Gas Service Co., Inc. v. City of London, 84-SC-36-DG

• Citation: 687 S.W.2d 144
• Decision Date: 21 March 1985
• Docket Number: No. 84-SC-36-DG,84-SC-36-DG
• Court: United States State Supreme Court (Kentucky)
• Parties: GAS SERVICE COMPANY, INC., Movant, v. CITY OF LONDON and London Utility Commission, Respondents.

Page 144

687 S.W.2d 144

GAS SERVICE COMPANY, INC., Movant, v. CITY OF LONDON and London Utility Commission, Respondents.

No. 84-SC-36-DG

Supreme Court of Kentucky.

March 21, 1985.

Robert L. Milby, Hamm, Milby & Ridings, London, for movant.

William R. Patterson, Landrum & Patterson, Gordon W. Moss, Hays & Moss, Lexington, for respondents.

William A. Thielen, Lexington, for amicus curiae--Ky. Mun. Inc.

LEIBSON, Justice.

This case developed as a consequence of a natural gas explosion that occurred on Fourth Street between Main and Hill Streets, in London, Kentucky, on January 16, 1979, destroying some buildings and damaging others.

A number of persons who sustained damage from the blast filed negligence actions against Gas Service Company, Inc., the movant on this appeal (referred to herein as the "Gas Company"). In turn the Gas Company filed a third party action against the City of London, Kentucky, and the London Utility Commission, its agent (collectively referred to herein as the "City"), seeking contribution and/or indemnity. The Gas Company alleged the City was responsible for installing a system of sewer lines in close proximity to existing gas lines and then later negligently repairing the sewer line so as to cause an ultimate failure in an adjacent gas line. According to testimony taken by deposition the Gas Company was prepared to prove that the City made a faulty repair which, by the process of electrolysis, destroyed the patching plate used on the sewer line and also caused a hole in the adjacent gas line. Ultimately gas thus escaping caused the explosion in controversy.

The Gas Company's liability to the original plaintiffs is not at issue at this point. The trial court granted summary judgment to the original plaintiffs against the Gas Company on the issue of liability, and the jury assessed damages. The issues between the original plaintiffs and the Gas Company have been resolved.

However, the trial court also dismissed the Gas Company's third party complaint for contribution and/or indemnity against the City, on grounds that it was a municipality immune from suit in the circumstances alleged. The Court of Appeals affirmed this decision. We accepted discretionary review to consider once again the legal morass that has generated around the subject of municipal immunity. We reverse for reasons that follow.

The landmark case in Kentucky on the present status of municipal immunity, written with the intention of being dispositive of this issue, is Haney v. City of Lexington, Ky., 386 S.W.2d 738 (1964).

Haney supposedly "abrogated the former rule of sovereign immunity for a municipal corporation," making liability the rule. City of Lexington v. Yank, Ky., 431 S.W.2d 892, 893 (1968). Haney postulates:

"So, once again, we are called upon to examine this legal anachronism of municipal immunity from liability for tort.

....

Even the origin of this doctrine contains some elements of the mysterious. Some writers assume that it is a direct outgrowth of the divine right of the king who could do no wrong. But insofar as municipal or county or local district communities are concerned, it is generally agreed that the application of the immunity doctrine grew out of Russell v. Men of Devon, 2 T.R. 667, 100 Eng.Rep. 359 (1788), which involved a tort action against an unincorporated county.

....

It is equally hard to determine how this doctrine became imbedded in the law of our Commonwealth. Apparently we started without it because in Prather v. City of Lexington, 52 Ky. (13 B.Mon.) 559, 560 (1852), this was said:

'Where a particular act, operating injuriously to an individual, is authorized by a municipal corporation, by a delegation of power either general or special, it will be liable for the injury in its corporate capacity, where the acts done would warrant a like action against an individual.' "

386 S.W.2d at 739.

Haney makes clear that there is no constitutional basis for municipal immunity. Haney then discusses the development through case law of "distinctions between functions of the municipal corporation that purportedly were governmental or public and those thought to be proprietary or private, denying liability in the case of governmental functions, but imposing it in situations involving proprietary actions." 386 S.W.2d at 740. Haney comments:

"At most, the distinctions seem to be contrived and without sensible basis. That which was proprietary in some states was deemed governmental in others." Id.

