Opinion
No. A06-1795.
Filed July 24, 2007.
Appeal from the District Court, Dakota County, File No. C1-05-8558.
Robert B. Bauer, Kristine K. Nogosek, Jessica L. Sanborn, Severson, Sheldon, Dougherty Molenda, P.A., (for appellants).
Jana O'Leary Sullivan, League of Minnesota Cities, Minnesota (for respondent).
Considered and decided by Lansing, Presiding Judge; Halbrooks, Judge; and Hudson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
Appellants Gary and Doris Schmitz challenge the district court's grant of summary judgment in favor of respondent City of Farmington. Because the district court erred by concluding that (1) respondent was statutorily immune from liability because it relied entirely on the professional and scientific judgment of its contractors regarding dewatering; (2) none of the exceptions for nonliability of an employer for the acts of its independent contractor applied; and (3) appellants could not maintain an action for inverse condemnation, we reverse.
FACTS
In April 2003, respondent approved its Main Street reconstruction project. It entered into a contract with a general contractor to perform the first phase of the project, and construction began in August 2003. As part of this project, a new sanitary-sewer system was to be constructed along Willow Street, about 50 feet from appellants' home. To facilitate construction, appellants granted respondent a temporary construction easement on their property, and respondent agreed when construction was completed to restore appellants' property to its condition before construction.
The contract specified that dewatering, which is the removal of groundwater by pumping to lower the water table, might be necessary to excavate the trench and install the pipe, which had to be laid in a dry condition before backfill was added. The contract called for the maintenance of the groundwater level at one foot below the pipe invert; it required measuring the rate of flow from the dewatering pumps at the beginning of the process and once per week thereafter, and keeping a daily log of hours pumped.
The general contractor contracted with a subcontractor to design and implement the dewatering project. In the permit notification form required for dewatering, the city and its contractor estimated that 44 million gallons of water would be pumped out to lower the water table 10 to 15 feet. This was achieved by drilling a series of 30-foot-deep wells, installing pumps, and laying pipes to discharge the pumped groundwater to the Vermillion River. Four wells were operated at a time, continuously pumping water at a rate of 500 gallons per minute. With the right of entry authorized by the easement, a drain trench leading to the river was constructed on the western corner of appellants' property. During the dewatering process, respondent's agent visited the dewatering site almost daily.
After the dewatering process was completed, significant cracks appeared in the foundation walls, chimney, interior walls, and basement floor of appellants' house. According to appellants' measurements, the western side of their house settled an estimated two and one-half inches and the wide crack in the basement floor was described as essentially splitting their house in half. Appellants informed the city, the contractor, the subcontractor, and their respective insurance companies about the damage to their home. Each denied liability. Appellants consulted with an engineering firm, which concluded that the settling of the ground under appellants' home due to the dewatering probably caused the damage.
In June 2005, appellants initiated this action against respondent, alleging that the dewatering caused the damage to their home. They sought damages for negligence, and, in the alternative, brought a petition for a writ of mandamus for inverse condemnation.
Respondent moved for summary judgment. For purposes of summary judgment, causation and damages were not in dispute. The district court granted respondent's motion for summary judgment, concluding that (1) respondent was statutorily immune from liability; (2) respondent could not be held vicariously liable for the independent contractors' conduct; and (3) inverse condemnation was not appropriate. This appeal follows.
DECISION
"On appeal from a grant of summary judgment, the role of this court is to review whether genuine issues of material fact exist and whether the trial court erred in its application of the law." Zimmer v. Carlton County Co-op Power Ass'n, 483 N.W.2d 511, 513 (Minn.App. 1992), review denied (Minn. Jun. 10, 1992). "[T]he reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Appellate courts review de novo the district court's application of the law. Frost-Benco Elec. Ass'n v. Minn. Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).
I
Appellants argue that the district court erred by concluding that respondent was statutorily immune from their negligence claim. "The existence of governmental immunity is purely a question of law, distinct from a defense to the merits of a plaintiff's claim." Unzen v. City of Duluth, 683 N.W.2d 875, 878 (Minn.App. 2004), review denied (Minn. Oct. 27, 2004). "Whether immunity applies is a legal question, which is reviewed de novo. The party asserting the defense of immunity has the burden of proof." Christopherson v. City of Albert Lea, 623 N.W.2d 272, 275 (Minn.App. 2001) (citations omitted).
