DeBry v. Noble

• Decision Date: 27 January 1995
• Docket Number: Nos. 920377,930239,s. 920377
• Citation: 889 P.2d 428
• Parties: Robert J. DeBRY and Joan DeBry, Plaintiffs and Petitioners, v. Wallace R. NOBLE, individually and in his capacity as Chief Building Official of Salt Lake County; and Salt Lake County, Defendants and Respondents.
• Court: Utah Supreme Court

Page 428

889 P.2d 428

Robert J. DeBRY and Joan DeBry, Plaintiffs and Petitioners, v. Wallace R. NOBLE, individually and in his capacity as Chief Building Official of Salt Lake County; and Salt Lake County, Defendants and Respondents.

Nos. 920377, 930239.

Supreme Court of Utah.

Jan. 27, 1995.

Robert J. DeBry, Edward T. Wells, Salt Lake City, for plaintiffs.

David E. Yocom, Paul G. Maughan, Salt Lake City, for Salt Lake County.

ON CERTIORARI TO THE UTAH COURT OF APPEALS

STEWART, Associate Chief Justice:

This opinion decides two related cases that are here on certiorari to the Utah Court of Appeals. In DeBry v. Salt Lake County, 835 P.2d 981 (Utah Ct.App.1992) (DeBry I ), the court of appeals affirmed a summary judgment dismissing a complaint filed by Robert J. DeBry and Joan DeBry for damages against defendants Salt Lake County and Wallace R. Noble. The complaint alleged that the plaintiffs were injured by the negligent inspection of a building that the DeBrys purchased from a third party, Cascade Enterprises, and by the fraudulent issuance of a temporary occupancy permit for that building. The court of appeals held that the plaintiffs' negligence and fraud claims were barred by the Governmental Immunity Act. The court of appeals also affirmed the dismissal of another complaint the DeBrys had filed against the same defendants alleging similar claims for relief on grounds of sovereign immunity and res judicata. DeBry v. Salt Lake County, No. 910745-CA, slip op. (Utah Ct.App. March 16, 1993) (DeBry II ). DeBry II was not published.

Robert J. and Joan DeBry executed an earnest money agreement to purchase an office building from Cascade Enterprises while it was still under construction. In December 1985, before the building was completed, Salt Lake County issued a temporary thirty-day certificate of occupancy for the building on the erroneous representation by Cascade's Del Bartel to Wallace R. Noble, a Salt Lake County building official, that Cascade had obtained all necessary permits for the building. Cascade had in fact obtained only a footings permit. Because there did not appear to be any significant hazard that precluded temporary occupancy while the building was being completed and brought into compliance with the building code, Noble issued the certificate. The DeBrys thereafter purchased the building.

Although the County discovered that Cascade had obtained only a footings permit and not a building permit, it did not revoke the temporary occupancy permit. After the temporary occupancy permit expired, Noble found that the building did not comply with the building code and sent a letter to the DeBrys informing them that a permanent certificate of occupancy would not issue until they procured a building permit and corrected specified defects in the building. The letter gave the DeBrys thirty working days to bring the building into compliance with the code. Two months later, Noble sent another letter to the DeBrys, stating that by occupying the building without a certificate of occupancy, they were in violation of the code and that no further inspections would be made until the DeBrys obtained a building permit.

In October 1986, the DeBrys sent the County the affidavit of a licensed civil engineer stating that the building was in violation of the uniform building code. A month later, the County served the DeBrys with an order to vacate within ten days on the grounds that the DeBrys had no valid certificate of occupancy and the defects found by the County after its March 1986 inspection had not been corrected.

The DeBrys appealed the order to the Salt Lake County Board of Appeals. The Board denied their request for an extension of time to vacate the building and refused to direct additional inspections until the DeBrys complied with the order. The Utah Court of Appeals dismissed an appeal from the order for lack of jurisdiction. DeBry v. Salt Lake County Bd. of App., 764 P.2d 627 (Utah Ct.App.1988).

The DeBrys then filed a complaint alleging that the County and Noble were negligent in failing to require the building contractors to correct violations of the building code and in issuing the temporary certificate of occupancy without making any inspections or determining whether a building permit had issued. ¹ The complaint asserted a claim of fraud against the County and Noble on the theory that the temporary certificate of occupancy was a misrepresentation. The complaint also asserted that the notice to vacate deprived the DeBrys of asserted First and Fourteenth Amendment rights of freedom of enterprise and occupation, Fifth and Fourteenth Amendment rights to the use of their building, and a Fourteenth Amendment right to the equal protection of the laws.

