[Cite as Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54, 2010-Ohio-4505.]




       HUDSON, SUPERINTENDENT, APPELLANT, v. PETROSURANCE, INC.,
                                    APPELLEE, ET AL.
  [Cite as Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54, 2010-Ohio-4505.]
No provision in the Insurers Supervision, Rehabilitation, and Liquidation Act,
        codified in R.C. Chapter 3903, authorizes payment of interest to any
        claimant.
  (No. 2009-1816 — Submitted May 26, 2010 — Decided September 29, 2010.)
     APPEAL from the Court of Appeals for Franklin County, No. 08AP-1030,
                                    2009-Ohio-4307.
                                 __________________
                               SYLLABUS OF THE COURT
The Insurers Supervision, Rehabilitation, and Liquidation Act, codified in R.C.
      Chapter 3903, establishes nine prioritized classes of claims that can be filed
      against an insurer’s estate during liquidation and directs the liquidator to
      exhaust the estate’s assets by paying approved claims in full to the insurer’s
      creditors and preferred claimants in the order of the priority established by
      the General Assembly in R.C. 3903.42, but no provision in that act
      expressly authorizes payment of interest to any claimant.
                                 __________________
        O’DONNELL, J.
        {¶ 1} The superintendent of insurance for the state of Ohio, Mary Jo
Hudson, acting in the capacity as liquidator of the Oil & Gas Insurance Company
(“OGICO”), appeals from a judgment of the Tenth District Court of Appeals that
reversed a grant of summary judgment in favor of the superintendent on a
declaratory judgment action and held that the superintendent had no authority to
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pay interest to creditors and claimants of OGICO before paying the shareholders
of OGICO.
       {¶ 2} The issue presented on this appeal is whether the liquidator may
pay interest to the insurer’s creditors and other preferred claimants on allowed
claims before paying the funds remaining in the estate to the insurer’s
shareholders, in this case, Petrosurance, Inc.
       {¶ 3} The Insurers Supervision, Rehabilitation, and Liquidation Act
(“Liquidation Act”), codified in R.C. Chapter 3903, establishes nine prioritized
classes of claims that can be filed against an insurer’s estate during liquidation
and directs the liquidator to exhaust the estate’s assets by paying approved claims
in full to the insurer’s creditors and preferred claimants in the order of the priority
established by the General Assembly in R.C. 3903.42, but no provision in that act
expressly authorizes payment of interest to any claimant. Accordingly, we affirm
the judgment of the court of appeals that the superintendent lacks authority to pay
interest to OGICO’s creditors and other claimants, and we remand the case to the
trial court for further proceedings in accordance with our decision.
                          Facts and Procedural History
       {¶ 4} The Oil & Gas Insurance Company operated as an Ohio property
and casualty insurance company primarily insuring oil- and gas-related activities
until August 1990, when the Franklin County Court of Common Pleas declared it
insolvent and ordered the superintendent of insurance to liquidate the assets of the
company, over the objection of its sole shareholder, Petrosurance, Inc.
Subsequently, the court ordered all claims against the assets of OGICO to be
submitted by December 31, 1997.
       {¶ 5} Pursuant to that court order, the superintendent of insurance
collected and verified the submitted claims, and the trial court authorized payment
to OGICO’s policyholder claimants in 2004 and to OGICO’s general creditors
and state and local governments in 2006. After making these expenditures, the




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superintendent held a balance in the estate exceeding $13 million. Thereafter, in
2006, representatives of the superintendent provided a claim form to
Petrosurance, suggesting that it assert its right to the remaining funds.
         {¶ 6} However, on April 30, 2007, before Petrosurance returned its proof
of claim form, the superintendent filed a declaratory judgment action against
Petrosurance and Mark Hardy,1 seeking a declaration that they had no right to any
remaining funds because neither had an allowed claim against the estate.
Petrosurance counterclaimed, asserting that it is entitled to the funds because it is
OGICO’s sole shareholder and the liquidation statute provides that after paying
all claims and any remaining administrative expenses, any balance belongs to
shareholders of the liquidated insurance company.                  The trial court dismissed
Petrosurance’s counterclaim, stating that a claimed right to the funds must be
established in accordance with the Liquidation Act and that it lacked jurisdiction
to hear the counterclaim because the act bars civil actions against an insurer or
liquidator after the court enters its liquidation order.
         {¶ 7} On October 16, 2007, Petrosurance submitted its proof of claim to
the superintendent, asserting entitlement to the remaining funds as the sole
shareholder of OGICO.            On November 1, 2007, the superintendent advised
Petrosurance that its proof of claim would not be filed, because the company
submitted it after the December 31, 1997 filing deadline and because its claim
was encompassed in a prior claim filed by Hardy in 1991 and no objection had
been filed in response to the superintendent’s denial of that claim.


