Court Opinion

ID: 8052081
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:12:58.323105+00
Date Added: 2024-06-11T09:07:29.738547
License: Public Domain

BROCK, C.J.,
dissenting: As the majority recognizes, the threshold issue is determining which is the applicable “claim” under the statute. The majority concludes that “claim” encompasses both the insured’s claim against New Hampshire Insurance Guaranty Association (NHIGA) and the third party’s underlying claim against the insured. I disagree. I conclude that “claim” refers solely to Pitco’s claim against NHIGA arising from its policy with an insolvent insurer, Ideal Mutual Insurance Company (Ideal), see Howell v. State, 868 P.2d 568, 571-72 (Mont. 1994); Maytag Corp. v. Tennessee Ins. Guar. Assn., 608 N.E.2d 772, 775 (Ohio Ct. App.), juris. motion overruled, 600 N.E.2d 679 (Ohio 1992), and that NHIGA is liable for defending Pitco against the Lorkowski’s claims. Thus, I respectfully dissent.
The statute’s references to the rights and obligations of “claimants or policyholders,” RSA 404-B:2, of “the claimant or insured,” RSA 404-B:5, IV(a), of the “policyholder or claimant,” RSA 404-B:8, 1(a), and of the “insured or claimant,” RSA404-B:11,1 (1983), do not compel the conclusion that the Lorkowskis are the relevant claimants. The Lorkowskis’ action against Pitco arose from a workplace injury caused by an allegedly defective product. Therefore, unlike Pitco’s claim against NHIGA, the Lorkowskis’ action did not arise out of a policy with an insolvent insurer. Cf. RSA 404-B:5, IV.
I agree with the majority that the statute plainly contemplates that “claimant” is different from “insured” or “policyholder,” Merrill v. Great Bay Disposal Serv., 125 N.H. 540, 543, 484 A.2d 1101, 1103 (1984); however, it does not follow that “claimant” necessarily refers to a tort victim suing an “insured” of an insolvent insurer. Insurance law permits certain persons who are neither insureds nor policyholders to maintain a claim under an insurance *582policy against an insurer. See, e.g., 20B J. APPLEMAN & J. Appleman, insurance law and practice § 11749 (1980) (discussing ability of payee under loss payable clause to sue in own name to recover a loss occurring under a property insurance policy). Furthermore, my interpretation comports with the purpose of RSA chapter 404-B, “avoiding] financial loss to claimants or policyholders because of the insolvency of an insurer.” RSA 404-B :2 (emphasis added); see RSA 404-B:4.
NHIGA contends that it has no obligation to pay Piteo as a result of Lorkowski’s receipt of workers’ compensation benefits, cf. RSA 404-B:12, I (1983), Lorkowski’s failure to exhaust his rights against the insurers of Lender’s Bagel, cf. id., and the asserted liens of Lender’s Bagel’s workers’ compensation insurers on Lorkowski’s recovery from Piteo, cf. RSA 404-B:5, IV My conclusion that the relevant “claim” is Pitco’s reimbursement claim, rather than the Lorkowskis’ underlying action, resolves NHIGA’s contention.
Relying on RSA 404-B:12, I, NHIGA also argues that Pitco’s failure to exhaust its rights against Lender’s Bagel and Lender’s Bagel’s liability insurers in Pitco’s third party action precludes reimbursement from NHIGA. I have already concluded that Pitco’s claim is the relevant claim and it is undisputed that Piteo had no other available insurance to cover the Lorkowskis’ claim. Although the majority does not directly address NHIGA’s argument, I would hold that the rights that must be exhausted under RSA 404-B: 12, I, are any rights Piteo may have against a solvent insurer “under any provision in an insurance policy,” id., not any legal actions that Piteo might have against a potential defendant who happens to have insurance. See Insurance Com’r v. Prop. & Cas. Corp., 546 A.2d 458, 463-64 (Md. 1988); Sands v. Pa. Ins. Guaranty Ass’n, 423 A.2d 1224, 1227-28 (Pa. Super. Ct. 1980).
The two-part test adopted by the majority may be applicable to NHIGA’s liability; however, I disagree with the conclusion that the majority reaches under step one. NHIGA agreed to defend Piteo. The majority disregards this fact, however, and concludes that NHIGA had no obligation to defend Piteo following the Lorkowskis’ receipt of workers’ compensation benefits. Furthermore, the statutory sections relied upon by the majority address only NHIGA’s liability arising from claims, not its duty to defend. See RSA 404-B:12,1, :8,1(a). NHIGA, in lieu of Ideal, should defend Pitco. Cf. Ferrari v. Toto, 417 N.E.2d 427, 429 (Mass. 1981).
The majority also incorrectly concludes that the Lorkowskis’ receipt of workers’ compensation benefits in an amount greater than the statutory liability established in RSA 404-B:8, 1(a), vitiates *583NHIGA’s obligation to indemnify Pitco. NHIGA properly points out that Pitco’s policy with Ideal provided that Ideal would “pay on behalf of [Pitco] all sums which [Pitco] shall become legally obligated to pay as damages.” (Emphasis added.) In an analogous case involving similar insurance policy language, we stated that “[a]n insurer refusing to defend its insured undertakes the risk that the insured will settle and that it may be held liable for damages, and will not be heard to complain about the strict form of the structure of the relief afforded in the underlying case.” A.B.C. Builders v. American Mut. Ins. Co., 139 N.H. 745, 750, 661 A.2d 1187, 1191 (1995).
NHIGA provided counsel for Pitco in the suit filed by the Lorkowskis, but informed Pitco that it would deny coverage to the extent that Lorkowski had received workers’ compensation benefits. During the course of this representation, NHIGA neither consented nor objected to the proposed settlement between Pitco and the Lorkowskis. We have shown little sympathy for insurers who have declined to participate in proceedings for which they ultimately wTere responsible, concluding that “it is fair that [the insurer] should abide by the result.” Id. (quotation omitted). So long as a settlement reached under such circumstances results from good faith conduct by the insured and bears a reasonable relation to the potential liability of the insured in the underlying action, the insurer may not complain that it is not “legally obligated to pay.” See Mississippi Ins. Guar. Ass’n v. Byars, 614 So. 2d 959, 964-65 (Miss. 1993); Alvey, Inc. v. Missouri Ins. Guar. Ass’n, 922 S.W.2d 804, 809 (Mo. Ct. App. 1996). I would remand this case to the superior court to determine whether Pitco acted in good faith in entering the settlement and, if so, whether the amount of settlement Pitco paid to the Lorkowskis was reasonable.
For the foregoing reasons, I respectfully dissent.
JOHNSON, J., joins in the dissent.