Court Opinion

ID: 9753907
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:34:28.121157+00
Date Added: 2024-06-11T09:54:52.953479
License: Public Domain

DISSENTING OPINION BY
Judge PELLEGRINI.
Because the majority opinion is in conflict with Section 1724 of the Procurement Code and inconsistent with our Supreme Court’s decision in Fletcher v. Pennsylvania Property and Casualty Insurance Guaranty Association, 603, Pa. 452, 985 A.2d 678 (2009), I respectfully dissent.
Petitioners filed an action seeking a declaration to determine coverage under a policy that they have with the State Workers’ Insurance Fund (SWIF) for workers’ compensation as well as for defense costs and indemnity paid. The issue in this case is whether the Board of Claims has jurisdiction over those types of claims.
The majority holds that under Section 1724(a)(1) of the Procurement Code,1 the Board has “exclusive jurisdiction to arbitrate claims arising from ... a contract entered into by a Commonwealth agency in accordance with this part and filed with the board in accordance with section 1712.1 (relating to contract controversies)” to review coverage disputes involving SWIF workers’ compensation policies. 62 Pa.C.S. § 1724(a)(1). In arriving at that conclusion, the majority, relying on cases largely decided before the Board of Claims’ jurisdiction was revised in 2002 when it was placed in the Procurement Code, finds that SWIF polices are contracts, and Pennsylvania courts have broadly construed that provision as conferring jurisdiction of the Board of Claims to all contract disputes. See, e.g., Shovel Transfer and Storage, Inc. v. Simpson, 523 Pa. 235, 565 A.2d 1153 (1989). I dissent for the following reasons.
First, the presumption that the Board of Claims has exclusive jurisdiction over contract claims is no longer valid. Prior to 2002, when its jurisdiction was placed in the Procurement Code, the Board’s jurisdiction resided in former Section 4 of the Board of Claims Act, Act of May 20, 1937, P.L. 728, as amended, 72 P.S. § 4651-4, repealed by 62 Pa.C.S. § 1724. Section 4 provided:
The Board of Claims shall have exclusive jurisdiction 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 board shall also have exclusive jurisdiction to hear and determine those claims authorized by the act of March 30, 1811 (P.L. 145, Ch. XCIX), entitled “An act to amend and *858consolidate the several acts relating to the settlement of the public accounts and the payment of the public monies, and for other purposes,” and continued “by Article X, act of April 9, 1929 (P.L. 343, No. 176), known as The Fiscal Code,” wherein the Auditor General and State Treasurer were granted the power to adjust and settle certain claims against the Commonwealth.
Board of Claims Act, Act of May 20, 1937, P.L. 728, as amended, formerly 72 P.S. § 4651-4, repealed by Section 21 of the Act of December 3, 2002, P.L. 1147.
However, when provisions regarding the Board of Claims were put into Chapter 17 of the Procurement Code, the old Board of Claims Act was not merely relocated, but the jurisdiction of the Board of Claims was changed, limited and made non-exclusive. Section 1724 now provides:
§ 1724. Jurisdiction
(a) Exclusive jurisdiction. — The board shall have exclusive jurisdiction to arbitrate claims arising from all of the following:

(1) A contract entered into by a Commonwealth agency in accordance with this part and filed with the board in accordance with section 1712.1 (relating to contract controversies).

(2) A written agreement executed by a Commonwealth agency and the Office of Attorney General in which the parties expressly agree to utilize the board to arbitrate disputes arising from the agreement.
(3) Unless otherwise provided by law, a contract entered into by a Commonwealth agency involving real property interests in which the Commonwealth agency is the respondent.
(b) Concurrent jurisdiction. — The board shall have concurrent jurisdiction to arbitrate claims arising from all of the following:
(1) A contract entered into by a Commonwealth agency in accordance with this part in which the Commonwealth agency is the claimant.
(2) Unless otherwise provided by law, a contract entered into by a Commonwealth agency involving real property interests in which the Commonwealth agency is the claimant.
