Hoge v. Burleigh County Water Management Dist.

• Decision Date: 09 October 1981
• Docket Number: No. 9948,9948
• Citation: 311 N.W.2d 23
• Parties: Dennis E. HOGE and James L. Hoge, Plaintiffs and Appellees, v. The BURLEIGH COUNTY WATER MANAGEMENT DISTRICT, a public corporation, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 23

311 N.W.2d 23

Dennis E. HOGE and James L. Hoge, Plaintiffs and Appellees, v. The BURLEIGH COUNTY WATER MANAGEMENT DISTRICT, a public corporation, Defendant and Appellant.

Civ. No. 9948.

Supreme Court of North Dakota.

Oct. 9, 1981.

Zuger & Bucklin, Bismarck, for plaintiffs and appellees; argued by Robert V. Bolinske, Bismarck.

Lundberg, Conmy, Nodland, Lucas & Schulz, Bismarck, for defendant and appellant; argued by Robert H. Lundberg, Bismarck.

Michael A. Dwyer, Asst. Atty. Gen., North Dakota State Water Commission, Bismarck, amicus curiae.

ERICKSTAD, Chief Justice.

The Burleigh County Water Management District (Water Management District) has appealed to this court from a judgment of the District Court of Burleigh County. The district court ordered the Water Management District to pay damages, including attorneys' fees, in the amount of $14,293.48 to Dennis E. and James L. Hoge (Hoges) for damages to their property which resulted from flood water in April 1979, and the design and construction of the Burnt Creek Flood Control project. That project was designed and constructed cooperatively by the Water Management District and the United States Soil Conservation Service. The district court held that the Hoges proved their damages and were entitled to recovery for those damages because of an indemnity clause in the deed of property from the Hoges to the Water Management District. Additionally, the district court held that an act of God was not the sole proximate cause of the damages to the Hoges' property, and, therefore, the Water Management District's defense of an act of God failed. We affirm the district court's judgment.

Burnt Creek is a stream beginning in the Wilton area of north Burleigh County which meanders in a southerly direction, then turning southwesterly and entering the Missouri River bottom land approximately five miles north of Bismarck. The stream is confined in relatively high banks, especially toward the southerly end. The Missouri River bottom land upon which it enters has a flat topography. The stream, after it reaches the Missouri River bottoms, has a small carrying capacity. This small carrying capacity has caused almost annual flooding on the bottom land. Because the Missouri River bottom lands slope gently to the south, water frequently spreads over a large area south, west, and north of the point where Burnt Creek enters the bottom land, causing damages to homes and property.

To help alleviate this condition the defendant, Water Management District, and the United States Soil Conservation Service cooperatively determined that a flood control project should be built. The project was designed by the United States Soil Conservation Service and construction began in October 1975. The project was completed in October 1976. Land was needed from various landowners, including the Hoges, for the construction. The Hoges lived directly west of the project. Their land was bounded on the west by the Missouri River and on the east by an old Missouri River channel, creating an island. The Hoges are farmers raising cattle and grain.

The Water Management District obtained a deed of certain lands belonging to the Hoges in May of 1975. That deed contained the following indemnity clause:

"The party of the second part hereby agrees to indemnify and to hold and save the parties of the first part harmless from any and all damages to their lands not conveyed herein in fee arising from the use of the rights, easement and right-of-way herein granted, and agrees to pay any damages which may arise to the parties of the first part's property through the use, occupation and possession of the rights herein granted by the party of the second part."

It is this indemnity clause which is the basis for the Hoges' recovery.

The project, as designed by the United States Soil Conservation Service, and built jointly by the Service and the Water Management District, provided for a floodway to carry the excess waters of Burnt Creek west from where the creek entered the Missouri River bottom land to the old Missouri River channel on the east side of the Hoges' land. Embankments were put up along the floodway to protect the land to the south from a 100-year flood. The embankment along the north side of the floodway was built to protect against a 25-year flood. The reason given for this variance in protection was that the area to the south had suffered more frequent flooding than the area to the north and economics precluded a more extensive project for the north area. Embankments were raised along the east edge of the Hoges' land (and just west of the old Missouri River channel) to protect the Hoges' land from flooding to a 25-year flood frequency. The embankment on the east edge of the Hoges' land was tied into a dike previously built by the Hoges along the western edge of their land, adjacent to the Missouri River and down to the point where the old Missouri River channel joins the river itself.

