Teachy v. Coble Dairies, Inc.

• Citation: 293 S.E.2d 182,306 N.C. 324
• Decision Date: 13 July 1982
• Docket Number: No. 90PA82,90PA82
• Court: United States State Supreme Court of North Carolina
• Parties: Lela J. TEACHY, et al., Plaintiff, v. COBLE DAIRIES, INC., et al., Original Defendants and Third Party Plaintiffs, v. DEPARTMENT OF TRANSPORTATION OF the STATE OF NORTH CAROLINA, Third-Party Defendant.

Page 182

293 S.E.2d 182

306 N.C. 324

Lela J. TEACHY, et al., Plaintiff, v. COBLE DAIRIES, INC., et al., Original Defendants and Third

Party Plaintiffs, v. DEPARTMENT OF TRANSPORTATION OF the STATE OF NORTH CAROLINA,

Third-Party Defendant.

No. 90PA82.

Supreme Court of North Carolina.

July 13, 1982.

Taylor, Warren, Kerr & Walker by John H. Kerr III, Goldsboro, for original defendants and third-party plaintiffs-appellees.

Rufus L. Edmisten, Atty. Gen. by Ralf F. Haskell, Asst. Atty. Gen., Raleigh, for third-party defendant-appellant.

MITCHELL, Justice.

The plaintiff, administratrix of the estate of James Everette Teachy, Jr., brought an action in the Superior Court of Wayne County against Coble Dairies, Inc. and Edward Dean Holmes for the wrongful death of her intestate. The death allegedly resulted from the collision of an automobile driven by the decedent with a truck owned by the defendant Coble Dairies, Inc. and operated by the defendant Holmes. The defendants filed answers denying their negligence and alleging contributory negligence. The defendants also filed a third-party complaint against the Department of Transportation of the State of North Carolina alleging negligence in the maintenance of a traffic light at the intersection where the collision occurred.

The third-party defendant, the Department of Transportation of the State of North Carolina, filed a bifold motion to dismiss the third-party complaint consisting of a motion to dismiss for failure to state a claim upon which relief could be granted and a motion to dismiss for lack of jurisdiction based upon the doctrine of sovereign immunity. The trial court denied both. The Court of Appeals refused to review the denial of either motion on grounds that the denial of such motions is not immediately appealable. For the reasons stated herein, we consider those questions rejected by the Court of Appeals and hold that the doctrine of sovereign immunity does not prevent the State from being joined as a third-party defendant to a tort action brought in the courts of North Carolina.

The denial of a motion to dismiss for failure to state a claim upon which relief can be granted, made pursuant to Rule 12(b)(6), Rules of Civil Procedure, G.S. 1A-1, is an interlocutory order from which no immediate appeal may be taken. State v. School, 299 N.C. 351, 261 S.E.2d 908, appeal dismissed, 449 U.S. 807, 101 S.Ct. 55, 66 L.Ed.2d 11 (1980). The Court of Appeals correctly refused to review the trial court's denial of the motion of the State as third-party defendant to dismiss on this ground.

The Court of Appeals further held that the denial of a motion to dismiss on grounds of sovereign immunity is not immediately appealable. This decision was based on the conclusion that the denial of a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction is not immediately appealable and the sub silentio determination that sovereign immunity is a matter of subject matter jurisdiction. This decision by the Court of Appeals squarely conflicts with its decisions in Stahl-Rider, Inc. v. State, 48 N.C.App. 380, 269 S.E.2d 217 (1980) and Sides v. Hospital, 22 N.C.App. 117, 205 S.E.2d 784 (1974), modified, 287 N.C. 14, 213 S.E.2d 297 (1975).

In holding that the denial of a motion under Rule 12(b)(1) to dismiss for lack of subject matter jurisdiction is not immediately appealable, the Court of Appeals relied on Shaver v. Construction Co., 54 N.C.App. 486, 283 S.E.2d 526 (1981), wherein it interpreted G.S. 1-277. That statute provides for immediate appeal of certain orders and determinations of trial judges. An order granting a motion to dismiss for lack of subject matter jurisdiction is immediately appealable under G.S. 1-277(a), because it determines or discontinues the action. G.S. 1-277(b) permits the immediate appeal of a ruling, whether granting or denying a motion to dismiss under Rule 12(b)(2), as to the court's jurisdiction over the defendant's person or property. The Shaver opinion acknowledged that, while G.S. 1-277(b) permits the immediate appeal of an order denying a motion made pursuant to Rule 12(b)(2) to dismiss for lack of jurisdiction over the person, that statute does not apply to orders denying motions made pursuant to Rule 12(b)(1) to dismiss for lack of subject matter jurisdiction. The Court of Appeals held that such orders, the same as other orders not determinative of an action, are interlocutory and therefore not immediately appealable. Under the principle of inclusio unius est exclusio alterius, the reasoning of the Court of Appeals on this point is sound. The contrary holding in Eller v. Coca-Cola Co., 53 N.C.App. 500, 281 S.E.2d 81 (1981) and Kilby v. Dowdle, 4 N.C.App. 450, 166 S.E.2d 875 (1969) should be disregarded.

