Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

PECHNER v. PENNSYLVANIA INSURANCE DEPARTMENT (11/10/82)

SUPREME COURT OF PENNSYLVANIA


decided: November 10, 1982.

PECHNER, DORFMAN, WOLFFE, ROUNICK AND CABOT, APPELLANTS,
v.
PENNSYLVANIA INSURANCE DEPARTMENT, ET AL., APPELLEES. *FN*JOHN NAGLE AND YONISH TRUCKING, INC., APPELLANTS, V. PENNSYLVANIA INSURANCE DEPARTMENT, ET AL., APPELLEES

No. 466 January Term, 1979, Appeal from the Order of the Commonwealth Court dated October 26, 1979 at 2242 C.D. 1977, No. 467 January Term, 1979, Appeal from the Order of the Commonwealth Court dated October 26, 1979 at 972 C.D. 1977

COUNSEL

Leonard Schaeffer, Stanley A. Uhr, Philadelphia, for appellants.

Hannah Leavitt, Asst. Atty. Gen., Harrisburg, for Ins. Dept.

Thomas R. Balaban, William R. Balaban, Harrisburg, for Coal Mine Comp. Rating Bureau, et al.

Robert J. Demer, Harrisburg, for appellees.

O'Brien, C.j., and Roberts, Nix, Larsen, Flaherty, McDermott and Hutchinson, JJ. Nix, J., files a concurring opinion. O'Brien, C.j., files a concurring and dissenting opinion. Roberts, J., files a concurring and dissenting opinion in which Hutchinson, J., joins.

Author: Mcdermott

[ 499 Pa. Page 141]

OPINION

These are consolidated appeals of Commonwealth Court orders disposing of numerous preliminary objections raised by appellees in opposition to petitions for review filed by

[ 499 Pa. Page 142]

    appellants.*fn1 Appellants are coal haulers,*fn2 who, under the Workmen's Compensation Act,*fn3 are required to purchase black lung disease insurance for protection of their employees. This coverage was mandated by a 1973 federal statute.*fn4 The initial rates of premiums for this insurance were set by the Coal Mine Compensation Rating Bureau ("Bureau"), which is authorized by the Insurance Company Law of 1921,*fn5 and is empowered to classify risks, establish underwriting rules and set premium rates under the supervision of the Insurance Commissioner ("Commissioner").

The premium rates, as originally promulgated, made no distinction between coal haulers, such as appellants, and tunnel mine operators. Appellants argued that a lower premium should have been set for their employees since coal haulers' activities are confined to the surface where risk of contracting black lung disease is less severe. To seek redress of this imbalance, appellants filed a petition for review in the nature of an action in equity in Commonwealth Court (No. 1805 C.D. 1976), which was dismissed with instructions that administrative procedures mandated in 40 P.S. § 814 should be followed.*fn6 Appellants then sought an administrative

[ 499 Pa. Page 143]

    hearing before the Commissioner. On February 7, 1977, the Commissioner ordered the Bureau to re-evaluate the premiums but declined to rule on appellants' request for a full refund of all overpaid premiums dating back to 1973 when they were first paid.

Pursuant to the Commissioner's February order (hereinafter "February order"), a new, lower premium rate was set by the Bureau. This new rate was implemented in April 1977 with the Commissioner's approval and without objection from appellants. The Commissioner entered a final order in August of 1977 (hereinafter "August order") which granted a refund to appellants dating back to the February order.

While administrative proceedings were still pending following the February order, appellants filed the instant petition for review seeking both legal and equitable relief. As grounds for equitable jurisdiction, appellants alleged class status (i.e., a class of one thousand or more similarly situated coal haulers), and challenged the adequacy of relief provided by the then available administrative procedures under 40 P.S. § 814.

Preliminary objections to this petition for review were filed by the Insurance Department, other Commonwealth agencies (collectively "Commonwealth appellees") and the Commissioner, as well as by the numerous insurance companies ("non-Commonwealth appellees"), which participated in

[ 499 Pa. Page 144]

    the challenged rate setting, provided the coverage in question and were named as co-defendants by appellants in the petition.

