Boston & Maine Corp. v. Town of Hampton

• Citation: 987 F.2d 855
• Decision Date: 09 December 1992
• Docket Number: No. 92-1832,92-1832
• Parties: BOSTON & MAINE CORPORATION, Plaintiff, Appellant, v. TOWN OF HAMPTON, Defendant, Appellee. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 855

987 F.2d 855

25 Fed.R.Serv.3d 374

BOSTON & MAINE CORPORATION, Plaintiff, Appellant, v. TOWN OF HAMPTON, Defendant, Appellee.

No. 92-1832.

United States Court of Appeals First Circuit.

Heard Dec. 9, 1992.

Decided March 5, 1993.

Ernest J. Babcock, Portland, ME, with whom Elizabeth A. Germani, Providence, and Friedman & Babcock, Portland, ME, were on brief for plaintiff, appellant.

Thomas F. Kehr, Manchester, with whom Craig L. Staples and Cleveland, Waters and Bass, P.A., Concord, NH, were on brief for appellee.

Before TORRUELLA and CYR, Circuit Judges, and KEETON, ^* District Judge.

KEETON, District Judge.

I. Introduction

On a snowy day in March, 1988, Ms. Jeanne Lynch was driving her car on Exeter Road in Hampton, New Hampshire. At the approach to a bridge, her car skidded over an icy patch of road. She lost control. The car crashed through the side railing of the bridge and fell twenty feet onto the railroad tracks below. The bridge and the railroad tracks were owned by Boston and Maine Corporation ("B & M").

In July 1989, Lynch sued B & M in the Superior Court of New Hampshire (the "Lynch case"). She chose not to sue the Town of Hampton ("Hampton"). Though the record before us is not crystal clear (and because the matter is not decisive, we have not called upon counsel to clarify it), we understand that B & M then filed a separate action against Hampton in the Superior Court, seeking contribution and indemnity. (Hampton Brief at 2.) Also, on November 3, 1989 B & M filed in the Lynch case a "motion to join the Town of Hampton as a direct defendant as to Ms. Lynch...." (Id.) This B & M motion apparently did not assert any claim by B & M against Hampton. In December 1989, B & M moved in the Lynch case for "a nonsuit without prejudice" to its contribution and indemnification rights against Hampton. (Id.) The record before us does not disclose the precise intent or effect of this motion of B & M, as defendant, to have another entity joined as a "direct defendant," when the plaintiff, Lynch, did not choose to make that entity a defendant. It does appear, however, that at the time of this motion in the Lynch case, B & M did not attempt to plead any claim against Hampton for contribution or indemnity in the Lynch case. Apparently B & M was then intending to pursue its separate action against Hampton in the Superior Court. When the Superior Court, in December 1989, allowed B & M's motion for a "nonsuit" in the Lynch case, apparently the Superior Court and the parties treated this as an order eliminating Hampton as a "direct defendant as to Ms. Lynch."

Trial in the Lynch case was to begin on April 1, 1991. Shortly before that date, Lynch settled with B & M. Hampton asserts that a release of any claim by Lynch against Hampton was part of this settlement. B & M, contending that its rights of contribution and indemnity matured when it settled with Lynch, then attempted in the Lynch case to proceed against Hampton to recover from Hampton all or some of the amounts B & M paid to Lynch in settlement. Hampton, having been a defendant only as to Lynch (and then only on the motion of B & M), moved to dismiss after Lynch settled with B & M. The Superior Court granted this motion over B & M's objection.

After the Superior Court dismissed the Lynch case, B & M filed (in 1991), in the United States District Court for the District of New Hampshire, a civil action against Hampton for contribution and indemnity.

In September 1991, Hampton moved to dismiss the federal action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, citing B & M's failure to present factual allegations supporting a claim that Hampton had actual notice of a hazardous condition at the time and place of Lynch's accident. After some procedural maneuvering the district court dismissed the complaint for failure to allege facts sufficient to support a claim of actual notice and opportunity to correct. The Clerk accordingly entered final judgment against B & M.

B & M's appeal from this final judgment presents two issues. First, did the district court err in concluding that the applicable common law of New Hampshire requires actual notice of a hazardous condition and a reasonable opportunity to correct the hazardous condition before a municipality may be held liable for injuries caused by allegedly inadequate winter maintenance of its roadways? Second, did the district court commit reversible error in dismissing for failure to plead with particularity facts sufficient to meet the substantive law standard of municipal liability in New Hampshire?

