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Carpenter Technology Corp. v. Admiral Insurance Co.6/17/2002
.S. Public Health Service, U.S. Dep't of Health and Human Servs., Atlanta, GA 1993. TCE is "between a probable and possible human carcinogen." U.S. Environmental Protection Agency, 63 FR 34338 (June 24, 1998).
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. Both PPCIGA and NJPLIGA denied Carpenter's claims for statutory benefits. Carpenter, PPCIGA, and NJPLIGA moved for summary judgment. Carpenter admitted it was a Pennsylvania resident for insurance guaranty association purposes.
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 Carpenter paid to the insolvent insurers were used to calculate the assessments paid to PPCIGA and not NJPLIGA. Accordingly, NJPLIGA's liability to Carpenter, if any, would be secondary. Carpenter does not challenge that determination.
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
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