State ex rel. Missouri Dept. of Agriculture v. McHenry

• Decision Date: 02 April 1985
• Docket Number: No. 66078,66078
• Citation: 687 S.W.2d 178
• Parties: STATE ex rel. State of Missouri, MISSOURI DEPARTMENT OF AGRICULTURE, et al., Relators, v. The Honorable James F. McHENRY, Judge of the Circuit Court, 19th Judicial Circuit, Respondent.
• Court: Missouri Supreme Court

Page 178

687 S.W.2d 178

STATE ex rel. State of Missouri, MISSOURI DEPARTMENT OF AGRICULTURE, et al., Relators, v. The Honorable James F. McHENRY, Judge of the Circuit Court 19th Judicial Circuit, Respondent.

No. 66078.

Supreme Court of Missouri,

En Banc.

April 2, 1985.

Edwin H. Steinmann, Jr., Asst. Atty. Gen., Jefferson City, James F. Gunn, F. Craig King, Jr., St. Louis, for relators.

Lori J. Levine, Jefferson City, Larry Seckington, Bruce H. Stoltze, Des Moines, Iowa, for respondent.

BLACKMAR, Judge.

This case presents important questions of sovereign immunity and official immunity in claims based on the Grain Dealer's Law (Ch. 276, RSMo) and the Missouri Grain Warehouse Law (Ch. 411, RSMo). ¹

IGF Insurance Company is organized under the laws of Iowa. It executed a warehouseman's bond (§ 411.275) on August 1, 1979 and a Grain Dealer's bond (§ 276.426) on April 3, 1981 to secure the operations of Ira Paul Smith and Irene Smith, d/b/a Westboro Elevator, Westboro, Missouri.

IGF on October 18, 1982 filed suit in three counts in the Circuit Court of Cole County, Missouri, naming as defendants (1) the State of Missouri, (2) "Missouri Department of Agriculture," (3) James B. Boillot individually and in his official capacity as Director of the Missouri Department of Agriculture, ² (4) "Missouri Division of Grain Inspection, Weighing and Warehousing," and (5) Tommy Hopkins Individually and in his official capacity as Director of the division last named. ³ Count I sought a declaratory judgment "construing the rights and duties under the [warehouseman's] bond." Count II sought a similar declaration as to the grain dealer's bond. Counsel made it clear at oral argument that IGF is trying to avoid liability on the bonds given for the protection of the Smiths' customers, because of alleged deficiencies in the performances of the state and its officials. ⁴ Count III seeks money judgment against all defendants in the amount of $113,000 in connection with the warehouse bond, and $84,000 in connection with the Grain Dealer's bond, together with interest, costs and attorneys' fees.

The defendants sought a writ of prohibition in the Court of Appeals, Western District, and a provisional rule was issued. Even though the provisional rule extended to the entire action, the state and its agencies do not challenge the declaratory judgment prayer in Counts I and II as to them but do seek prohibition against the claims made in Count III. The individual defendants ask prohibition as to all counts.

Following briefing and argument before an expanded panel the majority of the Court of Appeals voted to quash the preliminary rule summarily and without opinion. Three judges dissented from the summary disposition, and one disagreed with the result. We granted transfer because of the importance of the case, and now take it as though we had issued our own provisional rule. We make the provisional rule absolute as sought by the defendants.

I.

It is first argued that the trial court, in considering and overruling the motions to dismiss, was acting in the exercise of its jurisdiction, and that any error may be corrected by appeal. State ex rel. Morasch v. Kimberlin, 654 S.W.2d 889 (Mo. banc 1983) is cited for the proposition that the writ of prohibition is not available to correct the possibly erroneous failure to dismiss a case. The respondent argues that the cases should proceed through the discovery and trial stages.

Morasch should not be mechanically applied to cases in which substantial questions of sovereign immunity or official immunity are presented. "Immunity" connotes not only immunity from judgment but also immunity from suit. State ex rel. New Liberty Hospital District v. Pratt, 687 S.W.2d 184 (Mo. banc 1985); State ex rel. Eli Lilly & Co. v. Gaertner, 619 S.W.2d 761, 763, fn. 5 (Mo.App.1981). Immunity claims have jurisdictional aspects. It is not always satisfactory to leave a case pending against a public agency or a public officer, with prospects for burdensome discovery and trial, simply because the circuit court has overruled a motion to dismiss. There are undoubtedly cases in which the issue of immunity depends on factual issues which cannot be effectively determined short of trial, but there are also cases in which an initial inquiry may demonstrate that immunity exists as a matter of law, so as to lay the foundation for the issuance of an initial writ. The decision is a matter of discretion. It is also appropriate to require a litigant who sues the state or its officers to file a petition demonstrating a viable theory of liability. Sherrill v. Wilson, 653 S.W.2d 661 (Mo. banc 1983).

