73 Pa. Commw. 495 | Pa. Commw. Ct. | 1983
Lead Opinion
Opinion bt
In this original jurisdiction matter, these preliminary objections now before us challenge the Township of South Fayette’s petition for review in the nature of a complaint in mandamus, which seeks an order to require the Secretary of Revenue, the Insurance Commissioner, the Auditor General and the State Trea
In response, the state officials have filed preliminary objections, alleging that: (1) the township lacks standing, (2) the township has failed to join indispensable parties, and (3) the township has failed to state a cause of action as to each official. We will consider each of the objections under separate headings.
Standing
In first addressing the standing objection, we note that our Supreme Court, in William Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975), held that standing requires an aggrieved party showing a substantial, direct and immediate interest in the subject matter of the litigation. The requirement of a “substantial interest” simply means that there must be some discernible adverse effect to some interest other than the abstract interest of all citizens in having others comply with the law. The requirement of a “direct interest” means that the person claiming to be aggrieved must show causation of harm to his interest by the matter of which he complains. The nature of the connection between the injury complained of and the injury to the person challenging it is the concern of the “immediate interest” element. 464 Pa. at 195, 346 A.2d at 282.
The state officials contend that the language of section 2262(a), which provides that each municipality
However, unlike the Township of Upper Moreland v. Department of Transportation, 48 Pa. Commonwealth Ct. 27, 409 A.2d 118 (1979); Borough of Valley-Hi Incorporation Case, 33 Pa. Commonwealth Ct. 180, 381 A.2d 204 (1977), and Snelling v. Department of Transportation, 27 Pa. Commonwealth Ct. 276, 366 A.2d 1298 (1976), upon which the state officials rely, the township here is not generally representing itself as the fiduciary of the public interest with no express or implied mandate to do so. Rather, the township has specific statutorily prescribed responsibilities to offer fire protection to its residents. See, e.g., section 1502 of the First Class Township Code.
Given this statutorily prescribed responsibility, the township’s interest in fire protection resembles the environmental interest of a second class township, discussed recently in Franklin Township and County of Fayette v. Department of Environmental Resources
Furthermore, in the situation before us, the legislature expressly recognized the municipality’s role in distributing the foreign fire insurance premium tax by providing in section 2262(a), that before a municipality shall receive this tax from the State Treasurer, the municipality “shall first certify to the Auditor General that the fire department or fire company or companies of such near or adjacent [municipality] afford fire protection to the inhabitants of [that municipality]. ...” Our Superior Court recognized that involvement of a municipality in applying the proceeds of this tax:
The manner in which the fund was to be set up or administered was left by the legislature to the municipalities.
Commonwealth v. Souder, 172 Pa. Superior Ct. 463, 470, 94 A.2d 136, 139 (1953), aff’d 376 Pa. 78, 101 A.2d 693 (1954).
Indispensable Parlies
The township alleges that the post offices serving it and its neighboring municipalities
In response, the state officials contend that the municipalities surrounding the township’s borders are indispensable parties, and that the township’s failure to join them constrains us to dismiss the complaint, citing Columbia Gas and Transmission Co. v. Diamond Fuel Co., 464 Pa. 377, 346 A.2d 788 (1975) (failure to join indispensable parties deprives a court of jurisdiction).
Recently, our Supreme Court, in Mechanicsburg Area School District v. Kline, 494 Pa. 476, 431 A.2d 953 (1981), noted that:
The determination of an indispensable party question involves at least these considerations:
(1) Do absent parties have a right or interest related to the claims ?
*504 (2) If so, what is the nature of that right or interest?
(3) Is that right or interest essential to the merits of the issue ?
(4) Can justice be afforded without violating the due process rights of absent parties?
Id. at 481, 431 A.2d at 956.
Mechanicsburg involved preliminary objections by various state officials to a school district’s complaint in equity, which sought to compel those officials to (Calculate the income valuation of that district in accordance with state funding statutes. At issue was whether all the other school districts of this Commonwealth were indispensable parties to the action. The court said:
The other school districts had a right under [the Act] to a correct and accurate determination of the amount of subsidy granted them. This right is the same as that of [appellant school district]. It is not one of entitlement to a determined portion of the total subsidy, but rather to a sum to be determined by correct computations of the Secretary of Education in accordance with the state school subsidy formula. ...
Id. at 482, 431 A.2d at 956. Noting that each school district had “a vested right to receive the benefit of the use of correct process by the state officials identified in the Code [and] not a vested right to receive a fixed or determined sum of money. ...” Id. at 482, 431 A.2d at 957, the court held that the other school districts were not “essential” to the determination of the issue of ascertaining the correct computation.
