In th e S u p re m e Co u rt o f Ge o rg ia

De c id e d: Ma y 2 3 , 2 0 1 6

S 1 5 G1 7 8 0

. GEORGIA DEP A RTMENT OF LABOR v

.

RTT AS S OCIATES , INC.

B ENHAM , Ju stic e

.

Th is c a se in v o lv e s a writte n c o n tra c t b e twe e n a v e n d o r a nd a sta te a g e n c y

th a t c o n ta in e d fo rm la n g u a ge stip u la tin g th a t a m e n d m e n ts h a d to b e in writin g

a n d e x e c u te d b y th e a ge n c y a n d th e c o n tra c to r. Th e v e n d o r a sse rts th a t t h e

c o n tra c t wa s e x te n d e d b y c o u rse o f c o n d u c t a s we ll a s b y c e rta in in te rn a l

writin g s c re a te d b y th e a g e n c y

. By th e te rm s o f Ge o rg ia ’s c o n stitu tio n, th e sta te

wa iv e s its so v e re ig n im m u n ity fo r b re a c h o f c o n tra c t wh e n it e n te rs in to a

writte n c o n tra c t. 1 At issu e is wh e th e r an a g e n c y ’s wa iv e r o f im m u nity f r o m a

b re a c h o f c o n tra c t c l a i m a s a re su lt o f e nte rin g in to a writte n c o n tra c t re m a in s

in ta c t in th e e v e n t th e c o n tra c t is e x te n d e d with o u t a wr i t t e n d o c u m e nt sig n e d

b y b o th p a rtie s e x pre ssly a m e n d in g th e c o ntra c t, a s re q u ire d b y its te rm s.

1 Pursuant to Ga. Const. of 1983, A r t. 1, Sec. I I

, Par. I X (c): “The state’s defense of

sovereig n immunity is hereby waived as to any action e x contractu for the breach of any written

contract now ex isting or hereafter e n tered into by the state or its departments or ag e ncies.” See also

OCGA §50-21-1 (a).Th e re c ord sh o ws a p p e lla n t G e o rg ia De pa rtm e n t o f La bo r (DOL) e n te re d

in to th e c o n tra c t in q u e stio n w ith a pp e lle e RTT Asso c ia te s, In c . (RTT) fo r th e

p u rp o se o f e n g a g in g R TT to d e v e lo p c e rta in c o m p u te r so ftwa re

. A

re p re se n ta tiv e o f b o th pa r tie s e x e c u te d th e writte n c o n tra c t. Th e c o n tra c t

i d e n t ifie d th e b e g in n in g d a te to be Ma rc h 1, 2 0 1 2

, a nd th e e x p ira tio n d a te

, o r

“ Da te of Co m

p le tio n

, ” to b e Ju n e 3 0

, 2 0 1 2

. 2 Th e m a x im um a m o u n t to b e p a id

u n d e r th e c o n tra c t wa s sh o wn to b e $ 2 47 ,4 2 2 .6 8, a n d RTT’s p e rfo rm a n c e wa s

se c u re d b y a p e rfo rm a n c e b o n d in th is a m o u n t. As n o te d

, th e c o n tra c t sp e c ifie d

th a t a m e n d m e n ts m

u st b e in writin g an d fu lly e x e cu t e d b y b o th p a rtie s. Th e

c o n tra c t sp e c i f

i e d th a t tim e is o f th e e sse n c e w ith re sp e c t to th e c o n tra c to r’s

p e rfo rm a n c e

. It c o n ta in e d a n in te g ra tio n c la use sta tin g th a t th e c o n tra c t

re p re se n ts th e e n tire a g re e m e n t b e twe e n th e p a rtie s a n d th a t th e p a rtie s sh a ll n o t

re ly u p o n re p re se n ta tio n s n o t in c lu d e d in th e c o n t r ac t

. It a lso sta te d th a t th e

c o n tra c to r’s o b lig a tio ns un d e r t h e c o n tra c t su rv iv e d th e e xp ira tio n o r

te rm in a tio n of th e c on tra c t.

DOL m a de on e p ro g re ss p a y m e nt to RTT fo r th e wo rk in v o lv e d in th e first

2 W e n o t e t h a t J u ne 30 marks the end of the state’s f iscal y ear, and DOL a sserts that its

contracts ty

pically ex pire at the end of a fiscal y ear for budg eting purposes.

2o f fo u r m ile sto n e s in th e c o ntra c t, a lo ng w i t h a n a d v a n c e to wa rd th e se c o n d

m ile sto n e p a y m e n t e v e n th o u g h DOL c la im s th a t w o rk wa s n e ve r d e liv e re d

. In

o rd e r to a c c o m m od a te a c h a n g e in fe de ra l la w th a t im p a c te d th e d e sire d so ftwa re

d e sig n

, DOL e x e c u te d a n in te rn a l p ro je c t c ha n g e re q u e st b y w h ic h it so u g h t a n d

wa s g ra n te d a

uth o ri t y t o i n c re a se th e c o st o f th e c on tra c t by $ 1 2,0 0 0

. Th e

c h a n g e re q u e st, a

p p ro v e d o n Ju n e 1 2

, 2 0 1 2

, sta te s it d o e s n o t im p a c t th e c o n tra c t

sc h e du le

. An in te rn a l pu rc h a se o rd e r, d a te d Ju ly 1 7

, 2 0 1 2, w a s p re pa re d to

su p p o rt th is c h a n g e to th e c o n tra c t, a n d th e p u rc h a se o rd e r re fe re n c e s a c o n tra c t

d a te o f Au g u st 3 0

, 2 0 1 2

. In re sp o n se to a n o th e r c h a n g e in fe d e ra l la w

, a se c o n d

in te rn a l p ro

je c t c h a n g e re q u e st in v o l v in g a $ 7 ,0 00 c h a n g e to th e sc op e o f th e

c o n tra c t wa s su b m itte d o n S e p te m b e r 1 4 an d a

p p ro v e d o n S e p te m

b e r 1 7

, 2 0 1 2

.

