Georgia Department of Labor v. Rtt Associates, Inc.
299 Ga. 78
Ga.2016Background
- Georgia Department of Labor (DOL) and RTT Associates executed a written contract to develop software with a March 1–June 30, 2012 term, $247,422.68 cap, a performance bond, an "amendments must be in writing and executed by both parties" clause, a time-is-of-the-essence completion date, and an integration clause.
- DOL made partial payments; RTT did not finish work by the June 30, 2012 completion date.
- After expiration, DOL created internal change requests, a purchase order, and disbursement requests increasing contract amounts; none were signed by RTT nor provided to RTT before suit; communications and some software deliveries continued post-expiration.
- On April 3, 2013 DOL notified RTT of breach and terminated the contract and made a claim on the performance bond; May 7, 2013 DOL said it would not use RTT’s software.
- RTT sued for breach, asserting DOL improperly terminated and that the contract had been extended/amended by course of conduct and internal writings; trial court granted summary judgment for DOL, holding no written amendment extended the contract and sovereign immunity was not waived; Court of Appeals reversed; Georgia Supreme Court granted certiorari.
Issues
| Issue | RTT's Argument | DOL's Argument | Held |
|---|---|---|---|
| Whether parties’ post-expiration course of conduct or internal agency documents extended or amended the written contract so as to waive sovereign immunity | Course of conduct and internal documents show mutual intent to extend/modify the contract, creating a triable fact | Post-expiration conduct and internal writings are not a writing signed by both parties as required; any extension would be an unwritten agreement that cannot waive sovereign immunity | Held for DOL: post-expiration conduct and internal agency documents do not create a written contract; sovereign immunity not waived |
| Whether the contract provision requiring written amendments can be waived by conduct when the state is a party | The parties can waive the written-amendment requirement by mutual conduct | The constitutional/statutory waiver requires a written contract; courts may not create waiver by applying general contract principles against the state | Held for DOL: parties cannot waive sovereign immunity by informal conduct; written contract is required |
| Whether general common-law contract doctrines (modification by conduct, implied contracts) apply to create liability against the State | General contract principles allow modification by conduct, so they should apply here | Constitutional and statutory law restrict waiver of sovereign immunity to written contracts; courts cannot expand waiver by common law | Held for DOL: common-law modification rules cannot be used to waive sovereign immunity against the State |
| Whether any internal agency admissions or documents create a triable issue of fact about waiver of sovereign immunity | DOL’s internal statements and post-expiration acceptance of deliverables show extension and waiver | Internal documents and admissions are insufficient because they were not executed by both parties and occurred after contract expiration; they cannot satisfy the written-contract requirement | Held for DOL: such materials do not create a factual dispute that overcomes sovereign immunity requirement |
Key Cases Cited
- Bd. of Regents v. Tyson, 261 Ga. 368 (Ga. 1991) (an agreement formed by conduct but not in writing does not waive sovereign immunity)
- Georgia Dept. of Natural Resources v. Ctr. for a Sustainable Coast, Inc., 294 Ga. 593 (Ga. 2014) (only the General Assembly may waive sovereign immunity; courts cannot create exceptions)
- PMS Constr. Co., Inc. v. DeKalb County, 243 Ga. 870 (Ga. 1979) (public-entity contract claims require written agreements; implied contracts/quantum meruit do not waive immunity)
- Bd. of Regents v. Barnes, 322 Ga. App. 47 (Ga. Ct. App. 2013) (claimant bears burden to prove written contract for waiver of sovereign immunity)
- Georgia Dept. of Corrections v. Couch, 295 Ga. 469 (Ga. 2014) (sovereign immunity protects state funds and limits creation of liability without explicit lawful waiver)