Frank Briscoe Co., Inc. v. County of Clark

• Decision Date: 03 March 1986
• Docket Number: Civ. No. LV 80-135 RDF.
• Citation: 643 F. Supp. 93
• Parties: FRANK BRISCOE COMPANY, INC., a corporation, Plaintiff, v. COUNTY OF CLARK, a political subdivision of the State of Nevada, Defendant.
• Court: U.S. District Court — District of Nevada

643 F. Supp. 93

FRANK BRISCOE COMPANY, INC., a corporation, Plaintiff, v. COUNTY OF CLARK, a political subdivision of the State of Nevada, Defendant.

Civ. No. LV 80-135 RDF.

United States District Court, D. Nevada.

March 3, 1986.

COPYRIGHT MATERIAL OMITTED

Morton R. Galane, James J. Jimmerson, Las Vegas, Nev., Pepe & Hazard, Anne E. & Joseph Lupica, Louis Pepe, Hartford, Conn., William M. Beadie, Moore, Costello & Hart, St. Paul, Minn., for plaintiff.

Robert J. Miller, Dist. Atty., Victor W. Priebe, Deputy Dist. Atty., Las Vegas, Nev., Lewis, Mitchell & Moore, Roy S. Mitchell and A. Wayne Lalle, Vienna, Va., for defendant.

DECISION AND ORDER ON MOTIONS TO DISMISS

ROGER D. FOLEY, District Judge.

INTRODUCTION

Pursuant to Chapter 790, 1973 Statutes of Nevada, the County of Clark of the State of Nevada (County) was assigned the responsibility for the development and implementation of a pollution abatement plan for the Las Vegas Wash and the Las Vegas Bay arm of Lake Mead. The County, pursuant to the above authority, adopted a waste water resources management plan, electing to build an advanced waste water treatment plant (AWTP) to export from the Las Vegas Wash fully processed waste water solids, the product of the AWTP, and to reclaim the waters discharged from the plant for in-valley irrigation, power and industry use and possibly future ground water recharge, all as described in County's report of September 1973 to the Governor.

The County, desiring to design, construct, own, operate and maintain an AWTP as soon as possible, engaged, by written contract of January 7, 1974, Exhibit 5 in evidence, the consulting services of a group of professional engineering firms (NECON) to provide complete professional engineering and technical services for the planning, designing, financing and construction of the AWTP. Among the many duties undertaken by contract with the County, NECON was to design an AWTP of approximately 90 million gallons per day and connect it with the existing secondary waste water treatment plant.

NECON prepared plans and specifications and bidding documents for the County which the County approved. (Exhibit 1, Exhibit 1.1, Exhibit 1.2 and Exhibit 1.3.) After the bidding process, the County awarded the contract for the construction of the AWTP to Frank Briscoe Company, Inc. (Briscoe), the plaintiff herein, on March 17, 1977 (Exhibit 2), and work began shortly thereafter.

On May 7, 1980, Briscoe brought this action on the construction contract for the AWTP against the County and others seeking from the County declaratory and injunctive relief and specific performance of the contract. Briscoe did not seek damages against the County. On July 31, 1980, the County answered Briscoe's complaint and asserted by way of counterclaim that Briscoe had breached the contract. On September 15, 1980, Briscoe replied to the County's counterclaim by a counterclaim in reply alleging that the County had breached the contract. On April 2, 1984, Briscoe, with leave of the Court, filed its amended complaint. On April 16, 1984 (# 714), the County filed a motion to dismiss the amended complaint. The same was responded to and the County replied. The Clerk submitted the motion to the Court for decision on October 3, 1984. The motion remains undecided.

All of the private corporation defendants named in the amended complaint have been previously dismissed. (See order re motions 6/12/85, # 1241.) In addition to the County, there remain defendants named in the amended complaint Clark County Sanitation District No. 1, a special county district, its Board, the Board of County Commissioners, and a number of individual county officers and employees (noncontracting county defendants).

I. THE NONCONTRACTING COUNTY DEFENDANTS

This Court believes that the County is correct that there can be no ex contractu liability by agency. There is no privity of contract between Briscoe and the noncontracting county defendants. As a matter of law, a noncontracting county defendant cannot be held liable in contract to Briscoe even if the agency allegations are true. All of the remaining defendants in the amended complaint, except Clark County, are dismissed with prejudice.