The school district subsidy formulas at issue in Mechanicsburg required complex calculations of nu
Moreover, the school district’s complaint in Mechanicsburg sought to enjoin the state officials from paying the final installment of school subsidies for the school year in question. The potential reimbursement delay to the other Commonwealth school districts did not establish those districts as indispensable parties. Likewise, the township’s request here to impound distribution of the tax receipts until a policy is established to ensure compliance with section 2262, should not establish the neighboring municipalities as indispensable parties, notwithstanding the distinction that the township named only its neighboring municipalities, rather than all municipalities in the state.
Therefore, we conclude that the township did not fail to join indispensable parties.
The town,ship seeks a mandamus order requiring each of the named state officials to take the necessary action to force foreign fire insurance companies to state correctly the municipality in which the insured property is located.
The state officials assert that the township has failed to state a claim upon which relief can be granted, because none of the officials has a mandatory duty to enforce the reporting requirements of the foreign fire insurance premium tax, and, therefore, that we cannot issue a writ of mandamus. Mandamus can compel the performance of a ministerial act or mandatory duty only ‘ ‘where there is a clear legal right in the plaintiff, a corresponding duty in the defendant, and a want of any other appropriate and adequate remedy.” Valley Forge Racing Association., Inc. v. State Horse Racing Commission, 449 Pa. 292, 295, 297 A.2d 823, 825 (1972).
Specifically, as to each official, the township addresses the following statutory responsibilities: The
Section 506 of the Company Law sets forth the requirements of fire insurance policies. Subsection (8) of that section states:
In addition to the other provisions of this section, no foreign fire insurance company shall issue a policy affording fire insurance, as described in this section, on property in this Commonwealth, unless such policy contains the exact name of the [municipality] wherein the insured property is located in addition to the mailing address for each such insured property. (Emphasis added.)
Section 507 of that Law, 40 P.S. §637, grants the Insurance Commissioner the authority to enforce the provisions of section 506:
Upon satisfactory evidence that any person, corporation, or insurance company, association or exchange is issued, or caused to be issued, any policy or contract of fire insurance on property situated in this Commonwealth contrary to the provisions of section 506 of this Act [40 P.S. §636], the Insurance Commissioner may, in his discretion, take, against the offending party, any one or more of the following courses of action: (1) Suspend or revoke the license of such offending person, corporation or insurance company, association or exchange; (2) refuse, for a period of not to exceed one year thereafter, to issue a new license*508 to such offending person, corporation or insurance company, association or exchange; (3) impose a penalty of not more than $1,000 for each violation of said section. (Emphasis added.)
The Insurance Commissioner asserts that he may enforce only the requirements pertaining to insurance policies, and that he has no authority to enforce tax reporting requirements of insurance companies. Moreover, he contends that his authority to enforce section 506 is explicitly discretionary, which precludes the use of mandamus to compel such enforcement. See Pennsylvania Tavern Association v. Liquor Control Board, 472 Pa. 567, 372 A.2d 1187 (1977).
In addition, the township asserts that the Secretary of Revenue, under section 2262, has the responsibility of collecting and distributing taxes of foreign fire insurance companies. Section 2262 provides, in relevant part:
The amount to be paid to each of the treasurers of the several [municipalities] shall be based upon the return of said two percentum tax upon premiums received from foreign fire insurance companies doing business within the said [municipality], and shall be proportionate to the premiums received by such companies on account of insurance written upon property located in such [municipality], as shown hy the report made in the Department of Revenue. (Emphasis added.)
The Secretary of Revenue contends that, although he is authorized to enforce reporting requirements of foreign fire insurance companies, he is under no mandatory duty to eliminate every reporting violation.
Finally, the township has joined as defendants the Auditor General, who participates in the issuance of funds to municipalities under section 2262, and the State Treasurer, who issues checks for payment of the taxes levied.
In response, the Auditor General asserts that under the Insurance Act, the Insurance Commissioner, not the Auditor General has discretion to take action against any insurance company for issuing any policy or contract of fire insurance which is contrary to the provisions of section 507 of that Act.