N e ith e r o f th e se c h a n g e re q u e st d o c u m e n ts wa s e x e c u te d by RTT a n d n o

e v id e n c e e x ists th a t sh o ws RTT wa s p ro v id e d a c o py of th e se d o c u m e n ts a t a n y

tim e p rio r to th e filin g o f R TT’s la wsu it. No writte n a m e n d m e n t to th e c o n tra c t

wa s e x e c u te d b y e ith e r pa rty to e x te n d th e e x p i r a t io n d a te o f th e c o n tra c t o r

m o d ify an y o th e r c o n tra c t te r m. R T T a d m its it d id n o t c o m p le te th e re q u ire d

wo rk o n o r b e fo re th e e x e c u te d c o n tra c t’s e x p ira tio n d a te

.

Th e re c o rd re fle c ts th a t e v e n a fte r th e c o n tra c t’s sta te d e x p ira tio n d a te

, th e

3p a rtie s c o n tin u e d to c o m m u n ic a te a n d wo rk to g e th e r with re sp e c t t o

d e v e lo p m e n t a n d d e liv e ry o f a wo rk a b le so ftwa re p ro d u c t th a t sa tisfie d DOL’s

re q u ire m e n ts. By

le tte r d a te d Ap ril 3 , 2 0 1 3 , h o we ve r, DOL n o tifie d RTT th a t

it w a s in b re a c h o f th e c o n tra c t fo r its fa ilu re to d e liv e r a fu n c tio n a l p ro d u c t th a t

c o m p lie d with th e c o n tra c t re q u ire m e nts, a n d th a t th e c o ntra c t wa s imm e d ia te ly

t e r mi n at e d

. Also on th a t d a te

, DOL m a d e a w ritte n c la im a g a in st th e

p e rfo rm a n c e b o n d

. In a Ma y 7

, 2 01 3, m e e tin g b e twe e n th e p a rtie s’

re p re se n ta tiv e s, DOL in fo rm e d RTT th a t it wo u ld n o t u tiliz e RTT’s so ftwa re

.

RTT file d su it a g a in st DOL se e k in g da m a g e s fo r, a m o n g o t h e r th in g s,

b re a c h o f c o n tra c t. In its c o m p la in t, RTT a sse rte d DOL im p ro p e rly te rm in a te d

th e c on tra c t b e c a

use it fa ile d to g iv e n o tic e o f a c la im o f d e fa u lt a n d a n

o p p ortu n ity to c u re d e fa

u lt b e fo re te rm in a tio n, as r e q u ire d b y th e te rm s o f th e

c o n tra c t. Afte r c e rta in c l ai ms a n d c o u n te rc la im s we re d isp o se d o f b y th e tria l

c o u rt’s o rd e rs, a n d a fte r c o n d u c tin g a n e vid e n ti a r y h e a rin g

, th e tria l c o urt

g ra n te d D OL’s m o tio n fo r su m m a ry ju dg m e n t o n a ll re m a in in g c la im s. Th e tria l

c o u rt c o n c lu d e d RTT h a d fa ile d to c arry its bu rd e n o f p ro o f th a t th e c o n tra c t h a d

b e e n e x te n d e d o r a m e n de d b y a writin g e x e c u te d b y b oth p artie s, a s re q uire d b y

th e te rm s o f th e c o n tra c t. In ste a d

, th e tria l c o u rt fo u n d th a t “[a ] t b e st, th e re c o rd

4e v id e n c e s [DOL’s] will i n g n e s s to no t h o ld [RTT] to th e d e liv e ry d e a d lin e

c o n ta in e d in th e writte n [c ] o n tra c t.” Th e re fo re

, th e tria l c o u rt c o n c lu d e d

,

so v e re ig n im m

u n ity wa s n o t wa iv e d, a s re q u ire d by c o nstitu tio na l a n d sta tu to ry

p ro v isio ns, b e y o n d th e re q u ire d c o m p le tio n d a te o f th e c on tra c t.

RTT tim e ly a

p p e a le d

, a n d th e Co urt o f Ap p e a ls r e v e rse d th e g ra n t o f

su m m ary ju d g me n t to DOL, fin d in g

, in te r a lia

, th a t e v id e nc e of th e p a rtie s’

c o u rse o f c o n d u c t c re a te d a q u e stio n o f fa c t a s to wh e th e r th e p a rtie s wa iv e d o r

e x te n d e d th e re q u ire d c o m ple tio n d a te a s we ll a s th e p ro v isio n th a t th e c o n tra c t

c o u ld b e a m e n d e d o n ly in w ritin g

. RT T Asso c ia te s, In c

. v

. Ge o rg ia D e p t. o f

L a b o r

, 3 3 3 Ga

. Ap p

. 1 7 3

, 1 7 8 (1 ) (7 7 5 S E 2 d 6 44 ) (2 0 1 5 ). Co n se q u e ntly

, th e

Co u rt o f Ap p e a ls h e ld th e tria l c o u rt e rre d in c o n c lu d in g

, a s a m a tte r o f la w, th a t

RTT’s c la im s we re ba rre d b y th e do c trin e o f so v e re ig n im m u n ity

. Id

. a t 1 7 9 (1 ).

Th is Co u rt g ra n te d DOL’s p e titio n fo r writ o f c e rtio ra ri to e x a m in e wh e th e r th e

Co u rt o f Ap p e a ls e rre d b y re v e r s i n g th e tria l c o u rt’s g ra nt o f su m m a ry

ju d g m e n t. F o r th e re a so ns se t fo rth b e lo w, we re v e rse th e C o u rt o f Ap p e a ls a n d

h o ld th a t th e tria l c o u rt’s o rd e r sh ou ld b e a ffirm e d

.

To su m m a riz e

, RTT fa ile d to c om p le te its c o n tra c tu a l ob lig a tio n s b e fo re

t h e c o n tra c t e x pire d

. Ev e n if th e p a rtie s’ c on du c t a fte r th e e xp ira tio n o f t h e

5c o n tra c t c o u ld b e fo u n d to d e m o n stra te a n a g re e m e n t b e twe e n t h e p a r tie s to

c o n tin u e to p e rfo rm

u nd e r th e o rig in a l c o ntra c t, a s a m a tte r o f la w n e ith e r th a t

c o n d u c t n o r th e in te rn a l d o c u m e n ts c re a te d b y D OL a fte r th e c o n tra c t e x p ire d

e sta b lish e s a w r i t te n c o n tra c t to d o so

. With ou t a writte n c o ntra c t, th e sta te ’s

so v e re ig n im m

un ity fro m a

c o n tra c t a c tio n is n o t wa iv e d

.