1. {¶ a} In Fabe v. Prompt Fin., Inc. (1994), 69 Ohio St.3d 268, 269, 631 N.E.2d 614, this court
described the relationship between Mark Hardy, Petrosurance, and OGICO as follows: “OGICO’s
parent company is Petrosurance Incorporated, a subsidiary of Forum Holdings U.S.A., Inc. Forum
Holdings U.S.A., Inc. is a subsidiary of Forum Re Group, Inc., a.k.a. The Group, Inc. * * *
   {¶ b} “* * * [Hardy] is a director of OGICO and a director of Petrosurance Incorporated. Hardy
is also a director of Forum Holdings U.S.A., Inc., and the chief executive officer and a director of
Forum Re Group, Inc. * * * [I]t is apparent from the record that all related corporate entities
come under the ultimate control of Hardy.”




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       {¶ 8} The superintendent then moved for summary judgment in the
declaratory judgment action, arguing that Petrosurance had waived its right to the
remaining funds by failing to submit a timely claim, and further arguing that
Hardy had waived his right to the remaining funds by failing to object to the
superintendent’s denial of his prior claim.        The superintendent sought a
declaration that Petrosurance had no interest in the OGICO liquidation estate and
also sought permission to distribute pro rata shares of the remaining funds to the
creditors whose claims had been allowed as interest on those claims.
Petrosurance also moved for summary judgment, contending that its proof of
claim properly asserted entitlement to the funds as OGICO’s sole shareholder.
       {¶ 9} On November 13, 2007, the court granted the superintendent’s
motion for summary judgment with respect to Hardy, concluding that the
superintendent had properly denied his 1991 claim because it had not been
supported by any evidence and that Hardy lacked standing to complain of that
denial because he failed to object in accordance with the procedure set forth in
R.C. 3903.39.
       {¶ 10} Subsequently, on August 5, 2008, the court granted summary
judgment in favor of the superintendent, concluding that interest could be paid to
the creditors and preferred claimants on the principal of their claims. However, it
declined to decide whether Petrosurance had properly asserted its claim, because
it concluded that, as a practical matter, no funds would remain sufficient to pay
Petrosurance once the superintendent paid interest on the other claims.
       {¶ 11} Petrosurance appealed to the Tenth District Court of Appeals,
which reversed the trial court’s entry of summary judgment in favor of the
superintendent, concluding that “Petrosurance did not waive its right to file a
claim for the surplus funds, that the absolute final bar date did not apply to
Petrosurance’s shareholder claim, and that the payment of interest to higher
priority claimants is not permitted under R.C. 3903.42.” Hudson v. Petrosurance,




                                         4
                                January Term, 2010




Inc., 10th Dist. No. 08AP-1030, 2009-Ohio-4307, ¶ 45. The appellate court also
stated that the superintendent had erroneously refused to file Petrosurance’s proof
of claim and had refused to request a hearing when Petrosurance objected to the
superintendent’s refusal to file its claim. Id. at ¶ 46. The appellate court observed
that, based on the trial court’s erroneous ruling that the superintendent could pay
interest to creditors, the court had never determined whether Petrosurance was
entitled to the surplus funds. The appellate court then remanded the matter for
further proceedings.
       {¶ 12} On appeal to this court, the superintendent presents one proposition
of law: “When all creditors’ claims against a liquidated insurance company have
been paid in principal and a surplus remains, the liquidator must pay the creditors
for interest that accrued during liquidation before paying any remainder to the
company’s shareholders.”
       {¶ 13} The superintendent contends that although R.C. Chapter 3903
neither explicitly allows nor prohibits the payment of interest to creditors, the
absence of a specific provision for interest does not render the obligation to pay
interest a nullity, since the purpose of the statute is to protect the insureds,
claimants, creditors, and the public generally, and any ambiguity must be liberally
construed in favor of these groups. The superintendent also asserts that the
majority of other jurisdictions permit the payment of interest to creditors when
sufficient funds exist and that allowing creditors to recover interest on their claims
does not prejudice shareholder rights.
       {¶ 14} In response, Petrosurance contends that the Liquidation Act does
not authorize the superintendent to pay interest to any creditors or claimants in an
insurance company liquidation proceeding.          It asserts that if the General
Assembly had intended creditors and claimants to recover interest, it would have
expressly provided for the payment of interest in the statute, as it has done in




