Neu

Plaintiff/respondent the People of the State of California, acting by and through the Insurance Commissioner (Commissioner) petitioned the superior court for a preliminary injunction, preventing defendants/appellants Nicholas Neu and Michael Gershuny from violating Insurance Code sections 700 (transacting insurance business without a certificate of authority) and 703 (acting for a nonadmitted insurer.) 1 The superior court granted the preliminary injunction; and appellants Neu and Gershuny appeal, asserting that the court abused its discretion because there was no evidence of a present or threatened violation of the pertinent Insurance Code sections; and the preliminary injunction prohibits appellants from engaging in a lawful business, not regulated by the Commissioner.

Facts

Automobile Maintenance Contracts, Inc. (AMC) is a Delaware corporation with its principal place of business in the City of Inglewood. Appellant Neu was a vice-president of AMC, at least until about March 1987; appellant Gershuny also was a vice-president and operational manager of AMC.

On or about March 1, 1986, AMC began selling auto repair contracts. As of March 1987, AMC had sold approximately…