1

. Th e G e org ia Co n stitu tio n a d d re sse s th e w a iv e r o f th e sta te ’s im m u n ity

fro m lia b ility fo r b re a c h o f c on tra c t a s fo llo w s:

(c ) Th e sta te ’s d e fe n se o f so v e re ig n im m u n ity is h e re b y w a iv e d a s

to a n y a c tio n e x c o n tra c tu fo r th e bre a c h of a ny writ t e n c o n tra c t

n o w e x istin g o r h e re a fte r e n te re d in to by th e sta te o r its d e p a rtm e n ts

a n d a g e n c ie s.

* * * *

(e ) Ex c e p t a s s p e cific a lly p ro v id e d in th is P a ra g ra p h

, so v e re ig n

im m u n ity e xte n ds to th e sta te a n d a ll o f its d e p a rtm e n ts a n d

a g e n c ie s. Th e so v e re ig n im m u n ity o f th e sta te a n d its d e p a rtm e n ts

a n d a ge n c ie s c a n o n ly b e wa iv e d b y a n A c t o f th e Ge n e ra l

Asse m b ly w h ic h sp e c ifi c a lly p ro v id e s th a t so v e re ig n im m u n ity is

th e re b y wa iv e d a n d th e e x te n t o f su c h wa iv e r.

Ga

. Co n st. o f 1 9 8 3

, Art. I, S e c

. II, P a r. IX (c ) an d (e ). A c c o rd in g ly

, sin c e th e

DOL is an a g e nc y of th e sta te 3 it i s i mmu n e f ro m su it e x c e p t a s sp e c ific a lly

wa iv e d in th e c o n stitu tio n o r b y a n a c t o f th e Ge n e ra l A sse m b ly

. P u rsu a n t to

3 See OCGA § 34–2-1, creating the Department of L abor as an administrative a g ency of the

state.

6OCGA § 5 0 -2 1 -1 (a ), th e Ge n e r a l A sse m b ly ha s p ro v id e d th a t so v e re ig n

im m u n ity is wa iv e d in a c o n tra c t a c tio n a g a in st a st a t e a g e n c y “ fo r th e b re a c h

o f a n y writte n c o n tra c t . . . .”

Th e b u rd e n o f de m o n stra tin g a wa iv e r of so v e re ig n im m un ity re sts u p o n

th e p a rty a sse rtin g it. Bd

. of Re g e n ts, e tc

. v

. Ba rn e s

, 3 22 Ga

. Ap p

. 47

, 4 9 -5 0 (2 )

(7 4 3 S E2 d 6 0 9 ) (2 01 3 ) (a d d re ssin g th e c la im a n t’s d u ty to e sta b lish th e e x iste n c e

o f a writte n c o n tra c t in o rd e r to c la im w a iv e r o f so v e re ig n imm u n ity

, a n d

h o ld in g th a t a n im

plie d c o n tra c t will n o t su p p o rt a wa iv e r u n d e r th e so v e re ig n

im m u n ity pro visio n s of th e Ge o rg ia Co n stitu tio n ); Ge o rg ia De p t. o f Co mmu n ity

He a lth v

. Da ta In q u iry

, L L C

, 3 1 3 Ga

. Ap p

. 6 83

, 6 8 5 (1 ) (7 2 2 S E2 d 4 0 3 ) (2 0 1 2 )

(sa m e ). S e e a lso Bd

. o f Re g e n t s

, e tc

. v

. Da nie ls

, 26 4 Ga

. 3 28

, 3 2 9 (4 4 6 S E2 d

7 3 5 ) (1 9 9 4 ) (a d dre ssin g th e c la im a n t’s d u ty in a to r t a c t i o n to d e m o n stra te

wa iv e r of im m

u n ity th ro u g h th e sta te a g e n c y ’s p u rc h a se o f liab ility in su r a n c e

c o v e rin g th e c la im ). Wh e th e r so v e re ig n im m un ity h a s b e e n wa iv e d u n d e r th e

u n d isp u te d fa c ts o f th is c a se is a q u e stio n of la w

, a n d th is Co u rt’s re v ie w is d e

n o v o. S e e Ge o rg ia D e

p t. o f Na tu ra l Re

so urc e s v

. Ce n te r fo r a S u sta in a b le

Co a st, In c

. , 2 94 Ga

. 5 9 3

, 5 9 6 ( 2 ) (7 5 5 S E2 d 1 8 4 ) (2 0 1 4 ). F o r re a so n s m o re

fu lly se t fo rth b e l o w

, we fin d RTT ha s fa ile d to m e e t its b u rd e n of sh o win g

7wa iv e r o f so v e re ig n im m u n ity

.

2

. Citin g

, w ith o n e e x c e p tio n

, c a se s in v o lv in g c o n tra c t d isp u te s in wh ic h

th e sta te wa s n o t a p a rty

, th e Co u rt o f Ap p e a ls ru le d th a t c o ntra c tu a l o blig a tio n s

m a y su rv iv e th e e n d o f a writte n c o n tra c t; th a t p a rtie s m a y m o d ify th e te rm s o f

a writte n c o n tra c t b y m u tu a l c o n se n t a n d with o u t a w r itin g ; an d th a t th e

c o n tra c tin g p a r t ie s m a y wa iv e a p ro v isio n th a t th e c o n tra c t m a y b e m o d ifie d

o n ly in writin g. Se e RT

T Asso c ia te s

, su p ra

, 3 3 3 Ga

. Ap p

. a t 1 7 7 -1 78 (1 ). Wh ile

p riv a te pa rtie s, h o we ve r, m a y b e a ble to m o d ify a n d e x te n d writte n c o n tra c ts b y

m a n ife stin g th e ir in te n t to d o so e v e n with o u t a w r i t t e n a g re e m e n t, th e

e n fo rc e a b ility o f a c o n tra c t a ga in st th e sta te is go ve rn e d b y th e c on stitu tio n a n d

b y sta tu te

. In o rd e r fo r s o v e r e i g n im m u n ity to be wa iv e d with re sp e c t to

c o n tra c t a c tio n s a g a in st th e sta te

, th e c o n tra c t m ust be in writin g

. Th e Co u rt o f

Ap p e a ls e rre d in e xte n d in g g e n e ra l c o m m o n la w ru le s o f c o ntra c t in a m a n n e r

th a t c re a te s c o n tra c t lia

b ility a g a in st a sta te a ge n c y fo r a n a g re e m e n t th a t d oe s

n o t m e e t th e in -writin g re q u ire m e n t fo r wa iv e r o f so v e re ig n im m u n ity

.