And, indeed, for proof of this comment we need look no further than the subject matter of the present action, a city's liability for negligence in failure to keep its sewer system in proper repair. In Prather v. City of Lexington (1852), quoted in Haney, supra at 740, liability for failure to keep "sewers of the city in proper repair" was cited as a prime example of municipal liability. At the time of Haney we wrote "[t]he act of constructing a sewer is [regarded as] governmental in nature, with no liability [cases cited], but afterwards, if a negligent act of the city causes the basement of a connecting residence to be flooded, the city is responsible in damages. [Case cited]." Id. We further stated:

"We see no reason to belabor this point. We believe that all of these contrived devices [attempts to classify when there is liability for torts of municipal corporations] resulted from the fact that the courts for many years have been repelled by the injustice of the rule of municipal immunity and have attempted to soften its harsh application by seeking a few escape hatches." Id.

Yet, since Haney we find Court of Appeals cases, including the present one, now classifying negligence in maintenance and repair of sewers as immune from liability, on new grounds presumably deriving from our post Haney opinions. See Court of Appeals opinions in Hempel v. Lexington-Fayette Urban Cty. Gov., Ky.App., 641 S.W.2d 51 (1982) and Carmichael v. Lexington-Fayette, etc., Ky.App., 608 S.W.2d 66 (1980). In Carmichael and Hempel the earlier liability based on the proprietary classification falls victim to a nebulous new classification designated an "inherent part" or "ultimate function" of municipal government.

It is understandable if the movant in the present case should wonder how we arrived in a situation where he could have recovered for damages from the city's negligent maintenance and repair of the sewer system when municipal immunity was the rule and liability the exception, but can no longer recover now when liability is supposedly the rule and immunity the exception.

In short, with certain narrow exceptions stated in the opinion, Haney separates municipal immunity from sovereign immunity and seeks to abolish it. But subsequent decisions have so circumscribed its language that we have regressed beyond its starting point. In Haney, and in City of Louisville v. Chapman, Ky., 413 S.W.2d 74 (1967), which followed close on the heels of Haney, we regarded municipal immunity as a judicially created monstrosity which should be judicially destroyed. Fifteen years later we find that this monstrosity is not only alive and well, but grown to such proportions that it provides immunity for negligence in repair and maintenance of sewers, a function previously regarded as one proprietary in nature and not protected by municipal immunity. See City of Paris v. Baldwin Bros., 169 Ky. 802, 185 S.W. 144 (1916), City of Frankfort v. Buttimer, 146 Ky. 815, 143 S.W. 410 (1912), Toebbe v. City of Covington, 145 Ky. 763, 141 S.W. 421 (1911) and Town of Central Covington v. Beiser, 122 Ky. 715, 92 S.W. 973 (1906), all premising liability for damages on condition of city sewer facilities.

In Haney we hold that municipal corporations are no longer "immune from liability for ordinary torts." 386 S.W.2d at 742. We then designate a narrowly defined exception to liability:

"We wish to make it plain, however, that this opinion does not impose liability on the municipality in the exercise of legislative or judicial or quasi-legislative or quasi-judicial functions." Id.

To further explain the new rule we add:

"We think the scope of abrogation adopted by Wisconsin is a proper one and we adopt it. It is stated in Holytz v. City of Milwaukee, 17 Wis.2d 26, 115 N.W.2d 618 [ (1962) ], as follows:

'Perhaps clarity will be afforded by our expression that henceforward, so far as governmental responsibility for torts is concerned, the rule is liability--the exception is immunity.... Our decision does not broaden the government's obligation so as to make it responsible for all harms to others; it is only as to those harms which are torts that governmental bodies are to be liable by reason of this decision.' "

City of Louisville v. Chapman, Ky., 413 S.W.2d 74, 76 (1967) follows on the heels of Haney and "reaffirm[s] our holding in Haney " and the narrow exception for "the exercise of legislative or judicial or quasi-judicial or quasi-legislative functions."

But beginning shortly thereafter in City of Louisville v. Louisville Seed Co., Ky., 433 S.W.2d 638, 641 (1968), while paying lip service to Haney ¹ we "compromise" its holding with new language raising up the municipal immunity concept like Phoenix from the ashes, language which is at least as difficult to understand and apply as the old, discarded proprietary/governmental dichotomy.

The new rule resurrects municipal immunity "when a claimant seeks to hold the city liable for a risk which is inherently part of the carrying on of the function of government, such as its failure to provide fire protection, police protection or, as here, flood protection." 433 S.W.2d at 643. The court continues "We refer only to the ultimate failure and not to the situation where the city is engaging in activities with the citizen on a person to person basis as any other private citizen might do." Id.

For the next fifteen years the courts of this Commonwealth, ours included, have struggled without...