Opinion
03-23-00321-CV
11-06-2024
Mine Safety Appliances Company, LLC, successor to Mine Safety Appliances Company, Appellant v. Prime Tempus Inc., Special Deputy Receiver, Appellee
FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GV-03-004537, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING
Before Justices Baker, Triana, and Smith
MEMORANDUM OPINION
THOMAS J. BAKER, JUSTICE
This case involves the receivership of Highlands Insurance Company (the Receivership). The trial court appointed the Texas Commissioner of Insurance as the receiver, and the Commissioner appointed Prime Tempus, Inc. as Special Deputy Receiver (SDR). The trial court also approved a Rehabilitation Plan (Plan) for the insurer. This appeal concerns the classification by the SDR of a claim submitted by one of Highlands's insureds, appellant Mine Safety Appliances Company, LLC, as successor to Mine Safety Appliances Company. The SDR classified Mine Safety's claim against the Receivership as a Class 8 "Late-Filed Non-Policy Claim" under the Plan and filed an application with the trial court for final classification of the claim as such. See Tex. Ins. Code § 443.301 (providing for priority of distribution payments on unsecured claims based on class to which claims belong). Mine Safety filed an objection to the application, which the trial court overruled in a final, appealable order that also approved the SDR's application. See id. §§ 443.007(e) (authorizing party in interest to object to receiver's application to court to take proposed action), .257(c) ("The final disposition by the receivership court of a disputed claim is deemed a final judgment for purposes of appeal."). On appeal, Mine Safety argues that the trial court abused its discretion in approving the SDR's classification of its claim, urging that Mine Safety "substantially complied" with the requirements to file a timely proof of claim (POC). See id. § 443.252 ("Proof of Claim"). For the following reasons, we affirm the order.
BACKGROUND
Highlands's Receivership
This matter arises from the rehabilitation-and later, liquidation-proceedings for Highlands, a Texas property and casualty insurance company. In November 2003, the trial court-the 53rd Judicial District Court (the Receivership Court)-placed Highlands into receivership for purposes of rehabilitation, appointing the Commissioner as receiver, and referring the rehabilitation to a Special Master in Chancery (Master) for oversight and to make recommendations on the receiver's applications to the court. See Tex. R. Civ. P. 171 (providing for appointment of masters and specifying their powers, including to hear evidence and conduct hearings "in the same manner as provided for a court sitting in the trial of a case," and specifying that court "may confirm, modify, correct, reject, reverse or recommit the report"). Shortly thereafter, the Commissioner designated Prime Tempus as the SDR.
In May 2006, the SDR filed an application with the Receivership Court to approve its program for notifying creditors of its proposed rehabilitation plan (Notice Application) and setting a claims-filing deadline of March 30, 2007 (the Bar Date). See Tex. Ins. Code § 443.101 (outlining requirements of rehabilitation plans and procedures for obtaining their approval and providing notice to creditors of them). Later that month, the Receivership Court rendered its Order Approving Program for Notifying Creditors of Rehabilitation Program and Setting Claims Filing Deadline (the Bar Date Order). In the Bar Date Order, the Receivership Court found that the notice program specified in the SDR's Notice Application "satisfies due process standards" and that "all claims against Highlands'[s] obligations shall be filed through POCs and processed through the estate."
Shortly after the Bar Date Order was rendered, the SDR sent out to potential claimants and parties of interest the court-approved "Notice to Claimants and Parties of Interest of Highlands Insurance Company in Receivership" (Claims Notice). The Claims Notice informed the claimants of "very important" events and information, including the following:
•The filing of a proposed rehabilitation plan for Highlands and the procedure for objecting to it;
•The right of claimants and parties in interest to request to receive notice of all legal pleadings filed by the SDR;
•The admonishment that all claimants and parties in interest will be bound by the terms of the rehabilitation plan;
•Notice that the March 30, 2007 Bar Date is the deadline for filing POCs;
•The requirement that all claimants who have a claim against the Receivership estate must file a POC before the Bar Date for any claim or portion of a claim, and that all insureds under occurrence policies or surety insurance are allowed to file a POC for protection under those instruments;
• The admonishment that failure to properly complete the POC form according to the instructions may cause the claim to be delayed or disallowed;
• Notice that the timely POC requirement "applies to any claims previously reported to Highlands, including claims by insureds of Highlands for defense or indemnity under their policy of insurance";
• Notice that if the amount of a claim is unknown, claimants must still file the POC by the Bar Date and may insert the word "unstated" in the "amount" column on the required POC form; and
• Notice that claimants and parties in interest may view or download copies of all relevant forms on the Receivership's website (www.HighlandsRehabPlan.com) or in paper form by making a written request to a specified address.
