Bills v. Arizona Property and Casualty Insurance Guaranty Fund2/2/1999
and purpose." Id. at 122, 888 P.2d at 780. Finally, we will affirm the trial court's ruling if it is correct on any ground. Glaze v. Marcus, 151 Ariz. 538, 729 P.2d 342 (App. 1986).
I. Statutory Issues
In 1970, the Arizona Legislature enacted a series of statutes that, inter alia, established the Fund's predecessor ("the association"), designated the members of its board, and set forth the association's statutory powers and duties. 1970 Ariz. Sess. Laws, ch. 78, § 2 (enacting former A.R.S. §§ 20-662(A), 20-663, and 20-664). Those laws were repealed and replaced with a new set of statutes, A.R.S. §§ 20-661 through 20-680 ("the statutes"), in 1977. 1977 Ariz. Sess. Laws, ch. 130, §§ 1 and 2. The Fund was created "to assume the liability of insolvent insurers." Betancourt v. Arizona Property & Cas. Ins. Fund, 170 Ariz. 296, 298, 823 P.2d 1304, 1306 (App. 1991). Its essential purpose is "to provide for the payment of claims under certain insurance policies to avoid excess delay in payment and financial loss to claimants or policyholders because of the insolvency of an insurer." Wells Fargo, 165 Ariz. at 568, 799 P.2d at 909.
" he Fund is obligated, within limits, to pay all 'covered' claims of insolvent insurers." A.H. v. Arizona Property & Cas. Ins. Guar. Fund, 190 Ariz. 526, 527, 950 P.2d 1147, 1148 (1997), quoting A.R.S. §§ 20-667 and 20-661. "A 'covered claim' is an unpaid claim arising 'out of' and 'within the coverage' of a policy written by an insolvent insurer to which the statutes apply." A.H., 190 Ariz. at 527, 950 P.2d at 1148, quoting § 20-661(3). The Fund's obligation on covered claims is further limited to a maximum amount of "less than" $100,000. § 20-667(B).
In describing the nature of the Fund and its relationship with the insured and the insolvent insurer, our supreme court recently stated:
"Sections 20-661 to 20-680 obligate the Fund to step into the shoes of insolvent insurers and adjust, compromise, settle, and pay covered claims that arise under insurance contracts. It may also deny claims, and defend and indemnify as necessary. See § 20-667(C) ("The fund is deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all the rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent."). As we recognized in [Arizona Property & Casualty Insurance Guaranty Fund v.] Herder, [156 Ariz. 203, 751 P.2d 519 (1988),] however, the rights and obligations of an insolvent insurer and the Fund are not absolutely coextensive but are limited by the statute. 156 Ariz. at 205 n.3, 751 P.2d at 521 n.3 (" he Fund is deemed the insurer to the extent of the Fund's obligations on the covered claims, and not to the extent of the insolvent insurer's."). The Fund is therefore a creature of statute that assumes the contractual obligations and rights of insolvent insurers within the limits of its legislated mandate-in essence, it exists as the result of a limited, statutorily imposed novation. Thus, its relationship with parties insured by insolvent carriers is governed by the insured's contract. Section 12-341.01(A) is clearly applicable to coverage disputes between the insured and the Fund because the Fund's obligation is determined under the underlying insurance contract." A.H., 190 Ariz. at 529-30, 950 P.2d at 1150-51 (holding that "a dispute concerning policy coverage resolved by interpretation of § 20-673(C) is one that arises from contract" for purposes of awarding attorneys' fees under A.R.S. § 12-341.01). See also Clark Equip. Co. v. Arizona Property & Cas. Ins. Guar. Fund, 189 Ariz. 433, 445, 943 P.2d 793, 805 (App. 1997) ("Even though the Fund was create
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