The application of the foregoing rule to the instant case is not so unassailable, however. Courts have differed as to whether sovereign immunity is a matter of personal or subject matter jurisdiction. The very ambiguity in the couching of the motion to dismiss is indicative of this confusion. A viable argument may be propounded that the State, as a party, is claiming by the doctrine of sovereign immunity that the particular forum of the State courts has no jurisdiction over the State's person. See Stahl-Rider, Inc. v. State, 48 N.C.App. 380, 269 S.E.2d 217 (1980); Sides v. Hospital, 22 N.C.App. 117, 205 S.E.2d 784 (1974), modified, 287 N.C. 14, 213 S.E.2d 297 (1975). On the other hand, the doctrine may be characterized as an objection that the State courts have no jurisdiction to hear the particular subject matter of tort claims against the State. See Petition of Petrol Shipping Corp., 360 F.2d 103 (2d Cir.) cert. denied, 385 U.S. 931, 87 S.Ct. 291, 17 L.Ed.2d 213 (1966); 5 C. Wright & A. Miller, Federal Practice and Procedure § 1351 (1969). Although the federal courts have tended to minimize the importance of the designation of a sovereign immunity defense as either a Rule 12(b)(1) motion regarding subject matter jurisdiction or a Rule 12(b)(2) motion regarding jurisdiction over the person, the distinction becomes crucial in North Carolina because G.S. 1-277(b) allows the immediate appeal of a denial of a Rule 12(b)(2) motion but not the immediate appeal of a denial of a Rule 12(b)(1) motion. The determination of this issue is not essential to this Court's authority to decide the instant case, however, because the case is before us on discretionary review under G.S. 7A-31, and we elect to exercise our supervisory authority to determine the underlying issues. See Consumers Power Co. v. Power Co., 285 N.C. 434, 206 S.E.2d 178 (1974) (exercise of supervisory jurisdiction when appeal did not lie). Moreover, our decision on the merits should abate the recurrence of such attempted immediate appeals. Therefore, we do not determine whether sovereign immunity is a question of subject matter jurisdiction or whether the denial of a motion to dismiss on grounds of sovereign immunity is immediately appealable.

Sovereign immunity, as Justice Miller once observed, is a principle which "has never been discussed or the reasons for it given, but ... has always been treated as an established doctrine." United States v. Lee, 106 U.S. 196, 207, 1 S.Ct. 240, 250, 27 L.Ed. 171, 177 (1882). The concept of sovereign immunity, extant in the English common law, made its way into the common law of colonial North Carolina and remains in force in this State. G.S. 4-1; Bruton v. Enterprises, Inc., 273 N.C. 399, 160 S.E.2d 482 (1968). Anomalously, the rationale underlying English sovereign immunity--that the King can do no wrong--was implicitly rejected by the abolition of the monarchy in this country. Comment, Sovereign Immunity: A Modern Rationale in Light of the 1976 Amendments to the Administrative Procedure Act, 1981 Duke L.J. 116, 118.

The perceived pervasiveness of the principle is evidenced by the repeated characterization of sovereign immunity as "an established principle of jurisprudence in all civilized nations." Beers v. Arkansas, 61 U.S. (20 How.) 527, 529, 15 L.Ed. 991, 992 (1857), quoted in Carpenter v. Railroad, 184 N.C. 400, 402, 114 S.E. 693, 694 (1922). This Court continued to endorse the doctrine in such language until relatively recently. See Schloss v. Highway Commission, 230 N.C. 489, 53 S.E.2d 517 (1949).

Meanwhile, the oft-criticized principle was abrogated in part by legislative enactments. Congress passed the Federal Tort Claims Act in 1946. 60 Stat. 842 (1946), 28 U.S.C. §§ 2671-2680, 1346(b), 1402(b), 2402, 2411 (1948). A year later, the United Kingdom abolished such immunity. English Crown Proceeding Act of 1947, 10-11 Geo. VI, c. 44. In North Carolina, the doctrine was initially eroded by piecemeal legislation. See A Survey of Statutory Changes--Torts: Tort Claims Against the State, 29 N.C.L.Rev. 416, 417 (1951). Special statutes were passed to allow certain tort claims against the State to be heard by the State Board of Education, by various other agencies, and later by the Industrial Commission. Id. Finally, the 1951 General Assembly established permanent means for resolving tort claims against the State through the Tort Claims Act. 1951 N.C.Sess.Laws 1059 (current version at G.S. 143-291 et seq.).

The effect of the Tort Claims Act was twofold. First, the State partially waived its sovereign immunity by consenting to direct suits brought as a result of negligent acts committed by its employees in the course of their employment. Second, the Act provided that the forum for such direct actions would be the Industrial Commission, rather than the State courts. The Act was silent as to the issue in the instant case: whether the State may be brought into the State courts as a third-party defendant.

Rule 14 of the Rules of Civil Procedure, G.S. § 1A-1, encompasses third-party practice. Rule 14(a) permits a defendant in the State courts to sue a person not a party to the action who is or may be liable to the...