In July 2006, the SDR mailed copies of the Claims Notice containing the instructions for filing a POC to Mine Safety at three different addresses for its offices in Pittsburgh, PA, and to its insurance broker. The SDR provided proof to the Receivership Court that such notices were mailed and not returned, and Mine Safety has not contested that it received the Claims Notices. Beginning that same month, the Plan's website included a section for "frequently asked questions" (FAQs). Among those FAQs was the following:
Q. I had an occurrence policy with Highlands. What happens if I am noticed of a new claim after the claims filing deadline?
A: Policyholders who were issued an occurrence policy by Highlands or one of its affiliates, may file a proof of claim for any known or unknown claims that the insured believes may be made against them in the future. The insured may check mark the "Other" category and write in "Policyholder protection claim on occurrence policy." Please report all new claims as they are received. Even if you do not know of any claims that may be filed against you, you are entitled to file a proof of claim at this time. If you do not file a proof of claim now, and a claim arises after the claims filing deadline, your claim may only be allowed as a late claim under the provisions of the Texas Insurance Code and the Rehabilitation Plan.
The Receivership Court subsequently approved the SDR's Plan and later approved first and second amended versions of it. However, the provisions relevant to this dispute did not change, and thus our references to the Plan are to the live, second amended version, which is available on the Receivership's website.
Mine Safety's products, toxic-tort liability, and insurance policies with Highlands
The factual recitations in this section are derived from the unchallenged factual background in the Master's Recommendation.
Mine Safety sells safety products, including respiratory devices, such as masks and respirators, and heat-protection devices, such as clothing and gloves, some of which previously contained asbestos. These products were used at mines and other worksites where plaintiffs allege they were exposed to coal-mine dust, silica, and asbestos. As of June 30, 2017, Mine Safety had incurred over $468 million in losses in connection with such toxic-tort claims (Tort Claims).
The issues in this appeal stem from these Tort Claims and how they relate to Highlands's issuance of two excess comprehensive general liability policies to Mine Safety for the policy periods March 30, 1973, to April 1, 1976, and April 1, 1976, to April 1, 1977. The type of environmental mass tort claims involved here can occur over many decades and are often referred to as "long-tail claims," and the fact of or amount of all such claims under these types of occurrence-based policies cannot be known with any certainty as they continue to arise into the future. Liability under an occurrence policy is triggered if the act or omission alleged by the claimant against an insured such as Mine Safety occurred during the policy period. According to the Master, the Receivership "is somewhat unique and extremely challenging because of the large number of occurrence policies written by Highlands that involve long-tail claims," and
One of the primary jobs of a Special Deputy Receiver ("SDR") overseeing an insurance company receivership proceeding under the Texas Insurance Code is to solicit proofs of claim . . . from creditors/claimants of the estate, classify them, and pay them as appropriate with funds available in the estate based on a liquidation/sale/recovery of the estate's assets.
In this appeal Mine Safety takes issue with the SDR's performance of its classification duty as to insurance claims Mine Safety made against the Receivership.
