Opinion ID: 1666961
Heading Depth: 1
Heading Rank: 5

Heading: Recovery for Breach of Contract

Text: The University cites Vaughan v. Sibley, 709 So.2d 482 (Ala.Civ.App.1997). That case involved an action by Loy O. Vaughan, Jr., an associate professor of mathematics at the University of Alabama at Birmingham (`UAB'), against the University of Alabama Board of Trustees. 709 So.2d at 484. He sought both retrospective relief  in the form of back pay  and prospective relief through enforcement of the Board's `Rule 350-Salary Policy.' 709 So.2d at 484. Rule 350 provided that each faculty member [was] to be paid within an approved salary range unless the president of the campus file[d] an annual exception to the range `accompanied by the necessary documentation.' 709 So.2d at 484. From 1982 to 1993, Vaughan's salary was below the minimum of the approved salary range. 709 So.2d at 484. Exceptions had been filed annually, as provided by Rule 350, only from 1982 to 1985. 709 So.2d at 484 n. 2. Vaughan argued that the Board's failure to pay him the minimum salary after 1985, without the required exceptions, entitl[ed] him to relief that [was] not barred by the sovereign immunity clause. 709 So.2d at 485. The Court of Civil Appeals concluded that insofar as the requested relief consist[ed] of ordering the defendants to follow the Rule 350 salary policy in the future, either by paying Vaughan the minimum salary in his approved range or by filing an annual exception to the range, § 14[did] not bar the action. 709 So.2d at 485. However, it held that Vaughan was not entitled to the retrospective relief of back pay. 709 So.2d at 486-87. In doing so, the court explained: Because of the sovereign immunity clause, the courts of this state are without jurisdiction to entertain a suit seeking damages, including back pay, for breach of contract against the state. State Bd. of Adjustment v. Department of Mental Health, 581 So.2d 481 (Ala.Civ.App.1991). Vaughan's remedy, if any, is with the Board of Adjustment. Sections 41-9-62(a)(4) and (a)(7), Code of Alabama 1975, provide: `(a) The Board of Adjustment shall have the power and jurisdiction and it shall be its duty to hear and consider: `.... `(4) All claims against the State of Alabama or any of its agencies, commissions, boards, institutions or departments arising out of any contract, express or implied, to which the State of Alabama or any of its agencies, commissions, boards, institutions or departments are parties, where there is claimed a legal or moral obligation resting on the state; `.... `(7) All claims for underpayment by the State of Alabama or any of its agencies, commissions, boards, institutions or departments to parties having dealings with the State of Alabama or any of its agencies, commissions, boards, institutions or departments.' (Emphasis added.) The Board of Adjustment has jurisdiction over claims against the state that are not justiciable in the courts because of the state's constitutional immunity from being made a defendant. Lee v. Cunningham, 234 Ala. 639, 641, 176 So. 477 (1937). The Board of Adjustment has exclusive jurisdiction over a contract claim against a state university. Alabama State University v. State Bd. of Adjustment, 541 So.2d 567 (Ala.Civ.App.1989). 709 So.2d at 486. See also Matthews v. Alabama Agric. & Mech. Univ., 716 So.2d 1272 at 1281-82 (Ala.Civ.App.1998) (in an action against the University by a former employee, declaratory and injunctive relief, including reinstatement would be available to the employee upon a determination that a contract existed and that the University breached it, but claims for retrospective relief in the form of compensatory damages for mental distress or back pay and cost-of-living raises were barred by sovereign immunity); Shoals Cmty. College v. Colagross, supra. The holding of Vaughan with regard to retrospective relief is consistent with well-established authority. See, e.g., Stark v. Troy State Univ., 514 So.2d 46 (Ala.1987). Stark involved an action by Paul Stark, an assistant professor in the School of Business of Troy State University, against Troy State, its chancellor, and its chief executive officer (hereinafter collectively referred to as Troy State). 514 So.2d at 47. Stark alleged that Troy State had adopted a binding policy that provided for a normal teaching load... of fifteen (15) hours of undergraduate classes, and for full pay or salary to faculty who [taught] the equivalent of twelve quarter hours during the summer. 514 So.2d at 48. He alleged that the policy constitut[ed] a binding contract that [the defendants were] ignoring. 514 So.2d at 48. In addition to declaratory and injunctive relief, Stark sought compensatory damages, that is, back pay, based upon overloads found to have been taught over the [preceding] five (5) academic years and based upon summer teaching found to have been compensated for at less than what the duly adopted policy of [Troy State] required. 514 So.2d at 48. The trial court dismissed the claims against the university and entered a summary judgment in favor of the officials. This Court affirmed the judgment. As to the claim for retrospective relief, this Court stated: [I]f the individual defendants have not acted toward the plaintiff in accordance with the rules and regulations set by the university, their acts are arbitrary and an action seeking to compel them to perform their legal duties will not be barred by the sovereign immunity clause of the Alabama Constitution of 1901; however, the action for compensatory damages cannot be maintained.  514 So.2d at 50 (emphasis added). This principle was also applied in Milton v. Espey, 356 So.2d 1201 (Ala.1978), which involved only claims for retrospective relief. Both Milton and Espey were employees of the University of Alabama. Milton was employed at the Ferguson Center of the University of Alabama ... from March 1, 1973, until August 19, 1974. Espey [was] the Director of the Ferguson Center. 356 So.2d at 1202. Milton's five-count complaint purported to state claims against Espey in his individual capacity. The complaint did not purport to assert claims directly against the University of Alabama. The claims against Espey, however, included theories of breach of contract, negligence, and fraud, for which Milton sought money damages. 