Court Opinion

ID: 9636470
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:30:03.202608+00
Date Added: 2024-06-11T18:09:46.331930
License: Public Domain

*527VERNIERO, J.,
dissenting.
I would affirm the judgment of the Appellate Division substantially for the reasons expressed in Judge Bilder’s persuasive opinion. Carpenter Tech. Corp. v. Admiral Ins. Co., 335 N.J.Super. 510, 762 A.2d 1066 (2000). Based on a straightforward analysis, the panel determined that when the Legislature used the phrase “reduced by the amount of recovery” in N.J.S.A 17:30A-12a, it meant what it said, namely, that “NJPLIGA is entitled to credit only for the amounts actually received by plaintiff from [PPCIGA].” Carpenter, supra, 335 N.J.Super. at 516, 762 A.2d 1066. The majority has reached an opposite conclusion. The Court concludes that “reduced by the amount of recovery” means reduced by an amount “equal to the statutory maximum amount payable by PPCIGA.” Ante at 520, 800 A.2d at 64.
Our sole task is to look at the statute’s words and ascribe to them their plain meaning. The Court does otherwise. It ferrets out an ambiguity that, in my view, does not exist. In so doing, the Court advances a parochial interest, and it dilutes our State’s role in a national system designed to counteract the problems created by insolvent insurers. The irony is that, under the guise of protecting New Jersey’s interests, the Court’s disposition limits the amount of insurance monies available to remediate the environmental damage to four New Jersey sites. Our land and water, more so than Pennsylvania’s, are at risk in this ease. Because I do not subscribe to the Court’s approach or to the statutory interpretation on which it is based, I respectfully dissent.
I.
I begin my analysis, as I must, by reviewing the text of the New Jersey Property-Liability Insurance Guaranty Association Act, N.J.S.A. 17:30A-1 to -20 (Act), which provides in relevant part:
a. Any person having a covered claim which may be recovered from more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured at the time of the insured *528event except that if it is a first party claim for damage to property with a permanent location, he shall seek l'ecovery first from the association of the location of the property. Any recovery under this act shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. However, if recovery is denied or deferred by the association, a person may proceed to recover from any other insurance guaranty association or its equivalent from which recovery may be legally sought.
b. Any person having a claim against an insurer, whether or not the insurer is a member insurer, under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under that other policy. An amount payable on a covered claim ... shall be reduced by the amount of recovery under any such insurance policy.
[N.J.S.A 17:30A-12.]
In adopting that language, the Legislature declared its goal unequivocally:
The purpose of this act is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay [in] payment, to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers.
[N.J.S.A 17:30A-2a.]
The statute generally tracks the Post-Assessment Property and Liability Insurance Guaranty Model Act (Model Act), which was drafted by the National Association of Insurance Commissioners “as a means of allocating the risk of insolvent insurers equitably among the several states.” American Employers’ Ins. Co. v. Elf Atochem, 157 N.J. 580, 587, 725 A.2d 1093 (1999). As written, the statute contains two differences from the Model Act. First, it eliminates the reference to workers’ compensation. Second, the New Jersey Act provides that if a claimant is “denied or deferred” by the first guaranty association approached, the claimant “may proceed to recover from any other insurance guaranty association or its equivalent from which recovery may be legally sought.” N.J.S.A. 17:30A-12a. By enacting a statute similar to the Model Act, New Jersey has joined the majority of states in establishing a national system to ameliorate the losses to insureds that result when property and liability carriers fail.
*529II.
Against that statutory backdrop, we are called on to interpret the “amount of recovery” language found at N.J.S.A. 17:30A-12a. A preeminent principle of our jurisprudence is that a court should not presume that in enacting a statute the Legislature intended something other than what it expressed by way of its plain language. State v. Wright, 107 N.J. 488, 495, 527 A.2d 379 (1987). “A statute should be interpreted in accordance with its plain meaning if it is ‘clear and unambiguous on its face and admits of only one interpretation.’ ” Bd. of Educ. of Neptune v. Neptune Township Educ. Ass’n, 144 N.J. 16, 25, 675 A.2d 611 (1996) (quoting State v. Butler, 89 N.J. 220, 226, 445 A.2d 399 (1982)). When a statute is clear, “we need delve no deeper than the act’s literal terms to divine the Legislature’s intent.” Butler, supra, 89 N.J. at 226, 445 A.2d 399.
