Before Judges Coburn, Axelrad and Bilder.
The opinion of the court was delivered by: Per Curiam
On appeal from Superior Court of New Jersey, Law Division, Camden County.
This appeal arises from a declaratory judgment action in which plaintiff Carpenter Technology Corporation sought a declaration of coverage under multiple comprehensive general liability insurance polices issued by various defendants for claims brought against Carpenter by New Jersey and the federal government for alleged environmental contamination. Three of the insurers were insolvent with the result that the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) and the Pennsylvania Insurance Guaranty Association (PIGA) became defendants.
Carpenter has settled with the parties except NJPLIGA, and even with respect to NJPLIGA most of the issues have been resolved without appeal. There remain only two contested issues.
First, the amount of credit NJPLIGA is entitled to receive as a result of plaintiff's claim against PIGA. It is uncontested that PIGA is the primarily liable guaranty association. Under the Pennsylvania law creating PIGA, its statutory limit is $299,900 per claim. Plaintiff settled its claims against PIGA for lesser sums. The contested issue is the amount of credit NJPLIGA is entitled to with respect to PIGA primary liability. The trial judge, in order of October 23, 1998 and August 19, 1999, declared that NJPLIGA is entitled to a credit per "covered claim" in an amount equal to PIGA's maximum statutory limits, i.e. $299,900, and that consequently NJPLIGA's maximum obligation to plaintiff is $100 per "covered claim", ie. NJPLIGA's maximum statutory limit of $300,000 less PIGA's maximum statutory limit of $299,900. Plaintiff appeals contending that NJPLIGA is not entitled to a credit for more than plaintiff received from PIGA in settlement.
Second, the number of "covered claims" for which NJPLIGA is liable to plaintiff. In the order of August 19, 1999, the trial judge found the total number of "covered claims" to be 65 and entered a judgment in favor of plaintiff against NJPLIGA in the sum of $6500. NJPLIGA cross-appeals contending that there are only 11 "covered claims". The credit to which NJPLIGA is entitled.
The real question here is the proper interpretation of N.J.S.A. 17:30A-12a which in pertinent part reads as follows:
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. Any recovery under this act shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. (emphasis added)
Plaintiff contends the plain language of the statute limits NJPLIGA's credit to the settlement amounts it received from PIGA.(*fn1)
Superficially it would seem to be so. However NJPLIGA contends that such an interpretation would do violence to the purpose of the legislation which created New Jersey's guaranty association.
Although the interpretation of this statute is novel to us, NJPLIGA notes that this offset provision is identical to that contained in the model act designed by the National Association of Insurance Commissioners and seeks to rely on the interpretations of other state courts to support its position.
It points to Palmer v. Montana Ins. Guar. Ass'n, 779 P.2d 61 (Mont. 1989) as the oft-cited leading case. Its reliance on Palmer is misplaced.
In Palmer the insured, Palmer, had received the statutory maximum of $300,000 from the primary guaranty association (Idaho Insurance Guaranty Fund) and was seeking in addition the Montana guaranty associations' $300,000 statutory maximum. The lower court had interpreted the Idaho offset as applying to the insured's total claim (which exceeded the $1,000,000 coverage afforded by the insolvent insurer), thus permitting the stacking of the coverage limits of the two guaranty associations. In addition to the $300,000 ...