Wilson v. Hogan

Decision Date23 May 1991
Docket NumberNo. 17369,17369
Citation473 N.W.2d 492
PartiesDawn F. WILSON, Individually and as Special Administrator of the Estate of John D. Wilson, Plaintiff, v. Edward HOGAN, Defendant and Third Party Plaintiff v. CITY OF RAPID CITY, and State of South Dakota, Third Party Defendants. . Considered on Briefs
CourtSouth Dakota Supreme Court

Mark Barnett, Atty. Gen., Camron Hoseck, Asst. Atty. Gen., Pierre, for third party defendant, State of S.D.

Steven C. Beardsley, Craig A. Pfeifle, Lynn, Jackson, Shultz & Lebrun, P.C., Rapid City, for Edward Hogan.

SABERS, Justice.

State appeals denial of its motion to dismiss third party complaint against state on grounds of sovereign immunity and deficient notice.

Facts

On September 20, 1989, Wilson and Hogan were involved in a car accident on a Rapid City street in which Wilson died. On November 9, 1989, plaintiff, as Wilson's representative, brought suit against Hogan for negligence for damages for Wilson's death.

On May 21, 1990, Hogan's attorney notified the South Dakota attorney general, pursuant to SDCL 3-21-2 and 3-21-3, 1 that he intended to file a third party liability claim against the state that "[a]n inadequately designed and maintained storm drainage system on East St. Joseph Street (Highway 79) ... contributed to ... Wilson's death[.]" Hogan's attorney wrote: "Despite the history of the water drainage problems on this road, an adequate storm drainage system has not been installed." On June 26, 1990, Hogan filed his third party complaint for contribution or indemnity against Rapid City (city) and the State of South Dakota (state).

On July 17, 1990, state moved to dismiss Hogan's third party complaint on the grounds that it was barred by sovereign immunity, that Hogan failed to give state commissioner of administration notice as required by SDCL 3-21-3 and that notice to the attorney general was two months late under SDCL 3-21-2. City later filed its own motion to dismiss on the grounds that Hogan failed to provide the required notice to city officials. Following a hearing, circuit court denied both motions to dismiss.

On December 20, 1990, this court granted state's petition for intermediate appeal from the order denying the motion for dismissal. State raises sovereign immunity and deficiency of notice. City did not appeal the denial of its motion.

1. Sovereign Immunity

There are no facts in dispute in this intermediate appeal. Whether Hogan's third party action against state is barred by sovereign immunity is a question of law which is "reviewed by this court de novo." Brown v. Egan Consol. Sch. Dist., 449 N.W.2d 259, 260 (S.D.1989) (citing Beville v. U.S.D./ Bd. of Regents, 420 N.W.2d 9, 11 (S.D.1988)). We give no deference to the trial court's order denying the state's motion to dismiss. Id.

The question is whether the plaintiff's cause of action against state in tort would be barred by the doctrine of sovereign immunity. Hogan points out that his third party complaint against state for contribution or for indemnity under an implied contract theory does not sound in tort, but is equitable in origin. Dehn v. Prouty, 321 N.W.2d 534, 537 (S.D.1982); Degen v. Bayman, 86 S.D. 598, 200 N.W.2d 134, 136 (1972) (Degen I ). See also Samuelson v. Chicago, Rock Island & Pacific Ry. Co., 287 Minn. 264, 178 N.W.2d 620, 623 (1970); 18 Am.Jur.2d Contribution Sec. 2 (1985). The right to contribution is now codified at SDCL 15-8-12. However, actions for contribution do not stand alone. They are derivative of the principal action, and "[t]here can be no right to contribution unless the injured party has a possible remedy against two or more persons." Burmeister v. Youngstrom, 81 S.D. 578, 139 N.W.2d 226, 231 (1965). See also 18 Am.Jur.2d, supra, at Sec. 3. In other words, Hogan's third party derivative action against state is barred by sovereign immunity if an action by the principal plaintiff against state in tort would have been barred by sovereign immunity.

In general, the doctrine of sovereign immunity as found in the common law and in our South Dakota Constitution means that the governing acts of the state, its agencies and other public entities 2 cannot be attacked in court without the state's consent. S.D. Const. art. III, Sec. 27; Blue Fox Bar, Inc. v. City of Yankton, 424 N.W.2d 915, 917 (S.D.1988). However, this broad statement of the principle is subject to significant qualifications.

Not all acts performed by all public entities or their employees are governing acts. To prohibit all lawsuits against all public officials, regardless of the character of their jobs, and all public entities, regardless of the nature of their functions, would defeat another constitutional provision: the "open courts" provision at S.D. Const. art. VI, Sec. 20, according to which "[a]ll courts shall be open, and every man for an injury done him in his property, person or reputation, shall have remedy by due course of law, and right and justice, administered without denial or delay." See Oien v. City of Sioux Falls, 393 N.W.2d 286, 291 (S.D.1986).

