Wiecking v. Allied Medical Supply Corp.

• Court: Virginia Supreme Court
• Writing for the Court: RUSSELL
• Citation: Wiecking v. Allied Medical Supply Corp., 239 Va. 548, 391 S.E.2d 258 (1990)
• Decision Date: 20 April 1990
• Docket Number: No. 890533,890533
• Parties: David K. WIECKING, M.D., etc., et al. v. ALLIED MEDICAL SUPPLY CORPORATION. Record

Page 258

391 S.E.2d 258

239 Va. 548

David K. WIECKING, M.D., etc., et al. v. ALLIED MEDICAL SUPPLY CORPORATION.

Record No. 890533.

Supreme Court of Virginia.

April 20, 1990.

Carol S. Nance, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., John A. Rupp, Sr. Asst. Atty. Gen., on briefs), for appellants.

Malcolm P. McConnell, III (Thomas F. Coates, III, Coates and Davenport, Richmond, on brief), for appellee.

Present: All the Justices.

RUSSELL, Justice.

This appeal presents the questions whether a contractor's claim to compensation for services rendered at the request of an officer of the Commonwealth is barred by the defense of sovereign immunity, and if not, whether the officer had authority to enter into a contract on the Commonwealth's behalf.

The convoluted procedural history of the case is immaterial to the dispositive issues on appeal. The facts will be stated in the light most favorable to the contractor, who prevailed below.

The medical examiner of the county or city in which a death occurs from any of several causes, enumerated in Code § 32.1-283(A), is required by subsection (B) of that statute to "take charge of the dead body," investigate the cause and manner of death, and make a prompt report to the Chief Medical Examiner. The Chief Medical Examiner is required to furnish "facilities and personnel" to the local medical examiner for such an investigation, id., but no express statutory provision is made for the payment of any expenses the medical examiner might incur.

Geoffrey T. Mann, M.D., LL.B., was the first Chief Medical Examiner in Virginia, serving from 1947 until his retirement in 1972. In 1962, he published a "Medical Examiner's Handbook" which set forth instructions, policies, and procedures pertaining to the operations of his office. This publication provided a schedule of fees to be paid by the Commonwealth to funeral directors for the transportation of human remains to a morgue for autopsy under a medical examiner's direction. In 1979, after Dr. Mann's retirement, his successor, David K. Wiecking, M.D., LL.B., amended the handbook to increase the schedule of approved fees.

Allied Medical Supply Corporation, formerly Allied Ambulance Service, Inc., (Allied), operates an ambulance service in the Richmond area. In 1970 or 1971, Dr. Mann met with Mr. E.C. Long, Allied's president, and reached an oral agreement that Allied would transfer dead bodies to the morgue in Richmond, when called upon by the medical examiner's office to do so, for the same fees as those set forth in the handbook pertaining to funeral directors. Thereafter, Allied transported dead bodies in the Richmond area to the morgue when called upon by the medical examiner's office, billed the local medical examiner for the service, and received payment in full from the Commonwealth for each such service. This arrangement continued without incident for approximately nine years.

In May 1979, the Commonwealth suspended payment of Allied's bills, although Allied continued to receive calls from the medical examiner's office to transport dead bodies from the point of death to the morgue, and continued to furnish the service in response to each call. When the Commonwealth's arrears reached $6,400, Allied made a claim for that amount, and, in 1980, filed this action in the Circuit Court of the City of Richmond against Dr. Wiecking, Chief Medical Examiner, Dr. James B. Kenley, State Health Commissioner, and Vincent J. Pross, Acting Comptroller (collectively, the Commonwealth). ¹ After languishing on the court's docket for many years, the case came to a bench trial in 1987, resulting in a judgment for the plaintiff.

I

On appeal, the Commonwealth argues that the plaintiff's claim is barred by the doctrine of sovereign immunity and that the Commonwealth "did not consent to be sued." This argument requires a discussion of the questions whether the obligation the plaintiff seeks to enforce is a valid one and if so, whether this action lies for its enforcement.

