William P. Zuger appealed from a summary judgment dismissing his claim against the North Dakota Insurance Guaranty Association (Guaranty Association) and Griggs County Hospital and Nursing Home, McKenzie County Memorial Hospital, and St. Aloisius Medical Center (herein collectively referred to as the defendant hospitals). We affirm.
The defendant hospitals carried malpractice insurance issued by Great Global Assurance Company (Great Global). Under these policies, Great Global was required to defend malpractice actions brought against the defendant hospitals. North Star Casualty Services, Inc. (North Star) was a managing general agent for Great Global, involved in marketing its malpractice insurance policies and providing administrative services. In 1985, North Star, acting on behalf of Great Global, retained Zuger to represent the defendant hospitals in medical malpractice actions that had been brought against them.
On February 7, 1986, Great Global was declared insolvent by the Arizona courts. The Guaranty Association then assumed responsibility for the defense of the pending cases against the defendant hospitals, and it retained Zuger to continue his services in providing that defense.
Zuger filed a claim with the Guaranty Association for attorney fees and litigation expenses in defending the defendant hospitals. The Guaranty Association paid Zu-ger’s claim for post-insolvency attorney fees and expenses, but denied his claim for attorney fees and litigation expenses incurred prior to Great Global’s insolvency. Zuger sued the Guaranty Association and the defendant hospitals to collect his pre-insolvency attorney fees and expenses. The parties filed motions for summary judgment. The district court concluded that, as a matter of law, the Guaranty Association and the defendant hospitals were entitled to dismissal of Zuger’s claim, on its merits, and it granted summary judgment dismissing the action. Zuger appealed.
The Guaranty Association is a non-profit unincorporated legal entity created under Chapter 26.1-42, N.D.C.C. Its purpose is to protect the public by providing financial resources if an insurer becomes insolvent and there is a claim for which the insolvent insurer was obligated to provide coverage.
North Dakota Insurance Guaranty Association v. Agway,
“ ‘Covered claim’ means an unpaid claim, including one for unearned premiums, within the coverage of an insurance policy to which this chapter applies issued by an insurer if the insurer becomes insolvent after July 1, 1971....”
So, the Guaranty Association’s statutory responsibility is to assume unpaid claims “within the coverage of an insurance policy” to which Chapter 26.1-42, N.D.C.C., applies.
The parties agree that the issue on appeal is a legal issue, not a factual one, whether Zuger’s claim for pre-insolvency attorney fees and litigation expenses is a covered claim, under Chapter 26.1-42, N.D.C.C. Zuger asserts that the statutory definition of covered claim unambiguously encompasses his claim. We disagree.
Statutory interpretation is a question of law fully reviewable by this court.
*137
Holtz v. North Dakota Workers Compensation Bureau,
Chapter 26.1-42, N.D.C.C., was adopted from the Model Insurance Guaranty Association Bill drafted by the National Association of Insurance Commissioners.
See Beyer’s Cement v. North Dakota Insurance Guaranty Association,
The Supreme Court of Michigan explains the policy underlying this interpretation of a covered claim under these statutes, in
Metry, supra,
“We conclude that the Court of Appeals correctly, found that attorney fees for services rendered prior to insolvency are not covered claims. The act is designed to protect from potentially catastrophic loss persons who have a right to rely on the existence of an insurance policy — the insureds and persons with claims against the insureds. Persons in such categories are relatively helpless with regard to the insolvency of an insurer. They are not likely to be in a position to evaluate the financial stability of the insurance company and they have no control over the time at which their claims arise. Other creditors of the insurance companies, such as attorneys, have an ongoing relationship with the company and can presumably judge its financial position. Further, they are in a position to protect themselves from the serious consequences of an insurance company’s insolvency by negotiating appropriate provisions in their contracts regarding the frequency of billing and payment.
The claims of the plaintiff law firms arise not out of the insurance policies, but rather out of their contracts for legal services entered into with the insurance companies. Accordingly we conclude that fees for pre-insolvency legal services are not ‘covered claims’.”
Zuger concedes that every jurisdiction deciding this issue has concluded that a claim for pre-insolvency attorney fees is not a covered claim. Zuger argues, however, that these decisions are simply not well reasoned. We disagree.
The primary objective in interpreting a statute is to ascertain the intent of the Legislature.
Resolution Trust v.
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Dickinson Econo-Storage,
The interpretation of the term “covered claim” in the model act by these sister jurisdictions imputes a very reasonable and plausible legislative intent that only the claims of insureds and innocent victims of incidents for which insurance coverage was purchased are entitled to recover against the statutorily created fund. Those whose claims arise from separate contracts or dealings with an insolvent insurer are merely creditors whose redress lies elsewhere. We agree with this interpretation, and we hold that Zuger’s claim for pre-insolvency attorney fees and litigation expenses is not a covered claim under Chapter 26.1-42, N.D.C.C. 1
Zuger also seeks to recover his pre-insol-vency attorney fees and litigation expenses against the Guaranty Association and the defendant hospitals on a theory of unjust enrichment.
Unjust enrichment is an equitable doctrine, applied in the absence of an express or implied contract, to prevent a person from being unjustly enriched at the expense of another.
Home Insurance of Dickinson v. Speldrich,
Zuger asserts that the Guaranty Association has benefited from his legal services, because it retained him to continue representing the defendant hospitals after Great Global was declared insolvent, and, therefore, benefited from his pre-insolven-cy legal work. Zuger relies on the general rule that one who performs services for another without an express agreement as to compensation is entitled to the reasonable value of the services provided.
See Matter of the Estate of Raketti,
The essential element in recovering under a theory of unjust enrichment is the receipt of a benefit by the defendant from the plaintiff which would be inequitable to retain without paying for its value.
Gate City Savings and Loan Association v. International Business Machines,
Under very similar circumstances, the Supreme Court of Alaska construed a similar statute in
White v. Alaska Insurance Guaranty Association,
“... the equitable remedy of restitution will be denied where the party upon whom the benefit is conferred is protected by countervailing public policy; restitution will not be permitted to defeat a protection which a legislature intends to afford. When insolvency was declared, the Association succeeded to certain of the obligations of the insurance companies by operation of law. The purpose of the legislation providing for this succession is a limited one: to protect the policyholders and persons making claims against them from absorbing losses. It would be inconsistent with this limited purpose to saddle the Association with any loss suffered by the [appellant attorneys].”
We hold that Zuger does not have a claim for services against the Guaranty Association under a theory of unjust enrichment.
Zuger also asserts that the defendant hospitals have been unjustly enriched and should pay the reasonable value of his pre-insolvency fees and litigation expenses, because they directly benefited from his defense of the malpractice claims against them. We disagree that the defendant hospitals have been unjustly enriched under these circumstances. Zuger’s contract for providing services was with Great Global, and the defendant hospitals have no contractual obligation to pay for the legal services. They purchased insurance from Great Global to have those legal services provided and paid for by Great Global. Zu-ger was aware of that when he contracted to provide the services.
A third party who derives benefit from an agreement between others has not necessarily been unjustly enriched.
Home Insurance of Dickinson v. Speldrich,
We agree with the Supreme Court of Nebraska in
Doyle v. Union Insurance Co.,
The judgment is affirmed.
Notes
. This is not to say that the Legislature might not in the future, and in simple fairness probably should, expand the meaning of a covered claim to include pre-insolvency attorney fees and expenses when it is shown that they arise in connection with carrying out the terms of an insurance policy. However, such an amendment would destroy the uniformity which is basic to uniform acts.