Fodness v. City of Sioux Falls

• Decision Date: 29 July 2020
• Docket Number: #28965
• Citation: 947 N.W.2d 619
• Parties: Emily FODNESS, Christine Fodness and Michael Fodness, Plaintiffs and Appellants, v. CITY OF SIOUX FALLS, Defendant and Appellee.
• Court: South Dakota Supreme Court

947 N.W.2d 619

Emily FODNESS, Christine Fodness and Michael Fodness, Plaintiffs and Appellants,

v.CITY OF SIOUX FALLS, Defendant and Appellee.

#28965

Supreme Court of South Dakota.

ARGUED JANUARY 14, 2020

OPINION FILED July 29, 2020

DANIEL R. FRITZ, TIMOTHY R. RAHN of Ballard Spahr LLP, Sioux Falls, South Dakota, Attorneys for plaintiffs and appellants.

JAMES E. MOORE, ALEXIS A. WARNER of Woods Fuller Shultz & Smith P.C., Sioux Falls, South Dakota, Attorneys for defendant and appellee.

KERN, Justice

[¶1.] Emily Fodness suffered extensive injuries when her apartment collapsed after a contractor demolished certain portions of a load-bearing wall. Emily and her parents brought a negligence action against the City of Sioux Falls (the City) for issuing a building permit for the project. The City moved to dismiss, arguing that the public duty rule barred the suit and that the Fodnesses failed to plead sufficient facts to establish that the City owed them a special duty, which would bring them within an exception to the rule. The circuit court granted the City's motion to dismiss and denied the Fodnesses’ motion to amend their complaint. The Fodnesses appeal. We affirm.

Facts and Procedural History

[¶2.] In April 2016, the City and Hultgren Construction LLC (Hultgren) began discussions about renovating the two buildings in downtown Sioux Falls located at and adjacent to 136 South Phillips Avenue (the Property). Hultgren intended to remove portions of the load-bearing wall separating the interior of the two buildings to create a single, open area for commercial development. Emily and her parents, Christine and Michael (the Fodnesses), lived in an upstairs apartment in one of the buildings. Hultgren applied to the City for a building permit for interior demolition but did not include with its permit application any architectural or structural plans for its proposed work. The City issued the building permit, and Hultgren posted the permit outside the Property and began demolition work at the site.

[¶3.] On December 2, 2016, Hultgren demolished certain portions of a load-bearing wall separating the two adjoining buildings. Michael was on the ground level when he ran out after feeling the building shift. He escaped before the building collapsed. Christine was not at home, but Emily was asleep in her room upstairs when the apartment collapsed. Emily dropped to the story below and became trapped by the rubble that fell from the walls and ceilings above her. Fortunately, Emily found her cellphone and communicated with family and first responders who rushed to her aid. Emily remained trapped for approximately four hours before rescuers were able to remove her from the debris and transport her to the hospital for emergency treatment for her injuries.

[¶4.] Emily, Christine, and Michael brought an action against the City, alleging one count of negligence and seeking compensation for their physical and emotional injuries. In their complaint, the Fodnesses alleged that the City was negligent in issuing Hultgren a building permit for interior demolition without adequate architectural or structural plans, particularly in light of its alleged knowledge of Hultgren's violation of the conditions of past permits. According to the Fodnesses, the City was familiar with Hultgren's practices because the City had previously issued approximately 33 building permits to Hultgren from February 2013 to September 2016. They alleged the City received numerous complaints from citizens and businesses that Hultgren was failing to comply with, and working beyond, the scope of its building permits.

[¶5.] While the Fodnesses did not use the phrase "public duty" in their complaint, they did allege that the City breached "special duties" to them, that they relied on the City's actions, and that the City's actions increased their risk of harm. They contended that the City was uniquely aware of the particular dangers and risks the Fodnesses would be exposed to when the City issued the permit. The Fodnesses alleged that they would not have continued to reside at the Property during the Hultgren construction project had the City notified them of the dangers the City knew existed. Thus, the Fodnesses claimed the City breached its special duty to them by exposing their family to known, dangerous, and life-threatening conditions that would not have occurred except for the City's acts and omissions.

[¶6.] The City moved to dismiss for failure to state a claim under SDCL 15-6-12(b)(5). The City argued that it owed no duty to the Fodnesses under the public duty rule and could not be subject to liability for negligently issuing a building permit. Moreover, the City argued that the Fodnesses failed to establish that the City owed them a special duty to bring them within the exception to the public duty rule because they could not satisfy any of the factors set forth in our holding in Tipton v. Town of Tabor (Tipton I ), 538 N.W.2d 783 (S.D. 1995).