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statutes regarding bank liquidations, which provide for creditors to receive
interest on claims before payment of funds to shareholders. See R.C. 1125.24.
       {¶ 15} Accordingly, we are asked to consider whether R.C. Chapter 3903
permits the liquidator of an insurance company to pay interest to the insurer’s
creditors and other preferred claimants on allowed claims before paying any
remaining funds to the insurer’s shareholders.
                   R.C. Chapter 3903 — The Liquidation Act
       {¶ 16} The Liquidation Act sets forth a comprehensive framework
governing the liquidation of insurance companies operating in Ohio. The purpose
of the act is to protect the interests of insureds, claimants, creditors, and the public
generally, and the provisions of the act are to be liberally construed to effectuate
this purpose.    See R.C. 3903.02(C) and (D).          When the superintendent of
insurance believes that an insurer has become insolvent, R.C. 3903.17 authorizes
the superintendent to file a complaint in the court of common pleas for an order of
liquidation. Upon the court’s issuance of such an order, the superintendent takes
possession of the assets of the insurer and is empowered to review all claims filed
in the liquidation by creditors and other preferred claimants, and to recommend
the amounts to be paid on each claim. R.C. 3903.18(A) and 3903.43(A).
       {¶ 17} R.C. 3903.35(A) specifies that “[p]roof of all claims shall be filed
with the liquidator in the form required by section 3903.36 of the Revised Code
on or before the last day for filing specified in the notice required under section
3903.22 of the Revised Code * * *.” When the superintendent denies a claim in
whole or in part, written notice must be given to the claimant or his attorney, and
“[w]ithin sixty days from the mailing of the notice, the claimant may file
objections with the [superintendent].” R.C. 3903.39(A). Further, if no such filing
is made, the claimant may not further object to the determination. Id.
       {¶ 18} R.C. 3903.42 establishes nine prioritized classes of claimants and
provides that “[e]very claim in each class shall be paid in full or adequate funds




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retained for such payment before the members of the next class may receive any
payment.” The priority of classes is as follows:
       {¶ 19} “(A) Class 1. The costs and expenses of administration * * *.
       {¶ 20} “ * * *
       {¶ 21} “(B) Class 2. All claims under policies for losses incurred,
including third party claims, all claims of contracted providers against a medicaid
health insuring corporation for covered health care services provided to medicaid
recipients, all claims against the insurer for liability for bodily injury or for injury
to or destruction of tangible property that are not under policies, and all claims of
a guaranty association or foreign guaranty association. * * * Claims under
nonassessable policies for unearned premium or other premium refunds.
       {¶ 22} “(C) Class 3. Claims of the federal government.
       {¶ 23} “(D) Class 4. Debts due to employees for services performed * * *.
***
       {¶ 24} “(E) Class 5. Claims of general creditors.
       {¶ 25} “(F) Class 6. Claims of any state or local government. * * *
       {¶ 26} “(G) Class 7. Claims filed late or any other claims other than
claims under divisions (H) and (I) of this section.
       {¶ 27} “(H) Class 8. Surplus or contribution notes, or similar obligations,
and premium refunds on assessable policies. * * *
       {¶ 28} “(I) Class 9. The claims of shareholders or other owners.”
                                       Analysis
       {¶ 29} This cause is now before our court upon acceptance of a
discretionary appeal.    Because this case was originally decided on summary
judgment, our review is de novo, in accordance with the standard set forth in
Civ.R. 56.    See Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833
N.E.2d 712, ¶ 8, and Albain v. Flower Hosp. (1990), 50 Ohio St.3d 251, 254, 553
N.E.2d 1038, reversed on other grounds by Clark v. Southview Hosp. & Family



