Kane v. Town of Estes Park

Citation786 P.2d 412
Decision Date05 February 1990
Docket NumberNo. 87SA408,87SA408
PartiesNick KANE; Penny L. Kane; Nicky's Restaurant and Lounge, Ltd., a Colorado corporation; Nicky's Restaurant, Lounge and Motor Lodge, a Colorado corporation; Perry E. Bartlett and Audrey M. Bartlett, d/b/a Deer Crest Chalets; Don L. Heinemann and Nelrose R. Heinemann, d/b/a The Villager Motel; Crossed Fingers, Inc., d/b/a Eicher's Motor Inn, a Colorado corporation; Aldon and Elizabeth Olson; Ronald C. Brodie; Brodie's Supermarket, Inc.; Lloyd and Mary Meyers; Lonigan's, a Colorado general partnership; Park Wheel Corporation, a Colorado corporation; Steven Nagl; Lon Kinnie; Bruce Beckord; Bob Copper; Edward Grueff; Gerard Pearson; James Durward; Goran Svenonius; Rachel and J.R. Preston; D.A. Lienemann, Sr., d/b/a Fall River Estates; and Charlotte Miller, d/b/a "Indian Village" and APROPO, Inc., Plaintiffs-Appellants, v. The TOWN OF ESTES PARK, a Colorado municipality, Defendant-Appellee.
CourtSupreme Court of Colorado

French & Stone, P.C., Joseph C. French and David M. Haynes, Boulder, for plaintiffs-appellants Nick Kane, Penny L. Kane, Nicky's Restaurant and Lounge, Ltd., Nicky's Restaurant, Lounge and Motor Lodge, Perry E. Bartlett and Audrey M. Bartlett, d/b/a Deer Crest Chalets, Don L. Heinemann and Nelrose R. Heinemann, d/b/a The Villager Motel, Crossed Fingers, Inc., d/b/a Eicher's Motor Inn, Aldon and Elizabeth Olson, Ronald C. Brodie, Brodie's Supermarket, Inc., Lloyd and Mary Meyers, Lonigan's, Park Wheel Corp., Steven Nagl and Lon Kinnie.

Bragg, Baker and Cederberg, P.C., Jonathan M. Jellema, Denver, for plaintiffs-appellants Bruce Beckord, Bob Copper, Edward Grueff, Gerard Pearson, James Durward and Goran Svenonius.

Dale S. Carpenter, Lakewood, for plaintiffs-appellants Rachel and J.R. Preston and D.A. Lienemann, Sr., d/b/a Fall River Estates.

Miller, Hale & Harrison, Robert Bruce Miller, Boulder, for plaintiff-appellant Charlotte Miller, d/b/a "Indian Village" and APROPO, Inc.

Anderson, Campbell & Laugesen, P.C., Laird Campbell, Denver, for defendant-appellee.

Justice LOHR delivered the Opinion of the Court.

This case stems from the 1982 failure of the Lawn Lake Dam. The dam failure caused a massive quantity of water to rush downstream, overwhelming the small Cascade Dam and Reservoir, owned and operated by the Town of Estes Park (Estes Park). The combined waters proceeded onward, leaving a trail of destruction in their wake. The issue in this case is whether Estes Park can be held liable, on theories of strict liability or negligence, for the resulting personal injuries and property damage. The trial court granted summary judgment in favor of Estes Park. It held that Estes Park was exempt from the strict liability provision of section 37-87-104(1), 15 C.R.S. (1982 Supp.), and that a reservoir owner has no duty to guard against upstream dam failures. We affirm the trial court's grant of summary judgment.

I.

The Lawn Lake Dam was located on the Roaring River in Rocky Mountain National Park, high above the town of Estes Park. On July 15, 1982, the dam failed, sending approximately four hundred fifty acre-feet of water rushing downstream into the Fall River, upon which Estes Park's Cascade Dam was located. The descending water soon inundated the ten acre-feet capacity Cascade Reservoir and breached the Cascade Dam. The waters then swept through Estes Park, causing injury to persons and damage to property.

Several lawsuits were filed and then consolidated in Larimer County District Court. Estes Park was among the defendants. 1 The trial court granted summary judgment in favor of Estes Park, and the plaintiffs appealed. 2

II.

The plaintiffs assert that Estes Park is strictly liable for any damage resulting from the failure of Cascade Dam. The trial court held that strict liability was governed by section 37-87-104, 15 C.R.S. (1982 Supp.), and that the provisions of that statute expressly exclude a public entity such as Estes Park.

At the time of the dam failure, section 37-87-104, 15 C.R.S. (1982 Supp.), governed the liability of reservoir owners. It provided:

(1) Except as provided in subsection (2) of this section, the owner of a reservoir shall be liable for all damages arising from leakage or overflow of the waters therefrom or floods caused by the breaking of the embankments of such reservoir.

