Duit Constr. Co. v. Ark. State Claims Comm'n

• Decision Date: 10 December 2015
• Docket Number: No. CV–15–278,CV–15–278
• Citation: 476 S.W.3d 791
• Parties: Duit Construction Company, Inc., Appellant, v. Arkansas State Claims Commission; Arkansas General Assembly, Claims Review Subcommittee; Arkansas General Assembly, Joint Budget Committee ; Arkansas State Highway Commission; and Arkansas State Highway and Transportation Department, Appellees.
• Court: Arkansas Supreme Court

476 S.W.3d 791

Duit Construction Company, Inc., Appellant,

v.Arkansas State Claims Commission; Arkansas General Assembly, Claims Review Subcommittee; Arkansas General Assembly, Joint Budget Committee ; Arkansas State Highway Commission; and Arkansas State Highway and Transportation Department, Appellees.

No. CV–15–278

Supreme Court of Arkansas.

Opinion Delivered December 10, 2015

Rehearing Denied January 14, 2016

Jack East III, Little Rock, for appellant.

Leslie Rutledge, Att'y Gen., by: Mindy D. Pipkin, Ass't Att'y Gen., and Michelle Davenport, for appellee.

PAUL E. DANIELSON, Associate Justice

Appellant Duit Construction Co., Inc., appeals from the order of the Pulaski County Circuit Court that dismissed its claims against Appellees, the Arkansas State Claims Commission (the "ASCC"); the Arkansas General Assembly's Claims Review Subcommittee; the Arkansas General Assembly's Joint Budget Committee; the Arkansas State Highway Commission (the "ASHC"); and the Arkansas State Highway and Transportation Department (the "ASHTD"), following this court's reversal and remand in Arkansas State Claims Commission v. Duit Construction Co., Inc., 2014 Ark. 432, 445 S.W.3d 496 (Duit I ). In this appeal, Duit asserts that the circuit court erred in dismissing its due-process claim as barred by sovereign immunity. We affirm the circuit court's order.

A complete recitation of the underlying facts can be found in Duit I, 2014 Ark. 432, 445 S.W.3d 496. In brief, Duit's suit against the Appellees stemmed from the ASCC's denial of a claim by Duit relating to a contract it had entered into with the ASHC to complete an improvement project on Interstate 30 in Saline and Pulaski Counties. In its suit, Duit challenged the constitutionality of the method by which the State resolves claims against it, asserting that the procedures violated the Due Process Clause by "failing to provide a fair and impartial post-deprivation procedure for the resolution of breach of contract claims against the State, and by discriminating against non-residents." Id. at 3, 445 S.W.3d at 500.

Following motions to dismiss by the Appellees, the circuit court entered an order in which it found that the framework for resolving claims against the State did not violate the Due Process Clause and that Duit's allegations were otherwise barred by sovereign immunity. The circuit court, however, denied the Appellees' motions to dismiss Duit's claim that out-of-state contractors bringing claims against the State had been treated differently from in-state contractors. The Appellees appealed from the circuit court's order pursuant to Arkansas Rule of Appellate Procedure—Civil 2(a)(10), allowing an interlocutory appeal from an order denying a motion to dismiss based on the defense of sovereign immunity, and Duit filed a cross-appeal.

In Duit I, we held that Duit's complaint failed to plead facts that, if proven, would demonstrate a difference in the treatment between in-state and out-of-state contractors; therefore, Duit had failed to establish the exception to the sovereign-immunity doctrine for unconstitutional acts. See Duit I, 2014 Ark. 432, 445 S.W.3d 496. Accordingly, we reversed the circuit court's denial of the motions to dismiss Duit's equal-protection claim and remanded for entry of an order consistent with our opinion. See id. We further dismissed Duit's cross-appeal challenging the dismissal of its due-process claim for lack of jurisdiction over the cross-appeal. See id.

On remand to the circuit court, Duit filed a second amended complaint, which amended only one paragraph. However, just nine days later, the circuit court entered its order of dismissal:

On October 21, 2013, this Court entered an order granting defendants' motions to dismiss plaintiff's due process claims, but denying defendants' motions to dismiss plaintiff's equal protection claim based on sovereign immunity. Defendants appealed to the Arkansas Supreme Court. The Arkansas Supreme Court has issued its mandate and its opinion in Case No. CV–14–137. The mandate and the opinion have been filed with the Clerk of this Court. It is hereby ORDERED as follows:

(1) Consistent with this Court's order of October 21, 2013, Duit Construction Company, Inc.'s due process claim is dismissed.

(2) Consistent with the Arkansas Supreme Court's mandate and opinion in Case No. CV–14–137, Duit Construction Company, Inc.'s equal protection claim is barred by sovereign immunity. Duit Construction Company, Inc.'s equal protection claim is, therefore, dismissed with prejudice.

