Lead Opinion
The State of New Jersey and the United States identified Carpenter Technology Corporation (Carpenter), a corporation with its principal place of business in Pennsylvania, as a potentially responsible party (PRP) for environmental contamination at four sites in New Jersey. In response, Carpenter commenced a declaratory judgment action in which it sought a declaration of coverage for the claims under multiple insurance policies issued by defendant insurance companies. Three of Carpenter’s insurers became insolvent and, as a result, the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) and the Pennsylvania Property and Casualty Insurance Guaranty Association (PPCIGA) (formerly known as the Pennsylvania Insurance Guaranty Association (PIGA)) were added as defendants.
PPCIGA is the primarily-liable guaranty association because any entity that may recover from more than one insurance guaranty association shall seek recovery first from the association of the residence of the insured. N.J.S.A 17:30A-12a. The issue in this appeal is the amount of credit to which NJPLIGA is entitled because of PPCIGA’s primary liability. The trial court concluded that NJPLIGA is entitled to a credit per “covered claim” of $299,900, which represents the maximum statutory amount PPCI-GA could tender Carpenter under Pennsylvania law. The Appellate Division rejected that conclusion, holding that NJPLIGA is entitled only to a credit for the amount PPCIGA actually paid Carpenter in settlement of each covered claim. We conclude that the Appellate Division’s holding contravenes the Legislature’s intent in creating New Jersey’s insurance guaranty association. We therefore reverse.
I
In 1974, our Legislature enacted the New Jersey Property-Liability Insurance Guaranty Association Act, N.J.S.A. 17:30A-1 to -20(Aet). The Act requires that all insurers in New Jersey, with limited exceptions, join NJPLIGA in order to transact business. Railroad Roofing & Bldg. Supply Co. v. Financial Fire & Cas. Co., 85 N.J. 384, 389-90,
In 1994, the New Jersey Department of Environmental Protection (NJDEP) and the United States Environmental Protection Agency (EPA) identified Carpenter,
Carpenter maintained primary umbrella and excess comprehensive general liability insurance to cover liabilities resulting from its manufacturing operations. Under the terms of the policies, each insurer agreed to defend and indemnify Carpenter for all liabilities to third parties. The policies covered claims brought by state and federal agencies for environmental damage that Carpenter caused by discharging waste materials and by-products into the environment.
Like NJPLIGA, PPCIGA is a property-liability insurance guaranty association created by Pennsylvania statute to provide limited relief to policyholders and claimants in the event of insurance company insolvencies. Under both the New Jersey and Pennsylvania statutory schemes, if a potential claimant can make a claim against either guaranty association, the claimant must seek recovery first from the guaranty association of the state in which it resides. N.J.S.A. 17:30A-12; 40 Pa. Stat. Ann. § 1701.503. NJPLIGA’s maximum statutory limit per “covered claim” is $300,000. N.J.S.A. 17:30A-8. PPCIGA’s maximum statutory limit per “covered claim” is $299,900. 40 Pa. Stat. Ann. § 1701.203.
In 1993, Carpenter filed a complaint seeking declaratory relief requiring its insurers to defend Carpenter in any litigation and to indemnify Carpenter for all past, present or future losses and expenses in accordance with the liability coverage for environmental clean-up and remediation of the four New Jersey sites. As discussed, at the time Carpenter filed suit, three of Carpenter’s insurers were insolvent. Accordingly, Carpenter sought statutory benefits from PPCIGA and NJPLIGA pursuant to 40 Penn. Stat. Ann. § 991.1801 to 991.1820 and N.J.S.A. 17:30A-1 to -20 respectively.
The trial court granted partial summary judgment to NJPLIGA and determined that PPCIGA was the primary payor in respect of the four New Jersey sites. The court noted that because Carpenter’s corporate residence was in Pennsylvania, Carpenter was not a New Jersey policyholder. The court also found that the premiums
The trial court also determined that NJPLIGA’s maximum obligation to Carpenter in respect of the New Jersey sites was equal to its maximum statutory limit of $300,000 per “covered claim.” Further, the court determined that the $300,000 limit should be reduced by a credit attributable to PPCIGA’s payment to Carpenter under N.J.S.A 17:30A-12a, but did not determine the amount of the reduction. The trial court calculated Carpenter’s past damages attributable to the New Jersey sites to be $20,289,864.