(c) Limitations. — The board shall have no power and exercise no jurisdiction over a claim asserted under subsection (a)(1) unless it is fíled with the board in accordance with section 1712.1. The board shall have no power and exercise no jurisdiction over a claim asserted against a Commonwealth agency under subsection (a)(2) or (3) unless the claim was filed with the board within six months after it accrued. The board shall have no power and exercise no jurisdiction over claims for payment or damages to providers of medical assistance services arising out of the operation of the medical assistance program established by the act of June 13, 1967 (P.L. 31, No. 21), known as the Public Welfare Code.
(d) Nonmonetary relief. — Nothing in this section shall preclude a party from seeking nonmonetary relief in another forum as provided by law.
62 Pa.C.S. § 1724. (Emphasis added.)2
As can be seen under Section 1724(a)(1), the Board of Claims’ jurisdiction only in*859volves claims involving contracts involving goods or services procured or sought to be procured under the Procurement Code. Moreover, even if the contract was entered into under the Procurement Code, the Board of Claims no longer has exclusive jurisdiction because Section 1724(d) provides that a party is not precluded from bringing an action in another forum if non-monetary relief is sought. Scientific Games International v. Department of Revenue, 34 A.3d 307 (Pa.Cmwlth.2011). In this case, if Petitioners had not sought reimbursement for defense costs and indemnity paid, then there would be no question that we would have jurisdiction to entertain this claim.
Instead of following the plain language of Section 1724 regarding the Board of Claims’ jurisdiction, the majority states that there should be no “departure from 200 years of precedent” of the strong presumption of the exclusivity of the Board of Claims’ jurisdiction regarding contracts. However, changes made by the General Assembly by enacting a new statute or amending an old one always trump precedent interpreting previous statutes involving the same subject matter, no matter how old, how many or how well-settled the precedent may be.
Second, the Board of Claims does not have jurisdiction because SWIF policies of insurance are not covered by the Procurement Code. The Procurement Code provides a comprehensive method for Commonwealth agencies for procurement, which is defined as the “[b]uying, purchasing, renting, leasing, licensing or otherwise acquiring any supplies, services or construction. The term also includes all functions that pertain to the obtaining of any supply, service or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract and all phases of contract administration.” 62 Pa.C.S. § 103. Section 511 sets forth the methods by which contracts can be awarded under the Procurement Code. It provides:
All Commonwealth agency contracts shall be awarded by competitive sealed bidding under section 512 (relating to competitive sealed bidding) except as provided in:
Section 512.1 (relating to competitive electronic auction bidding).
Section 513 (relating to competitive sealed proposals).
Section 514 (relating to small procurements).
Section 515 (relating to sole source procurement).
*860Section 516 (relating to emergency procurement).
Section 517 (relating to multiple awards).
Section 518 (relating to competitive selection procedures for certain services).
Section 519 (relating to selection procedure for insurance and notary bonds).
62 Pa.C.S. § 511.
Chapter 17 of the Procurement Code, in which the Board of Claims’ jurisdiction is set forth, is titled “Legal and Contractual Remedies.” See 62 Pa.C.S. §§ 1701-1751. It deals with how claims are processed, how to challenge matters arising from the way the contract has been bid or administered under Section 511, and other sections referred to in that chapter. For example, Section 1711.1 addresses bid protests and Section 1711.2 addresses remedies where solicitations or awards are contrary to law. The provision of the chapter which sets forth the Board of Claims’ jurisdiction is Section 1724(a), which limits its exclusive jurisdiction to only those claims that were first filed with the contracting officer under Section 1712.1. If the controversy has not been filed first with the contract officer under that provision, Section 1724(c) divests the Board of Claims’ jurisdiction to hear the matter. Section 1712.1 provides:
§ 1712.1. Contract controversies
(a) Right to claim. — A contractor may file a claim with the contracting officer in writing for controversies arising from a contract entered into by the Commonwealth.
(b) Filing of claim. — A claim shall be filed with the contracting officer within six months of the date it accrues. If a contractor fails to file a claim or files an untimely claim, the contractor is deemed to have waived its right to assert a claim in any forum. Untimely filed claims shall be disregarded by the contracting officer.
