Calvert Associates Ltd. Partnership v. Department of Employment and Social Services, Employment Sec. Administration

• Decision Date: 07 April 1976
• Docket Number: No. 162,162
• Citation: 357 A.2d 839,277 Md. 372
• Parties: CALVERT ASSOCIATES LIMITED PARTNERSHIP et al. v. DEPARTMENT OF EMPLOYMENT AND SOCIAL SERVICES, EMPLOYMENT SECURITY ADMINISTRATION.
• Court: Maryland Court of Appeals

Page 372

277 Md. 372

357 A.2d 839

CALVERT ASSOCIATES LIMITED PARTNERSHIP et al. v. DEPARTMENT OF EMPLOYMENT AND SOCIAL SERVICES, EMPLOYMENT

SECURITY ADMINISTRATION.

No. 162.

Court of Appeals of Maryland.

April 7, 1976.

Christopher Sanger, Washington, D. C., for appellants.

David Huddle, William P. Daisley and Michael C. Blackstone, Chevy Chase, on the brief, amicus curiae by, Apartment and Office Building Assn. of Metropolitan Washington, Inc.

Joel J. Rabin, Asst. Atty. Gen., Baltimore (Francis B. Burch, Atty. Gen. and Diana G. Motz, Asst. Atty. Gen., Baltimore, on the brief), for appellee.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and O'DONNELL, ^* JJ.

SMITH, Judge.

Appellants, Calvert Associates Limited Partnership et al. (Calvert), here seek to impinge upon the doctrine of sovereign immunity. As they put it, however, they do 'not advocate . . . that the doctrine of sovereign immunity be fully swept away by judicial decision,' but rather they 'urge that the Court hold the doctrine not applicable where the State . . . enters into purely private contracts with its citizens.' For the reasons which we shall develop we are unable to accede to this point of view.

The facts are relatively simple. Leases were entered into between two limited partnerships and the State for space in Riverdale, Maryland, to be occupied by the Department of Employment and Social Services. The leases in each instance were on the standard lease from of the State of Maryland. In each instance someone placed a date prior to July 1, 1974, upon the leases. Each lease was for a term of one year 'to commence on the first day of July, nineteen hundred seventy-four.' Each lease was executed by the Executive Director of the Employment Security Administration and by the Secretary of the Department of Employment and Social Services. In one instance approval of the Board of Public Works was secured on August 20, 1974. In the other, such approval was on September 19, 1974. In neither instance did the State enter into occupancy prior to that approval. Calvert seeks rent from July 1, 1974. Pursuant to Maryland Rule 323 b the State filed a motion raising preliminary objection 'on the ground that (it) has total governmental immunity against this action, and has not consented to filing thereof, or otherwise waived its immunity.' With the motion there was submitted an affidavit from the Director of the Division of Budget and Finance of the Department of Employment and Social Services. It said that he was 'responsible for supervising and approving the budget of the Department of Employment and Social Services,' that he 'must determine for which purposes funds in the budget may be spent and approve the expenditure of funds for purposes authorized by State and Federal law and disapprove expenditures for purposes not valid under those lawful requirements,' and that, '(t)o the best of (his) knowledge and belief, there (were) no funds within the (then) current budget of the Department of Employment and Social Services which c(ould) be used for payment of any recovery in (this) action or for the rent now claimed on the premises involved in the action.' He further stated that '(s)uch expenditures would first have to be approved and the funds granted by the United States Department of Labor which funds the State programs . . . occupying the premises under the lease involved in this action.' He also said in the affidavit that he was 'unaware of any action taken by the Department of Labor toward such approval or granting of funds.' The trial judge (Bowie, J.) granted the State's motion. We granted the writ of certiorari prior to consideration of Calvert's appeal by the Court of Special Appeals.

Calvert argues that '(i)n the realm of private affairs and private business relations, the State is entitled to no rights or privileges over and above those granted to others doing business in the private sector of the economy.' It says that many states 'which otherwise adhere to traditional concepts of sovereign immunity as passed down from English common law, have held as an exception to the doctrine that when authority is granted to the State and/or its agencies to enter into a contract, a concomitant of that authority must necessarily be a waiver of the State's power to deny a remedy for its own breach or violation thereof.' Calvert further argues that '(e)ven if the Doctrine of Sovereign Immunity is held applicable to the private business transactions involved (in this proceeding), the State has consented to be sued on leases which it enters into, and (Calvert's) causes of action are therefore maintainable.' On the issue of sovereign immunity it finally argues that the trial judge's 'ruling . . . achieves an unjust and irrational result, is contrary to the best interests of the State and its citizenry, and cannot possibly be reflective of the intent of the Maryland legislature.' It no doubt is frustrating to an individual dealing with the State to encounter a situation similar to that presented here and to not be able to have the courts adjudicate the dispute. As this Court has said on many occasions, however, the remedy lies not with the judiciary, but with the General Assembly since the General Assembly has made it abundantly clear that suits against the State for damages are not permitted.

