Fireman's Insurance v. Arkansas State Claims Commission

784 S.W.2d 771, 301 Ark. 451, 1990 Ark. LEXIS 109
CourtSupreme Court of Arkansas
DecidedFebruary 26, 1990
Docket89-245
StatusPublished
Cited by52 cases

This text of 784 S.W.2d 771 (Fireman's Insurance v. Arkansas State Claims Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fireman's Insurance v. Arkansas State Claims Commission, 784 S.W.2d 771, 301 Ark. 451, 1990 Ark. LEXIS 109 (Ark. 1990).

Opinion

Otis H. Turner, Justice.

This action commenced as a claim filed by appellants with the Arkansas Claims Commission.

Potashnik Corporation and Sajan Construction Corporation contracted with the Arkansas Highway and Transportation Department for certain highway construction. Following default of the original contractors, Fireman’s Insurance Company as surety on the contractor’s performance bond, retained Blattner and Sons, Inc. to complete the projects. During completion of construction, disputes arose between Fireman’s and Blattner on the one hand and the Arkansas Highway and Transportation Department on the other, over costs and damages alleged to have occurred during completion, for which Fireman’s and Blattner claimed entitlement from the department.

A complaint was filed with the Arkansas State Claims Commission and the hearing was held at which Fireman’s and Blattner were afforded an opportunity to prove their claim. A complete transcript of that hearing was made and preserved. The Claims Commission subsequently issued its written order finding no improper action on the part of the Highway and Transportation Department and denied the claim in its entirety.

From that order the appellant petitioned the circuit court for review under the provisions of the Administrative Procedure Act and subsequently filed in circuit court a petition for writ of certiorari seeking a reversal of the Commission’s order and entry of judgment, or in the alternative, a de novo jury trial or oral hearing and written briefs. The appellees moved to dismiss the petition for writ of certiorari and petition for Administrative Procedure Act review. After a hearing the motion was granted and the petitions dismissed. From this order of dismissal, Fireman’s and Blattner bring this appeal.

Though the appellants make compelling arguments, we are persuaded that the sovereign immunity granted by the Constitution of the State of Arkansas bars an action against the state and that the procedure for hearing claims as established by the General Assembly meets due process requirements and that the order of the circuit court should be affirmed.

Six alleged errors are asserted by appellant: (1) the Administrative Procedures Act applies here and judicial review from the Claims Commission should therefore be granted, (2) Arkansas case law dictates a review of the Claim’s Commission decisions by certiorari to the circuit court; (3) sovereign immunity would not be violated by review under either the Administrative Procedure Act or on certiorari; (4) the circuit court was in error in holding that the Claims Commission is an arm of the General Assembly; (5) the Claims Commission’s order and the court’s denial of review is violative of appellant’s due process rights; (6) the Claims Commission’s order and the dismissal by the court of appellant’s petition for review is violative of the doctrine of separation of powers.

In holding that the doctrine of sovereign immunity as dictated by the Arkansas Constitution and interpreted by a long line of case law bars the relief sought by appellants, the first five of appellants’ points will be considered together. The Constitution of Arkansas provides that the state of Arkansas shall never be made a defendant in any of her courts. Arkansas Constitution of 1874, Article 5, Section 20. The completeness of the intent of such immunity is best illustrated by the long and unequivocal line of cases expressly recognizing and protecting the immunity. As early as Pitcock v. State, 91 Ark. 527, 121 S.W. 742 (1913), this court held that the constitutional prohibition was not merely declaratory that the state could not be sued without her consent, but that all suits against the state were expressly forbidden. Further, where the pleadings show that the action is, in effect, one against the state, the trial court acquires no jurisdiction.

Extending this immunity to its next logical step, we held that where a suit is brought against an agency of the state with relation to some matter in which the defendant represents the state in action and liability, and the state, though not a party of record, is the real party in interest so that judgment for plaintiff would operate to control the action of the state or to subject the state to liability, the action is, in effect, one against the state and prohibited by the constitutional bar. Page v. McKinnley, 196 Ark. 331, 118 S.W.2d 235 (1938). See also, Beaulieu v. Gray, 288 Ark. 395, 705 S.W.2d 880 (1986).

To further illustrate the intent of the General Assembly to keep and maintain a doctrine of complete sovereign immunity, this court, in 1979, while recognizing the complete immunity enjoyed by the state for the acts of its officers and employees, held that in the absence of specific legislation extending immunity to those officers and employees, they were not individually protected under the umbrella of the state’s immunity. At the very next session of the legislature, a statute was passed extending the state’s immunity to its officers and employees in the absence of malicious acts. Ark. Code Ann. § 19-10-305 (1987).

The only exception to total and complete sovereign immunity from claims which has been recognized by this court occurs when the state is the moving party seeking specific relief. In that instance the state is prohibited from raising the defense of sovereign immunity as a defense to a counterclaim or offset. Parker v. Moore, 222 Ark. 811, 262 S.W.2d 891 (1953).

In addition to Article 5 of the Constitution invoking sovereign immunity in relation to actions against the state, the framers of the Constitution included a subsequent provision stating that the General Assembly shall provide for payment of all just and legal debts of the state. Arkansas Constitution of 1874, Article 16, Section 2. For many years these debts, after processing by the legislature, were paid by special acts of the General Assembly for claimants the legislature deemed deserving. As the state grew and the legislative demands increased, the General Assembly was apparently unable to devote sufficient time to the investigation and action required in handling each individual claim. The answer was passage of the first Claims Commission Act in 1933. A similar act was passed each two years thereafter until Act 53 of the 1945 General Assembly was enacted, creating the Board of Fiscal Control, the first continuing body to consider whether the individual claims against the state were “just and legal debts” which should be honored and worthy of recommendation to the General Assembly for the appropriation of funds for payment.

In 1949 the General Assembly created the State Claims Commission by Act 462 of 1949, which granted to the Commission exclusive jurisdiction over all claims against the state and its agencies, departments and institutions (with certain exceptions not here involved).

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Bluebook (online)
784 S.W.2d 771, 301 Ark. 451, 1990 Ark. LEXIS 109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/firemans-insurance-v-arkansas-state-claims-commission-ark-1990.