Galati v. Lake Havasu City

• Citation: 186 Ariz. 131,920 P.2d 11
• Decision Date: 08 February 1996
• Docket Number: No. 1,CA-CV,1
• Parties: James Patrick GALATI, Plaintiff-Appellant, v. LAKE HAVASU CITY, a publicly incorporated entity, Defendant-Appellee. 94-0397.
• Court: Court of Appeals of Arizona

Page 11

920 P.2d 11

186 Ariz. 131

James Patrick GALATI, Plaintiff-Appellant, v. LAKE HAVASU CITY, a publicly incorporated entity, Defendant-Appellee.

No. 1 CA-CV 94-0397.

Court of Appeals of Arizona Division 1, Department A.

Feb. 8, 1996.

Review Denied July 2, 1996.

[186 Ariz. 133] Law Offices of Keith S. Knochel by Keith S. Knochel, Bullhead City, and Ulrich & Kessler, P.C. by Paul G. Ulrich, Phoenix, for Plaintiff-Appellant.

Doyle, Appel & Shook by Marc Appel, Phoenix, for Defendant-Appellee.

OPINION

CONTRERAS, Presiding Judge.

On this appeal, we consider whether the trial court properly granted summary judgment on the basis that appellee Lake Havasu City ("City") was immune from suit regarding appellant James Patrick Galati's ("Galati") claim that his single vehicle accident resulted from the unreasonably hazardous design of a city street. We hold that the City was not entitled to absolute legislative or administrative immunity in this case. We therefore reverse.

FACTS AND PROCEDURAL HISTORY

On review of the trial court's grant of summary judgment, we view the facts favorably to Galati, the party against whom judgment was granted, and determine "de novo whether there are any genuine issues of material fact and whether the trial court erred in its application of the law." Gonzalez v. Satrustegui, 178 Ariz. 92, 97, 870 P.2d 1188, 1193 (App.1993). Pursuant to former Rule 11(a)(3), Arizona Rules of Civil Appellate Procedure, the parties limited the record on appeal, and we have limited our review to that record.

On November 7, 1991, Galati was involved in a single vehicle, rollover accident on McCulloch Boulevard in Lake Havasu City. Galati lost control of his vehicle after he traveled over a dip in the road and failed to negotiate a curve. For purposes of the motion for summary judgment, the City did not contest that the design of the road at the site of the accident was substandard.

Galati filed suit against the City, claiming that the City was negligent in the design and maintenance of McCulloch Boulevard, and that this negligence caused his accident. The City moved for summary judgment, claiming that its decision not to redesign or allocate funds for reconstruction of McCulloch Boulevard was either a legislative or an executive policy decision for which the City was absolutely immune. The City further argued that its warning and speed limit signs at the site of the accident were sufficient, and that there was no evidence that the roadway was improperly maintained. The trial court granted the City's motion, and Galati appealed.

DISCUSSION

1. Immunity

In 1982, the Arizona Supreme Court held that, under Arizona common law, a governmental entity is liable for its negligence except as to legislative acts, judicial acts, and executive policy decisions. Ryan v. State, 134 Ariz. 308, 310, 656 P.2d 597, 599 (1982). The court encouraged the legislature to develop the area of immunities. Id. In response, the legislature adopted the "Actions Against Public Entities or Public Employees Act" ("Act"). Laws 1984, Ch. 285 (codified at A.R.S. §§ 12-820 through -823). See City of Tucson v. Fahringer, 164 Ariz. 599, 795 P.2d 819 (1990); Pritchard v. State, 163 Ariz. 427, 788 P.2d 1178 (1990); Evenstad v. State, 178 Ariz. 578, 875 P.2d 811 (App.1993); James L Conlogue, Note, A Separation of Powers Analysis of the Absolute Immunity of Public Entities, 28 Ariz.L.Rev. 49 (1986). The Act "reaffirmed the now well settled common law notion that governmental immunity is the exception and liability the rule ...", Fahringer, 164 Ariz. at 600 n. 4, 795 P.2d at 820 n. 4, and "codified various common law doctrines that conferred absolute and qualified immunity on various public entities and employees." Id. at 600, 795 P.2d at 820. See also Pritchard, 163 Ariz. at 431, 788 P.2d at 1182.

