Enghauser Mfg. Co. v. Eriksson Engineering Ltd.

• Citation: 6 OBR 53,6 Ohio St.3d 31,451 N.E.2d 228
• Decision Date: 20 July 1983
• Docket Number: No. 82-810,82-810
• Parties: , 6 O.B.R. 53 ENGHAUSER MANUFACTURING COMPANY, Appellant, v. ERIKSSON ENGINEERING LTD.; City of Lebanon, Appellee.
• Court: Ohio Supreme Court

Page 31

6 Ohio St.3d 31

451 N.E.2d 228, 6 O.B.R. 53

ENGHAUSER MANUFACTURING COMPANY, Appellant, v. ERIKSSON ENGINEERING LTD.; City of Lebanon, Appellee.

No. 82-810.

Supreme Court of Ohio.

July 20, 1983.

Syllabus by the Court

1. The judicially created doctrine of municipal immunity is, within certain limits, abolished, thereby rendering municipal corporations subject to suit for damages by individuals injured by the negligence or wrongful acts or omissions of their agents or employees whether such agents and employees are engaged in proprietary or governmental functions. (Dayton v. Pease, 4 Ohio St. 80, and its progeny overruled; Haverlack v. Portage Homes, Inc., 2 Ohio St.3d 26, 442 N.E.2d 749, followed and extended.)

2. Under this decision abolishing municipal immunity, no tort action will lie against a municipal corporation for those acts or omissions involving the exercise of a legislative or judicial function or 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. However, once the decision has been made to engage in a certain activity or function, municipalities will be held liable, the same as private corporations and persons, for the negligence of their employees and agents in the performance of the activities.

Appellant, Enghauser Manufacturing Company, alleged in its amended complaint filed August 21, 1978, that the city of Lebanon, appellee herein, ¹ had negligently planned, designed, and constructed a new bridge and roadway which proximately resulted in the flooding of appellant's abutting industrial property. Appellant further alleged nuisance, trespass, and appropriation of property.

Earlier, after an attempt to transfer this action to the Court of Claims had failed, an amended motion to dismiss for failure to state a claim was filed. The trial court treated the motion as one for summary judgment, and subsequently overruled such motion.

In August 1978, a jury trial was commenced and appellant was resultantly awarded $91,000 in damages against appellee city.

Thereafter, appellee filed a motion for judgment notwithstanding the verdict, and in the alternative, a motion for a new trial. The trial court ordered "that the verdict and the judgment entry * * * be * * * set aside as to the money judgment and also as to the issue and finding of negligence, but not as to the issue and finding of nuisance, and that final judgment on said money judgment and also the issue and finding of negligence be * * * entered for the defendant, City of Lebanon * * *." The court also found that this ruling mooted the alternative motion for a new trial.

The court of appeals affirmed, determining that the suit herein was barred by the doctrine of sovereign immunity.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

James E. Sheets, Cincinnati, for appellant.

J. William Duning, Lebanon, Lindhorst & Dreidame and William M. Cussen, Cincinnati, for appellee.

WILLIAM B. BROWN, Justice.

The case presents this court with the question of whether the doctrine of governmental immunity from tort liability for municipalities should be sustained in Ohio. With the limitations set forth in this opinion, this court overrules Dayton v. Pease (1854), 4 Ohio St. 80, wherein the sovereign immunity doctrine was extended to encompass local governmental units, and all other decisions which support this doctrine, and holds that immunity from tort liability heretofore judicially conferred upon local governmental units is hereby abrogated. Henceforth, so far as municipal governmental responsibility for torts is concerned, the rule is liability--the exception is immunity.

The abolition of this doctrine in Ohio is long overdue. There are probably few tenets of American jurisprudence which have been so unanimously berated as the governmental immunity doctrine. It has been the subject of thousands of learned dissertations; the highest courts of numerous other states, test writers, and law review writers have all been unusually articulate in castigating the existing rule. A quick review of Ohio case law reveals that this court has many times had the matter under consideration.

In light of the comprehensive nature of discussion on this subject, there is little new this court can now add. But because this court is charting a new course in Ohio jurisprudence with this decision, a brief summary of the nature of governmental immunity is appropriate.

Various reasons have been assigned for perpetuation of the doctrine of municipal immunity from liability for torts. The reason adduced most frequently to support the doctrine is that " * * * if there is to be a departure from the rule the policy should be declared and the extent of liability fixed by the legislature." Conway v. Humbert (1966), 82 S.D. 317, 323, 145 N.W.2d 524. This type of argument begs the question of the desirability of the doctrine and relegates the whole problem to a discussion of who should change the doctrine.