The parties engaged in settlement negotiations. NJPLIGA participated in but later withdrew from those negotiations. In 1997, Carpenter settled with PPCIGA. NJPLIGA subsequently moved for summary judgment seeking an order permitting it to set off the maximum statutory claim payable by PPCIGA against its liability to Carpenter on each “covered claim.” The trial court granted the motion and ruled that NJPLIGA was entitled to a credit for each “covered claim” equal to PPCIGA’s maximum statutory limit ($299,900). The court held that NJPLIGA’s maximum “per covered claim” obligation to Carpenter was $300,000, less a credit for PPCIGA’s $299,900 statutory limit, that is, $100 per claim. Subsequently, the trial court held that Carpenter was entitled to relief on sixty-five “covered claims.” Consequently, the trial court entered judgment in favor of Carpenter against NJPLIGA in the amount of $6,500.
The Appellate Division affirmed in part and reversed in part. Carpenter Tech. Corp. v. Admiral Ins. Co., 335 N.J.Super. 510, 517,
We granted certification, 167 N.J. 633,
II
The narrow issue in this appeal is whether Section 12a of the Act entitles NJPLIGA to a credit equal to the statutory maximum payable by PPCIGA or merely to a credit for the amount Carpenter actually recovered from PPCIGA.
A
N.J.S.A. 17:30A-12, Priority of claim of associations in other states, provides:
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 event except that if it is a first party claim for damage to property with a permanent location, he [or she] shall seek recovery 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 isdenied 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 [or her] right under that other policy. An amount payable on a covered claim under P.L.1974, c. 17 (C. 17.-30A-1 et seq.) shall be reduced by the amount of recovery under any such insurance policy.
[ (Emphasis added).]
As a general rule, “[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.” Franklin Tower One v. N.M., 157 N.J. 602, 613,
A simple reading of Section 12a demonstrates that its meaning is not plain. The first sentence states that a claimant “shall seek recovery first from the association of the place of residence of the insured.” N.J.S.A. 17:30A-12a. As a matter of plain language, as well as common sense, “recovery” implies all available recovery. The next sentence states recovery in New Jersey shall be reduced by “the amount of recovery from any other insurance guaranty association or its equivalent.” Ibid. That sentence blurs, but does not alter, the meaning of the first sentence, given what we perceive to be the Legislature’s intent and this State’s public policy, both discussed more fully below.
Stated differently, the statute read as a whole, particularly the initial sentence of Section 12a, establishes a principle of primary liability whereby the guaranty association located in the state of the insured’s corporate residence is primarily liable. Residence is the standard by which the statute determines the priority of liability. The language “amount of recovery from” is ambiguous in that context. We are persuaded therefore that “varying interpretations
The Supreme Court of Nevada, construing similar language in the Nevada guaranty association act, observed that the term “shall be reduced by the amount of recovery” is “neither a model of clarity nor an exemplar of the draftsman’s craft.” Cimini v. Nevada Ins. Guar. Ass’n, 112 Nev. 442,
Because different interpretations of the statute are arguable, we are obligated to look beyond its language, to discover the “spirit of the law.” Storch v. Sauerhoff, 334 N.J.Super. 226, 229,
B
Mindful of our duty to discern the legislative intent, we examine the Act’s goals. The Act was created to “avoid financial loss to claimants or policyholders because of the insolvency of insurance companies.” See Senate Bill Statement, S. 1004, c. 17 (April 11, 1974). Thus, the Act’s function is twofold: to avoid “excessive delay,” and to avoid “financial loss to claimants or policyholders.” N.J.S.A. 17:30A-2; New Jersey Prop.-Liab. Ins. Guar. Ass’n v. Sheeran, 137 N.J.Super. 345, 351,
The principle of primary liability as set forth in Section 12a tracks the language of the Post-Assessment Property and Liability Insurance Guaranty Association Model Act (Model Act) drafted by the National Association of Insurance Commissioners (NAIC). A significant majority of states, including New Jersey and Pennsylvania, has passed some version of the Model Act containing the provision at issue in the present case. NAIC’s purpose in passing the Model Act was to “minimize financial loss to claimants or policyholders because of the insolvency of an insurer.” Post-Assessment Prop. & Liab. Ins. Guar. Assoc. Model Act, reprinted in NAIC Model Laws, Regulations and Guidelines, at 540-1, § 2 (1995).
In passing New Jersey’s Act, the Legislature sought to bring our State within a nationwide network of individual insurance guaranty association statutes designed to spread equitably the risk of insurer insolvency among the states. See generally American Employers’ Insurance Co. v. Elf Atochem North America, Inc., 157 N.J. 580, 598,
This Court has recognized the legislative intent that conservation of NJPLIGA’s resources is necessary to achieve the Act’s stated goals. In American Employers’, supra, at issue was whether the defendant was a New Jersey resident at the time of the insured event. 157 N.J. at 590,
We now consider caselaw relevant to our analysis of Section 12a.
