Opinion ID: 1995010
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Heading: The defense of sovereign immunity.

Text: The Authority argues that it is a state agency and, thus, is entitled to raise the defense of absolute immunity to suit, either in tort or contract. The plaintiffs, to the contrary, argue that the Authority is either a municipal corporation or a corporate entity responsible in damages for the torts of its employees. If it is a municipal corporation, say the plaintiffs, the Authority is liable for this particular tort because it was committed in the Authority's proprietary capacity rather than its governmental capacity. The doctrine of sovereign immunity to suit is written into the Constitution of Delaware by Article I, § 8, Del. C.Ann. It is an absolute bar to all suits against the State unless by legislative act the General Assembly has waived the immunity. Shellhorn & Hill, Inc. v. State, Del., 187 A.2d 71. Sovereign immunity is also available to the counties of the State, as state agencies, as a defense in all actions brought against them. Carter v. Wilds, 8 Houst. 14, 31 A. 715. And in Banks v. Downing, 7 Terry 127, 78 A.2d 865, the Public Building Commission charged with maintaining the County Court House in New Castle County was held to be a state agency and, thus, immune from suit. We think under our authorities, as well as many in our sister states, the State's absolute immunity from suit, unless waived by the General Assembly, extends to all state agencies as such. With respect to municipal corporations, however, a somewhat different situation exists. Such corporations, to some extent at least, are state agencies performing governmental functions and, as such, are immune from suit in tort, but at the same time they are public corporate bodies performing proprietary functions with respect to which they are liable in tort. Flait v. Mayor and Council of Wilmington, 9 Terry 89, 97 A.2d 545. The distinctions appear illogical but, nevertheless, they exist in our law as a result of a long line of decisions. The first question to be determined, accordingly, is precisely, What is the Authority  state agency or municipal corporation? A local Housing Authority is created under 31 Del.C. § 4303, following a determination by the State Board of Housing, a state agency created by 31 Del.C., Ch. 41, of the need for such local Housing Authority. The purpose for which such Authorities are created is to engage in low-rent housing and slum-clearance projects which, by 31 Del.C. § 4302, are declared to be public objects essential to the public interest. Rather extensive powers are conferred upon an Authority. For example, it is given the power to acquire property, to remove substandard conditions, to construct facilities, to borrow money, and to sue and be sued. See 31 Del.C. § 4307. Despite this broad grant of power to local Authorities, however, they remain under the Supervision of the State Board of Housing to a certain extent by reason of 31 Del.C. §§ 4314, 4315 and 4316. The sole connection any municipality has with an Authority is participating with the Governor pursuant to 31 Del.C. § 4303, in the selection of the Authority's Commissioners, and the subsequent filling of vacancies. Following their appointment, however, the Commissioners act independently of any control (31 Del.C. § 4305) except for the supervisory power of the State Board of Housing. We think the Authority before us is a state agency and not a municipal corporation. Traditionally, municipal corporations have been confined to incorporated cities, villages, or towns having limited and local powers of legislation and self-government. 1 McQuillen, Municipal Corporations, § 2.07. In Downs v. Commissioners of Town of Smyrna, 2 Penn. 132, 45 A. 717, a municipal corporation was defined as a body corporate and politic created to assist in the civil government of the state, with limited delegated authority to run the local affairs of a city, town or district. See, also, City of Wilmington v. Ewing, 2 Penn. 66, 43 A. 305, and Coyle v. McIntire, 7 Houst. 44, 30 A. 728. The Authority is described by law as a body both corporate and politic, exercising public powers. It is nowhere described as a municipal corporation. The terms public corporate body or public corporation are generic; they describe any corporate instrumentality created by the State for public purposes and with the object of administering a portion of the powers of the State. 1 McQuillen, Municipal Corporations, § 2.03. Although a municipal corporation is a public corporation, not all public corporations are municipal corporations. Coyle v. Gray, 7 Houst. 44, 30 A. 728, 731. We think it clear that the Authority before us is a state agency created to discharge a public object essential to the public interest. As such, it may raise the defense of sovereign immunity to suit unless that defense has been waived by act of the General Assembly. We think there has been an effective waiver by the General Assembly of the Authority's immunity to suit. We are of this opinion for several reasons. It seems reasonable to us to conclude that the selection by the General Assembly of an independent corporate form to accomplish the public purpose of low-cost housing is an indication that it was intended that it be treated as any private corporation, uncloaked with sovereign immunity to suit. See Ryan v. Boston Housing Authority, 322 Mass. 299, 77 N.E.2d 399; McCabe v. New Jersey Turnpike Authority, 35 N.J. 26, 170 A.2d 810; Eastern Motor Express, Inc. v. Espenshade, D.C., 138 F.Supp. 426; Linger v. Pennsylvania Turnpike Comm., 158 F. Supp. 900. Also, by 31 Del.C. § 4307(a) (5), the Authority was given the power to sue and be sued. In other jurisdictions, the conferring of such a power upon a state agency is considered as a waiver of immunity in a contract action, but there is a difference of opinion as to whether it amounts to a waiver in a tort action. See Note, 74 Harv. L.R. 714. We think it illogical to find in the conferred power a waiver as to contract, but not as to tort. The General Assembly made no effort to narrow the grant of power. Its literal meaning constitutes a complete waiver of immunity and, in view of the recognized hardship resulting from the defense of sovereign immunity, we see no reason to perpetuate the hardship by a strained construction of the language of the grant. Our conclusion in this respect finds support in other jurisdictions. See Keifer & Keifer v. R. F. C., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784; Federal Housing Administration, Region No. 4 v. Burr, 309 U.S. 242, 60 S.Ct. 488, 84 L.Ed. 724; Knowles v. Housing Authority of City of Columbus, 212 Ga. 729, 95 S.E.2d 659, 61 A.L.R.2d 1241; Housing Authority of Birmingham Dist. v. Morris, 244 Ala. 557, 14 So.2d 527; Hope Natural Gas Co. v. West Virginia Turnpike Comm., 143 W.Va. 913, 105 S.E. 2d 630. We recognize, of course, that there is substantial authority to the contrary, e. g., Rader v. Pennsylvania Turnpike Comm., 407 Pa. 609, 182 A.2d 199, but we find it unpersuasive. There is a final indication that the General Assembly intended a complete waiver of immunity with respect to Housing Authorities in the grant by 31 Del.C. § 4307 (a) (3) of power to insure or provide for the insurance of the property or operation of the authority against such risks as the authority may deem advisable. If immunity to suit had been intended by the General Assembly, what purpose does the grant of authority to insure its operation serve? We think our conclusion that there has been a legislative waiver of immunity as to Housing Authorities is not in conflict with Eastern Union Co. of Del. v. Moffat Tunnel Improvement Dist., 6 W.W.Harr. 488, 178 A. 864. This case held that a sue and defend clause did not constitute a waiver of immunity. The case involved a municipal corporation and the sue and defend clause was construed in the light of the historical doctrine of partial municipal immunity. As we have pointed out by reason of past precedents there is an illogical distinction made in the law between state agencies and municipal corporations.