Generally, municipalities are subject to tort liability. Minn. Stat. § 466.02 (2006). But municipalities have statutory immunity from "[a]ny claim based upon the performance or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused." Minn. Stat. § 466.03, subd. 6 (2006). "Statutory immunity is based on the separation of powers and is intended to prevent judicial review, through the medium of a tort action, of executive and legislative policy-making decisions." Fear v. Indep. Sch. Dist. 911, 634 N.W.2d 204, 210 (Minn.App. 2001), review denied (Minn. Dec. 11, 2001). Appellate courts interpret the discretionary-function exception narrowly. Conlin v. City of St. Paul, 605 N.W.2d 396, 400 (Minn. 2000).
Although most acts by municipalities require some exercise of judgment and discretion, not every governmental act is entitled to immunity protection. Angell v. Hennepin County Reg'l Rail Auth., 578 N.W.2d 343, 346 (Minn. 1998). Statutory-immunity protection is limited to discretionary acts that constitute policy-making activities that are legislative or executive in nature. Id. at 345-46. These involve "the evaluation of factors such as the financial, political, economic, and social effects of a given plan or policy." Terwilliger v. Hennepin County, 561 N.W.2d 909, 912 (Minn. 1997) (quotation omitted). "In contrast, operational or day-to-day decisions involving the application of scientific or technical skills are not protected by statutory immunity." Angell, 578 N.W.2d at 346. The "professional evaluation of complex factors" does not convert an operational function into policy-making, "absent a demonstration that immunity is essential to avoid judicial interference with governmental policymaking." Sota Foods, Inc. v. Larson-Peterson Assoc., Inc., 497 N.W.2d 276, 280 (Minn.App. 1993) (quotation omitted). Further, the implementation of established policy, in contrast to formulating the policy, is generally not subject to immunity. Angell, 578 N.W.2d at 346.
When determining whether immunity is appropriate, the first step is to identify the challenged conduct. Conlin, 605 N.W.2d at 400. Appellants do not dispute that respondent's decisions to proceed with the project and to contract with the general contractor are protected by immunity. See Chabot v. City of Sauk Rapids, 422 N.W.2d 708, 710-11 (Minn. 1988) (holding that decision of the city not to make major capital improvements to its existing drainage system is a policy decision protected by immunity). But appellants challenge respondent's conduct concerning the dewatering and its "failure to ensure that the project was completed so as not to injure [appellants'] property."
The district court ruled that "the city relied entirely on the professional and scientific judgment of its independent contractors to perform the necessary dewatering." In effect, the court ruled that the city itself did not engage in any non-immunized acts for which it could be held liable.
Appellants argue that dewatering was an operational act that did not involve weighing social, political, or economic issues. Respondent maintains that dewatering was part of the overall decision to proceed with the project so that it is immunized. While the decision to dewater as part of the overall decision to proceed with the project is immunized, appellants here are challenging the implementation of the dewatering project, which they claim involved the application of scientific or technical skills, which is not immunized. Angell, 578 N.W.2d at 346. The issue for appellants, as the district court recognized, is whether respondent, as opposed to its contractor and subcontractor, engaged in this conduct, and whether the general rule that an employer is not liable for the acts of its independent contractors protects respondent from liability.
First, appellants argue that the district court erroneously found that the city relied solely on the judgment of its contractors for the dewatering process, and they contend that the engineers who designed the project were acting as the city's agents or employees. But appellants are not alleging negligent design. Furthermore, according to the deposition of respondent's city engineer, the subcontractor designed the dewatering project.
Next, appellants contend that the contract specified that the contractor was to dewater before laying the sewer lines, and the contractor and the subcontractor were following the instructions of the respondent. This argument is relevant to whether respondent's control over the contractor creates an exception to an employer's nonliability for independent contractors, rather than the issue of immunity and we will address this below.
Finally, we address appellants' broader argument that respondent failed to ensure that the project was completed so as not to injure their property. First, this is more relevant to an exception to an employer's nonliability for the conduct of an independent contractor, discussed below, rather than immunity. Furthermore, decisions on supervision are considered policy-level activities protected by statutory immunity. Fear, 634 N.W.2d at 212. Consequently, any claims appellants may have of negligent supervision are subject to immunity.
But here, the evidence shows that one of respondent's agents visited the dewatering site almost daily, while another visited periodically. Respondent failed to connect their visits to any evaluation or balancing of social, political, or economical considerations. See Nusbaum v. County of Blue Earth, 422 N.W.2d 713, 722 (Minn. 1988) (stating that the burden is on the government to show that its conduct "was of a policy-making nature involving social, political, or economical considerations"). Instead, the visits primarily involved the exercise of professional and scientific judgment — conduct not protected from liability. Respondent has not offered any evidence that this conduct required the balancing of policy objectives. Accordingly, we conclude that respondent is not entitled to statutory immunity as to the monitoring, but we agree with the district court there was no showing that respondent itself otherwise engaged in the protected conduct.
