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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Merrimack
No. 95-812
NEW HAMPSHIRE INSURANCE GUARANTY ASSOCIATION
v.
PITCO FRIALATOR, INC.
January 20, 1998
Orr & Reno, of Concord (R. James Steiner on the brief) and Hutchins, Wheeler & Dittmar, of Boston, Massachusetts (Joseph C. Tanski and Margaret A. Robbins on the brief, and Mr. Tanski orally), for the plaintiff.
Sulloway & Hollis, of Concord (Jeffrey S. Cohen on the brief) and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., of Boston, Massachusetts (Paul D. Wilson and Rosemary M. Allen on the brief, and Mr. Wilson orally), for the defendant.
HORTON, J. The plaintiff, New Hampshire Insurance Guaranty Association (NHIGA), appeals a decision of the Superior Court (Arnold, J.) granting summary judgment to the defendant, Pitco Frialator, Inc. (Pitco), and denying NHIGA's cross-motion for summary judgment. The superior court interpreted the New Hampshire Insurance Guaranty Association Act, see RSA ch. 404-B (1983 & Supp. 1997), as obligating NHIGA to pay Pitco $300,000 as reimbursement for Pitco's payment to third parties in settling a tort action after the insolvency of Pitco's liability insurer. We reverse.
The following facts are undisputed, except as noted. In 1984, William Lorkowski sustained serious injuries during the course of his employment at Lender's Bagel Bakery (Lender's Bagel) in Buffalo, New York. Following the accident, Lorkowski received over $300,000 in benefits from the workers' compensation insurers of Lender's Bagel. Alleging that equipment manufactured by Pitco caused the accident, Lorkowski and his wife commenced an action against Pitco in New York. The Lorkowskis' action sought approximately $15 million in damages, $5 million of which represented the wife's alleged losses. Pitco subsequently commenced a third-party action against Lender's Bagel in order to obtain contribution for any liability established against Pitco in the Lorkowskis' action. See Gonzales v. Armac Industries, Ltd., 611 N.E.2d 261, 264 (N.Y. 1993) (discussing defendant manufacturer's right to seek contribution from plaintiff's employer despite general exclusivity of workers' compensation regime).
At the time of Lorkowski's accident, Pitco had liability insurance through a policy with Ideal Mutual Insurance Company (Ideal). During the pendency of the Lorkowskis' action, however, Ideal was declared insolvent. As a result of Ideal's insolvency, NHIGA became obligated to defend and pay certain claims under Ideal's policies to the extent provided by RSA chapter 404-B. See RSA 404-B:8, I (1983 & Supp. 1997). Accordingly, NHIGA provided counsel for Pitco in the Lorkowskis' action against Pitco. NHIGA subsequently informed Pitco that it would deny coverage to Pitco to the extent that Lorkowski had received workers' compensation benefits.
In April 1992, Pitco settled the Lorkowskis' action for $500,000. Following Pitco's request for NHIGA's comments, NHIGA neither consented nor objected to the settlement. At approximately the same time that Pitco settled with the Lorkowskis, the Lorkowskis reached a settlement with Lender's Bagel through its workers' compensation and liability insurance carriers. This settlement with Lender's Bagel provided for $1.2 million to the Lorkowskis, the continuation of workers' compensation benefits, and a waiver by the workers' compensation insurers of any lien or offset resulting from past or future benefits, see generally N.Y. Work. Comp. Law