[¶7.] In response, the Fodnesses filed a brief in opposition to the motion to dismiss and moved to amend their complaint. The circuit court held oral argument on the motions and took the matter under advisement. The court issued a written opinion granting the City's motion to dismiss because the complaint failed to allege sufficient facts to establish that the City owed the Fodnesses a special duty of care. The court also denied the Fodnesses’ motion to amend because they failed to show how an amendment would cure the defects in their original complaint. The circuit court entered an order of dismissal on March 19, 2019.

[¶8.] The Fodnesses appeal raising two issues for review, which we restate as follows:

1. Whether the circuit court erred in dismissing the Fodnesses’ complaint under SDCL 15-6-12(b)(5).

2. Whether the circuit court abused its discretion in denying the motion for leave to amend the complaint.

Analysis

1. Whether the circuit court erred in dismissing the Fodnesses’ complaint under SDCL 15-6-12(b)(5).

[¶9.] "An appeal of a motion to dismiss presents a question of law and our standard of review is de novo, with no deference given to the trial court's legal conclusions." Id. ¶ 4, 659 N.W.2d at 22. A motion to dismiss "is viewed with disfavor and is rarely granted." Guthmiller v. Deloitte & Touche, LLP , 2005 S.D. 77, ¶ 4, 699 N.W.2d 493, 496. South Dakota still adheres to the rules of notice pleading, and therefore, a complaint need only contain "[a] short and plain statement of the claim showing that the pleader is entitled to relief[.]" Gruhlke v. Sioux Empire Fed. Credit Union, Inc. , 2008 S.D. 89, ¶ 17, 756 N.W.2d 399, 409 (quoting SDCL 15-6-8(a)(1) ).

[¶10.] "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. ¶ 17 n.14, 756 N.W.2d at 409 n.14. Whether the complaint states a valid claim for relief is viewed "in the light most favorable to the plaintiff" and examined "to determine if the allegations provide for relief on any possible theory." Osloond v. Farrier , 2003 S.D. 28, ¶ 4, 659 N.W.2d 20, 22.

[¶11.] The Fodnesses’ complaint alleges a single count of negligence against the City of Sioux Falls for issuance of the building permit. A cause of action for negligence "against a public entity ... requires [proof of] the existence of a duty, a breach of that duty, and causation." Maher v. City of Box Elder , 2019 S.D. 15, ¶ 8, 925 N.W.2d 482, 485 (citing Tipton v. Town of Tabor (Tipton II ), 1997 S.D. 96, ¶ 12, 567 N.W.2d 351, 357 ). "Before liability may be imposed on the theory of negligence there must be a duty on the part of the defendant to protect a plaintiff from injury." Kuehl v. Horner (J.W.) Lumber Co. , 2004 S.D. 48, ¶ 10, 678 N.W.2d 809, 812. This duty depends on "whether a relationship exists between the parties such that the law will impose upon the defendant a legal obligation of reasonable conduct for the benefit of the plaintiff." Zerfas v. AMCO Ins. Co. , 2015 S.D. 99, ¶ 10, 873 N.W.2d 65, 69. "Under the public duty doctrine government entities are generally determined to owe governmental duties only to the public, not individuals." McDowell , 2018 S.D. 1, ¶ 36, 906 N.W.2d at 409 (citing Tipton II , 1997 S.D. 96, ¶ 10, 567 N.W.2d at 356 ). "Because such duties exist only for the protection of the public, they cannot be the basis for liability to a particular class of persons." Id.

[¶12.] The Fodnesses allege the City violated its public duty by failing to follow its own building code, and although they failed to cite any provision of the code in their complaint, the applicable provisions were identified for the circuit court during the motions hearing. The City's building code adopted the International Building Code 2015 edition, which was in effect when the City issued the permit to Hultgren. See Sioux Falls Building Code § 150.017 (2015) (setting forth applicable portions of the 2015 international building code). Section 107.1 provides:

Submittal documents consisting of one complete set of hard copy plans ... with other construction documents , statement of special inspections , geotechnical reports and other data shall be submitted with each permit application. The construction documents shall be prepared by a registered design professional where required by the statutes of the jurisdiction in which the project is to be constructed. Where special conditions exist, the building official is authorized to require additional construction documents to be prepared by a registered design professional.

(Emphasis in original.)¹ The building code further provides that:

No person shall demolish or wreck a building or structure without first obtaining a razing permit .... Construction documents and a schedule for demolition shall be submitted where required by the building official. Where such information is required, no work shall be done until such construction

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