County Sovereign Immunity Invokes Change-Order Ordinance

The recent case of Fulton County v. Soco Contracting Company, Inc. addresses two very interesting questions for local government attorneys.  First, can a county ordinance bolster a defense of sovereign immunity against a contractor’s claims?  Second, can a county waive sovereign immunity by failing to respond to Requests for Admission?

Facts:

County hired Contractor to construct a facility near the airport.  The contract provided that change orders must satisfy a county ordinance, which required approval by the Board of Commissioners.  But in emergency situations, the County Manager could approve change orders, as long as the contractor executes a proposed modification and the purchasing agent approves it.

The project suffered substantial delays, which Contractor attributed to weather, design delays, delays by the County in providing decisions on changes, and delays in obtaining permits during the federal government’s shutdown. As a result of these issues, Contractor comes County changed the scope of the contract.  Contractor asserted claims against County for the delays and the changes to the work.  The appellate opinion addresses the change order claims.

Ruling:

Even though there was no written change order, Contractor argued that the emergency exception applied, and it should be paid on the change order claim.  In response, County relied on sovereign immunity – to the extent that the claim was not based on a written contract.  Under Georgia’s Constitution, counties receive sovereign immunity, but an exception applies for claims based on written contract.

  • Compliance with County Ordinance

The appellate court ruled against the claim because Contractor did not prove it satisfied the county ordinance.  Because the ordinance was incorporated in the contract, to satisfy the written-contract exception to sovereign immunity, Contractor must have shown compliance with the ordinance.

Specifically, Contractor did not show it obtained approval of the County Manager or satisfy the other requirements of the ordinance.  While these may seem like technicalities, sovereign immunity is a constitutional principle that cannot be waived by County or the courts.  Since the contract required compliance with the county ordinance to implement a valid change order, Contractor had to prove such compliance to invoke the written-contract exception to sovereign immunity.

  • Effect of Failing to Respond to Requests for Admission

But this did not end the court’s analysis.  County failed to timely respond to Contractor’s Requests for Admission, one of which sought to establish County’s liability for the claim.  Normally such a failure would result in admission of liability.  But a constitutional principle like sovereign immunity, and its exception for claims based on written contracts, cannot be waived or modified by such procedural defects.  As a result, County narrowly escaped liability for a procedural defect that would render private parties conclusively liable.