Northland Ins. v. State

• Decision Date: 08 December 2000
• Docket Number: 98-00307
• Parties: NORTHLAND INSURANCE CO. v. STATE OF TENNESSEEIN THE SUPREME COURT OF TENNESSEE AT NASHVILLE
• Court: Tennessee Supreme Court

NORTHLAND INSURANCE CO. v STATE OF TENNESSEE

No. M1998-00307-SC-R11-CV

IN THE SUPREME COURT OF TENNESSEE AT NASHVILLE

October 3, 2000 Session

Filed December 8, 2000

Appeal by permission from the Court of Appeals, Middle Section Tennessee Claims Commission for Davidson County No. 94435

W. R. Baker, Commissioner

The issue in this case is whether the Tennessee Claims Commission has subject matter jurisdiction over a claim against the State of Tennessee for contribution and indemnity. The jurisdiction of the Claims Commission is set forth in Tennessee Code Annotated section 9-8-307. That statute allows for suits against the State in the Claims Commission alleging that state employees have maintained a dangerous condition on a state maintained highway. The statute, however, does not mention contribution and indemnity suits as part of the Commission's jurisdiction. Because of the principle that a waiver of sovereign immunity must be clear and unmistakable, we conclude that the State has not consented to hear contribution and indemnity claims. We therefore affirm the Court of Appeals' decision dismissing the appellant's claim.

Tenn. R. App. P. 11 Application for Permission to Appeal; Judgment of the Court of Appeals Affirmed

James G. O'Kane, Knoxville, Tennessee, for the appellant, Northland Insurance Company.

Paul G. Summers, Attorney General & Reporter; Michael E. Moore, Solicitor General; Anthony D. Miller, Assistant Attorney General; Laura T. Kidwell, Assistant Attorney General, Nashville, Tennessee, for the appellee, State of Tennessee.

Frank F. Drowota, III, J., delivered the opinion of the court, in which E. Riley Anderson, C.J., and Adolpho A. Birch, Jr., Janice M. Holder, and William M. Barker, JJ., joined.

OPINION

On March 14, 1998, Dion Deskovic became involved in an accident while driving his tractor-trailer on Interstate 40 in Putnam County. The accident caused the fuel tank of the tractor-trailer to spill diesel fuel onto the highway. Employees of the Tennessee Department of Transportation arrived and spread sand over the spilled fuel. Thereafter, Kenneth B. McDonald, while working for Tennessee Walnut, Inc. and Grundy County Lumber Co., Inc. ("Walnut, Inc."), drove his truck and flatbed trailer up to the accident scene. Mr. McDonald attempted to avoid a collision with Mr. Deskovic's disabled tractor-trailer, which partially obstructed the highway, but he could not do so. Mr. McDonald's truck struck and killed Mr. Deskovic, who was standing outside his vehicle, and injured two wrecker operators, Robert L. Sheppard and Emmet McGuire, who were at the scene attending the disabled tractor-trailer.

Mr. Sheppard and his wife, Mr. McGuire and his wife, and the estate of Mr. Deskovic filed suit against Mr. McDonald and Walnut, Inc. Northland Insurance Co., the liability insurer of these defendants and the appellant before this Court, settled the cases by paying $150,000.00 to the estate of Mr. Deskovic, $845,000.00 to Mr. and Mrs. Sheppard, and $5,000.00 to Mr. and Mrs. McGuire.

After this settlement, Mr. McDonald and Walnut, Inc., filed a claim with the Tennessee Claims Commission seeking indemnity or contribution for the $1,000,000.00 paid by Northland, alleging that the State's negligence in failing to stop traffic caused the accident. In May 1992, Northland filed a motion in the Claims Commission to be substituted as plaintiff and real party in interest. The State did not oppose the motion and the Commission granted it.

For reasons that are not clear from the record, no further action was taken on this litigation for four years. Then, in March 1996, the State moved to dismiss the suit for lack of subject matter jurisdiction. The Claims Commission denied the motion. After trial, which occurred in October 1998, Commissioner W. R. Baker entered a final order. The total damages recoverable against the State were in excess of the $300,000.00 limit under Tennessee Code Annotated section 9-8-307(e), therefore, judgment was entered against the State of Tennessee in the amount of $300,000.00.

