2008-440, In the Matter of the Liquidation of the Home Insurance Company

services between October 2002 and January 2003 to The Home Insurance

and Liquidation Act, RSA ch. 402-C (2006). We affirm.

The parties do not dispute the relevant facts. SSGC rendered legal

402-C:44, V (2006), for priority of payment under the Insurers Rehabilitation assignment of pre-liquidation legal fees to Class V Residual Classification, RSA (SSGC), challenges a ruling of the Trial Court (Conboy, J.) sustaining the HICKS, J. The appellant, Sheiness, Scott, Grossman & Cohn, L.L.P.

the State of New Hampshire as Liquidator of the Home Insurance Company. memorandum of law), for the respondent, the Commissioner of Insurance of of Boston, Massachusetts (J. David Leslie and Eric A. Smith on the the memorandum of law and orally), and Rackemann, Sawyer & Brewster P.C., Kelly A. Ayotte, attorney general (J. Christopher Marshall, attorney, on

to press. Errors may be reported by E-mail at the following address: L.L.P., of Houston, Texas (H. Miles Cohn on the brief), for the appellant. Saturley on the brief and orally) and Sheiness, Scott, Grossman & Cohn, Nelson, Kinder, Mosseau & Saturley, P.C., of Manchester (William C.

editorial errors in order that corrections may be made before the opinion goes No. 2008-440 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Merrimack Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as payable to witnesses; and reasonable attorney’s fees. p. 2 liquidation; any necessary filing fees; the fees and mileage the insurer; compensation for all services rendered in the

the legislature did not see fit to include. consider what the legislature might have said or add language that actual and necessary costs of preserving or recovering the assets of beyond it for further indication of legislative intent, and we will not

[insolvent] insurer’s estate shall be[:]”

administration, including but not limited to the following: the a statute’s language is plain and unambiguous, we need not look I. A DMINISTRATION COSTS. The costs and expenses of

review, the court-appointed referee ( RSA 402-C:44 states that “[t]he order of distribution of claims from the review omitted). beyond Class II.” In the Matter of Liquidation of Home Ins. Co., 154 N.H. at 479 (quotation “administration” as that term is used within RSA 402-C:44, I.

ascribe the plain and ordinary meanings to the words used. When first examine the language of the statute, and, where possible, properly categorized as Class I Administration Costs, RSA 402-C:44, I. Upon as expressed in the words of the statute considered as a whole. We de novo. We are the final arbiters of the legislature’s intent The interpretation of a statute is a question of law, which we unlikely that there will be sufficient assets to make distributions to classes

expended in protecting Home’s financial interests constitute costs of On appeal, the parties dispute whether the pre-liquidation legal services

finding. recommit. The trial court denied this motion and sustained the referee’s Commissioner of Insurance as liquidator (liquidator) of its estate. court ordered Home liquidated in June 2003 and appointed the respondent Rogers, R.) affirmed. SSGC moved to

477 (2006). SSGC appealed the Class V declaration, asserting that its claim is

In the Matter of Liquidation of Home Ins. Co., 154 N.H. 472,

and necessary for the defense of Home in the referenced . . . litigation.” “[I]t is Class V residual priority, finding that the “services provided were reasonable fees and expenses. The liquidator allowed the claim in full and designated it a SSGC filed a proof of claim for $74,784.89 for its pre-liquidation legal

subsequently entered receivership upon becoming insolvent. The superior Company (Home) in connection with certain asbestos-related litigation. Home consistent with the effective

p. 3 is ultimately required to “reduce the assets to a degree of liquidity that is

the insurer,” RSA 402-C:25, IV (entitled “Powers of Liquidator”). The liquidator liquidating, disposing of or otherwise dealing with the business and property of the court-appointed liquidator. “[d]efray[ing] all expenses of taking possession of, conserving, conducting, liquidate. RSA 402-C:21, II references an “estate,” The statutory text draws a clear distinction in time separated by the order to services do not fall within the ambit of administration costs, RSA 402-C:44, I.