The DeBrys and the defendants filed cross-motions for summary judgment. The defendants argued that they were immune under the Governmental Immunity Act (the "Act"), Utah Code Ann. §§ 63-30-1 to -38, that the DeBrys had failed to allege a valid claim of fraud against them, and that the DeBrys' eviction from the building did not violate any constitutional rights.

The DeBrys responded that building inspections were not governmental functions immunized from tort liability under the Act and that even if they were governmental functions, the Act waived immunity. In addition, the DeBrys argued that if the Act barred the actions, it violated the open courts or guaranteed remedy provision in article I, section 11 of the Utah Constitution.

Judge Pat Brian granted the defendants' motion for summary judgment. He ruled that the County's actions with respect to the building permit and inspection were governmental functions and that the State had not waived immunity, that the Act did not violate article I, section 11 of the Utah Constitution, and that the County's order to vacate the building was not unconstitutional. Judge Brian also ruled that the DeBrys had failed to state a claim for fraud either against the County or against Noble in either his official or his individual capacity.

More than a year after Judge Brian entered summary judgment in DeBry I, the DeBrys moved for leave to file a fifth amended complaint against the County and Noble, again alleging that the County had negligently issued a building permit and certificate of occupancy to Cascade and that the DeBrys had relied on the issuance of those permits in purchasing the building. The proposed fifth amended complaint alleged that the County "negligently revoked the certificate of occupancy; continually refused to allow the building to be occupied; on or about March 7, 1988, imposed new conditions before the building could be occupied"; and after March 1988, imposed further new conditions for issuance of a permanent certificate of occupancy. The proposed fifth amended complaint also alleged two new causes of action against the County. The first alleged breach of a third-party beneficiary contract. The theory was that the temporary certificate of occupancy constituted a contract between the County and Cascade that obligated Cascade to complete improvements and the County to allow the building to be occupied, that the contract was breached, and that the DeBrys were third-party beneficiaries of the contract between the County and Cascade. The second new claim for relief sought a writ of mandamus to compel the County to issue a permanent certificate of occupancy for the building. Judge Brian denied the motion to file the amended complaint in February 1990, without stating whether the order was with or without prejudice and without stating any grounds for denying the motion.

Before Judge Brian denied the motion to file a fifth amended complaint in DeBry I, the DeBrys filed another original complaint against the County and Noble. That case was assigned to Judge Kenneth Rigtrup and is referred to as DeBry II. That complaint was almost identical to the complaint in DeBry I, except that it alleged a continuing violation of the defendants' statutory duties. It also alleged a claim for breach of a third-party beneficiary contract and sought a writ of mandamus against Noble. Both claims were based on the same basic facts that had been alleged in the case before Judge Brian.

After Judge Brian denied the motion to amend in DeBry I, Judge Rigtrup ruled in DeBry II that res judicata barred that action because the parties and the claims for relief in DeBry II were identical to the parties and the claims for relief in DeBry I. Judge Rigtrup imposed Rule 11 sanctions against the DeBrys in the amount of $500 for abuse of process.

The court of appeals affirmed the summary judgment in DeBry I. It held that (1) both the County's and Noble's acts were immune governmental functions and that immunity had not been waived under the Act, (2) the Act did not violate article I, section 11 of the Utah Constitution, (3) the DeBrys' constitutional rights had not been violated, and (4) because the DeBrys had not alleged that Noble had acted in his individual capacity, instead of his representative capacity, with respect to the fraud claim, that claim was also barred by the Act. DeBry I, 835 P.2d at 989.

In DeBry II, the court of appeals in a brief per curiam opinion affirmed Judge Rigtrup's dismissal of the complaint on the ground that "the claims were barred by sovereign immunity as set forth in the related case of [DeBry I ], ... and on the further basis that the prior determination concerning sovereign immunity was res judicata in this case." DeBry II, slip op. The court of appeals did not address the lawfulness of the Rule 11 sanctions.

The DeBrys contend that the court of appeals erred in DeBry I in ruling (1) that the inspection of buildings and the issuance of temporary occupancy permits are governmental functions that are immune from suit under the Act and (2) that the DeBrys did not plead an action for fraud against Noble. In addition, the DeBrys raise several constitutional issues, namely, that (1) insofar as ...