Port Of Bellingham v. State Of Alaska ( 2016 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
SHANNON C. ADAMSON and
NICHOLAS ADAMSON, husband and No. 72925-0-
wife,
Plaintiffs, DIVISION ONE
PUBLISHED OPINION
PORT OF BELLINGHAM, a Washington
municipal corporation,
Defendant.
PORT OF BELLINGHAM, a Washington
municipal corporation,
Appellant,
v.
STATE OF ALASKA, by and through
its DEPARTMENT OF
TRANSPORTATION AND PUBLIC
FACILITIES - ALASKA MARINE
HIGHWAY SYSTEM,
FILED: March 14, 2016
Respondent.
Trickey, J. —The Port of Bellingham and the state of Alaska, through the
Alaska Manne Highway System (AMHS), agreed to a lease in 2009 regarding
AMHS ferries using the Port of Bellingham's terminal. When an AMHS employee
sued the Port of Bellingham for negligently causing injuries to her while working
for AMHS, the Port impleaded Alaska based on provisions in the lease. But
Alaska, by statute, retains sovereign immunity for any claim that arises out of an
injury to a state-employed seaman.
No. 72925-0-1 / 2
Alaska argues that the Port's claims fall within Alaska's sovereign immunity,
which AMHS officials did not have authority to relinquish. The Port maintains that
Alaska's sovereign immunity does not apply to third-party suits. The Port's
argument contradicts the Alaska statute's plain language. Accordingly, AMHS's
act of agreeing to the lease exceeded its authority and is ultra vires. Thus, the
Port cannot enforce its claims against Alaska. We affirm the trial court's dismissal
of the Port's claims.1
FACTS
In 1988, the Port of Bellingham and the state of Alaska, through AMHS,
signed a 20-year lease to allow Alaska to use the Port's terminal forAMHS ferries.
The parties executed a new lease in 2009, agreeing that Washington law would
govern its construction, validity, performance, and enforcement. The parties also
included a provision for the allocation of fault between Alaska and the Port:
Section 6.1 - Allocation of Fault: In the event a third-party asserts a
claim for damages against either Lessor or the state in connection
with this lease, the parties agree that either may take those steps
necessary for the fact finder to make an allocation of comparative
fault between Lessor and the state, in which case the party's liability
to the claimant or the other party, if any, will not exceed its
proportionate degree of fault.[2]
In 2012, there was an accident involving the passenger ramp connecting
the pierto the ferry. The accident injured Shannon Adamson, an AMHS employee
who was operating the ramp at the time. Alaska compensated Adamson in
accordance with its workers' compensation program. Adamson sued the Port for
1 The Port moved to strike portions of Alaska's supplemental response brief. We deny
that motion.
2 Clerk's Papers (CP) at 50-51.
2
No. 72925-0-1 / 3
additional damages under a negligence theory. The Port, in turn, impleaded
Alaska as a third-party defendant.
The Port alleged five causes of action against Alaska, including negligence
under Washington law, negligence under general maritime law, breach of contract,
right to allocation offault under the lease, and general maritime indemnity. Alaska
brought a CR 12(b)(6) motion to dismiss the Port's claims. The trial court granted
Alaska's motion. The Port moved for reconsideration or clarification, which the
court denied. The Port appeals.
ANALYSIS
The Port appeals the trial court's dismissal of its third-party plaintiff claims
against Alaska for failure "to state a claim upon which relief can be granted." CR
12(b)(6). Although the trial court considered documents outside the pleadings, in
this case the "basic operative facts are undisputed and the core issue[s] [are]
one[s] of law," so we review the trial court's dismissal under the standards for a
motion to dismiss. Ortblad v. State, 85 Wn.2d 109, 111, 530 P.2d 635 (1975).
Dismissal under this standard is appropriate only "if it appears beyond doubt that
the plaintiff cannot prove any set offacts" that would justify recovery. Tenore v.
AT&T Wireless Servs., 136 Wn.2d 322, 330, 962 P.2d 104 (1998). We review CR
12(b)(6) motions de novo. Tenore. 136 Wn.2d at 329-30.
The Port also appeals the trial court's denial of its motion for
reconsideration, but we need not consider that separately. We review motions for
reconsideration for an abuse of discretion. West v. Deo't of Licensing, 182 Wn.
