City of Dover v. Imperial Cas. & Indem. Co.

Decision Date30 April 1990
Docket NumberNo. 89-006,89-006
Citation575 A.2d 1280,133 N.H. 109
CourtNew Hampshire Supreme Court

Scott E. Woodman, Dover, for plaintiff, filed no brief.

Backus, Meyer & Solomon, Manchester (B J Branch, on the brief and orally), for defendant.

Gregoire, Calivas & Morrison, Dover (Chris W. Calivas, on the brief and orally), for intervenor, Alice Hitchens.

Burns, Bryant, Hinchey, Cox & Schulte P.A., Dover (Mark H. Gardner, on the brief), by brief for Michael St. Pierre, as amicus curiae.

Cleveland, Waters and Bass P.A., Concord (Craig L. Staples and Thomas F. Kehr, on the brief), by brief for the New Hampshire Mun. Ass'n--Property Liability Ins. Trust, as amicus curiae.

BROCK, Chief Justice.

The defendant, the provider of insurance coverage for the plaintiff, argues on appeal that the Superior Court (Nadeau, J.) erred in finding that RSA 507-B:2, I, which affords immunity to municipalities for certain actions in negligence, violates the New Hampshire State Constitution. We affirm.

Alice Hitchens claims that she suffered an injury on January 4, 1986, while walking on a sidewalk adjacent to Central Avenue in Dover. According to Mrs. Hitchens, the City of Dover's (City) failure to maintain the sidewalk in a safe condition resulted in the accumulation of "slippery substances." She alleges that she slipped and fell on these substances and was caused to suffer severe and permanent personal injuries, pain and suffering, mental anguish, medical expenses, lost wages and diminished earning capacity. Mrs. Hitchens filed a lawsuit against the City asking for damages as a result of the alleged negligence in maintaining the sidewalk.

The City forwarded a copy of the writ of summons to its liability insurer, Imperial Casualty & Indemnity Company (Imperial), which had issued the City a comprehensive general liability insurance policy. The policy contained several endorsements, one of which excluded coverage for "any injury for which the insured is immune from liability under the provisions of RSA 507-B." Among other things, RSA chapter 507-B provides that municipalities may not be held liable for personal injury arising out of the negligent maintenance of sidewalks. RSA 507-B:2, I. Therefore, Imperial notified Mrs. Hitchens and the City that the alleged injury was not covered by the policy.

The City filed a petition for declaratory judgment claiming that Imperial had a duty to indemnify and defend Mrs. Hitchens' claim. Imperial filed an answer and subsequently submitted a motion for summary judgment with affidavits, claiming that Mrs. Hitchens' injury was excluded by the policy endorsement. The City responded with an answer and cross-motion for summary judgment supported by affidavits, contending that the constitutionality of the statute underlying the endorsement, RSA 507-B:2, I, had been successfully challenged and that the claim was therefore covered under the provisions of the policy.

A hearing was held on December 8, 1988, which resulted in the issuance of a superior court order granting the City's cross-motion for summary judgment. The trial court ruled that the City was not immune from liability and that coverage did exist under the endorsement. The ruling was based on a prior Superior Court (Temple, J.) decision, Bisson v. Town of Farmington, No. 86-C-574, (where RSA 507-B:2, I, was held to be unconstitutional), and on Opinion of the Justices, 126 N.H. 554, 493 A.2d 1182 (1985)(where language similar to that found in RSA 507-B:2, I, was found not to be "constitutionally justifiable").

On appeal, the defendant contends that the trial court erred in finding that RSA 507-B:2, I, violates the State Constitution. The defendant argues that the limitations on municipal liability are justified and, to the extent that the statute creates classifications of tort claimants, the classifications are reasonable, not arbitrary, and rest upon a ground of difference having a fair and substantial relation to the legitimate object of regulation.

In opposition, Mrs. Hitchens, as intervenor, and Michael St. Pierre, as amicus curiae, argue that RSA 507-B:2, I, would deprive them of their right to a remedy as provided in part I, article 14 of the State Constitution. They claim that the classifications created by the statute are not reasonable and violate State constitutional guarantees of equal protection found in part I, articles 2 and 12.

We begin our analysis of these claims with a brief historical review of municipal immunity in New Hampshire. The doctrine of municipal immunity for torts was first created by the judiciary, see Merrill v. Manchester, 114 N.H. 722, 727, 332 A.2d 378, 382 (1974) and is generally believed to have originated in England. See id. at 724, 332 A.2d at 380. Limits on the liability of municipalities were recognized early in the history of our State, see Farnum v. Town of Concord, 2 N.H. 392 (1821), and over time, municipal immunity from tort liability arising out of certain actions in negligence became well-settled law in New Hampshire. Opinion of the Justices, 101 N.H. 546, 548, 134 A.2d 279, 280 (1957).