Mine Safety's letters notifying Highlands of the Tort Claims and failure to file a timely POC
Both before and after commencement of the Receivership, and in connection with the numerous lawsuits filed against Mine Safety alleging Tort Claims, Mine Safety sent periodic letters to Highlands providing it notice of such lawsuits. On five dates preceding its receipt of the Claims Notice, Mine Safety sent Highlands letters informing it of particular lawsuits, attaching copies of the petitions and summonses therein and identifying the two Highlands policies implicated. The letters specified that Mine Safety was bringing the matters to Highlands's attention "for any liability attributed to the insured during your policy periods, and for the protection for the insured's excess exposure under the listed excess policies."
The Receivership sent a letter to Mine Safety in June 2006-about a month before the SDR sent out the Claims Notice-acknowledging receipt of Mine Safety's latest letter and enclosures. This letter informed Mine Safety that the excess coverage provided by the two at-issue policies "would not respond [sic] until such time that all applicable underlying policies and other insurance have been properly exhausted." It further informed Mine Safety that Highlands "specifically reserves its right to limit or deny coverage based upon" the policies' provisions and that "to the extent that any policy issued by Highlands contains terms, conditions and exclusions that super[s]ede those contained in any underlying policies, Highlands fully reserves any and all rights available thereunder." The letter concluded by asking Mine Safety to "provide a status update of all previously submitted toxic tort claims."
On at least nine dates after its receipt of the Claims Notice, Mine Safety sent additional, similar letters to Highlands providing notice of other lawsuits filed against it. Most of these letters were sent after the Bar Date and included substantively the same information as the pre-Claims-Notice letters: notice to Highlands of Tort Claims and lawsuits against Mine Safety and identification of the Highlands policies implicated. The post-Bar Date letters additionally informed Highlands that they served as a "First Notice of Loss."
Although the pre- and post-Claims-Notice letters appear in the record and declare that they are supported by various attachments-such as "correspondence," a "Primary Carrier Contact List," "Scanned Loss Notices," and "Claims Reporting Bordereau [sic]"-those attachments do not appear in the record. Mine Safety refers to these letters as "submissions" it made to Highlands. Although it concedes that it did not file any POCs before the Bar Date, Mine Safety argues that its pre-Bar Date submissions should be deemed POCs because the information contained therein "substantially complied" with the POC requirements.
Beginning in July 2007, the Receivership-in letters responsive to Mine Safety's submissions-confirmed its receipt of Mine Safety's letters but advised Mine Safety that Highlands was in receivership and that if Mine Safety had "not already done so, [the Receivership] suggest[s] that you file a Proof of Claim relative to your rights under all subject insurance policies for which claims for coverage have been or may be submitted to the receivership estate." The Receivership's letters additionally directed Mine Safety to its website containing the POC form and "additional information." The latest letter from the Receivership to Mine Safety advising it to file a POC form was sent on January 16, 2009, and identified the Plan's paragraph pertaining to the "Late Filed Bar Claims Date" of March 31, 2009:
If a claimant establishes to the satisfaction of the [SDR] or the Receivership Court that the claimant (i) did not know of the General Claims Bar Date and had not received notice thereof, (ii) filed a proof of claim by the earlier of (a) March 31, 2009 or (b) ninety days after first learning of the General Claims Bar Date, and (iii) payment of the claim will not prejudice the orderly administration of the Estate, then the claim shall be processed and paid to the extent allowable consistent with other similarly classified claims.
The January 2009 letter additionally stated, "Highlands'[s] records reflect that Mine Safety did not timely file a POC. If your records show that Mine Safety did timely file a POC, please provide a copy with proof of delivery." The letter informed Mine Safety that "because the POC condition precedent has not been met," the Receivership could not "respond to any claims submitted against, by or on behalf of Mine Safety." Further, under the terms of the Plan, "the SDR is not paying claims at th[e late-filed] level of claim, which are defined as 'Non-Policy Claims' in the [P]lan" and has "no obligation to incur costs to provide or pay for a defense made on any non-Policy Claims during the administration of this Plan unless and until the SDR determines that a distribution to such classes is likely."
