Court Opinion

ID: 9711544
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:34:05.983675+00
Date Added: 2024-06-11T18:23:05.798394
License: Public Domain

LARSEN, Justice,
concurring.
I concur in the majority opinion.
*261First: It offends public policy for a school district to purchase insurance against tax refunds. Even if an insurance company willing to write such a policy could be found, the premium payments would be a frivolous waste of tax dollars.
Second: I agree that the insurance policy provision which excludes matters “uninsurable under the law pursuant to which [the] policy shall be construed” applies to tax refunds. I submit that even without relying on this exclusion, the tax refund is not covered by the policy for the following reasons:
Where the language is clear and unambiguous, the terms of an insurance contract are to be given their plain and ordinary meaning. Pennsylvania Manufacturers’ Association Insurance Co. v. Aetna Casualty and Surety Insurance Co., 426 Pa. 453, 233 A.2d 548 (1967). The policy clearly and unambiguously insures against “loss”. If it is found that a tax has been illegally collected from some taxpayers and is refunded, any shortage in necessary funds will be collected from other taxpayers, since the source of the school district’s funds is the taxpaying public. To claim that this resulted in a “loss” to the school district would defy common sense; it would disregard the plain and ordinary meaning of “loss”.
The statute which governs the refund of taxes in this case is the Act of May 21, 1943, P.L. 349, § 1, as amended, 72 P.S. § 5566b (1968). This act provides that whenever a political subdivision (including a school district) has collected taxes to which it is not legally entitled, any taxpayer entitled to a refund must make a written claim within two years.1 The *262statement that the “political subdivision is not legally entitled” to the taxes as well as the use of the word “refund” in the statute supports the conclusion that the school district has not suffered a “loss” when the taxes are refunded. The school district simply cannot “lose” that to which it was not legally entitled.
In his dissent, Mr. Justice Kauffman urges that the tax refund is a “loss” because the policy defines “loss” in unusually broad terms as “any amount which the Assured or School District are legally obligated to pay . . . ”. Despite the broad terms, there is absolutely no indication that a peculiar meaning be given to the word “loss”. In fact, the examples which follow the definition are garden-variety “losses”: “damages, judgments, settlements and costs, cost of investigation and defense of legal actions ...” etc. The language of the policy does not require that an eccentric meaning be given to the word “loss”, and permitting the schopl district to recover the amount of the refunded taxes from the insurance company would disregard the plain and ordinary meaning rule set forth in Pennsylvania Manufacturers’ Association Insurance Co. v. Aetna Casualty and Surety Insurance Co., supra.

. Under 72 P.S. § 5566b the taxpayer who does not make a written claim within two years cannot get a refund. However, this does not indicate that the funds belonged to the school district after all, and that any refunds actually made were “losses”. The statute merely prescribes a refund procedure which must be strictly adhered to. The cases construing this statute do not conclude that the political subdivision owned any unclaimed funds but instead conclude that the taxpayer failed to observe the statutory refund procedure. See: Pittsburgh Coal Co. v. Forward Township School District, 366 Pa. 489, 78 A.2d 253 (1951); Box Office Pictures, Inc. v. Board of Finance and Revenue, 402 Pa. 511, 166 A.2d 656 (1961). (The refund procedure has to be adhered to even where the taxing statute was unconstitutional.)