Cromwell v. Rapid City Police Dept., 21582.

Decision Date25 July 2001
Docket NumberNo. 21582.,21582.
PartiesChristopher CROMWELL, Plaintiff and Appellee, v. RAPID CITY POLICE DEPARTMENT; City of Rapid City; and Michael W. Lang, in His Official Capacity as an Officer of the Rapid City Police Department, Defendants, Third-Party Plaintiffs and Appellants, v. Steven B. Purchase, Third-Party Defendant.
CourtSouth Dakota Supreme Court

John S. Dorsey, Whiting, Hagg & Hagg, Rapid City, for plaintiff and appellee.

James S. Nelson and David E. Lust, Gunderson, Palmer, Goodsell & Nelson, Rapid City, for defendants and appellants.

LOVRIEN, Circuit Judge

[¶ 1.] The City of Rapid City and Officer Michael W. Lang appeal the trial court's denial of their motion for summary judgment based upon claims of sovereign immunity under SDCL 21-32A 1. We affirm.

FACTS AND PROCEDURE

[¶ 2.] On August 1, 1997, Christopher Cromwell, was injured when a car driven by Steven B. Purchase of Rapid City, broadsided his vehicle. Purchase was intoxicated at the time of the crash and was being pursued by Rapid City Police Officer, Michael W. Lang. Cromwell's guardian served notice of claim upon City on or about January 12, 1998. Suit was commenced by City's admission of service on September 25, 1999.

[¶ 3.] At the time of the accident, City had in effect liability coverage with the South Dakota Public Assurance Alliance (SDPAA), a risk pool for claims. This coverage was claims paid coverage, meaning it only covered claims paid before termination of the policy.

[¶ 4.] In October 1998, City decided to terminate its coverage with SDPAA effective December 31, 1998 and purchase insurance coverage with St. Paul Insurance Company. The St. Paul policy became effective October 1, 1998, and was a claims made policy; the St. Paul policy did not cover any claims made before October 1, 1998.

[¶ 5.] The change from the risk pool to insurance created a coverage gap. By its actions, City gave up its coverage for claims that occurred before October 1, 1998 but had not been paid out by December 1, 1998. Approximately thirty claims against City, including Cromwell's, fell within this gap and are pending or are in some stage of litigation. During the negotiations to purchase liability insurance, City discussed but decided not to purchase tail insurance that would have covered all pending claims. City brought a motion for summary judgment, seeking dismissal of Cromwell's claim based on sovereign immunity.

[¶ 6.] The circuit court denied City's motion and City filed an intermediate appeal. We permitted the appeal to proceed and now affirm.

STANDARD OF REVIEW

[¶ 7.] In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we have often stated:

[W]e must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Dakota Cheese, Inc. v. Ford, 1999 SD 147, ¶ 15, 603 N.W.2d 73, 76 (quoting Campion v. Parkview Apartments, 1999 SD 10, ¶ 22, 588 N.W.2d 897, 902 and Wildeboer v. South Dakota Junior Chamber of Comm., 1997 SD 33, ¶ 9, 561 N.W.2d 666, 668). Summary judgment will be affirmed "`only when there are no genuine issues of material fact and the legal questions have been correctly decided.'" Casazza v. State, 2000 SD 120, ¶ 8, 616 N.W.2d 872, 874 (quoting Julson v. Federated Mut. Ins. Co., 1997 SD 43, ¶ 5, 562 N.W.2d 117, 119).

[¶ 8.] "Whether the defendants are protected by sovereign immunity is a question of law, reviewed de novo, with no deference given to the trial court's legal conclusions." Hansen v. South Dakota DOT, 1998 SD 109, ¶ 7, 584 N.W.2d 881, 883 (citing Wilson v. Hogan, 473 N.W.2d 492, 493 (S.D.1991)).

[¶ 9.] When the interpretation of a statute is in question, we have said:

Questions of law such as statutory interpretation are reviewed by the Court de novo.... The purpose of statutory construction is to discover the true intention of the law which is to be ascertained primarily from the language expressed in the statute. The intent of a statute is determined from what the legislature said, rather than what the Court thinks it should have said, and the Court must confine itself to the language used. Words and phrases in a statute must be given their plain meaning and effect. When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court's only function is to declare the meaning of the statute as clearly expressed. Since statutes must be construed according to their intent, the intent must be determined from the statute as a whole, as well as enactments relating to the same subject.

Lekanidis v. Bendetti, 2000 SD 86, ¶ 16, 613 N.W.2d 542, 545 (quoting Dahn v. Trownsell, 1998 SD 36, ¶ 14, 576 N.W.2d 535, 539).