Equally well-established is the corollary principle that the judiciary enjoys no fiat to rewrite a plainly-written enactment of the Legislature. State v. Afanador, 134 N.J. 162, 171, 631 A.2d 946 (1993) (“Absent any explicit indications of special meanings, the words used in a statute carry their ordinary and well-understood meanings.”). Applying those standards, the Appellate Division reached the only possible conclusion regarding the meaning of “reduced by the amount of recovery.” Nothing about that phrase is unclear or ambiguous. It means that a NJPLIGA payment is to be reduced by the amount a claimant actually receives from the other guaranty association.
Unlike the majority, I do not believe that enforcement of the Act’s literal language will lead to an absurd result. The exposure of the guaranty association of one state can be distinct from the exposure of a secondary association in a different state, based on differences in the laws of those jurisdictions and in the specific provisions of their respective statutes. Thus, I can foresee that an association of first resort could have defenses to some but not all of a claimant’s claims, thus warranting less than the maximum allowable recovery. After a claimant has recovered from one *530association and then approaches a second association, the set-off should be the sum that the claimant has received in the first state, not that state’s statutory maximum.
The majority suggests that the “seek recovery first” language in N.J.S.A. 17:30A-12a, when read in concert with the “exhaust first” language in N.J.S.A 17:30A-12b, evinces a Legislative desire to limit recovery in these circumstances. I disagree. The “exhaust first” language appears solely within the context of a person having a claim under a policy “other than a policy of an insolvent insurer!,]” N.J.SA 17:30A-12b, which is not the ease here. When the Legislature has employed a term in one place in a statute and excluded it in another, the term should not be implied where excluded. Higgins v. Pascack Valley Hosp., 158 N.J. 404, 419, 730 A.2d 327 (1999).
Policy exhaustion makes complete sense when private insurance is concerned. Without question, a claimant should be required to draw on sources of insurance for which premiums have been paid before tapping into a fund guaranteed or established by the State. See Kent M. Forney, Insurer Insolvencies and Guaranty Associations, 43 Drake L.Rev. 813, 825 (1995) (“This rule is a direct outgrowth of the philosophy underlying the [Model] Act that the guaranty association is to be the ‘payer of last resort,’ and other solvent insurers are not entitled to reduce their liability because of the insolvency.”). In that regard, when the Legislature used “exhaust first” in one section of N.J.SA 17:30A-12 and not in the other, it intended to require exhaustion relative to other insurance carriers, not as between guaranty associations.
One state, Arizona, has adopted the majority’s interpretation. It did so, however, by legislatively amending the Model Act to provide that a claimant “shall first exhaust coverage from the [guaranty] fund of the place of residence of the insured!.]” Ariz. Rev.Stat. Ann. § 20-673B (emphasis added). That language is distinct from the provision in the New Jersey Act. Its enactment in Arizona underscores that the Legislature, not the judiciary, is the appropriate body to effectuate the result reached here.
*531Additionally, the Court states that “[a]s a matter of plain language, as well as common sense, ‘recovery’ implies all available recovery.” Ante at 513, 800 A.2d at 59. Not so. First, if the language of the Act is plain, then the Court should not “imply” any greater meaning to the word “recovery.” Second, the Court’s determination that recovery means “all available” recovery is contrary to the normal usage of that term. In our usual parlance, “recovery” means “[t]he amount finally collected, or the amount of judgment.” Black’s Law Dictionary 1147 (5th ed.1979). Parties often recover less than the amount sought in a dispute. In any event, for the reasons already stated, the Court’s interpretation of “recovery” is belied by the Act’s unambiguous text.