Rather than directly responding to the January 2009 letter or filing a POC as urged by the Receiver, about a month later Mine Safety sent the same type of claims-notice letter as was its years-long routine, notifying Highlands of more Tort Claims filed against Mine Safety. The March 31, 2009 late-filed-claims date passed without Mine Safety's filing a POC. In March 2010, the SDR again wrote to Mine Safety, reiterating the necessary procedures outlined in its January 2009 letter.
The record does not reflect any further correspondence between Mine Safety and Highlands or the Receivership until August 8, 2017, when, for the first time, Mine Safety submitted to the Receivership a POC on the prescribed form (2017 POC). The relevant box was checked indicating that the claim was "for indemnity, cost of defense, or expense under a policy of insurance," and the POC represented that the total amount of the claim was the $20 million policy limits for the two Highlands policies. A few weeks later, a representative of the SDR responded to the 2017 POC by letter captioned "Notice of Classification of Claim as Late Filed Non-Policy Claim" and summarized the prior notices given to Mine Safety of the need to file a POC and the applicable deadlines.
Over the next couple years, counsel for the SDR and for Mine Safety periodically corresponded, discussing the classification of Mine Safety's claim. Mine Safety argued that, despite its decade-late submission of a POC form, it had "substantially complied" with the POC requirements through its years-long submissions to Highlands and that its claim should be deemed timely filed. Eventually, in October 2020, the SDR filed with the Receivership Court its Application for Final Classification of Disputed Claim regarding Mine Safety's claim, which the Receivership Court approved and is the basis of this appeal.
In a 2021 affidavit, Mine Safety's counsel explained the decade delay in Mine Safety's filing a POC. Counsel averred that from 2006 to 2017, Mine Safety "was involved in litigation against multiple of its solvent insurers to secure coverage for the Tort Claims." In 2009, Mine Safety "believed that coverage from its solvent carriers may have completely satisfied [its] losses," and, thus, Mine Safety "did not take further action in advance of the Receivership's late-filed claims bar date." In 2010, Mine Safety was "still pursuing coverage from solvent carriers" and "did not know that its losses for the Tort Claims would require it to pursue coverage under the Highlands policies" and, thus, Mine Safety "did not respond" to the Receiver's March 2010 letter. Eventually, on May 17, 2017, Mine Safety "entered into a stipulation with the last of its solvent, on-the-risk insurers concerning final briefing on legal issues in advance of appeal. At the same time, [Mine Safety] continued to face liability from the Tort Claims." "At that point," Mine Safety "concluded that it would likely need to proceed to appeal in order to collect from that insurer, meaning it could take years before [it] was able to recover fully from its solvent insurers, if at all," and, "as a result of this conclusion," Mine Safety "determined that it needed to pursue coverage from Highlands."
Subsequent procedural history
After the SDR filed its Application, Mine Safety filed an objection to the Application. After further briefing by the parties on the timeliness of Mine Safety's claims, and after a period during which the Master held the Application in abeyance while Highlands was placed in liquidation by an October 26, 2021 order of the Receivership Court, the Master held an evidentiary hearing on the matter in May 2022. During the hearing, Mine Safety admitted that it received the Claims Notices that the Receivership mailed to it.
The Master issued his Recommendation on October 5, 2022, in which he concluded that the SDR's Application should be granted, Mine Safety's 2017 POC should be classified as a Late-Filed Non-Policy Claim, and Mine Safety had not filed any timely POCs. Mine Safety filed an Objection to the Recommendation (Objection) in the Receivership Court, challenging the legal conclusions therein but not the Recommendation's factual findings about the notice it received or its failure to submit any POC forms before the Bar Date.
In February 2023, the Receivership Court conducted a hearing on Mine Safety's Objection. Mine Safety did not call witnesses or introduce any exhibits but made argument. Mine Safety did not contest the fact that the SDR complied with the notice requirements under the Plan and stated, "[W]e don't dispute that [Mine Safety was] required to file under the terms-under the notice that was provided, the notice indicated they did need to file. The question is that clearly wasn't understood, I think."
