K & W Elec., Inc. v. State

• Decision Date: 07 April 2006
• Docket Number: No. 04-0643.,04-0643.
• Citation: 712 N.W.2d 107
• Parties: K & W ELECTRIC, INC., Appellant, v. STATE of Iowa, Appellee.
• Court: Iowa Supreme Court

712 N.W.2d 107

K & W ELECTRIC, INC., Appellant, v. STATE of Iowa, Appellee.

No. 04-0643.

Supreme Court of Iowa.

April 7, 2006.

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John J. Hines of Dutton, Braun, Staack, Hellman, P.L.C., Waterloo, for appellant.

Thomas J. Miller, Attorney General, and Noel C. Hindt and Richard E. Mull, Assistant Attorneys General, for appellee.

TERNUS, Justice.

The appellant, K & W Electric, Inc., appeals an adverse summary judgment ruling on its damage claims against the appellee, State of Iowa. K & W sued the State on theories of negligence, violation of Iowa Code section 314.7 (1999), and inverse condemnation, claiming a highway construction project undertaken by the Iowa Department of Transportation (DOT) in the vicinity of the plaintiff's premises caused flooding that damaged the plaintiff's property. The district court held the plaintiff's claims were time barred, see Iowa Code § 614.1(4), and the defendant was immune from tort liability under Iowa Code section 669.14(8). We affirm.

I. Facts and Prior Proceedings.

The plaintiff is an electrical contractor whose place of business is at 1127 Lincoln Street in Cedar Falls, Iowa. Its business premises include a large steel building that houses an office, shop, and storage facilities. The plaintiff's property is located in the 100-year flood plain of the Cedar River near a diversion channel of the river.

The Cedar River has a long history of flooding in Cedar Falls, with the highest recorded flood prior to the events giving rise to this litigation occurring in 1961. In 1984, the Federal Emergency Management Agency (FEMA) prepared a flood insurance study of the city to investigate the existence and severity of flood hazards and to assist the community in promoting sound flood plain management. The study included a flow-frequency analysis, flood profiles, and floodways for each channel. A floodway, according to the FEMA report, "is the channel of a stream plus any adjacent flood plain areas that must be kept free of encroachment so that the 100-year flood can be carried without substantial increases in flood heights." Under federal standards, a substantial increase is an increase in excess of one foot.

In the early 1990s, the DOT undertook an extensive highway construction project involving multiple interchanges between highways 218, 58, and 57 over and near the Cedar River and the Cedar River diversion channel. Some of these structures were just a short distance from the plaintiff's property. Using data from the FEMA report, engineers designed the bridges and structures crossing the river and diversion channel to span the floodway without increasing a 100-year flood by more than one foot. The designs were approved by the Iowa Department of Natural Resources, and the project was constructed according to design.

In April 1993 heavy rainfall and snowmelt caused a flood that matched the record 1961 flood. During this flood, the plaintiff's land was covered by floodwaters of substantial depth. Only the building, which had been built on an elevation approximately one foot above the 100-year flood level established by the Cedar Falls flood plain maps, remained above flood level, but barely so. A second flood occurred in August 1993, but the flood crest was about two feet less than the April flood.

In the aftermath of the extensive flooding in 1993, the DOT sponsored a flood study conducted by Rust Environment and Infrastructure, Inc. The purpose of the study was to review the flooding characteristics of the Cedar River in light of data collected from the 1993 floods and to determine the effects of highway construction in the area. (The report stated that at the time of the April 1993 flood, "the majority of the highway improvements were in place.") The "Cedar River Flood Plain Study," hereinafter "the Rust report," was published on January 25, 1994. The report asserted that the availability of "actual flood high-water elevations and discharge measurements" from the 1993 floods had "resulted in the most reliable computer model ever developed for the Cedar River study area."

