Kawai America Corp. v. University of North Carolina at Chapel Hill

567 S.E.2d 215, 152 N.C. App. 163, 2002 N.C. App. LEXIS 887
CourtCourt of Appeals of North Carolina
DecidedAugust 6, 2002
DocketCOA01-1145
StatusPublished
Cited by33 cases

This text of 567 S.E.2d 215 (Kawai America Corp. v. University of North Carolina at Chapel Hill) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kawai America Corp. v. University of North Carolina at Chapel Hill, 567 S.E.2d 215, 152 N.C. App. 163, 2002 N.C. App. LEXIS 887 (N.C. Ct. App. 2002).

Opinions

HUDSON, Judge.

The University of North Carolina at Chapel Hill (the “University”) appeals an order denying its motion to dismiss plaintiffs’ claims for conversion and damage to property on grounds of sovereign immunity, lack of personal and subject matter jurisdiction, and failure to state a claim upon which relief can be granted. For the reasons discussed below, we reverse in part, affirm in part, and remand.

The facts relevant to this appeal are not in dispute. Plaintiff Piedmont Music, Inc., (“Piedmont”) is a dealer of pianos manufactured by plaintiff Kawai America Corporation (“Kawai”). On or about 16 February 1995, plaintiffs entered into an agreement with the University, under which Piedmont through Kawai was to provide pianos to the University for use in its Department of Music, in exchange for pianos owned by the University that were in need of repair. According to the agreement, Kawai through Piedmont could loan additional pianos to the University, and Piedmont could offer for sale any pianos it had placed with the University to other customers, provided that Piedmont replaced any pianos sold with pianos of comparable model and quality. In the event of termination of the agreement, pianos that Piedmont had provided in exchange for pianos owned by the University would remain the property of the University, but pianos that were loaned to the University would be returned to Piedmont at Piedmont’s expense.

At some point prior to the initiation of this action, the parties decided to terminate the agreement. A dispute then arose over the return of the pianos. The parties agreed that certain pianos were to be returned to plaintiffs, and plaintiffs received these pianos. Plaintiffs contend, however, that the pianos were returned to them in damaged condition and that they are entitled to compensation for the damage under the terms of the agreement. Plaintiffs further contend that there are fourteen additional pianos that they did not receive, to which they are entitled under the agreement.

On 26 February 2001, plaintiffs filed a complaint against the University in Orange County Superior Court. The complaint alleged [165]*165four causes of action: (1) breach of contract; (2) in the alternative, conversion; (3) damage to property; and (4) claim and delivery. Subsequently, plaintiffs voluntarily dismissed without prejudice the fourth cause of action pursuant to Rule 41 of the North Carolina Rules of Civil Procedure. The University moved to dismiss the claims for conversion and damage to property, asserting sovereign immunity, lack of personal and subject matter jurisdiction, and failure to state a claim upon which relief can be granted. The court denied the motion to dismiss, and the University appeals.

This Court has “repeatedly held that appeals raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review.” Price v. Davis, 132 N.C. App. 556, 558-59, 512 S.E.2d 783, 785 (1999). Therefore, although interlocutory orders such as a denial of a motion to dismiss are not generally immediately appealable, this appeal is properly before us. See Vest v. Easley, 145 N.C. App. 70, 72, 549 S.E.2d 568, 571 (2001).

Absent consent or waiver, “an action cannot be maintained against the State of North Carolina or an agency thereof.” Guthrie v. State Ports Authority, 307 N.C. 522, 534, 299 S.E.2d 618, 625 (1983) (emphasis omitted). Unless waived, “the immunity provided by the doctrine [of sovereign immunity] is absolute and unqualified.” Price, 132 N.C. App. at 559, 512 S.E.2d at 786 (internal quotation marks omitted). The University is a state agency to which the doctrine of sovereign immunity applies. See Truesdale v. University of North Carolina, 91 N.C. App. 186, 192, 371 S.E.2d 503, 506-07 (1988), appeal dismissed and disc. review denied, 323 N.C. 706, 377 S.E.2d 229, cert. denied, 493 U.S. 808, 107 L.Ed. 2d 19 (1989), overruled on other grounds by Corum v. University of North Carolina, 330 N.C. 761, 413 S.E.2d 276, cert. denied sub nom. Durham v. Corum, 506 U.S. 985, 121 L. Ed. 2d 431 (1992). Therefore, unless the University consented to suit or waived its immunity regarding these claims, the claims are barred.

The State may statutorily waive sovereign immunity, but may then “be sued only in the manner and upon the terms and conditions prescribed.” Alliance Co. v. State Hospital, 241 N.C. 329, 332, 85 S.E.2d 386, 389 (1955) (internal quotation marks omitted). Statutes which authorize suit against the State, “being in derogation of the sovereign right to immunity, must be strictly construed.” Guthrie, 307 N.C. at 538, 299 S.E.2d at 627. One such statute, the State Tort Claims [166]*166Act (the “Act”), provides in relevant part that the Industrial Commission may award damages in claims based on the negligence of “any officer, employee, involuntary servant or agent of the State while acting within the scope of his office, employment, service, agency or authority, under circumstances where the State of North Carolina, if a private person, would be liable to the claimant in accordance with the laws of North Carolina.” N.C. Gen. Stat. 143-291(a) (2001). The Act thus waives the sovereign immunity of the State with respect to “suits brought as a result of negligent acts committed by its employees in the course of their employment.” Teachy v. Coble Dairies, Inc., 306 N.C. 324, 329, 293 S.E.2d 182, 185 (1982). The Act also establishes that the forum for such suits is the Industrial Commission, rather than the State courts. See id.

This Court has stated that:

Suits against the State, its agencies and its officers for alleged tor-tious acts can be maintained only to the extent authorized by the Tort Claims Act, and that Act authorizes recovery only for negligent torts. Intentional torts committed by agents and officers of the State are not compensable under the Tort Claims Act.

Wojsko v. State, 47 N.C. App. 605, 610, 267 S.E.2d 708, 711 (citation omitted), appeal dismissed and disc. review denied, 301 N.C. 239, 283 S.E.2d 136 (1980); see also Frazier v. Murray, 135 N.C. App. 43, 48, 519 S.E.2d 525, 528 (1999) (“The Tort Claims Act does not give the Industrial Commission jurisdiction to award damages based on intentional acts.”), appeal dismissed, 351 N.C. 354, 542 S.E.2d 209 (2000). Our courts have clearly held that any modification or waiver of the doctrine of sovereign immunity must come from the General Assembly. See Blackwelder v. City of Winston-Salem, 332 N.C. 319, 324, 420 S.E.2d 432

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Bluebook (online)
567 S.E.2d 215, 152 N.C. App. 163, 2002 N.C. App. LEXIS 887, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kawai-america-corp-v-university-of-north-carolina-at-chapel-hill-ncctapp-2002.