After the Receivership Court signed an order denying Mine Safety's Objection, Mine Safety filed a notice of appeal. Recognizing that the order did not expressly comply with Subsection 443.257(c) of the Insurance Code so as to make it final and appealable, we abated the appeal to allow the trial court to sign a compliant order. See id. § 443.257(c). After the trial court signed such order and we received a copy of it in a supplemental clerk's record, we reinstated the appeal.
DISCUSSION
In three issues, Mine Safety argues that the Receivership Court abused its discretion in (1) failing to adopt and apply a "substantial compliance" standard to the pre-Bar Date submissions that Mine Safety made to Highlands, (2) failing to find under such standard that Mine Safety's submissions should be treated as timely POCs, and (3) failing to deem Mine Safety's 2017 POC as timely under Section 443.251(b)(1) of the Insurance Code. See id. § 443.251(b)(1).
Mine Safety bore the burden of proof in the Receivership Court. See id. § 443.007(e) ("An objecting party has the burden of showing why the receivership court should not authorize the proposed action."). Additionally, when issues are referred to and heard by a master under Rule 171, the master's report is conclusive on all issues except those specifically objected to. See Young v. Young, 854 S.W.2d 698, 701 (Tex. App.-Dallas 1993, writ denied). Appellate courts review receivership courts' rulings on a receiver's proposed actions for an abuse of discretion. See Tucker v. Universal Ins. Exch., No. 03-09-00390-CV, 2010 WL 3059201, at *2 (Tex. App.-Austin Aug. 5, 2010, no pet.) (mem. op.); American Ben. Life Ins. v. Hill Country Life Ins., 582 S.W.2d 227, 228-29 (Tex. App.-Fort Worth 1979, writ ref'd n.r.e.). The trial court abuses its discretion if it rules in an unreasonable or arbitrary manner, without reference to any guiding rules or principles, see Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985), or fails to analyze or apply the law correctly, see In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016). In light of these standards, we address each of Mine Safety's arguments in turn.
Substantial compliance
In its first two issues, Mine Safety argues that even though it did not timely submit any POCs on the Receivership's prescribed form, its multiple pre-Bar Date submissions to Highlands should be deemed as timely filed POCs under the theory that they substantially complied with the POC requirements by containing most of the statutorily required information. See Tex. Ins. Code § 443.252(a). It cites several sources on which it claims the SDR, Master, and Receivership Court should have relied to adopt and apply a substantial-compliance standard.
Mine Safety first asserts that Section 6.1 of the Plan "contemplates that something less than strict adherence to the precise proof of claim filing forms will not preclude payment on a claim." That section, labeled "Proof of Claim Form," reads,
Claims to be paid pursuant to the Plan, except for administration claims, must be supported by a timely filed or otherwise allowed proof of claim that complies with [Texas Insurance Code] §443.252 , and which includes without limitation a statement signed by the claimant that gives the particulars of the claim, the amount and any security for the claim, and the name and address of the claimant or its counsel. The proof of claim amount shall be net of all payments thereon and shall state that the sum claimed is justly owing and that no setoff, counterclaim, or defense to the claim exists. Documentation supporting the claim shall be described in detail in the proof of claim or attached. If not attached,
documents to support the claim shall be promptly provided to the [SDR] within thirty days of request or the claim may be disallowed. Notice to Highlands of the existence of a claim does not constitute the filing of a proof of claim, and does not satisfy the requirements under this section. Detailed information about how to file a claim will be available at www.highlandsrehabplan.com. This website will include the forms and instructions needed to file a claim.
(Emphases added.) Mine Safety relies on the two words "otherwise allowed" in the first-sentence's phrase "timely filed or otherwise allowed proof of claim" as support for its argument that the Plan contemplates a substantial-compliance standard, meaning that something other than a POC submitted on the prescribed form may substitute for the form under certain circumstances. Mine Safety posits that this reference to "otherwise allowed" POCs includes the periodic letter notices it sent to Highlands disclosing the Tort Claims. We disagree.