the petition for liquidation.” RSA 402-C:21, II. and all other persons interested in its estate are fixed as of the date of filing of

& Supp. 2008), the assets and liabilities of which are fixed pending action by “liquidation order,” RSA 402-C:26, I(a), and taking various actions such as cf. 11 U.S.C.A. § 541 (2004

liquidation looming.” defending an insurer in a period of financial difficulties with the prospect of a From these provisions we conclude that SSGC’s pre-liquidation legal

(emphasis added).

insolvent] insurer and . . . its creditors, policyholders, shareholders, members

rehabilitation of an insolvent insurer). This entails notifying creditors of the added); cf. RSA 402-C:16, I (charging rehabilitator with same task in a administer them under the orders of the court.” RSA 402-C:21, I (emphasis incentive to do what SSGC did – . . . to perform an enormous amount of work have no priority,” 26 E. M. Holmes, liquidator must “take possession of the assets of the insurer and . . . Once the liquidator is appointed and the liquidation is underway, the

liquidate,” RSA 402-C:21, I, issues, “the rights and liabilities of . . . [the review of New Hampshire’s statutory liquidation scheme. Once an “order to With these principles in mind, we begin our analysis with an abbreviated

(2005).

liquidation were not paid as administration costs, attorneys would have little “expenses for professional services performed before the liquidation is initiated attorney’s fees.” Second, it maintains that “[i]f attorney’s fees incurred pre- L. R. Russ & T. F. Segalla, Couch on Insurance 3d § 6:12, at 6-29 (2005), and distinguishes between “services rendered in the liquidation” and “reasonable have noted that “[a]ttorneys’ fees are not ordinarily entitled to a preference,” 1 the Matter of Liquidation of Home Ins. Co., 154 N.H. at 484. Commentators liquidation cannot constitute ‘administration costs’ under RSA 402-C:44, I.” In assuming, without deciding, “that claims and rights to payment that arise pre- We previously approached the issue presented in this appeal by

rendered prior to the liquidation because the text of RSA p. 4 402-C:44, I, SSGC first argues that administration costs include legal services 4

administration costs listed within RSA p. 4 402-C:44, I, are illustrative,

actually constitute “costs and expenses of

render “reasonable attorney’s fees” mere surplusage. The various types of

applicability of [the relevant statute] to those BRODERICK, C.J., and DALIANIS and DUGGAN, JJ., concurred.

sight of the fact that such expenses only gain Class I priority when they fees” exemplifies its textual predecessors. p. 4 402-C:44, I (“including but not limited to”). As such, “reasonable attorney’s

classification of RSA p. 4 402-C:44, V. Contrary to SSGC’s assertion, our reading of “administration” does not

particularized” (quotation and brackets omitted)).

(199 p. 4 4) (holding that phrase “‘including but not limited to’ . . . limits the (emphasis added). legal services). See Roberts v. General Motors Corp., 138 N.H. 532, 538

argument that “reasonable attorney’s fees” are separately listed in Class I loses liquidation do not constitute administration costs. N.E.2d 785, 788 (Ill. App. Ct.), appeal denied, 686 N.E.2d 1172 (Ill. 1997). The States, p. 4 491 U.S. 617, 628 (1989); People ex rel. Schacht v. Prestige Cas., 678 in furtherance of the liquidation. See Caplin & Drysdale, Chartered v. United the fees of other pre-liquidation professionals falling within the residual distinguish between the fee for SSGC’s pre-liquidation legal representation and SSGC does not advance nor do we discern any principled way to

a general creditor of insolvent insurance company by virtue of pre-liquidation Coronet Ins. Co., 698 N.E.2d 598, 603 (Ill. App. Ct. 1998) (stating law firm was

Accordingly, general litigation services rendered and payable prior to the Liquidation of Home Ins. Co., 15 p. 4 4 N.H. at 484-85; cf. RSA 402-C:16, I.

within the statutory scheme only in relation to authorized activities undertaken § 6:8, at 6-18 to -19. “Administer” (and by extension “administration”) appears