Lead Opinion
The issue before this Court, one of first impression, is whether a crossclaim for contribution and indemnification may be asserted against the State in our trial courts. We answer in the affirmative.
This appeal had its genesis in a cause of action instituted by Selective Insurance Company of the Southeast (hereinafter Selective) against both NCNB National Bank of North Carolina (hereinafter NCNB) and the State of North Carolina (hereinafter State) arising out of the loss or theft of bearer bonds with a par value of $500,000. The bonds were deposited by Selective with the North Carolina Department of Insurance (hereinafter Department) as a condition for conducting insurance business in North Carolina. NCNB was the custodian of the bonds for Selective which instructed NCNB to deposit the bonds with the Department. NCNB hired third-party defendant Airborne Freight Corporation to deliver the bonds to the Department, which it did on or about 15 January 1985. In February 1985, the Department advised NCNB that it had received the Airborne package but that the package had been lost. The package has yet to be found.
In its complaint Selective asks for declaratory relief and damages for breach of trust against the State, that a surety bond it executed as a condition for reissuance of those bonds be declared void, and that Selective be relieved of any liabilities or obligations under that surety bond. As against NCNB, Selective seeks a declaratory judgment that, because of NCNB’s alleged negligence and breach of a custodianship agreement under which it had held the bonds, NCNB is liable to Selective for any and all liabilities incurred by or asserted against Selective with respect to the bearer bonds. Selective also seeks monetary damages caused by NCNB’s alleged negligence.
NCNB filed an answer and asserted a crossclaim against the State for contribution and indemnity. The State moved to dismiss Selective’s complaint and NCNB’s crossclaim. The motions were granted and both Selective and NCNB appealed to the
In its crossclaim, NCNB asserts two claims against the State. The first is for contribution. NCNB contends that if it was negligent, then “the State of North Carolina, through the Department, was [also] negligent in losing the package containing the Bearer Bonds and that such negligence on the part of the State of North Carolina joined and concurred with the negligence of NCNB, if any, and NCNB is entitled to recover contribution from the State of North Carolina . . . .”
NCNB’s second claim against the State is for indemnification. NCNB contends that if it was negligent in any way, “the State of North Carolina, through the Department, was negligent in losing the package containing the Bearer Bonds and that such negligence of the State of North Carolina was the primary, active and proximate cause of Southeastern’s damages . . . and therefore, NCNB is entitled to be indemnified by the State of North Carolina . . . .”
NCNB properly asserted these claims as crossclaims pursuant to N.C.G.S. § 1A-1, Rule 13(g), because the State was a co-defendant in the original action brought by Selective against both NCNB and the State. Rule 13(g) provides:
(g) Crossclaim against coparty. — A pleading may state as a crossclaim any claim by one party against a coparty arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such crossclaim may include a claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of a claim asserted in the action against the crossclaimant.
N.C.G.S. § 1A-1, Rule 13(g) (1983).
In the instant case, the Court of Appeals affirmed the trial court’s finding that it lacked jurisdiction over NCNB’s crossclaim on the grounds that there is no express provision in Rule 13(g), comparable to Rule 14(c), which allows a crossclaim to be asserted against the State. The Court of Appeals noted that “[t]he Legislature has simply not similarly excepted crossclaims against the State from the Tort Claims Act as it has for third-party claims.” Selective Ins. Co. v. NCNB, 91 N.C. App. 597, 602,
The State Tort Claims Act provides in pertinent part as follows:
The North Carolina Industrial Commission is hereby constituted a court for the purpose of hearing and passing upon tort claims against the State Board of Education, the Board of Transportation, and all other departments, institutions and agencies of the State.
N.C.G.S. § 143-291 (1987 & Cum. Supp. 1988).