E v e n if, a s th e Co u rt o f Ap p e a ls c o n c lu d e d

, D OL a n d R TT wa i v e d

,

th ro u g h th e ir c o u rse o f c o n d u c t, th e p r o v i s i o n th a t th e c on tra c t c o u ld b e

a m e n d e d o nly in writin g a n d sim ila rly wa iv e d o r e x te nd e d th e re q u ire d

8c o m

p le tio n d a te

, th is c on d u c t c o u ld n ot h a v e wa i v e d DOL’s so v e re ig n

im m u n ity

. In Bd

. o

f R e g e n ts, e tc

. v

. T

y so n

, 4 th is Co urt h e ld th a t e ve n if a

c o n tra c t with a sta te a g e nc y is fo r me d b y th e p a rtie s’ c o n d u c t, if it is n o t a

writte n c o n tra c t th e sta te ’s so ve re ig n imm u nity is n o t wa iv e d. In th e T y so n c a se

,

th e Bo a rd o f R e g e n ts wa s e n title d to ju d g m e n t in its fa vo r o n a b re a c h o f

c o n tra c t a c tio n th a t w a s n o t b a se d u p o n a writte n co n t r a c t b u t o n m u ltip le

u n sig n e d d o c u m e nts th a t d id n ot e sta b lish t h e n e c e ssa ry te rm s o f a c o n tra c t.

RTT se e k s to distin g u ish T y so n o n th e g ro u n d th a t T y so n in v o lv e d a c l a i m

w h e re n o writte n c o n tra c t wa s e v e r fo rm e d b e twe e n th e p a rtie s. H e re

, a n

e n fo r c e ab le c o n tra c t wa s fo rm e d a n d th e o nly issu e

, a c c o rd in g to RTT, is

wh e th e r it wa s e x te nd e d b y c o u rse o f c on du c t o r b y writin g s t h a t

, w h e n

c o n stru e d to g e th e r

, c re a te e v id e n c e o f a n in te n t to a m e n d a n d e x te n d th e

c o n tra c t.

Ge n e ra l ru le s o f c o n tra c t la w t h at mi g h t o th e rwise su p p o rt a c la im fo r

b re a c h o f c o n tra c t d a m a g e s b e twe e n p riv a te p a rtie s, h o we v e r, will n o t su p p ort

a c la im a g a in st th e sta te o r o n e o f its a ge n c ie s if th e c o ntra c t is n ot in writin g so

a s to trig g e r th e wa iv e r o f so v e re ig n im m u nity

. S e e PMS Co n stru c tio n C o

., In c

.

4 261 Ga. 368, 369-370 (1) (404 SE2d 557) (1991).

9v

. D e

Ka lb Co u n ty

, 2 4 3 G a

. 8 7 0 (2 5 7 SE2 d 2 8 5 ) (1 9 7 9 ). In PMS C o n stru c tio n

,

th is Co u rt h e ld th a t a p a rty m a y n o t re c o ve r fo r b re a c h o f c o n tra c t fro m a c o u n ty

b a se d u p o n a

n im plie d c o n tra c t, n o r u p o n a c la im o f q ua n t u m m e ru it fo r th e

v a lu e of se rv ic e s p ro v id e d

, be c a u se o f th e sta tu to ry re qu ire m e n t th a t a c o n tra c t

with a c o u n t y mu s t be in writin g p u rsu a n t to wh a t is n o w O CGA § 3 6 -1 0 -1

(re q u irin g p u b lic wo rk s c o n tra c ts with a c o u n ty to b e in w ritin g a n d e n te re d o n

th e c o u n ty ’s m in ute s). Id

. a t 8 7 2 (2 ). S im ila rly , we h o ld th a t g e n e ra l c o n tra c t

r u le s m a y n o t be a

p p lie d to c re a te a wa iv e r o f so v e re ig n im m u n ity wh e re th e

c o n tra c t is n o t in writin g a s re q u ire d b y th e c on stitu tio n a n d b y OCGA § 5 0 -2 1

-

1

. “ T he d o c trin e o f so v e re ig n im m u n ity re q u ire s th a t th e c o n d itio n s a n d

lim ita tio n s o f th e sta tu te th a t wa iv e s imm u n ity b e stric tly fo llo we d

. . . .” Bd

. o f

Re g e n ts, e tc

. v

. Ba rn e s

, su p ra

, 3 2 2 Ga

. Ap p. a t 5 0 (2 ) (im p lie d c o n tra c t will n o t

su p p o rt a wa iv e r o f so v e re ig n im m u nity ). Re g a rd le ss o f th e p a rtie s’ c ou rse o f

c o n d u c t, th a t c o n d u c t wa s in e ffe c tiv e to wa iv e so v e re ig n im m un ity sin c e wa iv e r

o f so v e re ig n im m

u n ity fo r a b re a c h o f c o n tra c t a c tio n re q u ire s a writte n c o n tra c t.

Th is c o n tra c t ha d e x p ire d b e fo re RTT fu lly pe rfo rm e d u n d e r it. We n o te th a t a ll

th e c o n d u c t a

n d in te rn a l d oc u m e n ts re lie d u po n by RTT c a m e a fte r th e

c o n tra c t’s e x p ira tio n da te

, so th a t DOL’s wa iv e r o f i mm un ity h a d a lre a d y

10e x p ire d

.