                                           7
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Health Ctr. (1994), 68 Ohio St.3d 435, 628 N.E.2d 46. As we stated in Grafton v.
Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241, “[i]n order to
obtain summary judgment, the movant must show that (1) there is no genuine
issue of material fact; (2) the moving party is entitled to judgment as a matter of
law; and (3) it appears from the evidence that reasonable minds can come to but
one conclusion when viewing evidence in favor of the nonmoving party, and that
conclusion is adverse to the nonmoving party. State ex rel. Cassels v. Dayton
City School Dist. Bd. of Edn. (1994), 69 Ohio St.3d 217, 219, 631 N.E.2d 150,
152. This court has complete and independent power of review as to all questions
of law. MCI Telecommunications Corp. v. Pub. Util. Comm. (1988), 38 Ohio
St.3d 266, 268, 527 N.E.2d 777, 780; Indus. Energy Consumers of Ohio Power
Co. v. Pub. Util. Comm. (1994), 68 Ohio St.3d 559, 563, 629 N.E.2d 423, 426.”
       {¶ 30} Here, there are no questions of fact, and the only issue involves a
question of law, which we consider on a de novo basis.           In construing the
Liquidation Act to determine whether the superintendent is authorized to pay
interest to OGICO’s creditors and other preferred claimants before paying
Petrosurance, our obligation is to ascertain and to give effect to the intent of the
legislature as expressed in the statute. Dircksen v. Greene Cty. Bd. of Revision,
109 Ohio St.3d 470, 2006-Ohio-2990, 849 N.E.2d 20, ¶ 16. In State ex rel. Russo
v. McDonnell, 110 Ohio St.3d 144, 2006-Ohio-3459, 852 N.E.2d 145, ¶ 37, we
explained that “in order to determine this intent, we must ‘ “read words and
phrases in context according to the rules of grammar and common usage.” ’ ” Id.,
quoting State ex rel. Cincinnati Bell Tel. Co. v. Pub. Util. Comm., 105 Ohio St.3d
177, 2005-Ohio-1150, 824 N.E.2d 68, ¶ 27, quoting State ex rel. Lee v. Karnes,
103 Ohio St.3d 559, 2004-Ohio-5718, 817 N.E.2d 76, ¶ 23; see also R.C. 1.42.
Moreover, as we recognized in State v. Lowe, 112 Ohio St.3d 507, 2007-Ohio-
606, 861 N.E.2d 512, ¶ 15, “a court may not add words to an unambiguous




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statute, but must apply the statute as written.” Id., citing Portage Cty. Bd. of
Commrs. v. Akron, 109 Ohio St.3d 106, 2006-Ohio-954, 846 N.E.2d 478, ¶ 52.
       {¶ 31} The Liquidation Act is silent as to the payment of interest, but the
General Assembly could have expressly provided for payment of interest on
claims against an insurer’s estate, if it had chosen to do so. We decline to add
words to the statute or interpret the legislative silence as authorization to pay
interest, as such a construction would materially affect the priority of payments to
claimants as set forth in R.C. 3903.42. To interpret what is already plain “is not
interpretation but legislation, which is not the function of the courts.” Iddings v.
Jefferson Cty. School Dist. Bd. of Edn. (1951), 155 Ohio St. 287, 290, 44 O.O.
294, 98 N.E.2d 827.
       {¶ 32} In other statutory contexts, the legislature has indicated its intent to
authorize payment of interest to claimants with plain, direct, and express
language. For example, R.C. 1125.24, the statute establishing the priority of
distribution of the assets of an insolvent bank, provides that “[i]nterest shall be
given the same priority as the claim on which it is based, but no interest shall be
paid on any claim until the principal of all claims within the same class has been
paid or provided for in full.” (Emphasis added.) In contrast, the legislative
silence in R.C. 3903.42 cannot fairly be read to authorize payment of interest in
insurer liquidations.
       {¶ 33} Our role as a court is to apply statutes as written, and we conclude
that the General Assembly did not intend to authorize the superintendent of
insurance, acting as liquidator of an insurance company, to pay interest to
creditors and other preferred claimants of an insolvent insurance company before
paying remaining funds to company shareholders.
                                    Conclusion
       {¶ 34} In accordance with R.C. 3903.42, which establishes a priority of
classes for payment of claims against an insolvent insurance company but does



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not authorize the payment of interest on any claim, we reject the superintendent’s
proposition of law that interest should be paid to creditors and other preferred
claimants to make them whole before the owners of the company may recover
from assets of the liquidation estate. Also, because the plain meaning of the
statute directs payment of these remaining funds to shareholders, we decline to
follow the practice in other jurisdictions of distributing assets remaining after
principal claims have been paid to creditors.
       {¶ 35} Accordingly, we affirm the judgment of the court of appeals,
which reversed the grant of summary judgment to the superintendent and held that
R.C. Chapter 3903 does not permit the payment of interest in an insurer
liquidation and that the superintendent erroneously refused to file Petrosurance’s
proof of claim.
       {¶ 36} It is undisputed in this record that Petrosurance is the sole
shareholder of OGICO, that the superintendent has “considered all timely filed
claims, and paid in full all claims that were determined proper and allowed by the
Liquidator and the Court,” and that the superintendent is in possession of
approximately $13 million resulting from the liquidation of OGICO’s assets.
Moreover, R.C. 3903.42 establishes a priority for payment of claims from an
insurer’s estate, but does not authorize payment of interest.
       {¶ 37} We also affirm the appellate court holdings regarding its rejection
of the bases for the superintendent’s refusal to file Petrosurance’s 2007 proof of
claim and its conclusion that Petrosurance did not waive its right to file that claim.
In addition, we agree that the superintendent thwarted efforts of Petrosurance to
collect these funds by erroneously refusing to file the proof of claim and then
refusing to request a hearing on objections by Petrosurance to that refusal.
       {¶ 38} We further recognize, as did the appellate court, that the trial court,
based on its erroneous conclusion that the superintendent could pay interest to
creditors before making any payment to Petrosurance, never considered