The Commonwealth Court, speaking through the late President Judge Bowman, denied appellants' request for equitable relief against the Commissioner, the Commonwealth and non-Commonwealth appellees and dismissed all legal claims against the Commonwealth appellees on the basis of sovereign immunity.*fn7 Concluding that it lacked jurisdiction over the remaining legal claims against the non-Commonwealth appellees, the lower court then remanded these claims to the appropriate courts of common pleas. See Nagle v. Pennsylvania Ins. Dept., 46 Pa. Commw. 621, 406 A.2d 1229 (1979).

Appellants brought this direct appeal, presenting the following two issues for our review: (1) whether appellants are entitled to invoke the equity jurisdiction of the Commonwealth Court; (2) whether sovereign immunity bars appellants' trespass claims against the Commonwealth appellees. Because we conclude that the statute creating sovereign immunity cannot be retroactively applied to preclude the trespass claims against the Commonwealth appellees, we reverse in part.

I

We agree with the Commonwealth Court that its equitable jurisdiction does not extend to appellants' claims for equitable relief. It is well settled that equity will not intervene before all available legal remedies are exhausted.*fn8

[ 499 Pa. Page 145]

    correct in declining to consider appellants' equitable claims.

II

Appellants' second contention is that the Commonwealth Court's retroactive application of 42 Pa.C.S.A. § 5110 ("Act 152")*fn11 to bar their cause of action in trespass against the Commonwealth appellees was unconstitutional under Article 1, Section 11 of the Pennsylvania Constitution.*fn12 On this question we are in agreement with appellants and, accordingly, reverse.

Appellants' petition for review, as pointed out by the able opinion of the late President Judge Bowman in the court below, contains both tortious and equitable prayers for relief. See Nagle v. Pennsylvania Ins. Dept., 46 Pa. Commw. 621, 624, 406 A.2d 1229, 1232 (1979). The tortious claims allege that the Commonwealth appellees, i.e., the Insurance Department and other Commonwealth agencies, were negligent in failing to set a lower premium rate for appellants. Since the cause of action against the Commonwealth appellees sounds partially in tort, the court below was required to address the question of whether sovereign immunity would apply as a bar to the tortious claims against the Commonwealth.

In resolving this issue, President Judge Bowman ruled that appellants' tort claims against the Commonwealth were barred. His decision relied on Brungard v. Hartman, 46 Pa. Commw. 10, 405 A.2d 1089 (1979), which allowed the

[ 499 Pa. Page 147]

    retroactive application of Act 152 to bar causes of action that accrued prior to its passage.*fn13 The Commonwealth Court's decision in Brungard was appealed to this Court, where it was expressly reversed. Brungard v. Mansfield State College, 491 Pa. 114, 419 A.2d 1171 (1980). Citing our opinion in Gibson v. Commonwealth, 490 Pa. 156, 415 A.2d 80 (1980), we stated:

Act 152 cannot be constitutionally applied to actions like the instant one which accrued and were in existence prior to the passage of the Act.

Brungard v. Mansfield State College, 491 Pa. at 116, 419 A.2d at 1172.

In light of our reasoning in Gibson and Brungard, we conclude that appellants' tortious claims against the Commonwealth appellees were not barred by passage of Act 152.*fn14

[ 499 Pa. Page 148]

Accordingly, the order of the Commonwealth Court appealed from in No. 466, denying appellants counsel fees, is affirmed. The order of the Commonwealth Court appealed from in No. 467, sustaining appellees' preliminary objections is reversed insofar as it dismisses appellants' trespass claims against the Commonwealth appellees on the basis of sovereign immunity. These cases are remanded to the Commonwealth Court for proceedings consistent with this opinion.

NIX, Justice, concurring.

