# Kersten Co., Inc. v. Department of Social Services > Supreme Court of Iowa · April 25, 1973 · 207 N.W.2d 117 URL: https://www.frixlaw.com/law-library/cases/9844986 ## Case - **Full name:** KERSTEN COMPANY, INC., a Corporation, Appellee, v. DEPARTMENT OF SOCIAL SERVICES of the State of Iowa, and State of Iowa, Appellants - **Court:** Supreme Court of Iowa - **Decided:** April 25, 1973 - **Citations:** 207 N.W.2d 117; 1973 Iowa Sup. LEXIS 1000 - **Precedential status:** Published - **Opinion:** Dissent by Rawlings - **Judges:** Legrand, Moore, Mason, Rees, Harris, Rawlings, Uhlenhopp, Reynoldson, McCormick - **Cited by:** 66 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9844986 ## How later opinions describe it (automated extraction) - explaining it is generally the role of the supreme court to decide if case precedent should no longer be followed ## Opinion text RAWLINGS, Justice (dissenting). I respectfully dissent. In order to reach a desired and probably desirable result the majority, albeit in good faith, employs what can only be described as an existentialistic approach. I. Initially it, in effect, ignores these apt observations in Cover v. Craemer, 258 Iowa 29, 34-35 , 137 N.W.2d 595, 599 (1965): “[Volume] 21 C.J.S. Courts § 187, says: ‘Under the stare decisis rule, a principle of law which has become settled by a series of decisions generally is binding on the courts and should be followed in similar cases. * * “In § 214 it is said: ‘This rule is especially applicable where the construction placed on a statute by previous decisions has been long acquiesced in by the legislature, by its continued use or failure to change the language of the statute so construed, the power to change the law as interpreted being regarded, in such circumstances as one to be exercised solely by the legislature.’ “Goodman v. Henry L. Doherty & Co., 218 Iowa 529, 531 , 255 N.W. 667, 668 , states: ‘Precedents are the stepping stones of the law in its goings. Once placed, they should not be lightly displaced. Such, broadly, is the reason why an appellate court consents to the overruling of a prior decision only in a very exceptional case.’ ” The majority also disregards other established principles regarding statutory construction. In this regard it stands without question that if the General Assembly, in enacting our Iowa Tort Claims Act in 1965 (The Code 1973, Chapter 25A), had intended to abolish state immunity in the field of contracts it could easily have so declared. This it did not do and it is not for us to so extend chapter 25A that it be made applicable to contractual controversies. See generally Iowa R.Civ.P. 344(f) (13); Read v. Estate of Mincks, 176 N.W.2d 192, 194 (Iowa 1970) ; Graham v. Worthington, 259 Iowa 845, 855, 867-870 , 146 N.W.2d 626 (1966). See also State v. Flack, 251 Iowa 529, 533-534 , 101 N.W.2d 535 (1960). Furthermore it would appear the majority, in part, inferentially predicates its stand upon absence of mutuality of remedy, at best a relatively ethereal premise. See generally 5A Corbin on Contracts, §§ 1178-1182. See also Code chapter 25. In any event it is impossible for me to now join in overruling Megee v. Barnes, 160 N.W.2d 815 (Iowa 1968), merely upon *123 the basis of a personal desire. Although I favor the result reached by the majority it still remains the subject at hand is a matter of public policy resting exclusively with the legislative branch of government. See 49 Am.Jur., States, Territories, and Dependencies, §§ 73, 91; 81 C.J.S. States §§ 213-215. In light of the foregoing it is evident the majority engages in nothing less than impermissible judicial legislation. See Iowa Const., art. Ill (Departments of Government), § 1; Frost v. State, 172 N.W.2d 575, 584 (Iowa 1969); 16 Am.Jur.2d, Constitutional Law, §§ 222, 225, 227, 20 Am. Jur.2d, Courts, §§ 64-65; 16 C.J.S. Constitutional Law § 151(1); 82 C.J.S. Statutes § 9. So until the General Assembly speaks on the subject I adhere to this rationale in Megee v. Barnes, 160 N.W.2d at 816 -817: “We have held many times the state is not subject to suit without its consent. The immunity is from suit, not from liability. “Rule 9 of the Rules of Civil Procedure, reported by us to the legislature in January, 1943, effective July 4, 1943, gives recognition to the rule just stated in this language: ‘The state may sue in the same way as an individual. * * * It may be sued as provided by any statutes in force at the time.’ No statute has been cited or come to our attention which provides the state may be sued in such an action as this. “The legislature must be held to have known the language of Rule 9 and to have approved it. We have repeatedly held these rules have the force and effect of statutes. Krebs v. Town of Manson, 256 Iowa 957, 960 , 129 N.W.2d 744 , 746 and citations; Kutrules v. Suchomel, 258 Iowa 1206, 1211 , 141 N.W.2d 593 , 596 and citations. “The legislature has given the consent of the state, upon the conditions provided in section 613.8 Code 1966 for its protection, that it be made a party to any action involving (1) the title to real estate, (2) partition thereof, (3) foreclosure of liens or mortgages against real-estate or (4) the determination of priorities of liens or claims against real estate, for the purpose of obtaining an adjudication as to any such mortgage or other lien or claim. (Section 613.8). “Section 613.12 provides the state waives immunity from suit and consents to the jurisdiction of any court in which an action is brought against the state highway commission respecting any claim, right or controversy arising out of the work performed or by virtue of the provisions of any construction contract entered into by the commission. “It