Hanover Insurance Co. v. State Workers' Insurance Fund
35 A.3d 849
| Pa. Commw. Ct. | 2012Background
- Nunez sustained a work injury while employed by Dependable; Dependable leased premises from W. & W. Realty, Inc., named in a personal injury suit by Nunez.
- Dependable had SWIF workers' compensation and employer's liability coverage with an alternate-employers endorsement naming Dependable as alternate employer.
- SWIF's policy coverage for employer liability was primary over other coverages and sought defense for Dependable; SWIF refused.
- Dependable also carried a Seabright workers' compensation policy; Hanover demanded defense from Seabright but Seabright did not respond.
- Hanover seeks, on behalf of Dependable, declaratory relief that SWIF's policy provides primary/concurrent coverage, that SWIF must defend, reimburse defense costs and indemnity, and that attorneys' fees are awarded in the declaratory judgment action.
- SWIF and the Department of Labor and Industry challenged the court's jurisdiction, arguing the Board of Claims has exclusive jurisdiction over these contract-related insurance coverage disputes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Board of Claims has exclusive jurisdiction under 1724(a)(1). | petitioners: 1724(a)(1) applies only to contract controversies filed with the Board; no contract exists between petitioners and the Commonwealth. | SWIF: 1724(a)(1) covers claims arising from a contract with a Commonwealth agency; SWIF policy disputes fall under Board jurisdiction. | No; majority holds Board jurisdiction is exclusive under 1724(a)(1) for contract controversies, and this matter should be transferred. |
| Whether SWIF policies constitute a 'contract' under the Procurement Code. | Petitioners: Procurement Code §1724(a)(1) covers contracts arising from such Commonwealth contracts; no contract here. | SWIF: SWIF policies are contracts governed by Procurement Code; Board has exclusive jurisdiction. | Board has exclusive jurisdiction; SWIF policies are contracts under the Procurement Code for Board review. |
| Whether sovereign immunity or Fletcher controls; original jurisdiction should remain with court. | Petitioners: Fletcher v. PCCG A. supports original jurisdiction for coverage determinations; sovereign immunity allows declaratory relief in court. | Majority: sovereign immunity and Board-first approach apply; Data-Quest and Limbach support Board jurisdiction; remedy through Board. | Original jurisdiction is not maintained; case transferred to Board of Claims. |
Key Cases Cited
- Caparo Real Estate, Inc. v. State, 160 Pa.Cmwlth. 581 (Pa. Cmwlth. 1993) (Board jurisdiction over contract claims against SWIF)
- Data-Quest, Inc. v. Department of Health, 972 A.2d 74 (Pa. Cmwlth. 2009) (broad reading of 1724; quasi-contract claims possible under Board)
- Wausau Ins. Co. v. Department of Transportation, 581 Pa. 381, 865 A.2d 825 (2005) (Board jurisdiction over assignment and equitable subrogation arising from contracts with the Commonwealth)
- Limbach Co. v. Department of General Services, 862 A.2d 713 (Pa. Cmwlth. 2004) (rejected narrowing of Board jurisdiction; data-quest discussion of 1724 authority)
- Shovel Transfer & Storage, Inc. v. Simpson, 523 Pa. 235, 565 A.2d 1153 (1989) (contract existence and Board jurisdiction hollistic approach)
- Hunt v. Goeckel, 713 A.2d 746 (Pa. Cmwlth. 1998) (Board jurisdiction over contract-based third-party beneficiary claims)
- Fletcher v. Pennsylvania Property and Casualty Insurance Guaranty Association, 603 Pa. 452, 985 A.2d 678 (2009) (contrast to MCARE; supports original jurisdiction for certain insurance coverage determinations)