(2) No employee, shareholder, or member of a board of directors of an owner of a reservoir shall be liable for any damage arising from leakage or overflow of the waters from such reservoir or for any damage arising from floods caused by breaking of the embankments of such reservoir if a valid liability insurance policy has been purchased by the owner of the reservoir and is in effect at the time such damage occurs. Such insurance policy shall insure against such damages and provide coverage in an amount of not less than fifty thousand dollars for each claim and in an aggregate amount of not less than one million dollars for all claims which arise out of any one incident. The policy may provide that it does not apply to any act or omission of an employee, shareholder, or member of a board of directors of an owner, if such act or omission is dishonest, fraudulent, malicious, or criminal. The policy may also contain other reasonable provisions with respect to policy periods, territory, claims, conditions, and other matters common to such policies of insurance. The limitation of liability pursuant to this subsection (2) shall not apply to any criminal, fraudulent, or malicious act by a member of the board of directors of the owner, a shareholder of the owner, or an employee of such owner nor shall it apply to any ultra vires act of the owner or of a member of the board of directors, a shareholder, or an employee of such owner. The provisions of this subsection (2) shall not be deemed to impose any liability upon a member of the board of directors, a shareholder, or an employee of the owner of a reservoir beyond that established by other principles or provisions of law.

(3) As used in this section, the word "owner" does not include public entities or public employees as defined in the "Colorado Governmental Immunity Act", article 10 of title 24, C.R.S.1973.

Act approved May 27, 1981. Ch. 428, 1981 Colo.Sess.Laws 1778-79. 3

In interpreting statutes our primary task is to determine and give effect to the legislature's intent. Kern v. Gebhardt, 746 P.2d 1340, 1344 (Colo.1987). To determine the legislature's intent we look first to the statutory language. People v. District Court, 713 P.2d 918, 921 (Colo.1986). When the statutory language is plain, our inquiry need go no further. Kern, 746 P.2d at 1344; Harding v. Industrial Comm., 183 Colo. 52, 59, 515 P.2d 95, 98 (1973).

Section 37-87-104(3) excludes from the term "owner" all "public entities" as defined in the Colorado Governmental Immunity Act. An incorporated town is a public entity as defined in that act. § 24-10-103(5), 10A C.R.S. (1988). 4 The plain language of section 37-87-104, therefore, excludes an incorporated town such as Estes Park from both the strict liability provision of subsection (1) and the insurance provisions of subsection (2).

The plaintiffs argue that the legislature intended to exempt public entities from only the insurance provisions of subsection (2) and not from the strict liability imposed by subsection (1). We cannot agree. Even were we to look beyond the plain meaning of section 37-87-104, we would not find the limited legislative history of Senate Bill 259, which added subsections (2) and (3) to section 37-87-104, to require a different result. Although discussion at the legislative hearings focused on the insurance and immunity provisions of subsection (2), a review of the testimony at the hearings does not establish with any degree of clarity that subsection (3) was intended to exempt public entities from the subsection (2) provisions only and not from strict liability under subsection (1) as well. We interpret the statute according to its plain meaning and hold that public entities are not subject to the strict liability imposed by section 37-87-104.

The plaintiffs argue that even if public entities are not subject to the strict liability imposed by section 37-87-104, they remain subject to the common law rule of strict liability for dam and reservoir owners. Colorado's first statutory provision holding reservoir owners strictly liable was a codification of the pre-existing common law rule. See Sylvester v. Jerome, 19 Colo. 128, 134-35, 34 P. 760, 762 (1893). Although a pre-existing common law rule remains in full force unless and until the legislature repeals it, § 2-4-211, 1B C.R.S. (1980), "[t]he legislature may at any time by a legislative act, repeal any part of the common law either expressly or by passage of an act inconsistent therewith on any particular subject." Colorado State Bd. of Pharmacy v. Hallett, 88 Colo. 331, 335, 296 P. 540, 542 (1931). The statutory provisions governing liability of dam and reservoir owners, found in section 37-87-104, are comprehensive, preempting the common law. This court, in fact, has held that the common law in this area is not controlling because "statutes fix the liability of reservoir owners." Garnet Ditch & Reservoir Co. v. Sampson, 48 Colo. 285, 288, 110 P. 79, 80 (1910). Section 37-87-104's exclusion of public entities from the section's strict liability provision persuades us that the legislature intended to repeal any existing common law that might make public entities strictly liable.

III.

We now consider whether the trial court erred in granting summary judgment for Estes Park on the plaintiffs' negligence claims. Under C.R.C.P. 56(c), summary judgment is appropriate only when "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Camacho v. Honda Motor Co., Ltd., 741 P.2d 1240, 1248-49 (Colo...

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