In Ohio, there is no doubt that the municipal immunity doctrine was judicially created. See State v. Franklin Bank of Columbus (1840), 10 Ohio 91; Western College of Homeopathic Medicine v. Cleveland (1861), 12 Ohio St. 375; and Thacker v. Bd. of Trustees of Ohio State Univ. (1973), 35 Ohio St.2d 49, 67-68 (Justice William B. Brown, dissenting). Accord Muskopf v. Corning Hospital Dist. (1961), 55 Cal.2d 211, 218, 11 Cal.Rptr. 89, 359 P.2d 457. Inasmuch as it is a judicially created doctrine, it may be judicially abolished. (See Sears v. Cincinnati [1972], 31 Ohio St.2d 157, 161-162, 285 N.E.2d 732 ; Muskopf v. Corning Hospital Dist., supra; Molitor v. Kaneland Community Unit Dist. No. 302 [1959], 18 Ill.2d 11, 25, 163 N.E.2d 89.)

Having established that this doctrine is a creature of the courts, this court not only has the power but the duty and responsibility to evaluate the doctrine of municipal immunity in light of reason, logic, and the actions, functions and duties of a municipality in the twentieth century in order to determine whether it should adhere to its own rule of municipal tort immunity.

The courts which have adhered to the rule cite few reasons for that position, other than the longevity of the doctrine and its firmly established position. It is commonly accepted that the doctrine by which municipal corporations are held immune from liability in tort originated with the case of Russell v. Men of Devon (1788), 100 Eng.Rep. 359, 362, wherein the immunity was supported because (1) since the group was unincorporated, there was no fund from which the judgment could be paid and (2) "it is better that an individual should sustain an injury than that the public should suffer an inconvenience."

As Justice Traynor stated in Muskopf, supra, 56 Cal.2d at 216, 11 Cal.Rptr. 89, 359 P.2d 457, "[i]f the reasons for Russell v. Men of Devon and the rule of county or local district immunity ever had any substance they have none today."

In scarifying the second justification for immunity as set forth in Russell, supra, the Supreme Court of New Hampshire stated in Merrill v. Manchester (1975), 114 N.H. 722, 724-725, 332 A.2d 378, 380, as follows:

"That an individual injured by the negligence of the employees of a municipal corporation should bear his loss himself as advocated in the Russell case, supra, instead of having it borne by the public treasury to which he and all other citizens contribute, offends the basic principles of equality of burdens and of elementary justice. Becker v. Beaudoin, 106 R.I. 562, 568, 261 A.2d 896, 900 (1970); Molitor v. Kaneland Community Unit Dist. No. 302, 18 Ill.2d 11, 21, 163 N.E.2d 89, 93 (1959). It 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. * * * It is also contrary to the basic concept of the law of torts that liability follows negligence and that individual corporations are responsible for the negligence of their agents, servants and employees in the course of their employment. Spencer v. General Hosp., 425 F.2d 479, 487 (D.Cir.1969) (Wright, J., concurring)."

It would indeed be a sad commentary on our concept of justice if this court continued to endorse the belief that an individual should sustain an injury rather than the municipality be inconvenienced.

The other justification for immunity set forth in Russell has likewise lost its validity and vitality. The widespread availability and use of insurance or other modern funding methods render an argument based on economics invalid. Further, there is no empirical data to support the fear that governmental functions would be curtailed as a result of imposing liability for tortious conduct. Ayala v. Philadelphia Bd. of Pub. Edn. (1973), 453 Pa. 584, 596, 305 A.2d 877; Note (1973), 26 U.Fla.L.Rev. 89, 90.

Even though the reasons behind the municipal immunity doctrine have vanished and its construction renders an injustice to all people wronged by the local governmental unit or its agents, it has been suggested that the rule be retained because of the principle of stare decisis.

As to the fundamental nature and the importance of stare decisis, there is no doubt. It lies at the heart of the common law. By this rule, our society has preserved the best of the wisdom and the morality of past ages. Wisdom and morality, however, are not immutable universals of the scholastic philosophers; they are to be modified by each new generation.

When, however, a rule of law is judge-made, and the reasons for its use have vanished, the court should not perpetuate it until petrification. A rule that has outlived its usefulness should be changed. Greater justification is needed for a rule of law than that it has been part of the common law for a few hundred years.

The judicial conscience must...