canal/claiborne, Limited v. Stonehedge Development, LLC ( 2014 )

Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #063
FROM: CLERK OF SUPREME COURT OF LOUISIANA
The Opinions handed down on the 9th day of December, 2014, are as follows:
BY GUIDRY, J.:
2014-C -0664 CANAL/CLAIBORNE, LIMITED v. STONEHEDGE DEVELOPMENT, LLC (Parish
of Jefferson)
Accordingly, we conclude the trial court was without subject
matter jurisdiction to entertain the plaintiff’s claim for
enrichment without cause and dismiss that claim with prejudice.
REVERSED AND REMANDED TO THE DISTRICT.
WEIMER, J., concurs in part and dissents in part.
HUGHES, J., concurs in part and dissents in part for the reasons
assigned by Justice Weimer.
12/09/14
SUPREME COURT OF LOUISIANA
No. 2014-C-0664
CANAL/CLAIBORNE, LIMITED
VERSUS
STONEHEDGE DEVELOPMENT, LLC
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL
FIFTH CIRCUIT, PARISH OF JEFFERSON
GUIDRY, Justice
The Louisiana Constitution of 1974 provides for the waiver of sovereign
immunity from suits in contract or tort against the state, a state agency, or a
political subdivision. La. Const. art. XII, Sect. 10(A). In all “other suits against
the state, a state agency, or a political subdivision,” the legislature “may authorize”
such suits by a “measure . . . waiv[ing] immunity from suit and liability.” La.
Const. art. XII, Sect. 10(B). Following Hurricane Katrina, the defendant state
agency for a period of time failed to remove its partially damaged movable
property from the premises of the plaintiff’s building. During this time, the
defendant state agency also failed to remit rental payments to plaintiff’s lessee,
who had in turn subleased the premises to the defendant state agency. The plaintiff
sought remuneration for lost rental income. The issue presented in this case is
whether the plaintiff’s quasi-contractual claim of unjust enrichment, based on the
lost rental income, falls within the scope of that waiver of sovereign immunity.
For the reasons set forth below, we find the plaintiff’s unjust enrichment claim
does not fall within the scope of the waiver of sovereign immunity in contract or
tort. We also find the plaintiff’s suit asserting a claim of unjust enrichment has not
1
been otherwise permitted by the legislature in a “measure authorizing … immunity
from suit and liability.”
FACTS and PROCEDURAL HISTORY
Canal/Claiborne, Limited (hereinafter “Canal/Claiborne”) is the owner of
property located at 1661 Canal Street in New Orleans. In January 1995,
Canal/Claiborne entered into a lease with Stonehedge Development, L.L.C.
(hereinafter “Stonehedge”). Stonehedge, in the business of leasing properties to
governmental entities, entered into a sublease in June 1995 with the State of
Louisiana, Department of Children and Family Services (hereinafter
“Department”). The Department occupied the premises, remitting monthly rent
payments of about $53,000.00 to Stonehedge, which in turn remitted monthly
payments of about $36,000.00 to Canal/Claiborne until Hurricane Katrina struck
the city in 2005.
The premises were significantly damaged, rendering the building
uninhabitable. Canal/Claiborne repaired the building and reopened it in November
2005, except those areas occupied by the Department, which had initially not
allowed removal of its damaged furniture, supplies, and sensitive files.
Canal/Claiborne continued to invoice Stonehedge for the monthly rentals as they
accrued. By December 2005, the Department had authorized Canal/Claiborne to
clean out the Department’s property from the first floor, and by March 2006, the
Department had removed a major portion of its property on the second floor. The
Department made no rental payments from November 2005 until the middle of
June 2006, when the Department entered into an emergency procurement lease
directly with Canal/Claiborne and began remitting payments to Canal/Claiborne.
Canal/Claiborne filed a petition for sums due under the lease in January
2006, alleging Stonehedge was in default under the lease and that the Department,
2
by not removing its property, was continuing to occupy the building. In July 2007,
Stonehedge filed a third party demand against the Department, incorporating all of
the allegations contained in the original petition. In June 2010, Canal/Claiborne
amended and supplemented its original petition to add a direct claim against the
Department, asserting the terms of the sublease between Stonehedge and the
Department and seeking additional rentals or other damages without pleading a
specific legal theory. The Department filed a dilatory exception of prematurity
asserting Canal/Claiborne “failed to adhere to La. R.S. 39:1673 and acquire a
decision from the chief procurement officer of the Department of Administration
prior to the commencement of an action in court . . ..”1 The trial court overruled the
exception on two grounds: Canal/Claiborne did not directly contract with the
Department and the Department had effectively waived the administrative remedy
when it voluntarily withdrew a previous dilatory exception against Stonehedge and
by its ongoing participation in the litigation.
Eventually the matter proceeded to a bench trial in October 2012 against the
Department only, Canal/Claiborne having settled with Stonehedge. In November
2012, the trial court entered judgment in favor of Canal/Claiborne and against the
Department, awarding $188,066.24 in damages with legal interest from the date of
judicial demand. The judgment did not expressly state a legal theory underlying
the Department’s liability, merely awarding “damages suffered . . . as a result of
the . . . occupancy of 1661 Canal Street . . ..”
The court of appeal affirmed the trial court’s judgment, finding no error in
the denial of the Department’s exception of prematurity under La. Rev. Stat.
39:1673. The appellate court found no error in the trial court’s conclusion that
1
The Louisiana Procurement Code provides for an administrative procedure to resolve
“controversies between the state and a contractor and which arise under or by virtue of a contract
between them.” La. Rev. Stat. 39:1673(A).
3
Canal/Claiborne was not a contractor with the Department and that
Canal/Claiborne’s suit “is for unjust enrichment or damages for trespass.”
Canal/Claiborne, Limited v. Stonehedge Development, LLC, 13-0641 (La. App. 5
Cir. 2/26/14), 136 So. 3d 326, 328.
