Lyons v. River Road Constr., Inc.

• Decision Date: 14 March 2003
• Citation: 858 So.2d 257
• Parties: James K. LYONS, in his official capacity as director of the Alabama State Port Authority v. RIVER ROAD CONSTRUCTION, INC.
• Court: Alabama Supreme Court

858 So.2d 257

James K. LYONS, in his official capacity as director of the Alabama State Port Authority v. RIVER ROAD CONSTRUCTION, INC.

1012092.

Supreme Court of Alabama.

March 14, 2003.

James Rebarchak and David F. Walker of Miller, Hamilton, Snider & Odom, L.L.C., Mobile, for appellant.

William J. Baxley and Joel E. Dillard of Baxley, Dillard, Dauphin & McKnight, Birmingham, for appellee.

LYONS, Justice.

James K. Lyons, in his official capacity as director of the Alabama State Port Authority¹ ("the port authority"), petitioned this Court, pursuant to Rule 5, Ala. R.App. P., for permission to appeal from the trial court's denial of his motion to dismiss a case pending below based upon the doctrine of State immunity provided in Art. I, § 14, Alabama Constitution of 1901.² We granted permission to appeal, and we reverse and remand.

I. Facts and Procedural History

On September 10, 1998, the port authority contracted with Ben Radcliff Contractor, Inc. ("Radcliff"), to construct a liquid-bulk terminal at the Theodore Ship Turning Basin located at the Port of Mobile. On October 2, 1998, Radcliff entered into a subcontract with River Road Construction, Inc. ("River Road"), for the dredging portion of the project.

River Road alleges that in developing its bid to Radcliff for the dredging it relied upon the soil-boring data in a report prepared by Southern Earth Sciences, Inc. The report was commissioned by the port authority, and it indicated that the material involved in the dredging work consisted of sand and clay. However, after River Road began dredging, it encountered a substantial presence of rock, which made the dredging work more difficult and more expensive. River Road alleges that when it became aware of the presence of rock in the area to be dredged it gave notice of the unforeseen conditions to Radcliff and the port authority. River Road completed the dredging work; it alleges that it incurred additional expenses of $1,108,944 in dredging the unanticipated rock. The port authority refused to pay River Road the additional expenses.

On June 12, 2000, River Road filed a complaint against the port authority with the State Board of Adjustment ("the Board") demanding payment of its additional expenses. The port authority filed with the Board a motion to dismiss the complaint for lack of jurisdiction. In its response to the port authority's motion to dismiss, River Road acknowledged that its action against the port authority could not be submitted to a court because it was constitutionally barred by the doctrine of State immunity.

On March 23, 2001, while its claim before the Board was pending, River Road sued Lyons in his official capacity as director of the port authority. River Road alleged that the soil-boring data report Lyons furnished it and on which it relied in submitting its bid for the dredging project was misleading because the report failed to disclose the substantial quantity of rock. River Road alleged that the rock composition was "unforeseen by the parties when dredging bids were made and accepted," and that the amount of its bid would have been greater had it known that the basin was composed of rock. River Road requested a declaration of its rights and further requested the court to compel Lyons to perform his "legal duty" to pay River Road for the additional expenses of $1,108,944.

The Board subsequently dismissed River Road's claim against the port authority on the basis that it lacked jurisdiction of the claim. Lyons filed a motion in the circuit court to dismiss the complaint against him, arguing that River Road's action was barred by the doctrine of State immunity. River Road argued in response to Lyons's motion to dismiss that its action was not precluded by the doctrine of State immunity because, it says (1) its action was brought to compel a State official to perform a legal duty, (2) its action was brought to compel a State official to perform a ministerial act, and (3) its action was brought under the Declaratory Judgment Act, § 6-6-220 et seq., Ala.Code 1975.

In a letter brief dated April 23, 2002, River Road urged the trial court to adopt the principles expressed in Sizemore v. Rinehart, 611 So.2d 1064 (Ala.Civ.App. 1992), and Kemp v. Britt, 410 So.2d 31 (Ala.1982). River Road argued that the plaintiffs in both Sizemore and Kemp obtained declaratory judgments and injunctive relief against State officials, notwithstanding § 14, Ala. Const. of 1901, because the State owed the plaintiffs a legal obligation.

On July 24, 2002, the trial court entered an order denying Lyons's motion to dismiss; the court helpfully explained its ruling as follows:

"At first blush it would certainly appear that this is either a suit against the State for money damages or a request for an advisory opinion, neither of which is a proper subject for consideration by this Court. However, [River Road] cites several cases which appear to support its position.