Municipal tort immunity was founded on the principle that "[i]t is better that an individual should sustain an injury than that the public should suffer an inconvenience." Gossler v. Manchester, 107 N.H. 310, 312, 221 A.2d 242, 243 (1966) (quoting Russell v. Men of Devon, 2 Term Rep. 667, 100 Eng.Rep. 359 (1789)). The legislature, perhaps recognizing the harsh consequences of this principle, enacted statutes mitigating the doctrine under certain circumstances. See id. at 313, 221 A.2d at 244 (citing RSA 245:20 (change in grade of highway) (current version at RSA 231:75); RSA 247:17 (bridges, culverts, sluiceways or dangerous embankments) (current version at RSA 231:92); RSA 412:3 (immunity waived to extent of insurance coverage); RSA 247:9, :10 (notice of insufficiency) (current version at RSA 231:90, :91)). The courts also established limits on immunity by holding that municipalities were liable for torts as if they were private corporations when they performed proprietary functions. Merrill v. Manchester, 114 N.H. at 725, 332 A.2d at 381. As a result of both legislative and judicial action, no general rule existed by which tort liability of municipalities could be ascertained, and liability had to be determined by a process of elimination. Gossler v. Manchester, 107 N.H. at 313, 221 A.2d at 244 (citing Rhobidas v. Concord, 70 N.H. 90, 47 A. 82 (1899)).

In Gossler, a 1966 case, this court recognized the persuasiveness of arguments supporting the abrogation of governmental immunity. Gossler v. Manchester, 107 N.H. at 314, 221 A.2d at 245. However, we declined to overturn the doctrine, stating that "the scope of municipal liability ... was a matter for legislative rather than judicial determination." Id. at 315, 221 A.2d at 245 (citing Harkinson v. City of Manchester, 90 N.H. 554, 5 A.2d 721 (1939)). This position was re-enforced the following year when then Chief Justice Kenison, while acknowledging his "dim view of governmental immunity," wrote for the majority in holding that "[t]he extent to which ... immunity should be preserved or waived is purely a legislative question." Krzysztalowski v. Fortin, 108 N.H. 187, 189, 230 A.2d 750, 752 (1967) (quoting Opinion of the Justices, 101 N.H. at 549, 134 A.2d at 281).

Following the decisions in Gossler and Krzysztalowski, several legislative initiatives were proposed to further limit the doctrine of municipal immunity. Merrill v. Manchester, 114 N.H. at 727, 332 A.2d at 382. None was successfully enacted. Id.

In 1974, we were again asked to rule upon the doctrine of municipal immunity for torts. Merrill v. Manchester, 114 N.H. 722, 332 A.2d 378 (1974). In Merrill, we stated that the principle underlying municipal immunity, "[t]hat an individual injured by the negligence of the employees of a municipal corporation should bear his loss himself ... offends the basic principles of equality of burdens and of elementary justice." Id. at 724, 332 A.2d at 380. Further, we stated that the principle is "foreign to the spirit of our constitutional guarantee that every subject is entitled to a legal remedy for injuries he may receive in his person or property." Id. at 725, 332 A.2d at 380. We thus concluded that municipalities should be held to the same safety standards as other citizens, id. at 728, 332 A.2d at 383, and that they are subject to the same rules of liability as private corporations, id. at 730, 332 A.2d at 383.

In Merrill, the immunity from tort liability which had been conferred upon municipalities was abrogated, subject to certain exceptions. Merrill v. Manchester, 114 N.H. at 729, 332 A.2d at 383. These exceptions provided limited immunity for acts and omissions constituting "(a) the exercise of a legislative or judicial function, and (b) the exercise of an executive or 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." Id. We also ruled 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." Id. at 730, 332 A.2d at 384. In so ruling, the effective date of the abrogation was delayed by approximately six months to permit the legislature to take appropriate action in regard to "social and economic factors." Id.

The legislature responded to Merrill by enacting RSA chapter 507-B, which was intended to define in a comprehensive manner the exposure of local governmental units to liability. Laws 1975, ch. 483; Estate of Cargill v. City of Rochester, 119 N.H. 661, 668, 406 A.2d 704, 708 (1979). RSA 507-B:2 specified when a municipality was liable for negligence and read:

"507-B:2 Liability for...

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