is at once apparent the present action is not of the kind in which the state has waived its immunity from suit in either 613.8 or 613.12. It is also apparent that if the state enjoyed no such immunity both these statutes were wholly unnecessary.” It is also appropriate to here note, a breach of contract claimant is not today without remedy. Code sections 25.1, 25.2, 25.3 provide for filing and processing of claims on which the state would be liable except for its sovereignty. Significantly, in case any such claim be rejected by the state appeal board, it is finally for the two legislative houses to act on the matter. If. Moreover, the majority creates but leaves unanswered some truly troublesome problems, both procedural and substantive. In the first place no means has been or could be judicially provided by which claims for breach of contract may be filed with or officially acted upon by any officer, board, commission, or agent of the state. Demonstrably, with regard to tort claims, § 25A.3 provides: “Authority is hereby conferred upon the state appeal board, acting on behalf *124 of the state of Iowa, subject to the advice and approval of the attorney general, to consider, ascertain, adjust, compromise, settle, determine, and allow any claim as defined in this chapter. If any claim is compromised, settled, or allowed in an amount of more than five thousand dollars, the unanimous approval of all members of the state appeal board and the attorney general shall be required and the approval of the district court of the state of Iowa for Polk county shall also be required. “Claims made under this chapter shall be filed with the state comptroller, who shall acknowledge receipt on behalf of the state appeal board. “The state appeal board may adopt rules, regulations, and procedures for the handling, processing, and investigation of claims.” Then § 2SA.4 says: “The district court of the state of Iowa for the district in which the plaintiff is resident or in which the act or omission complained of occurred, or where the act or omission occurred outside of Iowa and the plaintiff is a nonresident, the Polk county district court, sitting without a jury, shall have exclusive jurisdiction to hear, determine, and render judgment on any suit or claim as defined in this chapter. However, the laws and rules of civil procedure of this state on change of place of trial shall apply to such suits. “The state shall be liable in respect to such claims to the same claimants, in the same manner, and to the same extent as a private individual under like circumstances, except that the state shall not be liable for interest prior to judgment or for punitive damages. Costs shall be allowed in all courts to the successful claimant to the same extent as if the state were a private litigant. “The immunity of the state from suit and liability is waived to the extent provided in this chapter. “A suit is commenced under this chapter by serving the attorney general or his duly authorized delegate in charge of the tort claims division by service of an original notice. The state shall have thirty days within which to enter its general or special appearance.” And § 2SA.S states: “No suit shall be permitted under this chapter unless the state appeal board has made final disposition of the claim; except that if the state appeal board does not make final disposition of a claim within six months after the claim is made in writing to the state appeal board, the claimant may, by notice in writing, withdraw the claim from consideration of the state appeal board and begin suit under this chapter. Disposition of or offer to settle any claim made under this chapter shall not be competent evidence of liability or amount of damages in any suit under this chapter.” It may, of course, be argued our court house doors are always open to litigants. But the majority seemingly finds pre-liti-gation arbitration is of little or no consequence regarding breach of contract controversies. I deem it highly important, as did the General Assembly in enacting Code chapter 2SA. III. Assuming, arguendo, the matter of pre-litigation arbitration is of no great moment, it still remains there can be no “settlement by agreement” even after legal action has been instituted. Again by way of illustration Code § 2SA.9 authorizes the attorney general to compromise or settle, with court approval, any tort action commenced against the sovereignty. Finally, in this regard, it is for the General Assembly alone to enact laws govern *125 ing the expenditure of state funds including appropriations for payment of money, See Iowa Const., art. VII, §§ 2, 5; Graham v. Worthington, 259 Iowa at 857-861 , 146 N.W.2d at 634-637 . Here, however, there has been no appropriation for payment of contract breach damages, and neither the attorney general nor courts can bind the state to pay same either by agreement, judicial fiat or judgment, in the absence of specific valid statutory authority. See 49 Am.Jur., States, Territories, and Dependencies, § 104; 81 C.J.S. States §§ 231-232. See also Code § 25A.11. This means any breach of contract monetary judgment entered against the state is relatively meaningless. In any event it will remain for the legislature to act before ultimate redress can be had. Compare Code chapter 25. Consequently, the grant of any such judgment to a litigant as against the state, absent appropriate legislative action, may be an illusory and empty victory to a suing party. Thus the majority, by indulging in judicial legislation, also engages in what could conceivably be an exercise in futility. I would reverse. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9844986. Public record. Not legal advice.