Oklahoma City Mun. Imp. Authority v. HTB, Inc.

Decision Date20 December 1988
Docket Number65766,No. 65517,65517
Citation769 P.2d 131,1988 OK 149
PartiesThe OKLAHOMA CITY MUNICIPAL IMPROVEMENT AUTHORITY, a public trust, and the trustees thereof, the City of Oklahoma City, a municipal corporation, and the Oklahoma City Municipal Facilities Authority, a public trust, and the trustees thereof, Appellants, v. HTB, INC., Interpace Corp., GHA Lock Joint, Inc., P.S.A.T., Inc., Phelps, Spitz, Ammerman & Thomas, Inc., Phelps & Spitz, Inc., Painter & Spitz, Inc., Brooks Collier, Ingram & Spitz, Inc., Frederick J. Spitz, Project Construction Co., the Concho Co., Brewer Construction Co., PCB, a joint venture, and the Benham Group, Inc., RGDC, Inc., LRB & Associates, Inc., and Metro Water Consultants, Appellees. to 65768 and 65866.
CourtOklahoma Supreme Court

L. Gene Gist, Sally E. Scott, Chris A. Pearson, Andrews, Davis, Legg, Bixler, Milsten & Murrah, Oklahoma City, for appellants Oklahoma City Mun. Imp. Authority.

Craig B. Keith, Diane D. Huckins, Asst. Mun. Counselors, Oklahoma City, for appellants Oklahoma City Mun. Authority and the City of Oklahoma City.

Kenneth McKinney, McKinney, Stringer & Webster, Oklahoma City, for appellees Interpace Corp. and GHA Lock Joint, Inc.

Kent E. Mast, G. Lee Garrett, Jr., Hansell & Post, Atlanta, Ga., for appellees Interpace Corp.

John B. Hayes, Looney, Nichols, Johnson & Hayes, Oklahoma City, for appellees HTB, Inc.

Ben L. Burdick, Arthur F. Hoge, III, Crowe & Dunlevy, Oklahoma City, for appellees PSA & T, Inc. and Spitz, et al.

Don Hamilton, Oklahoma City, for appellee LRB & Associates, Inc.

Ben T. Lampkins, Lampkin, Wolfe & McCaffrey & Tawwater, Oklahoma City, for appellee Metro Water Consultants.

John R. Couch, Hugh A. Baysinger, J. Roger Hurt, Pierce, Couch, Hendrickson, Johnston & Baysinger, Oklahoma City, for defendant Benham Group.

SUMMERS, Justice.

Plaintiffs/appellants 1 seek certiorari to resolve the question of whether statutes of limitation operate to bar their actions for recovery of damages allegedly caused by defendants' negligent design and construction of part of a municipal water system. Although numerous issues were raised before the trial court and the Court of Appeals, and were properly preserved in plaintiffs' petition to this Court, we limit ourselves to the single issue which resolves the matter, and hold that these actions are not barred by statutes of limitation or repose because the plaintiffs at all times pertinent acted in a sovereign capacity to protect vested public rights. 2

All parties agree that plaintiffs Oklahoma City Municipal Improvement Authority (OCMIA) and Oklahoma City Municipal Facilities Authority (OCMFA) function as public trusts established pursuant to Oklahoma statutes, with the plaintiff City of Oklahoma City (City) as beneficiary. Further, none of the defendants contest the factual statement from plaintiffs that OCMFA is the financing vehicle for public funds used in emergency repairs of the system and also processes and receives federal funds used to construct and maintain the system. The actions below focus upon Phase III of a plan for the extension and improvement of water mains from Lake Stanley Draper to the Oklahoma City Area, with this phase consisting of 8 1/2 miles of pipe stretching from the Draper Lake pumping station to Southeast 29th and Douglas Boulevard. On May 24, 1974 defendants completed work on Phase III and recommended its acceptance. Between July 10 and October 8, 1974 OCMIA and the City accepted Phase III as formally complete. We need not determine the precise date of completion and recognize only that the earliest acceptance date mentioned falls precisely ten years before plaintiffs Defendants, each of whom assumed responsibility for all or some portion of the design and/or construction of Phase III responded to plaintiffs' actions with motions for summary judgment alleging that the statute of repose at 12 O.S.1981 § 109 3 as well as all applicable statutes of limitation bar suit against them. The trial court granted defendants' motions, from which orders plaintiffs appeal.

filed suit to recover damages for ten breaks in the pipe which breaks began in June 1980. Plaintiffs filed these suits on June 10, 1984.

