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FIRST NATIONAL BANK MARYLAND v. COMMONWEALTH PENNSYLVANIA (07/16/87)

decided: July 16, 1987.

THE FIRST NATIONAL BANK OF MARYLAND, AS TRUSTEE, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT, GEORGE F. GRODE, INSURANCE COMMISSIONER, AND U.S. MORTGAGE INSURANCE COMPANY, RESPONDENTS



Original Jurisdiction in case of The First National Bank of Maryland, as Trustee v. Commonwealth of Pennsylvania, Insurance Department, George F. Grode, Insurance Commissioner and U.S. Mortgage Insurance Company.

COUNSEL

Christopher Wolf, with him, Warren L. Dennis and William A. Slaughter, Ballard, Spahr, Andrews & Ingersoll, for petitioner.

Janice L. Anderson, Deputy Attorney General, with her, Andrew S. Gordon, Chief Deputy Attorney General, Chief Litigation Section, and LeRoy S. Zimmerman, Attorney General, for respondent, Commonwealth of Pennsylvania, Insurance Department and George F. Grode, Insurance Commissioner.

Thomas A. Allen, with him, Ellen K. Glessner and Steven J. Cooperstein, White and Williams, for respondent, U.S. Mortgage Insurance Company.

President Judge Crumlish, Jr., Judge Colins, and Senior Judge Narick, sitting as a panel of three. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 107 Pa. Commw. Page 443]

First National Bank of Maryland (FNB) petitions this Court to compel the Insurance Commissioner to issue a summary order suspending and/or supervising the business of U.S. Mortgage Insurance Company (USMI). Sections 510 and 511 of the Insurance Department Act of 1921*fn1 (Article V). The Insurance Commissioner and USMI have filed preliminary objections.

The pertinent facts for purposes of this petition can be found in First National Bank of Maryland v. Insurance Department, 102 Pa. Commonwealth Ct. 474, 518 A.2d 871 (1986), where this Court denied FNB's motion for an immediate writ of peremptory mandamus. In that earlier action, this Court held that FNB, as a trustee for purchasers of mortgage-backed securities issued by a defaulting real estate investment corporation, was not entitled to mandamus because its right to immediate relief in the form of a suspension order against USMI was not clear. At the same time, we directed that the Insurance Commissioner's preliminary objections be listed for consideration. The Commissioner and USMI preliminarily object to the instant petition because they allege that FNB (1) lacks standing, (2) improperly invokes our original jurisdiction, and (3) has failed to state a claim upon which relief can be granted.*fn2

[ 107 Pa. Commw. Page 444]

Standing

The Commissioner argues that Article V authorizes only his department to initiate a suspension action against an insurer after he determines that reasonable cause exists.*fn3

Hence, the Commissioner contends that FNB is not an aggrieved party under the standards set forth in Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975).

While Article V does confer exclusive authority upon the Commissioner to institute a suspension proceeding, we agree with FNB that a party injured by the ...


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