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Lorman v. City of Rutland

Supreme Court of Vermont

June 29, 2018

Keith & Jackie Lorman, Charles & Melissa Gallagher, and Daniel & Alicia Daly
City of Rutland

          On Appeal from Superior Court, Rutland Unit, Civil Division Helen M. Toor, J.

          Helen M. Toor, J. Karl C. Anderson of Anderson & Eaton, P.C., Rutland, for Plaintiffs-Appellants.

          Marikate E. Kelley and Philip C. Woodward of Woodward & Kelley, PLLC, North Ferrisburgh, for Defendant-Appellee.

          PRESENT: Reiber, C.J., Robinson, Eaton and Carroll, JJ., and Wesley, Supr. J. (Ret.), Specially Assigned

          REIBER, C.J.

         ¶ 1. Plaintiffs sought relief from the City of Rutland after suffering sewage backups in their homes. The trial court granted summary judgment to the City, concluding that plaintiffs failed to adequately support their negligence, nuisance, trespass, and constitutional takings claims. Plaintiffs appeal, arguing that they produced sufficient evidence to survive summary judgment. We affirm the court's decision.

         ¶ 2. The following facts are undisputed unless otherwise noted. Plaintiffs live on Butterfly Avenue in the City of Rutland. The City's sewage/stormwater system is over 100 years old. Two combined sewer/stormwater lines run under plaintiffs' street. Originally, these pipes consisted of a 12-inch vitrified clay pipe on the western line and a parallel 15-inch vitrified clay pipe on the eastern line. In 1987, the City conducted a video inspection of the pipes, which showed that the pipes were cracked, structurally unsound, and that they had significant root intrusion. The following year, based on the root intrusion, engineering recommendations, and financial considerations, the City undertook a so-called slip-lining process that inserted polyethylene sleeves of lesser diameter through the clay pipes. It slip-lined the 12-inch clay pipe on the western line with a 9-inch polyethylene pipe, and it slip-lined the 15-inch clay pipe on the eastern line with a 12-inch polyethene pipe.

         ¶ 3. In May 2014, the City experienced an extremely intense rain and hail storm, accompanied by high winds; 1.3 inches of rain fell in just fifteen minutes. The total rainfall was 1.65 inches. The flow rate at the City's main sewer interceptor rose instantly from approximately 7 million gallons per day (MGD) to almost 70 MGD, and the storm caused 3 million gallons of combined wastewater (domestic sewage and stormwater) to overflow to receiving streams. That day, the City's combined sewer/stormwater line also backed up into the basements of plaintiffs' homes causing property damage.

         ¶ 4. In January 2015, plaintiffs sued the City, asserting that it had been negligent in the design, construction, and/or maintenance and repair of the City's public sewer lines. Plaintiffs also raised nuisance, trespass, and constitutional takings claims. With respect to their negligence claim, plaintiffs alleged that the City had not acted reasonably or prudently in designing the lines and in deciding to slip-line them in 1988. They further asserted that the City had a duty to keep and maintain the lines in a reasonably safe and proper condition for the public's use and benefit. Plaintiffs sought damages as well as injunctive relief requiring the City to remedy the storm/wastewater system near their property to prevent future damages.[1]

         ¶ 5. The City moved for summary judgment. In addition to the facts recited above, the City produced evidence that it has had an excessive number of combined storm/sewer overflows due in part to the age of its infrastructure and that it has limited resources in addressing these issues. The City also noted that the state and the federal governments imposed significant regulatory constraints on its actions and priorities, which was one of many factors that influenced the City's decisions regarding the use of its limited funds. Plaintiffs' expert agreed that deciding the priority of projects was a matter of discretion and that such decisions involved the exercise of judgment and the weighing of technical merit and available resources. Based on these and additional proffered facts, the City maintained that it was entitled to summary judgment on numerous grounds, including immunity and plaintiffs' failure to establish causation for the negligence and nuisance claims.

         ¶ 6. Plaintiffs opposed the motion, submitting an affidavit from their expert engineer to supplement the expert's deposition testimony. With respect to their negligence claim, plaintiffs argued that they had produced evidence to show that the cause of the sewage backup in their homes was a combination of a bend in the westernmost pipe and a reduction in flow caused by the slip-lining. The parties disagreed about the degree of the bend in the pipe; they also disagreed whether the slip-lining had reduced the water flow given the root intrusion and other issues with the pre-1988 pipes. Plaintiffs also challenged the City's position regarding their nuisance, trespass, and takings claims.

         ¶ 7. In an April 2017 order, the court granted summary judgment to the City. It concluded that plaintiffs could not establish causation for purposes of their negligence claim. It thus did not reach the City's remaining arguments regarding this claim. Given the absence of causation, the trial court also rejected plaintiffs' nuisance claim. As to trespass, the court found that plaintiffs needed to show an intentional act and that there was no such allegation or evidence of that here. Finally, the court found that plaintiffs failed to present sufficient evidence to support their takings claim. This appeal followed.