(3) Consistent with this Court's order of October 21, 2013, all other claims of Duit Construction Company, Inc. are hereby dismissed with prejudice.

IT IS SO ORDERED this 18th day of December, 2014.

Duit now appeals.

For its sole point on appeal, Duit contends that the circuit court erred in dismissing its due-process claim as barred by sovereign immunity. It claims that it has a right to an impartial decision maker and that the process used by Arkansas for resolving claims against the State is fundamentally unfair because the General Assembly's budgetary and expenditure duties are too inconsistent with the General Assembly's due-process responsibilities in deciding contract claims against the ASHTD. Duit avers that the current method of resolving claims against the State violates the Due Process Clause—a violation it asserts as the basis for an exemption to the sovereign-immunity doctrine. Accordingly, it claims, the circuit court's order dismissing its due-process challenge should be reversed.

The Appellees counter that the circuit court correctly dismissed Duit's due-process claim because it was barred by sovereign immunity. They assert that Duit sought relief that, if granted, would control the actions of the State by requiring the legislature to rework its vehicle for deciding claims and would subject the State to monetary liability. The Appellees further contend that Duit's complaint did not meet the threshold showing of a valid constitutional claim that would except his claim from sovereign immunity, because the fifty-year precedent of this court has established that the ASCC statutes provide parties with due process.

This court reviews a circuit court's decision on a motion to dismiss by treating the facts alleged in the complaint as true and viewing them in the light most favorable to the plaintiff. See Fuqua v. Flowers, 341 Ark. 901, 20 S.W.3d 388 (2000). However, our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. See Fitzgiven v. Dorey, 2013 Ark. 346, 429 S.W.3d 234.

In the instant case, the circuit court found that Duit's due-process claim against the Appellees was barred by sovereign immunity. Sovereign immunity is jurisdictional immunity from suit. See Short v. Westark Cmty. College, 347 Ark. 497, 65 S.W.3d 440 (2002). This defense arises from article 5, section 20, of the Arkansas Constitution : "The State of Arkansas shall never be made a defendant in any of her courts." This court has consistently interpreted this constitutional provision as a general prohibition against awards of money damages in lawsuits against the state and its institutions. See Short, 347 Ark. 497, 65 S.W.3d 440.

When the pleadings show that the action is, in effect, one against the State, the circuit court acquires no jurisdiction. See Arkansas Dep't of Cmty. Corr. v. City of Pine Bluff, 2013 Ark. 36, 425 S.W.3d 731. In determining whether the doctrine of sovereign immunity applies, the court must decide if a judgment for the plaintiff will operate to control the action of the State or subject it to liability. See id. If so, the suit is one against the State and is barred by the doctrine of sovereign immunity, unless an exception to sovereign immunity applies. See id. We have recognized three ways in which a claim of sovereign immunity may be surmounted: (1) where the State is the moving party seeking specific relief; (2) where an act of the legislature has created a specific waiver of sovereign immunity; and (3) where the state agency is acting illegally, unconstitutionally, or if a state-agency officer refuses to do a purely ministerial action required by statute.¹ See Duit I, 2014 Ark. 432, 445 S.W.3d 496.

Duit's due-process claim was premised on its assertion that the current procedure for allowing the ASCC and the legislative branch to decide contract claims against the State was neither fair nor impartial and violated its constitutional right to due process. The circuit court, however, rejected Duit's claim, finding that the framework for deciding claims against the State was a sufficient and constitutional remedy for purposes of the Due Process Clause.

The ASCC exists to provide relief in the event of a claim against the State and its agencies. See Fuqua, 341 Ark. 901, 20 S.W.3d 388. It was created to provide a method by which claims against the State were to be addressed, while at the same time preserving the State's sovereign immunity. See, e.g., Arkansas Pub. Defender Comm'n v. Greene Cnty. Cir. Ct., 343 Ark. 49, 32 S.W.3d 470 (2000). The ASCC is an arm of the legislature; its jurisdiction is exclusive, and its decisions may be appealed only to the General Assembly. See Ark Code Ann. § 19–10–204 (Supp. 2009); Ark.Code Ann. § 19–10–211(a) (Repl. 2007); Fireman's Ins. Co. v. Arkansas State Claims Comm'n, 301 Ark. 451, 784 S.W.2d 771 (1990). It is well settled that the ASCC's "procedure for hearing claims as established by the General Assembly meets due process requirements," specifically, the opportunity to be heard at a meaningful time and in a meaningful manner. Fireman's Ins. Co., 301 Ark. at 454, 784 S.W.2d at 773 ; Austin v. Arkansas State Highway Comm'n, 320 Ark. 292, 895 S.W.2d 941 (1995).

In the instant case, it is the General Assembly's role in the Commission process with which Duit most particularly takes issue. In its complaint, Duit asserted that the General Assembly "is...