As n o te d

, o n ly o n e o f th e c a se s re lie d u p o n b y th e C o u rt o f Ap pe a ls, to

su p p o rt its c o nc lu sio n th a t a c o n tra c tu a l re qu ire m e nt th a t m o d ific a tio n s m u st b e

i n w r i tin g m a y b e wa iv e d b y c o u rse o f c on du c t, in v olv e d a b re a c h o f c o n t r a c t

c la im a g a in st a

n e ntity with so v e re ig n im m u nity

, na m e ly a c o u n ty

. 5 In Ha n d e x

o f Flo rid a

, In c

. v

. C

h a t h a m Co u n ty

, 6 a p a rty th a t e n te re d in to a c o n stru c tio n

c o n tra c t with a Ge o rg ia c o u n ty wa s su e d b y its su b c o ntra c to r a n d th e n file d a

th ird -p a rty c o m

p la in t a ga in st th e c o u n ty fo r b re a c h of c o ntra c t. Alth o u g h

su m m ary ju d g m e n t in fa v o r o f th e c o u n ty wa s u p h e ld

, in its o p in io n th e Co urt

o f Ap p e a ls a p p lie d g e n e ra l ru le s o f c o n tra c t la w a n d fo u n d th e c o u n ty wa iv e d

th e writte n m o d ific a tio n re q u ire m e n t in its c on tra c t by th e c o u rse o f c o n d u c t

b e twe e n th e p a rtie s. Ev e n s o

, n o liab ility fo r b re a c h o f c on tra c t wa s im p o se d

a g a in st th e c o u n ty u n d e r th e fa c ts of th e c a se

. Mo re im po rta ntly

, th e issu e o f

so v e re ig n im m

u n ity w a s n o t a d d re sse d in th e o p in io n. To th e e x te n t, ho we ve r,

th a t th e Ha n d

e x c a se c a n b e in te r p re te d a s c re a tin g a wa iv e r of so v e re ig n

im m u n ity fo r a b re a c h of c o n tra c t c la im so le ly a s a re su lt of th e p artie s’ c o u rse

5 A county shares the immunity of the state for purposes of the sovereig n immunity doctrine.

Gilbert v. Richardson , 264 Ga. 744, 747 (2) (452 SE2d 476) (1994).

6 268 Ga. App. 285 (602 SE2d 660) (2004).

11o f c o n d u c t, th a t c a se is d isap p ro v e d

.

RTT re lie s u p o n oth e r Co u rt o f Ap p e a ls c a se s to su p p o rt its a sse rtio n th a t

a sta te a g e n c y m a y wa iv e so v e re ig n im m u n ity b y its wa iv e r o f c e rta in c o n tra c t

te rm s. As illu stra te d b e lo w

, th e se c a se s are e ith e r distin g u ish a b le o r a re h e re b y

d isap p ro v e d

.

In De p t. of T ra n sp o rta tio n v

. Da lto n Pa v in g & Co n stru c tio n

, I n c

. , 7 th e

Co u rt o f Ap p e a ls h e ld th a t a n issu e o f fa c t w a s c re a te d

, th e re b y d e fe a tin g th e

sta te a g e n c y ’s m o tio n fo r d ire c te d v e rd ic t o r m o tio n fo r ju d g me n t

n o twith sta n d in g th e v e rd ic t, wh e re e v id e n c e wa s p re se n te d th a t th e sta te a g e n c y

wa iv e d, b y its c o n d u c t, c e rta in c o n tra c tu a l re q u ire m e n ts. 8 Th is c o nc lu sio n wa s

b a se d u p o n a su m m a ry sta te m e n t th a t “ a pa rty to a c on tra c t m a y wa iv e

c o n tra c tu a l pro v isio n s fo r h is b e n e fit,” u n su p p o rte d b y a ny a n a ly sis o r su p p ort

fo r wh e th e r su c h g e n e ra l c on tra c t ru le s a p p ly to c re a te a w a iv e r o f so v e re ig n

7 227 Ga. App. 207 (489 SE2d 329) (1997).

8 I n the Dalton Paving case, the DOT’s written contract required tha t a n y a lteration that

materially increased or decreased the cost of performance must b e in writing and ex ecuted by both

parties, o r else would require a w ritten “force a c c o u nt” ag r eement sig ned b y the state hig hway

eng ineer and ag r eed to in writing by the contractor. I d. at 216 (4). The Court o f Appeals determined

that the evidence created a jury issue as to whether the D OT waived this ex press provision. I d. at

217.

12im m

u n ity wh e n th e p a rty is a sta te a g e n c y

. 9 In fa c t, a s in th e H a n d e x c a se

, th e

issu e o f so v e re ig n im m

u n ity w a s n o t a d d re sse d

. Ag a in

, h o we v e r, to th e e x te n t

th e Da lto n P a v in g c a se c a n b e i n t e r p r e te d a s c re a tin g a wa iv e r o f so v e re ig n

im m u n ity fo r a b re a c h o f c on tra c t c la im a s a r e su lt o f th e p a rtie s’ c o u rse o f

c o n d u c t, th a t c a se is d isapp ro v e d

.

In S ta te Hwy

. De

p t. v W rig h t Co n tra c tin g Co

., 1 0 th e Co u rt o f A p p e a ls

a p p lie d g e n e ra l c o n t r ac t p rin c ip le s to c o nc lu d e th a t wh e re th e o wn e r in a

c o n stru c tio n pro

je c t o ra lly ord e rs e xtra wo rk w ith n o tic e th a t th e c o n t r a c to r

e x p e c ts a d d itio n a l c o m

p e nsa tio n

, th e o wn e r th e re b y wa iv e s th e c o n tra c t ’ s

re q u ire m e n t o f a w r i t t e n o rd e r fo r e x tra wo rk an d th e c o ntra c to r m a y re c o v e r

c o m p e nsa tio n fo r th e wo rk p e rfo rm e d

. Id

. a t 7 5 8 -7 5 9 (1 ). Th a t c a se

, ho we ve r,

wa s d e c id e d in 1 96 3

, b e fo r e t h e c o m m o n la w d oc trin e o f so v e re ig n im m u n ity

wa s a ffo rd e d c on stitu tio n a l sta tu s b y a 1 97 4 a m e n d m e n t to th e sta te c o n stitu tio n

a u th oriz in g th e le g isla tu re to wa iv e so v e re ig n im m un ity

. 1 1 P re v io u sly

, a n d a t

9 I d. at 215-216.

1 0 107 Ga. App. 758 (131 SE2d 808) (1963).