II. WAIVER OF SOVEREIGN IMMUNITY

In 1965 the State of Nevada, for itself and its political subdivisions, conditionally and with limitation, waived its sovereign immunity from suit and consented to have its liability determined in accordance with the same rules of law as are applied to civil actions against natural persons and corporations. (NRS 41.031.) Hence, this action for breach of contract, breach of implied warranty and for tortious breach of contract and breach of implied warranty as set forth in the amended complaint, could lawfully be brought against the County subject to the conditions and limitations of the waiver.

(A) The Discretionary Function Exception

NRS 41.032 provides in pertinent part: no action may be brought under NRS 41.031 or against an officer or employee of the state or any of its ... political subdivisions which is:

. . . . .

2. Based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of the state or any of its agencies or political subdivisions or of any officer or employee of any of these, whether or not the discretion involved is abused.

It should be noted that by NRS 41.031 the state for itself and its political subdivisions waives sovereign immunity and consent to be sued for, among other claims that could be brought against a private person or corporation, claims for breach of contract and for tort. This is unlike the Federal Tort Claims Act, 28 U.S.C. § 1346(b), which, conditionally and with limitations, waives United States sovereign immunity from tort. But the language of the discretionary function exception to the Federal Tort Claims Act, 28 U.S.C. § 2680(a), is in substance identical with the language of NRS 41.032(2). Thus, decisions of the United States Supreme Court dealing with the scope of 28 U.S.C. § 2680(a), Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427, and later cases of the high court, are controlling and other federal cases are good precedent in the construction of NRS 41.032(2).

The County's motion to dismiss argues that Briscoe, in its amended complaint, seeks to hold the County liable for its actions taken and its failure to act during the exercise or performance of discretionary functions or duties. In considering this argument, it is noted that NRS 41.032(2) is as broad as is the waiver of sovereign immunity, NRS 41.031, and applies to actions for breach of contract, breach of implied warranty and for all actions sounding in tort, including cases arising out of breach of contract and breach of implied warranty as alleged in the amended complaint. Briscoe attempts to get around NRS 41.031 and 41.032(2) by claiming that the County engaged in proprietary acts, rather than governmental acts. This effort must fail. The Nevada Legislature abolished any such distinction in 1965 when it enacted NRS 41.031 et seq., Harrigan v. Reno, 86 Nev. 678, 475 P.2d 94 (1970). Nevada cases prior to 1965 and cases from other jurisdictions that are in point, where the defense of sovereign immunity was avoided in one way or another, such as by distinguishing proprietary acts from governmental acts, are not controlling or persuasive as to Nevada law after 1965. As the Nevada Supreme Court stated in State v. Silva, 86 Nev. 911, 914, 478 P.2d 591 (1970):

Before the enactment of the statutory waiver of immunity, Nevada case law on the viability of the doctrine of sovereign immunity was uncertain and in flux. Walsh v. Clark Co. School Dist., 82 Nev. 414, 419 P.2d 774 (1966); Hardgrave v. State ex rel. Hwy. Dep't, 80 Nev. 74, 389 P.2d 249 (1964); Rice v. Clark County, 79 Nev. 253, 382 P.2d 605 (1963). The trend was toward the judicial abolition of that doctrine. Rice v. Clark County, supra. It is only fair to assume that the 1965 Legislature reacted to that trend, and elected to waive immunity within limits and impose a ceiling upon the recovery allowable to a claimant, rather than await further judicial action upon the subject. The apparent legislative thrust was to waive immunity and, correlatively, to strictly construe limitations upon that waiver.

Since 1965, all claims of whatever nature that could be brought against natural persons or corporations can be brought against the State and its political subdivisions only under the conditions and limitations spelled out in the 1965 waiver of Sovereign Immunity Act.

This Court does not have jurisdiction under NRS 41.031 over this suit against the County to the extent that the actions or inactions of the County complained of were taken or omitted during the exercise or performance of discretionary functions or duties. NRS 41.032(2) is an exception to the waiver of sovereign immunity. Sovereign immunity is not waived if the action or inaction complained of was taken or omitted during the exercise or performance of discretionary function or duty.

1. Third Count of Amended Complaint

(a) The Termination of NECON

In paragraphs 23(a) and (b) of the Third Count, the County's decision to terminate NECON and to replace it with other engineers, without providing Briscoe with access to NECON's design calculations and other work product, after the contract of Briscoe was entered into and after construction had begun, is alleged by Briscoe to have been a breach of contract.

The decision to terminate NECON without providing access to their design calculations and other work product, and the replacing of NECON with other engineers were all actions or inactions taken during the exercise or performance of discretionary functions and are exempt and not actionable.

(b) Segmentation into Four Separate Phases

In paragraphs 23(d), (e) and (f) of the Third Count, the County's decision to segment the job into four...