For the reasons that follow, we affirm the judgment of the district court.

II. Applicable Standard of Care for Municipal Liability

A. Standard of Review

"[A] court of appeals should review de novo a district court's determination of state law." Salve Regina College v. Russell, --- U.S. ----, ----, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991); G.D. v. Westmoreland School Dist., 930 F.2d 942, 946 (1st Cir.1991). "When de novo review is compelled, no form of appellate deference is acceptable." Salve Regina, --- U.S. at ----, 111 S.Ct. at 1224. Nevertheless, "[i]n a case where the controlling question of state law remains unsettled, it is not unreasonable to assume that the considered judgment of the court of appeals frequently will coincide with the reasoned determination of the district court." Id. --- U.S. at ----, 111 at 1224. This is such a case. Although we reach the same holding as did the district court regarding state law, we also note that the precise issue of state law has not been squarely answered in state decisions. Accordingly, we address the issue fully.

B. Common Law Duty of Actual Notice and Reasonable Opportunity to Correct

Almost two decades ago, the New Hampshire Supreme Court abrogated the common law partial immunity from liability historically available to municipalities. Merrill v. City of Manchester, 114 N.H. 722, 332 A.2d 378 (1974). In abolishing the judicially created rule of immunity the Court did not impose "absolute or strict liability on cities and towns." Id. 332 A.2d at 383. Instead, it concluded that "municipalities should be held to the same safety standards as other citizens and that they are subject to the same rules of liability as private corporations." City of Dover v. Imperial Casualty & Indemnity Co., 133 N.H. 109, 575 A.2d 1280, 1283 (1990) (citing Merrill, 332 A.2d at 383).

Standing alone, however, this quoted statement of the general rule of municipal liability in New Hampshire under the common law of negligence can easily be misunderstood. At the same time the Court declared this rule in Merrill, it also made clear that the general rule of liability for negligence does not apply to "acts and omissions constituting [either] (a) the exercise of a legislative or judicial function, [or] (b) the exercise of an executive of planning function, involving the making of a basic policy decision which is characterized by the exercise of a high degree of official judgment or discretion." Merrill, 332 A.2d at 383.

We need not be concerned about whether these two qualifications are correctly described as "exceptions" or "deviations" from the scope of liability of private corporations or instead as merely applications of ordinary principles regarding the duty of reasonable care in the distinctive circumstances of municipal actions and functions. Unlike individuals and private corporations engaged solely in proprietary activities, municipal entities also have legislative, judicial, and executive functions. They are charged with responsibility for acting to represent the public and serve the public interest to an extent and in ways beyond any duty or authority of a private corporation. Thus, for reasons developed more fully in later sections of this opinion, the requirements of actual notice and opportunity to correct hazards on municipal roads are entirely compatible with the declaration that municipalities are held to the same standards of conduct and the same rules of tort liability as private corporations and other citizens. In any event, we conclude that insofar as municipal liability is governed by judicial decisions rather than statutes, the distinctive limitations on the scope of municipal liability stated in Merrill have remained firmly in place in the law of New Hampshire ever since Merrill was decided.

C. Statutory Partial Preservation of the Common Law Immunity

In Merrill, the Court noted that "the legislature has authority to specify the terms and conditions of suit against cities and towns, limit the amount of recovery, or take any other action which in its wisdom it may deem proper." Merrill, 332 A.2d at 384. The Court, accordingly, stayed for six months the effective date of its abrogation of common law immunity "[t]o permit the legislature to take action in regard to the social and economic factors resulting from [the] decision." Id.

In response to Merrill, the legislature enacted RSA 507-B. 1975 N.H.Laws, ch. 483. Subject to exceptions not relevant here, this statute purportedly preserved for municipalities, in part, the scope of the immunity that the decision in Merrill would otherwise have destroyed. For example, the statute declared that municipalities would not be liable for accidents occurring on "public sidewalks, streets, [and] highways...." N.H.Rev.Stat.Ann. 507-B:2, I (1975).

D. Judicial Declaration of Unconstitutionality of the Statutory Preservation of Immunity

Neither by later legislation nor by judicial decision had any change in the declared statutory preservation of partial protection of municipalities against tort liability been announced before the time of Lynch's accident in 1988. In 1990, however, the Supreme Court of New Hampshire declared the 1975 statute unconstitutional, on the ground that such a broad exemption from liability violated the equal protection provisions of the New Hampshire Constitution. City of...