App. 500, 516, 331 P.3d 72 (2014), review denied. 339 P.3d 634 (Wash. 2014).
No. 72925-0-1 / 4
Because we "can sustain the trial court's judgment upon any theory established by
the pleadings and supported by the proof," itwould be impossible for this court to
both affirm the trial court's motion to dismiss and hold that the trial court's denial
of reconsideration was an abuse of discretion. LaMon v. Butler. 112 Wn.2d 193,
200-01, 770 P.2d 1027 (1989). If we reversed the trial court's motion to dismiss,
the appeal of the motion for reconsideration would be moot. Wood v. Battle
Ground Sch. Dist.. 107 Wn. App. 550, 574, 27 P.3d 1208 (2001).
Contract Claims
The Port claims that the allocation of fault provision in its lease obligates
Alaska to compensate it for Adamson's injuries. Alaska disputes this interpretation
ofthe lease. But it also argues that, to the extentthe lease subjectsAlaska to suits
for claims arising out of injuries to state-employed seamen, it is ultra vires and
unenforceable. We assume for the purpose of this appeal that the lease may
require Alaska to compensate the Port for some or all ofthe damages it incurs as
a result ofAdamson's injury. Wefocus instead onwhether AMHS had the authority
to sign a lease that would allow the Port to sue Alaska on a claim related to the
injury of a state-employed seaman.
Ultra Vires Actions
Alaska argues that it has withdrawn its waiver of sovereign immunity for all
claims arising out of injuries to state-employed seamen. The Port argues that this
withdrawal was limited to cases brought by the injured employees, and does not
apply tosuits by third parties.3 Because the plain language of the statute does not
3The Port does not claim that Alaska withdrew its sovereign immunity in the lease itself,
only through the statute.
4
No. 72925-0-1 / 5
support the Port's interpretation, we agree with Alaska.
When public officials enter into contracts that are outside the scope of their
authority, the contracts are void and unenforceable under the ultra vires doctrine.
Noel v. Cole. 98 Wn.2d 375, 378, 655 P.2d 245 (1982) (superseded by statute on
unrelated grounds). An agreement may be ultra vires because the substance of
the contract was outside of the agent's authority, or because the agent failed to
follow statutorily required procedures for entering into the contract. Noel. 98 Wn.2d
at 379.
Here, Alaska's constitution authorizes its legislature to establish the limits
of sovereign immunity. Alaska Const, art. II, § 21. The Alaska legislature
provided a limited waiver of sovereign immunity by statute for most tort and
contract claims. AS 09.50.250. But the state of Alaska withdrew that waiver of
sovereign immunity for claims arising out of injuries to state-employed seamen in
2003:
A person or corporation having a contract, quasi-contract, or tort
claim against the state may bring an action against the state in a
state court that has jurisdiction over the claim. . . . However, an
action may not be brought if the claim
(5) arises out of injury, illness, or death of a seaman that occurs or
manifests itself during or in the course of, or arises out of,
employment with the state; AS 23.30 provides the exclusive remedy
for such a claim, and no action may be brought against the state, its
vessels, or its employees under the Jones Act (46 U.S.C. 30104--
30105), in admiralty, or under the general maritime law.
AS 09.50.250.
When the meaning and language ofa statute is clear, this court gives "effect
to that plain meaning." TracFone Wireless. Inc. v. Dep't of Revenue, 170 Wn.2d
No. 72925-0-1 / 6
273, 281, 242 P.3d 810 (2010).
The statute's plain language indicates a broad exclusion of all claims that
arise out of injuries to state-employed seamen. There is no language in the statute
that limits its scope only to those claims brought by injured seamen. The statute
indicates that chapter 23.30 AS, Alaska's Workers' Compensation Act (AWCA),
will be the exclusive remedy for all these claims. The AWCA specifies that the no-
fault compensation provided to workers through AS 23.30.045 is the exclusive
remedy for an employee, or "anyone otherwise entitled to recover damages from
the employer or fellow employee at law or in admiralty on account of the injury or
death." AS 23.30.045, .055. Therefore, Alaska's sovereign immunity bars all
claims that arise out of injuries to Alaska-employed seamen.
