Wilkinson v. Bd. of Dental Exam'rs of Ala.

• Decision Date: 20 May 2011
• Docket Number: 2100175.
• Parties: Mary Ann WILKINSON v. BOARD OF DENTAL EXAMINERS OF ALABAMA.
• Court: Alabama Court of Civil Appeals

102 So.3d 362

Mary Ann WILKINSON

v.BOARD OF DENTAL EXAMINERS OF ALABAMA.

2100175.

Court of Civil Appeals of Alabama.

April 1, 2011.

Rehearing Denied May 20, 2011.

J. Bradley Medaris and Robert N. Barber of Barber Medaris, LLC, Birmingham, for appellant.

Hendon Blaylock Coody, deputy atty. gen., Montgomery, for appellee.

THOMAS, Judge.

Mary Ann Wilkinson was employed by the Board of Dental Examiners of Alabama (“the Board”) for several years, until the Board terminated her employment in December 2009. During her tenure with the Board, Wilkinson was employed pursuant to yearly contracts. Wilkinson's employment contracts provided that the “sole remedy for the settlement of any and all disputes arising under the terms of this agreement shall be limited to the filing of a claim with the Board of Adjustment for the State of Alabama.”

In July 2010, Wilkinson sued the Board, seeking compensation she alleged was due her pursuant to her employment contracts. Wilkinson based her breach-of-contract claim on an audit of the Board covering the period between October 2003 and September 2007 conducted by the Department of Examiners of Public Accounts of Alabama, which was completed in February 2009. Wilkinson alleged that the audit had revealed that the Board had not paid Wilkinson for her attendance at Board meetings between October 2004 and September 2007 and that the Board had overpaid Wilkinson other compensation. According to Wilkinson's complaint, the audit determined that the Board had underpaid Wilkinson $31,950 and had overpaid Wilkinson $21,787.92. Thus, Wilkinson contended in her complaint that the Board owed her $10,162.08. She also requested a further audit and compensation for her attendance at Board meetings between October 2007 and December 2009.

The Board filed a motion to dismiss Wilkinson's complaint, in which it alleged that the complaint should be dismissed pursuant to Rule 12(b)(1), Ala. R. Civ. P., on the ground that the trial court lacked subject-matter jurisdiction because the Board, as a State agency, is immune from suit under Ala. Const.1901, Art. I, § 14; that the complaint should be dismissed pursuant to Rule 12(b)(6), Ala. R. Civ. P., because it failed to state a claim; and that the complaint should be dismissed pursuant to Rule 12(b)(3), Ala. R. Civ. P., for improper venue. The motion to dismiss contained legal argument concerning only the immunity issue and whether the employment contracts, which provided that Wilkinson's sole remedy would lie with the Board of Adjustment, barred her complaint in the circuit court. Wilkinson responded to the Board's motion to dismiss with a detailed brief, ¹ arguing that the Board did not qualify for immunity under § 14 and that, therefore, her claim could not be heard by the Board of Adjustment. SeeAla.Code 1975, § 41–9–62(b) (stating that the Board of Adjustment has no jurisdiction “to settle or adjust any matter or claim of which the courts of this state have or had jurisdiction”); see also Lee v. Cunningham, 234 Ala. 639, 641, 176 So. 477, 479 (1937); and Vaughan v. Sibley, 709 So.2d 482, 486 (Ala.Civ.App.1997) (“The Board of Adjustment has jurisdiction over claims against the state that are not justiciable in the courts because of the state's constitutional immunity from being made a defendant.”). After the Board replied to Wilkinson's response and after a hearing, the trial court dismissed Wilkinson's complaint, finding in its order that the Board was a State agency because “the funds raised by the Board are appropriated by the State to the Board for use as provided by statute.” Wilkinson timely appealed to this court.

“In Newman v. Savas, 878 So.2d 1147[, 1148–49] (Ala.2003), this Court set out the standard of review of a ruling on a motion to dismiss for lack of subject-matter jurisdiction:

“ ‘A ruling on a motion to dismiss is reviewed without a presumption of correctness. Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993). This Court must accept the allegations of the complaint as true. Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala.2002). Furthermore, in reviewing a ruling on a motion to dismiss we will not consider whether the pleader will ultimately prevail but whether the pleader may possibly prevail. Nance, 622 So.2d at 299.’ ”

Pontius v. State Farm Mut. Auto. Ins. Co., 915 So.2d 557, 563 (Ala.2005).

On appeal, Wilkinson challenges the Board's entitlement to § 14 immunity.

