88 A.3d 1079
Pa. Commw. Ct.2014Background
- Telwell borrowed $2.6 million from PSERS in 2003 to refinance Telwell Property; Grandbridge serviced the loan.
- Telwell alleged it was overcharged interest due to higher Commitment rate than Note rate and filed a Restated Claim for Breach of Contract/Duty of Good Faith.
- The Board dismissed the Restated Claim for lack of subject matter jurisdiction, holding Section 102(f.1) excludes loans from the Code.
- Telwell appealed, arguing the Board has broad jurisdiction and that Chapter 17 of the Code waives sovereign immunity; alternatively, 1724(a)(3) could give jurisdiction if a real property interest was created.
- The Court held Section 102(f.1) unambiguously excludes loans from the Code, thus Board lacks jurisdiction over the Restated Claim against PSERS, affirming with respect to PSERS; but remands the Grandbridge portion for transfer to the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Board have jurisdiction over the Restated Claim? | Telwell: Board has broad jurisdiction under Code and waives sovereign immunity. | PSERS: Section 102(f.1) excludes loans from the Code; no Board jurisdiction. | Board lacks jurisdiction over the Restated Claim. |
| Does 1724(a)(3) provide jurisdiction based on a real property interest? | Telwell: Note secured by mortgage could trigger 1724(a)(3). | Respondents: Section 102(f.1) controls; 1724(a)(3) not applicable here; issue not raised below. | Not addressed on the merits due to waiver. |
| What is the proper disposition given lack of jurisdiction over PSERS but potential jurisdiction over Grandbridge? | Telwell: Grandbridge claims should be transferred to trial court. | Respondents: jurisdiction limited; transfer not necessary for Grandbridge if Board lacks jurisdiction. | Remand to transfer Grandbridge claims to the trial court under Rule 213(f). |
Key Cases Cited
- Hanover Insurance Co. v. State Workers’ Insurance Fund, 35 A.3d 849 (Pa.Cmwlth.2012) (broad Board jurisdiction over contracts with Commonwealth)
- Department of Health v. Data-Quest, Inc., 972 A.2d 74 (Pa.Cmwlth.2009) (broad Board jurisdiction over quasi-contract/contract claims)
- Employers Insurance of Wausau v. Department of Transportation, 581 Pa. 381, 865 A.2d 825 (2005) (Board's exclusive jurisdiction over Commonwealth contracts; sovereign immunity context)
- Scientific Games International, Inc. v. Department of Revenue, 66 A.3d 740 (2013) (Supreme Court on scope of sovereign immunity and Board jurisdiction post-Act 142)