The majority again relies upon Gibson v. Commonwealth, 490 Pa. 156, 415 A.2d 80 (1980) to deny the legislative grant of retroactivity provided under Act 152, 42 Pa.C.S.A. § 5110. I noted my dissent in Gibson, supra, 490 Pa. at 166, 415 A.2d at 85, and set forth at length the basis for my disagreement in Bershefsky v. Commonwealth, 491 Pa. 102, 105-113, 418 A.2d 1331, 1332-36 (1980) (Nix, J. dissenting). I am still firmly convinced of the unsoundness of the reasoning of Gibson and the error of its conclusion. Regrettably, a majority of this Court has persisted in that view, Brungard v. Mansfield State College, 491 Pa. 114, 419 A.2d 1171 (1980); Bershefsky v. Commonwealth, supra, and I concede that the

[ 499 Pa. Page 149]

    opinion of Mr. Justice McDermott accurately reflects the law as it has been stated by a majority of this Court. Since a continuous unavailing "cry in the wilderness" will serve no further jurisprudential purpose, I join the opinion.

O'BRIEN, Chief Justice, concurring and dissenting.

I join in the majority opinion to the extent that it affirms the orders of the Commonwealth Court. I dissent from the section of the majority opinion which reverses the Commonwealth Court order sustaining appellees' preliminary objection on sovereign immunity grounds. I remain convinced that, under Article I, Section 11 of the Pennsylvania Constitution, the doctrine of absolute sovereign immunity was part of the common law of this Commonwealth until Act 152 limited the scope of the doctrine.

ROBERTS, Justice, concurring and dissenting.

I dissent from the mandate insofar as it reverses the order of the Commonwealth Court at No. 467 January Term, 1979, and remands for further proceedings. A remand will unnecessarily consume scarce judicial resources, and will put the parties, including the Commonwealth, through the expense of needless additional litigation.

The Commonwealth Court has already determined that the Insurance Commissioner reasonably exercised his discretion in refusing to award a refund of premium payments retroactive to 1973. In sustaining the Commissioner's exercise of discretion, the Commonwealth Court stated:

"[T]here is no evidence that the initial classification and rate were patently erroneous or unsupported by information then available regarding the relationship of black lung to the coal-hauling industry . . . . Petitioners [(the coal haulers)] were unable to persuade the Commissioner on the record of the hearing below that coal haulers were improperly included or improperly classified as to 1976."

[ 499 Pa. Page 150]

Nagle v. Commonwealth of Pennsylvania, Insurance Department ex rel. Sheppard, 48 Pa. Commw. 295, 302, 409 A.2d 525, 528 (1980). This adjudication alone will, on remand, compel the dismissal of appellants' counts against the named Commonwealth agencies.

The majority offers no explanation of how it would reconcile the Commonwealth Court's determination that the Insurance Commissioner acted reasonably with a ruling which would permit the present action in trespass to proceed to trial on a theory of negligent conduct. At the heart of appellants' cause of action in trespass is the allegation that the Insurance Commissioner has acted unreasonably. However, there can be no basis for a theory of negligent conduct on the part of the Commonwealth or its officials for improperly implementing insurance rates where that very conduct has been sustained against a claim of unreasonableness: absent unreasonableness, there is no negligence. Because appellants' cause of action in trespass depends upon a determination that the Insurance Commissioner acted unreasonably, it must be concluded that the Commonwealth Court's decision sustaining the Insurance Commissioner forecloses the present action.*fn*


*fn* Also named as appellees in both cases are: William J. Sheppard, Insurance Commissioner, Coal Mine Compensation Rating Bureau of Pennsylvania, State Workmen's Insurance Board, State Workmen's Insurance Fund, American Casualty Company, American Mutual Liability Insurance Company, American States Insurance Corporation, Employers Mutual Liability Insurance Company of Wisconsin, Globe Indemnity Company, Lackawanna Casualty Company, Liberty Mutual Insurance Company, Motorists Beneficial Insurance Company, Ohio Casualty Insurance Company, Old Republic Insurance Company, Pennsylvania Manufacturers Association Insurance Company, Pennsylvania National Mutual Casualty Insurance Company, Rockwood Insurance Company, United States Fidelity and Guaranty Company, West American Insurance Company, Westmoreland Casualty Company and John Doe Insurance Company. John Doe and Jane Doe are listed as appellees in No. 467 only.


Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.