The Department applied for writs of review in this court and, at the same
time, filed a declinatory exception of lack of subject matter jurisdiction and a
peremptory exception of prescription. The Department has for the first time in any
court raised the issue of subject matter jurisdiction, arguing that Canal/Claiborne
has asserted a quasi-contractual unjust enrichment claim against the Department
for storing items on Canal/Claiborne’s property for a certain period of time. The
Department asserts that, under La. Const. art. XII, Sect. 10(A), “[n]either the state,
a state agency, nor a political subdivision shall be immune from suit and liability in
contract or for injury to a person or property.” Because sovereign immunity has
not been waived as to suits asserting claims for unjust enrichment, and because
Canal/Claiborne’s claim is a quasi-contractual claim for unjust enrichment, the
Department contends the judgment of the trial court is a nullity under La. Code
Civ. Proc. art. 2002(A)(3) because the court lacked jurisdiction over the subject
matter of the claim.
We granted the writ application to determine whether the plaintiff’s unjust
enrichment claim falls within the scope of the waiver of immunity “from suit and
liability in contract” for purposes of La. Const. art. XII, Sect. 10.
Canal/Claiborne, Limited v. Stonehedge Development, LLC, 14-0664 (La.
06/20/14), ___ So.3d ___.
ANALYSIS
Although not raised in the lower courts, we find the Department’s exception
of subject matter jurisdiction is properly raised in this court. Louisiana courts have
4
recognized that such an exception may be raised at any stage of the proceedings,
including at the appellate level. Piper v. Olinde Hardware & Supply Co., 288
So. 2d 626 (La. 1974); Colaccurcio v. Ledet, 94-1798 (La. App. 4 Cir. 9/28/95),
662 So. 2d 65. The jurisdiction of a court over the subject matter of an action or
proceeding cannot be conferred by consent of the parties. La. Code Civ. Proc. art.
3. Thus, a judgment rendered by a court with no jurisdiction over the subject
matter of the action or proceeding is void. Id.
Turning to the merits of the exception, we must determine whether the
plaintiff’s alleged quasi-contractual claim of unjust enrichment falls within the
scope of the waiver of immunity set forth in La. Const. art. XII, Sect. 10(A). For
the reasons set forth below, we find that it does not.
The starting point in the interpretation of constitutional provisions is the
language of the Constitution itself. Louisiana Mun. Ass’n v. State, 00-0374, p. 5
(La. 10/6/00), 773 So. 2d 663, 667. When a constitutional provision is plain and
unambiguous, and its application does not lead to absurd consequences, its
language must be given effect. Id. at pp. 5-6, 773 So. 2d at 667. The Louisiana
Constitution of 1974 provides, in Article XII, Section 10(A): “Neither the state, a
state agency, nor a political subdivision shall be immune from suit and liability in
contract or for injury to person or property.” This court has recognized Section
10(A) as an “unequivocal, self-executing waiver of sovereign immunity as to suit
and liability in contract and tort cases.” Fulmer v. State, Dept. of Wildlife and
Fisheries, 10-2779 (La. 7/1/11), 68 So. 3d 499, 503 (quoting Jacobs v. City of
Bunkie, 98-2510 (La.5/18/99), 737 So. 2d 14, 22). This language is clear and
unambiguous, and we need not rely on the constitutional debates to infer any
qualifications in that waiver. See Chamberlain v. State of Louisiana, Dept. of
Transp. and Dev’t, 93-472 (La. 9/3/93), 624 So. 2d 874.
5
In this case, the plaintiff’s claim against the Department is in part, at least,
one for enrichment without cause, see La. Civ. Code art. 2298, as there exists no
contract between Canal/Claiborne and the Department. Both the trial court and the
court of appeal concluded there was no contract between the parties, and
Canal/Claiborne has conceded it was not a contractor with the Department and,
thus, not bound by the administrative procedures set forth in La. Rev. Stat.
39:1673. In this case, the Department entered into a sublease with Stonehedge, the
original lessee. A sublease is an agreement in which the original lessee leases to a
third party, the sublessee, all or part of the property leased to the original lessee by
the owner of the property. When Stonehedge and the Department entered into a
sublease of the Canal Street property, a new contract came into existence that was
separate and distinct from the original lease between the sublessor, Stonehedge,
and the owner of the property, Canal/Claiborne. See Bourgeois, Dupuis, Wright &
Cohen v. Hayes, 457 So. 2d 231 (La. App. 3rd Cir.), writ denied, 461 So. 3d 315 (La.
1984). Although Canal/Claiborne asserts the lease and sublease effectively
constituted “a contractual arrangement” through which it received a “pass-through
portion” of the monthly rentals the Department was obligated to pay Stonehedge,
we conclude there was no privity of contract under the sublease between
Canal/Claiborne as the owner of the property and the Department as the sublessee.
See Id.
Nor do we find any merit to Canal/Claiborne’s assertion that it was a third-
party beneficiary of the sublease between Stonehedge and the Department and,
therefore, the Department is liable in contract to Canal/Claiborne. Under a
stipulation pour autrui, a contracting party may stipulate a benefit for a third
person, who must then manifest an intention to avail himself of the benefit. La.
Civ. Code art. 1978. This court has identified three criteria for determining
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whether the contracting parties have provided a benefit to a third party: 1) the
stipulation for a third party is manifestly clear; 2) there is certainty as to the benefit
provided the third party; and 3) the benefit is not a mere incident of the contract
between the promisor and the promissee. Joseph v. Hospital Serv. Dist. No. 2 of
Parish of St. Mary, 05-2364, pp. 8-9 (La. 10/15/06), 939 So. 2d 1206, 1212.
Although the original lease between Canal/Claiborne and Stonehedge was
predicated on Stonehedge subleasing the property to a governmental entity, the
sublease between Stonehedge and the Department makes no reference whatsoever
to Canal/Claiborne, whether as the property owner, the original lessor, or as a third
party beneficiary of the sublease. The most basic requirement of a stipulation pour
autrui is that the contract in question manifest a clear intention to benefit the third
party; absent such a clear manifestation, a party claiming to be a third party
beneficiary cannot meet his burden of proof. Joseph, p. 9, 939 So. 2d at 1212. A
stipulation pour autrui is never presumed. Id. Here, Canal/Claiborne argues the
benefit provided to it was “a specified amount of the monthly rentals – the amount
[the Department] paid less Stonehedge’s ‘cut.’” Canal/Claiborne further argues
that it not only accepted the benefit when it received these rental payments, but it
also accepted the legal obligations of lessor that accompanied that benefit. Despite
such arguments, Canal/Claiborne has failed to point to any actual provision in the
sublease that manifests any specific benefit to a third person, namely
Canal/Claiborne. Furthermore, there is no certainty as to any benefit to
Canal/Claiborne from the sublease and any benefit inuring to Canal/Claiborne is
merely incidental to the sublease between Stonehedge and the Department. As this
court has noted, “‘not every promise, performance of which may be advantageous
to a third person, will create in him an actionable right.’” Joseph, pp. 9-10, 939
So. 2d at 1212-13 (quoting Smith, J. Denson, Third Party Beneficiaries in
7
Louisiana: The Stipulation Pour Autrui, 11 Tul. L.Rev. 18, 28 (1936)). We
conclude Canal/Claiborne had no rights under the sublease as a beneficiary thereto,
and, therefore, the Department was not liable in contract to Canal/Claiborne
pursuant to the sublease. See La. Civ. Code arts. 1978 et seq.
