{
  "id": 9249206,
  "name": "KAWAI AMERICA CORPORATION and PIEDMONT MUSIC, INC. d/b/a NORTH CAROLINA ARTISAN SELECT, Plaintiffs v. UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Defendant",
  "name_abbreviation": "Kawai America Corp. v. University of North Carolina at Chapel Hill",
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    "parties": [
      "KAWAI AMERICA CORPORATION and PIEDMONT MUSIC, INC. d/b/a NORTH CAROLINA ARTISAN SELECT, Plaintiffs v. UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Defendant"
    ],
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      {
        "text": "HUDSON, Judge.\nThe University of North Carolina at Chapel Hill (the \u201cUniversity\u201d) appeals an order denying its motion to dismiss plaintiffs\u2019 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.\nThe facts relevant to this appeal are not in dispute. Plaintiff Piedmont Music, Inc., (\u201cPiedmont\u201d) is a dealer of pianos manufactured by plaintiff Kawai America Corporation (\u201cKawai\u201d). 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\u2019s expense.\nAt 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.\nOn 26 February 2001, plaintiffs filed a complaint against the University in Orange County Superior Court. The complaint alleged four 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.\nThis Court has \u201crepeatedly held that appeals raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review.\u201d 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).\nAbsent consent or waiver, \u201can action cannot be maintained against the State of North Carolina or an agency thereof.\u201d Guthrie v. State Ports Authority, 307 N.C. 522, 534, 299 S.E.2d 618, 625 (1983) (emphasis omitted). Unless waived, \u201cthe immunity provided by the doctrine [of sovereign immunity] is absolute and unqualified.\u201d 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.\nThe State may statutorily waive sovereign immunity, but may then \u201cbe sued only in the manner and upon the terms and conditions prescribed.\u201d 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, \u201cbeing in derogation of the sovereign right to immunity, must be strictly construed.\u201d Guthrie, 307 N.C. at 538, 299 S.E.2d at 627. One such statute, the State Tort Claims Act (the \u201cAct\u201d), provides in relevant part that the Industrial Commission may award damages in claims based on the negligence of \u201cany 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.\u201d N.C. Gen. Stat. 143-291(a) (2001). The Act thus waives the sovereign immunity of the State with respect to \u201csuits brought as a result of negligent acts committed by its employees in the course of their employment.\u201d 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.\nThis Court has stated that:\nSuits 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.\nWojsko 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) (\u201cThe Tort Claims Act does not give the Industrial Commission jurisdiction to award damages based on intentional acts.\u201d), 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, 435 (1992) (\u201cWe feel that any change in this doctrine [of sovereign immunity] should come from the General Assembly.\u201d); Guthrie, 307 N.C. at 534, 299 S.E.2d at 625 (\u201cIt is for the General Assembly to determine when and under what circumstances the State may be sued.\u201d (emphasis and internal quotation marks omitted)).\nWe note that this appeal concerns only the claims for conversion and damage to property. The University did not seek to dismiss the claim against it for breach of contract, correctly noting that the doctrine of sovereign immunity does not bar such a suit. \u201c[W]henever the State of North Carolina, through its authorized officers and agencies, enters into a valid contract, the State implicitly consents to be sued for damages on the contract in the event it breaches the contract.\u201d Smith v. State, 289 N.C. 303, 320, 222 S.E.2d 412, 423-24 (1976). Our Supreme Court emphasized, however, that \u201c[t]his decision has no application to the doctrine of sovereign immunity as it relates to the State\u2019s liability for torts.\u201d Id. at 322, 222 S.E.2d at 424.\nIf plaintiffs\u2019 remaining claims were based on negligence, they could be pursued in the Industrial Commission but not in superior court. Conversion, however, is an intentional tort. See Restatement (Second) of Torts \u00a7 222A(1) (1965) (\u201cConversion is an intentional exercise of dominion or control over a chattel. . . .\u201d); see also Lewis v. Leasing Corp., 36 N.C. App. 556, 560, 244 S.E.2d 706, 709 (1978) (holding that an indemnity contract did not relieve parties from liability for the intentional tort of conversion). The State has not waived sovereign immunity for intentional torts by action of the Tort Claims Act or other statute. See Wojsko, 47 N.C. App. at 610, 267 S.E.2d at 711. The plaintiffs\u2019 claim for conversion is therefore barred by the doctrine of sovereign immunity.