The City argues that it is immune from suit regarding its funding and roadway construction priorities, and, therefore, it cannot be sued for substandard or dangerous roadway design when correction of such a design requires allocation of its limited financial resources to a particular construction project. In particular, the City claims statutory legislative immunity and immunity for "[t]he exercise of an administrative function involving the determination of fundamental governmental policy." A.R.S. § 12-820.01(A). Determining whether the City is entitled to such immunity is a question of law for the court. Carroll v. Robinson, 178 Ariz. 453, 456, 874 P.2d 1010, 1013 (App.1994).

a. Legislative Immunity

The City argues that street design and funding decisions are legislative acts entitled to absolute immunity. In this regard, the City points to the affidavit of its city manager, Larry Price, who stated that the City's street funding decisions are "an administrative function involving the determination of the City's fundamental policy regarding the construction or maintenance of its roadway facilities for which administrative discretion is required." The City does not point to any evidence that it made an affirmative decision not to fund a street improvement project for McCulloch Boulevard, but does argue that the City's prioritization of road construction projects makes its failure to fund the project the same as a decision not to fund. We disagree.

We have found no Arizona case directly on point. ¹ The immunity statute, however, provides immunity for the City's "exercise of a ... legislative function." A.R.S. § 12-820.01(A)(1) (emphasis added). We interpret the term "exercise" to require action, not the absence of action. Arizona cases determining what is a legislative act require an actual decision or affirmative act, not a failure to make a decision. Saggio v. Connelly, 147 Ariz. 240, 241, 709 P.2d 874, 875 (1985). A decision to fund street construction or improvements is a legislative act. See Wennerstrom v. City of Mesa, 169 Ariz. 485, 821 P.2d 146 (1991) (bond election for street improvements a legislative act; council's approval of specific project was not). We hold, however, that the absence of a decision to fund a street improvement project is not the exercise of a legislative function entitled to immunity under A.R.S. section 12-820.01(A)(1). Cf. Goss v. City of Globe, 180 Ariz. 229, 231, 883 P.2d 466, 468 (App.1994) (decision by default not entitled to immunity as an "exercise of an administrative function involving the determination of fundamental governmental policy" under A.R.S. section 12-820.01(A)(2)).

Even if the City had made an affirmative decision not to fund roadway improvements to McCulloch Boulevard, however, the City would not be entitled to immunity for street design that was substandard when constructed. If a City decides to act, it must do so non-negligently. Austin v. City of Scottsdale, 140 Ariz. 579, 581-82, 684 P.2d 151, 153-54 (1984); Grimm v. Arizona Bd. of Pardons & Paroles, 115 Ariz. 260, 267, 564 P.2d 1227, 1234 (1977). The record is not clear when the street was built, if it was substandard at that time, if the City approved a substandard design, or if the substandard design made the street irremediably and unreasonably dangerous. Although the City has an affirmative defense if the street design was "prepared in conformance with generally accepted engineering or design standards in effect at the time of the preparation of the plan or design," ² the City must warn the public of any unreasonably dangerous hazards. A.R.S. § 12-820.03; Goss, 180 Ariz. at 233, 883 P.2d at 470. We find, therefore, that the City's claimed legislative immunity does not support the trial court's entry of summary judgment.

b. Immunity for Policy Decisions

The City also argues that the decisions how to maintain and whether to upgrade its roads are discretionary policy decisions entitled to absolute immunity, even where, as here, the "decision" is made by default. The relevant statute provides:

A. A public entity shall not be liable for acts and omissions of its employees constituting:

* * * * * *

2. The exercise of an administrative function involving the determination of fundamental governmental policy.

B. The determination of a fundamental governmental policy involves the exercise of discretion and shall include, but is not limited to:

1. A determination of whether to seek or whether to provide the resources necessary for:

* * * * * *

(b) The construction or maintenance of facilities.

2. A determination of whether and how to spend existing resources, including those allocated for equipment, facilities and personnel....

A.R.S. § 12-820.01(B). The City argues that it is immune from liability for any failure to remedy the roadway's dangerous design because any such failure was based on the City's determinations not to provide the resources necessary to upgrade the road and to spend its limited resources on other projects.

Not all administrative decisions are entitled to immunity. In Chamberlain v. Mathis, 151 Ariz. 551, 729 P.2d 905 (1986), the Arizona Supreme Court stated that common law governmental immunity did not attach to "ministerial" acts, concluding that absolute immunity should be applied narrowly. Id. at 556, 558, 729 P.2d at 910, 912. In Evenstad, this court distinguished between discretionary governmental actions involving fundamental governmental policy, to which absolute immunity applies, and ministerial actions implementing that policy, to which immunity does not apply. 178 Ariz. at 583-84, 875 P.2d at 816-17 (distinguishing the discretionary policy decisions involved in promulgating administrative rules and regulations, and the ministerial implementation of those rules). Cf. Carroll, 178 Ariz. at 456-58, 874 P.2d at 1013-15 (state and its employees entitled to qualified immunity for discretionary decision to revoke day care license).

In Bird v. State, 170 Ariz. 20, 821 P.2d 287 (App.1991), however, this court held that the legislature in A.R.S. section 12-820.01(B) defined certain actions to be...