We conclude that Canal/Claiborne has failed to identify a claim against the
Department sounding in contract that would fall within the scope of the waiver of
immunity found in La. Const. art. XII, Sect. 10(A). That a claim of enrichment
without cause under La. Civ. Code art. 2298 is a quasi-contractual claim is well-
settled in our jurisprudence. “There is a general concept of quasi contractual
obligations; it is a concept based upon the principle that where there is an unjust
enrichment of one at the expense or impoverishment of another, then the value of
that enrichment or else, in some cases, the amount of the impoverishment must be
restituted.” Minyard v. Curtis Products, Inc., 251 La. 624, 205 So. 2d 422, 432 (La.
1967) (citing Planiol, Traité Élémentaire De Droit Civil, T. 2, no. 812, no. 813 (8th
ed. 1939)). As we have noted, the language of the waiver of immunity from suits in
contract is clear and unambiguous. When a constitutional provision is clear and
unambiguous and its application does not lead to absurd consequences, it must be
applied as written and no further interpretation need be made in search of the intent
of the drafters or the electorate. See La. Civ. Code art. 9; Louisiana Mun. Ass'n,
pp. 5-6, 773 So. 2d at 667; Chamberlain, 624 So. 2d at 886. We find no absurd
consequences in concluding this provision does not include a waiver of immunity
for quasi-contractual claims. Although Canal/Claiborne points to the unique
circumstances of this case, both in light of the devastation of Hurricane Katrina
and the Department’s conduct before and after the commencement of litigation,
Canal/Claiborne had remedies under its lease with Stonehedge and remedies in tort
8
against the Department.2 Thus, we find the unjust enrichment claim asserted by
Canal/Claiborne does not fall within the scope of the waiver of sovereign
immunity from suits in contract found in La. Const. art. XII, Sect. 10(A).
Accordingly, unless otherwise authorized by the legislature, the trial court was
without subject matter jurisdiction to entertain Canal/Claiborne’s unjust
enrichment claim against the Department.
Turning to La. Const. art. XII, Sect. 10(B), we find the plaintiff’s suit
asserting a quasi-contractual claim of unjust enrichment was not otherwise
authorized against the Department pursuant to La. Rev. Stat. 36:471. La. Const.
art. XII, Sect. 10(B), entitled “Waiver In Other Suits,” provides as follows:
The legislature may authorize other suits against the state, a state
agency, or a political subdivision. A measure authorizing suit shall
waive immunity from suit and liability.
Canal/Claiborne argues that La. Rev. Stat. 36:471, enacted in 1988 under the 1974
Constitution, created the Department of Social Services, the predecessor agency to
the Department of Children and Family Services, as “a body corporate with the
power to sue and be sued.” La. Rev. Stat. 36:471(A).3 Canal/Claiborne maintains
that this statute falls directly within the ambit of Art. XII, Sect. 10(B) and that the
clause “to sue and be sued” found in La. Rev. Stat. 36:471(A) amounts to a general
waiver of immunity from suit and liability without regard to any type of claim.
Whether the power “to sue and be sued” language found in La. Rev. Stat.
36:471(A) constitutes a general waiver of sovereign immunity within the context
2
Although the lower court and the Department have used the term “trespass” to describe the
Department’s alleged occupancy of Canal/Claiborne’s property, our civil law traditions fully
safeguard the rights of owners and possessors of immovable property. MCI Communications
Services, Inc. v. Hagan, 11-1039 (La. 10/25/11), 74 So. 3d 1148, 1156 n. 12 (citing 2 A.N.
Yiannopoulos, Louisiana Civil Law Treatise; Property, § 293, p. 579 (4th ed. 2001).
3
By Act No. 877 of 2010, Sect. 3, the legislature directed the Louisiana State Law Institute to
change all references to the Department of Social Services to the Department of Children and
Family Services.
9
of the 1974 Constitution and Art. XII, Sect. 10(B) is a res nova issue in our courts.
We hold, however, that this language without more does not constitute a blanket
waiver of immunity from suit of any kind. The history of sovereign immunity in
Louisiana was well explained in Chamberlain, 624 So. 2d at 880-81. We discern
from this history that Louisiana courts have construed the “sue and be sued”
language as granting a waiver of immunity not only from suit but also from
substantive liability. Canal/Claiborne urges that the power “to sue and be sued”
language now operates as a general waiver of immunity from all types of claims,
regardless of the specific provisions in the 1974 Constitution limiting the waiver of
immunity to contract and tort claims.
The 1921 constitutional provision originally vested in the legislature the
discretionary power from time to time to consent to suit. In 1946, the provision
was amended to address the enforcement of judgments. In 1959, this court
construed the provision as it then existed as giving the legislature the power to
waive the traditional sovereign immunity from suit, but not the immunity from
substantive tort liability, effectively reducing the legislature's waiver of immunity
to a mere invitation “to visit the courthouse” to file suit and to be thrown out
shortly thereafter on an exception of no cause of action. See Duree v. Maryland
Casualty Co., 238 La. 166, 114 So. 2d 594 (1959); Stephens v. Natchitoches School
Board, 238 La. 388, 115 So. 2d 793 (1959). This construction prompted a 1960
constitutional amendment to add the liability language to the 1921 Constitution,
assuring that any waiver of immunity would be both from suit and from liability.