“Section 14 of the Alabama Constitution provides ‘that the State of Alabama shall never be made a defendant in any court of law or equity.’ This court has held that the use of the word ‘State’ in Section 14 was intended to protect from suit only immediate and strictly governmental agencies of the State. Ex parte Board of School Commissioners of Mobile County, 230 Ala. 304, 161 So. 108 (1935).”

Thomas v. Alabama Mun. Elec. Auth., 432 So.2d 470, 480 (Ala.1983). Wilkinson argues that the Board is not an “immediate and strictly governmental agenc[y] of the State,” and, therefore, that it is not entitled to § 14 immunity.

The Board relies on Delavan v. Board of Dental Examiners of Alabama, 620 So.2d 13, 18 (Ala.Civ.App.1992), and Vining v. Board of Dental Examiners of Alabama, 492 So.2d 607, 610 (Ala.Civ.App.1985). In both cases, this court described the Board as a State agency. In neither case was the immunity of the Board an issue, and in neither case, as Wilkinson aptly points out, did this court undertake an analysis of the factors relevant to a determination whether the Board is an “agency” entitled to § 14 immunity. Thus, we agree with Wilkinson that our inquiry cannot end with Delavan and Vining.

Alabama courts have spent considerable time developing a method for determining when an entity created by the legislature is an “immediate and strictly governmental agenc[y] of the State” for purposes of § 14 immunity.

“Whether a lawsuit against a body created by legislative enactment is a suit against the state depends on the character of power delegated to the body, the relation of the body to the state, and the nature of the function performed by the body. All factors in the relationship must be examined to determine whether the suit is against an arm of the state or merely against a franchisee licensed for some beneficial purpose.”

Armory Comm'n of Alabama v. Staudt, 388 So.2d 991, 993 (Ala.1980) (citing State Docks Comm'n v. Barnes, 225 Ala. 403, 406–07, 143 So. 581, 584 (1932)). In Staudt, the supreme court was called upon to determine whether the Armory Commission of Alabama (“the commission”) was immune from a suit arising from a slip and fall on the premises of a National Guard Armory. Staudt, 388 So.2d at 992. The statute creating the Commission permitted it to incorporate and to sue or be sued in its own name. Id. However, the supreme court noted that the statute permitting the Commission to sue or be sued could not waive § 14 immunity if the Commission were a State agency entitled to such immunity. Id. The mere fact that the Commission was a corporate body was not determinative, said the court; instead, as quoted above, the court indicated that three main factors should be considered when determining whether a certain entity is immune from suit under § 14: “the character of power delegated to the body, the relation of the body to the state, and the nature of the function performed by the body.” Id. at 993. Because the State appropriated money to the Commission and because the governor was authorized to use other State funds to pay any expenses or obligations of the Commission if the appropriation were insufficient, the Staudt court determined that the Commission was, indeed, an agency of the State, in large part because a suit against the Commission had the ability to impact the State treasury. Id. at 993–94.

The Board relies on language quoted in Staudt, 388 So.2d at 993–94, which first appeared in White v. Alabama Insane Hospital, 138 Ala. 479, 482, 35 So. 454, 454 (1903), as a basis for its argument that it is entitled to § 14 immunity:

“There is a clear distinction between that class of incorporated institutions belonging [to] and controlled by the State and private incorporations, in the fact that the only property interest vested in the former belonged to the State. So, too, there is a distinction between this class, of incorporations and municipal corporations. Note on page 378 of 29 L.R. A.

“The power of the State to create a body corporate as its agent to carry on certain special kinds of work for its benefit or for the public interest can not be doubted. And where this power is exercised the institution thus established is in every sense a State institution and belongs to the State, although managed and its affairs administered under the supervision of trustees of the body corporate created for that purpose. Who doubts the right of the State to create a corporation for the management of an insane hospital, or a deaf and dumb asylum, or an institution of learning? And where they are created, who has the property interest in these institutions? Clearly the State. In the exercise of its right of sovereignty it established them for public purposes; it donates the property or the funds to purchase it upon which they are built, [and] supplies the means by which they are maintained and operated. They have no capital stock, or shares held by individuals. Indeed, they have no membership or stockholders. They are not created for profit, but solely as public benefactors, the beneficiaries being the people who compose the State.”

White, 138 Ala. at 481–82, 35 So. at 454. In White, the supreme court determined that the Alabama Insane Hospital (“the hospital”) was immune from suit. The court described the Hospital as “a mere state agency created for the purpose of [ ] caring for and treating the unfortunate insane citizens of the State—a purely governmental function, wise and beneficial.” Id. at 483, 35 So. at 454. However, the...