May 19, 1994
Mr. Marvin K. Dorman, Jr. Senior Deputy State Budget Officer Office of State Budget and Management 116 West Jones Street Raleigh, North Carolina 27603-8005
RE: Advisory Opinion; Application of Sovereign Immunity to Medical Malpractice/Liability Claims; G.S. § 143-291
Dear Mr. Dorman:
By letter dated 29 April 1994 you requested an opinion of this office as to (1) whether the legal principle of sovereign immunity protects the State of North Carolina against medical malpractice/liability claims above the limits set forth in the State Tort Claims Act, and, (2) if so, why does the State currently authorize the purchase and possession of medical liability insurance for certain agencies.
It has long and consistently been held that an action cannot be maintained against the State of North Carolina or a department or agency thereof unless it consents to be sued or upon its waiver of immunity, and that this immunity is absolute and unqualified. Guthrie v. State Ports Authority, 307 N.C. 522, 299 S.Ed.2 6l8 (1983); Smith v. State, 289 N.C. 303, 222 S.Ed.2d 412 (1976); Orange County v. Health , 282 N.C. 292, 192 S.Ed.2d 308 (1972); Truesdale v. University of North Carolina, 91 N.C.App. 186, 371 S.Ed.2d 503 (1988). The State has maintained its sovereign immunity in tort actions and has waived that immunity only through its Tort Claims Act, G.S. § 143-291, et seq., allowing actions to be brought in the North Carolina Industrial Commission against departments, agencies and institutions of the State caused by negligence of an employee, officer, agent or involuntary servant of the State. Guthrie v. State Ports Authority, supra.; Zimmer v. N.C. Department of Transportation, 87 N.C.App. 132, 360 S.Ed.2d 115 (1987).
This immunity and waiver of immunity for claims based on negligence includes claims based on medical malpractice against state agencies. The State has liability for such claims to a maximum award of $100,000 per claim as provided in the State Tort Claims Act, G.S. § 143-291. There is no liability for amounts in excess of that limit, and, therefore, the State is protected against excessive judgments.
With regard to the second part of your question, we know of no authorization that presently exists for the purchase and possession of medical liability insurance covering state agencies. There is, however, statutory authority for state agencies to purchase and possess medical liability insurance covering state employees.
This is significant because of the potential personal liability of state employees for injuries caused by their negligence in the performance of their duties. "Public officers" are immune from personal liability for "mere negligence" but individual "public employees" are not immune and may be held personally liable for their negligence. Reid v. Roberts, 112 N.C. App. 222, 435 S.E.2d 116 (1993); Coleman v. Cooper, 102 N.C. App. 650, 403 S.Ed.2d 577 (1991).
The reasons for authorizing state agencies to purchase medical liability insurance for state employees vary according to the particular concerns of all parties involved. Sovereign immunity protects the State but does not always adequately compensate a victim of negligent medical treatment or protect and limit the personal liability of the state employee who provides medical treatment, which has led in the past to problems in recruiting and training qualified medical personnel at state institutions.
Authority to purchase insurance is found in several different statutes. The Defense of State Employees, Medical Contractors and Local Sanitarians Act, G.S. § 143-300.2, et seq., provides that the State may provide for the defense of any civil or criminal action brought against an officer, agent or employee of the State on account of an act done or omission made in the scope and course of his office, agency or employment, and to pay settlements or judgments not to exceed the amount allowed in the State Tort Claims Act ($100,000 per claim). This is obviously not insurance but is protection applicable to all state employees and includes claims alleging medical malpractice. This Act also relates to authorized insurance coverage.
G.S. § 58-31-25 and § 58-32-15 authorize the purchase of excess professional liability insurance covering officers and employees of any state department, institution or agency. This insurance is for coverage in excess of that provided by the State Tort Claims and Defense of State Employees Act (presently $100,000 per claim). The insurance is placed through the Public Officers and Employees’ Liability Insurance Commission, and premiums are paid by the employing agency.
These statutes authorize the purchase of excess medical liability insurance coverage. However, the excess insurance coverage now in effect for state employees excludes claims for medical, nursing and dental malpractice.
In the 1993 Session laws, Chapter 321, Section 214, the General Assembly authorized the Secretaries of the Departments of Human Resources, Environmental Health and Natural Resources and Correction to provide medical liability coverage not to exceed $1,000,000.00 on behalf of employees licensed to practice medicine or dentistry who are providing such services pursuant to their state employment or training. The coverage allowed may include commercial liability insurance or self-insurance. This coverage is not "excess coverage" and has nothing to do with the Defense of State Employees Act. This authority was first granted by the General Assembly in the 1989 Session Laws, Chapter 752, Section 129, continued in the 1991 Session Laws, Chapter 689, Section 114, and modified slightly in the 1992 Session Laws, Chapter 900, Section 131.
The University of North Carolina (and UNC Hospitals) is authorized pursuant to G.S. § 116-219, et seq., to purchase insurance or create self-insurance trusts to provide coverage "for personal tort liability to individual health-care practitioners who are employees, agents or officers of the University institutions or affiliated health-care entity. Again, this coverage is for individuals.
Community colleges are not state institutions but are included in the provisions of the State Tort Claims Act and Defense of State Employees Act. G.S. § 115D-58.12 and § 115D-24 authorize boards of trustees of community colleges to purchase liability insurance to cover damages caused by the negligence of agents and employees of such boards and institutions. This authority includes potential coverage for medical negligence or malpractice.
We hope this satisfactorily answers your questions. If you have additional questions or wish to discuss this issue further, please contact us.
Ann Reed Senior Deputy Attorney General
Elisha H. Bunting, Jr.
Special Deputy Attorney General