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Carpenter Technology Corp. v. Admiral Insurance Co.6/17/2002
elsey, 135 N.J. 500, 516 (1994). See also N.J.S.A. 1:1-1 (stating that courts construe statutory words and phrases according to their generally accepted meaning unless that meaning is inconsistent with legislative intent). Accordingly, a court's "ultimate goal in construing a statute is to ensure that the Legislature's plan is effectuated." Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 144 (1999) (citation omitted); see also Jimenez v. Baglieri, 152 N.J. 337, 351 (1998) ("The inquiry in the ultimate analysis is to determine the true intention of the law[.]") Moreover, " egislative intent may also be inferred on grounds of policy or reasonableness." McCann v. Clerk of the City of Jersey City, 338 N.J. Super. 509, 519 (App. Div.), aff'd, 167 N.J. 311 (2001) (citation omitted).
A simple reading of Section 12a demonstrates that its meaning is not plain. The first sentence states that a claimant "shall seek recovery first from the association of the place of residence of the insured." N.J.S.A. 17:30A-12a. As a matter of plain language, as well as common sense, "recovery" implies all available recovery. The next sentence states recovery in New Jersey shall be reduced by "the amount of recovery from any other insurance guaranty association or its equivalent." Ibid. That sentence blurs, but does not alter, the meaning of the first sentence, given what we perceive to be the Legislature's intent and this State's public policy, both discussed more fully below.
Stated differently, the statute read as a whole, particularly the initial sentence of Section 12a, establishes a principle of primary liability whereby the guaranty association located in the state of the insured's corporate residence is primarily liable. Residence is the standard by which the statute determines the priority of liability. The language "amount of recovery from" is ambiguous in that context. We are persuaded therefore that "varying interpretations of the statute are plausible." Sisler, supra, 157 N.J. at 202.
The Supreme Court of Nevada, construing similar language in the Nevada guaranty association act, observed that the term "shall be reduced by the amount of recovery" is "neither a model of clarity nor an exemplar of the draftsman's craft." Cimini v. Nevada Ins. Guar. Ass'n, 915 P.2d 279, 282 (Nev. 1996). The Cimini court quoted the Arizona Supreme Court in Arizona Property & Casualty Insurance Guaranty Fund v. Herder, 751 P.2d 519, 523 (Ariz. 1988), wherein the Arizona court found ambiguous the phrase " ny amount payable on a covered claim shall be reduced by the amount of such recovery under other applicable insurance" in Arizona's insurance guaranty association act. (Emphasis added).
Because different interpretations of the statute are arguable, we are obligated to look beyond its language, to discover the "spirit of the law." Storch v. Sauerhoff, 334 N.J. Super. 226, 229 (Ch. Div. 2000) (citing Ochoa, supra, 314 N.J. Super. at 172).
B.
Mindful of our duty to discern the legislative intent, we examine the Act's goals. The Act was created to "avoid financial loss to claimants or policyholders because of the insolvency of insurance companies." See Senate Bill Statement, S. 1004, c. 17 (April 11, 1974). Thus, the Act's function is twofold: to avoid "excessive delay," and to avoid "financial loss to claimants or policyholders." N.J.S.A. 17:30A-2; New Jersey Prop.-Liab. Ins. Guar. Ass'n v. Sheeran, 137 N.J. Super. 345, 351 (App. Div. 1975). However, no legislative history exists in respect of the language in Section 12a stating that " ny recovery under this act shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent."
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