Summary
In Safeguard Mutual Insurance Co. v. Insurance Commissioner, 48 Pa. Commw. 235, 410 A.2d 84 (1980), we held that the Commonwealth was immune from suit where an insurer sought to recover the costs of an alleged erroneous, inaccurate and incompetently performed examination ordered by the Insurance Commissioner. The Court in Safeguard determined that the allegedly erroneous report of the Commissioner was not within any exception to sovereign immunity.
Summary of this case from Bufford v. Pa. Dept. of TranspOpinion
Argued October 2, 1979
January 3, 1980.
Sovereign immunity — Judicial Code, 42 Pa. C.S. § 5110 — Examination of insurance company — Damages resulting from inaccurate examination — Waiver of immunity.
1. A counterclaim by an insurer filed in an action brought by the Commonwealth to recover costs of an examination of the company ordered by the Insurance Commissioner is properly dismissed when the insurer therein seeks damages, allegedly resulting from the examination, in an amount greater than the Commonwealth claim as well as an accounting, as such claim does not fall within the class of cases wherein the defense of sovereign immunity has been waived by the Commonwealth under provisions of the Judicial Code, 42 Pa. C.S. § 5110, and is not alleged to fall within the limited exception judicially created in instances wherein the Commonwealth has initiated the action. [237-8]
Judges CRUMLISH, JR. and DiSALLE filed dissenting opinions.
Argued October 2, 1979, before President Judge BOWMAN and Judges CRUMLISH, JR., WILKINSON, JR., ROGERS, BLATT, DiSALLE and MacPHAIL. Judges MENCER and CRAIG did not participate.
Appeal, No. 273 C.D. 1978, from the Order of the Court of Common Pleas of Philadelphia County in case of Commonwealth of Pennsylvania, Insurance Commissioner of the Commonwealth of Pennsylvania, 3172 May Term, 1976.
Complaint in assumpsit in the Court of Common Pleas of Philadelphia County to recover costs of examination of insurance company. Defendant filed counterclaim. Counterclaim dismissed. WRIGHT, J. Defendant appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Malcolm H. Waldron, Jr., for appellant. Joseph F. Lynch, Deputy Attorney General, with him Benjamin Levin, Assistant Attorney General, for appellee.
This appeal is from an order of the lower court dismissing defendant-appellant's "amended counterclaim in recoupment," which is the last in a series of counterclaims and amended counterclaims which the lower court had permitted to be filed. The action originated when the plaintiff-appellee, Insurance Commissioner of the Commonwealth of Pennsylvania (Commissioner), filed a complaint in assumpsit against the defendant-appellant, Safeguard Mutual Insurance Company (Safeguard), seeking under applicable statutory law recovery of the costs of an examination of Safeguard ordered by the Commissioner. In response to the complaint, Safeguard filed an answer with new matter and a counterclaim seeking damages in conjunction with the allegedly erroneous, inaccurate examination by incompetent personnel ordered by the Commissioner, said damage claim seeking recovery of a sum far in excess of the damages sought by the Commissioner. Preliminary objections to the counterclaim were filed by the Commissioner and sustained by the lower court on the grounds that the appropriate pleading by Safeguard would have been a claim in recoupment. As a result, the counterclaim was dismissed without prejudice to Safeguard to file an amended counterclaim alleging a claim in recoupment. A long series of amended counterclaims followed, all of which were dismissed for failure to allege a claim in recoupment. Each time, Safeguard was permitted to file an amended counterclaim. Finally, in the order presently before us on appeal, the lower court dismissed the counterclaim with prejudice on the basis of Behrend v. Yellow Cab Co., 441 Pa. 105, 271 A.2d 241 (1970). This appeal followed.
The only issue raised by Safeguard on appeal is whether sovereign immunity is a defense to its counterclaim. Citing Mayle v. Pennsylvania Department of Highways, 479 Pa. 384, 388 A.2d 709 (1978), Safeguard contends that the doctrine of sovereign immunity has been abolished and is thus not available to the Commissioner as a defense. While it is true that Mayle judicially abrogated the doctrine, the Legislature has since reinstated sovereign immunity with only limited exceptions. See Act of September 28, 1978, P.L. 788 (Act 152). We recently held in Brungard v. Hartman, 46 Pa. Commw. 10, 405 A.2d 1089 (1979) that Act 152 should be applied retroactively. Consequently, Safeguard's counterclaim against the Commissioner is subject to the defense of sovereign immunity unless it falls within the eight enumerated exceptions in Act 152 or within an exception to the doctrine created under the statutory and case law existing prior to the Mayle decision. See Section 5(b)(1) of Act 152.
The pertinent provisions of Act 152 are now codified in Section 5110 of the Judicial Code, 42 Pa. C.S. § 5110.
Safeguard's counterclaim as stated (alleging damages in excess of the Commissioner's claim and requesting an accounting) does not fall within one of the enumerated exceptions to the doctrine of sovereign immunity. Although we recognize that a limited exception to the doctrine has been judicially created in instances in which the Commonwealth brings suit, Commonwealth v. Berks County, 364 Pa. 447, 72 A.2d 129 (1950); Pennsylvania Fish Commission v. Township of Pleasant, 36 Pa. Commw. 216, 388 A.2d 756 (1978), Safeguard has not alleged that its claim falls within that exception nor has it challenged the lower court's action in refusing to allow it to plead damages over and above the amount of damages sought by the Commissioner. As a result, we do not consider the applicability of the recoupment exception to this case, but merely reiterate that sovereign immunity remains a defense to claims against the Commonwealth. On this basis, we will affirm the lower court's dismissal of Safeguard's counterclaim.
ORDER
NOW, January 3, 1980, the order of the Philadelphia Court of Common Pleas, sustaining the preliminary objections of the appellee and dismissing the counterclaim of the appellant, is hereby affirmed.
I respectfully dissent for the reasons set forth in my Concurring and Dissenting opinion in Brungard v. Hartman, 46 Pa. Commw. 10, 405 A.2d 1089 (1979).
I respectfully dissent for the reasons set forth in my concurring and dissenting opinion in Estate of Armstrong v. Pennsylvania Board of Probation and Parole, 46 Pa. Commw. 33, 405 A.2d 1099 (1979).