                                         10
                                January Term, 2010




Petrosurance’s entitlement to the remaining funds held by the superintendent.
Accordingly, the matter is remanded to the trial court to permit Petrosurance an
opportunity to submit its proof of claim and for the trial court to determine its
entitlement to the remaining funds in accordance with R.C. Chapter 3903 and its
disposition of this matter in accordance with our opinion.
                                                             Judgment accordingly.
          PFEIFER, LUNDBERG STRATTON, O’CONNOR, LANZINGER, and CUPP, JJ.,
concur.
          BROWN, C.J., concurs separately.
                               __________________
          BROWN, C.J., concurring.
          {¶ 39} I concur with the majority that no provision of the Insurers
Supervision, Rehabilitation, and Liquidation Act (“Liquidation Act”) expressly
authorizes payment of interest to any claimant.        In the absence of express
authorizing statutory language, I am reluctantly constrained to conclude that the
superintendent may not pay interest to the Oil & Gas Insurance Company’s
(“OGICO’s”) creditors and other preferred claimants before paying Petrosurance,
an OGICO shareholder—an entity in the lowest priority class for receiving funds
under R.C. 3903.42.
          {¶ 40} The superintendent has presented an appealing policy argument
that she should be permitted to pay Class 2 through Class 8 claimants interest on
their claims when adequate funds remain after satisfaction of their original claims,
before distributing any remaining funds to Class 9 claimants, i.e., shareholders of
the defunct company. As summarized by the National Association of Insurance
Commissioners in its amicus brief in support of the superintendent, “the Ohio
Liquidation statutes are designed and should be implemented to protect the
interests of injured claimants over the interests of shareholders and owners whose
actions likely caused the insolvency.” However, it is within the province of the



                                         11
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legislative branch, rather than the judicial branch, to determine public policy
relative to the liquidation of insurance companies.
       {¶ 41} The superintendent correctly observes that R.C. 3903.21(A) vests
in her, as liquidator, expansive powers and that R.C. 3903.43 provides her with
the authority to “compound, compromise, or in any other manner negotiate the
amount for which claims will be recommended to the court.”        Moreover, R.C.
3903.02(D) explicitly identifies the purpose of the Liquidation Act as the
“protection of the interests of insureds, claimants, creditors, and the public
generally.”   It is tempting to accept the superintendent’s argument that these
general statutory provisions vest her with authority to revisit previously awarded
claims and add interest to them when funds remain at the conclusion of payment
of Class 8 claims. In my view the equities weigh in favor of such a result.
However, R.C. 3903.42 expressly states with specificity the “order of distribution
of claims” and does not include authorization for payment of interest on claims.
And as observed by the majority, the inclusion in R.C. 1125.24 of language
specifically authorizing the payment of interest on claims filed in bank
liquidations demonstrates that the General Assembly is capable of authorizing
interest payments in liquidation proceedings when it intends to do so. Yet no such
express authorization exists in R.C. Chapter 3903.
       {¶ 42} I therefore write separately to urge the members of the General
Assembly to consider amending R.C. Chapter 3903 to expressly authorize the
liquidator of an insurance company to pay interest on previously allowed claims,
when surplus funds exist, prior to distributing funds to shareholders. The General
Assembly has expressed the general purpose of the Liquidation Act as the
protection of the interests of insureds, claimants, creditors, and the public
generally. R.C. 3903.02(D). Amendment of the Liquidation Act to expressly
authorize payment of interest on claims, when a surplus exists, would more fully




                                        12
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protect the interests of claimants and thereby more fully effectuate the stated goal
of the act.
                              __________________
        Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General,
Brandon J. Lester, Deputy Solicitor, and W. Scott Myers and Sean M. Culley,
Assistant Attorneys General, for appellant.
        Beckman Weil Shepardson, L.L.C., Peter L. Cassady, Laurie A. Lamb,
and John (Hui) Li, for appellee.
        Squire Sanders & Dempsey, L.L.P., and Aneca E. Lasley, urging reversal
on behalf of amicus curiae, National Association of Insurance Commissioners.
                           ______________________




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