Wood v. North Carolina State University

• Decision Date: 04 December 2001
• Docket Number: No. COA00-1129.,COA00-1129.
• Citation: 147 NC App. 336,556 S.E.2d 38
• Parties: Kathy A. WOOD and Evalyn Gonzales, Plaintiffs, v. NORTH CAROLINA STATE UNIVERSITY, Defendant.
• Court: North Carolina Court of Appeals

556 S.E.2d 38

147 NC App. 336

Kathy A. WOOD and Evalyn Gonzales, Plaintiffs, v. NORTH CAROLINA STATE UNIVERSITY, Defendant.

No. COA00-1129.

Court of Appeals of North Carolina.

December 4, 2001.

Kennedy, Kennedy, Kennedy and Kennedy, L.L.P., by Harvey L. Kennedy and Harold L. Kennedy, III, Winston-Salem, for plaintiff-appellees.

Attorney General Roy Cooper, by Thomas O. Lawton III, Assistant Attorney General, for defendant-appellant.

HUDSON, Judge.

North Carolina State University ("NCSU") appeals an order granting the plaintiffs' motion to strike its defense of sovereign immunity and denying its motion to dismiss, which the court converted to a motion for summary judgment, on the ground of sovereign immunity. Because we hold that to the extent NCSU's sovereign immunity was waived, jurisdiction is in the Industrial Commission, we vacate the order and remand this action to the superior court for dismissal.

I.

The facts relevant to this appeal are not in dispute. Plaintiffs Kathy A. Wood and Evalyn Gonzales are former students at NCSU who alleged that they were sexually harassed by Shuaib Ahmad, a former NCSU professor. Plaintiffs filed a complaint on 28 May 1999, alleging intentional infliction of mental and emotional distress against Ahmad and against NCSU on the theory that NCSU ratified Ahmad's conduct by failing to discipline and fire him. On 20 July 1999, NCSU moved to dismiss the complaint on the basis of sovereign immunity. Plaintiffs moved to strike the defense of sovereign immunity on 13 September 1999. Plaintiffs then amended their complaint to allege that NCSU waived its sovereign immunity by purchasing liability insurance and to add causes of action against NCSU for negligent retention and negligent supervision. NCSU moved for dismissal of the amended complaint on the basis of sovereign immunity on 27 September 1999. On 4 October 1999, Plaintiffs voluntarily dismissed Ahmad as a defendant.

After a hearing, the superior court granted Plaintiffs' motion to strike the defense of sovereign immunity and denied NCSU's motion to dismiss the amended complaint, which the court had converted to a motion for summary judgment. The trial court determined that NCSU had waived the defense of sovereign immunity by purchasing liability insurance; that the doctrine of sovereign immunity does not apply to the facts of this case due to a ministerial duty exception to the doctrine; that the doctrine of sovereign immunity does not apply to claims of negligent retention and negligent supervision; and that NCSU is estopped from asserting the defense of sovereign immunity. NCSU appeals this order.

II.

We have held that "appeals raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review." Price v. Davis, 132 N.C.App. 556, 558-59, 512 S.E.2d 783, 785 (1999). Therefore, although this is an appeal from an interlocutory order, it is properly before us. See N.C. Gen.Stat. §§ 1-277(a), 7A-27(d)(1) (1999); Vest v. Easley, 145 N.C.App. 70, 549 S.E.2d 568, 571 (2001). Sovereign immunity protects the State and its agencies from suit absent waiver or consent. See Guthrie v. State Ports Authority, 307 N.C. 522, 534, 299 S.E.2d 618, 625 (1983); Insurance Co. v. Gold, Commissioner of Insurance, 254 N.C. 168, 172-73, 118 S.E.2d 792, 795 (1961); Truesdale v. University of North Carolina, 91 N.C.App. 186, 192, 371 S.E.2d 503, 506-07 (1988),appeal dismissed and disc. review denied, 323 N.C. 706, 377 S.E.2d 229-30,cert. denied, 493 U.S. 808, 110 S.Ct. 50, 107 L.Ed.2d 19 (1989), overruled on other grounds by Corum v. University of North Carolina, 330 N.C. 761, 413 S.E.2d 276,cert. denied sub nom. Durham v. Corum, 506 U.S. 985, 113 S.Ct. 493, 121 L.Ed.2d 431 (1992). NCSU is a State agency. See Truesdale, 91 N.C.App. at 192,371 S.E.2d at 506-07. Therefore, since there is no allegation that NCSU consented to suit, it is immune from suit unless its sovereign immunity has been waived.

A waiver of sovereign immunity must be established by the General Assembly. Our Supreme Court has stated that "[i]t is for the General Assembly to determine when and under what circumstances the State may be sued." Guthrie, 307 N.C. at 534, 299 S.E.2d at 625 (emphasis and internal quotation marks omitted). The Court has further stated that

[t]he State and its governmental units cannot be deprived of the sovereign attributes of immunity except by a clear waiver by the lawmaking body. The concept of sovereign immunity is so firmly established that it should not and cannot be waived by indirection or by procedural rule. Any such change should be by plain, unmistakable mandate of the lawmaking body.

