Ex Parte Alabama Dept. of Transp.

• Decision Date: 20 July 2007
• Docket Number: No. 1060078.,1060078.
• Citation: 978 So.2d 17
• Parties: Ex parte ALABAMA DEPARTMENT OF TRANSPORTATION (In re Good Hope Contracting Company, Inc. v. Alabama Department of Transportation).
• Court: Alabama Supreme Court

978 So.2d 17

Ex parte ALABAMA DEPARTMENT OF TRANSPORTATION

(In re Good Hope Contracting Company, Inc. v. Alabama Department of Transportation).

No. 1060078.

Supreme Court of Alabama.

July 20, 2007.

Roger L. Bates, Mark T. Waggoner, and Stephen N. Fitts III of Hand Arendall, L.L.C., Birmingham, for petitioner.

Jack G. Kowalski, L. Griffin Tyndall, and David Wanhatalo of Burr & Forman, LLP, Birmingham, for respondent.

SEE, Justice.

The Alabama Department of Transportation ("ALDOT") petitions this Court for the writ of mandamus directing the Montgomery Circuit Court to enter an order dismissing the complaint of Good Hope Contracting Company, Inc. ("Good Hope"), on the grounds of sovereign immunity. Because ALDOT has demonstrated a clear legal right to this relief, we grant the petition and issue the writ of mandamus.

Facts and Procedural Background

Between March 2002 and January 2003, Good Hope entered into three contracts with ALDOT pursuant to which Good Hope was to undertake various roadway-construction projects. Those contracts contained similar liquidated-damages clauses that allowed ALDOT to assess liquidated damages against Good Hope, calculated on the basis of the number of days Good Hope exceeded the time allotted under the contract for the completion of the project. The contracts, however, give Good Hope the right to request an extension of time in which to complete the project. They provide that the "Director [of ALDOT] shall have final authority to approve or disapprove the request for an extension of time" and to decide "any question connected with ... delay in the prosecution of the Work." Petition at 7. Based upon these contract provisions, ALDOT withheld approximately $600,000 in liquidated damages from the contract price owed to Good Hope on the three contracts.

Good Hope sued ALDOT, alleging that the liquidated damages had been wrongfully assessed and seeking damages for breach of contract, negligence, and unjust enrichment and asserting a claim based on quantum meruit. Good Hope also sought a judgment declaring that the liquidated-damages provision in each contract was a penalty and was therefore void, and it sought a writ of mandamus from the trial court directing ALDOT to pay for the services Good Hope had performed under the contracts. ALDOT moved the trial court to dismiss the complaint on the ground that ALDOT, as an agency of the State of Alabama, is entitled to sovereign immunity under § 14, Ala. Const.1901. The trial court set the case for trial without ruling on ALDOT's motion to dismiss.

ALDOT petitioned this Court for the writ of mandamus directing the trial court to dismiss Good Hope's action against it. ALDOT also moved this Court to stay the proceedings in the trial court pending this Court's consideration of ALDOT's petition. We ordered answer and briefs, and we stayed the proceedings in the trial court pending disposition of the petition for the writ of mandamus.

Issue

The issue is whether the trial court erred in failing to dismiss Good Hope's claims against ALDOT on the basis of sovereign immunity.

Standard of Review

As this Court has consistently held, the writ of mandamus is a

"`drastic and extraordinary writ that will be issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court.'"

Ex parte Wood, 852 So.2d 705, 708 (Ala. 2002) (quoting Ex parte United Serv. Stations, Inc., 628 So.2d 501, 503 (Ala.1993)). "`In reviewing the denial of a motion to dismiss by means of a mandamus petition, we do not change our standard of review....'" Drummond Co. v. Alabama Dep't of Transp., 937 So.2d 56, 57 (Ala. 2006) (quoting Ex parte Haralson, 853 So.2d 928, 931 (Ala.2003)).

"In Newman v. Savas, 878 So.2d 1147 (Ala.2003), this Court set out the standard of review of a ruling on a motion to dismiss for lack of subject-matter jurisdiction:

"'A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala.2002). Furthermore, in reviewing a ruling on a motion to dismiss we will not consider whether the pleader will ultimately prevail but whether the pleader may possibly prevail. Nance, 622 So.2d at 299.'

"878 So.2d at 1148-49."

Pontius v. State Farm Mut. Auto. Ins. Co., 915 So.2d 557, 563 (Ala.2005). We construe all doubts regarding the sufficiency of the complaint in favor of the plaintiff. Drummond Co., 937 So.2d at 58.