As amended by Act 621 of 1960, Art. III, Sect. 35 of the 1921 Constitution
provided in part as follows:
The Legislature is empowered to waive, by special or general
laws or resolutions, the immunity from suit and from liability of the
state, and of parishes, municipalities, political subdivisions, public
boards, institutions, departments, commissions, districts, corporations,
10
agencies and authorities and other public or governmental bodies; and
each authorization by the Legislature for suit against the State or other
such public body, heretofore and hereafter enacted or granted, shall be
construed to be and shall be effective and valid for all purposes, as of
and from the date thereof, as a waiver of the defendant's immunity
both from suit and from liability. The Legislature shall, by special or
general laws or resolutions, prescribe the procedural rules, including
rules of venue and service of process, to govern suits against the state
and other public bodies; the procedure in such suits, in the absence of
applicable procedural rules promulgated by the Legislature, to be the
same as in suits between private litigants. No judgment against the
state or any other public body shall be exigible, payable or paid except
out of funds appropriated for payment thereof. …
Commenting on the 1960 amendment to Art. III, Sect. 35 of the 1921
Constitution, this court stated in Hamilton v. City of Shreveport, 247 La. 784, 174
So. 2d 529, 530 (1965):
[T]he Legislature of 1960 in adopting the aforementioned
proposed amendment did so with the express purpose of
nullifying the effect of [Duree and Stephens, a pair of]
decisions of this court ... [which held] that whenever the
Legislature authorized suit under Section 35 of Article 3
of the Constitution of 1921, as amended pursuant to Act
No. 385 of 1946, it simply waived the traditional
immunity of the state and its subdivisions from suit and
did not constitute a waiver of the state or its agencies
from liability for the negligence of one of its employees
in the exercise of a governmental function.
In Hamilton, however, the court was faced with the issue of whether the “sue and
be sued” language constituted a waiver of immunity from suit and liability only for
a government entity’s tort actions resulting from its proprietary activities and not
the entity’s actions founded on the tortious conduct of its officers and employees
when functioning in a governmental capacity. The Hamilton court rejected that
contention, declining to limit the waiver of immunity. 247 La. at 792, 174 So.2d at
532. The Hamilton court concluded that each legislative authorization of suit was
to be construed “to be and shall be effective and valid for all purposes . . . a waiver
of the defendant’s immunity from both suit and from liability.” Id. at 532; see
11
also Board of Comm'rs of Port of New Orleans v. Splendour Shipping &
Enterprises Co., 273 So. 2d 19, 24-25 (La. 1973).
In Herrin v. Perry, 254 La. 933, 228 So. 2d 649, this court applied Hamilton
to find a general waiver of tort liability, holding that the ‘“sue and be sued’
provision in the charter or organic act of any body enumerated in the 1960
amendment to Art. III, Sect. 35 of the 1921 Constitution must be construed as a
general waiver of immunity from suit.” 228 So. 2d at 656. The Herrin court thus
rejected the argument of the Department of Highways that the 1960 amendment to
the 1921 Constitution was not intended to cause all prior acts creating
governmental agencies and giving them the authority “to sue and be sued” to be
considered as general waivers of immunity from tort liability. The Herrin court
was not confronted with the scope of the waiver of immunity outside of the tort
context.
In Splendour, supra, decided in 1973 while the constitutional convention
was under way, this court found that in Louisiana sovereign or governmental
immunity was a judicially-created doctrine, which was outmoded and which was
inconsistent with the state’s policy of requiring that state agencies either “act
responsibly, or be subject to answer in court.” 273 So. 2d at 26. Thus, even in the
absence of any legislative authority to “sue and be sued,” this court held that state
agencies were not immune from suit in tort, abrogating sovereign immunity in tort
cases. Chamberlain, 624 So. 2d at 881.
The 1974 Constitution continued the Splendour court’s broad abrogation of
sovereign immunity in tort, and created a similarly broad waiver of immunity for
suits in contract; however, the 1974 Constitution notably continued the
requirement of legislative pre-authorization for suits other than those in contract or
for injury to person or property. The 1974 Constitution, as this court explained in
12
Chamberlain, now contains in Article XII, Section 10(A) an absolute prohibition
against immunity from suit and liability in contract and tort suits, while Section
10(B) continues the requirement that in other suits a legislative waiver, when
given, must be both from suit and from liability. 624 So. 2d at 881 (citing
Hargrave, “Statutory” and “Hortatory” Provisions of the Louisiana Constitution
of 1974, 43 La. L. Rev. 647, 652-53 (1983)). In Chamberlain, we recognized that
Section 10(B), because it continues the legislative consent method for “other
suits,” retains “some vestige of sovereign immunity as a viable doctrine.” 624
So. 2d at 882 (citing Burmaster v. Gravity Drainage Dist. No. 2 of Parish of St.
Charles, 602 So. 2d 1045 (La. App. 5th Cir.), writ denied, 608 So. 2d 167 (La.
1992) (applying Sect. 10(B) to find governmental entity possessed sovereign
immunity in suit not involving “injury or property” where legislative consent had
not been obtained); Two O’Clock Bayou Land Co. v. State of Louisiana, 415 So. 2d
990, 992 (La. App. 3rd Cir. 1982) (same)).
The cases relied upon by the plaintiff do not support its assertion that, when
the legislature imbues an agency with the “power to sue and be sued,” the
legislature has intentionally passed a “measure” authorizing all suits against a state
agency, including those other than a claim in contract or for injury to person or
property, within the meaning of La. Const. art. XII, Sect. 10(B). In James v.
Charity Hosp., 398 So. 2d 622, 623 (La. App. 1st Cir. 1981), the plaintiffs sought
damages for the wrongful death of their child, filing suit in Iberville Parish in the
Eighteenth Judicial District Court against Charity Hospital of New Orleans and the
unknown maker of a heat lamp, to which Charity Hospital filed an exception of
improper venue. The court interpreted La. Rev. Stat. 46:759, which provides as
follows: “The Charity Hospital at New Orleans may sue and be sued, in all affairs
and actions whatever, before any of the courts of the state.” The plaintiffs
13
contended the phrase “before any court of this state” constituted an exception to
the general rules of venue. Charity Hospital argued the intent of the legislation
was simply to waive the sovereign immunity that had prevented individuals from
suing the hospital. The appellate court found the statute was intended to waive
sovereign immunity rather than constitute an exception to the general venue
provisions. 398 So. 2d at 623. Notably, the court was not called upon to determine
the scope of the waiver of immunity in the context of La. Const. art. XII, Sect.