Of significance to the present lawsuit, the report found that the effects of construction were significant in the diversion channel and its vicinity, an area that included the plaintiff's business. Three factors were identified as leading to an increased water flow in the diversion channel: (1) backwater created by the highway 218 bridge over the diversion channel; (2) backwater created by bridges on the main channel; and (3) construction of West Lake, which removed a portion of Big Woods Road, creating a less resistant flow path for water to enter the diversion channel. The report concluded, however, that "[a]ll highway structures were sized based on information available at the time of the specific project." It noted the structures for highway 58 and highway 218 through the diversion channel spanned the floodway as identified in the FEMA report. In addition, the Rust report stated that based on the model in use when the improvements were designed, the increase in the floodways was anticipated to be approximately one foot. In actuality, the increase was greater, particularly in the area of the plaintiff's business.

In March 1994, shortly after the Rust report was released, K & W filed a claim with the state appeal board, seeking recovery for damage to a truck caused by the April 1993 flood. In relevant part, its claim stated:

Our construction business, located at 1127 Lincoln Street, Cedar Falls, was completely surrounded by flood waters on April 2, 1993. The flood waters were caused by highway construction in the area.

In order to keep our business in operation, we used our big heavy duty trucks to transport employees and material from our place of business, thru the flood waters, to our job sites and to our customers. We used the International Truck to go thru the flood water and it developed engine and rear end trouble.

K & W claimed approximately $5600 in damages. The claim was denied, however, and K & W did not pursue further litigation against the State.

On July 22, 1999, heavy rains hit northern Iowa, causing a flood on the Cedar River. K & W's property was again flooded. This time, however, water entered the plaintiff's building, causing extensive damage and necessitating significant cleanup efforts. On January 31, 2000, K & W filed a tort claim against the State for property damage in excess of $32,000. The plaintiff again claimed the flooding and resultant damages were caused by the effects of highway construction. K & W alleged the State was negligent, and it specifically referred to the Rust report and the three construction-related factors identified there as having increased the water flow in the diversion channel. In addition to damages, the plaintiff asked that a plan be developed to protect its property and that the State pay for construction of the solution. The appeal board denied K & W's claim.

This lawsuit was filed on June 11, 2001. The plaintiff reasserted its negligence claim, alleging the DOT failed to exercise due care in the design and construction of the highway projects in the vicinity of the plaintiff's facility. In addition, K & W contended the DOT's construction activities violated Iowa Code section 314.7, which requires that contractors must "use strict diligence in draining the surface water from the public road in its natural channel" when improving any highway. Finally, the plaintiff claimed a permanent devaluation of its property, resulting in an inverse condemnation.

The State subsequently filed a motion for summary judgment on several grounds, but only two are pertinent to this appeal: (1) the design-and-construction immunity of Iowa Code section 669.14(8) applies to the plaintiff's tort claims because the project design complied with generally accepted engineering standards, and the highways were constructed in accordance with the design specifications; and (2) the plaintiff's inverse condemnation claim is barred by the statute of limitations contained in Iowa Code section 614.1(4) because K & W was aware of the potential for increased flooding since at least the April 1993 flood. Accepting both arguments, the district court granted the State's motion for summary judgment. The plaintiff has appealed.

II. Scope of Review.

The district court's ruling on a motion for summary judgment is reviewed for correction of errors of law. See Christy v. Miulli, 692 N.W.2d 694, 699 (Iowa 2005).

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

Id. (citation omitted). A genuine factual issue "is generated if reasonable minds can differ on how the issue should be resolved." Id. A fact is material only if its existence would affect the outcome of the suit. Faeth v. State Farm Mut. Auto. Ins. Co., 707 N.W.2d 328, 331 (Iowa 2005).

To obtain summary judgment, "the moving party must affirmatively establish the existence of undisputed facts entitling that party to a particular result under controlling law." Griglione v. Martin, 525 N.W.2d 810, 813 (Iowa 1994). In considering whether the moving party has satisfied this requirement, we accord the nonmoving party every legitimate inference that may be drawn from the record. Faeth, 707 N.W.2d at 331. If the moving party has met its burden, "[t]he resisting party must set forth specific facts showing that a genuine factual issue exists." Grabill v. Adams County Fair & Racing Ass'n, 666 N.W.2d 592, 594 (Iowa 2003).

III. Design-and-Construction Immunity.

We begin with the State's claim that its statutory waiver of sovereign immunity does not apply to the plaintiff's negligence claims by virtue of the exception contained in section 669.14(...