IN RE: the REHABILITATION OF FRONTIER INSURANCE COMPANY. (2008)

Appeal from an order of the Supreme Court (Platkin, J.), entered December 21, 2007 in Albany County, which, in a proceeding pursuant to Insurance Law article 74, denied the motion of John P. and Sue Ellen P. to modify an injunction barring suit against respondent.

 In 2001, Supreme Court (Lehner, J.) placed respondent in rehabilitation and issued an injunction staying all actions then pending or to be commenced against it (see Insurance Law §§ 7403, 7419[b] ).  John P. and Sue Ellen P. (hereinafter the parents), as guardians of their disabled son, commenced an action in Delaware state court against, among others, a corporation insured by respondent.   They obtained a judgment for compensatory and punitive damages against the now-defunct corporation and one of its employees. After the parents demanded that respondent indemnify its insured and satisfy the Delaware judgment, petitioner, as respondent's rehabilitator, disagreed with their interpretation of the insurance policies and offered to pay only a percentage of the compensatory damages.   The parents then commenced a declaratory judgment action against respondent in federal court to resolve the issue of coverage. The federal court suspended that action based upon the stay provision of the 2001 order of rehabilitation.   The parents then filed the present motion, within the rehabilitation proceeding, seeking to modify the injunction so as to enable them to prosecute their federal action.   Supreme Court (Platkin, J.) denied the motion, prompting this appeal.

 Supreme Court properly denied the parents' request for an exception to the injunction.   Insurance Law article 74 is designed to provide a comprehensive and exclusive mechanism to rehabilitate insolvent insurance companies and return them to solvency (see Insurance Law § 7403[a];  cf. Matter of Knickerbocker Agency [Holz], 4 N.Y.2d 245, 250, 173 N.Y.S.2d 602, 149 N.E.2d 885 [1958];  Matter of United Community Ins. Co., 226 A.D.2d 948, 949-950, 641 N.Y.S.2d 172 [1996] ).   Petitioner is vested with broad discretion to manage and preserve the insolvent insurer's assets in an attempt to facilitate rehabilitation (see Matter of Dinallo v. DiNapoli, 9 N.Y.3d 94, 97, 846 N.Y.S.2d 593, 877 N.E.2d 643 [2007];  Matter of Callon Petroleum Co. v. Superintendent of Ins. of State of N.Y., 53 A.D.3d 845, 845, 863 N.Y.S.2d 92 [2008];  Matter of Mills v. Florida Asset Fin. Corp., 31 A.D.3d 849, 850, 818 N.Y.S.2d 333 [2006];  Curiale v. AIG Multi-Line Syndicate, 204 A.D.2d 237, 238, 613 N.Y.S.2d 360 [1994], lv. dismissed 84 N.Y.2d 1026, 623 N.Y.S.2d 182, 647 N.E.2d 454 [1995] ).   To further the rehabilitation scheme, courts may impose injunctions prohibiting commencement or prosecution of litigation against an insolvent insurer while rehabilitation efforts are underway (see Insurance Law § 7419[b];  Matter of Knickerbocker Agency [Holz], 4 N.Y.2d at 250, 173 N.Y.S.2d 602, 149 N.E.2d 885).   Trial courts have considerable discretion concerning the scope of any such injunctions, including whether an injunction should be modified, and we will only disturb such a determination if the court abused its discretion (see Honeywell Intl. v. R. Freedman & Son, 307 A.D.2d 518, 519, 761 N.Y.S.2d 745 [2003];  Matter of United Community Ins. Co., 226 A.D.2d at 950, 641 N.Y.S.2d 172).

Here, Supreme Court did not abuse its discretion in refusing to modify the blanket injunction by making an exception for the parents' litigation.   The parents rely on a New Jersey case to support their argument that the court should review each case on its unique facts and consider whether the parties would suffer a hardship (Aly v. E.S. Sutton Realty, 360 N.J.Super. 214, 822 A.2d 615 [2003] ).   That case is not binding authority in this state, nor is it persuasive because it is factually distinguishable.   Even were we to apply the balancing approved of in that case, the parents failed to prove any financial emergency or need to preserve evidence which would establish a hardship;  thus, there was no necessity to lift the stay imposed in the rehabilitation order (see Hall v. Michael Bello Ins. Agency, 379 N.J.Super. 599, 609-610, 880 A.2d 451, 457-458 [2005];  Aly v. E.S. Sutton Realty, 360 N.J.Super. at 231-232, 822 A.2d at 625-626).   The court's determination here rationally preserves the goals of rehabilitation by denying an exception to the injunction and permitting petitioner to exercise his business discretion to manage respondent's claims.   As the parents have not shown that the court abused its discretion, we affirm (see Matter of United Community Ins. Co., 226 A.D.2d at 950, 641 N.Y.S.2d 172).

ORDERED that the order is affirmed, without costs.

KANE, J.

CARDONA, P.J., CARPINELLO, LAHTINEN and MALONE JR., JJ., concur.