City of Bloomington Utilities v. Walter

• Decision Date: 15 April 2009
• Docket Number: No. 53A01-0807-CV-356.,53A01-0807-CV-356.
• Citation: 904 N.E.2d 346
• Parties: CITY OF BLOOMINGTON UTILITIES DEPARTMENT, Appellant-Defendant, v. Misty WALTER, Micky Day, Leslie Cadavid and Hernan Cadavid, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

904 N.E.2d 346

CITY OF BLOOMINGTON UTILITIES DEPARTMENT, Appellant-Defendant, v. Misty WALTER, Micky Day, Leslie Cadavid and Hernan Cadavid, Appellees-Plaintiffs.

No. 53A01-0807-CV-356.

Court of Appeals of Indiana.

April 15, 2009.

Andrew P. Wirick, Hume Smith Geddes Green & Simmons, LLP, Indianapolis, IN, Attorney for Appellant.

Michael T. Scarton, Shean Law Offices, Bloomington, IN, Attorney for Appellees.

OPINION

KIRSCH, Judge.

The City of Bloomington Utilities Department ("CBU") brings this interlocutory appeal challenging the trial court's denial of its motion for summary judgment. CBU raises the following restated issue: whether the trial court erred in failing to find that CBU is immune from liability under the Indiana Tort Claims Act, Indiana Code chapter 34-13-3 ("ITCA"), for damage caused by sewage flowing from its sewer pipes into the home of one of its customers.

We affirm and remand.

FACTS AND PROCEDURAL HISTORY

Leslie and Hernan Cadavid (together, the "Cadavids") are husband and wife and owners of a rental property located in Bloomington, Indiana. In November 2005, Misty Walter and Micky Day rented the downstairs apartment of the rental from the Cadavids. CBU provided the residence with sewer services.

Around 8:00 a.m. on November 15, 2005, Walter and Day noticed that their bedroom rug was wet. Day immediately called the Cadavids, who, in turn, contacted CBU about the problem. Rick Schroeder, CBU's Assistant Superintendent for lift stations, booster stations, and sewer cleaning, responded to the call and determined that the blockage was in an eight-inch sewer line leading to the rental's lateral line. CBU is responsible for the proper maintenance and operation of the City of Bloomington's (the "City") public sewer lines that are eight or more inches in diameter.¹ Lateral lines from a sewer main are the customer's responsibility. CBU employees had the blockage cleared by 12:45 p.m., but by that time, the property within the apartment had been severely damaged by sewage. Schroeder could not determine the exact cause of the blockage, but suspected that it may have been tree roots and grease.

The Cadavids notified their insurance carrier about their loss caused by the sewage; however, the insurance company denied their claim because the blockage occurred within the City's portion of the system. In compliance with the ITCA, the Cadavids sent a Notice of Tort Claim to the City and CBU (together, "Defendants"), but Defendants denied the claim. On May 3, 2006, Walter and Day sent their Notice of Tort Claim to Defendants, which claim Defendants likewise denied.

On March 21, 2007, Walter, Day, and the Cadavids (collectively, "Homeowners") filed their complaint under the ITCA against Defendants alleging that Defendants negligently planned, designed, installed, operated, maintained, and controlled the sewer lines serving the rental. Defendants filed an answer to the complaint and a motion for summary judgment claiming: (1) CBU's creation of a schedule for inspecting sewer pipes was a discretionary function for which it was immune under Indiana Code section 34-13-3-3(7); and (2) even if Defendants were not immune, Defendants did not have notice of the problem and an opportunity to repair the condition prior to the November 15, 2005 incident.

The trial court scheduled a hearing on Defendants' motion for summary judgment. In May 2008, Defendants each made a separate Qualified Settlement Offer ("QSO") to each of the Homeowners. The Homeowners accepted the City's QSO, but did not accept CBU's. Following a hearing on summary judgment, the trial court denied CBU's motion for summary judgment finding that: (1) CBU was not engaging in a discretionary function that warranted immunity; and (2) there was a genuine issue of material fact regarding sufficient notice. On August 28, 2008, all parties stipulated to the dismissal of the City from the lawsuit. The following day, this court granted CBU's petition for interlocutory appeal under Indiana Appellate Rule 14(B). CBU now appeals.² Additional facts will be added as necessary.

DISCUSSION AND DECISION

Our standard of review is well settled. Summary judgment is appropriate only if the designated evidentiary material demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); see N. Ind. Pub. Serv. Co. v. Bloom, 847 N.E.2d 175, 180 (Ind.2006); Ind. Dep't of Envtl. Mgmt. v. Constr. Mgmt. Assocs., 890 N.E.2d 107, 111-12 (Ind.Ct.App.2008). On appeal, we apply the same standard as the trial court and resolve disputed facts or inferences in favor of the non-moving party. Savieo v. City of New Haven, 824 N.E.2d 1272, 1274 (Ind.Ct.App.2005), trans. denied. All doubts as to the existence of a material issue must be resolved against the moving party. Constr. Mgmt. Assocs., 890 N.E.2d at 112.