Similarly, I cannot agree with the majority’s contention that the “seek recovery first” language of the Act makes the guaranty association of first resort the “primary” insurer and the remaining associations the “excess” insurers, with all of the implications of those terms. The guaranty associations of the several states do not fall into the primary-excess paradigm relative to each other because there is no exhaustion provision with respect to them. On the contrary, as noted, the secondary associations are treated as excess insurers only in connection with insurance policies other than those of an insolvent insurer. That is why the other insurance policies must be exhausted before a guaranty association can be approached. See McMahon v. Caravan Refrigerated Cargo, 406 Pa.Super. 303, 594 A.2d 349, 351 (Pa.Super.Ct.) (concluding that claimant need not obtain final adjudication of his rights against another state’s insurance guaranty association as prerequisite to obtaining benefits from his home state’s association), appeal denied, 529 Pa. 621, 600 A.2d 538 (1991).
If the Legislature did not intend the New Jersey association to fall into the primary-excess paradigm, then what purpose is served by having a claimant first seek recovery in a jurisdiction other than ours? The Act itself supplies the answer to that question. The Act directs a claimant to “seek recovery first from the association of the place of residence of the insured” or, in the case *532of a first-party claim for property damage, “from the association of the location of the property.” N.J.S.A. 17:30A-12a. I discern from that language that the Legislature intended to establish an orderly process by which every claimant would know in advance where and how to assert a claim.
Given that the Act serves as our link to a national claims system, that orderly process makes perfect sense. The Model Act establishes the same basic process. Significantly, the comment to the Model Act emphasizes that the claims process “does not prohibit recovery from more than one association, but it does describe the association to be approached first and then requires that any previous recoveries from like associations must be set off against recoveries from [another] association.” Model Act § 12 cmt. (emphasis added). The comment’s reference to recoveries rather than to maximum statutory limits lends further support to the Appellate Division’s holding.
The Act also fosters one of the Legislature’s stated aims, namely, “to avoid excessive delay [in] payment[.]” N.J.S.A. 17:30A-2a. Requiring claimants to assert claims first in their home jurisdictions, or in the state in which their property is located, reduces the costs of litigation and generally facilitates the prompt administration of claims. That requirement, however, does not on its face signal a legislative intent to limit NJPLIGA’s obligation in the present circumstances.
III.
The out-of-state cases cited by the majority do not, in my view, support the Court’s disposition. In Palmer v. Montana Insurance Guaranty Ass’n, the issue was whether the coverage limit of the secondarily-liable Montana Insurance Guaranty Association (MIGA) could be “stacked” with the limit of the primarily-liable Idaho Association. 239 Mont. 78, 779 P.2d 61, 62 (Mont.1989). The claimant had already received Idaho’s maximum statutory benefit ($300,000), and had argued successfully in the Montana District Court that the Idaho payment should be deducted from its *533total unpaid claim, but not from Montana’s statutory limit (which was also $300,000). Id. at 62-63. The Palmer claimant thus was attempting to obtain the full maximum statutory limit from each liable guaranty association.
The Montana Supreme Court rejected that attempt at double-recovery, stating: “The framers’ comments to this offset provision of the Model Act support our conclusion that payments from another association are offset against the $300,000 limit of MIGA’s obligation.” Id. at 64 (emphasis added). Because the claimant in Palmer had received the statutory limit from Idaho, there was never any question about the credit to which the Montana association was entitled.
That same situation occurred in Sifers v. General Marine Catering Co., 897 A.2d 1288 (5th Cir.1990). There, the claimant received the Texas Insurance Guaranty Association’s statutory maximum amount ($100,000), thus eliminating any question about the amount of credit to which Louisiana was entitled. Id. at 1290. Cox v. Minnesota Insurance Guaranty Ass’n likewise involved a payment of the statutory maximum by the Florida Insurance Guaranty Association that exceeded the limits of the later-approached Minnesota Insurance Guaranty Association. 508 N.W.2d 536, 539 (Minn.Ct.App.1993). Thus, no issue regarding the meaning of “amount of recovery” was implieáted in any of those cases. Lastly, in Mosier v. Oklahoma Property & Casualty Insurance Guaranty Ass’n, the Oklahoma Court of Appeals specifically declined to express an opinion on the question that is before us in this appeal. 890 A.2d 878, 881 n. 3 (Okla.1994).