\nWe are not persuaded by plaintiffs\u2019 argument that the superior court could obtain jurisdiction over the conversion claim through the doctrine of pendent jurisdiction. Plaintiffs cite no legal authority in support of their novel theory that pendent jurisdiction can be used to waive sovereign immunity. Our Supreme Court has stated that only the General Assembly has the authority to modify the doctrine of sovereign immunity, and it has not done so in this manner. See Blackwelder, 332 N.C. at 324, 420 S.E.2d at 435; Guthrie, 307 N.C. at 534, 299 S.E.2d at 625. For the same reason, we reject plaintiffs\u2019 argument that the superior court should take jurisdiction over the conversion claim in the interest of judicial economy.\nAlthough a claim for damage to property ordinarily may be characterized as either an intentional tort or negligence, see Murray v. Insurance Co., 51 N.C. App. 10, 14, 275 S.E.2d 195, 198 (1981); Restatement (Second) of Torts \u00a7\u00a7 497, 499 (1965); Restatement (Second) of Torts \u00a7 871 (1979), here, the claim is neither. The complaint alleges that the University is responsible for paying for damage to pianos, by specific reference to the contract. In paragraph 26, plaintiffs \u201creallege paragraphs 1 through 17,\u201d which are contained in the breach of contract allegations. In paragraph 27, the complaint alleges that \u201c[t]he Agreement indicates that \u2018University shall bear the risk of loss for the pianos while pianos are in University\u2019s possession.\u2019 \u201d Because \u201c[u]pon information and belief, the pianos .. . were damaged while in the possession and under control of the University,\u201d the plaintiffs requested damages. There are no allegations of negligent or intentional tortious behavior by the University, but rather references to liability stemming from the \u201cAgreement.\u201d Thus, as a claim based on allegations of contract, this claim is not barred by the doctrine of sovereign immunity. See Smith, 289 N.C. at 320, 222 S.E.2d at 423-24.\nIn conclusion, we hold that the trial court erred by denying defendant\u2019s motion to dismiss the claim of conversion on grounds of sovereign immunity, but not by denying the motion to dismiss the claim for damage to property, which we believe arises from the contract allegations. We therefore reverse the trial court\u2019s denial of the University\u2019s motion to dismiss the conversion claim and affirm the denial of the University\u2019s motion to dismiss the damage to property claim. Thus, we remand for entry of an order dismissing the conversion claim and for further proceedings in the breach of contract claim, which was not part of this appeal, and in the damage to property claim.\nReversed in part, affirmed in part, and remanded.\nJudge BIGGS concurs.\nJudge GREENE concurs in a separate opinion.",
        "type": "majority",
        "author": "HUDSON, Judge."
      },
      {
        "text": "GREENE, Judge,\nconcurring.\nI fully concur in the majority opinion but write separately to clarify the issue of plaintiffs\u2019 \u201cdamage to property\u201d claim.\nWhile plaintiffs\u2019 \u201cdamage to property\u201d claim seeks recovery for damage done to the pianos while in the University\u2019s possession and is based on the contract provision wherein the University assumed the risk of any loss to the pianos, their \u201cbreach of contract\u201d claim also seeks damages; but these damages are for breach of the contract provision holding the University responsible for the wrongful withholding of the pianos. As the two claims represent separate issues arising under the contract, the University\u2019s sovereign immunity defense does not apply to either.",
        "type": "concurrence",
        "author": "GREENE, Judge,"
      }
    ],
    "attorneys": [
      "Attorney General Roy Cooper, by Assistant Attorney General Celia Grasty Lata, for defendant-appellant.",
      "Horton, Sloan & Gerber, P.L.L.C., by Norman L. Sloan, for plaintiff-appellees."
    ],
    "corrections": "",
    "head_matter": "KAWAI AMERICA CORPORATION and PIEDMONT MUSIC, INC. d/b/a NORTH CAROLINA ARTISAN SELECT, Plaintiffs v. UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Defendant\nNo. COA01-1145\n(Filed 6 August 2002)\n1. Appeal and Error\u2014 appealability \u2014 governmental immunity \u2014 substantial right\nAn appeal from the denial of a motion to dismiss which asserted governmental immunity was interlocutory, but proper. Appeals raising issues of governmental immunity affect a substantial right.\n2. Immunity\u2014 governmental \u2014 conversion\u2014contract claims\nThe trial court erred by denying a motion to dismiss an action for conversion of pianos against a state university on the grounds of sovereign immunity, but not by denying a motion to dismiss a property damage claim which arose from contract provisions. The State has not waived sovereign immunity for intentional torts such as conversion, the superior court could not obtain judgment through pendant jurisdiction because only the General Assembly has authority to modify sovereign immunity, and the State implicitly consents to be sued when it enters into a contract.\nJudge Greene concurring.\nAppeal by defendant from order entered 18 June 2001 by Judge Leon Stanback in Orange County Superior Court. Heard in the Court of Appeals 4 June 2002.\nAttorney General Roy Cooper, by Assistant Attorney General Celia Grasty Lata, for defendant-appellant.\nHorton, Sloan & Gerber, P.L.L.C., by Norman L. Sloan, for plaintiff-appellees."
  },
  "file_name": "0163-01",
  "first_page_order": 191,
  "last_page_order": 196
}