         ¶ 8. We review a grant of summary judgment using the same standard as the trial court. Richart v. Jackson, 171 Vt. 94, 97, 758 A.2d 319, 321 (2000). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." V.R.C.P. 56(a). "When a defendant moves for summary judgment, [it] satisfies [its] legal burden by presenting at least one legally sufficient defense that would bar plaintiff's claim." Smith v. Day, 148 Vt. 595, 597, 538 A.2d 157, 158 (1987) (quotation omitted). We conclude that the City was entitled to summary judgment on plaintiffs' claims, although parts of our decision rest on different grounds than those identified by the trial court. See Hudson v. Town of E. Montpelier, 161 Vt. 168, 170, 638 A.2d 561, 563 (1993) (recognizing that Supreme Court need not adopt trial "court's rationale in affirming its conclusion"). We conclude as a matter of law that the City is immune from plaintiffs' negligence, trespass, and nuisance claims because it was exercising discretionary, policymaking authority when it designed the sewer/stormwater lines and when it decided to slip-line certain pipes rather than replace the lines entirely. As to plaintiffs' takings claim, we agree with the trial court that plaintiffs failed to present sufficient evidence to survive summary judgment. We thus affirm the court's decision.

         I. Immunity A. Governmental/Proprietary Distinction

         ¶ 9. We begin with the question of immunity. "Municipal immunity is a common-law doctrine dating back in Vermont to the mid 1800s." Hillerby v. Town of Colchester, 167 Vt. 270, 272, 706 A.2d 446, 447 (1997) (discussing history of municipal immunity). Vermont is one of few states that continue to distinguish between a municipality's "governmental" and "proprietary" functions in assessing whether a municipality is subject to tort liability. Id. "Absent insurance coverage, those functions which are governmental are protected by the doctrine of sovereign immunity, while, in contrast, the governmental unit will be liable for injuries caused or sustained in furtherance of its proprietary functions." Dugan v. City of Burlington, 135 Vt. 303, 304, 375 A.2d 991, 992 (1977). "The rationale for this is that municipalities perform governmental responsibilities for the general public as instrumentalities of the state; they conduct proprietary activities only for the benefit of the municipality and its residents." Hillerby, 167 Vt. at 272, 706 A.2d at 447. We have long held that the "construction" and "repair" of sewer systems are proprietary functions. Winn v. Vill. of Rutland, 52 Vt. 481, 491-93 (1880) (concluding that municipality has "duty to exercise ordinary care and skill in the construction of sewers" and once constructed, has duty "to keep it in repair," but not addressing whether municipality could be liable "by reason of any fault in the general system of sewerage adopted, or in the plan and location selected for the sewer in question," which "would merit more extended consideration"); Fuller v. City of Rutland, 122 Vt. 284, 286-87, 171 A.2d 58, 59 (1961) (citing Winn and concluding that municipality was engaged in proprietary function when employees dug hole in road in attempt to locate sewer; reiterating that "building and maintaining" sewers is proprietary function). "The general rule is that where a municipality assumes the management of its sewer system, it is bound to use reasonable diligence and care to see that such sewer is not clogged with refuse and is liable for negligence in the performance of such duty to a property owner injured thereby." Stoneking v. Orleans Vill., 127 Vt. 161, 166-67, 243 A.2d 763, 766 (1968).

         ¶ 10. We have continued to adhere to the governmental/proprietary distinction although it "has been criticized by courts and commentators for many years as unworkable." Hudson, 161 Vt. at 177 n.3, 638 A.2d at 567 n.3 (recognizing that "Vermont is one of a minority of states that retains the governmental-proprietary distinction"). We have reasoned that despite its "inherent difficulties," this "doctrine strikes the best available balance between the municipality's need to function for the good of its citizens and the injured tort victim's right to recover from such injuries," and "[i]t ensures that the municipality's sovereign immunity is not applied so broadly that it denies unnecessarily a remedy to a party injured by a municipality's actions." Vt. Gas Sys., Inc. v. City of Burlington, 153 Vt. 210, 214, 571 A.2d 45, 48 (1989).

         B. Discretionary-Function Immunity

         ¶ 11. At the same time, however, courts have long recognized a distinction between a municipality's planning and design decisions regarding sewer and water systems and its acts of constructing and maintaining such systems. See Winn, 52 Vt. at 491 (recognizing distinction). As the U.S. Supreme Court has explained:

The duties of the municipal authorities in adopting a general plan of drainage, and determining when and where sewers shall be built, of what size and at what level, are of a quasi judicial nature, involving the exercise of deliberate judgment and large discretion, and depending upon considerations affecting the public health and general convenience throughout an extensive territory; and the exercise of such judgment and discretion in the selection and adoption of the general plan or system of drainage is not subject to revision by a court or jury in a private action for not sufficiently draining a particular lot of land. But the construction and repair of sewers, according to the general plan so adopted, are simply ministerial duties; and ...

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