City of Laramie v. Facer

• Decision Date: 05 July 1991
• Docket Number: No. 90-54,90-54
• Parties: The CITY OF LARAMIE, Wyoming, Petitioner, v. Greg T. FACER, as father and natural guardian of his son, Shane J. Facer, a minor, and on his own behalf, Respondent.
• Court: Wyoming Supreme Court

Page 268

814 P.2d 268

The CITY OF LARAMIE, Wyoming, Petitioner, v. Greg T. FACER, as father and natural guardian of his son, Shane J. Facer, a minor, and on his own behalf, Respondent.

No. 90-54.

Supreme Court of Wyoming.

July 5, 1991.

Bruce A. Salzburg of Herschler, Freudenthal, Salzburg, Bonds & Rideout, P.C., Cheyenne, for petitioner.

William L. Combs, Harold F. Buck, Nicholas Vassallo of Buck Law Offices, Cheyenne, for respondent.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY, and GOLDEN, JJ.

URBIGKIT, Chief Justice.

By appellate review, we are asked whether participation by local governments in a pool fund pursuant to W.S. 1-39-118(c)(ii) constitutes a purchase of insurance which would waive governmental immunity under W.S. 1-39-118(b) constituting a section of the Wyoming Governmental Claims Act, W.S. 1-39-101 through 1-39-120, enacted in 1979. ¹ We hold that the governmental unit pool fund creation and participation is not the purchase of liability insurance coverage and no waiver of governmental immunity under that insurance coverage exception results.

We reverse the decision of the district court that the City of Laramie's participation in a W.S. 1-39-118(c)(ii) pool fund constituted insurance purchase which extended the municipality's tort liability to include defect in the design, construction or maintenance of the city's streets.

BACKGROUND

W.S. 1-39-104 provides immunity to governmental entities and employees for any tort except as waived by the Act. Abelseth v. City of Gillette, 752 P.2d 430 (Wyo.1988); Hurst v. State, 698 P.2d 1130 (Wyo.1985). W.S. 1-39-118(a) ² establishes the maximum liability for a governmental entity or employee, but under W.S. 1-39-118(b), permits the purchase of liability insurance. Pickle v. Board of County Com'rs of County of Platte, 764 P.2d 262 (Wyo.1988); St. Paul Fire and Marine Ins. Co. v. Albany County School Dist. No. 1, 763 P.2d 1255 (Wyo.1988). The W.S. 1-39-118(b) purchase of liability insurance extends the governmental unit's liability to the extent covered within the liability insurance policy. Pickle, 764 P.2d 262. The Act waived immunity for negligent operation or maintenance of public facilities under W.S. 1-39-111, State v. Stovall, 648 P.2d 543 (Wyo.1982), until 1986 when the Wyoming legislature repealed this waiver and enacted W.S. 1-39-120, which provided:

(a) The liability imposed by W.S. 1-39-105 through 1-39-112 does not include liability for damages caused by:

(i) A defect in the plan or design of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area;

(ii) The failure to construct or reconstruct any bridge, culvert, highway roadway, street, alley, sidewalk or parking area; or

(iii) The maintenance, including maintenance to compensate for weather conditions, of any bridge, culvert, highway, roadway, street, alley, sidewalk or parking area.

See White v. State, 784 P.2d 1313 (Wyo.1989).

In 1986, Natrona County, Laramie County and the cities of Cheyenne, Wyoming and Laramie, Wyoming formed a joint powers agreement to create the Wyoming Association of Risk Management (WARM) under the authorization of W.S. 1-39-118(c)(ii) and the Wyoming Joint Powers Act, W.S. 16-1-102 through 16-1-108. Three years later in 1989, Greg T. Facer filed a personal injury suit against the City of Laramie as the father and natural guardian of his minor son, Shane J. Facer. The suit sought to recover for Shane's serious injury when his vehicle left the roadway and struck a city sign that had been placed at windshield height resulting in the sign shattering the windshield and causing his head injuries. The lawsuit was a claim of negligent design, construction, and maintenance. The City of Laramie, pursuant to W.R.C.P. 12(b)(6), moved to dismiss for the failure to state a claim upon which relief could be granted. The district court denied the motion in concluding that the City of Laramie had waived the immunity provided by W.S. 1-39-120 by purchasing insurance that provided coverage for "bodily injuries" without excluding liability for highway design. We granted a petition for a writ of certiorari to review this substantial issue of Wyoming municipality law.

