FILED

September 21, 1999

Cecil Crowson, Jr.

Appellate Court Clerk

NORTHLAND INSURANCE CO., )

)

Plaintiff/Appellee, ) Appeal No.

) 01-A-01-9811-BC-00616

v. )

) Tennessee Claims Commission

STATE OF TENNESSEE, ) No. 94435

)

Defendant/Appellant. )

COURT OF APPEALS OF TENNESSEE

APPEAL FROM THE TENNESSEE CLAIMS COMMISSION FOR

DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

THE HONORABLE W. R. BAKER, COMMISSIONER

JAMES G. O'KANE

Baker, McReynolds, Byrne,

 O'Kane, Shea & Townsend

607 Market Street, 11th Floor

P. O. Box 1708

Knoxville, Tennessee 37901-1708

ATTORNEY FOR PLAINTIFF/APPELLEE

PAUL G. SUMMERS

Attorney General and Reporter

MICHAEL E. MOORE

Solicitor General

ANTHONY D. MILLER

LAURA T. KIDWELL

Assistant Attorneys General

425 Fifth Avenue North

Second Floor, Cordell Hull Building

Nashville, Tennessee 37243

ATTORNEYS FOR DEFENDANT/APPELLANT

REVERSED AND DISMISSED

WILLIAM B. CAIN, JUDGE
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O P I N I O N

The State of Tennessee appeals an adverse judgment of the Tennessee

Claims Commission. Because we have determined that the Claims Commission

lacks subject matter jurisdiction, the judgment of the Commission is reversed.

The genesis of the claim was a multiple vehicle accident occurring in the

west bound lane of Interstate Highway 40 in Putnam County, Tennessee on

March 14, 1988. Since the appellants challenge only the failure of the Claims

Commission to dismiss the claim under Rule 12.02(6) of the Tennessee Rules

of Civil Procedure for lack of subject matter jurisdiction, there is neither

transcript of the evidence nor Rule 24(c) statement of the evidence before this

court. "[W]hen a complaint is tested by a [Rule] 12.02(6) motion to dismiss, we

must take all the well-pleaded, material factual allegations as true, and we must

construe the complaint liberally in the plaintiff's favor." Dobbs v. Guenther, 846

S.W.2d 270, 273 (Tenn. App. 1992).

The complaint alleges that on the morning of March 14, 1988, near mile

marker 296 on Interstate 40 in Putnam County, Tennessee, a tractor trailer,

driven by Dion Deskovic, was involved in a motor vehicle accident while

traveling in the west bound lane. This accident resulted in a spill of diesel fuel

in the west bound lanes. Employees of the Tennessee Department of

Transportation spread sand on the highway because of the presence of the diesel

fuel. At this time, Kenneth B. McDonald, an employee of Tennessee Walnut,

Inc. and Grundy County Lumber Co., Inc., was driving a 1985 Mack truck and

flatbed trailer in a westerly direction on Interstate 40. As he came upon the

scene of the previous accident, Mr. McDonald attempted to control his vehicle.

However, since the Deskovic vehicle was disabled and parked partially in the

right west bound lane of Interstate 40, Mr. McDonald, despite all reasonable

precautions, was unable to control his vehicle. Mr. McDonald's Mack truck

struck and killed Mr. Deskovic, seriously and permanently injured one Robert

L. Sheppard, and slightly injured one Emmett McGuire, all of whom were

attending in some manner the disabled Deskovic vehicle.
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Suit was filed by Mr. Sheppard and his wife, Mr. McGuire and his wife,

and the estate of Mr. Deskovic against Tennessee Walnut, Inc., Grundy County

Lumber Co., Inc., and Kenneth B. McDonald. The tractor flatbed trailer vehicle

driven by Mr. McDonald was being operated by him at the time of the accident,

within the scope of his employment with Tennessee Walnut and Grundy County

Lumber. Northland Insurance Company, the liability insurer of these

defendants, settled the cases by paying $150,000.00 to the estate of Dion

Deskovic, $5,000.00 to Mr. and Mrs. McGuire, and $845,000.00 to Mr. and

Mrs. Sheppard.