Likewise, although section 2262 does provide that the State Treasurer shall pay to the treasurers of various municipalities the net proceeds of the tax paid upon premiums by foreign fire insurance companies, that section indicates that such proceeds shall be based on reports made to the Department of Revenue. Thus, because the complaint does not allege that the State Treasurer is distributing the funds contrary to law, that he has the duty or discretion to ensure that these reports are being made correctly, or that he possesses any duty, responsibility, power or authority with respect to the administration or implementation of the Insurance Act, we must conclude that
However, as to the demurrers of the Secretary of Revenue and the Insurance Commissioner, arguing that any enforcement powers they have are discretionary, we find our Supreme Court’s decision in Hotel Casey Co. v. Ross, 343 Pa. 573, 23 A.2d 737 (1942), applicable. In that case, a hotel, following a decision by our Supreme Court that hotels operating dining rooms for the convenience of their guests were not subject to the payment of the restaurant mercantile license tax, applied to the Pennsylvania Board of Finance and Revenue for a refund of taxes paid under an erroneous interpretation of that tax. The board had argued that under the applicable statute,
It would seem both illogical and unreasonable to assume that, when the legislature attempted to correct a rigor of the law that caused an injustice and in so acting made it the duty of one of its fiscal agents to determine whether a tax had been collected to which the state was not rightfully or equitably entitled and made specific provision for a refund or credit in the event of such a finding, it intended only such illusory relief as would leave the granting of the refund to the unlimited discretion of the agency. . . . Consequently, where a statute directs the doing*512 of a thing for the sake of justice the word “may” means the same thing as the word “shall”. The principle is thus stated in Supervisors, Rock Island Co. v. United States, 71 U.S. 435, 446, 18 L. Ed. 419; “The conclusion to be deduced from the authorities is, that where power is given to public officers and the language of the act before us, or in equivalent language — whenever the public interest or individual rights call for its exercise — and the language used, though permissive in form, is in fact peremptory. What they are empowered to do for a third person the law requires shall be done. The power is given not for their benefit, but for his. It is placed with the depositary to meet the demands of right, to prevent a failure of justice. It is given as a remedy to those entitled to invoke its aid, and who would otherwise be remedyless. In all such cases it is held that the intent of the legislature, which is the test, was not to devolve a mere discretion, but to impose “a positive and absolute duty.”
Id. at 579, 23 A.2d at 740.
Likewise, .the requirements of the Company Law and section 2262, when read together, that the Insurance Commissioner require insurance companies to ensure that insurance policies reflect the ‘ ‘ exact name of the [municipality] wherein the insured property is located,”
If the facts set forth in the petition are found to be true, the commission is required to perform a purely ministerial act, to wit, to direct refund or a credit. There would therefore seem to be no question but that mandamus is the proper remedy.
Id. at 483, 23 A.2d at 742.
Therefore, the demurrer aspect of the preliminary objections of the State Treasurer and the Auditor General are sustained, and those of the Insurance Commissioner and the Secretary of Revenue are overruled.
Order
Now, April 19, 1983, the preliminary objections of Robert Bloom, Secretary of Revenue of the Commonwealth of Pennsylvania, and Michael L. Browne, Insurance Commissioner of the Commonwealth of Pennsylvania, paragraphs 1-11, inclusive, are overruled.
The preliminary objections of Al Benedict, Auditor General of the Commonwealth of Pennsylvania, paragraphs 1-12, inclusive, are sustained.
The preliminary objections of R. Budd Dwyer, State Treasurer of the Commonwealth of Pennsylvania, are determined as follows :
Standing
Paragraphs 1-8, inclusive, are overruled.
Paragraphs 9-15, inclusive, are overruled.
Demurrer
Paragraphs 16-24, inclusive, are sustained. Paragraphs 25-27, inclusive, a motion for more specific pleadings, are thereby moot.
Amended Pleadings
Paragraphs 1-9, inclusive, of the State Treasurer’s amended pleadings, which supplement paragraphs 9-15 of his original preliminary objections regarding the indispensable party issue, are overruled.
Section 2262 provides, in relevant part:
§2262. Payment of amount by State Treasurer to municipalities ; apportionment
(a) On and after the first day of January, one thousand nine hundred and nineteen, and annually thereafter, there shall be paid by the State Treasurer to the treasurers of the several cities, towns, townships, and boroughs within the Commonwealth, the entire net amount received from the two per centum tax paid upon premiums by foreign fire insurance companies. The amount to be paid to each of the treasurers of the several cities, towns, townships, and boroughs shall be based upon the return of said two per centum tax upon premiums received from foreign fire insurance companies doing business within the said cities, towns, townships, and boroughs, and shall be proportionate to the premiums received by such companies on account of insurance written upon property located in such city, borough, town or township, as shown by the report made to the Department of Revenue. Each city, borough, town or township, receiving any payment from the State Treasurer hereunder, shall forthwith pay the amount received to the relief fund association of, or the pension fund covering the employes of the fire department, or of such fire company, or fire companies, paid or volunteer, now existing, or hereafter organized, in such city, borough, town or township, and duly recognized as such by the council or commissioners or supervisors, as the ease may be, of such city, borough, town, or township. In any borough, town or township in which there is no fire department or fire company or companies, the amount received by
Act of June 24, 1931, P.L. 1206, as amended, 53 P.S. §56516 and §56517, which grants a township of the first class the power:
To make regulations within the township or within such limits, as may be deemed proper, relative to the cause and management of fires and the prevention thereof; to purchase or contribute to the purchase of fire engines and fire apparatus for the use of the township, and to appropriate money to fire companies for the operation and the maintenance thereof and for the construction, repair and maintenance of fire company houses; to ordain rules and regulations for the government of such fire companies and their