1 1 See Ga. L

. 1 973, pp.1489-90, incorporated into the 1976 Georg ia Constitution at Art. VI

, Sec. 5

, Para. I (empowering the General Assem b l y t o c r e a t e a state court of c laims for the trial of

such claims ag ainst state a n d local g overnments as the leg islature mig ht permit). See the discussion

of this constitutional amendment in Gilbert v. Richardson , 264 Ga., supra at n. 2 .

13th e tim e t h e W rig h t Co n tra c tin g c a se wa s d e c id e d

, th e c o urts h a d a u th o rity to

a b ro ga te o r m o d ify th e so v e re ig n im m u n ity d o c trin e a s a p ro d u c t o f th e c o m m o n

la w. S e e Ge o rg ia De

p t. o f Na tu ra l Re

so u rc e s v

. Ce n te r

fo r a S u sta in a b le Co a st,

In c

. , su p ra

, 2 9 4 Ga

. a t 5 96 -5 9 7 (2 ) (re v ie win g th e histo ry o f so v e re ig n im m u n ity

in th is sta te ). Cu rre n tly

, th e Co n stitu tio n o f 1 9 8 3 re se rv e s to th e le g isla tu re th e

e x c lu siv e p o we r t o w a i v e so v e re ig n imm u n ity

. S e e Ga

. Co n st. Art. I, S e c

. II,

P a r. IX ( e )

. “ Th e p la in a n d u n a m b ig u o u s te xt o f [o u r c u rre n t c o n stitu tio n ]

s h o w s t h a t o n ly th e G e ne ra l Asse m b ly h a s th e a

u th o rity to wa iv e th e S ta te ’s

so v e re ig n im m

un ity .” 2 9 4 Ga

. a t 5 9 9

. Wh ile th e Co u rt of Ap p e a ls a t th e tim e

o f th e W rig h t Co n tra c tin g o p in io n h a d a u th ority to a

p p ly c o m m o n la w c o n tra c t

p rin c ip le s in a m a n n e r th a t e ffe c tiv e ly wa iv e d so v e re ig n im m u n ity

, th e c o u rts

n o lo n ge r h a v e s u c h a

u th o rity

. 1 2 Co n se q u e n tly

, R TT’s re lia n c e o n W rig h t

Co n tra c tin g fo r a

u th o rity to e sta b lish th a t a sta te a g e nc y m a y wa iv e so v e re ig n

im m u n ity b y its c ou rse o f c o n d u c t is m isp la c e d

. 1 3

1 2 “Opinions of Georg ia appellate courts dealing w ith the judicial application of sovereig n

immunity prior to the 1974 constitutional amendment are n ot a pplicable to claims ag ainst the State

arising after the 1974 amendment because the 1974 amendment created an entirely new ball g ame

with reg ard to sovereig n immunity .” (Citation and punctuation omitted.) Georgia Dept. of Natural

Resources v. Center for a Sustainable Coast, Inc. , supra, 294 Ga. at 601.

1 3 RTT also relies in its brief upon W estern Surety Co. v. Dept. of Transportation

, 326 Ga.

App. 6 71 (757 SE2d 272) (2014), in which the Court of Appeals noted the common law proposition

that a party to a contract may waive a contractual p rovision by its c onduct, but we nt on to find no

14In su m

, th e Co u rt o f Ap p e a ls e rre d wh e n it a p p lie d c o m m on la w prin c ip le s

re g a rd in g th e a

b ility of p a rtie s to m o d ify or wa iv e c o n tra c t p ro visio n s b y th e ir

c o n d u c t o r m a

n ife st in te nt to th e issu e o f wh e th e r DOL wa iv e d, b y its c o n d u c t,

its so v e re ig n im m

u n ity fro m RTT’s c la im s. O n ly th e Ge n e ra l A sse m b ly

, a n d

n o t th e c o u rts, h a s a

u th o rity to wa iv e so ve re ig n im m u n ity

. S e e G e o rg ia De

p t.

o f Na tu ra l Re

so urc e s v

. Ce n te r fo r a S

u sta in a b le Co a st, In c

. , su p ra

, 2 9 4 Ga

. a t

5 9 9 a n d c a se s c ite d th e re in

.

3

. It fo llo ws th a t t h e C o u r t o f Ap p e a ls a lso e rre d in c o n c lu din g th a t a n

issu e o f fa c t re m a in s to b e d e te rm in e d with re sp e c t to wh e th e r c e rta in a c tio n s

a n d sta te m e nts b y DOL e m p lo y e e s e ffe c tiv e ly e x te n d e d th e te rm s of th e writte n

c o n tra c t, th e re b y d e fe a tin g DOL’s c la im o f so ve re ig n im m u n ity

. In su p p o rt o f

its c o n c lu sio n th a t a ju ry c o u ld fin d so v e re ig n im m u n ity wa s wa iv e d b y c o u rse

o f c o n d u c t, th e Co u rt o f Ap p e a ls p o in ts to DOL’s c o ntin u e d a c c e p ta n c e o f n e w

e d itio n s o f th e so ftwa re R TT d e liv e re d a fte r e x p ira tio n o f th e c o m p le tio n d a te ;

to DOL’s sta te m e n t in its le tte r se n t we ll a fte r th e e x p ira tio n o f th e c o m p le tio n

d a te n otify in g RTT th a t th e c o n tra c t wa s (o n ly th e n ) “ te rm in a te d im m e d ia te ly ”

waiver o f t h e c o n t ra ct provision at issue. Given the constitutional mandate that only the General

Assembly may w aive sovereig n immunity

, reliance on this case for RTT’s a ssertion that DOL

waived sovereig n immunity b y its conduct is also m isplaced a nd contrary to the law of this state.