IV.
As additional policy support for its disposition, the majority hints at potential collusion between a claimant and a foreign association by which the parties could engage in “quick deals and cheap settlements [.]” Ante at 521, 800 A.2d at 64. From the injured claimant’s perspective, such collusion seems unlikely. For example, the total amount Carpenter can recover under the re*534spective guaranty statutes is the $300,000 cap per covered claim found in the New Jersey Act. See Palmer, supra, 239 Mont. 78, 779 P.2d 61; Sifers, supra, 897 F.2d 1288; Cox, supra, 508 N.W.2d 536. Under the Appellate Division’s holding, the claimant’s recovery is. capped at the statutory maximum of the New Jersey Act, irrespective of the sum actually received from the other state’s guaranty association. Thus, a claimant in Carpenter’s position would have little incentive to shift liability from Pennsylvania to New Jersey because, in the end, the claimant would face the same limitation to recovery.
Moreover, if a foreign association unilaterally denies or defers coverage, the Act plainly permits a claimant to proceed against the New Jersey association regardless of the motives of the foreign association. N.J.S.A. 17:30A-12a. That rule underscores that the Act’s primary objectives are to protect claimants to the fullest extent possible and to pay claims promptly. We should not, then, conjure up images of would-be conspirators to detract us from those central purposes. In any event, a claimant is better off obtaining as much money as possible from the foreign association first approached to eliminate the need for further litigation in this State.
The Legislature was well aware of that reality when it enacted the Act. Indeed, the Act expressly authorizes our New Jersey association to “[ijnvestigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association’s obligation[.]” N.J.S.A 17:30A-8a(4) (emphasis added). Given the large volume of civil cases, I doubt that the system could function properly without parties engaging in some form of compromise. One commentator has observed aptly that “[mjost practitioners and academics consider it to be in the public interest to have disputes settled between parties without a judicial decision.” Seth Nesin, The Benefits of Applying Issue Preclusion to Interlocutory Judgments in Cases That Settle, 76 N.Y.U. L.Rev. 874, 889 (2001). The Court needlessly raises the specter that cases in this area will be tried to their bitter *535conclusions irrespective of the merits of the disputes or the public’s interest in having litigants resolve their differences amicably.
Lastly, the majority posits that “a major goal” of the statute is “[t]he conservation of resources!.]” Ante at 515, 800 A.2d at 61. The majority overstates the significance of that aspect of the Act. The overarching aim of the Act is, as the Legislature itself declared, “to avoid financial loss to claimants or policyholders because of the insolvency of an insurer!.]” N.J.S.A. 17:30A~2. To be sure, our Legislature intended our resources to be husbanded by capping our fund’s liability at $300,000 per claim and excluding certain claims and damages from the scope of recovery. N.J.S.A 17:30A-8a(l); N.J.S.A. 17:30A-5(d). Those cost-containment methods, however, do not reflect any intention on the part of the Legislature to reduce the fund’s obligation by sums never actually received by a claimant.
V.
In sum, the Act’s clear goal is to protect insureds as part of a national legislative pattern established to address the inequities and hardships caused by insurance company insolvencies. Interpreting the statute to advance New Jersey’s parochial financial interest is at odds with that objective. In the last analysis, those financial interests are overstated when one considers that our true interest in this case is to fund an environmental clean-up plan for four New Jersey sites. Because that interest is not advanced by the majority’s approach and for the other reasons stated, I would affirm the judgment of the Appellate Division.
For reversal — Chief Justice PORITZ and Justices STEIN, COLEMAN and ZAZZALI — 4.
For affirmance — Justice VERNIERO.