10(B), as the underlying claim was for injury to a person.
Similarly, Willis v. Dept. of Culture, Recreation, and Tourism, 525 So. 2d
1162, 1164 (La. App. 2nd Cir. 1988), does not stand for the general waiver
proposition asserted by Canal/Claiborne; indeed, the court’s holding tends to
counter that proposition. In Willis, the plaintiff filed a petitory action against the
Department of Culture, Recreation, and Tourism, State of Louisiana, alleging that
he was the owner of a tract of land in Webster Parish and that the Department had
taken possession of a portion of his land by erecting a fence. The Department filed
an exception of sovereign immunity asserting the State of Louisiana may not be
sued without legislative consent except where the cause of action is in contract or
tort in accordance with La. Const. art. XII, Sect. 10(A). The court of appeal held
that the Department was immune from suit. The court first found the plaintiff’s
suit, despite an allegation of trespass, was a petitory action, rather than a claim in
contract or tort, and thus fell within the classification of “other suits” found in La.
Const. art. XII, Sect. 10(B) requiring legislative authorization prior to institution of
suit. The court rejected the plaintiff’s reliance on the “sue and be sued” language
found in the statute creating the Department of Culture, Recreation and Tourism,
La. Rev. Stat. 36:201. The court noted the legislature did not transfer title to lands
such as lake bottoms to the Department in the legislation creating the Department.
14
Accordingly, the court held that, “[i]n granting the power to sue and be sued, the
legislature only waived the state’s immunity in the areas within the ambit of the
department’s administration … and did not serve as a measure waiving immunity
for the determination of the ownership of lands claimed by the state.” 535 So. 2d at
1164.
Canal/Claiborne lastly cites State ex rel. Dept. of Highways v. City of
Pineville, 403 So. 2d 49 (La. 1981), arguing that, if a state agency, having the
power to sue and be sued, can assert a claim founded on the theory of unjust
enrichment, or some other form of quasi-contract, then that agency is surely
subject to suit for a quasi-contractual claim. City of Pineville, however, did not
address the intent of the meaning of the “power to sue and be sued” language
within the context of La. Const. art. XII, Sect. 10(B). This court in City of
Pineville, was instead called upon to interpret a provision of the 1921 Constitution,
Art. XIX, Sect. 16, which provided that “[p]rescription shall not run against the
State in any civil matter, unless otherwise provided in this Constitution or
expressly by law.” An identical provision is found in La. Const. art. XII, Sect. 13
(1974). The court had to determine whether the Department of Transportation and
Development, the successor to the Department of Highways, which was
established as a “body politic and corporate” and given the power “to sue and be
sued” in La. Rev. Stats. 48:13 and 48:22, could be characterized as the State of
Louisiana and, thus, could claim constitutional immunity from prescription. This
court held that the “State,” for the purposes of the constitutional immunity from
prescription, does not include a state agency that is a body corporate with the
power to sue and be sued and, when vested with a cause of action, is the sole party
capable of asserting it. 403 So. 2d at 52. The court reasoned, “[r]egardless of its
status as an instrumentality of the state, such an agency remains a distinct legal
15
entity subject to claims of prescription except where the law provides otherwise.”
Id. Thus, the court concluded the department could not claim constitutional
immunity. Although the court in City of Pineville did, after finding the agreement
between the city and the department was void ab initio, ultimately acknowledge the
department had plausibly asserted in the alternative a cause of action founded upon
the theory of unjust enrichment, the court was not confronted with the issue of
whether such a claim could be asserted against the department within the meaning
of Art. XII, Sect. 10 of the 1974 Constitution without legislative authorization prior
to the imposition of suit.
Though not cited by the plaintiff, we note the appellate court in St. John the
Baptist Parish v. State ex rel. Dept. of Wildlife and Fisheries, 02-612 (La. App. 5
Cir. 10/16/02), 828 So. 2d 1229, 1230-1231, ostensibly held the “sue and be sued
language” found in the Department of Wildlife and Fisheries statutes, La. Rev.
Stat. 36:602(A), functioned as a general waiver of sovereign immunity. However,
the appellate court was called upon only to determine the merits of a declinatory
exception of improper venue filed by the Department, not an exception of lack of
subject matter jurisdiction. In that case, the landowner in 1952 had donated a
servitude to St. John the Baptist Parish for construction of a drainage canal. At the
time, the landowner had leased to various hunting clubs a number of camps,
constructed by the clubs at their expense, that were located wholly or partially
within the parish’s servitude. In 2001, the landowner donated the property to the
Department to be used as a wildlife preserve. After being informed by the
Department that they would have to remove the hunting camp buildings located on
the property pursuant to the Department’s policy of not allowing overnight
camping, the hunting clubs donated the camps to the parish in exchange for the
parish’s agreement to lease the camps back to the clubs, albeit with certain
16
conditions. The parish and the hunting clubs then filed suit in St. John the Baptist
Parish against the Department seeking a declaratory judgment regarding ownership
of the camps and the property, as well as restraining orders preventing the
Department from tearing down the buildings. The Department objected to venue in
the parish, arguing venue was more properly located in Baton Rouge.
The appellate court affirmed the trial court’s denial of the venue exception.
The appellate court first found that La. Rev. Stat. 56:7, which requires a challenge
to the properly established policies of the Department of Wildlife and Fisheries
Commission must be brought in the Commission’s domicile, did not apply at this
point in the litigation because the ownership of the property had not yet been
determined. The appellate court next found La. Code Civ. Proc. art. 80 controlled,
because Art. 80 provides that a dispute over real property, which would include a
personal servitude, is properly brought in the parish where the property is located.
Finally, the appellate court rejected the Department’s argument La. Code Civ.
Proc. art. 80 did not apply because the hunting clubs and the Parish had failed to
obtain authorization from the legislature before filing suit. The court cited the “sue
and be sued” language in La. Rev. Stat. 36:602 to find that sovereign immunity did
not bar the action and that the plaintiffs were not required to seek the approval of
the legislature before filing suit. 828 So. 2d at 1233-34.
