Opinion ID: 1972471
Heading Depth: 1
Heading Rank: 3

Heading: Statutory Construction of the Act

Text: This precise issue is one of first impression in this state. In order to determine whether the Superior Court properly exercised discretion to allow Sprint to file a claim beyond the bar date, we must examine the Insurers' Insolvency Fund Act. General Laws 1956 (1989 Reenactment) chapter 34 of title 27. Initially enacted in 1970, the act was repealed on July 1, 1988, by a subsequent act that contained provisions substantially similar to those currently in effect, P.L. 1970, ch. 166, § 1; P.L. 1988, ch. 407, § 1. The stated purpose of the act, found in § 27-34-2, is to provide a mechanism for the payment of covered claims under certain insurance policies[,] to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, and to create an entity to assess the cost of such protection and distribute it equitably among member insurers. The particular section of the act we must construe is § 27-34-8(a)(1)(iii), which provides, Notwithstanding any other provisions of this chapter, a covered claim shall not include any claim filed with the fund after the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer. In construing a statute, this court has the responsibility of effectuating the intent of the Legislature by examining the statute in its entirety and giving words their plain and ordinary meaning. In re Falstaff Brewing Corp., 637 A.2d 1047, 1049 (R.I. 1994). It is well settled that when a statute has a plain, clear, and unambiguous meaning, no interpretation is required. Krupa v. Murray, 557 A.2d 868, 869 (R.I. 1989). It is the conclusion of this court that the language of § 27-34-8(a)(1)(iii) is plain and unambiguous. The subsection clearly states that a covered claim shall not include any claim filed with the fund after the final date set by the court, language that evinces an unambiguous legislative intent to exclude any claim filed after the bar date. Accordingly, we must reject the arguments of Sprint and of the Receiver because their contentions contradict the clear terms of the statute. There exists no basis, therefore, on which the Superior Court could exercise discretion either under its equitable powers or under Rule 6 to permit Sprint to file a claim with the fund beyond the bar date of June 18, 1991. Moreover, we note that other jurisdictions with similar statutes have held that their courts lack discretion to allow out-of-time claims. See Kinder v. Pacific Public Carriers Co-op, Inc., 105 Cal. App.3d 657, 663-64, 164 Cal. Rptr. 567, 570 (1980); Satellite Bowl, Inc. v. Michigan Property & Casualty Guaranty Association, 165 Mich. App. 768, 771-72, 419 N.W.2d 460, 462 (1988) (per curiam); Jason v. Superintendent of Insurance, 67 A.D.2d 850, 850-51, 413 N.Y.S.2d 17, 18 (1979), aff'd, 49 N.Y.2d 716, 717, 425 N.Y.S.2d 804, 402 N.E.2d 143 (1980); Lake Hospital System, Inc. v. Ohio Insurance Guaranty Association, 69 Ohio St.3d 521, 524-26, 634 N.E.2d 611, 614-15 (1994). These decisions hold that although an insolvency fund serves to eliminate the risk for policyholders of doing business with an insolvent insurer, there must be some degree of finality to liquidation proceedings. Satellite Bowl, 165 Mich. App. at 772, 419 N.W.2d at 462. Otherwise, the allowance of claims after the bar date would unnecessarily prolong distribution of the insolvent insurer's assets to the detriment of other claimants and the guaranty association. Lake Hospital System, Inc., 69 Ohio St.3d at 526, 634 N.E.2d at 615; accord Florida Insurance Guaranty Association, Inc. v. Garcia, 614 So.2d 684, 686 (Fla. Dist. Ct. App. 1993). Furthermore, although we can appreciate the appearance of inequity that results from not allowing an occurrence policyholder to file a claim even though the notice of the claim was not received before the bar date, such a situation is distinguishable from a case in which the claimant failed to receive notice of the bar date or in which the fund induced the claimant to postpone a claim. See Abraugh v. Gillespie, 203 Cal. App.3d 462, 468, 250 Cal. Rptr. 21, 24 (1988). Thus, because ignorance of the claim is not recognized by statute to forgive a late filing, Jason, 67 A.D.2d at 851, 413 N.Y.S.2d at 18, there is simply no basis on which this court can employ equitable principles to circumvent valid legislative enactments; rather, it is the domain of the Legislature to fashion an equitable remedy. See, e.g., Keefe v. Nunes, 83 R.I. 260, 263, 115 A.2d 355, 357 (1955) (holding that even utilizing a liberal construction of the Workers' Compensation Act, this court must refrain from engaging in unwarranted legislation    under the guise of adjudication) (quoting Martinuzzi v. Capital Marble & Tile Co., 79 R.I. 115, 118, 84 A.2d 605, 607 (1951)). Consequently, even though one purpose of the act is to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, § 27-34-2, we must give effect to the clear legislative intent of § 27-34-8(a)(1)(iii), which prohibits any claim from being filed after the bar date. Thus, the Superior Court lacked discretion to permit a claim against the insolvency fund when that claim was filed out of time. Accordingly, we sustain the appeal and reverse the order of the Superior Court, to which we return the papers in this case.