In Legal Terms - May/June 1999

New Liability Questions Raised in Supreme Court Decision
For years there has been debate within the legal community regarding whether the statutory provision limiting the amount of damages which can be recovered from a county for the negligent acts of its officials and employees acting within the line and scope of their employment would also apply to those officials and employees sued in their official capacities. See, Code of Alabama 1975, § 11-93-1 et seq. Several appellate cases released in recent years have indicated that the statutory cap does not apply to the employees of a governmental entity, and as a result, the number of lawsuits naming officials and employees in their official and individual capacities has increased significantly. Unfortunately, a new opinion released by the Supreme Court of Alabama on April 23, 1999 threatens to increase that number even more.

In Smitherman v. Marshall County Commission, et al., [MS. 1971866, April 23, 1999], ___ So.2d ___ (Ala. 1999), an unanimous Court affirmatively held that commissioners and employees could be sued in their official capacity and that the statutory cap does not apply in such suits. In the same case, the Court also held that there was a legal distinction between the county and the county commission, and that the county commission could be sued in tort.1 The statutory cap does apparently apply to claims against the commission.

The good news (if there is any) is that the Court did reaffirm that county officials and employees could not be sued in their individual capacity. See, also, Cook v. County of St. Clair, 384 So.2d 1 (Ala. 1980). However, the decision threatens to bring an onslaught of new cases against officials and employees.2 Moreover, in many respects (and as is unfortunately often the case), the decision actually raises more questions than it answers, and as presently written, opens the door for a whole new line of case law interpreting what the decision in Smitherman really means, and what protection, if any, counties, officials, and employees have against the recovery of judgments which exceed the statutory cap.

The Smitherman case involves an automobile accident which rendered the plaintiff (a minor) a quadriplegic. The family sued the county alleging, among other things, that the county had negligently or wantonly failed to take actions necessary to keep the roadway in a reasonably safe condition. The original suit named the county, the county commission, the county commissioners, and the county engineer as defendants in the case, but the trial court dismissed all parties except the county finding that naming those individuals "is only another way of pleading a claim against the entity". The plaintiffs appealed to the Supreme Court, which reversed the trial court's decision. The Supreme Court affirmed that there was no legal basis for suing the commissioners and engineer in their individual capacity, but that there was a legal distinction between the county and its governing body, officials, and employees acting in their official capacities, and that those parties were improperly dismissed from the suit.

The Court further held that the statutory cap on recovery of damages applied to the claims against the county commission, but not to those against the commissioners or the engineer. In reaching this conclusion, it relied on the holdings in earlier cases where the same Court had found that, "The Legislature could easily have made certain that the $100,000 cap was applicable to 'employees' of 'governmental entities', but it did not do so." Ravi v. Coates, 662 So.2d 218, 223 (Ala. 1995). See, also, Elmore County Commission v. Ragona, 540 So.2d 720 (Ala. 1989).

While at first glance this decision appears to resolve the issues of the potential liability of county officials and employees and of the possible recovery of damages against such persons, the Court actually raises new questions about the recovery of damages against officials and employees. In a footnote attached to its finding that the statutory cap does not apply to officials and employees in their official capacity, the Court raises the issue of the total potential of liability of counties in these cases, and references a case in which it had held that the City of Birmingham was required to indemnify its employee for damages awarded against the employee, but only up to the amount of the statutory cap. See, Benson v. City of Birmingham, 659 So.2d 82 (Ala. 1995).

The reference to this case is puzzling for several reasons. First of all, the Benson decision was based in part on a statutory provision which requires cities to provide such indemnification. See, Code of Alabama 1975, § 11-47-24. There is no similar statutory requirement for counties. Secondly, while the reference appears to suggest that there may be a limitation to the amount of damages which can be recovered from the county for a judgment rendered against its officials or employees, the decision provides no guidance regarding recovery of damages in excess of the limitations set out in § 11-93-2. Is the Court suggesting that there may be a bar to what can be recovered even though these individuals are not specifically protected by the statute? Or is the Court of the opinion that these individuals may have some assets in their "official capacity" which could be seized for satisfaction of judgments? Is it possible that these individuals may be expected to satisfy these judgments out of personal assets?

The Benson case does not address how the plaintiffs in that lawsuit might recover the balance of the $1,600,000 judgment rendered against the employee and the city and it certainly does not address that issue in the case which is the subject of this article. However, it is curious that the Court would find that the cap does not apply and in the same breath hint that there may be other limitations on possible recovery of judgments exceeding the statutorily-allowed amounts. Thus, as stated at the outset, this case actually leaves little resolved, and has county attorneys across the state scratching their heads and debating where we are and where we go from here.

There is no real debate that the decision in Smitherman is a defeat for counties, and particularly for its officials and employees who are now clearly subject to suit and judgment independent of the county itself. However, the full impact of this decision, if it remains intact, may not be known for years to come. The defendants in Smitherman have filed an Application for Rehearing asking the Supreme Court to reconsider and revise its opinion in this case, and they have been joined by several counties and the Association 3 , who have filed amicus curiae briefs in support of Marshall County. While there is some hope that this decision will be altered or revised, it may be several weeks or months before a decision on the Application is made by the Court. However, every county official and employee has a vital interest in the ultimate outcome of Smitherman and in future cases interpreting its real meaning and its impact on those actually performing the work of the county.

1 This finding overrules previous holdings such as Calvert v. Cullman County Commission, 669 So.2d 119 (Ala. 1995), in which the Supreme Court had held that, "The difference between naming a county as a defendant and naming its governing body as a defendant is a difference in nomenclature."

2 There is apparently already at least one case where the plaintiffs have amended their complaint to add the county engineer as a defendant in a negligent road repair case.

3 The law firm of Webb & Eley has filed the amicus brief on behalf of the Association, and the Court has granted the petition to appear in that capacity.