44 Pa. Commw. 289 | Pa. Commw. Ct. | 1979
Opinion by
This petition for review raises the question of the jurisdiction of the Board of Arbitration of Claims (Board) over Fred S. James & Company, Inc. (Appellant), an “additional defendant” in a suit brought by Miller’s Mutual Insurance Company (Miller) against the Commonwealth of Pennsylvania, Department of General Services (Commonwealth).
Miller’s suit was instituted on November 30, 1976, to recover an amount allegedly owing to it for the earned but unpaid premium on a thirty-day fire insurance binder covering certain Commonwealth-owned
On August 16, 1977, the Commonwealth, after its motion for allowance of joinder was approved by the Board, joined Appellant as an additional defendant. In so doing, the Commonwealth averred that Appellant, by reason of having been the broker for an insurance company which had issued a policy of insurance to the Commonwealth covering the same properties for the preceding year, owed certain fiduciary duties to the Commonwealth. These duties were allegedly tortiously breached when- Appellant failed to disclose certain information to the Commonwealth relating to Appellant’s purported involvement as reinsurance broker on the coverage - ultimately offered by Miller. The Commonwealth further averred that Appellant and Miller unlawfully conspired to fix prices for insurance coverage on the properties in violation of Section 5(a)(4) of the Unfair Insurance. Practices Act, Act of July 22, 1974,.P.L. 589, as amended, 40 P.S. §1171.5 (a) (4). Thereafter, Appellant filed-preliminary objections to the joinder raising questions of jurisdiction and including a demurrer. The Board dismissed the preliminary objections and certified that the dismissal of the preliminary - objections involved a controlling question of law. Appellant then filed for permission to appeal to this Court which was- granted on May 5, 1978.
What we stated in United Brokers Mortgage Co. v. Fidelity Philadelphia Trust Co., 26 Pa. Commonwealth Ct. 260, 363 A.2d 817 (1976), seems particularly appropriate here. In that ease, the Board was held to have jurisdiction over a contractual dispute involving a private party when such party was sued with and as an agent of certain instrumentalities of the Commonwealth and when the acts of the private party were inextricably entwined with those of the defendant instrumentalities. However, the Board was held not to have jurisdiction of an action in tort arising out of the contractual relationship when it was brought solely against the private party acting as an agent of the instrumentalities of the Commonwealth. With regard to our determination that the Board was without jurisdiction over the tort claim, President Judge Bowman remarked:
Neither precepts of judicial economy nor the promotion of the orderly administration of justice can be extended to afford ancillary jurisdiction to the Board to hear a tort claim against [a private party] because it assertedly arises out of a multi-contract relationship involving [the instrumentalities of the' Commonwealth].
Id. at 268, 363 A.2d at 822.
The question not resolved in United Brokers Mortgage Go., however, is whether the Board can nevertheless assume jurisdiction when the private party is not sued directly but is brought into the action as an additional defendant. Resolution of this question may be readily made by reference to General State Authority v. Van Cor, Inc., 27 Pa. Commonwealth Ct. 203, 365 A.2d 1350 (1976). Van Cor, a prime contractor, was sued in the Common Pleas Court by a subcontractor. Thereafter, Yan Cor brought the General State Authority (GSA) into the proceedings as an additional defendant. Upon appeal of the lower court’s dismissal of the preliminary objections filed by GSA, we reversed and held that since Yan Cor could not have brought an original action against GSA on its claim as stated in the Court of Common Pleas, it could not bring an action in that Court for the same cause by joining GSA as an additional defendant.
When we view the case at bar, it is clear beyond peradventure that the Commonwealth could not have brought an action against Appellant for breach of fiduciary duties, fraud, and conspiracy before the Board. It follows, therefore that the Commonwealth cannot achieve this result indirectly by attempting to bring Appellant into the action as an additional defendant to assert such claims. Having decided this threshold jurisdictional question in Appellant’s favor, we need not address the remaining preliminary objections.
Accordingly, we reverse.
And Now, this 17th day of July, 1979, the order of the Board of Arbitration of Claims, dated'March 21, 1978, is hereby reversed and the preliminary objection filed by Fred S. James & Company, Inc., of Pennsylvania, to the Complaint of the Commonwealth of Pennsylvania raising a question of jurisdiction is sustained, and said Complaint dismissed.
Two other related appeals were filed in this Court by Appellant, both of which are now admittedly moot. The first, a petition
Section 4 of the Act, 72 P.S. §4651-4, restates the jurisdictional mandate of the Board: “to hear and determine all claims against the Commonwealth arising from contracts hereafter entered into with the Commonwealth, where the amount in controversy amounts to $300.00 or more.” The Act of October 5, 1978, P.L. 1104, extensively amended the Act of May 20, 1937, P.L. 728, as amended. The amending act abolished the Board of Arbitration of Claims by Section 7 and created a new independent administrative board, known as the Board of Claims, by Section 2. The jurisdiction of the Board of Claims is set forth in Section 3 of the amending act.