Notably, the appellate court in St. John the Baptist Parish was not called
upon to determine whether the plaintiffs’ claims fell inside or outside the scope of
the waiver of sovereign immunity in contract or for injury to person or property as
set forth in Art. XII, Sect. 10(A) of the 1974 Constitution. Presumably the
appellate court had determined the claims sounded in contract, as elsewhere the
court noted the operative facts centered on the servitude agreement as well as the
location of the property. 828 So. 2d at 1233. The plaintiffs’ claims logically
17
sounded in contract, as ownership of the camps and the property would necessarily
have been determined by the terms of the landowner’s donations to the parish and
the Department. But perhaps more pertinent to our case today, the appellate court
in St. John the Baptist Parish made no determination that the plaintiffs’ claims fell
outside the scope of the waiver in La. Const. art. XII, Sect. 10(A), but the plaintiffs
were otherwise authorized to bring suit against the Department under La. Const.
art. XII, Sect. 10(B) by operation of the “sue and be sued” language in La. Rev.
Stat. 36:602(A). The appellate court was not called upon to determine whether the
language in La. Rev. Stat. 36:602(A) operated as a “measure” permitting suits
against a state agency other than suits in contract or for injury to person or property
within the meaning of La. Const. art. XII, Sect. 10(B). Thus, the appellate court’s
holding in St. John the Baptist Parish cannot be fairly interpreted to broadly hold
that the “sue and be sued” language generally waives sovereign immunity beyond
suit and liability in contract or tort. To the extent that it could, it is now overruled
by today’s decision in the present case.
We hold that the “power to sue and be sued” given a state agency by virtue
of the statute creating that agency does not by itself effect a general waiver of
immunity with regard to all suits within the meaning of Art. XII, Sect. 10(B), not
just suits in contract or for injury to person or property for which immunity has
been waived in Art. XII, Sect. 10(A). The “sue and be sued language,”
deliberately chosen by the legislature, serves an important function: it specifies that
governmental units created under statute may be designated as legal entities
distinct from the State for litigation purposes. See City of Pineville, 403 So. 2d at
52. Here, the Department of Children and Family Services performs important
public functions, and La. Rev. Stat. 36:471(A) enables the Department to bring suit
in performance of its duties. Likewise, La. Rev. Stat. 36:471(A) allows the
18
Department to be sued as a separate legal entity for negligence or other tortious
conduct, or for breach of contract, instead of the aggrieved party having to sue the
entire State of Louisiana for redress.
We discern no indication that the legislature, by designating a state agency
as a separate legal body with the power to sue and be sued, also meant to broadly
waive immunity and liability from suit of any kind, particularly in light of the
specifically articulated waiver of immunity for state agencies found in Art. XII,
Sects. 10(A) and (B) in the 1974 Constitution, which retains sovereign immunity
for suits other than those in contract or tort. See Chamberlain, 624 So. 2d at 882.
Canal/Claiborne has not directed us, nor have we found, any discussion in the
debates of the drafters during the 1973 Constitutional Convention that would
suggest the “power to sue and be sued” would be equivalent to a “measure”
authorizing suits against the state agency other than a suit founded in contract or
tort. Indeed, the drafters were well aware that, without prior legislative approval,
an individual could not file suit against the state or a state agency, and thus they
were doubtlessly aware of the scope of the waiver of immunity they would
eventually approve in proposing Art. XII, Sect. 10 to the electorate. See, e.g.,
Volume I, Official Journal of the Proceedings of the Constitutional Convention of
1973 of the State of Louisiana, (20th days proceedings), at 397-419 (July 26, 1973).
It is within the province of the legislature to say whether establishing a state
agency as a “body corporate with the power to sue and be sued” demonstrates an
intent to broadly waive immunity from all suits based on any legal theory, as well
as liability, within the meaning of Art. XII, Sect. 10(B). Absent any indication the
legislature so intended, we decline to read the “power to sue and be sued” language
found in La. Rev. Stat. 36:471 as purposefully granting a broad and general waiver
of immunity from suit and liability in all suits, not only those in contract or for
19
injury to a person or property, absent prior authorization from the legislature in a
“measure authorizing suit ….” See La. Const. art. XII, Sect. 10(B).
CONCLUSION
To capsulize, we find the plaintiff’s alleged quasi-contractual claim for
unjust enrichment does not fall within the scope of the waiver of sovereign
immunity from suit and liability in contract or for injury to person or property
found in La. Const. Art. XII, Sect. 10(A). Applying La. Const. art. XII, Sect.
10(B), we also find that, even though the Department of Children and Family
Services was created by La. Rev. Stat. 36:471(A) as a “body corporate with the
power to sue and be sued,” this language by itself does not constitute a “measure
authorizing” waiver of suit and liability in all claims other than suit in contract or
for injury to person or property. Therefore, the plaintiff’s suit asserting a quasi-
contractual claim of unjust enrichment has not otherwise been authorized by the
legislature in a “measure authorizing … immunity from suit and liability.”
Accordingly, we conclude the trial court was without subject matter jurisdiction to
entertain the plaintiff’s claim for enrichment without cause and dismiss that claim
with prejudice.4
REVERSED AND REMANDED TO THE DISTRICT COURT
4
We decline to review the Department’s peremptory exception of prescription. Because the
basis for the trial court’s award was founded to some extent on the plaintiff’s tort claim of
“trespass,” the Department’s exception of prescription is more appropriately heard in that forum
under the circumstances of this case.
20
12/09/14
SUPREME COURT OF LOUISIANA
NO. 2014-C-0664
CANAL/CLAIBORNE, LIMITED
VERSUS
STONEHEDGE DEVELOPMENT, LLC
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,
FIFTH CIRCUIT, PARISH OF JEFFERSON
Weimer, J., concurring in part, dissenting in part.
I agree that the plaintiff’s unjust enrichment claim brought against the State of
Louisiana, Department of Children and Family Services, is a quasi-contractual claim.
That unjust enrichment claim, therefore, is not authorized under La. Const. art. XII,
§ 10(A), which the majority correctly notes waives sovereign immunity only for
claims based on contract or tort. I respectfully disagree, however, with the majority
that the plaintiff’s claim has not been authorized under La. Const. art. XII, § 10(B),
when the legislature established the Department of Children and Family Services, as
“a body corporate with the power to sue and be sued.” La. R.S. 36:471(A).
