Posts tagged "Pennsylvania"

Commonwealth v. Pennsylvania Higher Education Assistance Agency (Lawyers Weekly No. 09-019-18)

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1784CV02682-BLS2 ____________________ COMMONWEALTH OF MASSACHUSETTS v. PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY d/b/a FedLoan Servicing ____________________ MEMORANDUM AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS The Commonwealth of Massachusetts has sued the Pennsylvania Higher Education Assistance Agency (PHEAA) for engaging in allegedly unfair and deceptive acts and practices against Massachusetts student loan borrowers. It appears to be undisputed that PHEAA, although originally established to help provide student loans and grants for Pennsylvania residents, has become one of the largest student loan servicers in the country and now manages the federal student loan accounts of hundreds of thousands of Massachusetts residents under a contract with the United States Department of Education. The Commonwealth claims that PHEAA violated the federal Consumer Financial Protection Act and G.L. c. 93A by charging and collecting amounts not owed by borrowers, failing to process borrowers’ applications for income driven repayment plans in a timely and accurate manner, and failing to properly count borrowers’ qualifying payments under the Public Service Loan Forgiveness program. PHEAA has moved to dismiss this action on several grounds. The Court will DENY this motion because it is not convinced that PHEAA is an arm of the Commonwealth of Pennsylvania and shares in its sovereign immunity, that PHEAA cannot be sued under G.L. c. 93A or that its alleged misconduct is exempt from c. 93A because it is affirmatively permitted by federal law, or that the United States Department of Education is an indispensable party. 1. Background—PHEAA’s Enabling Act. Certain aspects of the enabling act that created PHEAA provide background relevant to PHEAA’s claims that it is entitled to invoke the Commonwealth of Pennsylvania’s sovereign immunity and that it cannot be sued under G.L. c. 93A because it is a public entity. – 2 – PHEAA was established by the Pennsylvania Legislature as “a public corporation and government instrumentality.” 24 Pa. Stat. § 5101. It is authorized to make, guarantee, and service student loans. Id. § 5104(3). By statute, PHEAA has substantial financial and operational independence from the Commonwealth of Pennsylvania. PHEAA can spend money “for any of its purposes” without needing any legislative appropriation. Id. § 5104(3). Although PHEAA must deposit its revenues “in the State Treasury,” it may use its funds whenever it wants “at the discretion of the board of directors for carrying out any of the corporate purposes of the agency.” Id.; see also id. § 5105.10 (PHEAA’s loan servicing, loan repayment, and other revenues are held within State Treasury in a segregated “Educational Loan Assistance Fund,” are all “appropriated to [PHEAA’s] board,” and “may be applied and reapplied as the board shall direct and shall not be subject to lapsing”). And PHEAA may […]

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Posted by Massachusetts Legal Resources - March 1, 2018 at 7:48 pm

Categories: News   Tags: , , , , , , , ,

Insurance Company of the State of Pennsylvania v. Great Northern Insurance Company (Lawyers Weekly No. 10-030-16)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us   SJC-11897   INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA  vs.  GREAT NORTHERN INSURANCE COMPANY.       Suffolk.     November 2, 2015. – March 7, 2016.   Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.     Workers’ Compensation Act, Insurer, Coverage, Election of remedies.  Insurance, Workers’ compensation insurance, Contribution among insurers, Insurer’s obligation to defend.  Contribution.  Tender.  Election of Remedies.       Certification of a question of law to the Supreme Judicial Court by the United States District Court for the District of Massachusetts.     Barbara I. Michaelides, of Illinois (Aaron S. Bayer, of Connecticut, with her) for the plaintiff. Jennifer C. Sheehan (Richard J. Shea with her) for the defendant. Laura Meyer Gregory, for Massachusetts Defense Lawyers Association, amicus curiae, submitted a brief.     GANTS, C.J.  The United States Court of Appeals for the First Circuit certified the following question to this court, pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981): “Where two workers’ compensation insurance policies provide coverage for the same loss, may an insured elect which of its insurers is to defend and indemnify the claim by intentionally tendering its defense to that insurer and not the other and thereby foreclose the insurer to which tender is made from obtaining contribution from the insurer to which no tender is made?”   We answer “no” to the question.  Where, as here, two primary workers’ compensation insurance policies provide coverage for the same loss arising from injury to an employee, the insurance company that pays the loss has a right of equitable contribution to ensure that the coinsurer pays its fair share of the loss.  The employer of the injured employee may not prevent the insurance company that pays the loss from exercising its right of equitable contribution by intentionally giving notice of the injury only to that insurer.[1] Background.  We set forth below the relevant background and procedural history of the case contained in the certification order from the First Circuit, occasionally supplemented by undisputed information in the record.  In January, 2010, an employee of Progression, Inc. (Progression), was severely injured in an automobile accident while traveling abroad on a business trip.  Progression had purchased two workers’ compensation policies from two different insurers, one providing compulsory workers’ compensation coverage from the Insurance Company of the State of Pennsylvania (ISOP), […]

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Posted by Massachusetts Legal Resources - March 7, 2016 at 6:33 pm

Categories: News   Tags: , , , , , , , ,