"In Sizemore v. Rinehart, 611 So.2d 1064 (Ala.Civ.App.1992), the trial court's determination that taxes were improperly collected and due to be refunded was affirmed. The Petition for Writ of Certiorari was quashed as improvidently granted. Ex parte Sizemore, 611 So.2d 1069 (Ala.1993). Dissenting from that action[,] Justice Houston ... concluded that the suit was an action against the State seeking funds from the treasury and, as such, should be barred by § 14 of the [State] Constitution. See also Kemp v. Britt, [410] So.2d 31 (Ala.1982), a case in which the plaintiffs sought and obtained a declaration that the State owed them certain monetary benefits.

"If Justice Houston is right in his analysis of Sizemore, and I think he is, the Alabama courts have allowed cases analogous to this to proceed despite the apparent Constitutional prohibition. The motion to dismiss is denied."

II. Standard of Review

The appropriate standard of review of a trial court's denial of a motion to dismiss is whether "when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief." Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993); Raley v. Citibanc of Alabama/Andalusia, 474 So.2d 640, 641 (Ala.1985). This Court does not consider whether the plaintiff will ultimately prevail, but only whether the plaintiff may possibly prevail. Nance, 622 So.2d at 299. A "dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." Nance, 622 So.2d at 299; Garrett v. Hadden, 495 So.2d 616, 617 (Ala.1986); Hill v. Kraft, Inc., 496 So.2d 768, 769 (Ala.1986).

III. Analysis

The port authority is an agency of the State of Alabama. See § 33-1-2, Ala. Code 1975; Alabama State Docks Terminal Ry. v. Lyles, 797 So.2d 432, 434 (Ala. 2001). The Legislature has given the port authority the power to construct, own, and operate structures and facilities "needed for the convenient use of the port authority in the aid of commerce, including the dredging of approaches thereto." § 33-1-12, Ala.Code 1975. The port authority has the power "[t]o enter into contracts with... private persons, firms, [and] corporations..., in furtherance of its public purposes and objects...." § 33-1-12.1(6), Ala.Code 1975. As a State agency, the port authority cannot be sued for money damages. Lyles, 797 So.2d at 434; Jones v. Alabama State Docks, 443 So.2d 902 (Ala.1983) (an action for damages against the Alabama State Docks Department is prohibited by the doctrine of State immunity); State Docks Comm'n v. Barnes, 225 Ala. 403, 143 So. 581 (1932).

The immunity that protects the port authority is derived from Art. I, § 14, Ala. Const. of 1901. Section 14 provides "[t]hat the State of Alabama shall never be made a defendant in any court of law or equity." Under § 14, the State and its agencies are absolutely immune from suit. Ex parte Franklin County Dep't of Human Res., 674 So.2d 1277, 1279 (Ala.1996). State officers sued in their official capacities are also "`absolutely immune from suit when the action is, in effect, one against the state.'" Williams v. John C. Calhoun Cmty. Coll., 646 So.2d 1, 2 (Ala. 1994) (quoting Phillips v. Thomas, 555 So.2d 81, 83 (Ala.1989)). The State cannot be sued indirectly by suing an officer in his or her official capacity when a judgment against the officer would directly affect the financial status of the State treasury. Barnes, 225 Ala. at 405, 143 So. at 582; Alabama State Docks v. Saxon, 631 So.2d 943, 946-47 (Ala.1994) (holding that the director of the Alabama State Docks Department was entitled to State immunity).

This constitutionally guaranteed principle of State immunity acts as a jurisdictional bar to an action against the State by precluding a court from exercising subject-matter jurisdiction. Lyles, 797 So.2d at 435. Therefore, if Lyons is protected by State immunity, we must dismiss the action against him for lack of subject-matter jurisdiction. See Lyles, 797 So.2d at 435; see also Patterson v. Gladwin Corp., 835 So.2d 137 (Ala.2002).

A. Cases Relied upon by the Trial Court

We first address the holdings of Sizemore, supra, and Kemp, supra, relied upon by the trial court.³ In Sizemore, the plaintiffs challenged the constitutionality of State statutes that taxed the plaintiffs' military retirement benefits differently than the retirement benefits received by individuals "due to their state employment." 611 So.2d at 1065. The Court of Civil Appeals affirmed the trial court's judgment, holding that the statutory scheme violated the doctrine of intergovernmental tax immunity and authorizing the trial court to order refunds to the plaintiffs. 611 So.2d at 1067, 1069. This Court granted certiorari review of the case and then quashed the writ as improvidently granted. Ex parte Sizemore, 611 So.2d 1069 (Ala. 1993). In an opinion dissenting...