National Distributing Co. Inc. v. Department of Transp.

• Decision Date: 27 October 1981
• Docket Number: No. 37500,37500
• Citation: 283 S.E.2d 470,248 Ga. 451
• Parties: NATIONAL DISTRIBUTING CO. INC., et al. v. DEPARTMENT OF TRANSPORTATION of State of Georgia.
• Court: Georgia Supreme Court

Page 470

283 S.E.2d 470

248 Ga. 451

NATIONAL DISTRIBUTING CO. INC., et al. v. DEPARTMENT OF TRANSPORTATION of State of Georgia.

No. 37500.

Supreme Court of Georgia.

Oct. 27, 1981.

George B. Haley, Kevin B. Buice, Atlanta, for Nat. Distributing Co. Inc., et al.

Arthur K. Bolton, Atty. Gen., Roland F. Matson, Michael E. Hobbs, Asst. Attys. Gen., for Dept. of Transp.

GREGORY, Justice.

We granted certiorari to consider whether the Department of Transportation of the State of Georgia (DOT) is subject to suit for damages for breach of contract. The Court of Appeals held, as did the trial court, that the doctrine of sovereign immunity is a complete defense to such a suit. National Distributing Co. Inc. et al. v. Department of Transportation, Case No. 60501. 157 Ga.App. 789, 278 S.E.2d 648. We agree.

DOT entered into a written agreement in 1978 with National Distributing Company, Inc. (National) and others. The writing was denominated a "soil easement." The purpose was to provide material for a construction project of DOT. A certain amount of material was to be removed from the site by DOT and a stated price per cubic yard paid to National. Furthermore, DOT was to grade, slope and revegitate the site. DOT was also required to furnish a topographic map at the completion of the work. Rights under this agreement were assigned by DOT to a private corporation which was engaged in the project. The corporation elected not to use material from the site which was a choice it was entitled to make under the assignment. The material was not removed from the site nor was any of the other site work done. The topographic map was not furnished. National then filed its complaint seeking damages from DOT for breach of the agreement. The trial court granted summary judgment in favor of DOT on its motion setting forth, among others, the ground of sovereign immunity. The Court of Appeals affirmed on the basis of sovereign immunity.

It is the contention of National that, while the doctrine of sovereign immunity generally applies to suits against DOT, there has been a waiver of the doctrine which affects the action in this case. National points to Georgia Laws 1973, pp. 947, 983 as constituting the waiver. In particular, that portion of the Act codified as Code Ann. § 95A-304 is noted:

"Suits by or against the department

(a) Suits and settlement of claims

The department shall have the authority to bring suits, and it may be sued in such actions as are permitted by law.... (Emphasis added)

(b) Venue and service of process

All suits brought ex contractu by or against the department shall be brought in a county where any part of the work is to be or has been performed...."

Clearly, the statute purports to allow suits against the department. However, the language of the statute does not tell us whether all suits are permitted, or if not, what type suits are permitted. We are told only that the DOT may be sued in "such actions as are permitted by law." Assuming, as the parties have, that sovereign immunity generally applies to suits against DOT, we must resolve two preliminary questions in order to answer the certiorari question. (1) May sovereign immunity be waived by legislative enactment? (2) If sovereign immunity may be waived by legislative enactment, are suits for damages for breach of contract included within the language used by the legislature in Code Ann. § 95A-304 so as to create a waiver?

We deal with the first question. We have recognized that the doctrine of sovereign immunity came to us in Georgia through the common law of England. Crowder v. Department of State Parks, 228 Ga. 436, 185 S.E.2d 908 (1971). (See the collection of cases cited at page 439 which have acknowledged the force of the doctrine down through our history.) Running parallel with our recognition of the doctrine has been the further observation by the courts that the legislature may expressly consent that the state be sued and thereby waive the protection afforded to the state by the doctrine. This court pointed out in 1939 that if the doctrine is harsh and does not have the approval of the people, they should give their consent that the state be sued acting through their elected representatives in the legislature. Roberts v. Barwick, 187 Ga. 691, 694, 1 S.E.2d 713 (1939). Instead of disapproving, the people expressly gave their approval of the general application of the doctrine by way of a constitutional amendment voted upon in 1974. Code Ann. § 2-3401. At the same time they specifically authorized the General Assembly to provide for waiver. So it is, the General Assembly has power to waive sovereign immunity, as was held by the courts prior to 1974, and as commanded by the Constitution since.