(c) Contents of claim. — A claim shall state all grounds upon which the contractor asserts a controversy exists.
(d) Determination. — The contracting officer shall review a claim and issue a final determination in writing regarding the claim within 120 days of the receipt of the claim unless extended by consent of the contracting officer and the contractor. If the contracting officer fails to issue a final determination within the 120 days unless extended by consent of the parties, the claim shall be deemed denied. The determination of the contracting officer shall be the final order of the purchasing agency.
(e) Statement of claim. — Within 15 days of the mailing date of a final determination denying a claim or within 135 days of filing a claim if no extension is agreed to by the parties, whichever occurs first, the contractor may file a statement of claim with the board.
(f) Applicability. — The provisions of 2 Pa.C.S. (relating to administrative law and procedure) shall not apply to this section.
62 Pa.C.S. § 1712.1. (Emphasis added.)
Section 1712.1 only pertains to disputes involving contracts under the Procurement Code. SWIF’s selling of workers’ compensation insurance does not fit that scheme at all because the Procurement Code is for what its title states — it involves procuring of goods or services, not the selling of anything, especially not the selling of insurance coverage by SWIF.
SWIF is a state-created fund established to provide workers’ compensation insurance to Pennsylvania employers. Section 1504 of the Workers’ Compensation Act, Act of June 2, 1915, P.L. 736, added by the act of June 24, 1996, P.L. *861350, 77 P.S. § 2604. It is controlled by a Board consisting of the Secretary of Labor and Industry, the Insurance Commissioner and the State Treasurer. Section 1502 of the Workers’ Compensation Act, Act of June 2, 1915, P.L. 736, added by the act of June 24, 1996, P.L. 350, 77 P.S. § 2602. SWIF generally must follow the same rules and requirements private workers’ compensation insurers must follow. An employer who desires to obtain coverage is called a “subscriber.” Once it makes an application with the requisite information about the business and its employees, then:
Upon submission of the application, the board shall make such investigations as it may deem necessary and, within thirty (30) days after the application, shall issue a certificate showing the classification or group in which such applicant is entitled to be placed and the amount of premium payable by such applicant for the year for which insurance is sought. No insurance shall be issued for a longer period than a single year.
Section 1516 of the Workers’ Compensation Act, Act of June 2, 1915, P.L. 736, added by the act of June 24, 1996, P.L. 350, 77 P.S. § 2616.
Aside from not being a procurement contract, because a Commonwealth agency is not procuring goods or services, the method by which a subscriber obtains insurance has nothing to do with the manner in which contracts are bid, issued or administered under the Procurement Code, and the Section 1712.1 scheme simply does not apply to how SWIF policies are issued or administered. Because Section 1712.1 does not apply, the Board of Claims has no jurisdiction over coverage disputes involving SWIF policies.
Third, unlike the majority, sovereign immunity simply does not apply to contracts. Recently, our Supreme Court in Meyer v. Community College of Beaver County, 606 Pa. 539, 544-45, 2 A.3d 499, 502-503 (2010) stated:
[T]he language of the statute conferring governmental immunity, and of that implementing the exceptions, pertains to conduct causing “injury to a person or property.” 42 Pa.C.S. §§ 8541, 8542. The Commonwealth Court previously has recognized that these terms reflect the main policy consideration historically underlying tort law, whereas, the central focus of contract law is the protection of bargained-for expectations. See Hazleton Area Sch. Dist. v. Bosak, 671 A.2d 277, 282-83 (Pa.Cmwlth.1996).
In line with the extant understanding of the Political Subdivision Tort Claims Act, we believe the Legislature centered the immunity there conferred on “injury to a person or property” as a reflection of traditional tort jurisprudence. Accord supra note 4 (citing cases reflecting the long-prevailing understanding concerning the Tort Claims Act’s reach). We also agree with Appellants that nothing about the recodification of the immunity statute within the Judicial Code altered this substantive intent. In response to the College’s contention that the title changed, we observe that the central conferral of immunity was captioned “Governmental immunity generally’ from its inception. See Act of Nov. 26, 1978, P.L. 1399, No. 330, § 201. Furthermore, we credit Appellants’ position that, by suggesting that the Tort Claims Act impairs the enforceability of contractual relationships with the government, the Commonwealth Court’s holding may have unintended effects which are best to be avoided.