Firstly, the words "otherwise allowed" immediately follow the words "timely filed," and both phrases modify the term "proof of claim." Thus, there are POCs that are "timely filed" and those that are untimely filed but "otherwise allowed." Section 6.7 accounts for such untimely POCs: it specifies that to be timely, POCs must be filed by the March 30, 2007 Bar Date "except for the claims described below in subparts B through D." Those subparts- addressing executory contracts, lease claims, claims arising from avoided transfers or preferences, and POCs filed by the Late Filed Claims Bar Date-do not apply here.
Secondly, the remainder of the first sentence in the paragraph requires claims to be "supported by . . . a proof of claim that complies with §443.252." That section expressly provides that the SDR "may require" that a "prescribed form be used" and that "other information" than that enumerated in subsection (a) be included in a POC. See id. § 443.252(a), (b)(1), (2). As evidenced in several ways, the SDR did require the use of a prescribed form: (1) later in Section 6.1, the Plan directs claimants to the Receivership website, which contains "the forms . . . needed to file a claim," and admonishes claimants that "[n]otice to Highlands of the existence of a claim does not constitute the filing of a [POC], and does not satisfy the requirements under this section"; (2) the instructions accompanying the required POC form on the Receivership website, which state, "This Proof of Claim form must be used if you have a claim against the receivership estate"; and (3) the Claims Notice sent to Mine Safety and other claimants advising that "[f]ailure to properly complete the POC form [available on the website] according to the instructions may cause your claim to be delayed or disallowed." As already noted, because Mine Safety did not contest that it received the Claims Notice about nine months before the Bar Date, its receipt of the notice has been conclusively established. See Young, 854 S.W.2d at 701.
Furthermore, the SDR required the disclosure of "other information" on its prescribed POC form than that expressly enumerated in subsection (a): (1) whether there is "any other insurance available to cover" the claim and the name(s) of such insurer(s) and their contact information, and (2) whether the claimant has "received any compensation on the claim" and the amount of payment and identification of the payor. Cf. Tex. Ins. Code § 443.252(a). We conclude that the Plan does not support Mine Safety's proposed relaxation of the requirement that a claimant file a timely POC on the prescribed form, which includes this additional required information, to have its claim considered timely.
Mine Safety next argues that the adoption of a substantial-compliance doctrine is supported by non-binding or analogous caselaw. It cites a Texas case purportedly applying such a doctrine outside of the receivership context. See Roccaforte v. Jefferson County, 341 S.W.3d 919 (Tex. 2011). Roccaforte addressed whether a hand-delivered notice to county officials of a suit filed against them satisfied the statutory requirement of notice by certified or registered mail. See id. at 926. The Supreme Court concluded that the hand-delivered notice satisfied the purpose of the statute, which was not intended to "create a procedural trap allowing a county to obtain dismissal even though the appropriate officials have notice of the suit." Id. We cannot say that the trial court abused its discretion in failing to expand that narrow, fact-specific exception to the receivership context. Cf. Burgess v. El Paso Cancer Treatment Ctr., 881 S.W.2d 552, 556 (Tex. App.-El Paso 1994, writ denied) ("[C]hanges in the common law should be left to the Texas Legislature and our Supreme Court."); see also Petco Animal Supplies, Inc. v. Schuster, 144 S.W.3d 554, 565 (Tex. App.-Austin 2004, no pet.) ("As an intermediate appellate court, we are not free to mold Texas law as we see fit but must instead follow the precedents of the Texas Supreme Court unless and until the high court overrules them or the Texas Legislature supersedes them by statute.").
Moreover, this Court previously declined to provide equitable relief to a claimant by relaxing POC requirements, albeit when applying a prior version of the receivership statute and considering a claimant's submissions made solely after the bar date. See Chandler v. Jorge A. Gutierrez, P.C., 906 S.W.2d 195, 201 (Tex. App.-Austin 1995, writ denied) (noting that receivership statute did not "authorize extension of the filing deadline for equitable reasons, and we have already recognized that liquidation proceedings require some degree of finality"); see also BankDirect Cap. Fin., LLC v. Plasma Fab, LLC, 519 S.W.3d 76 (Tex. 2017) ("Noncompliance with a statutorily fixed time limit cannot be excused under the banner of substantial compliance.").