II
Appellants next argue that the district court erred as a matter of law by concluding that none of the exceptions to the general rule of nonliability of employers for the acts of its independent contractors applied. Generally, "an employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants." Anderson v. State, Dep't of Natural Res., 693 N.W.2d 181, 189 (Minn. 2005). But there are numerous exceptions to this general rule. Brown v. Gustafson, 264 Minn. 126, 130, 117 N.W.2d 763, 766 (1962).
Consequently, we must examine whether respondent, as the employer of independent contractors who used nonimmunized scientific or technical expertise in conducting the dewatering, is subject to one of these exceptions to the general rule of employers' nonliability for the acts of their independent contractors.
1. Control
First, the so-called "control exception" provides that "an employer of an independent contractor may be found negligent when it retains detailed control over a project and then fails to exercise reasonably careful supervision over that project." Anderson, 693 N.W.2d at 189; see Unzen, 683 N.W.2d at 881 (noting that in determining whether one is an employee or an independent contractor, "the right of the employer to control the means and manner of employment" is the most important factor). Here, the district court concluded that "there is no evidence to suggest the city retained control over this project." We agree.
Appellants rely on the language of the contract between respondent and its general contractor to support their argument that the respondent retained control, and they cite various provisions to support their argument. But we have examined the provisions concerning pumping and dewatering, which state that the contractor shall:
1. Provide draining, pumping, dewatering, and cleaning operations necessary to complete the Work.
2. Provide all necessary pumping to remove all surface water and groundwater from structures as required for the Work. Provide erosion control measures for discharge of water.
3. Protect Site and adjacent property to avoid damage.
Further, the contractor was to dewater as necessary, measure the rate of flow from the pumps weekly, and keep a daily log of the hours pumped.
These provisions do not support appellant's argument. The district court properly concluded that the control exception to the general rule that the employer of a independent contractor is not liable for harm that the latter causes does not apply.
2. Dangerous conditions
Another exception to the nonliability of employers for the acts of independent contractors arises for "work which is specifically, peculiarly, or `inherently' dangerous." Lakeview Terrace Homeowners Ass'n v. Le Rivage, Inc., 498 N.W.2d 68, 71 (Minn.App. 1993) (citing Restatement (Second) of Torts § 409 cmt. b (1965)); 18 Eugene McQuillin, The Law of Municipal Corporations § 53.76.30 (3d ed. rev. vol. 2003) (addressing exception as applied to municipalities). Under this exception, the municipality is liable when "the act which causes the injury is one which the contractor is employed to perform, and the injury results from the act of performance and not from the manner of performance." McQuillin, supra, § 53.76.30 (footnote omitted).
A nondelegable duty is imposed on an employer of an independent contractor "if the trier of fact finds the `work' involves either a `peculiar risk' or a `special damage.'" Conover v. N. States Power Co., 313 N.W.2d 397, 404-05 (Minn. 1981) (holding that doctrine does not apply to employees of independent contractor for negligence of contractor) (citing Restatement, supra, §§ 416, 427). The standard of knowledge as to the employer is essentially whether it knew or should have known. Restatement, supra, §§ 416, 427. Section 416, addressing work that is dangerous in the absence of special precautions, provides:
One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.
Peculiar risk is defined as
special risks, peculiar to the work to be done, and arising out of its character, or out of the place where it is to be done, against which a reasonable man would recognize the necessity of taking special precautions. . . . [It] does not mean that the risk must be one which is abnormal to the type of work done, or that it must be an abnormally great risk. It has reference only to a special, recognizable danger arising out of the work itself.
Restatement, supra, §§ 413 cmt. b (providing definition), 416 cmt. b (referring to definition of "peculiar risk" in section 413). Demolishing buildings, tearing down walls, and performing excavation work are examples of work to which this definition is applicable. Id. § 413 cmt. c.
Similarly, section 427, which is closely related to section 416, addressing negligence as to danger inherent in the work, provides:
One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractor's failure to take reasonable precautions against such danger.