The Court of Appeals, in a divided opinion affirmed the trial court, finding that operation of a water line does not affect the public generally in that it constitutes a proprietary function of government. 4 We disagree.

Since 1913, this court has followed the general rule that statutes of limitation do not apply to a government entity seeking in its sovereign capacity to vindicate public rights, and "that the maxium, 'nullum tempus occurrit regi,' 5 is not restricted in its application to sovereign states or governments, but that its application extends to and includes public rights of all kinds, and that it applies to municipal corporations as trustees of the rights of the public ..." Foot et al. v. Town of Watonga, 37 Okl. 43, 130 P. 597, 598 (1913). Adoption of the general rule in Foot protected the municipality in a property action in which the town held title to a lot designated for use by the general public. Holding against an estoppel theory, the court ruled that the public's rights stood paramount "no matter how lax the municipal authorities may have been in asserting [them]." Foot 130 P. at 598.

Cases cited by all the parties herein follow and clarify the general rule announced in Foot. These cases focus primarily upon whether the right affected is a public right or private right. Herndon v. Board of Commissioners in and for Pontotoc County, 158 Okl. 14, 11 P.2d 939 (1932); State ex rel. Cartwright v. Tidmore, 674 P.2d 14 (Okl.1983).

In the Herndon decision, this Court held that the trial court properly overruled defendant's demurrer in an action to compel conveyance of land used for the county courthouse, and that the statute of limitations did not apply to bar the county's action. The court stated the general rule and announced that the test to determine the nature of the right affected is "whether the right is such as to affect the public generally or to merely affect a class of individuals within the political subdivision." Id. 11 P.2d at 941.

As an example of a matter involving purely private rights, the Herndon court cited Board of County Commissioners of Woodward County v. Willett, 49 Okl. 254, 152 P. 365 (1915). The court in Willett ruled that the statute of limitations barred the county from recovering excess salary paid to a teacher because the suit affected only private rights "for the reason that the people of the state have no interest in the funds of the county illegally paid out and sought to be recovered, but only that part of the public within the confines of the county are interested in the funds." Id. 152 P. at 365.

In 1986, the Oklahoma Court of Appeals partly distinguished the 1915 Willett scenario from one in which the statute of limitations would not prohibit a county's action to recover monies paid under contracts pursuant to an alleged scheme of This more realistic perception first appeared in the appeal from an action to recover principal and interest on bonds purchased with monies from a county's sinking fund in which the trial court sustained the defendant's plea to the five year statute of limitations. Board of County Commissioners of Oklahoma County v. Good Township, 188 Okl. 151, 107 P.2d 805 (1940). The court found that the funds at issue involved constitutional and statutory provisions which "stamp the investment with a public interest", and that "the distinction [between public and private rights of a political subdivision] should be bolstered by every reasonable presumption favorable to government immunity from the limitation." Id. 107 P.2d at 807.

bribes and kickbacks. State ex rel. Board of County Commissioners v. Shelton, 727 P.2d 103 (Okla.App.1986). The Court of Appeals again followed the general rule, and noted that the "court's perception of 'public right' has developed to the point of being more realistic and workable in terms of modern social and economic conditions." Id. at 106.

These cases, which announce and clarify the general rule focus either upon property disputes in which the property at issue is held for use by the general public, or situations in which the public through legislative control expresses general concern in the rights at issue. This court's most recent pronouncement regarding governmental immunity from limitations follows the others and upholds the public's right to require compliance with statutory schemes for governmental contracting and bidding. State ex rel. Cartwright v. Tidmore, 674 P.2d 14 (Okl.1983).

In Tidmore, this Court held that the state's action to recover money paid to defendant under a contract was not barred by the statute of limitations where the state was suing in its sovereign capacity to vindicate legal rights which are public in nature. We reasoned that laws "requiring competitive bidding and written contracts protect the public at large by promoting economy in government and reducing the likelihood of fraud." Id. at 16. We further found that the general rule rests upon sound policy that "public interest shall not be prejudiced by the negligence of public officers to whose care it is consigned." Id. at 16.

From these cases we distill the general rule that statutes of limitation shall not bar suit by any government entity acting in its sovereign capacity to vindicate public rights, and that public policy requires that every reasonable presumption favor government immunity from such limitation. In applying this rule to the issue presently before us, we must determine whether plaintiffs below acted in a sovereign capacity, and whether the rights at issue rise to the level of public rights.

Throughout their arguments the defendants misguidedly equate...

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