Cross-motions for summary judgment again call for an interpretation of the term "covered claim" as that term is used in the New Jersey Property-Liability Insurance Guaranty Association Act, N.J.S.A. 17:30A-1 et seq. (hereinafter Guaranty Association Act). The issue is stated in this question: Is a corporation of the State of Delaware, authorized to do business in New Jersey and maintaining its principal and executive offices here, deemed to be a "resident," as that term is used in the definition of "claimant or insured" in the Guaranty Association Act?
Plaintiff Eastern Seaboard Pile Driving Corporation (Eastern), is a corporation organized under the laws of the State of Delaware with its principal place of business in Hoboken, New Jersey. Eastern has been authorized to conduct business in New Jersey since July 20, 1972 and, in addition to its principal office, maintains an executive office in Ridgefield Park, New Jersey. Eastern is the owner and operator of a steel dredge, the "Beverly M", which on March 17, 1973 allegedly sustained certain damage within the coverage of a marine insurance policy. The insurance policy had been issued to Eastern by several carriers, including Interstate Insurance Company, which was an underwriter of 10% of the risk covered by the policy.
On or about June 11, 1976 all of the insurance companies, with the exception of Interstate, approved a settlement for all of the claims for damage to the "Beverly M" on a compromised basis for the sum of $379,000. Subsequent to January 1, 1974 Interstate was determined to be insolvent by a court of competent jurisdiction. Plaintiff's claim was incurred prior to or 30 days after the determination of insolvency. Plaintiff filed a claim with the Association for the amount of its claim against Interstate. On or about September 13, 1976 the Association advised plaintiff that its claim was not a "covered claim," as that term is used in
the Guaranty Association Act, N.J.S.A. 17:30A-5(d). The rejection is correlative to the contention of the Association that Eastern is not "a resident of this State" within the intendment of the Guaranty Association Act.
Although affidavits and memoranda submitted on behalf of both parties focus, in part, upon the question of whether the steel dredge "Beverly M" was "permanently located in this State," counsel stipulated that the cross-motions are confined to the statutory prerequisite that the claimant or insured must be a resident of New Jersey at the time of the insured event.
Counsel for the parties agree that a reading of § 12 of the Guaranty Association Act supports the conclusion that a party claiming under the act has but one residence. Section 12 reads, in pertinent part, as follows:
17:30A-12. Priority of claim of associations in other states.
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 recovery first from the association of the location of the property. * * *
Counsel for the Association argues that a corporation is a resident only of the state of its incorporation, as that concept is used in the Guaranty Association Act. Counsel for the claimant replies that plaintiff's one place of residence is New Jersey. Eastern asserts that the character and extent of its activities in New Jersey "make it appropriate" to consider it a resident of this State. Eastern points to the maintenance of both principal and executive offices here, and to the fact that it has done business here continuously since the authorization issued July 20, 1972. Notable emphasis is also placed upon the fact that Eastern has filed New Jersey corporation business tax returns for the years 1972 through 1976, which reflect that 100% of the net worth of the corporation
has been allocated to its situs in New Jersey. Additionally, Eastern asserts that it does not now nor did it ever maintain a place of business in Delaware.
The New Jersey Property-Liability Insurance Guaranty Association Act, N.J.S.A. 17:30A-1 et seq. , is not accompanied with a legislative history. In the absence of legislative reports or debates the court is obliged to analyze the language of the statute in the context of the historical circumstances surrounding its enactment. See Salz v. State House Commission , 18 N.J. 106 (1955); Matawan Borough v. Monmouth Cty. Tax Bd. , 51 N.J. 291, 299 (1968). The reason of the law -- that is, the motive which led to the making of it -- is one of the most certain means of establishing the true sense of its terms. See Caputo v. The Best Foods , 17 N.J. 259, 264 (1955). The passage of the Guaranty Association Act (L. 1974, c. 17, § 1, eff. April 11, 1974), was the Legislature's response to the judicial declaration of insolvency of several property-liability ...