53 P.S. §56516.
To provide and maintain suitable places for the housing of engines, hose carts, and other apparatus for the extinguishment of fire ....
53 P.S. §56517.
Cf. Pennsylvania Auditor General v. East Washington Borough, 23 Pa. Commonwealth Ct. 382, 351 A.2d 687 (1976) (borough, which was the only appellant to challenge Auditor General, was entitled to receive proportionate share of the Commonwealth’s tax and casualty insurance premiums under a similar insurance statute).
Boroughs of Bridgeville, McDonald, Oakdale and the Township of Cecil.
See sections 2501-2592 of the Public School Code, Act of March 10, 1949, P. L. 30, as amended, 24 P.S. §§25-2501-25-2592.
The cases concerning the issue of indispensable parties, cited in the state officials’ briefs are contained in the Mechanicsburg decision. See, e.g., Action Coalition of Elders v. Allegheny, 493 Pa. 302, 426 A.2d 560 (1981). Scherbick v. Community College of Allegheny County, 479 Pa. 216, 387 A.2d 1301 (1978) ; Columbia Gas Transmission Corp. v. Diamond Fuel Co., 464 Pa. 377, 346 A.2d 788 (1975); Tigue v. Basalyga, 451 Pa. 436, 304 A.2d 119 (1973) ; Reifsnyder v. Pittsburgh Outdoor Advertising Co., 396 Pa. 320, 152 A.2d 894
Preliminary objections in the nature of a demurrer admit all well-pleaded facts in the pleading attacked as well as all reasonable inferences deducible therefrom and cannot be sustained unless it is clear on the face of the pleading that the law will not permit the recovery sought, resolving all doubts in favor of overruling the demurrer. Association of Pennsylvania State Colleges and University Faculties v. Commonwealth, 44 Pa. Commonwealth Ct. 193, 403 A.2d 1031 (1979).
Act of May 17, 1921, PA. 682, as amended, 40 P.S. §§636 and 637.
General provisions pertaining to the insurance premiums tax are set forth in article IX of the Tax Reform Code of 1972 (Tax
40 P.S. §637.
The Auditor General also asserts that he is constitutionally and statutorily prohibited from providing the requested relief because Pa. Const, art. 8, §10, and the Tax Code prohibit him from approving any transaction relative to the financial affairs of the Commonwealth before its occurrence, which the Auditor General is required or empowered to audit after its occurrence, and that in Volunteer Firemen’s Relief Association v. Minehart, 415 Pa. 305, 203 A.2d 476 (1964), our Supreme Court held that the Fiscal Code, Act of April 9, 1929, P.L. 343, as amended, 72 P.S. §403, imposed on the Auditor General a duty to audit accounts and records of firemen’s relief fund associations which receive monies under section 2262.
The State Treasurer was the only state official to include in his preliminary objections a motion for more specific pleadings. Because we are granting the State Treasurer’s preliminary objection as to the demurrer portion, we need not consider the motion for more specific pleadings.
Section 503 of the Fiscal Code, Act of April 9, 1929, P.L. 343, as amended by Act of June 6, 1939, P.L. 261, 72 P.S. §503.
See section 506(8) of tlie Company Law, 40 P.S. §686(8).
See footnote 7 above.
in Hotel Oasey, tbe court recognized that:
Although the writ [of mandamus] is granted by the law side of the court, equitable principles largely govern its insurance and it will be granted only “where necessary to promote the ends of justice and where the prayer of the petitioner appeals to the conscience of the court.”
Id. at 582, 23 A.2d at 742.
Concurrence in Part
Concurring and Dissenting Opinion by
I join with the majority but would also find that the neighboring municipalities are indispensable parties and would insist on their joinder under the applicable Rules of Civil Procedure. Unlike in Mechanicsburg, any finding here that the Township of South Payette is entitled to additional tax revenues, would diminish the revenues which would accrue to the surrounding municipalities.