Dekalb Cnty. Sch. Dist. v. Gold

• Citation: 734 S.E.2d 466,318 Ga.App. 633
• Decision Date: 20 November 2012
• Docket Number: No. A12A0824.,A12A0824.
• Parties: DeKALB COUNTY SCHOOL DISTRICT et al. v. GOLD et al.
• Court: United States Court of Appeals (Georgia)

318 Ga.App. 633

734 S.E.2d 466

12 FCDR 3731

DeKALB COUNTY SCHOOL DISTRICT et al.

v.GOLD et al.

No. A12A0824.

Court of Appeals of Georgia.

Nov. 20, 2012.

Allegra J. Lawrence–Hardy, Laurance Joseph Warco, Lee Alexander Peifer, Atlanta, for DeKalb County School District.

Roy E. Barnes, John Frank Salter Jr., for Gold.

DILLARD, Judge.

Elaine Ann Gold and Amy Jacobson Shaye are teachers for the DeKalb County School District. In 2009, the School District suspended its contributions to a tax-sheltered annuity plan, which Gold and Shaye allege was an employee-benefit plan established by the District as an alternative to the federal Social Security system. Gold and Shaye, on behalf of themselves individually and a class of similarly situated teachers (collectively, “Gold”), sued the School District, the DeKalb County Board of Education, and the members of the Board and the School District superintendent in their official capacities (collectively, the “District”), asserting claims for declaratory judgment, money had and received, unjust enrichment, promissory estoppel, conversion, breach of contract, and breach of the implied covenant of good faith and fair dealing. The District moved to dismiss Gold's complaint for failure to state a claim, arguing that the doctrine of sovereign immunity barred each of Gold's claims. The trial court denied the motion, and the District appeals. We agree with the District that sovereign immunity bars Gold's claims for declaratory judgment, money had and received, unjust enrichment, promissory estoppel, and conversion, and we conclude that the trial court erred in failing to dismiss these claims. We find that the trial court did not, however, err in denying the District's motion to dismiss Gold's claims for breach of contract and the associated implied covenant of good faith and fair dealing. Accordingly, we affirm in part and reverse in part.

Accepting Gold's well-pleaded material allegations as true,¹ the complaint shows that on June 27, 1979, the Board voted to leave the federal Social Security system to pursue an alternative employee-benefits plan. Before voting to leave Social Security, the Board passed a resolution (the “1979 Resolution”) which stated, in relevant part, that “in the event of withdrawal from Social Security, funds currently budgeted for Social Security shall be used for the support of the alternative plan,” and that “before the budget is adopted each year, a determination shall be made as to the amount that would have been required for continued participation in Social Security during the current year.” The Board further resolved that the amount required “to continue funding Social Security shall be the amount budgeted to fund the alternative to social security, and that [the Board] will give a two year notice to the employees before reducing or terminating these funding provisions.”

In 1983, the Board established a “Tax Sheltered Annuity Plan (Alternative to Social Security)” (the “TSA Plan”), which according to the complaint, demonstrated the Board's intent to provide contributions approximating “that which the Board would be paying pursuant to the Social Security Act of 1934.” ² The TSA Plan provided that it “may be amended or terminated by the Employer at any time,” although “[n]o amendment or termination of the [TSA Plan] shall reduce or impair the rights of any Participant or his Beneficiary which have already accrued.” Following the establishment of the TSA Plan, it remained the Board's stated policy that it “shall give a two-year notice to employees before reducing the funding provisions of the Alternative Plan to Social Security.”

At an emergency meeting on July 27, 2009, the Board suspended the School District's payment of contributions to the accounts of employee-participants in the TSA Plan,³ effective for payroll periods commencing after July 31, 2009. On May 10, 2010, after it came to the Board's attention that it did not provide two year's notice before reducing the funding of the TSA Plan, the Board voted to waive the policy requiring the notice. On June 14, 2010, the Board voted to “eliminate provisions [of the Board's bylaws and policies] that are not part of the TSA Plan itself.” As of the filing of the amended complaint in June 2011, the contributions to the TSA Plan had not been restored.

The District filed a motion to dismiss Gold's amended complaint on the primary ground that Gold's claims were barred by sovereign immunity. The trial court denied that motion, and the District appeals.⁴

1. Gold's complaint includes claims for declaratory relief, promissory estoppel, conversion, unjust enrichment, and money had and received. The District contends that the trial court erred in failing to dismiss these claims as barred by the doctrine of sovereign immunity. We agree.

