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Rutgers Casualty Insurance Company v. New Jersey Property-Liability Insurance Guaranty Association

August 29, 2012

RUTGERS CASUALTY INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
NEW JERSEY PROPERTY-LIABILITY INSURANCE GUARANTY ASSOCIATION, DEFENDANT-RESPONDENT, AND EAGLE INSURANCE COMPANY IN LIQUIDATION AND/OR NEWARK INSURANCE COMPANY IN LIQUIDATION AND/OR GSA INSURANCE COMPANY IN LIQUIDATION AND/OR NATIONAL CONSUMER INSURANCE COMPANY IN LIQUIDATION,*FN1 DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2161-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 28, 2011

Before Judges Axelrad, Sapp-Peterson and Ostrer.

In this appeal, plaintiff, Rutgers Casualty Insurance Company (RCIC), seeks reversal of the two trial court orders denying its motion for summary judgment in which it sought a declaration that it was entitled to collect, from New Jersey Property Liability Insurance Guaranty Association (PLIGA),*fn2 its pro rata share of remediation costs RCIC incurred following the removal of two underground tanks from residential properties. The motion judge found that RCIC was subject to the 2004 amendment to the New Jersey Property-Liability Guaranty Insurance Association Act (the Act), N.J.S.A. 17:30A-1 to -20, requiring claimants to obtain the maximum limit from other co-liable solvent insurers before seeking compensation from PLIGA. The motion judge thereafter granted PLIGA's cross-motion for summary judgment. We affirm.

The two residential properties, the Fredericksen property and the VanBlarcom property, each had underground storage tanks used to store home heating oil. Both properties were covered under a $300,000 homeowners' insurance policy issued by RCIC. Both properties were also previously insured by Newark Insurance Company (Newark). When the underground tanks were removed, it was discovered that both tanks had been leaking not only during the time period the properties were covered by the RCIC policy, but also during a period of time when the properties were insured by Newark. Plaintiff paid $59,369.53 to remediate the Fredericksen property and incurred $107,564.50 in remediation costs in connection with the VanBlarcom property. RCIC notified Newark that it believed the losses from the claims should be divided pro rata based upon its investigations, from which it determined the discharges were also occurring during the period of Newark's coverage of the properties.

Newark was declared insolvent before it resolved plaintiff's contribution claims against it. RCIC then pursued its claims against Newark with PLIGA, which became authorized to administer claims filed against Newark. PLIGA denied the claims on the basis that under the Act, it was under no duty to pay subrogation claims. RCIC thereafter commenced its action in Superior Court, seeking to recover a judgment against PLIGA for a pro rata share of the cost of the tank removals and soil and ground water remediation.

RCIC moved for summary judgment and PLIGA cross-moved for summary judgment. RCIC urged that under the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10--23.11 to --23.24 (Spill Act), PLIGA was obligated to pay its pro rata share of remediation costs incurred. RCIC additionally argued that the "new definition of exhaustion" under the Act's 2004 amendment could not be used to defeat PLIGA's obligation under the Spill Act to pay its pro rata share.

PLIGA, in its cross-motion, argued that the issue before the court was not "about contribution among joint tortfeasors or contribution among dischargers who sent waste to a landfill." PLIGA also noted that RCIC's settlement of the respective claims was well within the limits of each policy. Consequently, PLIGA urged that the issue before the court was one of statutory construction, namely, "whether or not there is a covered claim under Section 5 of the [Act]," that is, "allocation of insurance coverage, not contribution amongst people who contributed to an individual damage." Finally, in addressing the 2004 amendment, PLIGA argued that the intent of the legislation was to make PLIGA the "payer of last resort."

The motion judge, in an oral opinion rendered after argument, found the 2004 amendment applied and "the PLIGA policy does not come into play[.]" Therefore, the judge denied RCIC's motion and granted PLIGA's cross-motion. The present appeal followed.

On appeal, RCIC raises the following points for our consideration:

POINT I

RCIC HAS ASSERTED A 'COVERED CLAIM' PURSUANT TO THE ACT, ...


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