II.

There is no authority for a suit against the state of Missouri for money damages in the manner sought to be stated in Count III. The Department of Agriculture and the Division of Grain Inspection are agencies of the State of Missouri. If they are suable entities at all, they partake of the state's sovereign immunity.

The respondent, desperately seeking authority, cites V.S. DiCarlo Construction Co. v. State of Missouri, 485 S.W.2d 52 (Mo.1972). There the legislature had specifically authorized a construction contract. This Court held that the legislature necessarily intended for the state to pay the contract price, and impliedly consented to the liquidation of the contractor's claim in a judicial proceeding. There was, then, consent to the suit. IGF argues that the statutory requirements for warehouse and grain dealers' bonds, payable to the State of Missouri for the benefit of persons dealing with the principal, represented a contractual obligation analogous to that of DiCarlo. The analogy is inappropriate. In DiCarlo the state intended to make payment for services rendered. Here there is no indication whatsoever that the legislature intended for the state to make any payment whatsoever, or that it stand in the shoes of the surety if it be determined that state officials and employees have not performed their duties. The statutory indication is strongly to the contrary. Section 276.546.

IGF next argues that state regulation of warehouses and grain dealers is a "proprietary" rather than a "governmental" function. The proprietary-governmental dichotomy applies only in the law of municipal corporations, and not to activities of the state. ⁵ The legislature, in § 537.600, RSMo 1978, has mandated the restoration of sovereign immunity as it existed prior to our decision in Jones v. State Highway Commission, 557 S.W.2d 225 (Mo. banc 1977). We are precluded by the recent legislation from making extensions. Bartley v. Special School District, 649 S.W.2d 864 (Mo. banc 1983).

The regulation here in issue, moreover, is manifestly governmental. The interest of the state in regulating grain marketing facilities was recognized in Munn v. Illinois, 4 Otto 113, 94 U.S. 113, 24 L.Ed. 77 (1876). § 411.012, RSMo 1984 Supp. states that Ch. 411 "constitutes an exercise of state policy and regulatory power for the purpose of enhancing grain production and marketing." The statutes exist, not purely in the interest of persons in the grain trade, but principally because of the public's interest in an abundant food supply.

The doctrine of sovereign immunity was designed to protect the public treasury against the kind of claims sought to be maintained here.

The relator limits its assertion of immunity for the state and its agencies only to Count III of the petition. Our absolute writ will be limited to that count, insofar as these defendants are concerned. We of course express no opinion as to whether Counts I and II are properly stated, or as to their substance.

III.

The defendant Boillot is Director of the Department of Agriculture. He is appointed by the governor, subject to confirmation by the Senate, and reports directly to the governor. (Mo. Const., Art. IV, sec. 35). Chapters 276 and 411 expressly name the director as the official responsible for administering the Grain Dealer's and Warehouse statutes.

Our decisions consistently protect public officers from having their official performance called into question through the medium of private damage suits. Recent cases include Kanagawa v. State, 685 S.W.2d 831 (Mo. banc 1985) (operation of penal institutions); Sherrill v. Wilson, 653 S.W.2d 661 (Mo. banc 1983) (operation of state hospital); Jackson v. Wilson, 581 S.W.2d 39 (Mo.App.1979) (design and construction of state parks).

The respondent seeks to distinguish these cases by asserting that Boillot's duties under Chapters 276 and 411 are "ministerial." This contention will not stand analysis. Initial reliance is placed on § 411.271, requiring the director to make examinations and inspections at least annually, and to take action against licensees found not to be in compliance, but IGF's petition in the trial court states that examinations were made more often than yearly during the times referred to in the petition. The complaint rather, is that Boillot failed to take action asserted to be indicated by the inspections, in violation of the provisions of § 411.271.4, ⁶ which respondent characterizes as "mandatory."

The statutes, however, afford the director wide discretion. He may require an examiner to remain at the warehouse (411.070.1(5)); may take steps to require additional bond; (411.281, RSMo 1978); or may "at his discretion," suspend, annul, revoke or refuse to renew" the license (411.283.4, RSMo 1978). This latter action contemplates a hearing before the director and judicial review. (411.283.5, RSMo 1978). The statutes must be read as a whole. So read, they manifestly call for the exercise of the director's judgment as to the action to be taken in a particular situation. He may surely consider the degree of violation shown, the availability of other facilities in the area, the urgency of the situation, and other appropriate circumstances. The use of "shall" in § 411.271.4 statutes does not change the discretionary nature of...