In reviewing these arguments, we recognize that a motion to dismiss for failure to state a claim pursuant to OCGA § 9–11–12(b)(6), as invoked by the District, should not be sustained unless “the allegations of the complaint reveal, with certainty, that the plaintiff would not be entitled to relief under any state of provable facts asserted in support of the complaint.” ⁵ However, the District also argued in its motion that Gold's claims were barred by sovereign immunity and the motion, to that extent, was “based upon the trial court's lack of subject matter jurisdiction, rather than the merits of the plaintiff's claim.” ⁶ Accordingly, Gold—the party seeking to benefit from the waiver of sovereign immunity—had the burden of proof to establish waiver.⁷ Our review of the trial court's denial of the District's motion to dismiss on sovereign-immunity grounds is de novo.⁸

The Board, the School District, the Board's members, and the superintendent ⁹ enjoy sovereign immunity.¹⁰ Indeed, it is well established that the sovereign can not be sued in its own courts, or in any other court, without its consent and permission; ¹¹ but it may, if it thinks proper, “waive this privilege, and permit itself to be made a defendant in a suit by individuals....” ¹² The permission of the State is voluntary, and it follows, then, that the sovereign is at liberty to “prescribe the terms and conditions on which it consents to be sued....” ¹³ In this respect, our Constitution provides that, except as specifically provided therein, “[t]he sovereign immunity of the state and its departments and agencies can only be waived by an Act of the General Assembly which specifically provides that sovereign immunity is thereby waived and the extent of such waiver.” ¹⁴ With these guiding principles in mind, we now turn to the District's enumerations of error.

(a) We first consider whether sovereign immunity bars Gold's declaratory-judgment claim. Gold seeks a determination of the District's obligation to fund “the Alternative Plan to Social Security, known as the TSA Plan, for the years 2009, 2010, 2011, and 2012.” ¹⁵ She also seeks a declaration that the “freeze” on the District's contribution to the TSA Plan unconstitutionally deprived employees of benefits to which they had a vested right, and that the repeal of the two-year notice requirement unconstitutionally impaired an enforceable contract right owed by the District to Gold and other members of the class.

Our Constitution and statutes do not provide for a blanket waiver of sovereign immunity in declaratory-judgment actions; and this Court has found that “sovereign immunity is applicable to protect state agencies in declaratory judgment actions....” ¹⁶ On the other hand, as our Supreme Court recently noted in Southern LNG, Inc. v. MacGinnitie,¹⁷ declaratory actions against the State have nevertheless been recognized in certain contexts.¹⁸ Accordingly, we must decide whether, in the context of the case sub judice, the State has waived its sovereign immunity to Gold's declaratory-judgment claim.

The State's sovereign immunity has been specifically waived by the General Assembly pursuant to OCGA § 50–13–10, which is part of the Administrative Procedures Act.¹⁹ Therein, the state has specifically consented “to be sued and has explicitly waived its sovereign immunity as to declaratory judgment actions in which the rules of its agencies are challenged.” ²⁰ Gold does not contend, however, that the State's consent to be sued under OCGA § 50–13–10 applies to the declaratory-judgment action at issue here, which Gold brought under the Declaratory Judgments Act.²¹

Gold contends, rather, that her declaratory-judgment claim is sustainable because she sought declaratory relief “correlative to an action arising from a breach of a written contract.” In support of her position, Gold relies upon this Court's decision in Upper Oconee Basin Water Authority v. Jackson County.²² In that case, Jackson County sued the Upper Oconee Water Basin Authority, a State subdivision, for declaratory judgment, breach of contract, specific performance, and injunctive relief.²³ The Authority moved to dismiss the action on sovereign-immunity grounds and then appealed the trial court's denial of its motion.²⁴ At issue in Upper Oconee was whether the Authority breached an intergovernmental water-supply contract, ²⁵ and our Constitution has specifically waived the State's sovereign immunity for “any action ex contractu for the breach of any written contract.” ²⁶

Indeed, we noted in Upper Oconee that “[i]t is clear that, nomenclature aside, the essence of the County's claim is for breach of the Agreement,” ²⁷ and “the fact that the County has expressly asked for the Authority's obligations under the Agreement to be determined and enforced does not change the essential nature of the claim here.” ²⁸ Accordingly, we concluded that the trial court did not err in refusing to dismiss the county's lawsuit on the basis of sovereign immunity.²⁹

In this case, the differences between Gold's claim for breach of contract and her claim for declaratory judgment are more than a matter of mere nomenclature....