15a n d fu rth e r sta tin g th e c o n tra c t h a d b e e n e x te n de d m ultip le tim e s to a llo w RTT

to c o m p le te a n d de liv e r a sa tisfa c to ry p ro d u c t; an d to DOL’s c o rre sp o n d e n c e

to th e su re ty c o m

pa n y sta tin g th e sa m e

. 1 4 Ce rta in in te rn a l ac co u n t in g

d o c u m e nts we re a lso p re p a re d b y DOL re q ue stin g a d d itio n a l d isb u rse m e n ts o f

fu n d s to RTT a fte r th e c o n tra c t’s e x p ira tio n d a te

. Im p o rta n tly

, a ll th e se e v e n ts,

in c lu din g DOL’s p re p a ra tio n o f in te rn a l d isb u rse m e nt re qu e sts, oc c u rre d a fte r

th e c on tra c t h a d a lre a dy e x p ire d

. T he se e v e n ts c o u ld n o t h a ve a m e n d e d a

c o n tra c t th a t wa s n o lo ng e r in e x iste n c e

. At be st, th e se e v e nts se rv e d to c re a te

a n e w a g re e m e nt be twe e n th e p a rtie s w h o se fo rm e r c on tra c t h a d e x p ire d

. Bu t

e v e n if th e se e ve n ts c o u ld be in te rp re te d a s d e m o n stra tin g a m utu a l d e p a rtu re

fro m th e te rm s o f th e c o n tra c t with in te n t to c re a te a n e w a g re e m e n t b e twe e n th e

p a rtie s, th e se e v e n ts d id n o t c re a te a n e w writte n c o n tra c t a n d th u s d id n o t m e e t

th e c o n stitu tio n a l o r sta tu to ry re q u ire m e nts f o r w aiv in g so v e re ig n im m u n ity

with re sp e c t to ac o n tra c t a c tio n

. Ag a in

, th e a p p lic a tio n of g e n e ra l p ro v isio n s

o f c o n tra c t la w c a nn ot b e a pp lie d b y th e c o u rts to c re a te a wa iv e r o f so v e re ig n

1 4 Althoug h w e find no issue of fact remains to be tried in this c ase because, a s a matter of

law, the ag e ncy ’s actions could not create a waiver of sovereig n immunity

, we nevertheless note that

these actions, in any event, appear to be consistent with the con t r a c t ’ s terms that the contractor’s

oblig ations survive the ex piration of the con t r a ct. As the trial court noted, DOL ’s actions simply

demonstrate D OL continued to work with RTT toward the late f ulfillment o f the c ontract. They do

not, however, create an issue of fact with respect to whether DOL waived its sovereig n immunity

.

16im m

u n ity b y m e a n s o th e r th a n b y writte n c o n tra c t.

In th is c a se

, th e writte n c o n tra c t sp e c ifie d a c o m p le tio n d a te o n wh ic h th e

c o n tra c t e x p ire d

, a

n d re q u ire d th a t a m e n d m e n ts to it m u st b e in writin g

. T o

p e rm it im m

un ity to b e wa iv e d b y an u n writte n e x te n sio n o f th e c o ntra c t c re a te d

b y th e c o u r s e o f c o n d u c t o f DOL e m plo y e e s wo uld b e to a

u th o riz e a sta te

a g e n c y

, itse lf, to wa iv e so v e re ig n im m u n ity

, b y m e a n s o th e r th a n e n te rin g in to

a wr i t t e n c o ntra c t. A sta te a g e nc y ’s sta tu to ry a u th o rity to e n te r in to c o n tra c ts

d o e s n o t trig g e r th e c o n se n t o f th e Ge n e ra l Asse m b ly fo r th a t a g e n c y to b e su e d

,

e x c o ntra c tu

, un le ss it is a w ritte n c o n tra c t a s re q u ire d b y OCGA § 5 0 -2 1-1

. S e e

Op

. A tty

. Ge n

. 6 6-2 6 1 (a d v isin g th e Bo a rd o f Re g e n ts th a t e v e n th o u g h it ha s

sta tu to ry a

u th o rit y t o e n te r in to c o n tra c ts, it h a s n o a u th o rity to e n te r in to a

c o n tra c tu a l o b lig a tio n to a ssu m e to rt liability f o r a t h ird p a rty

, u n de r a h o ld

h a rm le ss c la u se o f a le a se

, th a t wo u ld w a iv e th a t a g e nc y ’s so v e re ig n im m u n ity ).

S e e a lso Op

. Atty

. Ge n

. 8 0 -6 7 (a d v isin g th e Ge o rg ia F ire Ac a d e my th a t e n te rin g

in to an in d e m

n ity a gre e m e n t fo r th e to rt liability o f a th ird p a rty wo u ld b e u ltra

v ire s an d v o id be c a

u se it wo u ld b e a n u n a

u th oriz e d a tte m

p t to w a iv e th e sta te ’s

so v e re ig n im m

u nity ). Lik e w ise

, a sta te a ge n c y la c ks th e p o w e r to wa iv e

so v e re ig n im m

un ity fo r c o n tra c t liab ility b y a n a c t o th e r th a n th e e x e c u tio n o f

17a

writte n c o n tra c t.

Ev e n if th e a c tio n s, sta t e m e n ts, o r c o n d u c t o f DOL e m plo y e e s c o u ld b e

fo u n d b y a t r i e r o f fa c t to h a v e e x te n d e d th e RTT c o n tra c t a n d wa iv e d th e

re q u ire m e n t th a t it c o u ld b e a m e n d e d on l y i n writin g

, wh e th e r DOL wa iv e d

so v e re ig n im m

u n ity b e y o nd th e te rm s o f th e writte n c o n tra c t is n o t a n issu e o f

fa c t; it is a n issu e o f la w

. As a m a tte r o f la w, so v e re ig n im m u nity w a s n o t a n d

c o u ld n o t b e wa iv e d b y DOL’s a c tio n s th a t o c c u rre d a fte r th e da te th e writte n

c o n tra c t e x p ire d

. Ev e n th e in te rn a l p a y re q ue sts a n d p u rc h a se o r d er p re p are d

a fte r t h e d a t e th e c on tra c t e x p ire d d o no t se rv e a s e vid e n c e th a t w o u ld e ith e r

c re a te a c o n tra c t su ffic ie n t to wa iv e so v e re ig n im m u nity p ursu a n t to O CGA §

