No. 1171 Philadelphia, 1980, Appeal from the Order of the Court of Common Pleas, Trial Division, Equity, of Philadelphia County, December Term, 1978, at No. 3539.
Mark A. Welge, Philadelphia, for appellants.
Leonard Schaeffer, Philadelphia, for appellees.
Brosky, Rowley and Montgomery, JJ.
[ 317 Pa. Super. Page 166]
Appellees, John Nagle and Yonish Trucking Inc., are Pennsylvania coal-hauling employers required by law to
[ 317 Pa. Super. Page 167]
purchase black lung insurance coverage for their employees. Appellants are insurance companies or funds licensed to underwrite Pennsylvania Workmen's Compensation and Occupational Disease insurance coverage for employers engaged in coal-mining operations. The appellant companies are members of the Coal Mine Compensation Rating Bureau (the Bureau). Beginning in 1973, and for the next five years, the Bureau fixed premium rates for black lung insurance coverage purchased by appellees at an amount equal to the premium rates charged to coal mining operators for the same coverage.
In July of 1976, appellees brought an action in the Commonwealth Court challenging the rates filed by the Bureau. The court dismissed the proceedings and suggested they be brought in the Insurance Department. After an administrative hearing, the Insurance Commissioner withdrew approval of the rates charged by appellants, approved new rates, and ordered the Bureau to refund all excess premiums collected since February 7, 1977. However, the Commissioner refused to order a refund of the excess premiums for the period from 1973 to 1976. Appellees appealed to the Commonwealth Court, which affirmed the order of the Insurance Commissioner. Nagle v. Com. Ins. Dept. ex rel. Sheppard, 48 Pa. Commw. 295, 409 A.2d 525 (1980).
A number of other proceedings were filed in the Commonwealth Court by appellees, nearly all of which were abandoned or withdrawn. One proceeding that was disposed of by the Commonwealth Court named as respondents the present appellants, as well as the Insurance Department, the Insurance Commissioner, the State Workmen's Insurance Fund and the State Workmen's Insurance Board. The Commonwealth Court sustained preliminary objections filed by the latter four governmental respondents, holding that the suit against them was barred by the defenses of sovereign immunity and absolute immunity. The case against the remaining respondents was transferred to the Court of Common Pleas of Philadelphia County for further proceedings. Nagle v. Pa. Ins. Dept., 46 Pa. Commw. 621, 406 A.2d
[ 317 Pa. Super. Page 1681229]
(1979). An appeal from that decision was taken to the Supreme Court of Pennsylvania.
On December 20, 1978, appellees filed the present action in equity in the Court of Common Pleas of Philadelphia County requesting an injunction, an accounting, restitution and reformation of the insurance contracts. They argued that they have been required to pay grossly excessive premiums to appellants; that appellants, in a fraudulent scheme to enrich themselves, ...