We also cannot conclude that the trial court abused its discretion by failing to adopt a substantial-compliance doctrine based on non-binding authority from other jurisdictions. See, e.g., In re Today's Destiny, Inc., No. 05-90080, 2008 WL 5479109, at *5-7 (Bankr.S.D.Tex. Nov. 26, 2008) (allowing POCs that substantially complied with applicable bankruptcy rules requiring POC to "conform substantially" to official form); Ito v. Investors Equity Life Holding Co., 346 P.3d 118, 132-33 (Haw. 2015) (construing Hawaii's POC statute to allow for substantial compliance where statute provided receiver with discretion to allow non-compliant claims). Even if such authority addressed sufficiently analogous statutes and facts as to be persuasive, this Court and the trial court are not bound to follow it. See Hebert v. Hopkins, 395 S.W.3d 884, 902 n.16 (Tex. App.-Austin 2013, no pet.) ("[C]ases from other jurisdictions have no precedential value for this Court.").
Lastly, Mine Safety argues that the adoption of a substantial-compliance doctrine is supported by Section 443.001 of the Insurance Code, which states that the chapter shall be "liberally construed" to support the enumerated purpose of the Receivership Act: "protect[ing] the interests of insureds, claimants, creditors, and the public generally." See Tex. Ins. Code § 443.001(a), (e). We do not read this provision to support solely Mine Safety's position; it may be read to equally support the conclusion of the Master that the orderly and timely administration of the Receivership estate requires a "bright-line deadline" for claims so that "finality" in this lengthy and "complex" process may be achieved. See also Chandler, 906 S.W.2d at 200 ("The filing deadline protects policyholders who timely filed claims because the allowance of late filed claims would unnecessarily prolong distribution of an insolvent insurer's assets and dilute funds from which to satisfy timely filed claims."). Moreover, the chapter's enumerated purpose is to be effected through, relevantly, "enhanced efficiency and economy of liquidation, through clarification of the law, to minimize legal uncertainty and litigation." See Tex. Ins. Code § 443.001(e)(3) (emphasis added). Allowing something other than strict compliance with the statutory POC requirements and use of the SDR's prescribed form-as required by the Plan, Claims Notice, and Receivership website-would cut against greater efficiency and economy.
We are unpersuaded by Mine Safety's arguments that the sources it cites require the adoption of a substantial-compliance doctrine, and we thus conclude that the Receivership Court did not abuse its discretion in concluding that Mine Safety was required to strictly comply with the POC requirements outlined in the Plan and Claims Notice. We accordingly overrule Mine Safety's first issue. And, because we conclude that the Receivership Court did not abuse its discretion in affirming the Master's Recommendation that the adoption of a substantial-compliance standard is neither warranted nor required here, we need not address Mine Safety's second issue, in which it contends that neither the Master nor the Receivership Court "addressed the factual question of whether the submissions . . . [it made] in advance of the General Claims Bar Date substantially complied" with the POC requirements. See Tex. R. App. P. 47.1.
Section 443.251's exception for late-filed POCs
In its final issue, Mine Safety argues that the Receivership Court erred by affirming the Master's "misinterpretation" of Insurance Code Subsection 443.251(b)(1) as it pertains to late-filed POCs. That subsection provides,
(b) The liquidator shall permit a claimant that makes a late filing to share ratably in distributions, whether past or future, as if the claim were not filed late, to the extent that the payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(1) the eligibility to file a proof of claim was not known to the claimant, and the claimant filed a proof of claim not later than the 90th day after the date of first learning of the eligibility[.]
Tex. Ins. Code § 443.251(b)(1). Mine Safety posits that this exception for late claims that are filed within ninety days of a claimant's "first learning of [its] eligibility" to file a POC applies to its internal determination that it was "appropriate" to seek coverage from Highlands after exhausting coverage under its policies with its solvent insurers. That is, it argues that it was not objectively "eligible," and could not have known it was eligible, to file a POC until after its other insurers' policies had been exhausted.