5 0 -2 1 -1 or se rv e to e x te n d th e o rig in a l writte n c on tra c t th a t h a d e x p ire d b e c a use

th e s e d o c u m e n ts a re n o t e x e c u te d b y b o th pa rtie s a nd are n ot o th e rwise

su ffic ie n t to c re a te a n e n fo rc e a b le c o ntra c t. S e e Bd

. o f Re g e n ts v

. Ty

so n

, su pra

,

2 6 1 Ga

. a t (1 ); Ge o rg ia De p t

. o f C o m m u n ity He a lth v

. Da ta In q u iry

, LLC,

su p ra

, 3 1 3 Ga

. Ap p

. a t (1 ) (b ). Th e s a me ru le w o u ld a pp ly to a n y a d m issio n s

m a d e b y DOL e m

plo y e e s th a t th e c o n tra c t h a d be e n e xte n d e d, wh e n th e

e v id e n c e sh o ws a ny a g re e m e n ts to e x t e n d d id n o t m e e t th e writte n c o n tra c t

re q u ire me n t se t fo rth in th e a p p lic a ble sta tu te an d c o nstitu tio n a l p ro v isio n

18re la tin g to wa iv e r o f so v e re ig n im m u nity

. Co n se q u e ntly

, th e Co u rt o f Ap p e a ls

e rre d in c o n c lu d in g th a t a n issu e o f fa c t wa s c re a te d a s to wh e th e r th e a c tio n s,

sta te m e n t s

, o r c o n d u c t o f DOL e m p lo y e e s c ou ld b e fo u n d to h a v e w a iv e d th e

a g e n c y ’s so v e re ig n im m

u n ity

.

Th e c o n stitu tio n a l p ro v isio n e x p re ssly re se rv in g th e po we r to wa iv e

so v e re ig n im mu n ity to th e le g isla tu re “ d o e s n ot a llo w fo r e x c e p tio n s” to b e

c re a te d b y th e c ou rts. G e org ia De p t. o f Na tu ra l R es o u r c e s v

. Ce n te r fo r a

S u sta in a b le Co ast, In c

. , su p ra

, 2 9 4 Ga . a t 5 9 9-6 00

. Th u s, n o e x c e p tio n to th e

ru le s re ga rd in g wa iv e r o f so v e re ig n im m u n ity m a y be c re a te d b y th e c o u rts in

th is c a se ba se d u po n a

n y re lia n c e RTT m a y h a v e p la c e d u po n th e p a rtie s’

c o n tin u e d c o m m

u n ic a tio n s re g a rd in g th e in c o m p le te so ftwa re p ro

je c t a fte r th e

e x p ira tio n o f th e w ritte n c o n tra c t. A n y w o r k th a t m a y h a v e be e n p e rfo rm e d

a fte r th e c o n tra c t e x p ire d wa s n o t p e rfo rm e d p u rsu a n t to a writte n c on tra c t a n d

c a n n o t su p p o rt a c la im a ga in s t D O L d u e to th e b a r o f so v e re ig n im m u n ity

.

Wh ile th is re su lt m a y se e m ha rsh

, p a rtie s are p re su m e d to k n o w th e la w, a n d a re

re q u ire d “ a t th e ir p e ril” to a sc e rta in th e a u th o rity o f a p ub lic o ffic e r with wh o m

th e y a re d e a lin g

. City o

f Atla n ta v

. B la c k

, 2 6 5 Ga

. 4 2 5

, 4 2 6 (4 57 SE2 d 5 5 1 )

(1 9 9 5 ) (d e sp ite th e pre su m ptiv e p le n a ry a

u th o rity o f p riv a te se c to r a tto rn e y s to

19n e g o tia te se ttle m e nts b e twe e n p a rtie s, p la in tiffs in a n a c tio n a g a in st th e City o f

Atla n ta we re p re su m e d to k n o w th a t th e a uth o rity c o n fe rre d on th e c ity a tto rn e y

to e nte r in to a m o n e ta ry se ttle m e n t o f th e ir c la im w a s e xp re ssly lim ite d b y c ity

o rd in a n c e ).

“ [A] fu n d a m e n ta l p u rp o se o f so v e re ig n im m un ity is th e p ro te c tio n o f sta te

fu n d s.” Ge o rg ia De

p t. o f Co rre c tio n s v

. Co u c h

, 2 9 5 Ga

. 4 69

, 4 8 0 (2 ) (b ) (7 5 9

S E2 d 8 0 4 ) (2 0 1 4 ). It fo llo ws th a t o n e o f th e p u rp o se s o f th e c o n stitu tio n ’s

re q u ire m e n t th a t c o n tra c ts m u st b e i n writin g in ord e r to in vo ke th e sta te ’s

wa iv e r o f so v e r e i g n im m u n ity is to p ro te c t th e sta te fro m e x p o su re to

u n a n tic ip a te d d a m a ge s. As DOL a sse rts, to p e rm it a ge n c y e m p lo y e e s to c re a te

o p e n -e n d e d ple d g e s o f th e sta te ’s c re dit th a t c a n n o t b e d e te rm in e d b y

e x a m in a tio n o r a

u d it o f writte n a g e n c y c o n tra c ts wo u ld p o te n tia lly v io la te th e

sta te ’s b u d g e tin g p ro c e ss 1 5 o r e v e n th e c o n stitu tio n a l p ro v isio n s re g a rd in g th e

sta te ’s in c u rrin g d e b t

. 1 6 F o r th is re a so n

, a lso

, th e Co u rt o f Ap p e a l’s o p in io n

m u st b e re v e rse d a n d th e tria l c o u rt’s o rd e r a ffirm e d

.

Ju d g m e n t re ve rse d . All th e Ju stic e s c o n c u r.

1 5 See the B udg et Act, OCGA § 45-12-71 et seq.

1 6 See Ga. Const. Art. V I I

, Sec. I V, Para. VI I I

. See also Op. Atty

. Gen. 74-115 (advising the

State A uditor that even a state ag ency ’s written contract incurring a fiscal oblig ation dependent upon

future appropriations or the continued ex istence of other sources of state funds is invalid because it

is bey ond the ag ency ’ s authority to pledg e the state’s credit).

20