Analysis

This Court has long held that "`"the circuit court is without jurisdiction to entertain a suit against the State because of Sec. 14 of the Constitution."'" Larkins v. Dep't of Mental Health & Mental Retardation, 806 So.2d 358, 364 (Ala. 2001) (quoting Alabama State Docks Terminal Ry. v. Lyles, 797 So.2d 432, 435 (Ala.2001), quoting in turn Aland v. Graham, 287 Ala. 226, 229, 250 So.2d 677, 678 (1971)). "[A]n action contrary to the State's immunity is an action over which the courts of this State lack subject-matter jurisdiction." Larkins, 806 So.2d at 363.

There are exceptions to the State's sovereign immunity.

"A state official is not immune from an action that (1) seeks to compel a state official to perform his or her legal duties, (2) seeks to enjoin a state official from enforcing unconstitutional laws, (3) seeks to compel a state official to perform ministerial acts, or (4) seeks a declaration under the Declaratory Judgments Act, § 6-6-220 et seq., Ala.Code 1975, construing a statute and applying it in a given situation."

Latham v. Department of Corr., 927 So.2d 815, 821 (Ala.2005).¹ Other actions that are not prohibited by § 14 include:

"(5) valid inverse condemnation actions brought against State officials in their representative capacity; and (6) actions for injunction or damages brought against State officials in their representative capacity and individually where it was alleged that they had acted fraudulently, in bad faith, beyond their authority or in a mistaken interpretation of law."

Drummond Co., 937 So.2d at 58 (emphasis omitted). In this case, ALDOT, as the party asserting the defense of immunity, bore the burden of demonstrating that Good Hope can prove no set of facts establishing one of the exceptions to the State's sovereign immunity. See Ex parte Butts, 775 So.2d 173, 177 (Ala.2000) ("As a general rule, a motion to dismiss `"for failure to state a claim is properly granted only when it appears beyond a doubt that the plaintiff can prove no set of facts entitling him to relief."'" (quoting Patton v. Black, 646 So.2d 8, 10 (Ala.1994), quoting in turn Winn-Dixie Montgomery, Inc. v. Henderson, 371 So.2d 899 (Ala. 1979))).

I. Claims for Damages and Equitable Relief

This Court has repeatedly held that § 14, Ala. Const.1901, "affords the State and its agencies an `absolute' immunity from suit in any court." Haley v. Barbour County, 885 So.2d 783, 788 (Ala.2004); see also Ex parte Mobile County Dep't of Human Res., 815 So.2d 527, 530 (Ala.2001) ("Pursuant to § 14, Ala. Const. of 1901, the State of Alabama and its agencies have absolute immunity from suit in any court."); Ex parte Tuscaloosa County, 796 So.2d 1100, 1103 (Ala.2000) ("Under Ala. Const. of 1901, § 14, the State of Alabama has absolute immunity from lawsuits. This absolute immunity extends to arms or agencies of the state...."). This absolute immunity from suit also bars suits for relief by way of mandamus or injunction. Ex parte Troy Univ., 961 So.2d 105, 110 (Ala.2006).

Because the immunity of the State is absolute, this Court has usually provided that any exceptions to that immunity extend only to suits naming the proper State official in his or her representative capacity. See Latham, 927 So.2d at 821 (laying out the exceptions to sovereign immunity). Even when an action names the proper State official in his or her representative capacity, such an action will be barred if it is, in substance, an action against the State for damages. See Ex parte Town of Lowndesboro, 950 So.2d 1203, 1206 (Ala.2006) ("Additionally, a party may not indirectly sue the State by suing its officers or agents `"when a result favorable to plaintiff would be directly to affect the financial status of the state treasury."'" (quoting Patterson v. Gladwin Corp., 835 So.2d 137, 142 (Ala.2002), quoting in turn State Docks Comm'n v. Barnes, 225 Ala. 403, 405, 143 So. 581, 582 (1932)) (emphasis added in Patterson)).

Good Hope argues that this Court, in Milton Construction Co. v. State Highway Department, 568 So.2d 784 (Ala.1990) ("Milton I"), and State Highway Department v. Milton Construction Co., 586 So.2d 872 (Ala.1991) ("Milton II"), allowed a plaintiff to bring a breach-of-contract action against the State Highway Department, the predecessor agency to ALDOT, notwithstanding the absolute immunity of the State agency. In Milton I, the plaintiff, Milton Construction Company, sought a judgment declaring that the disincentive clause of an incentive/disincentive-payments provision in each of two highway-construction contracts it had entered into with the Highway Department was void and unenforceable as a penalty. On these grounds, Milton asked the trial court to order the Highway Department to pay it the amounts of disincentive payments that the Highway Department had allegedly wrongfully withheld. This Court held that the disincentive clause in the highway-construction contracts was "void as a penalty and therefore unenforceable." 568 So.2d at 791. We remanded the case to the trial court for further proceedings consistent with this Court's opinion.

In Milton II, the Highway Department argued that the doctrine of sovereign immunity barred the trial court from ordering it to...