Annotate this Case

263 S.E.2d 578 (1980)


No. 36.

Supreme Court of North Carolina.

March 5, 1980.

*581 Maxwell, Freeman, Beason & Lambe, P.A. by James B. Maxwell and Robert A. Beason, Durham, for plaintiff-appellee.

Atty. Gen. Rufus L. Edmisten by Sp. Deputy Atty. Gen. Edwin M. Speas and Asst. Atty. Gen. Elizabeth C. Bunting, Raleigh, for defendant-appellant.

BRITT, Justice.

By its first assignment of error, defendant argues that the trial court erred in denying its motions to dismiss. Defendant contends that it is an agency of the State of North Carolina and thus enjoys the protection of sovereign immunity. The essence of its argument is that this court did not provide for retroactive application of the holding of the case of Smith v. State, 289 N.C. 303, 222 S.E.2d 412 (1976), in which the doctrine of sovereign immunity for breach of contract was abrogated.

Prior to our decision in Smith, it had long been the rule in North Carolina that the doctrine of sovereign immunity prevented the state or one of its agencies from being sued without its consent. E. g., Great American Ins. Co. v. Gold, Comm'r of Ins., 254 N.C. 168, 118 S.E.2d 792 (1961). Writing for the court in Smith v. State, Chief Justice Sharp held that ". . . whenever the State of North Carolina through its authorized officers and agencies, enters into a valid contract, the State implicitly consents to be sued for damages on the contract in the event it breaches the contract. Thus, in this case, and in causes of action on contract arising after the filing date of this opinion, 2 March 1976, the doctrine of sovereign immunity will not be a defense to the State. The State will occupy the same position as any other litigant." Smith v. State, 289 N.C. at 320, 222 S.E.2d at 424.

The general rule is that decisions are presumed to operate retroactively. Mason v. Nelson Cotton Co., 148 N.C. 492, 62 S.E. 625 (1908); see generally State v. Rivens, ___ N.C. ___, 261 S.E.2d 867 (1980). It is proper to limit the application of a new rule of decision in a solely prospective manner only when there is a compelling reason for so doing. State v. Rivens, supra; Mason v. Nelson Cotton Co., supra; Hill v. Brown, 144 N.C. 117, 56 S.E. 693 (1907); Hill v. Atlantic & N. C. R. R., 143 N.C. 539, 55 S.E. 854 (1906). When the law has received a given construction by a court of last resort, and contracts have been made and rights acquired under and in accord with such construction, such contracts may *582 not be invalidated nor vested rights acquired under them impaired by a change of construction made by a subsequent decision. Mason v. Nelson Cotton Co., supra; Hill v. Atlantic & N. C. R. R., supra.

The contract which gave rise to this litigation was entered into in 1972, at which time the doctrine of sovereign immunity was still a viable proposition of law. Consequently, the rights which had been acquired under the contract were subject to its mandate. Therefore, we reaffirm the conclusion of Smith in favor of a wholly prospective application of the abrogation of the doctrine of sovereign immunity.

It is not enough that we reaffirm the wholly prospective application of Smith. If we are to complete our inquiry with regard to this assignment of error, we are compelled to consider the subsidiary question as to when plaintiff's cause of action accrued. Plaintiff contends that if this court should reaffirm the wholly prospective application of Smith, his cause of action nonetheless remains viable in that it did not accrue until President Friday denied his grievance in the letter of 6 June 1976. We disagree.

A cause of action does not accrue until a right which belongs to a person is invaded in some manner by another. Thurston Motor Lines v. General Motors Corp., 258 N.C. 323, 128 S.E.2d 413 (1962); Shearin v. Lloyd, 246 N.C. 363, 98 S.E.2d 508 (1957). A cause of action for a suit involving a breach of contract accrues as of the date of breach. See Reidsville v. Burton, 269 N.C. 206, 152 S.E.2d 147 (1967). Ordinarily, the time for performance must have expired, Kelly v. Oliver, 113 N.C. 442, 18 S.E. 698 (1893), but where an employee has been discharged by his employer, there is total breach for which only a single action lies. See 4 A. Corbin, Contracts § 958 (1951).

Plaintiff's employment at the Center terminated on 31 August 1974. It follows, therefore, that breach occurred, if at all, no later than that date, and plaintiff's cause of action accrued as of that date, some sixteen months before the decision in Smith. Counsel for plaintiff argues forcefully that the ultimate act constituting breach of his contract of employment occurred after 2 March 1976 and was embodied in the letter of 6 June 1976 from President Friday denying the grievance appeal. However, the evidence is uncontroverted that plaintiff was no longer working at the Center in any capacity after 31 August 1974. In pursuing the internal review of his discharge, plaintiff was merely seeking administrative review of a decision which had already been made and implemented. In no way can it be concluded that the accrual of his cause of action was affected by this review. Plaintiff's rights were invaded, if at all, when he was dismissed from the Center on 31 August 1974, the date upon which funds to pay his salary were exhausted and after he was no longer able to act in any capacity at the Center.

At the time of oral argument, plaintiff directed this court's attention to the case of In re Metric Constructors, 31 N.C.App. 88, 228 S.E.2d 533 (1976), as additional authority for his position. Plaintiff's reliance on the case is inapposite. In In re Metric Constructors, plaintiffs sought judicial review of an administrative decision of the Department of Administration which called for Metric Constructors, Inc., to forfeit a bid bond in the amount of $316,000.00. Metric had submitted a bid in the amount of $6,332,000 for construction of a state office building but later discovered that the bid failed to include an item of more than $896,000 for structural steel. Metric sought to withdraw its bid, but the Department of Administration awarded the contract to the firm anyway. Metric refused to perform the contract. The Department of Administration then held a hearing and denied Metric's request that the bond be released. Plaintiffs thereafter sought judicial review of the decision pursuant to Chapter 143, Article 33, of the General Statutes.

The superior court denied the Department's motion to dismiss, and defendant appealed, arguing that the suit was barred by the doctrine of sovereign immunity. The Court of Appeals affirmed, holding that when the General Assembly has expressly provided a means of judicial review *583 for administrative decisions, the state has impliedly consented to waive the defense of sovereign immunity within the parameters of that review. In re Metric Constructors, 31 N.C.App. at 91, 228 S.E.2d 533; see generally, Great American Ins. Co. v. Comm'r of Ins., 254 N.C. at 173, 118 S.E.2d at 795. The Court of Appeals observed that the plaintiffs had properly followed the procedures which had been mandated by the statutes for pursuing review of an administrative decision. Id.

In the present case plaintiff does not seek judicial review of an administrative decision at all. Instead, he has brought suit on four common law theories of recovery. Had plaintiff sought judicial review of the administrative decision of the University, he would have had to file a petition in Wake Superior Court no later than 30 days after having received a written copy of the final decision of the University. G.S. § 150A-45 (1978). No such review was sought. Instead, plaintiff filed an independent common law action approximately one year after President Friday's decision. In short, plaintiff elected to seek relief on a theory as to which the defense of sovereign immunity had not been waived or abrogated as of the date that his alleged cause of action had accrued. Therefore, he waived any judicial review like that sought by the plaintiffs in In re Metric Constructors, supra.

The second paragraph of G.S. 150A-1(a) exempts the University of North Carolina and its constituent institutions from the provisions of Chapter 150A except for Article 4. Since plaintiff did not seek judicial review under Article 4, we find it unnecessary to determine the effect of the exempting provision on plaintiff's claim.

In light of our holding that the doctrine of sovereign immunity bars plaintiff's action, we decline to discuss the remaining assignments of error which defendant brought before the court.