After this settlement was made, Tennessee Walnut, Grundy County

Lumber, and Mr. McDonald filed their claim with the Tennessee Claims

Commission seeking indemnity and contribution for the $1,000,000.00 paid in

total as a settlement by Northland Insurance. On May 28, 1992, Northland

Insurance ("Appellee") filed a motion to be substituted as plaintiff and real party

in interest before the Claims Commission. This motion was not opposed by the

State ("Appellant") and was granted by the Commission on July 22, 1992.

The next action disclosed in the record occurred March 28, 1996, when

the State of Tennessee filed its 12.02(6) motion to dismiss for lack of subject

matter jurisdiction. On May 14, 1996, the Claims Commission entered the

following order:

The State has filed a motion to dismiss saying, "... there is no

provision ... allowing ... action against the State by an insurance

company for contribution, indemnity, or subrogation."

In July 1992 an order was entered in this claim saying: "On

motion of ... Northland Insurance Company, and for good cause

shown, and there being no opposition thereto by the State of

Tennessee as evidenced by the signature of the Deputy Attorney

General, it is hereby ordered that all claims available ... be and

hereby are consolidated in this proceeding and that Northland

Insurance Company be and hereby is substituted as Plaintiff real

party in interest and that this matter shall proceed ..."

And so it appears from the record that it was adjudged over

three years ago that this claimant is proceeding as a "real party in

interest," in contrast to proceeding for subrogation.

The State's motion is denied. 

The case was heard on its merits October 19th and 20th, 1998, by
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Honorable W. R. Baker, Commissioner. The Commissioner held thatAppellee's

actual damages were $845,000.00, representing the sums paid to settle the

claims of Robert Sheppard and wife. Considering all of the fault at 100%, the

Commissioner found the State of Tennessee to be 80% at fault and Robert

Sheppard to be 20% at fault, with Kenneth McDonald and Dion Deskovic

exonerated from fault. This left total damages recoverable against the State of

Tennessee of $676,000.00, but judgment was limited against the State of

Tennessee to $300,000.00 under Tennessee Code Annotated section 9-8-307(e).

The State appeals raising the single issue that the Claims Commission

does not have subject matter jurisdiction of the case. Article I, section 17 of the

Constitution of Tennessee provides in part: "Suits may be brought against the

State in such manner and in such courts as the Legislature may by law direct."

Tennessee Code Annotated section 20-13-102(a) provides: "No court in the

state shall have any power, jurisdiction, or authority to entertain any suit against

the state, or against any officer of the state acting by authority of the state, with

a view to reach the state, its treasury, funds, or property, and all such suits shall

be dismissed as to the state or such officers, on motion, plea, or demurrer of the

law officer of the state, or counsel employed for the state." The impassioned

and eloquent plea by Justice Henry in Cooper v. Rutherford County, 531 S.W.2d

783 (Tenn. 1975), remains a dissent. Sovereign immunity remains firmly

entrenched in Tennessee and its basis is both constitutional and statutory.

Austin v. City of Memphis, 684 S.W.2d 624, 637 (Tenn. App. 1984).

Regarding suit against the State which the Legislature allows, this court

holds as follows:

A statute permitting a suit against the state under the

authority of Article I, Section 17 of the Constitution of Tennessee

must be strictly construed and the jurisdiction cannot be enlarged

by implication. Stokes v. University of Tennessee at Martin, 737

S.W.2d 545, 546 (Tenn. App. 1987). The state cannot be subjected

to suits by individuals unless the words of the act are so plain, clear

and unmistakable as to leave no doubt of the intention of the

Legislature that it should be done. Quinton v. Board of Claims ,

165 Tenn. 201, 54 S.W.2d 953, 957 (1932); see also Brewington

v. Brewington, 215 Tenn. 475, 387 S.W.2d 777, 779 (1965).