We now consider the second question. The position taken by National is that the language of Code Ann. § 95-304 is a waiver of sovereign immunity in such actions as were permitted by law in 1973 at the time of the enactment of the statute. National contends that suits for damages for breach of contract were permitted in 1973 by authority of the courts in cases beginning with Regents of University System v. Blanton, 49 Ga.App. 602, 176 S.E. 673 (1934). Blanton holds that the state sheds its sovereignty by entering into a contract and thereby impliedly waives sovereign immunity. A number of Court of Appeals' decisions have followed Blanton in recognizing the existence of implied waiver by the act of entering into a contract. State Highway Department v. Cobb & Company, 111 Ga.App. 822, 143 S.E.2d 500 (1965); Hewitt Construction Co. v. State Highway Department, 113 Ga.App. 770, 149 S.E.2d 735 (1966); State Highway Department v. Knox-Rivers Construction Co., 117 Ga.App. 453, 462, 160 S.E.2d 641 (1968). The rule of implied waiver found in Blanton was repudiated by the Court of Appeals in 1977 in Meadows Motors, Inc. v. Department of Administrative Services, 141 Ga.App. 224, 233 S.E.2d 14 (1977). National points out that the opinion in Meadows Motors (and in Busbee v. University Professors, 235 Ga. 752, 758, 221 S.E.2d 437 (1975) upon which Meadows Motors partially relied) was rendered after the passage of Code Ann. § 95A-304 so that the statute incorporated the then existing rule of Blanton and not the later rule of Meadows Motors. We cannot agree. As observed in Meadows Motors, the implied waiver rule of Blanton was never adopted by this court, which has always required an express waiver. Busbee v. University Professors, supra; James v. State, 225 Ga. 809, 171 S.E.2d 533 (1969); Maddox v. Coogler, 224 Ga. 806, 165 S.E.2d 158 (1968); Peters v. Boggs, 217 Ga. 471, 123 S.E.2d 258 (1961); Roberts v. Barwick, supra; Cannon v. Montgomery, 184 Ga. 588, 192 S.E. 206 (1937); Western Union v. Western & Atlantic RR, 142 Ga. 532, 83 S.E. 135 (1914); and Georgia Military Institute v. Simpson, 31 Ga. 273 (1860). Thus, the law of Georgia as expressed by this court, did not permit suits for breach of contract against the State in 1973 on the theory of an implied waiver of the doctrine of sovereign immunity. Therefore, the statute of 1973 using the language "such actions as are permitted by law" did not incorporate an implied waiver theory.

National contends that this court acknowledged the theory of implied waiver in State Highway Department v. Marsh, 214 Ga. 693, 107 S.E.2d 179 (1959). We note that the opinion does not disclose whether or not the doctrine of sovereign immunity was raised as a defense in the trial court. We do not interpret Marsh as adopting any theory of waiver.

National argues that State Highway Department v. Cobb & Company, supra, found an express waiver and did not turn on the implied theory of Blanton. It is true that the Code of 1933 provided in Section 95-1505 that the "highway department may sue and be sued...". It is true that Cobb & Company in 1965 cited this provision. (And we note that in Busbee v. University Professors, supra, we held that other language which we equated to "sue and be sued" constituted express statutory authority for suits against the Board of Regents.) But, even if it can be said that Cobb & Company relied on Code Ann. § 95-1505 as an express waiver, this code section was repealed by the 1973 act which gave us the new language, "may be sued in such actions as are permitted by law." The old code section cannot be relied upon by these parties who contracted in 1978, long after its repeal. Neither can it be said that the new code section adopted the old through the device of incorporating Cobb & Company which in turn relied in part on the old code section. This flies in the face of the specific repeal of the old section.

We hold that the Department of Transportation of the State of Georgia may rely on the defense of sovereign immunity in suits seeking to recover damages for breach of contract.

Judgment affirmed.

All the Justices concur, except HILL, P. J., and CLARK and SMITH, JJ., who dissent.

WELTNER, Justice, concurring.

I cannot dispute the proposition that the doctrine of sovereign immunity is outmoded and imperfect. Nor can I quarrel with Justice Clarke's logic in his observation that its application to this case must of necessity vitiate for want of mutuality all contracts in which the Department of Transportation is a party. Yet, it is still the law of Georgia, 1976 Ga.Const., Art. VI, Sec. V, Par. I; Code Ann. § 2-3401, and, until mitigated by the General Assembly or altered by the people, should be recognized as such.

CLARKE, Justice, dissenting.

I agree that the doctrine of sovereign immunity is alive and well in Georgia; however, it is my opinion that in this instance immunity has been waived. The Department of Transportation is authorized to enter into contracts. Code Ann. § 95A-302(e), § 95A-801 et seq. An agreement enforceable as to one party and unenforceable as to the other party lacks mutuality and is no contract at all. Therefore, I believe the legislative authority to contract amounts to an...