356 So.2d at 1202. The breach-of-contract claims were based on allegations that the hours Milton worked exceeded those for which he was compensated. The negligence claim was based on allegations that Espey supervised Milton in a negligent manner in that he failed to evaluate Milton as provided by the rules and regulations of the University [of Alabama]. 356 So.2d at 1202. The trial court entered a summary judgment for Espey, and this Court affirmed that judgment as to the claims alleging breach of contract and negligence. The Court stated: There is no dispute that in employing Milton, Espey was acting in his official capacity as an agent of the University [of Alabama]. Milton admits this. Espey was merely the conduit through which the University [of Alabama] contracted with Milton. Thus, a suit seeking money damages for breach of contract [and negligence], although nominally against Espey individually, comes within the prohibition of Section 14 as a suit against the State. Milton's contract was in fact with the University of Alabama.... Thus, [the breach-of-contract and negligence claims] are barred by Section 14 and summary judgment was appropriately granted as to [those claims]. 356 So.2d at 1202-03 (emphasis added). [1] Thus, Stark, Milton, Matthews, and Vaughan hold that § 14 bars retrospective relief based on a claim against a state university alleging breach of an employment contract. In opposition to this principle, Dr. Jones cites two cases involving a contract right of the State in which a claim for back pay was allowed to proceed. [2] Ex parte Hirsch, 592 So.2d 597 (Ala.1991), and Breazeale v. Board of Trustees of Univ. of South Alabama, 575 So.2d 1126 (Ala.Civ.App.1991). For reasons that follow, those cases do not compel us to affirm the judgment in this case. Ex parte Hirsch involved a class action against the Alabama State Docks Department (the Department) by former employees of the Department, seeking  damages for breach of contract (1) for medical insurance premiums paid by [them] for their dependents, and (2) for losses caused by the denial of dependents' medical insurance claims where the denial was proximately caused by the [Department's] failure to pay the medical insurance premium. 592 So.2d at 603 (emphasis added). The dispute centered on two successive agreements between the Department and the plaintiffs'collective bargaining representative, the International Longshoremen's Association, Local 1984 (the Union), through which the Department provided group insurance for its employees. 592 So.2d at 598. The first agreement, effective April 2, 1986, did not require an employee co-payment for dependent coverage. The second agreement, effective December 1, 1987, or 1988 (the December agreement), required a 28% copayment by the employee for medical insurance for dependents. 592 So.2d at 600. The case involved crucial factual and legal issues, including whether the Union's representatives continued to represent the ... plaintiffs after they were terminated, and, if so, whether the representation bound the plaintiffs to the December agreement. 592 So.2d at 604. The trial court entered a summary judgment for the Department, and the Court of Civil Appeals affirmed the judgment on the ground that the action was barred by § 14. Hirsch v. Alabama State Docks Dep't, 592 So.2d 595, 596-97 (Ala.Civ.App.1991). This Court reversed the judgment of the Court of Civil Appeals. In doing so, it did not discuss the sovereign-immunity defense asserted by the Department. The Court merely stated: In support of their claims, the [plaintiffs] produced the documents described above, and they also produced evidence indicating that they met the contractual requirements to be entitled to the medical insurance benefits. Accordingly, the [plaintiffs] presented a prima facie case indicating that their action was an action to enforce a legal duty, and the Court of Civil Appeals erred when it determined that [the plaintiffs'] action was barred by sovereign immunity. 592 So.2d at 603. The Court acknowledged the unresolved factual and legal issues, stating: However meritorious the defendants' [substantive] arguments may turn out to be when addressed in their complete factual background, the record will not support a summary judgment .... [t]here exist genuine issues of material fact, suitable for a jury's determination.  592 So.2d at 604 (emphasis added). Nevertheless, it held that a claim for damages for breach of contract involving unliquidated claims against the State was not barred by § 14. Ex parte Hirsch has never been cited in an appellate opinion, and its inexplicable holding is contrary to the authority just discussed. Stark v. Troy State Univ., supra (sovereign immunity bars an award of compensatory damages in the form of back pay in a breach-of-contract action against a state university and university officials); Milton v. Espey, supra (relief in the form of money damages for breach of contract against the State is barred by § 14); and Vaughan v. Sibley, 709 So.2d at 486 (Because of the sovereign immunity clause, the courts of this state are without jurisdiction to entertain a suit seeking damages, including back pay, for breach of contract against the state.) Cf. Williams v. Hank's Ambulance Serv., Inc., 699 So.2d 1230, 1231 (Ala.1997) (because of § 14, courts could not compel the Commissioner of the Alabama Medicaid Agency to authorize retroactive payment to [medical service providers] for previous services they had provided to [Medicare beneficiaries]). Consequently, we hereby overrule Ex parte Hirsch to the extent it sanctioned a claim for damages arising out of a breach of contract involving unliquidated claims against the State. We also disagree with Breazeale v. Board of Trustees of University of South Alabama, 575 So.2d 1126 (Ala.Civ.App.1991), which was a class action ... on behalf of all nonfaculty employees of the University of South Alabama (USA). 575 So.2d at 1127. In part, the complaint sought retroactive monetary relief in the form of a recalculation of merit pay increases. 575 So.2d at 1127. The trial court granted USA's motion to dismiss on the ground of sovereign immunity. The Court of Civil Appeals reversed the judgment, find [ing] that the [employees'] request for a recalculation of merit pay raises [was] not an action for compensatory damages as prohibited in Stark [v. Troy State University, 514 So.2d 46 (Ala.1987)]. 575 So.2d at 1128. However, that holding is directly contrary to Stark, and is, therefore, overruled.