Restatement, supra, § 427 cmt. a. This section applies when the work "involves a risk, recognizable in advance, of physical harm to others which is inherent in the work itself, or normally to be expected in the ordinary course of the usual or prescribed way of doing it, or that the employer has special reason to contemplate such a risk under the particular circumstances under which the work is to be done." Id. cmt. b. It often applies to "the use of instrumentalities, such as fire or high explosives, which require constant attention and skillful management in order that they may not be harmful to others." Id. cmt. c. It also applies to work that is not highly dangerous but "involves a risk recognizable in advance that danger inherent in the work itself, or in the ordinary or prescribed way of doing it, may cause harm to others." Id.
The district court concluded that this exception did not apply because there was no evidence in the record "to suggest that the city had either actual or constructive notice that dewatering could cause property damage or that dewatering was either inherently dangerous or dangerous in the absence of special precautions." We must disagree. First, the contract provides that as to pumping and dewatering, the contractor is to "Protect Site and adjacent property to avoid damage," which implies that respondent was aware that damage to adjacent property could occur. Second, in the permit notification form, the city and its contractor estimated that some 44 million gallons of water would be removed, using wells that are 30 feet deep to lower the water some 10 to 15 feet. We believe that there is a genuine issue of material fact as to whether a reasonable person should be aware that displacing some 44 million gallons of water could pose a peculiar risk of harm requiring special precautions, such as the displacement of earth in an excavation does. Restatement, supra, § 413 cmt. c. Similarly, pumping that amount of water could also be likened to the use of fire or high explosives, requiring "constant attention and skillful management" to avoid harm. Restatement, supra, § 427 cmt. c. Respondent arguably recognized this by its contractual requirement that the contractor was to measure the rate of flow from the pumps weekly and to keep a daily log of the hours pumped, as well as by the almost daily visits by respondent's agent.
Respondent asserts that the language of § 413 of the Restatement, which refers to "physical harm," is arguably limited to claims of personal injury. But "physical harm" as used by the Restatement (Second) of Torts denotes "the physical impairment of the human body, or of land or chattels." Restatement, supra, § 7(3). "Where the harm is impairment of the body, it is called `bodily harm.'" Restatement, supra, § 7 cmt. e. Consequently, these sections are properly applied to damages for harm to property. Henderson Bros. Stores, Inc. v. Smiley, 120 Cal. App. 3d 903, 912-13 n. 5 (Cal.Ct.App. 1981) (finding no reason to restrict application of Restatement (Second) of Torts § 416 to bodily injury in claim for damages after tar kettle used for roofing erupted, spewing flames and setting fire to plaintiff's building).
3. Non-delegable duty to public
We next consider appellants' argument that the district court erred when it concluded that respondent "did not have a nondelegable duty" to protect appellants' private property, except insofar as it related to keeping the surrounding public areas and roads in reasonably safe condition. "The existence of a duty generally is a question of law for [appellate courts] to decide de novo." Anderson, 693 N.W.2d at 186.
Appellants cite the provision in the construction easement in which respondent agreed to restore their land to the condition in which it existed before construction, and they argue that this imposed a duty on respondent to protect their property from harm. Appellants did not seek recovery based on this provision in their complaint, it does not appear that they raised it in response to respondent's summary-judgment motion, and the district court did not address it in its decision. Consequently, we decline to address this issue on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (holding that generally, reviewing court should consider only issues raised to and decided by the district court).
Relying on Chabot, appellants argue that the city has a fundamental duty to repair, maintain, and operate a sewer. But in Chabot, the court stated that while there is a duty to repair and maintain, there is no duty to build a sewer. Chabot, 422 N.W.2d at 712. Further, as discussed above, a city decision to improve a sewer system is immunized. Id. at 710-11.
Appellants also argue that a person under a duty to the public has a non-delegable duty to see that work is carefully performed to avoid injury to others. See Lamb v. S. Unit Jehovah's Witnesses, 232 Minn. 259, 263, 45 N.W.2d 403, 406 (1950) (addressing duty to public, when church engaged independent contractor to connect church building to sewer main, trench on boulevard was filled in negligently, and pedestrian on boulevard was injured). In such a case, when injurious consequences must be expected to arise, an owner cannot relieve itself of liability by employing another. Id. at 264, 45 N.W.2d at 407. But Lamb is distinguishable because it addresses harm suffered on a public street. Id. at 263, 45 N.W.2d at 406. The rule in Lamb does not apply to private places; likewise, the justification for shifting to the employer of an independent contractor the duty of reasonable conduct for the protection of the public also does not apply. Lakeview Terrace, 498 N.W.2d at 71-72.
4. Removal of lateral support
Finally, we briefly address appellants' claim that there is a genuine issue of material fact as to whether respondent is liable for damages caused by removal of lateral support, on the theory that this was the result of the dewatering.
