartered company that became insolvent. Bard determined that AIC’s insolvency could not be rehabilitated and concluded that AIC needed to be liquidated. In 1984, the Vermont court issued an order directing Bard to liquidate AIC. In 1985, Bard filed an action in Texas against the Charles R. Myers Insurance Agency, Inc., (Myers) (defendant), a Texas company that wrote and sold AIC policies. Bard alleged that Myers owed AIC unpaid insurance premiums. In 1986, Myers filed a counterclaim against Bard and alleged that AIC’s pre-receivership management had conspired with one of Myers’s competitors to prevent Myers from placing certain insurance risks with AIC. Later in 1986, the Vermont Supreme Court affirmed the Vermont receivership court’s judgment that AIC had to be liquidated. Thereafter, in 1987, the Vermont receivership court entered its final liquidation order that included an injunction prohibiting any suits against AIC or the liquidator in Vermont or elsewhere. The injunction also prohibited counterclaims or set-offs in any action brought by the liquidator. Bard then filed a motion for summary judgment on Myers’s counterclaim and alleged that the Texas court had to give the Vermont liquidation order full faith and credit regarding the injunction provisions of the judgment or, alternatively, that the Texas court should recognize the Vermont judgment as a matter of comity. The trial court and the court of appeals refused to give full faith and credit or comity to the Vermont judgment provisions regarding the injunction and allowed judgment on Myers’s counterclaim. The court of appeals held that the Vermont orders lacked finality and, therefore, they were not entitled to full faith and credit. Bard appealed.