Tellingly, Mine Safety supports its argument entirely on its proposed construction of the term "eligibility" rather than by contending that it was unaware of the POC requirement before the Bar Date, which it cannot do because the record conclusively establishes that it was aware. Mine Safety contends that the applicable definition of the word "eligible" is "fit and proper," as in Mine Safety was "eligible" to file a POC when it determined that it was "fit and proper" to seek insurance proceeds from the Receivership. See Eligible, Black's Law Dictionary (12th ed. 2024) (noting that one definition of "eligible" is "fit and proper to be selected or to receive a benefit"). However, as the Master did, we disagree with this proposed construction of the term "eligibility" and instead apply the more appropriate and relevant definition in this statutory context, meaning "legally qualified" to file a POC. See Eligible, Merriam-Webster Dictionary, https://merriam-webster.com/dictionary/eligible#h1 (last visited Nov. 4, 2024) (defining "eligible," relevantly, as "qualified to participate"); Eligible, Black's Law Dictionary (12th ed. 2024) (defining "eligible," relevantly, as "legally qualified for an office, privilege, or status").
Because common words like "eligible" often have multiple dictionary definitions, we look to contextual clues in a statute to determine which meaning is most apposite. See Greater Houston P'ship v. Paxton, 468 S.W.3d 51, 59 (Tex. 2015). The context in which Section 443.251 appears is the Insurer Receivership Act, outlining the procedures, rights, and duties of insurers, insureds, claimants, interested parties, and receivers. See generally Tex. Ins. Code §§ 443.001-.402. After Highlands went into receivership and the SDR sent the court-approved Claims Notice to Mine Safety, Mine Safety-and all other persons with claims against the Receivership estate-became "eligible," i.e., "qualified," to file a POC. See id. §§ 443.004(a)(3) (defining "claimant" as "a person having any claim against an insurer, whether the claim is matured or not, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent"), .251 ("Except as provided by this subsection, proof of all claims must be filed with the liquidator [i.e., receiver] in the form required by Section 443.252 on or before the last day for filing specified in the notice required under Section 443.155."). The alternate definition of "fit and proper" implies the exercise of discretion by some undefined actor-who unilaterally determines whether it is fit and proper to file a POC-and is inapposite within the statutory context requiring all claimants to file POCs in accordance with Section 443.252. Mine Safety's argument places the determination of when and whether an insured is "eligible" to file a POC squarely with the insured, but eligibility must be an objective determination that does not turn on the subjective, internal processes and determinations of an insured. Rather, eligibility to file a POC is a simple, objective determination: Did the claimant have a claim against Highlands as of the Bar Date?
As the Receivership's website noted in the FAQs, claimants who had only contingent, unknown, or not-yet-matured claims were still entitled to file a POC to protect their rights. See also Tex. Ins. Code § 443.254(a), (c) (providing that insureds have right to file claim "for the protection afforded under the insured's policy, regardless of whether a claim is known at the time of filing, if the policy is an occurrence policy" and that insured "shall supplement the claim" when "a specific claim is made by or against the insured").
We decline to accept Mine Safety's contention, on this record and considering the unobjected-to facts recited in the Master's Recommendation, that it was not eligible to file a POC until more than a decade after it received the Claims Notice because it purportedly took that long for Mine Safety to determine, as an internal corporate decision, that it would not be able to wholly collect on its claims from its solvent insurers and should thus seek to pursue the deficiency from Highlands. The Receivership Court did not abuse its discretion in determining that the exception in Subsection 443.251(b) does not apply to render Mine Safety's late-filed claims timely. We overrule Mine Safety's third issue.
CONCLUSION
Having overruled Mine Safety's issues and determined that the trial court did not abuse its discretion in overruling Mine Safety's Objection to the Master's Recommendation and in affirming the SDR's Application for final claim classification, we affirm the trial court's final order.
Affirmed