This is an interlocutory appeal from an order denying a motion to quash an administrative subpoena issued by the liquidator of an insolvent insurance company under the authority of Iowa Code section 507C.21(l)(e) (1987). We reverse and remand for an order quashing the subpoena.
When an insurance company becomes insolvent, Iowa law provides that the commissioner of insurance shall act as liquidator to take possession of the assets and administer them for the benefit of the creditors subject to the supervision of the district court. See Iowa Code §§ 507C.16-.18 (1987). That happened here; Carriers Insurance Company became insolvent and William D. Hager, Commissioner of Insurance, was appointed by the district court as liquidator for Carriers.
The liquidation statute authorizes and directs the liquidator to collect the assets of the insolvent company, and the liquidator is authorized to bring suit if necessary to do so. That authorization extends to suits against officers of the insurance company as well as other parties. See Iowa Code §§ 507C.21(1)(Z), (m) (1987).
Hager was thus involved in two simultaneous proceedings concerning Carriers, the first to force the liquidation of the compa
The insurance commissioner’s subpoena power is found in Iowa Code section 507C.21(l)(e) which authorizes him, in part, to
[h]old hearings, subpoena witnesses, and compel their attendance, administer oaths, examine a person under oath, and compel a person to subscribe to the person’s testimony after it has been correctly reduced to writing, and in connection to the proceedings require the production of books, papers, records, or other documents which the liquidator deems relevant to the inquiry.
Acting under this statute, Hager subpoenaed Eugene Joerger, an accountant for Carriers, and ordered him to bring all papers relating to audits of Carriers. Ruan was not invited to attend. When he learned of the subpoena and the proposed examination of the accountant, Ruan filed a motion to quash the subpoena and a motion for a protective order under Iowa Rule of Civil Procedure 123. The district court denied both motions.
Ruan apparently agrees that the investigative subpoena under section 507C.21(l)(e) might be implemented without notice and opportunity to attend if the subpoena is used only in the liquidation proceedings. However, once the liquidator assumes the role of litigator and brings a suit against known parties, Ruan asserts that the notice requirements of our rules of civil procedure must apply.
Hager concedes that one of the purposes of the subpoena in this ease was to obtain evidence for use in his suit against Ruan, but he argues that this makes no difference because under section 507C.21(l)(e) a subpoena without notice may be used in “proceedings.” This, he claims, includes suits as . a litigator under sections 507C.21(1)(Z) and (m) as well as proceedings for liquidation under Iowa Code section 507C.16-.18. Ruan responds that this section envisions “hearings” because it uses the words “hearings,” “witnesses,” and “testimony,” which suggest more than a private interview of the party subpoenaed. At any rate, when the subpoena is used in a separate suit for damages, the statute cannot be interpreted in such a way as to allow discovery without notice, according to his argument.
Ruan argues that section 507C.21(l)(e), the subpoena statute, does not provide or even suggest that a liquidator is authorized to compel ex parte testimony in this case. Inquisitions and star chamber proceedings are antithetical to our system of law, he argues, but uncontrolled ex parte examination of witnesses nevertheless remains a real possibility under the trial court’s ruling.
We reject the idea that administrative subpoenas used in litigation are beyond the power of the court to limit or control. In Wilson & Co. v. Oxberger,
[Ujndue breadth of the subpoena, improper inclusion of irrelevant information, administrative authority to make the investigation, and proper issuance of the particular subpoena may always be raised and, if raised, must be resolved.
Wilson & Co.,
Iowa Rule of Civil Procedure 140 requires notice to opposing parties prior to taking depositions. Use of a liquidator’s subpoena under section 507C.21(l)(e) in a
Hager argues that such procedural requirements would gut the investigative subpoena. We disagree. It does not limit the liquidator’s authority in any respect; it only imposes reasonable procedural prerequisites for its use in certain cases. ■
We reverse and remand for entry of an order quashing the subpoena.
REVERSED AND REMANDED.
Notes
. These statutes provide, respectively, that the liquidator has the following powers:
[To c]ontinue to prosecute and to institute in the name of the insurer or in the liquidator’s own name any and all suits and other legal proceedings, in this state or elsewhere, and to abandon the prosecution of claims the liquidator deems unprofitable to pursue further. If the insurer is dissolved under section 507C.20, the liquidator may apply to any court in this state or elsewhere for leave to substitute the liquidator for the insurer as plaintiff.
And he also has the authority to
[pjrosecute an action on behalf of the creditors, members, policyholders or shareholders of the insurer against an officer 'of the insurer, or any other person.