While that case involved the Political Subdivision Tort Claims Act, the same concepts are equally applicable under the Sovereign Immunity Act. Accordingly, rather *862than being devoid of a remedy, SWIF subscribers could bring a declaratory judgment action to determine insurance coverage in court rather than having that determined by the Board of Claims.
Fourth, to prescribe any other remedy would be inconsistent with our Supreme Court’s decision in Fletcher v. Pennsylvania Property and Casualty Insurance Guaranty Association, 603 Pa. 452, 985 A.2d 678 (2009). That case, like this appeal, involved whether a state fund — the MCARE Fund — was required to provide coverage to a subscriber to the fund. The MCARE Fund is a statutory excess carrier that provides excess medical malpractice insurance coverage to the extent a health care provider’s liability exceeds its basic coverage in effect at the time of an occurrence. The issue in Fletcher was whether a declaratory judgment action to determine coverage could be brought in this court’s original jurisdiction or whether an administrative appeal have to be taken to the Insurance Department. Our Supreme Court held that Fletcher did not have to seek an adjudication from the Insurance Department to determine the extent of coverage finding that this Court had original jurisdiction to hear an action in which Fletcher sought a declaration regarding the MCARE Fund’s responsibility for excess liability and delay damages.
I can see no difference between the MCARE Fund and SWIF because both provide insurance coverage and both are state funds. If we hold that SWIF disputes go to the Board of Claims, then MCARE disputes would have to as well, which is inconsistent with our Supreme Court’s decision in Fletcher. It also belies the majority’s argument that somehow SWIF subscribers would have no remedy in the event of a breach of contract.
For the foregoing reasons, I would overrule SWIF’s preliminary objection and hold that this case can be heard in our original jurisdiction.
President Judge LEADBETTER and Judge BROBSON join in this dissenting opinion.

. Added by Section 12.2 of the Act of December 3, 2002, P.L. 1147 (2002 Act).
Section 21(a) of the 2002 Act repealed Section 4 of the Act of May 20, 1937, P.L. 728, as amended, formerly 72 P.S. § 4651-4 (“Board of Claims Act”), which, in relevant part, provided that ”[t]he Board of Claims shall have exclusive jurisdiction to hear and determine all claims against the Commonwealth arising from contracts hereafter entered into with the Commonwealth....”

. The majority relies heavily on our decision in Department of Health v. Data-Quest, Inc., 972 A.2d 74 (Pa.Cmwlth.2009). That case involved the Department of Health’s (DOH) solicitation of bids to develop a software system. In 2003, DOH personnel, with apparent authority, selected Data-Quest's software over other bidders' software and communicated to *859Data-Quest its intention to acquire its software. Until 2007, Data-Quest worked closely with DOH and the Bureau to customize its software for DOH’s purposes, but in 2007, DOH stated that it would not purchase Data-Quest's software. Data-Quest demanded payment for the costs of its services between 2003 and 2006, but DOH refused. Data-Quest filed a claim before the Board of Claims for damages under promissory estop-pel and quasi-contract theories for services performed in regard to its development of a software system. The Board of Claims denied the claim finding that it did not have jurisdiction over the claim unless it was based on a written agreement. See Section 1724(a)(1) of the Commonwealth Procurement Code, 62 Pa.C.S. § 1724(a)(1). We reversed, holding that claims involving a contract that was to have been entered under the Procurement Code were within the Board of Claims’ jurisdiction.
The obvious difference between Data-Quest and this case is that Data-Quest involves a procurement contract under the Procurement Code and this case does not. To the extent the majority relies on dicta in Data-Quest that the jurisdiction of the Board of Claims is substantially identical under the Procurement Code as under the old Board of Claims Act, that statement simply does not hold up when a comparison is made between those two Acts as I have done above.