DISCUSSION

That issue addresses whether a governmental entity by participation in the pool fund arrangement through a joint powers agreement under W.S. 1-39-118(c)(ii) results in the purchase of insurance waiver of immunity under W.S. 1-39-118(b) (insurance waiver section). If W.S. 1-39-118(c)(ii) creates insurance, the scope of resulting liability under subsection (b) will then be determined by interpreting the joint powers agreement and its operational documents. ³ Conversely, if W.S. 1-39-118(c)(ii) is merely a funding mechanism to defray costs created by the exceptions to immunity under W.S. 1-39-105 through 1-39-112 or exclusion of immunity under federal law, specifically 42 U.S.C.A. § 1981, then liability of the fund is determined by statutory interpretation and not by joint power agreement documents.

Our established rules of statutory construction control the question of whether the governmental pooling provision of W.S. 1-39-118(c)(ii) is a statutory funding mechanism or is a purchase of insurance under W.S. 1-39-118(b). To ascertain the intent of the legislature, Stovall, 648 P.2d 543, we give effect to every word, clause and sentence and construe all components of a statute in pari materia. See State ex rel. Wyoming Workers' Compensation Div. v. Brown, 805 P.2d 830, 843 (Wyo.1991) and Britton v. Bill Anselmi Pontiac-Buick-GMC, Inc., 786 P.2d 855, 864 (Wyo.1990). Applying our standard rules of construction, Kelsey v. Taft, 72 Wyo. 210, 263 P.2d 135 (1953); Houghton Bros. v. Yocum, 40 Wyo. 57, 274 P. 10 (1929), ⁴ we hold that W.S. 1-39-118(c)(ii) serves the legislative purpose of providing an alternative funding mechanism for the governmental unit to defray costs created by the exceptions to immunity under W.S. 1-39-105 through 1-39-112, but more significantly from non-immunized liabilities created by federal law. See 42 U.S.C.A. § 1981 and other variant United States statutes which may create liabilities for local governmental entities or their employees.

Our analysis of the internal structure of W.S. 1-39-118 leads clearly to that conclusion. Subsection (a) provides a liability limitation and subsection (b) constitutes a first alternative for funding by permitting the acquisition of insurance which both covers the liability imposed and extends liability to the amount of policy limits provided by the policies which the entity has purchased to protect it citizenry. Pickle, 764 P.2d 262. Subsection (c) constitutes the second general alternative which establishes four optional categories of self-payment coverage systems leaving flexibility and choice to the entity of government:

1. (i)--put aside money as an accrual fund;

2. (ii)--join with other units of government to set aside funds as a deposit and reassessment system;

3. (iv)--with loss to utilize an installment payment arrangement; or

4. (v)--deposit of funds into a state actuarial determined account as a pool fund maintained by the state.

Not only does this internal statutory structure cause rejection of interpretively changing W.S. 1-39-118(c)(ii) pooled funds into W.S. 1-39-118(b) insurance, but any other conclusion would operate against the intent of the WARM participants. Those governmental entities seek to limit liability and protect against claim loss and not to extend liability exposure. ⁵ We find an interpretation of the statutes to be self-defeating and inappropriate if the result were to require participants such as WARM to extend liability by joining together or to presume knowledgeable intent to assure unnecessary liability in addition to what is otherwise created by non-immunized activities included within W.S. 1-39-105 through 1-39-112 or provided by federal civil rights statutes, 42 U.S.C.A. § 1981, and other similar federally created rights of recovery where state governmental immunity is not necessarily a bar to relief. Monell v. Department of Social Services of City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

In construing the above sections of the statute some general rules of construction should be borne in mind. Statutes should, of course, be construed with a view to effecting the legislative intent, and such intent must be ascertained from the statute or statutes. However, a literal construction of the words used will not be sanctioned, when such construction would defeat the evident purpose of the Legislature. * * * And a construction producing unjust or absurd results will not be adopted, unless the terms of the statute preclude any other construction.

Houghton Bros., 274 P. at 11.

The decision of the trial court is reversed.

CARDINE, Justice, specially concurring and dissenting.

I join with the majority in its holding that Shane Facer's suit for negligent design, construction and maintenance of the city street is barred under the Wyoming Governmental Claims Act. However, in resolving that issue, the opinion of the court's analysis of W.S. 1-39-118 fires the wrong arrow in the wrong direction. The question this court should have resolved is not whether the city of Laramie had insurance. It did. Rather, we should have decided whether the city's insurance provided coverage for Shane Facer's injuries.

The premise of the majority is that self insurance is no insurance. This premise is unfounded. There is "no insurance" only when there is no funding of a reserve to pay losses. The absurdity of the majority opinion is illustrated by reference to W.S. 1-39-118(c), which provides that in addition to the procurement of insurance under W.S. 1-39-118(b), a governmental entity may:

"(i) Establish a self-insurance fund against the liability of the governmental entity and its officers and employees;

"(i...