Joy would reign insofar as Clavert is concerned if we were to advise that we had discovered a statute in effect in Maryland stating '(t)hat any citizen of this State, having any claim against this State for money, may commence and prosecute his action at law for the same against this State as defendant,' with juries to 'try such issue or issues,' and the further provision that if a jury should 'find for the plaintiff, they may assess such damages as they may think just, and the same shall be paid by the State . . ..' Just such an act was passed by the General Assembly as Chapter 53 of the Acts of 1786. Were it still in effect, it obviously would afford relief to Calvert, but it was repealed by Chapter 210 of the Acts of 1820, thus providing the base for our many pronouncements that relief in the matter of sovereign immunity must come from the General Assembly, and not from the juiciary.

Thirty-eight years after the repeal of Chapter 53 of the Acts of 1786 the General Assembly demonstrated its continuing belief that power to sue the State must come from it when, as a prelude to St John's College v. State, 15 Md. 330 (1860), it passed its Resolution No. 4 in 1858. Washington College, chartered by an act of the General Assembly in 1782, and St. John's College, chartered by such an act in 1784, were, as it was put in St. John's College at 341, 'declared (by the General Assembly to be) one university by the name of the University of Maryland . . ..' Commitments were made for appropriations upon which the State ultimately reneged. Eighty-one years before the Uniform Declaratory Judgment Act was adopted in Maryland the General Assembly passed its Resolution No. 4 saying that the Governor was 'authorised and required to cause such proceedings to be instituted as m(ight) be necessary to obtain the opinion of the Judges of the Court of Appeals of Maryland' as to whether the appropriation to St. John's College 'constitute(d) a contract on the part of the State, under all the circumstances of the case, which could not be legally repealed' by the General Assembly and whether the act of repeal was 'in violation of the tenth section of the first article of the Constitution of the United States, which declares 'that no State shall pass any law impairing the obligation of contracts" and whether the act in question 'with the circumstances of the case constituted such a contract as would, if entered into between individual citizens be legally binding upon them . . ..' As our predecessors put it at page 332 of 15 Md., '(i)n causing the necessary proceedings to be instituted under this resolution, the Governor being advised that he ought to occupy the position in court of defendant, it was agreed and arranged with the Visitors and Governors of St. John's College, that if they would file their bill, setting forth fully, in detail, the grounds of their complaint against the State, the Governor would appear to the suit and on behalf of the State answer the bill, and the bill was accordingly then filed' in the Circuit Court for Anne Arundel County. The fact that this resolution was regarded as necessary to permit the litigation is clear evidence of the view of the General Assembly on the subject in 1858.

In State v. Baltimore & O. R. R., 34 Md. 344 (1871), aff'd 21 U.S. 456, 21 Wall. 456, 22 L.Ed. 678 (1875), there was litigation between the State and that railroad relative to a tax said to be due the State in the amount of $500,000 on monies received by the railroad for the transportation of passengers between Washington and Baltimore. To the railroad's attempt to plead set-off, Chief Judge Bartol said:

'In actions instituted by the State, it is well settled that no right of set-off exists, unless in cases where such defense is expressly allowed by statute, for the reason that the State being sovereign is not liable to be sued by an individual or corporation.

'The right to sue the State was given by the Act of 1786, ch. 53, but this was afterwards repealed and the right taken away.

'This immunity belongs to the State by reason of her prerogative as a sovereign, and on grounds of public policy. Parties having claims or demands against her, must present them through another department of the Government-the Legislature-and cannot assert them by suit in the courts. For the same reason a right of set-off against the State does not exist.' Id. at 374.

In Weyler v. Gibson, 110 Md. 636, 73 A. 261 (1909), the Court permitted an action in ejectment against public officials who had improperly taken land for the Maryland Penitenitiary. At page 654, 73 A. at page...