C
UMC/Stamford, Inc. v. Allianz Underwriters Insurance Co., 276 N.J.Super. 52,
[A]n excess carrier is entitled to a credit, not from the primary carrier’s settlement, but from the amount allocable to the primary under its policies. In other words, the excess carrier is entitled to a credit for the full amount of the primary carrier’s coverage before it is required to pay any cleanup expense.
[Id. at 69,647 A.2d 182 (emphasis added).]
The Third Circuit cited UMC with approval in Chemical Leaman Tank Lines, Inc. v. Aetna Casualty & Surety Company,
[T]he UMC approach tracks ‘a widely followed corollary to the doctrine that a settlement with a primary insurer exhausts the primary coverage.’ Under this approach, the insured forfeits any right to coverage of any dollar difference between the settlement amount and the primary insurer’s policy limits. The excess insurer cannot be made liable for any part of this difference because the excess insurer never agreed to pay for losses below a specified floor____ This rule prevents the insured from securing a double recovery.
[Id. at 227.]
See also Koppers Co. v. Aetna Cas. & Sur. Co.,
D
A few jurisdictions have decided questions pertaining to insurance guaranty associations. Although the facts in those cases are not analogous to the facts in this appeal, and therefore provide only limited guidance, they are useful in our analysis. Specifically, those cases demonstrate how the national network of insurance
For example, in Mosier v. Oklahoma Property and Casualty Insurance Guaranty Ass’n,
The Oklahoma Court of Appeals determined that OPCIGA was entitled to offset its $150,000 obligation by TGA’s statutory limit, $100,000, rather than the amount actually received by the plaintiff from TGA, $75,000. Id. at 879. Thus, the court “held that this amount [$150,000] must be reduced by the amount ... [TGA] could have been required to pay.” Ibid. Because the TGA maximum was $100,000, OPCIGA’s obligation “was reduced from $150,000 to $50,000.” Ibid. OPCIGA sought review by the Oklahoma Supreme Court. Plaintiff did not and therefore the court did not review the appellate court’s holding in respect of whether OPCIGA was entitled to offset its obligation to the plaintiff by TGA’s statutory limit or the amount actually recovered by the plaintiff.
In Palmer v. Montana Insurance Guaranty Ass’n, 239 Mont. 78,
A constant in all of the above out-of-state cases is that the secondarily-liable guaranty association was credited the maximum amount recoverable from the primarily-liable guaranty association. We thus consider those cases to support the system of primary liability intended by the national network of guaranty associations.
We hold that NJPLIGA is entitled to a credit equal to the statutory maximum amount payable by PPCIGA. Our decision comports with the Legislature’s intent to enroll New Jersey in a national network of insurance guaranty associations designed to spread equitably the risk of insurer insolvency; our public policy favoring the protection of New Jersey insurance policy holders that fund NJPLIGA; the need to prevent claimants from bypassing the system of primary liability codified in the Act; and the duty to conserve NJPLIGA’s resources.
A
We find persuasive NJPLIGA’s argument that “[i]f a foreign corporation guaranty association and claimant can unilaterally decide the payment, if any, to be made by the primarily obligated guaranty association, then the mandate to seek recovery first from the state of residence is subject to quick deals and cheap settlements, and is truly inoperable.” (Emphasis added). The “plain meaning,” if applied literally, can lead to absurd results. “[W]here a literal interpretation would create a manifestly absurd result, contrary to public policy, the spirit of the law should control.” Turner v. First Union Nat. Bank, 162 N.J. 75, 84,
Although we do not attribute bad faith to PPCIGA or Carpenter, the process and the result give pause. By settling with Carpenter, PPCIGA at some level agreed that it had an obligation to pay Carpenter for its covered claims. Accordingly, on this record, any conflict concerning the priority of obligation between two liable guaranty associations must resolve itself in favor of the rule of primary liability expressed in Section 12a. To hold otherwise would force NJPLIGA to assume liability beyond that intended by the Legislature.
Although we recognize that in UMC and the other cases cited above, supra at 515-518,
The dissent concludes that because Section 12a does not employ the term “exhaust,” in contrast to Section 12b, which
In its discussion of exhaustion the dissent also asserts that the national network of state insurance guaranty associations establishes only the “order” in which claimants must pursue recovery. We disagree. If the dissent’s view is taken to its logical extreme, it inexorably follows that a claimant, for reasons good or ill, can make its initial claim against the foreign association, settle for a small sum, and then demand payment from NJPLIGA for the bulk of its claim. The claimant thus reverses the order of priority and effectively makes NJPLIGA primarily liable.