Under La. Const. art. XII, § 10(B), for “other suits against the state, a state
agency, or a political subdivision,” the legislature “may authorize” such suits by a
“measure ... waiv[ing] immunity from suit and liability.” The legislature’s
designation of the Department of Children and Family Services as having “the power
to sue and be sued” is a clear and unqualified waiver of immunity from suit and
liability for all purposes.
The majority, however, attempts to restrict the “power to sue and be sued”
language of La. R.S. 36:471(A) to only suits based in contract or tort. To impose
such a restriction on what is facially broad language, the majority turns to this court’s
prior opinion in Chamberlain v. State, Dept. of Transp. and Dev’t, 93-472 (La.
9/3/93), 624 So. 2d 874. In Chamberlain, the court noted that that Section 10(B),
inasmuch as it requires the legislative consent for liability stemming from “other
suits,” retains “some vestige of sovereign immunity as a viable doctrine.” Id., 624
So.2d at 882. The majority, in the instant case, then traces the history of the
sovereign immunity doctrine, finding that immunity still exists for suits besides tort
or contract suits, and concludes that immunity bars plaintiff’s quasi-contract suit. I
respectfully suggest the majority errs.
In its historical narrative, the majority attempts to limit this court’s decision in
Herrin v. Perry, 254 La. 933, 228 So. 2d 649 (1969). In Herrin, this court examined
the effect of statutory language permitting the state Department of Transportation to
“sue and be sued,” and concluded the quoted language constituted a waiver of
sovereign immunity. The Herrin court explained that “the ‘sue and be sued’
provision in the charter or organic act of any body enumerated in the 1960
Constitutional Amendment must be construed as a general waiver of immunity from
suit.” Herrin 228 So. 2d at 656. The limitation the court presently places on Herrin
is based on the fact that the “court was not confronted with the scope of the waiver
of immunity outside of the tort context.”
The distinction the majority now draws misses the point. The proper focus is
on the effect of the legislature’s choice to waive immunity when it employs the terms
“sue and be sued.” The alternative to language that waives immunity for any cause
of action, would be to require the legislature to list every conceivable cause of action.
Therefore, rather than accept that the legislature intended “sue and be sued” to cover
every type of suit, the majority apparently reverts to a requirement that the legislature
2
employ “magic words” to specify the type of suit for which sovereign immunity has
been waived. There is a general disfavor in the law to require the use of such “magic
words,” and it is unfitting for this court to foist such an encumbrance upon the
legislature to list every type of suit for which immunity applies when the simple
phrase “any and all suits” plainly suffices. See, e.g., Harrah’s Bossier City Inv. Co.,
LLC v. Bridges, 09-1916, p. 17 (La. 5/11/10), 41 So. 3d 438, 450 (ruling, in the
context of tax exemptions established by the legislature: “There are no ‘magic words’
necessary to create an exemption or an exclusion; the determining factor is the effect
of the statute: ‘the words and form used legislatively in granting an exemption are not
important if, in their essence, the Legislature creates an exemption.’”), quoting
Wooden v. Louisiana Tax Commission, (La. 2/20/95), 650 So. 2d 1157, 1161.
Also downplayed in the majority’s historical narrative of sovereign immunity
is that this court had concluded before Herrin that “sue and be sued” equates to a
broad legislative waiver of sovereign immunity. That is, the majority cites Hamilton
v. City of Shreveport, 247 La. 784, 174 So. 2d 529, 530 (1965), and notes that the
legislature’s use of “sue and be sued” language was at issue. Further, the majority
correctly recites that this court ruled that the “sue and be sued” language was
“effective and valid for all purposes … a waiver of the defendant’s immunity from
both suit and from liability.” (Emphasis added.) However, the majority attempts to
distance itself from the ruling in Hamilton that the waiver was “valid for all
purposes.” Canal/Claiborne, Ltd v. Stonehedge Development, LLC, No. 14-0664,
slip op. at 11 (La. Dec. ___, 2014).
To place distance between the instant case and Hamilton, the majority notes
that Hamilton dealt with a tort suit. At the time Hamilton was decided, however, the
constitution lacked the present waiver found in Section 10(A), expressly waiving
3
immunity in contract and tort. Therefore, the only significant point to be drawn from
Hamilton is not one of limitation, but rather that this court gave the “sue and be
sued” language an expansive meaning: “effective and valid for all purposes.” See
Hamilton, 174 So. 2d at 530 (emphasis added).
The majority never explains why the broad “sue and be sued” language, which
must be assumed to have been deliberately chosen by the legislature,1 is insufficient
to serve as a waiver of non-tort/non-contract suits under Section 10(B). Even more
instructive than this court’s ruling in Hamilton are the following principles, which
compel the conclusion that the legislature’s use of “sue and be sued” language
reflects a waiver under Section 10(B).
One of the governing principles is found in the Chamberlain opinion, on
which the majority relies for its historical narrative. In Chamberlain, 624 So. 2d at
879, this court explained: “Unlike the federal constitution which grants powers, the
Louisiana constitution, in general, limits powers. Polk v. Edwards, 1993 WL
364714, n.4 (La. 1993) (No. 93-CA-0362) (noting that “state constitutions typically
contain limits on governmental authority rather than grants of power as with the
federal constitution”).” Under this principle, unless restricted by the constitution, the
legislature is free to waive immunity for all causes of action.
Another longstanding principle indicates that we are to look for a restriction
in the constitution by using “the same general rules used in interpreting laws and
written instruments.” East Baton Rouge Parish School Bd. v. Foster, 02-2799, pp.
16-17 (La.6/6/03), 851 So. 2d 985, 996, citing Caddo-Shreveport Sales And Use
Tax Commission v. Office of Motor Vehicles, Dept. of Public Safety and
1
See, e.g., Tin, Inc. v. Washington Parish Sheriff’s Office, 12-2056, p. 14 (La. 3/19/13), 112
So. 3d 197, 207 (“[W]hen interpreting a statutory provision, we must presume that the Legislature
acts deliberately ….”).
4
Corrections, 97-2233, p. 6 (La. 4/14/98), 710 So. 2d 776, 780, and Radiofone, Inc.
v. City of New Orleans, 93-0962, p. 6 (La. 1/14/94), 630 So. 2d 694, 698.
