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North Carolina Insurance Guaranty Association v. Century Indemnity Co.6/21/1994
racter and nature as those specifically enumerated.'" State v. Lee, 277 N.C. 242, 244, 176 S.E.2d 772, 774 (1970) (citations omitted)(emphasis added). See also State v. Craig, 176 N.C. 740, 744, 97 S.E. 400, 401 (1918) ("when particular and specific words or acts, the subject of a statute, are followed by general words, the latter must as a rule be confined to acts and things of the same kind"). Here, the terms immediately preceding the phrase "or otherwise" in G.S. 58-48-20(4) are "subrogation" and "contribution." These two items are contractual or tort based forms of remedies. See Squires v. Sorahan, 252 N.C. 589, 591, 114 S.E.2d 277, 279 (1960)("subrogation . . . arises by reason of contract, . . . contribution . . . arises by reason of participation in the tort"); NCNB, 88 N.C. App. 705, 364 S.E.2d 675. On the other hand, equitable subrogation is a judicially imposed remedy grounded in equity. We conclude that in this context the phrase "or otherwise" does not encompass the purely equitable remedy applicable here.
Finally, our interpretation of G.S. 58-48-20(4), supra, addresses a potential inequity alluded to by defendant-Century in its brief:
In considering the purposes of the Guaranty Act, it is clear that our Legislature intended that insureds, such as Long, would have the full benefit of the statutory cap under the Guaranty Act, $300,000.00, when their insurer becomes insolvent. It could not have intended that the Association could use the statutory reference to "subrogation" as a shield against fulfillment of its statutory obligations. Principles of equity require the Association to reimburse Century for monies owed by the Association as the insurer for Long. This result would effectuate the purposes of the Act by encouraging the Association to promptly settle claims within its statutory limit. It would also prevent the Association from being rewarded for refusing to meet its statutory obligations.
(Emphasis in original.)
We are left with the question: what rational basis led plaintiff-Association to pay $200,000.00, an amount which was $100,000.00 less than its statutory cap under G.S. 58-48-35(a)(1)? Hypothetically, if plaintiff-Association had decided, for whatever reason, to pay only a small fraction of its statutory cap, for example $25,000.00, using plaintiff-Association's
flawed interpretation of G.S. 58-48-20, plaintiff-Association would have been under no obligation to pay defendant the remaining $275,000.00. If plaintiff-Association's logic were to prevail, there would be no incentive for plaintiff-Association to fulfill its statutory mandate. The less plaintiff-Association offered to contribute to the settlement of a claim, the more plaintiff-Association would stand to gain since under plaintiff-Association's argument the excess carrier would have no recourse. Plaintiff-Association's proposed interpretation of the statute is inconsistent with the goal of timely proper payments of legitimate claims, G.S. 58-48-5, and could encourage arbitrary and capricious settlement offers, leaving excess insurers with no remedy. We conclude that our General Assembly did not intend to encourage plaintiff-Association to use this type of hard bargaining technique against innocent excess insurers through the Act.
In sum, our decisions have been uniform in distinguishing between conventional subrogation and equitable subrogation. The dictates of ejusdem generis lead us to conclude that defendant-Century's recovery
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