Orange County v. Heath, 282 N.C. 292, 296, 192 S.E.2d 308, 310 (1972). Moreover, a statute creating a waiver must be strictly construed. See Floyd v. Highway Commission, 241 N.C. 461, 464, 85 S.E.2d 703, 705 (1955); Jones v. Pitt County Mem. Hospital, 104 N.C.App. 613, 615-16, 410 S.E.2d 513, 514 (1991).

Plaintiffs argue that the trial court properly struck NCSU's defense of sovereign immunity for three reasons: (1) NCSU waived its sovereign immunity by purchasing liability insurance; (2) NCSU is precluded from arguing the defense of sovereign immunity by the doctrine of quasi-estoppel; and (3) the ministerial duty exception to the doctrine of sovereign immunity applies here. We disagree on all grounds. The trial court relied upon the three grounds listed above, and additionally found that the doctrine of sovereign immunity does not apply to claims of negligent retention and negligent supervision. The court erred in this finding. See Herring v. Winston-Salem/Forsyth County Bd. of Educ., 137 N.C.App. 680, 684, 529 S.E.2d 458, 462 ("[W]e find negligent supervision to be a viable tort claim subject to the doctrine of sovereign immunity."), disc. review denied, 352 N.C. 673, 545 S.E.2d 423 (2000).

A.

Plaintiffs first argue that NCSU waived its sovereign immunity by purchasing liability insurance, at least up to the limit of the insurance coverage. While it may be possible to interpret the law this way, we are not persuaded that there is a "plain, unmistakable mandate" from the General Assembly to waive immunity in these circumstances. Heath, 282 N.C. at 296, 192 S.E.2d at 310; see Guthrie, 307 N.C. at 534-35, 299 S.E.2d at 625 (explaining that the State's immunity may be waived only by the General Assembly).

1.

Plaintiffs rely on dicta that has been promulgated through some of our reported cases. In EEE-ZZZ Lay Drain Co. v. N.C. Dept. of Human Resources, 108 N.C.App. 24, 422 S.E.2d 338 (1992),overruled in part by Meyer v. Walls, 347 N.C. 97, 489 S.E.2d 880 (1997), this Court stated that "sovereign immunity precludes suit against the State and its agencies unless the State has consented to be sued or waived its right. Such waiver is manifested by the purchase of liability insurance...." 108 N.C.App. at 27,422 S.E.2d at 340 (citation omitted). The EEE-ZZZ Lay Drain Court cited Baucom's Nursery Co. v. Mecklenburg County, 89 N.C.App. 542, 544, 366 S.E.2d 558, 560,disc. review denied, 322 N.C. 834, 371 S.E.2d 274 (1988), for this proposition. However, we did not hold in Baucom's Nursery that the State waives its immunity by purchasing liability insurance. Rather, we stated that "a county in this State may waive governmental immunity by purchasing liability insurance," and we cited to the statutory provision that created this waiver. 89 N.C.App. at 544,366 S.E.2d at 560 (emphasis added). Indeed, N.C. Gen. Stat. § 153A-435 (1999) provides that "[p]urchase of insurance pursuant to this subsection waives the county's governmental immunity, to the extent of insurance coverage, for any act or omission occurring in the exercise of a governmental function." N.C.G.S. § 153A-435(a) (emphasis added); see also N.C. Gen.Stat. § 160A-485(a) (1999) (providing that a city may "waive its immunity from civil liability in tort by the act of purchasing liability insurance."). Subsequently, this Court stated in Messick v. Catawba County, 110 N.C.App. 707, 431 S.E.2d 489,disc. review denied, 334 N.C. 621, 435 S.E.2d 336 (1993), that the doctrine of sovereign immunity "is inapplicable ... where the state has consented to suit or has waived its immunity through the purchase of liability insurance." 110 N.C.App. at 714,431 S.E.2d at 493-94. The Messick Court cited EEE-ZZZ Lay Drain in support of this statement.

Despite Plaintiffs' contention to the contrary, the broad statements in EEE-ZZZ Lay Drain and Messick are dicta, because the holdings of those cases did not rely on the proposition that the State waives its immunity by purchasing liability insurance. See Trustees of Rowan Tech. v. Hammond Assoc., 313 N.C. 230, 242, 328 S.E.2d 274, 281 (1985) ("Language in an opinion not necessary to the decision is obiter dictum and later decisions are not bound thereby."). The EEE-ZZZ Lay Drain Court held that there was no waiver because none of the conditions that could constitute a waiver were present in the case; there was apparently no allegation that any of the governmental defendants had purchased liability insurance. See EEE-ZZZ Lay Drain, 108 N.C.App. at 27, 422 S.E.2d at 341. The Messick Court held that there was no waiver because the record did not show that the defendant-county had purchased liability insurance. See Messick, 110 N.C.App. at 714, 431 S.E.2d at 494. The dicta from EEE-ZZZ Lay Drain and Messick have been repeated, but we have found no opinion in which the issue of whether the State waives its sovereign immunity by purchasing liability insurance was squarely confronted and decided. Because these cases do not hold that the State waives its immunity by purchasing insurance, nor do they cite a statute specifically providing that the State waives its immunity by purchasing insurance, we do not find them binding on this point.

2.

The State "partially waived" its sovereign immunity with respect to certain...