Under these principles, this court is tasked with examining Section 10(B) for
indicators that “sue and be sued” is insufficient to waive immunity for
non-tort/non-contract suits. Article XII, § 10(B) provides: “Waiver in Other Suits.
The legislature may authorize other suits against the state, a state agency, or a
political subdivision. A measure authorizing suit shall waive immunity from suit and
liability.”2
Nothing in the language of Article XII, § 10(B) places any restriction on the
legislature’s chosen method to waive liability. Returning to the majority’s historical
narrative, because the constitutional framers drew a distinction between suits for
tort/contract and all other suits, it is reasonable to infer that the legislature, if it had
so chosen, in turn could have drawn a similar distinction when authorizing suits
against the Department of Children and Family Services. As this court long ago
noted, “[t]he members of the Legislature are presumed to know the law.” State ex
rel. Varnado v. Louisiana Highway Commission, 177 La. 1, 147 So. 361, 362
(1933). Therefore, instead of designating the Department as “a body corporate with
the power to sue and be sued” as indicated in La. R.S. 36:471(A), the legislature
2
The language authorizing the legislature to waive immunity is consistent with Article III, § 35 of
the 1921 Constitution as amended by 1960 La. Act 621, which in pertinent part provides:
The Legislature is empowered to waive, by special or general laws or
resolutions, the immunity from suit and from liability of the state, and of parishes,
municipalities, political subdivisions, public boards, institutions, departments,
commissions, districts, corporations, agencies and authorities and other public or
governmental bodies; and each authorization by the Legislature for suit against the
State or other such public body, heretofore and hereafter enacted or granted, shall be
construed to be and shall be effective and valid for all purposes, as of and from the
date thereof, as a waiver of the defendant's immunity both from suit and from
liability.
5
could have designated the Department as “a body corporate with the power to sue and
be sued” in contract or tort.
By presently failing to give effect to the plain and broad designation of the
Department as “a body corporate with the power to sue and be sued,” the majority
effectively perpetuates a flawed policy. That is, the majority is rightly critical of the
line of cases under the former constitution, holding that the legislature’s waiver of
immunity was a “mere invitation ‘to visit the courthouse’ to file suit and to be thrown
out shortly thereafter on an exception of no cause of action. See Duree v. Maryland
Casualty Co., 238 La. 166, 114 So. 2d 594 (1959); Stephens v. Natchitoches School
Board, 238 La. 388, 115 So. 2d 793 (1959).” Canal/Claiborne, No. 14-0664, slip
op. at 10. The Duree and Stephens cases essentially put litigants in the position of
having a right, but no remedy. Similarly, the majority’s present refusal to recognize
the “sue and be sued” language as a waiver for the plaintiff’s quasi-contractual suit
contravenes the notion that if a state agency enters a private marketplace, the agency
should be held accountable just as a non-governmental entity would be accountable.
Cf. Williams v. State, Dept. of Health and Hospitals, 97-0055, pp. 6-7 (La.
12/2/97), 703 So. 2d 579, 583 (commenting on the treatment of sovereign immunity
under the current state constitution, this court explained: “the abrogation of sovereign
immunity necessitates the application of the law of the land equally to the sovereign
and the private litigant.”).
To recap this court’s historical interpretation of the “sue and be sued”
language, this court has already given an expansive meaning to the legislature’s use
of “sue and be sued” for purposes of waiving governmental immunity. There is no
significant difference between the prior constitution, as amended in 1960, and the
current constitution that would result in restricting this expansive meaning.
6
The majority’s new, restrictive interpretation begs an important question. If,
as the majority holds, the language “sue and be sued” provides limited authority to
a litigant to recover against the state’s Department of Children and Family Services,
is it consistent for “sue and be sued” to nevertheless suffice to authorize the
Department of Children and Family Services to recover against a litigant? Pursuant
to La. R.S. 46:236.1.2, that agency is authorized inter alia to obtain child support
orders, establish paternity, and obtain medical support orders. Each of those actions
is greatly different in character, but none of those actions sounds in contract or tort.
It would seem inconsistent to hold that “sue and be sued” is insufficient to enable the
agency to litigate a wide range of non-tort/non-contract actions, but “sue and be sued”
is not broad enough to waive immunity for non-tort/non-contract actions. The proper
aim of this court is to harmonize statutory provisions, not cast them into conflict or
doubt. State v. Louisiana Land and Exploration Co., 12-0884, p. 9 (La. 1/30/13),
110 So. 3d 1038, 1045 (“It is equally well settled under our rules of statutory
construction, where it is possible, courts have a duty in the interpretation of a statute
to adopt a construction which harmonizes and reconciles it with other provisions
dealing with the same subject matter.”).
Reading the phrase “sue and be sued” to mean that the legislature has
authorized and waived immunity for tort, contract, and all other causes of action is
supported by a plain reading of that phrase. That meaning harmonizes the agency’s
statutory duty to file a wide range of non-contract/non-tort suits under La. R.S.
46:236.1.2, with the agency’s obligation to be responsible for its actions in the
marketplace under the “sue and be sued” provision of La. R.S. 36:471(A). When a
cause of action against the agency is not based in contract or tort, the legislature’s
directive that the agency is enabled to “sue and be sued” encourages the agency to act
7
responsibly only if “sue and be sued” is interpreted to waive immunity for
non-tort/non-contract causes of action.
In a related vein, because the decision in St. John the Baptist Parish v. State
ex rel. Dept. of Wildlife and Fisheries, 02-612 (La.App. 5 Cir. 10/16/02), 828 So. 2d
1229, 1230-31, can be interpreted to broadly hold “sue and be sued” language
constitutes a general waiver of immunity in an action challenging the Department of
Wildlife and Fisheries’ ability to enforce its camping regulations (an action which is
not grounded in contract or tort), I find that the St. John the Baptist Parish court
ruled properly. Unlike the majority here, I would not overrule any portion of St.
John the Baptist Parish.
In conclusion, I respectfully dissent from the majority’s ruling, inasmuch as
that ruling does not construe the phrase “sue and be sued” as a waiver of immunity
to the plaintiff’s quasi-contractual claims and redefines that phrase, which this court
had previously held was “effective and valid for all purposes,” as a waiver of
sovereign immunity. See Hamilton, supra (emphasis added).
8