ISSUES

[¶ 10.] Did City waive its sovereign immunity by participation in the SDPAA for claims that arose during the time of that participation?

[¶ 11.] If sovereign immunity was waived by participation in the SDPAA, can City reassert sovereign immunity as to claims that arose during the time of participation, by withdrawing from SDPAA?

ANALYSIS AND DECISION
Sovereign Immunity

[¶ 12.] Sovereign immunity is the right of public entities to be free from liability of tort claims unless waived by legislative enactments and is a time-honored doctrine, predating the United States Constitution. "When the Constitution was ratified, it was well established in English law that the Crown could not be sued without consent in its own courts." Alden v. Maine, 527 U.S. 706, 715, 119 S.Ct. 2240, 2247, 144 L.Ed.2d 636 (1999) (citing Chisholm v. Georgia, 2 Dall. 419, 437-446, 1 L.Ed. 440 (1793) (Iredell, J., dissenting) (surveying English practice)). "Although the American people had rejected other aspects of English political theory, the doctrine that a sovereign could not be sued without its consent was universal in the States when the Constitution was drafted and ratified." Id.,527 U.S. at 715-16,119 S.Ct. at 2248,144 L.Ed.2d 636.

[¶ 13.] The South Dakota Constitution ratified the doctrine with the adoption of Article III, Section 27, which provides, "The Legislature shall direct by law in what manner and in what courts suits may be brought against the state." Although there has been legislative ratification and expansions of the doctrine, this Court has found that the doctrine is "judge made law." High-Grade Oil Co., Inc. v. Sommer, 295 N.W.2d 736, 738 (S.D.1980); Sioux Falls Constr. Co. v. City of Sioux Falls, 297 N.W.2d 454, 457 (S.D.1980). Limitations to this doctrine have been made by the courts and have been recognized by the states. The United States Supreme Court has recognized a number of limitations to the doctrine as it applies to the states. "The first of these limits is that sovereign immunity bars suits only in the absence of consent." Alden, 527 U.S. at 754, 119 S.Ct. at 2267, 144 L.Ed.2d 636. See also In re Request for Opinion of the Supreme Court, 379 N.W.2d 822, 825 (S.D. 1985)

. "The second important limit to the principle of sovereign immunity is that it bars suits against States but not lesser entities. The immunity does not extend to suits prosecuted against a municipal corporation or other governmental entity which is not an arm of the State." Alden, 527 U.S. at 754,

119 S.Ct. at 2267,

144 L.Ed.2d 636. See, e.g., Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 572, 50 L.Ed.2d 471 (1977); Lincoln County v. Luning, 133 U.S. 529, 10 S.Ct. 363, 33 L.Ed. 766 (1890). By the adoption of SDCL 21-32A-3, the South Dakota Legislature has extended the reach of sovereign immunity to all public entities in this state, which includes municipalities.1

Consent to Suit or Waiver of Immunity

[¶ 14.] Courts have long held that the doctrine of sovereign immunity protects public entities not only from a final judgment but also from having to defend a claim in court. "[L]ike other forms of immunity, [sovereign immunity] protect[s] states not only from liability for money judgments; but, also, from being required to appear and defend itself against the claims of private parties." Rhode Island v. United States, 115 F.Supp.2d 269, 279 (D.R.I.2000). See also Seminole Tribe of Florida v. Florida, 517 U.S. 44, 58, 116 S.Ct. 1114, 1124, 134 L.Ed.2d 252 (1996)

; State of Connecticut Dep't. of Envtl. Protection v. OSHA, 138 F.Supp.2d 285, 288 (D.Conn.2001). Unless the state has given its consent or has abrogated or waived its immunity legislatively, public entities are free from the liability of tort claims. In re Request for Opinion, 379 N.W.2d at 825.

[¶ 15.] The state legislature has defined the conditions for the waiver of sovereign immunity at SDCL 21-32A 1:

To the extent that any public entity, other than the state, participates in a risk sharing pool or purchases liability insurance and to the extent that coverage is afforded thereunder, the public entity shall be deemed to have waived the common law doctrine of sovereign immunity and shall be deemed to have consented to suit in the same manner that any other party may be sued....

[¶ 16.] Cromwell argues that the words, "to the extent that coverage is afforded thereunder," apply only to the purchase of insurance by a public entity and that participation by a public entity in a risk sharing pool, by itself, is sufficient to waive sovereign immunity. City argues that the "extent of coverage" language applies to both...

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