While the legislative history cited by the Port suggests that the Alaska
legislature's main concern was eliminating injured employees' claims under
maritime law, the statute's plain language provides a much broader exclusion. It
is improper for this court to examine material "outside the statute" when the
statute's language is unambiguous. Cerrillo v. Esparza. 158 Wn.2d 194, 203-04,
142P.3d 155(2006).
Here, no one disputes that Adamson is a state-employed seaman or that
she suffered her injury within the scope of her employment with Alaska. Thus,
Adamson's injury is the type of injury for which Alaska withdrew its waiver of
sovereign immunity.
Adamson's injury is the source of all the Port's claims against Alaska. The
Port brought five causes of action against Alaska. The claims were for negligence
No. 72925-0-1 / 7
under Washington law, negligence under general maritime law, breach of contract,
right to allocation of fault under the lease, and general maritime indemnity. In its
third-party complaint, the Port explicitly premised Alaska's liability to the Port for
each of those claims upon a finding that the Port was liable to Adamson.
Accordingly, Alaska's sovereign immunity would bar all five of the Port's
claims. AMHS officials had no authority to subject Alaska to suits for which the
legislature retained Alaska's sovereign immunity. Any agreement by AMHS on
behalf of Alaska to the contrary is ultra vires and thus void and unenforceable.
Equitable Estoppel
The Port argues that, even if the lease was ultra vires, Alaska is equitably
estopped from barring the Port's claims. We reject this argument because
equitable estoppel is not available when the inconsistent act was substantively
ultra vires.
"The State does not 'act' and will not be held estopped based on the ultra
vires acts of its officers." Board of Regents of Univ. of Wash, v. Citv of Seattle.
108 Wn.2d 545, 552, 741 P.2d 11 (1987). "[Ejstoppel may not be asserted to
enforce the promise of one who had no authority to enter into that undertaking on
behalf of the state." State v. Nw. Maonesite Co.. 28 Wn.2d 1, 26, 182 P.2d 643(1947). But courts draw a line between acts that are substantively ultra vires and
those that are procedurally ultra vires. Finch v. Matthews. 74 Wn.2d 161,172,443
P.2d 833 (1968). Acts are procedurally ultra vires when the agents acted within
their powers but exercised those powers "in an irregular manner or through
unauthorized procedural means." Finch, 74 Wn.2d at 172. Courts may apply the
No. 72925-0-1 / 8
doctrine of equitable estoppel to procedurally ultra vires acts. Finch. 74 Wn.2d at
171. "The distinction between procedural irregularity and a substantive lack of
authority is justified by the fact that in the latter case, the agency lacks the power
to do the act in any manner." Noel. 98 Wn.2d at 381 n.3.
An act may be procedurally ultra vires when an agency has the authority to
commit the act but ignores a required procedure. In Noel, the Department of
Natural Resources (DNR) agreed to sell timber without conducting an
environmental impact study. 98 Wn.2d at 381. DNR unquestionably had the
authority to contract to sell timber, but the act was procedurally ultra vires because
state law required DNR to prepare an environmental impact statement first. Noel.
98Wn.2dat381.
Here, AMHS lacked the substantive authority to subject Alaska to suit for
this type of claim. There was not any manner in which AMHS was authorized to
withdraw Alaska's sovereign immunity. Therefore, Alaska is not estopped from
withdrawing from a commitment that purports to do so.
Accordingly, the Port cannot recover from Alaska based on any obligations
in the lease. We affirm the trial court's dismissal of those claims.
Non-Contract Claims
The Port appeared to concede at oral argument that, despite bringing
negligence claims directly against Alaska, its claims against Alaska actually sound
in contract. The Port is correct. The Port claims that any damages it owes to
Adamson were caused by Alaska's breach of its duties to the Port "under the
8
No. 72925-0-1 / 9
[Ijease, general maritime law, and/or Washington common law."4 But the Port
never argues to this court that Alaska owes it any duties that do not arise from the
lease. And it only seeks a judgment against Alaska in the event that Adamson
obtains a judgment against the Port. Additionally, in its reply brief, the Port
withdrew its claim that there was admiralty jurisdiction over this action, thereby,
presumably, indicating it was withdrawing its maritime claims against Alaska.
Given the resolution of this appeal, we do not reach the Port and Alaska's
disputes over the maritime character of the underlying tort and the construction of
Washington's Industrial Insurance Act, Title 51.
Affirmed.
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WE CONCUR:
(jfrj*
CP at 24-25.