In April of 1979, there was a flood in the floodway area and the Hoges' land was inundated with water. They suffered extensive damage to their roads, crops, and machinery, and lost many calves due to the water being impounded on their land by the dikes.

The Missouri River flows to the west of Hoge Island. The river was flowing within its banks during and after the flood.

The Hoges contend they are entitled to recovery under the indemnity provision of their agreement with the Water Management District because the flood control project was inadequately designed, causing more water to flow north and onto their land than would ordinarily be the case. They argue that the water from the area drained into the floodway and the floodway acted as a water hose shooting water at and over the 25-year frequency dike on the north side of the old Missouri River channel. Their argument continues that once on their land the water was then trapped by the diking in the southwest corner of their land where the old Missouri River channel meets the Missouri River. Because they believe the floodway project was responsible for the damage to their land, the Hoges contend that natural forces were not the sole proximate cause of their damages and, therefore, that the Water Management District's defense of an act of God must fail. Similar arguments were made before the trial court. It agreed with the Hoges and issued findings of fact, conclusions of law, and order for judgment consistent therewith.

The Water Management District contends that the trial court's findings of fact are "clearly erroneous." It argues that the damage to the Hoges' property was caused by an accumulation of an unusual amount of snowfall in the Burnt Creek basin coupled with an unseasonably high temperature which, acting in concert, caused an unprecedented rush of water through the area. The Water Management District therefore relies on the defense that the Hoges' damages were caused by an act of God, arguing that the natural forces were the sole proximate cause of the damage to the Hoges' property. The Water Management District contends further that the deed in question did not unqualifiedly obligate them to indemnify the Hoges for damages to their land.

We conclude that the district court's findings that the flood control project contributed to the damage caused to the Hoges' land and that the Hoges are entitled to recovery because of the indemnity clause contained in the deed to the Water Management District are not "clearly erroneous." The defense that the flooding was caused by an act of God, therefore, fails. Because the Water Management District's liability arises out of the indemnity agreement, we do not address the issue of whether or not the Water Management District was negligent in the design or construction of the project.

The first issue for this court to address is whether or not the indemnity agreement between the Hoges and the Water Management District imposes liability on the Water Management District for losses suffered by the Hoges. The question presented is one of construction of a contract. Construction of a written contract to determine its legal effect is always a question of law for the court to decide. Hager v. Devils Lake Public School District, 301 N.W.2d 630, 633 (N.D.1981). On appeal to this court, the conclusions of law are fully reviewable. Id. at 633.

The contract of indemnity is construed in accordance with the rules for construction of contracts generally. First Trust Company of Lincoln v. Airdale Ranch and Cattle Company, 136 Neb. 521, 286 N.W. 766, 772 (1939). When interpreting indemnity contracts, therefore, as with contracts generally, the cardinal rule is that the contract must be interpreted to give effect to the mutual intentions of the parties if it can be done consistently with legal principles. Hager v. Devils Lake Public School District, 301 N.W.2d at 633; Title Guaranty & Surety Co. v. Roehm, 215 Mich. 586, 184 N.W. 414, 415 (1921); § 9-07-03, N.D.C.C.

The Water Management District contends that the intent of the paragraph was to indemnify the Hoges if the dikes were defectively constructed and washed away, causing water to flow and damage the Hoge property. It argues that the wording of the indemnity provision does not extend to the entire project, but is strictly limited to damages caused only on the lands conveyed by the Hoges.

The Hoges counter by saying the intent of the parties can be gleaned by a plain reading of the agreement. That intent, they claim, was that in the event the Hoges were in any way damaged, the Water Management District would indemnify them and hold and save them harmless from any and all such damage. They contend that the indemnity provision was an integral part of the agreement and that the agreement would likely not have been entered into had the indemnity feature been left out. They conclude that the indemnity agreement was for the protection of the Hoges and was designed to...