Daley v. State, 869 S.W.2d 338, 340 (Tenn. App. 1993). A rule of strict
5

construction may be stated in various terms and it would seem that each court,

addressing this particular question, seeks to strengthen the rule. It is difficult to

add anything to the following statement of the rule which came from the

supreme court more than sixty years ago:

Article 1, section 17, of the Constitution, delegating to the

Legislature the power to authorize suits against the state, being in

derogation of the state's inherent exemption from suit, must itself

be strictly construed; hence legislation authorizing suits against the

state must strictly pursue the constitutional requirements, and be so

plain, clear, and unmistakable in its provisions as to the manner

and form in which such suits may be brought as to leave nothing

to surmise or conjecture.

State v. Cook, 171 Tenn. 605, 106 S.W.2d 858, 860-61 (1937).

The Tennessee Claims Commission was created by chapter 972 of the

Public Acts of 1984 and the statutory universe thereof is codified as Tennessee

Code Annotated section 9-8-301, et seq. By section 1 of chapter 105 of the

Public Acts of 1985, the General Assembly provided for that which appears as

the first part of Tennessee Code Annotated section 9-8-307(a)(3), including the

provision: "It is the intent of the General Assembly that the jurisdiction of the

Claims Commission be liberally construed to implement the remedial purposes

of this legislation."

Even under such liberal construction, the case at bar cannot be brought

within the jurisdiction of the Claims Commission. As this court has previously

observed:

Tenn. Code Ann. § 9-8-307(a)(3)’s liberal construction

mandate does not invite the courts to engage in judicial legislation.

We cannot disregard the statute’s plain meaning, and we cannot

extend the statute’s application to circumstances notfairlyincluded

in its terms. Mid-South Publishing Co. v. Tennessee State Univ. &

Community College Sys. Bd. of Regents, App. No. 01-A-01-9002-

CH-00074, slip op. at 6, 16 T.A.M. 5-8 (Tenn.Ct.App. Dec. 19,

1990). Accordingly, we cannot create rights or establish liabilities

that are not already embodied in the statute. Rines v. Scott, 432

A.2d 767, 769 (Me. 1981). Liberal construction signifies only that

the interpretative process may produce broader coverage or more

inclusive application of statutory concepts. 3 Norman J. Singer,

Statutes and Statutory Construction § 58.02 (5th ed. 1992).

Hembree v. State, 1995 WL 50066 (Tenn. App. 1995), aff’d 925 S.W.2d 513
1

State v. Cook, 106 S.W.2d 858, 860-61 (Tenn. 1937) asserts a constitutional and

indeed pre-constitution mandate of strict construction which neither the legislature nor the

courts are empowered to expand and remain in conformity with the commands of Article I

section 17 of the Constitution of Tennessee. As late as Morris v. State, No. 01S01-9804-BC00076, 1999 WL 98965 (Tenn. 1999), the supreme court has applied the strict construction

rule to Tennessee Claims Commission jurisdiction. See also Daley v. State, 869 S.W.2d 338,

340 (Tenn. App. 1993); Beare Co. v. Olson, 711 S.W.2d 603, 605 (Tenn. 1986). 

6

(Tenn. 1996).1

Appellee asserts that the subject matter jurisdiction of the Claims

Commission in this case vests by the statute removing sovereign immunity.

Specifically in its brief, Appellee states:

Tenn. Code Ann. § 9-8-307(a)(1)(J) vests jurisdiction for

those claims involving dangerous conditions on state maintained

highways. This section does not exclude claims by a subrogated

party. It does not exclude claims for property damage. It does not

exclude claims for contribution or indemnity. To paraphrase

subsection G mentioned in Cox, it does not state that "damages are

not recoverable under this section for contribution and indemnity."