The doctrine of sovereign immunity is "alive and well" in Virginia, as a defense to actions in tort, Messina v. Burden, 228 Va. 301, 307, 321 S.E.2d 657, 660 (1984), but we have never extended that defense to actions based upon valid contracts entered into by duly authorized agents of the government. For a number of compelling reasons, many jurisdictions considering that scenario have refused to accord immunity to the sovereign. Those reasons were ably summarized by Chief Justice Sharp, writing for the Supreme Court of North Carolina, in Smith v. State, 289 N.C. 303, 222 S.E.2d 412 (1976), e.g.: when the state contracts for goods or services, receives the benefit of the contract, and then refuses to honor its obligations, the contractor's property is subjected to an unconstitutional taking without just compensation, Grant Const. Co. v. Burns, 92 Idaho 408, 413, 443 P.2d 1005, 1010 (1968); a denial of liability under such circumstances also violates state and federal due-process guarantees, George & Lynch, Inc. v. State, 57 Del. 158, 162, 197 A.2d 734, 736 (1964); to hold that the state may enter into a valid contract and yet retain the power to avoid its obligation would entail an obvious contradiction; neither the state nor the contractor can be bound, yet not bound, by a single contract, Kinsey Const. Co., Inc. v. S.C. Dept. of Mental Health, 272 S.C. 168, 172, 249 S.E.2d 900, 903 (1978); the courts will not attribute to the legislature any intention to permit the government to exercise "bad faith and shoddy dealing," Kersten Co. v. Dept. of Social Services, 207 N.W.2d 117, 119-20 (Iowa 1973); and relegating the injured party to an appeal for justice to the legislature in the form of a private bill for relief is to offer a "doubtful remedy," Ace Flying Service v. Colorado Dept. of Agriculture, 136 Colo. 19, 22, 314 P.2d 278, 280 (1957). Indeed, the enactment of tort-claims legislation leaves unimpaired the existing remedies against the government for breaches of contract, even for contracts implied in fact which contain elements of a tort. Hatzlachh Supply Co. v. United States, 444 U.S. 460, 466, 100 S.Ct. 647, 651, 62 L.Ed.2d 614 (1980).

The reasoning of the foregoing cases is virtually undisputed among the authorities which have considered the immunity question, and we find it persuasive. It is true that the legislature has the power to withhold appropriations to cover the state's obligations, see P, T & L Const. Co. v. Commissioner, Dept. of Transp., 55 N.J. 341, 262 A.2d 195 (1970); Smith v. State, 289 N.C. at 311, 222 S.E.2d at 418; and impose special procedures for the processing of claims, e.g., Code § 2.1-223.1 et seq.; their enforcement, e.g., Code § 8.01-192; and time limitations upon their enforceability, e.g., Code § 8.01-255. Those safeguards, however, affect only the remedy, not the validity of the obligation on which the claim is based. See People ex rel. Dept. of Pks. & Rec. v. West-A-Rama, Inc., 35 Cal.App.3d 786, 111 Cal.Rptr. 197 (1973). ²

With respect to the remedy, we have construed Code § 8.01-192 and its statutory predecessors as the Commonwealth's general consent to be subjected to suit in its own courts in contract cases. Stuart, Gov. v. Smith-Courtney Co., 123 Va. 231, 234, 96 S.E. 241, 242 (1918); Parsons v. The Commonwealth, 80 Va. 163, 167 (1885). In Higginbotham's ex'x v. The commonwealth, 66 Va. (25 Gratt.) 627, 637 (1874), Judge Bouldin, writing for the Court, observed that it has been, since 1778, the "cherished policy of Virginia" to allow to citizens "the largest liberty of suit against herself" in contract cases.

Accordingly, we hold that the doctrine of sovereign immunity has no application in actions based upon valid contracts entered into by duly authorized agents of the government. The sovereign is as liable for its contractual debts as any citizen would be, and that liability may be enforced by suit in the "appropriate circuit court," Code § 8.01-192, if proper and timely proceedings are taken.

II

We turn to the question whether the public officers who contracted for the plaintiff's services in the present case had authority to obligate the Commonwealth. The Commonwealth contends that Dr. Mann had no authority to enter into a continuing contract on its behalf and that his subordinate medical examiners similarly lacked authority to incur obligations against the public fisc. The Commonwealth argues that only the State Health Commissioner has direct statutory authority to enter into contractual...