The party appealing a summary judgment ruling has the burden of persuading this court that the grant or denial of summary judgment was erroneous. Owens Corning Fiberglass Corp. v. Cobb, 754 N.E.2d 905, 908 (Ind.2001). For a defendant to prevail, the defendant must show that the undisputed material facts negate at least one of the elements essential to the plaintiff's claim, or that a valid affirmative defense bars the plaintiff's claim. McDonald v. Lattire, 844 N.E.2d 206, 210 (Ind.Ct.App.2006). The trial court's findings and conclusions are not binding upon this court, but do facilitate appellate review and offer insight into the trial court's rationale for its decision. Savieo, 824 N.E.2d at 1274.

Here, Homeowners alleged that CBU negligently maintained and controlled the sewer lines by failing to clear severe root invasion from the sewer pipes. As a proximate result of this negligence, the Homeowners' sewer line became blocked, sewage flowed into the home, and the sewage caused damage to the Homeowners' real and personal property. Appellant's App. at 16. In its motion for summary judgment, CBU argued that its conduct qualified for governmental immunity as a discretionary function under Section 3 of the ITCA. In the alternative, CBU argued that it had insufficient notice and opportunity to remedy the problem in the sewer line. The trial court denied CBU's motion for summary judgment.

The ITCA governs tort claims against governmental entities and public employees and partially reinstated the sovereign immunity abolished by our Supreme Court in Campbell v. State, 259 Ind. 55, 284 N.E.2d 733 (1972). Gary Cmty. Sch. Corp. v. Boyd, 890 N.E.2d 794, 799 (Ind.Ct.App.2008), trans. denied; Brown v. Alexander, 876 N.E.2d 376, 380 (Ind.Ct. App.2007), trans. denied (2008). "Pursuant to the ITCA, `governmental entities can be subjected to liability for tortious conduct unless the conduct is within an immunity granted by Section 3 of [the] ITCA.'" Brown, 876 N.E.2d at 380 (quoting Oshinski v. N. Ind. Commuter Transp. Dist., 843 N.E.2d 536, 543 (Ind.Ct.App. 2006)). "A governmental entity . . . is not liable if a loss results from . . . [t]he performance of a discretionary function. . . ." Ind.Code § 34-13-3-3(7) (emphasis added). The party claiming immunity bears the burden of establishing that its conduct comes within the ITCA.³ Boyd, 890 N.E.2d at 800.

CBU asserts that, contrary to the trial court's findings, it is entitled to immunity for the discretionary function of enacting and following its Capacity, Management, Operations and Maintenance ("CMOM") Program—a program that set forth guidelines for CBU to inspect, clean, and repair the City's sewer system. Appellant's Br. at 6, Appellant's App. at 234. Inasmuch as CBU contends that it is not liable because the acts it performed here were purely discretionary, we note that, in Peavler v. Monroe County Bd. of Comm'rs, 528 N.E.2d 40 (Ind.1988), our Supreme Court adopted the "planning/operational" test as the standard for defining discretionary acts under the ITCA. 528 N.E.2d at 45. In Peavler, our Supreme Court explained that the word "discretionary" refers to the exercise of political power that is held accountable only to the Constitution or the political process. Id. The issue of whether an act is discretionary and therefore immune from liability is a question of law for the trial court to resolve. Id. at 46. The essential inquiry is whether the challenged act is the type of function that the legislature intended to protect with immunity. Id. Discretionary immunity is provided to governmental units for undertaking a policy-oriented decision-making process. Beck v. City of Evansville, 842 N.E.2d 856, 862 (Ind.Ct. App.2006), trans. denied. "The decisionmakers can adopt a policy that recommends action, recommends action to be phased in over time, recommends no action, or recommends a combination of action and inaction." Id. It does not matter what the adopted policy calls for, only that a policy was adopted. Id.

CBU cites to Beck v. City of Evansville to support its claim of immunity, arguing as follows:

In Beck, homeowners brought claims of negligence, nuisance, and inverse condemnation against the city resulting from flood damaged [sic] allegedly caused by inadequate sewer systems. Prior to this flood, the City of Evansville had developed a plan to address sewer problems and set priorities, as to which problems would be fixed, after weighing competing interests. The City of Evansville moved for summary judgment claiming, among other things, governmental immunity under the [ITCA]. The trial court granted defendant's motion for summary judgment and plaintiffs appealed. The court of appeals used the factors enumerated by Peavler to determine whether Evansville was entitled to governmental immunity. The majority of the discussion focused on the fact that the city developed a plan. The court of appeals upheld the trial court's decision because in their view "the City was performing a discretionary function when it commissioned and...