"[E]very person has the right to the lateral support of the land adjoining his and is entitled to damages for its removal." Brewitz v. City of St. Paul, 256 Minn. 525, 531, 99 N.W.2d 456, 461 (1959) (addressing claim against city for damages from removal of lateral support caused by grading). The district court here distinguished Brewitz on the ground that the city itself, rather than an independent contractor, removed the lateral support by lowering the grade of a nearby street.
Appellants argue that under Restatement (Second) of Torts § 422A (1965), the employer of an independent contractor in these circumstances is subject to the same liability for the contractor's withdrawal of lateral support as if the employer had retained the work in his own hands. Generally, section 422A applies to damage to the land. Id., cmt. b. "On the other hand, if support necessary only for artificial additions to the land is withdrawn, the employer is subject to liability for the negligence of the contractor, but is not liable if the contractor has not been negligent." Id. But we see no reason why the same exceptions to nonliability of an employer for the acts of an independent contractor described above should not also apply here. See Lakeview Terrace, 498 N.W.2d at 71 (referring to exceptions); C. T. Drechsler, Liability of Employer for Injury to Adjoining Realty Resulting from Excavation Work by Independent Contractor on his Premises, 33 A.L.R. 2d 111 §§ 6, 15(a) (1954) (referring to exceptions). Consequently, as discussed in the analysis of the exception for dangerous conditions, there is a genuine issue of material fact on this claim.
III
Appellants argue that the district court erred by concluding that appellants did not have a cause of action for inverse condemnation. When the government has taken property without formally using its eminent-domain power, the property owner has a cause of action for inverse condemnation. Alevizos v. Metro. Airports Comm'n, 298 Minn. 471, 477, 216 N.W.2d 651, 657 (1974).
"Actions for inverse condemnation must be brought to the court through an action in mandamus." Nolan Nolan v. City of Eagan, 673 N.W.2d 487, 492 (Minn.App. 2003), review denied (Minn. Mar. 16, 2004). This court will reverse a district court's order on a petition for a writ of mandamus "only when there is no evidence reasonably tending to sustain the trial court's findings." Id. at 493 (citation omitted). "When the district court's decision on a petition for a writ of mandamus is based solely on a legal determination, this court reviews that decision de novo." Id.
"Mandamus is an extraordinary remedy." N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004). A writ of mandamus may be issued when the petitioner establishes that respondent: "(1) failed to perform an official duty clearly imposed by law; (2) that, as a result, the petitioner suffered a public wrong specifically injurious to the petitioner; and (3) that there is no other adequate legal remedy." Id. (citations omitted). "A district court reviewing a petition for a writ of mandamus must decide whether a taking of property has occurred in the constitutional sense." Nolan, 673 N.W.2d at 492.
Here, the district court did not determine whether respondent's conduct constituted a taking. Instead, the district court concluded that appellants did not petition for a writ of mandamus and that they had an adequate remedy at law. Count II of appellants' complaint, however, is titled "Petition for Writ of Mandamus" and seeks to compel inverse condemnation. Without more specific findings by the district court, it is not possible to determine why the district court did not consider this allegation to be sufficient. In addition, the record shows that the parties litigated this issue on summary judgment. Furthermore, a party can simultaneously pursue a writ of mandamus and tort claims. Nolan, 673 N.W.2d. at 494. This court has stated that judicial efficiency and economy permit a landowner to "seek inverse condemnation by petitioning for mandamus, and alternatively, file a complaint, particularly where. . . it is uncertain whether the landowner will be successful in establishing that a taking occurred." Id. at 495.
We must also address the district court's conclusion that appellants have an adequate remedy at law against the independent contractors. Appellants could institute a negligence action directly against the contractors or bring a legal claim that the dewatering removed lateral support. See Brewitz, 256 Minn. at 535, 99 N.W.2d at 463 (stating that the exercise of a landowner's constitutional right to be compensated for damage to property caused by government conduct is a legal remedy). But "legal remedies are necessarily inadequate if a taking occurred." Nolan, 673 N.W.2d at 494. A "taking" is an interference "with the possession, enjoyment, or value of private property." Minn. Stat. § 117.025, subd. 2 (2006) (defining "taking" in the context of eminent domain). Here, the record shows that appellants alleged that dewatering caused substantial damage to their home and interfered with the possession, enjoyment, and value of appellants' property. Consequently, because there are genuine issues of material fact as to whether a taking has occurred, the district court erred by granting summary judgment on this issue.