The Court in Cox recognized the plain and unambiguous meaning

of the statute. It refused, as the State contended, to arbitrarily bar

claims for injuries caused by persons in the care, custody and

control the State, yet allow claims for injuries to persons in the

care, custody and control of the State. Similarly, Tenn. Code Ann.

§ 9-8-207(a)(1)(J) does not limit recovery to all claims except

those for contribution and indemnity. No such language appears

in this statute, and it is not implied in the language of the statute.

Rather, the plain meaning of the statute is to permit such claims

arising from dangerous conditions on state maintained highways.

This section does not exclude claims by a subrogated party. It does not

exclude claims for property damage. It does not exclude claims for contribution

or indemnity. Under the rule of strict construction applicable to the statutory

removal of sovereign immunity, we do not have a question of "what is not

excluded" but rather a question of "what is plainly, clearly, and unmistakably

included." In short, Appellee seeks a liberal construction of what we are

constitutionally and statutorily mandated to construe strictly.

The Claims Commission overruled the 12.02(6) motion on the basis that

Northland Insurance Company was substituted, without objection by the State,

as the "real party in interest." Neither the Claims Commission nor this court nor

the parties to the litigation have the power to expand subject matter jurisdiction
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in such a manner. Stokes v. University of Tenn., 737 S.W.2d 545, 546 (Tenn.

App. 1987).

In this case, the estate of Dion Deskovic, along with Mr. and Mrs.

Sheppard and Mr. and Mrs. McGuire, had potential claims against both the State

of Tennessee before the Tennessee Claims Commission, and Kenneth

McDonald, Tennessee Walnut, Inc., and Grundy County Lumber Co., Inc.,

before the Circuit Court of Putnam County. Appellee, Northland Insurance

Company was exposed to liability not because of any "dangerous conditions on

state maintained highways" but because of its policy of liability insurance

covering McDonald, Tennessee Walnut, and Grundy County Lumber. Appellee

seeks indemnity or contribution from an alleged joint tort feasor that for good

or ill is protected by sovereign immunity except where such immunity has been

removed by statute. Neither Tennessee Code Annotated section 9-8-307 nor any

other statute purports to waive sovereign immunity for indemnity or

contribution claims. The position of Appellee is tenable only under an

extremely broad and liberal construction of the statute. This court is bound by

a constitutional and statutorily mandated strict construction rule.

The foregoing is dispositive of this case. It is well, however, to note that

to the extent Appellee's claim involves the Uniform Contribution among

Tort-feasors Act, Tenn. Code Ann. § 29-11-101, et seq., there is no express

statement in the statute that it is applicable to the state. Tennessee has long

adhered to the rule that "[t]he general business of the legislative power is to

establish laws for individuals, not for the sovereign; and, when the rights of the

commonwealth are to be transferred to affected, the intention must be plainly

expressed or necessarily implied." Keeble v. City of Alcoa, 204 Tenn. 286, 289,

319 S.W.2d 249, 250 (1958); Davidson County v. Harmon, 200 Tenn. 575, 582,

292 S.W.2d 777, 780 (1956); Harrison Constr. Co. v. Gibson County Bd. of

Educ., 642 S.W.2d 148, 150 (Tenn. App. 1982); see also General Tel. Co. v.

Boyd, 208 Tenn. 24, 343 S.W.2d 872 (1960); Automobile Sales Co. v. Johnson,

174 Tenn. 38, 122 S.W.2d 453 (1938).

The ClaimsCommission is without subject matter jurisdiction of this case

and the judgment of the Commission is reversed and the case dismissed. Costs
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are assessed against Appellee, Northland Insurance Co., for which execution

may issue if necessary.

______________________________

WILLIAM B. CAIN, JUDGE

CONCUR:

___________________________________

BEN H. CANTRELL, P.J., M.S.

___________________________________

WILLIAM C. KOCH, JR., JUDGE