Therefore, the negligent acts of public employees are not shielded by sovereign immunity when the employees are acting in a merely ministerial, rather than discretionary capacity. Gasper v. Freidel, 450 N.W.2d 226, 230 (S.D.1990); Bego v. Gordon, 407 N.W.2d 801, 806 (S.D.1987); Nat'l Bank of S.D. v. Leir, 325 N.W.2d 845, 848-850 (S.D.1982); Kruger v. Wilson, 325 N.W.2d 851, 853-854 (S.D.1982); Sioux Falls Constr. Co. v. City of Sioux Falls, 297 N.W.2d 454, 458-459 (S.D.1980). Similarly, the functions of a public entity which are proprietary or commercial, as opposed to governmental, are not shielded by sovereign immunity. Aune v. B-Y Water Dist., 464 N.W.2d 1, 3 (S.D.1990); Blue Fox Bar, 424 N.W.2d at 918; Oien v. City of Sioux Falls, 393 N.W.2d at 290-291; Jensen v. Juul, 66 S.D. 1, 278 N.W. 6, 8 (1938); State v. Board of Commissioners, 53 S.D. 609, 222 N.W. 583, 592 (1928); O'Rourke v. City of Sioux Falls, 4 S.D. 47, 54 N.W. 1044, 1045-46 (1893).

As to the state itself, "there is no distinction between governmental and proprietary functions." High-Grade Oil Co., Inc. v. Sommer, 295 N.W.2d 736, 738 (S.D.1980) (citing State v. Board of Commissioners, 222 N.W. at 593). Therefore, the inquiry into whether a function is governmental or proprietary is only relevant in the case of non-state public entities like municipalities, which participate in the state's sovereign immunity only "to a lesser extent." Aune v. B-Y Water Dist., 464 N.W.2d at 5.

Even where suit against a public entity would otherwise be barred, either because it is the state or because it is a public entity other than the state acting in a governmental capacity, the public entity may choose to waive sovereign immunity. It may do so by entering into a contract which implicitly gives the other party to the contract a right of action upon it. Blue Fox Bar, 424 N.W.2d at 917-918. See also Finck v. City of Tea, 443 N.W.2d 632, 635 (S.D.1989). The state may also waive sovereign immunity by legislative enactment identifying the conditions under which lawsuits of a specified type would be permitted. S.D. Const. art. III, Sec. 27; Brown v. Egan Consol. Sch. Dist., 449 N.W.2d at 262; Norgeot v. State, 334 N.W.2d 501, 503 (S.D.1983); High Grade Oil, 295 N.W.2d at 739.

"Under Article XIII, Sec. 9 of our state constitution, construction and maintenance of public highways is a function of state government." High-Grade Oil, 295 N.W.2d at 737. The state legislature has "paramount control over all the public highways of the state[.]" Hurley v. Rapid City, 80 S.D. 180, 121 N.W.2d 21, 24 (1963). State may delegate its "paramount control" over public highways to municipalities. Id. SDCL 9-45-1 provides:

Every municipality shall have power to lay out, establish, open, vacate, alter, widen, extend, improve, repair, grade, gravel, service, pave, repave, bridge, construct a viaduct upon or over, erect equipment for street lighting in and otherwise improve, and establish and change the grade of roads, streets, alleys, sidewalks, and public grounds, and to regulate the making of openings and connections therein and the erection of lights thereon as provided by this title.

However, whether control over the roadway on which Wilson died was delegated to city under SDCL 9-45-1 and, if so, whether city's authority is governmental or proprietary need not be reached, because city neither based its motion for dismissal on sovereign immunity nor appealed the denial of its motion. However, even delegation of "paramount control" would not remove the shield of sovereign immunity from the state. Therefore, state is immune from suit arising from the construction and maintenance of roadways unless it has waived its sovereign immunity.

2. Waiver of Sovereign Immunity?

The next question is whether state waived its sovereign immunity from suits arising from the construction or maintenance of roadways. It is clear that no contract is involved and had plaintiff brought an action against state, that action would have been in tort. Therefore, if state waived its sovereign immunity, it was by legislative action.

SDCL 21-32-16 provides in part:

To the extent ... liability insurance is purchased ... and to the extent coverage is afforded thereunder, the state shall be deemed to have waived the common law doctrine of sovereign immunity and consented to suit in the same manner that any other party may be sued.

Under this statute, the state's sovereign immunity may be waived, but only by the purchase of liability insurance. The affidavit of state's Commissioner of Bureau of Administration states that no such liability insurance has been purchased which would provide coverage for this tort action against state. Therefore, state has not waived its sovereign immunity under SDCL 21-32-16.

Even though self-insurance through participation in a risk sharing pool accomplishes the same purpose as...

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