Both the Court of Appeals and the State rely upon Guthrie v. State Ports Authority,
N.C.G.S. § 1B-1(h) and the State Tort Claims Act operate to waive sovereign immunity for claims against the State for contribution and indemnification. The State correctly points out that statutes waiving sovereign immunity must be strictly construed. Guthrie v. State Ports Authority,
In the instant case, the State has already been made a party to the action in state court. The Court of Appeals has held that the complaint against NCNB and the State should not have been dismissed for failure to state a claim, and that question is not before us. Thus, we are presented with the question of whether the State, properly a party defendant, may be subject to a cross-claim for contribution and indemnification asserted by a codefendant in the same action. Stated differently, is the State a “coparty” within the meaning of Rule 13(g) so that a party may state as a crossclaim against it a claim for contribution and indemnification arising out of the transaction or occurrence that is the subject matter of the action? Since it is clear that the State is not immune from such claims substantively, and since the State is already properly before the court as a party defendant, there is no reason to exclude the State from the definition of a coparty under Rule 13(g).
The only difference between crossclaims for contribution and indemnification brought pursuant to Rule 13(g) and third-party actions brought under Rule 14 is that crossclaims are asserted against coparties whereas third-party actions are asserted against non-parties. Whether a claim against the State for contribution and indemnification is asserted as a crossclaim or a third-party action depends upon whether the State has been made a defendant in the original action; there is no substantive difference between the claims.
Rule 13(g) and Rule 14 both address claims for contribution and indemnification in almost identical language. Rule 13(g) provides that crossclaims may “include a claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of’ the claim asserted against the crossclaimant. Similarly, Rule 14 allows a defendant, as a third-party plaintiff, to serve a summons and complaint on any non-party “who is or may be liable to him for all or part of the plaintiffs claim against him.”
Beyond nearly identical language, Rule 13(g) and Rule 14 also share an identical
Similarly, the general purpose of Rule 14 is “to avoid two actions which should be tried together to save the time and cost of a reduplication of evidence, to obtain consistent results from identical or similar evidence, [sic] and to do away with the serious handicap to a defendant of a time difference between judgment against him, and a judgment in his favor against the third-party defendant.” 3 Moore’s Federal Practice § 14.04 at 26 (2d ed. 1988) (commenting on Rule 14 of the Federal Rules of Civil Procedure which is substantially similar to the North Carolina rule).
Allowing claims against the State for contribution and indemnification to be asserted as crossclaims accomplishes the legislative purpose behind Rule 13(g)
We therefore reverse the Court of Appeals on this question and remand the case to that court for further remand to the trial court for reinstatement of NCNB’s crossclaim against the State for contribution and indemnification.
Reversed in part and remanded.
Notes
. Guthrie involved an attempt to make the State Ports Authority, a state agency, an original party defendant in a tort action. This Court held that the State had not waived its sovereign immunity to this extent.
. The Uniform Contribution Among Tort-Feasors Act provides:
(h) The provisions of this Article shall apply to tort claims against the State. However, in such cases, the same rules governing liability and the limits of liability shall apply to the State and its agencies as in cases heard before the Industrial Commission. The State’s share in such cases shall not exceed the pro rata share based upon the maximum amount of liability under the Tort Claims Act.
N.C.G.S. § 1B-1(h) (1983).
. Since crossclaims can only be asserted against coparties, it was unnecessary for the legislature to say expressly that the State may be made a party under Rule 13(g) as it did in Rule 14 which provides for bringing in new parties.
. The Comment to Rule 13(g) provides: “Certainly the most common bases for crossclaims are those for contribution or indemnification in respect of the cross-claimant’s alleged liability, and the last sentence [of] Rule 13(g) specifically authorizes these bases.”
Dissenting Opinion
dissenting.
The Court of Appeals correctly noted that the General Assembly simply has not excepted crossclaims against the State from the requirements of the Tort Claims Act, while it has clearly excepted third-party claims from those requirements. Although the Court of Appeals recognized that it would be logical to also except crossclaims from the requirements of the Act, it declined to judicially create such an exception where the General Assembly had so clearly chosen not to provide an exception. I agree with the view apparently held by the Court of Appeals that the rules of construction applied by the majority of this Court in the present case have no application in situations such as this, where the General Assembly has spoken clearly but, according to the majority of this Court, reached an “absurd” result.
It is for the General Assembly, and not for this Court, to waive the State’s sovereign immunity and to determine the forum in which claims against the State will be heard when it waives sovereign immunity. Therefore, for the reasons stated by Judge Cozort in his opinion for the majority in the Court of Appeals, I dissent.