We recognize that the Pennsylvania maximum ($299,900) approximates the New Jersey cap ($300,000). One may therefore contend that our result frees NJPLIGA from virtually any liability — only $6,500, as determined by the trial court. But that result is fortuitous, attributable only to the fact that the statutory maximum in each state is nearly identical.
The Appellate Division and the dissent consider the out-of-state guaranty association eases unpersuasive. See 335 N.J.Super. at 514-15,
Finally, Carpenter’s and the dissent’s interpretation of Section 12a may expose NJPLIGA to substantially increased liability that will be borne ultimately by New Jersey’s insureds. As amicus notes, “[ijmposing that burden on New Jersey shifts the obligations from one state’s guaranty association to another at the whim of the insured, and effectively undermines the ... national network of guaranty associations.” We do not believe the Legislature intended the Act to require New Jersey residents and corporations to finance the cleanup of environmental sites polluted by foreign corporations that can recover from another state’s guaranty association. Moreover, adopting Carpenter’s interpretation would encourage out-of-state insureds to seek recovery from NJPLIGA when such recovery is more properly the responsibility of another state’s insurance guaranty association. In that regard, we accept NJPLIGA’s representation that
NJPLIGA is involved in numerous declaratory judgment actions involving foreign corporations who have elected to bring their insurance coverage lawsuits in New Jersey since it is perceived to be a policyholder friendly forum. As a result!,] NJPLIGA is repeatedly joined in litigation asserting that it bears liability to pay statutory benefits for foreign corporations, which benefits are properly payable by a primarily liable foreign insurance guaranty association.
The Act was not designed to be a panacea for all problems caused by insurance company insolvencies or to require NJPLIGA to assume all the obligations of an insolvent insurer. We agree with the Supreme Court of Montana’s observation that the legislation creating guaranty associations “was not adopted as a form of reinsurance for every insurer who becomes insolvent.” Palmer, supra,
B
Carpenter asserted at oral argument that its interpretation of the statute is consistent with this State’s strong public policy favoring the settlement of litigation. Although we support that policy, we cannot allow a settlement to undercut the clear legislative intent behind the Act. Carpenter was aware that NJPLIGA believed that it was entitled to a credit equal to the maximum amount payable by PPCIGA. Carpenter settled with PPCIGA and then turned to NJPLIGA to make up the difference. Carpenter assumed the risk inherent in such a settlement. In sum, nothing in the Act suggests that the Legislature intended NJPLI-GA to assume liabilities resulting from environmental or any other damage caused by an out-of-state corporation when those liabilities are the primary obligation of another guaranty association that has received the benefit of assessments paid by the original insolvent insurers.
Faced as we are with both parties’ invocations of public policy, we conclude that this State’s public policy supports NJPLIGA’s position. Further compounding the problem, “large carrier insolvencies are becoming more and more frequent” and affect a wide range of insurers, including those providing environmental insurance.
The dissent’s suggestion that our disposition limits the amount of monies available to remediate in-state environmental hazards does not consider the unique facts of this appeal. Although we do not know why the settlement with Pennsylvania occurred, the fact is that Carpenter settled for less than was available under Pennsylvania law. Further, the record does not inform us whether other resources are available, i.e., federal and/or state funding sources for the remediation of polluted sites. See Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. § 9601 to -9675 (West 2001); Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.25 (2001).
IV
Carpenter may not recover from NJPLIGA the difference between the amount Carpenter recovered from PPCIGA and NJPLIGA’s maximum recovery of $300,000 per covered claim. After settling with the primarily-liable insurance guaranty association, Carpenter now insists that NJPLIGA make up the difference, a result that could expose NJPLIGA to millions of dollars in potential liability. We believe that our Legislature did not intend such a result.
Based on our interpretation of N.J.S.A. 17:30A 12a, and on this record, we conclude that NJPLIGA is entitled to a credit equal to the statutory maximum amount payable by PPCIGA.
Reversed.
Notes
In 1994, the Pennsylvania Legislature repealed its statutory scheme, 40 Penn. Stat. Ann. § 1701.101 to 1701.605, and replaced it with 40 Penn. Stat. Ann. § 991.1801 to 991.1820. For ease of use, we will refer to the current version of the Pennsylvania Act.
We note that the current Pennsylvania statute provides a maximum recovery of $300,000. 40 Pa. Stat Ann. § 991.1803(b)( 1 )(i)(B).
Dissenting Opinion
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,
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
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 event 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,
II.
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
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,
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 association 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,
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
Additionally, the Court states that “[a]s a matter of plain language, as well as common sense, ‘recovery’ implies all available recovery.” Ante at 513,
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,
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 of 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
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,
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.,
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,
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 conclusions 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,
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.