Orange County v. Heath

Annotate this Case

192 S.E.2d 308 (1972)

282 N.C. 292

ORANGE COUNTY, a municipal corporation v. Forrest T. HEATH and wife, Nancy B. Heath.

No. 21.

Supreme Court of North Carolina.

November 15, 1972.

*309 Graham & Cheshire, by Lucius M. Cheshire, Hillsborough, for plaintiff appellee.

Winston, Coleman & Bernholz, by A. B. Coleman, Jr., Hillsborough, for defendants appellants.

HIGGINS, Justice.

The history of this proceeding leading up to Judge Hobgood's order appears in our prior decision reported in 278 N.C. 688, 180 S.E.2d 810. Judge Hobgood denied the defendants' motion for the assessment of damages on the ground the County of Orange cannot be held liable to the defendants for any damages they may have sustained as a result of the invalid restraining order issued by the court at the instance of Orange County, which order resulted in a work stoppage and delay in the completion of their mobile home park. The denial was based solely on the ground that Orange County, being a municipal corporation, having obtained the restraining order in the exercise of its governmenatal function, is immune from suit for damages.

The common law rule of governmental immunity prevails in North Carolina: "Under this common law rule a municipality is not liable for the torts of its employees or agents committed while performing a governmental function." Galligan v. Chapel Hill, 276 N.C. 172, 171 S.E.2d *310 427; Taylor v. Bowen, 272 N.C. 726, 158 S.E.2d 837; Millar v. Wilson, 222 N.C. 340, 23 S.E.2d 42. In the absence of statutory authority a municipality has no power to waive its governmental immunity. Stephenson v. Raleigh, 232 N.C. 42, 59 S.E.2d 195.

The fact that the defendants' claim arose in the action instituted by the County does not confer jurisdiction on the court to hear defendants' claim for damages. "The defendant in setting up this `new matter and by way of counterclaim,' . . . is in effect bringing a cross-action against the plaintiffs for their wrongful act as county commissioners in their official capacity, which he could not maintain if brought directly, and therefore he cannot bring it by way of counterclaim." Morgantown Graded School v. McDowell, 157 N.C. 316, 72 S.E. 1083.

The defendants, conceding the general rule of governmental immunity, nevertheless contend that North Carolina, by the enactment of Procedural Rule 65(c) (G.S. § 1A-1), waived immunity in a case of the type here involved. Rule 65(c) provides that restraining orders shall not issue except "Upon the giving of security by the applicant . . . No such security shall be required of the State of North Carolina or of any county or municipality thereof, of any officer or agency thereof acting in an official capacity, but damages may be awarded against such party in accord with this rule." Section (e) of Rule 65 provides: "An order or judgment dissolving an injunction or restraining order may include an award of damages against the party procuring the injunction and the sureties (emphasis ours) . . . without a showing of malice or want of probable cause . . . ." It is arguable that the provision includes only parties who are required to give the sureties. This interpretation fits into Professor Sizemore's view later referred to herein. The wording of the rule as to whether it applies generally or only to parties who are required to give sureties is at least equivocal.

Prior to the enactment of G.S. § 1A-1, the Bar Association and the General Statutes Commission made a study, looking toward changes in the rules of court procedure. These studies clearly indicate that G.S. § 1A-1 was intended as an amendment to the procedural law of the State bringing it in line with Federal Procedural Rule 65. However, the Bar Association and the General Statutes Commission were mindful of Article IV, Section 13(2) of the North Carolina Constitution which provides this limitation: "No rule of procedure or practice shall abridge substantive rights or abrogate or limit the right of trial by jury."

Professor Sizemore of the Wake Forest University School of Law, published an article in 5 Wake Forest Intramural Law Review 1 discussing the changes in Rule 65. Professor Sizemore, a member of the drafting committee, said: "The changes in injunction procedure are minute. Certain parts of the previous statutes dealing with injunction procedure have been repealed simply because substantially the same provisions are included in Rule 65." Clearly a minute change in a procedural rule would not embrace so fundamental a change as to abolish governmental immunity. Even if attempted, the constitutional provision above quoted would require a direct and positive declaration of policy, rather than a minute procedural change. The 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.

The decision of the Supreme Court of South Carolina in Hollifield v. Keller, 238 S.C. 584, 121 S.E.2d 213, is directly in point: "`As we understand the rule relating to the immunities attaching to sovereignty, *311 such attributes are never to be considered as waived or surrendered by any inference or implication. The surrender of an attribute of sovereignty being so much at variance with the commonly accepted tenets of government, so much at variance with sound public policy and public welfare, the Courts will never say that it has been abrogated, abridged, or surrendered, except in deference to plain, positive legislative declarations to that effect. Heman Const. Co. v. Capper, 105 Kan. 291, 293, 182 P. 386.'"

The General Assembly of North Carolina by G.S. § 160-191.1, apparently repealed and re-enacted by Chapter 698, Session Laws of 1971, provided: "The governing body of any incorporated city or town, by securing liability insurance as hereinafter provided, is hereby authorized and empowered, but not required, to waive its governmental immunity from liability for any damage by reason of death, or injury to person or property, proximately caused by the negligent operation of any motor vehicle by an officer, agent or employee of such city or town when acting within the scope of his authority or within the course of his employment. Such immunity is waived only to the extent of the amount of the insurance so obtained." Hence the waiver did not involve one of the present reasons for the rulethat is the solvency of the town. The precise manner in which the Legislature spelled out the waiver is a clear indication the General Assembly did not abandon, abrogate or abolish the rule of governmental immunity by the use of equivocal language in Procedural Rule 65.

The decision of the Court of Appeals affirming Judge Hobgood's order is correct and is