STANDARD OF REVIEWA motion to dismiss for lack of subject matter jurisdiction falls under Tennessee Rule of Civil Procedure 12.02(1). The concept of subject matter jurisdiction involves a court's lawful authority to adjudicate a controversy brought before it. See Meighan v. U.S. Sprint Communications Co., 924 S.W.2d 632, 639 (Tenn. 1996); Standard Sur. & Casualty Co. v. Sloan, 180 Tenn. 220, 230, 173 S.W.2d 436, 440 (1943). Subject matter jurisdiction involves the nature of the cause of action and the relief sought, see Landers v. Jones, 872 S.W.2d 674, 675 (Tenn. 1994), and can only be conferred on a court by constitutional or legislative act. See Kane v. Kane, 547 S.W.2d 559, 560 (Tenn. 1977); Computer Shoppe, Inc. v. State, 780 S.W.2d 729, 734 (Tenn. Ct. App. 1989). Since a determination of whether subject matter jurisdiction exists is a question of law, our standard of review is de novo, without a presumption of correctness. See Nelson v. Wal-Mart Stores, Inc., 8 S.W.3d 625, 628 (Tenn. 1999).

ANALYSISArticle I, section 17 of the Tennessee Constitution provides that "[s]uits may be brought against the State in such manner and in such courts as the Legislature may by law direct." This constitutional provision reflects sovereign immunity, the notion that a sovereign governmental entity cannot be sued in its own courts without its consent. See State v. Cook, 171 Tenn. 605, 609, 106 S.W.2d 858, 860 (1937); Tenn. Code Ann. § 20-13-102 ("No court in the state shall have any power, jurisdiction, or authority to entertain any suit against the state...with a view to reach the state, its treasury, funds, or property..."). As a general interpretive matter, this Court has held that the principle of sovereign immunity requires that legislation authorizing suits against the state must provide for the state's consent in "plain, clear, and unmistakable" terms. Cook, 171 Tenn. at 611, 106 S.W.2d at 861; see also Beare Company v. Olsen, 711 S.W.2d 603, 605 (Tenn. 1986). We must therefore carefully analyze the statute granting jurisdiction to the Tennessee Claims Commission, which this Court has previously held creates a "sweeping procedure for filing monetary claims against the state." Hembree v. State, 925 S.W.2d 513, 516 (Tenn. 1996).

That statute, Tennessee Code Annotated section 9-8-307, begins by stating that the Commission has "exclusive jurisdiction to determine all monetary claims against the state based on the acts or omissions of [state employees] falling within one (1) or more of the following categories..." Tenn. Code Ann. § 9-8-307(a)(1). One such category, which applies here, is "[d]angerous conditions on state maintained highways." Tenn. Code Ann. § 9-8-307(a)(1)(J). To maintain a suit based on this category, the claimant "must establish the foreseeability of the risk and notice given to the proper state officials at a time sufficiently prior to the injury for the state to have taken appropriate measures." Tenn. Code Ann. § 9-8-307(a)(1)(J). Also of relevance to this dispute is the following directive: "It is the intent of the general assembly that the jurisdiction of the claims commission be liberally construed to implement the remedial purposes of this legislation." Tenn. Code Ann. § 9-8-307(a)(3).

Reading these provisions together, Northland argues that subject matter jurisdiction is clear. This case involves state employees' negligent conduct regarding a dangerous condition on a state maintained highway; thus, it fits within one of the jurisdictional categories. Northland is seeking recovery from the state, based on its share of fault, which is a "monetary claim against the state." Northland avers that while contribution and indemnity claims are not specifically mentioned in the statute, they are nonetheless "monetary claims" which are directly connected to the underlying tort suit and the statute refers to "all" monetary claims. Moreover, in case there is any doubt, the scope of jurisdiction should be "liberally construed."

Given the interpretive principle...